Sandstorm Gold

Last updated
Sandstorm Gold Ltd.
Public
Traded as TSX:  SSL
NYSE:  SAND
IndustryMining
Headquarters,
Canada
Key people
Nolan Watson (CEO, 2008-current)
ServicesFinancial
Subsidiaries Mariana Resources Ltd (Guernsey)
Website www.sandstormgold.com

Sandstorm Gold Ltd. (formerly Sandstorm Resources) is a Canadian company that provides funding to mining companies in exchange for royalties, principally in the form of net smelter returns and streams. The company focuses on precious metals but did spin off Sandstorm Metals & Energy Ltd. in 2010 as a separate TSX Venture Exchange-listed company to make volumetric production payment transactions in the base metal and fossil fuel sectors, then bought it back in 2014. Sandstorm Gold graduated from the TSX Venture Exchange to the Toronto Stock Exchange and began listing shares on the New York Stock Exchange in 2012.

Contents

Business model

Like Franco-Nevada, Wheaton Precious Metals and Osisko Gold Royalties, Sandstorm Gold makes financial investments in the mining industry in exchange for volumetric production payments or royalties in the forms of net smelter returns and precious metals streaming contracts. [1] [2] These contracts are made with companies involved in mineral exploration or mine development; as an alternative to debt financing or issuing additional shares, the mining company seeking capital funding may agree to a contract with the royalty company to pay a percentage of its future income or products from the mine. [3] [4] For example, in Q1 2017 Sandstorm acquired 22 new net smelter return royalties for US$1.9 million. The Company completed transactions with multiple junior mining companies including Kivalliq Energy, Evrim Resources, Tower Resources, Copper Fox Metals, Millrock Resources and Condor Resources. [5]

Corporate history

The company was incorporated as Sandstorm Resources Ltd on March 23, 2007, headquartered in Vancouver, British Columbia. Nolan Watson had been the chief financial officer of Wheaton Precious Metals which had pioneered the use of volumetric production payments in the gold mining industry and, along with co-worker David Awram, sought to spin off that business model into a separate company. [6] [7] [8] During its initial public offering it raised CAD$200,000 in August 2007 with the shares being listed on the TSX Venture Exchange at 20 cents per share. It raised over CAD$100 million in further public offerings throughout 2009-10. The company used the funds raised from the public stock offerings to negotiate the terms of the streaming contracts. In 2010, the company spun off Sandstorm Metals & Energy Ltd. to hold its base metal and fossil fuel contracts, at the time it had interests in a copper mine and a natural gas project. [9] Sandstorm Metals existed as a separate TSX Venture Exchange-listed company, with Watson as CEO, until it was bought back by Sandstorm in 2014 after its first few investments, in coal and natural gas, proved unprofitable. In the meantime, Sandstorm Resources changed its name to Sandstorm Gold in February 2011. [10] In 2012, after a 5:1 share consolidation, its shares graduated to the Toronto Stock Exchange where it raised a further CAD$150 million at $10 per share and became listed on New York Stock Exchange. In 2013, Sandstorm Gold acquired Premier Royalty, which was the royalty-only spin off company of Premier Gold, and in 2014 it acquired a Diavik Diamond stream from Iamgold. [11] Further acquisitions included Mariana Resources Ltd for their 30% interest in the Hot Maden gold-copper project in Artvin, Turkey. [12] [13]

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References

  1. "What Does Volumetric Production Payment - VPP Mean?". investopedia.com. April 2008.
  2. "Commodity Flow-Nolan Watson is streaming a lot of business for two companies named Sandstorm". Financial Post Magazine. September 13, 2011.
  3. Pape, Gordon (August 9, 2016). "A stock worth its weight in gold". The Globe and Mail . p. B10.
  4. "Canada's top-10 royalty and streaming companies". Northern Miner. July 12, 2019. Retrieved May 3, 2020.
  5. "Sandstorm Gold Acquires 22 Royalties During Q1 2017". www.juniorminingnetwork.com. Retrieved 2017-03-24.
  6. Martin, Tony (May 28, 2011). "Me and my Money". The Globe and Mail. p. B13.
  7. "Sandstorm Resources and the Gold Royalty Model". The Midas Letter. June 2009. Archived from the original on 2010-03-30.
  8. "The Silver Wheaton Success Story". The Northern Miner. February 1–7, 2010.
  9. Kwantes, James (August 27, 2014). "Watson grows a golden stream at Sandstorm". Vancouver Sun . p. C3.
  10. Sandstorm Gold Ltd. (February 17, 2011). "Sandstorm Resources Announces Name Change to Sandstorm Gold" (Press release). Marketwired.
  11. "Iamgold sells Diavik royalty stream". Edmonton Journal . March 24, 2015. p. C8.
  12. Bochove, Danielle (July 7, 2017). "Streaming deal misunderstood, Sandstorm says". National Post. p. FP5.
  13. "Sandstorm Gold and Mariana Resources Announce Combination to Create Leading Mid-Tier Streaming Company". www.juniorminingnetwork.com. Retrieved 2017-04-26.