Sandstorm Gold Ltd. (“Sandstorm Gold Royalties”, “Sandstorm” or the “Company”) (NYSE: SAND, TSX: SSL) is pleased to announce that the Company has entered into a US$60 million financing package (the “Transaction”) with Bear Creek Mining (“Bear Creek”) to facilitate Bear Creek’s acquisition of the producing Mercedes gold-silver mine in Mexico (“Mercedes” or the “Mine”) from Equinox Gold Corp (“Equinox”). The financing package includes a US$37.5 million gold stream (the “Stream”), together with a US$22.5 million convertible debenture. Bear Creek announced today that it has agreed to acquire 100% of Mercedes from Equinox. The Transaction is expected to close by March 31, 2022 and gold deliveries to Sandstorm will commence immediately thereafter.

ACQUISITION HIGHLIGHTS
Immediately Accretive to Cash Flow: Sandstorm expects gold deliveries of 5,400 ounces in 2022 and 7,200 ounces per annum in the first three years post-closing. Sandstorm expects the Mercedes Stream to be 13% accretive to 2022­–24 average cash flow per share1.
Gold Stream with Fixed Deliveries: Sandstorm will receive 25,200 ounces of gold over the initial 3.5 years and a 4.4% gold stream thereafter. This is expected to increase the Company’s attributable gold equivalent ounces2 by 8% in 2022 and 11% in 2023/2024.
Increased Production Guidance: Sandstorm has increased its 2022 production guidance to be between 65,000 and 70,000 gold equivalent ounces.
Exploration Upside: Mercedes has a strong track record of reserve replacement, complemented by an expansive regional land package, which remains relatively untested. The Stream covers all 69,285 hectares of mineral concessions at Mercedes, plus a five kilometre area of interest.
Fully-Financed Transaction: The Transaction will be funded via a combination of cash reserves and Sandstorm’s $350 million ESG-linked revolving credit facility.
STREAM TERMS
In exchange for US$37.5 million, Sandstorm will receive 25,200 ounces of gold over 3.5 years (the “Fixed Deliveries”), followed by 4.4% of the gold production (the “Variable Stream”) from Mercedes for the remainder of the life-of-mine.

The Fixed Deliveries will begin on the earlier of the closing date or April 2022 and be delivered over a period of 3.5 years (the “Fixed Delivery Period”). During the Fixed Delivery Period, Sandstorm will pay Bear Creek 7.5% of the spot price of gold (the “Fixed Deliveries Ongoing Payment”) for each ounce of gold delivered by Bear Creek. Beginning 42 months after the commencement of the Fixed Delivery Period, the Variable Stream will begin, and Sandstorm will pay Bear Creek 25% of the spot price of gold (the “Variable Stream Ongoing Payment”) for each ounce of gold delivered by Bear Creek.

The payment of US$37.5 million will occur upon closing of the Transaction.

CONVERTIBLE DEBENTURE TERMS
The US$22.5 million convertible debenture bears an interest rate of 6% per annum and has a term of 3 years (the “Debenture”). Sandstorm has the right to convert the principal amount of the Debenture into common shares of Bear Creek, at any time prior to the maturity date, at a 35% premium, or as approved by the TSX-V, to Bear Creek’s share price on closing of the Transaction.

ABOUT MERCEDES MINE
The Mercedes gold-silver mine is located in the state of Sonora in northern Mexico, approximately 250 kilometres northeast of Hermosillo. The Mercedes district has been the focus of mining activities dating back to the 1880s. Commercial production commenced at the Mercedes in 2011 and the mine has produced over 800,000 ounces of gold.

Proven and Probable Reserves as at December 2020 totaled 2.6 million tonnes (“Mt”) grading 3.9 grams per tonne (“g/t”) gold and 29.2 g/t silver, containing 325,000 ounces of gold and 2.45 million ounces of silver (2.1 g/t gold cut-off, except Diluvio at 2.0 g/t gold cut-off).

Mercedes has a strong track record of reserve replacement, with year-end 2020 reserves declining just 8,000 ounces versus year-end 2015 despite cumulative production of 356,000 ounces of gold over this period. Reserve replacement has primarily resulted from resource conversion and brownfield exploration success at known veins, with the broader 693 km2 land package subject to limited regional exploration. Since 2017, average exploration expenses have been approximately US$1 million per annum, with Bear Creek budgeting $4 million for 2022.

Mercedes’ mill has a current capacity of 2,000 tonnes per day, with gold recoveries averaging approximately 95% over the past five years. Throughput in 2020 and 2021 has been negatively impacted by Covid-related shutdowns and safety measures, with annual mine throughput expected to be between 475,000–500,000 tonnes in 2021.

SANDSTORM FILES EARLY WARNING REPORT
Pursuant to National Instrument 62-103 - The Early Warning System and Related Take Over Bid and Insider Reporting Issues, Sandstorm is announcing the purchase of an aggregate of 4,808,575 common shares (the “Entrée Purchased Shares”) of Entrée Resources Ltd. (“Entrée”). The acquisition of the Entrée Purchased Shares represents approximately 2.0% of the outstanding common shares of Entrée (the “Entrée Shares”), on a non-diluted basis.

Prior to the purchase of the Entrée Purchased Shares, Sandstorm held 44,605,240 Entrée Shares as well as warrants to purchase an additional 1,657,317 Entrée Shares (“Entrée Warrants”). The 44,605,240 Entrée Shares represented approximately 23.9% of the then outstanding Entrée Shares (on a non-diluted basis). Assuming the exercise of all 1,657,317 Entrée Warrants held by the Company, Sandstorm would have then held an aggregate of 46,262,557 Entrée Shares, representing approximately 24.6% of the then outstanding Entrée Shares (on a partially diluted basis). Upon completion of the purchase of the Entrée Purchased Shares, an aggregate 49,413,815 Entrée Shares and 1,657,317 Entrée warrants are now owned directly by Sandstorm. The 49,413,815 Entrée Shares represent approximately 25.9% of the outstanding Entrée Shares (on a non-diluted basis). Assuming the exercise of all of the 1,657,317 Entrée Warrants now held by the Company, the Company would then hold 51,071,132 Entrée Shares, representing approximately 26.5% of the outstanding Entrée Shares (on a partially diluted basis).

The Entrée Purchased Shares were acquired on the open market over the facilities of the Toronto Stock Exchange and other published markets for the Entrée Shares between May 13, 2021 and December 16, 2021 at prices ranging from C$0.80 to C$1.00 per Entrée Acquired Share. The purchase of the Entrée Purchased Shares by Sandstorm was effected for investment purposes. While Sandstorm may from time to time acquire additional securities of Entrée, dispose of some or all of the existing or additional securities it holds or will hold, or may continue to hold its current position, it is Sandstorm’s current intention, based on market conditions and other circumstances, to acquire additional securities of Entrée.

An Early Warning Report, as required under National Instrument 62-103, contains additional information with respect to the foregoing matters and will be filed by the Company on Entrée’s SEDAR profile at www.sedar.com. To obtain a copy of the report, contact Kim Bergen at 604 628 1164. Entrée’s head office is located at 1066 West Hastings Street, Suite 1650, Vancouver, BC V6E 3X1.

The acquisition of the Entrée Purchased Shares was made in reliance on the normal course purchase exemption from the formal take-over bid requirements in section 4.1 of National Instrument 62-104, Takeover Bids and Issuer Bids (“NI 62-104”). The Entrée Purchased Shares acquired, together with all of the other Entrée Shares acquired during the 12-month period preceding this purchase, did not exceed 5% of the number of Entrée Shares outstanding at the beginning of such 12-month period, and the consideration paid for any of the Entrée Shares did not exceed the market price at the date of the purchase as determined in accordance with NI 62-104.

QP
Qualified
Person Keith Laskowski (MSc), Sandstorm’s Vice President, Technical Services is a Qualified Professional (#01221QP) of the Mining and Metallurgical Society of America and a Qualified Person as defined by Canadian National Instrument 43-101. He has reviewed and approved the scientific and technical information in this press release.
Note

Price assumptions of US$1,800/oz gold, US$22/oz silver & US$3.75/lb copper
Sandstorm has included attributable gold equivalent ounces as a performance measure in this press release which does not have any standardized meaning prescribed by IFRS. The Company's royalty and other commodity stream revenue, including adjustments for contractual income relating to those interests, is converted to an attributable gold equivalent ounce basis by dividing the royalty and other commodity revenue, including adjustments for contractual income relating to those interests, for that period by the average realized gold price per ounce from the Company's gold streams for the same respective period. These attributable gold equivalent ounces, when combined with the gold ounces sold from the Company's gold streams, equal total attributable gold equivalent ounces. The presentation of this non-IFRS measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate these non-IFRS measures differently.
CONTACT INFORMATION
For more information about Sandstorm Gold Royalties, please visit our website at www.sandstormgold.com or email us at info@sandstormgold.com.

NOLAN WATSON KIM BERGEN
PRESIDENT & CEO CAPITAL MARKETS