Sandstorm Gold Ltd. (“Sandstorm”) (NYSE MKT: SAND, TSX: SSL) and Mariana Resources Ltd. (“Mariana”) (TSX.V: MARL, AIM: MARL) are pleased to announce that the board of directors of Sandstorm and the independent directors of Mariana have reached an agreement on the terms of a recommended share and cash acquisition by which the entire issued ordinary share capital of Mariana (that Sandstorm does not already own) will be acquired by Sandstorm by means of a Court-sanctioned scheme of arrangement under Part VIII of the Companies (Guernsey) Law (the “Combination”).

Highlights of the Combination
•The Combination is expected to create a leading mid-tier stream and royalty company (the “Combined Group”), delivering significant benefits to shareholders of Mariana and Sandstorm. The Combined Group will have: ?A diversified portfolio of 155 streams and royalties including 20 producing, 23 development-stage, 26 advanced exploration-stage and 86 exploration-stage assets (the “Stream and Royalty Portfolio”). Of the projects that make up the Stream and Royalty Portfolio, 63% are located in North America, 19% in South America, 12% in Asia, 3% in Africa and 3% in Australia.
?A 30% incorporated joint venture interest (“JV”) in the high-grade, gold-copper, development-stage Hot Maden project in northeast Turkey (“Hot Maden”). Sandstorm intends to move from the current position of equity participation in the JV to converting the Combined Group’s interest into a gold stream, providing the potential to more than double attributable gold equivalent production once in full operation. At present the Combined Group has not begun soliciting interest in a conversion transaction and intends to conduct such solicitation in the future after Hot Maden has undergone several de-risking and value creating milestones. ?Hot Maden is expected to be a straightforward, low capital cost project with estimated initial construction capital requirements of US$169 million (US$51 million attributed to the 30% JV interest). The high-grade nature of the orebody and its wide mineralized zones provide the potential for a low cost mining operation, with estimated all-in sustaining costs of less than US$400 per ounce gold-equivalent, which if achieved would lead to significant cash flow generation from the project.
?Hot Maden will continue to be managed by Turkish company Lidya Madencilik Sanayi ve Ticaret A.S. (“Lidya”), the 70% JV partner at Hot Maden. Lidya is an experienced Turkish company and is part of Çal?k Holding, a Turkish conglomerate with several business lines including energy, telecommunication, finance, construction, textiles and mining. Lidya is currently partnered with Alacer Gold Corp. on the producing Çöpler mine and the development-stage Gediktepe and Kartaltepe projects in Turkey.

?An interest in the remaining exploration properties of Mariana with a focus on gold, silver and associated metals in Côte d’Ivoire, Turkey, and Argentina (the “Exploration Properties”). Following completion of the Combination, Sandstorm intends to spin-out the Exploration Properties into a separate company (the “SpinCo”), with the Combined Group retaining royalty interests over the Exploration Properties and equity in the SpinCo.

•Following the Combination, the Combined Group will maintain a strong balance sheet with significant available liquidity from its US$110 million revolving credit facility and strong cash flow from operations to fund Sandstorm’s ongoing strategy of future stream and royalty acquisitions. The Combined Group will also have a portfolio of equity and debt investments in other mining companies which is intended to be monetized to support the Combined Group’s ongoing acquisition strategy in due course.
•Cash currently remaining in the Mariana Group of approximately US$5 million as at April 25, 2017, being the last Business Day before the date of this Announcement, which is expected to be sufficient to fund Mariana’s ongoing pro rata share of development programmes and cash calls for the Hot Maden JV until January 2018 as well as furthering exploration as prioritised in Mariana’s area of focus.
•Superior market liquidity for Mariana Shareholders. Over the last 15 months, the daily dollar trading volume of Sandstorm has averaged approximately US$10 million between the NYSE MKT and TSX.
•Experienced management team which has completed more than US$2 billion in stream and royalty transactions. On completion of the Combination, Nolan Watson will be President and Chief Executive Officer of the Combined Group and Glen Parsons will continue to manage the Exploration Properties furthering the advancement up the development curve.

Commenting on today's announcement, Nolan Watson, President and Chief Executive Officer of Sandstorm said:

"We believe that, by combining Mariana and Sandstorm and converting the Hot Maden JV interest into a gold stream, we can unlock the inherent value of Hot Maden and deliver the optimal outcome for shareholders without incurring further equity dilution to finance the interest in Hot Maden. We believe that Hot Maden is a unique asset with a robust cash flow profile and will be an anchor gold stream asset that has the potential to more than double Sandstorm’s attributable gold equivalent production once in full operation. We are confident in Lidya as the operating partner at Hot Maden and we look forward to watching the project advance towards production and the mineralization expand through continued exploration.

The Combination is expected to transform the Combined Group into a leading mid-tier streaming and royalty company and our focus will be growth by acquisition with the primary objective being to add streams and royalties on quality projects with exploration upside, with the balance of Mariana’s exploration portfolio contributing to this. We believe that we are well positioned to continue to execute on our growth plans with significant available liquidity from our US$110 million revolving credit facility and a portfolio of equity and debt investments in other mining companies that we plan to monetize.”

Commenting on today’s announcement, John Horsburgh, Non-Executive Chairman of Mariana said:

"The independent directors recommend that Mariana Shareholders approve this Combination. The Combination with a company such as Sandstorm not only de-risks Mariana’s exposure as a single development/production asset company but provides a stronger diverse platform and ability to finance the development of the 30% owned high grade gold-copper discovery at Hot Maden in Turkey. The terms of the Combination represent a significant and attractive premium to the market price of Mariana Shares. The Consideration includes a cash consideration amount and a new Sandstorm share consideration amount component that provides an opportunity for Mariana Shareholders to participate in the upside of Hot Maden, as it advances to production, as well as exposure to the existing Mariana Exploration Properties and the Combined Group’s streaming and royalty portfolio. The independent directors have also taken into account the high liquidity of Sandstorm Shares in arriving at this recommendation.”

Terms of the Combination

Under the terms of the Combination, Mariana shareholders will receive 28.75 pence in cash and 0.2573 of a Sandstorm share for each one Mariana share held. The Combination values Mariana at approximately 110 pence per Mariana share based on the closing price of US$4.04 per Sandstorm Share on the NYSE MKT and a currency exchange rate of £0.7788 per USD, on April 25, 2017.

The terms of the Combination represent a premium of approximately 84% to the closing price of 59.50 pence per Mariana share on April 25, 2017 and a premium of approximately 88% to the 20-day VWAP per Mariana share.

If successful, the Combination will result in Mariana shareholders, together, owning approximately 19.0% of the ordinary share capital of the Combined Group.

Sandstorm holds 8,980,243 Mariana shares, representing approximately 7.0% of the issued ordinary share capital of Mariana, and Mariana warrants over a further 4,490,122 Mariana shares.

Voting Support and Board Approval

The Mariana independent directors have unanimously approved the Combination and intend to recommend that Mariana shareholders vote in favour of the Combination as they have irrevocably undertaken to vote in favour of the Scheme at the Guernsey Court Meeting and the resolutions to be proposed at the General Meeting in respect of, in aggregate, 905,050 Mariana Shares representing approximately 0.71% of the issued ordinary share capital of Mariana on April 25, 2017.

In addition to the irrevocable undertakings from the Mariana independent directors, Sandstorm has also received irrevocable undertakings from each of Australian Investors Pty Ltd and AngloGold Ashanti Holdings Plc to vote in favour of the Scheme at the Guernsey Court Meeting and the resolutions to be proposed at the General Meeting in respect of, in aggregate, 8,718,089 Mariana Shares, representing approximately 6.80% of Mariana's issued ordinary share capital on April 25, 2017.

Sandstorm has therefore received irrevocable undertakings to vote in favour of the Scheme at the Guernsey Court Meeting and the resolutions to be proposed at the General Meeting in respect of, in aggregate, 9,623,139 Mariana Shares representing, in aggregate, approximately 7.51%. of the issued ordinary share capital of Mariana on April 25, 2017.

Glen Parsons and Eric Roth have irrevocably undertaken to vote in favour of those resolutions to be proposed at the General Meeting on which they are entitled to vote in respect of, in aggregate, 986,621 Mariana Shares representing approximately 0.77% of the issued ordinary share capital of Mariana on April 25, 2017.

The issuance of the Sandstorm shares, including those issuable on exercise of any Mariana warrants and the Mariana options on a post-closing basis, is subject to approval by the Toronto Stock Exchange and the NYSE MKT.

About Mariana Resources

Mariana is an exploration and development company with an extensive portfolio of gold, silver, and copper projects in Turkey, South America, and Côte d’Ivoire. Mariana's most advanced asset is the Hot Maden gold-copper project in northeast Turkey, which is a joint venture with Turkish partner Lidya (30% Mariana and 70% Lidya). The JV holds 1 operating licence and 3 exploration licences comprising a total land area of 73.9 km2. On January 17, 2017, Mariana released the results of a technical report entitled “National Instrument 43-101 Technical Report Preliminary Economic Assessment Hot Maden Gold Copper Project Artvin Province, Turkey” with an effective date of March 1, 2017 (the “Hot Maden PEA”) which demonstrated robust estimated economics (after-tax NPV and IRR of US$1.37 billion and 153%, respectively) based on a development scenario incorporating an underground mining operation and processing facility for the production of two concentrates (a copper-gold concentrate and a gold-pyrite concentrate). Note that the Hot Maden PEA is preliminary in nature as it includes Indicated and Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability, and as such there is no certainty that the preliminary assessment and economics will be realized. The Hot Maden PEA was based on the June 2016 mineral resource estimate completed by RPM, which calculated resources (100% basis) by category of:
•Indicated (Main Zone): 7.1 million tonnes (“Mt”) grading 12.2 g/t gold and 2.3% copper for contained metal of 2.79 Moz of gold and 166 thousand tonnes (“kt”) of copper (3.43 Moz of gold equivalent)
•Inferred (Main Zone): 0.7 Mt grading 2.7 g/t gold and 0.9% copper for contained metal of 0.06 Moz of gold and 7 kt of copper (0.09 Moz of gold equivalent)
•Inferred (Southern Zone): 1.3 Mt grading 7.2 g/t gold and 0.7% copper for contained metal of 0.31 Moz of gold and 10 kt of copper (0.35 Moz gold equivalent)

Hot Maden Resource Estimate

Hot Maden Main Deposit (2 g/t AuEq Cut-Off)

Indicated Mineral Resource
Tonnes Au (g/t) Cu (%) Zn (%) AuEq (g/t) Au Ounces Cu Tonnes AuEq Ounces
Main Zone LG 463,000 1.1 1.1 0.3 2.4 17,000 5,000 36,000
Main Zone HG 4,501,000 3.9 1.9 0.2 6.3 570,000 87,000 908,000
Main Zone UHG 2,086,000 32.7 3.5 0.1 36.9 2,195,000 73,000 2,476,000
Mixed Gold-Zinc Zone 17,000 7.5 3.1 3.6 11.2 4,000 1,000 6,000
Peripheral Lodes 60,000 2.1 0.4 0.4 2.5 4,000 - 5,000
Total 7,127,000 12.2 2.3 0.2 15.0 2,790,000 166,000 3,431,000

Inferred Mineral Resource
Tonnes Au (g/t)Cu (%)Zn (%) AuEq (g/t) Au Ounces Cu Tonnes AuEq Ounces
Main Zone LG 395,000 1.7 0.9 0.03 2.8 21,000 4,000 35,000
Main Zone HG 31,000 3.9 1.6 0.1 5.8 4,000 - 6,000
Main Zone UHG 6,000 39.1 2.1 0.01 41.6 7,000 - 8,000
Mixed Gold-Zinc Zone 4,000 1.7 0.4 2.4 2.2 - - -
Peripheral Lodes 282,000 3.2 0.9 0.1 4.3 29,000 2,000 38,000
Total 718,000 2.7 0.9 0.1 3.8 62,000 7,000 88,000

Hot Maden South Deposit (2 g/t AuEq Cut-Off)

Indicated Mineral Resource
Tonnes Au (g/t)Cu (%) Zn (%) AuEq (g/t)Au Ounces Cu Tonnes AuEq Ounces
South Zone LG 396,000 2.8 0.7 - 3.6 35,000 3,000 46,000
South Zone HG 583,000 5.3 0.7 - 6.1 98,000 4,000 114,000
South Zone UHG 224,000 22.2 1.0 - 23.4 160,000 2,000 169,000
Mixed Gold-Zinc Zone 44,000 9.0 1.0 3.2 10.2 13,000 - 15,000
Peripheral Lodes 104,000 1.9 0.3 - 2.2 6,000 - 7,000
Total 1,352,000 7.2 0.7 0.1 8.1 313,000 10,000 351,000

Notes:
1.*Au Equivalence (AuEq) was calculated using a 100 day moving average of US$1,215/ounce for Au and US$2.13/pound for Cu as of May 29, 2016. No adjustment has been made for metallurgical recovery or net smelter return as these remain uncertain at this time. Based on grades and contained metal for Au and Cu, it is assumed that both commodities have reasonable potential to be economically extractable. a.The formula used for Au equivalent grade is: AuEq g/t = Au + [(Cu% x 22.0462 x 2.13)/(1215/31.1035)] and assumes 100% metallurgical recovery.
b.Au equivalent ounces are calculated by multiplying Mineral Resource tonnage by Au equivalent grade and converting for ounces. The formula used for Au equivalent ounces is: AuEq Oz = [Tonnage x AuEq grade (g/t)]/31.1035.

2.Mineral Resource grades are estimated in accordance with the JORC Code.
3.Mineral Resources are reported on a dry in-situ basis.



Due to insider holdings in Mariana, the transaction may be considered to be a “related party transaction” under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Sandstorm intends to rely on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(a) of MI 61-101 because at the time the transaction was agreed to, neither the fair market value of the subject matter of, nor the fair market value consideration for the transaction, as it related to insiders, exceeded 25% of Sandstorm’s market capitalization.

Advisors and Legal Counsel

Sandstorm’s financial advisor is KPMG LLP. Norton Rose Fulbright LLP (England), Carey Olsen (Guernsey), Cassels Brock & Blackwell LLP (Canada), and Neal, Gerber & Eisenberg LLP (United States) are acting as legal counsel to Sandstorm.

Mariana’s financial advisors are RFC Ambrian Limited and Raymond James Ltd. Watson Farley & Williams LLP (England), Mourant Ozannes (Guernsey), and Gowling WLG LLP (Canada) are acting as legal counsel to Mariana.

Sandstorm Gold Today Vol. 935.000
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10:19:51 T 4.88 -0.56 200 39 Merrill Lynch 79 CIBC
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10:19:51 T 4.88 -0.56 200 79 CIBC 1 Anonymous W