VANCOUVER, BC, May 8, 2023
/CNW/ - Sandstorm Gold Ltd. ("Sandstorm Gold Royalties",
"Sandstorm" or the "Company") (NYSE: SAND) (TSX: SSL) is pleased to
provide updates on certain development assets including SSR
Mining's acquisition of an operating interest in the Hod Maden
gold-copper project.
SSR MINING TO ACQUIRE OPERATING
INTEREST IN HOD MADEN
SSR Mining Inc. ("SSR Mining"), a leading diversified gold
company, has reached an agreement with Lidya Madencilik ("Lidya"),
to acquire up to a 40% interest in the Hod Maden gold-copper
project in Türkiye ("Hod Maden"), and assume operational control of
the asset upon closing of the transaction. SSR Mining will pay cash
consideration of US$270 million (the
"Transaction") as follows:
- US$120 million in cash paid on
closing for a 10% interest in Hod Maden;
- US$150 million in earn-in
structured cash milestone payments, linked to construction and
commercial production milestones at Hod Maden, to acquire an
additional 30% interest in the project.
In addition, SSR Mining will pay US$84
million to Lidya in the form of a contingent Mineral Reserve
and Resource payment upon discovery of an additional 500,000 ounces
of gold equivalent Reserves1 at Hod Maden beyond those
currently identified as Mineral Reserves and Mineral Resources.
Assuming the terms of the earn-in milestone payments of the
Transaction are fulfilled, SSR Mining will hold a 40% operating
interest in Hod Maden, with the remaining passive ownership held by
Lidya (30%) and Horizon Copper Corp. ("Horizon Copper") (30%).
Sandstorm maintains a 2.0% net smelter returns ("NSR") royalty on
100% of Hod Maden and a gold stream on Horizon Copper's interest
that entitles the Company to purchase 20% of the gold produced at
Hod Maden on a 100% basis2.
"We are very pleased to welcome a seasoned operator like SSR
Mining to the development team at Hod Maden," said Nolan Watson, Sandstorm's President & CEO.
"We believe the addition of SSR Mining will complement the work
that Lidya has undertaken over the last several years, working
meticulously to de-risk Hod Maden through permitting and securing
regulatory approvals. SSR Mining has a
successful, long-standing partnership with Lidya at
the Çöpler mine in Türkiye. Çöpler has been in production
since 2010 and SSR Mining continues to daylight exploration upside
at the asset and extend its mine life. We are excited to see this
proven partnership add similar value to Hod Maden."
For more information regarding the details of the Transaction,
please see SSR Mining's press release dated May 8, 2023 available on their website at
www.ssrmining.com.
About SSR Mining
SSR Mining is a leading diversified mining operator with
producing assets in the USA,
Türkiye, Canada, and Argentina. The company's portfolio has
produced, on average, over 700,000 gold equivalent ounces annually
over the last three years. With expertise across various mining and
processing skillsets, including open pit and underground
operations, SSR has a track record of creating value through
discovery, project development, and operations. The company is free
cash flow-focused and, as at March 31,
2023, has a robust balance sheet with a cash and cash
equivalent balance of US$561.8
million.
Development and Production
Outlook
Upon the closing of the Transaction, SSR Mining will continue
early-works construction activities at Hod Maden with its
development team mobilizing to site immediately. Early works
activities for 2023 are to focus on site access and earthworks at
an expected cost of approximately US$30
million (on a 100% basis). SSR Mining will assume the
project finance process that is currently underway. SSR Mining
expects to advance Hod Maden to a full construction decision in
2024 following a process to maximize project readiness and
synergies. SSR Mining anticipates commercial production to
commence in 2027.
Reflecting the indicative development schedule provided by SSR
Mining, Sandstorm's annual portfolio production is expected to
reach approximately 125,000–130,000 gold equivalent ounces
within the next five years, with sustainable average annual
production of approximately 110,000 gold equivalent ounces over the
next 15 years.
IVANHOE MINES LOOKS TO OPTIMIZE
PLATREEF PHASE 2 EXPANSION
Ivanhoe Mines Ltd. ("Ivanhoe") provided an update on the
Platreef development project in South
Africa. Surface construction activities are underway, while
lateral underground mine development is progressing well.
Construction for Platreef's Phase 1 concentrator has commenced,
with the first production on schedule for Q3 2024. Construction of
Platreef's first solar-power plant commenced in Q3 2022 with
commissioning expected in 2023. The solar-generated power from the
plant, which is expected to have a rated capacity of 5 megawatts,
will be used for mine development and construction activities.
Ivanhoe has initiated optimization work to identify
value-accretive options for installing hoisting capacity in Shaft
3. Shaft 3, which is currently under construction and was
originally planned as a ventilation-only shaft, is now planned to
be equipped for hoisting providing an alternative option to remove
ore and waste from the underground mine. Ivanhoe expects this to
de-risk the development and ramp-up of the Phase 1 mine and may be
used to accelerate the ramp-up of underground mining activities for
Phase 2, in advance of the completion of Shaft 2, which is expected
in 2027.
For more information, visit the Ivanhoe Mines website at
www.ivanhoemines.com and see the press release dated March 13, 2023.
Sandstorm holds a gold stream on the Platreef project whereby
Sandstorm is entitled to purchase 37.5% of payable gold produced
from Platreef until 131,250 gold ounces have been delivered, then
30% of payable gold produced until an aggregate of 256,980 ounces
are delivered, then 1.875% thereafter. Sandstorm will make ongoing
cash payments of US$100 per ounce of
gold until 256,980 ounces have been delivered, and then 80% of the
spot price of gold for each ounce delivered thereafter.
GREENSTONE PROJECT ON TRACK FOR GOLD
PRODUCTION IN FIRST HALF 2024
Equinox Gold Corp. ("Equinox") reports that construction at the
Greenstone project is approximately 73% complete and remains on
track to pour gold in the first half of 2024. At the end of Q1
2023, 83% of the total construction budget had been contracted and
65% of the total construction budget had been spent. All buildings
have been enclosed and construction is focused on mechanical,
piping, and electrical installations. Other completed construction
items include the Ministry of Transportation Patrol Yard, the
Goldfield Creek diversion, and the permanent effluent water
treatment plant. Equinox reported that the 14-kilometre natural gas
pipeline is complete and ready for commissioning in the second
quarter of 2023. Mining commenced ahead of schedule in the third
quarter of 2022 and is operating 24/7.
In March, Equinox announced up to $200
million in gold prepay and gold purchase and sale
agreements, which provides the company additional cash liquidity as
it continues to fund its 60% interest for construction of the
Greenstone project.
For more information, see Equinox's 2023 First Quart Report
published May 2, 2023, and the press
release dated May 2, 2023, both of
which are available on the company's website at
www.equinoxgold.com.
Sandstorm holds a gold stream on the Greenstone project pursuant
to an agreement with an affiliate of Orion Mine Finance, who holds
a 40% interest in the Greenstone project in a joint venture with
Equinox (holding the remaining 60%). Under the terms of the gold
stream, Sandstorm is entitled to purchase 2.375% of the gold
produced at the project (on a 100% basis) until 120,333 ounces are
delivered, then 1.583% of gold produced (on a 100% basis).
Sandstorm will make ongoing payments equal to 20% of the spot price
of gold per ounce plus an additional payment of up to $30 per ounce in ESG contributions.
Notes
|
1.
|
Contingent payment
relates to discovery of 500,000 gold equivalent ounces of new
Resources at Hod Maden, which are subsequently upgraded to either
Proven or Probable Reserves. Conversion of existing Measured,
Indicated, and Inferred Resources as at the date of the Transaction
does not count towards the 500,000 gold equivalent ounce
milestone.
|
2.
|
See Sandstorm's press
release dated February 17, 2022, for details regarding the Hod
Maden gold stream.
|
Contact Information
For more information about Sandstorm Gold Royalties, please
visit our website at www.sandstormgold.com or email us at
info@sandstormgold.com.
ABOUT SANDSTORM GOLD ROYALTIES
Sandstorm is a gold royalty company that provides upfront
financing to gold mining companies that are looking for capital and
in return, receives the right to a percentage of the gold produced
from a mine, for the life of the mine. Sandstorm holds a portfolio
of 250 royalties, of which 40 of the underlying mines are
producing. Sandstorm plans to grow and diversify its low cost
production profile through the acquisition of additional gold
royalties. For more information visit: www.sandstormgold.com.
CAUTIONARY STATEMENTS TO U.S. SECURITYHOLDERS
The financial information included or incorporated by reference
in this press release or the documents referenced herein has been
prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards
Board, which differs from US generally accepted accounting
principles ("US GAAP") in certain material respects, and thus are
not directly comparable to financial statements prepared in
accordance with US GAAP.
This press release and the documents incorporated by reference
herein, as applicable, have been prepared in accordance with
Canadian standards for the reporting of mineral resource and
mineral reserve estimates, which differ from the previous and
current standards of the United
States securities laws. In particular, and without limiting
the generality of the foregoing, the terms "mineral reserve",
"proven mineral reserve", "probable mineral reserve", "inferred
mineral resources,", "indicated mineral resources," "measured
mineral resources" and "mineral resources" used or referenced
herein and the documents incorporated by reference herein, as
applicable, are Canadian mineral disclosure terms as defined in
accordance with Canadian National Instrument 43-101 — Standards of
Disclosure for Mineral Projects ("NI 43-101") and the Canadian
Institute of Mining, Metallurgy and Petroleum (the "CIM") — CIM
Definition Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council, as amended (the "CIM Definition
Standards").
For United States reporting
purposes, the United States Securities and Exchange Commission (the
"SEC") has adopted amendments to its disclosure rules (the "SEC
Modernization Rules") to modernize the mining property disclosure
requirements for issuers whose securities are registered with the
SEC under the Exchange Act, which became effective February 25, 2019. The SEC Modernization Rules
more closely align the SEC's disclosure requirements and policies
for mining properties with current industry and global regulatory
practices and standards, including NI 43-101, and replace the
historical property disclosure requirements for mining registrants
that were included in SEC Industry Guide 7. Issuers were required
to comply with the SEC Modernization Rules in their first fiscal
year beginning on or after January 1,
2021. As a foreign private issuer that is eligible to file
reports with the SEC pursuant to the multi-jurisdictional
disclosure system, the Corporation is not required to provide
disclosure on its mineral properties under the SEC Modernization
Rules and will continue to provide disclosure under NI 43-101 and
the CIM Definition Standards. Accordingly, mineral reserve and
mineral resource information contained or incorporated by reference
herein may not be comparable to similar information disclosed by
United States companies subject to
the United States federal
securities laws and the rules and regulations thereunder.
As a result of the adoption of the SEC Modernization Rules, the
SEC now recognizes estimates of "measured mineral resources",
"indicated mineral resources" and "inferred mineral resources." In
addition, the SEC has amended its definitions of "proven mineral
reserves" and "probable mineral reserves" to be "substantially
similar" to the corresponding CIM Definition Standards that are
required under NI 43-101. While the SEC will now recognize
"measured mineral resources", "indicated mineral resources" and
"inferred mineral resources", U.S. investors should not assume that
all or any part of the mineralization in these categories will be
converted into a higher category of mineral resources or into
mineral reserves without further work and analysis. Mineralization
described using these terms has a greater amount of uncertainty as
to its existence and feasibility than mineralization that has been
characterized as reserves. Accordingly, U.S. investors are
cautioned not to assume that all or any measured mineral resources,
indicated mineral resources, or inferred mineral resources that the
Company reports are or will be economically or legally mineable
without further work and analysis. Further, "inferred mineral
resources" have a greater amount of uncertainty and as to whether
they can be mined legally or economically. Therefore, U.S.
investors are also cautioned not to assume that all or any part of
inferred mineral resources will be upgraded to a higher category
without further work and analysis. Under Canadian securities laws,
estimates of "inferred mineral resources" may not form the basis of
feasibility or pre-feasibility studies, except in rare cases. While
the above terms are "substantially similar" to CIM Definitions,
there are differences in the definitions under the SEC
Modernization Rules and the CIM Definition Standards. Accordingly,
there is no assurance any mineral reserves or mineral resources
that the Company may report as "proven mineral reserves", "probable
mineral reserves", "measured mineral resources", "indicated mineral
resources" and "inferred mineral resources" under NI 43-101 would
be the same had the Company prepared the reserve or resource
estimates under the standards adopted under the SEC Modernization
Rules or under the prior standards of SEC Industry Guide 7.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This press release contains "forward-looking statements", within
the meaning of the U.S. Securities Act of 1933, the U.S. Securities
Exchange Act of 1934, the Private Securities Litigation Reform Act
of 1995 and "forward-looking information" within the meaning of
applicable Canadian securities legislation, concerning the
business, operations and financial performance and condition of
Sandstorm Gold Royalties. Forward-looking statements include, but
are not limited to the expectation that SSR Mining will complete
the proposed Transaction with Lidya; the terms of the proposed
Transaction between SSR Mining and Lidya including whether the
Transaction will be completed as contemplated; expectations related
to development timelines for Hod Maden including the timing of
construction and commercial production; expected capital costs
associated with Hod Maden; the benefits of the proposed Transaction
and whether Hod Maden will benefit from the partnership between SSR
Mining and Lidya; Sandstorm's ability to achieve portfolio
production of approximately 125,000–130,000 gold equivalent
ounces within the next five years, with sustainable average annual
production of approximately 110,000 ounces over the next 15 years;
the future price of gold, silver, copper, iron ore and other
metals, the estimation of mineral reserves and resources,
realization of mineral reserve estimates, the timing and amount of
estimated future production. Forward-looking statements can
generally be identified by the use of forward-looking terminology
such as "may", "will", "expect", "intend", "estimate",
"anticipate", "believe", "continue", "plans", or similar
terminology.
Forward-looking statements are made based upon certain
assumptions and other important factors that, if untrue, could
cause the actual results, performances or achievements of Sandstorm
Gold Royalties to be materially different from future results,
performances or achievements expressed or implied by such
statements. Such statements and information are based on numerous
assumptions regarding present and future business strategies and
the environment in which Sandstorm Gold Royalties will operate in
the future, including the receipt of all required approvals, the
price of gold and copper and anticipated costs. Certain important
factors that could cause actual results, performances or
achievements to differ materially from those in the forward-looking
statements include, amongst others, failure to receive necessary
approvals, changes in business plans and strategies, market
conditions, share price, best use of available cash, gold and other
commodity price volatility, discrepancies between actual and
estimated production, mineral reserves and resources and
metallurgical recoveries, mining operational and development risks
relating to the parties which produce the gold or other commodity
the Company will purchase, regulatory restrictions, activities by
governmental authorities (including changes in taxation), currency
fluctuations, the global economic climate, dilution, share price
volatility and competition.
Forward-looking statements are subject to known and unknown
risks, uncertainties and other important factors that may cause the
actual results, level of activity, performance or achievements of
the Company to be materially different from those expressed or
implied by such forward-looking statements, including but not
limited to: the impact of general business and economic conditions,
the absence of control over mining operations from which the
Company will purchase gold, other commodities or receive royalties
from, and risks related to those mining operations, including risks
related to international operations, government and environmental
regulation, actual results of current exploration activities,
conclusions of economic evaluations and changes in project
parameters as plans continue to be refined, risks in the
marketability of minerals, fluctuations in the price of gold and
other commodities, fluctuation in foreign exchange rates and
interest rates, stock market volatility, as well as those factors
discussed in the section entitled "Risks to Sandstorm" in the
Company's annual report for the financial year ended December 31, 2022 and the section entitled "Risk
Factors" contained in the Company's annual information form dated
March 23, 2023 available at
www.sedar.com. Although the Company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking statements,
there may be other factors that cause results not to be as
anticipated, estimated or intended. There can be no assurance that
such statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. The Company does not
undertake to update any forward-looking statements that are
contained or incorporated by reference, except in accordance with
applicable securities laws.
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SOURCE Sandstorm Gold Ltd.