Name of the Project
Hod Maden gold/copper project.

Location
In the Eastern Pontides metallogenic belt, in north-eastern Turkey.

Project Owner/s
Sandstorm Gold Royalties reported on February 21, 2022, that it would reposition the company as a pure-play streamlining and royalty company, with the disposal of its 30% interest in the Hod Maden copper/gold project.

The company will sell its interest in the project to TSX-V-listed Royalty North Partners (RNP) in a reverse takeover transaction, which will result in the launch of a mining company, Horizon Copper.

Under the terms of the letter of intent, Sandstorm will sell its 30% stake in Hod Maden to RNP, transfer its 25% stake in shares of Entrée Resources – which has a 20% interest in the Oyu Tolgoi project, in Mongolia – and contribute $10-million in cash.

In exchange, Sandstorm will receive a $200-million gold stream on the Hod Maden project and a 34% interest in the resulting issuer, Horizon Copper, and enter into a $95-million debenture with Horizon Copper.

Horizon Copper will be a strategic partner to Sandstorm that will enable both companies to collaborate on future acquisitions. In future, Sandstorm might buy streams on the precious metal by-products from the copper project acquisitions made by Horizon Copper.

Under the terms of the stream, Sandstorm will receive 20% of all gold produced from Hod Maden and will make ongoing payments of 50% of the gold spot price until 405 000 oz of gold is delivered. Once that threshold has been reached, Sandstorm will receive 12% of the gold produced for the life of the mine for ongoing payments of 60% of the gold spot price.

Sandstorm has stated that its attributable gold equivalent production will amount to 65 000 oz to 70 000 oz in 2022. Subject to the closing of the transaction, the company is forecasting more than 100 000 gold-equivalent ounces in 2025.

Project Description
The feasibility study on the Hod Maden project, released in November 2021, envisages an underground mine divided into two distinct mining zones, with a modified drift-and-fill technique applied to the upper mine area and a longhole stoping technique applied to the lower mine area.

The upper mine will be accessed through two shallow shafts located north and south of the mineralisation.

The mine will have a capacity of 800 000 t/y, with a total of 8.7-million tonnes of ore produced during the 13-year mine life. The ore to be processed is classified into regular and a pyrite ore with a flowsheet reconfiguration when processing pyrite ore to maximise gold recovery.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 5% discount rate, of $1.3-billion and an internal rate of return of 41%, with an after-tax payback of two-years from the start of production.

Capital Expenditure
Upfront capital expenditure is estimated at $309-million.

Planned Start/End Date
Production from Hod Maden is expected in the second half of 2024.

Latest Developments
With the release of the feasibility study, the Hod Maden project has moved into the next stage of development.

Key Contracts, Suppliers and Consultants
GR Engineering Services, AMC Consultants and Hacettepe Mineral Teknolojileri (feasibility study).

Contact Details for Project Information
Sandstorm Gold, tel +1 604 689 0234 or email info@sandstormgold.com.