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Sandstorm Gold clinches ten royalty agreements on projects in W Africa and Nevada

28th January 2015

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Precious metals streaming firm Sandstorm Gold has entered into no fewer than ten royalty agreements on properties in West Africa and the US.

TSX- and NYSE MKT-listed Sandstorm said this week that it expected the royalties to provide it with long-term exposure to a number of high-quality assets with a relatively small capital outlay.

"We now have 56 streams and royalties and we are focused on deploying our available capital of over $165-million into additional transactions that will grow our future production and cash flow,” president and CEO Nolan Watson pointed out.

Sandstorm had completed a royalty agreement with TSX-listed Orezone Gold to provide up to $8-million in financing to advance its Bomboré project, in Burkina Faso. Sandstorm would deliver $3-million upfront to acquire a 0.45% net smelter return (NSR) royalty on Bomboré and had committed to $5-million more in royalty financing, available to Orezone on a drawdown basis for two years.

Orezone could access this standby royalty through two tranches of $1-million each for a 0.15% NSR and a final tranche of $3-million in cash or shares for a 0.45% NSR.

Sandstorm also gained a right of first refusal (ROFR) on any future stream or royalty financings related to the Bomboré project until 36 months after commercial production had been declared at the mine.

Orezone could repurchase the upfront royalty from Sandstorm for 36 months, at a premium of 10% a year up to a maximum of 30%. The standby royalty could also be repurchased at a premium of 10% a year if Orezone completed a gold stream financing and Sandstorm participated for no less than $30-million.

Orezone's 168 km2 Bomboré project was the largest undeveloped oxide gold deposit in Burkina Faso, containing 4.6-million ounces of measured and indicated gold resources, comprising two-million ounces of oxide resources and 2.6-million ounces of sulphide resources.

Gold resources occurred at surface in several zones along an 11 km strike length. Resources were open at depth and the average drilling depth, to date, was about 120 m below surface.

Sandstorm had also completed a royalty agreement with TSX-V-listed Castle Peak Mining on its Akorade project, in Ghana, delivering C$1.15-million upfront to acquire a 1% NSR royalty on Akorade, excluding the Bonsaso licence. The company had a ROFR on any future stream or royalty financing related to Akorade.

The Akorade project consisted of nine concessions in the Ashanti gold belt covering about 225 km2 near the regional mining centre of Tarkwa. A main road ran through the property and Castle Peak had access to grid power from all concessions.

Castle Peak recently published an inferred mineral resource based on a single shoot on the Apankrah structure and planned to continue exploration along this structure and on parallel structures to increase the resource.

Recent drill result highlights included intersections of 4 m of 22.8 g/t gold and 7 m of 7 g/t gold. Initial metallurgical testwork on assay samples had resulted in greater than 97% recovery using gravity and carbon-in-leach processes with 85% recovery in a gravity concentrate. Castle Peak would use the resource estimation and metallurgical testing as a basis for a preliminary economic assessment.

Meanwhile, Sandstorm had also acquired eight royalties on early-stage projects in Nevada, in the US, in a transaction with TSX-V-listed Tarsis Resources. The company also gained a ROFR on any future stream or royalty agreements related to the Nevada properties.

The royalties comprised Carlin-style gold deposits Bellview, in White Pine County; Hot Pot, in Lander County; Horsethief, in Lincoln County; Kobeh, in Eureka County; East Walker, a high-sulphidation epithermal gold deposit in Lyon County; Fri Gold, a gold-bearing porphyry/epithermal system in Nye County; Ashby, a mesothermal gold deposit in Mineral County; and Columbia, comprising quartz veins with gold and arsenopyrite in Humboldt County.

Sandstorm’s TSX-listed stock on Wednesday fell 7.5% on the back of its announcement to change hands at C$4.82 a share.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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