Sandstorm Gold Ltd. (“Sandstorm” or the “Company”) (NYSEAMERICAN: SAND, TSX: SSL) has entered into an agreement to sell US$18.2 million in debt and equity securities of Trek Mining Inc. (“Trek Mining”) to Ross Beaty (the “Sale Agreement”) conditional upon the closing of the announced business combination between Trek Mining, NewCastle Gold Ltd. (“NewCastle”) and Anfield Gold Corp. (“Anfield”) (the “Combination”). The combined entity intends to operate under the name Equinox Gold Corp. (“Equinox Gold”) and will be led by Ross Beaty as Chairman and Christian Milau as CEO.

Sandstorm Agrees to Sell Trek Mining Securities

As part of the Combination between Trek Mining, NewCastle and Anfield, Sandstorm has agreed to sell US$15.0 million of Trek Mining convertible debentures and US$3.2 million of Trek Mining shares, at a price of C$1.02 per share, to Ross Beaty. The Sale Agreement is subject to the closing of the proposed Combination.

Sandstorm President and CEO, Nolan Watson commented, “The announced combination between Trek Mining, NewCastle and Anfield is an encouraging development for Sandstorm shareholders. Sandstorm has royalties on properties that will be part of the Equinox Gold entity, and the combined company will be well financed to advance its assets into production. In addition, the monetization of a significant portion of our Trek Mining securities is consistent with our stated plan to sell non-core assets and use the capital raised to continue growing our royalty portfolio.”

Sandstorm’s royalty interests on projects owned by the combined company will include:
•a 3.0% - 5.0% sliding scale net smelter returns (“NSR”) royalty on the Aurizona project. At gold prices less than or equal to US$1,500 per ounce, the royalty is a 3% NSR.
•a 2.0% NSR royalty on the Aurizona Greenfields property, an approximately 180,000 hectare package of exploration ground adjacent to the Aurizona project. Trek Mining announced an exploration agreement with AngloGold Ashanti Holdings plc (“AngloGold”), whereby AngloGold may invest US$14 million in exploration to earn a 70% interest in the Aurizona Greenfields.
•an agreement to purchase 3.3% of the gold produced from the Koricancha toll mill facility in Peru, at a price of US$100 per ounce.

Equinox Gold Highlights

Equinox Gold will own two past-producing gold mines, Aurizona in Brazil and Castle Mountain in California. A July 2017 feasibility study for Aurizona outlined the design of an open-pit gold mine producing approximately 136,000 ounces of gold per year on average, with an initial 6.5-year mine life and significant exploration upside. Initial capital to fund construction and commissioning is estimated at US$130.8 million with all-in-sustaining costs estimated at US$754 per ounce.1 Early works construction has commenced at Aurizona with first gold pour planned for year-end 2018. On closing of the Combination, Equinox Gold is expected to have sufficient resources to fully fund the construction of Aurizona.

In addition to its flagship gold projects, Equinox Gold will hold a majority interest in an operating gold processing facility in Peru, and 100% of a feasibility-stage gold project in Brazil, and a high-grade past-producing gold project in Canada. Equinox Gold will also hold 100% of two highly prospective porphyry copper exploration projects in Ecuador and Chile and 60% of a porphyry copper project in Mexico.

The Combination is expected to be structured as a plan of arrangement under the Business Corporations Act (British Columbia) and, in addition to other customary closing conditions, is subject to TSX-V and other regulatory and court approvals or orders. The Combination will need to be approved by (i) two-thirds of the votes cast by NewCastle and Anfield shareholders at their respective shareholder meetings and (ii) if required, a simple majority of the votes cast by NewCastle and Anfield shareholders at their respective shareholder meetings, excluding the votes held by persons as required by Multilateral Instrument 61-101. There is no regulatory requirement for a meeting of Trek Mining shareholders. The special meetings of NewCastle and Anfield are expected to be held in December 2017. For more information about the Combination see the press release issued October 25, 2017 and titled, “Trek Mining, NewCastle Gold and Anfield Gold Announce Business Combination to Create Equinox Gold, a Leading Multi-Asset Gold Company” available on www.sedar.com under the Trek Mining, NewCastle and Anfield SEDAR profiles.

Note

1. Based on the “Feasibility Study on the Aurizona Gold Mine Project” prepared by Lycopodium Minerals Canada Ltd. with an effective date of July 10, 2017, which is available for download on SEDAR at www.sedar.com.