Sandstorm Gold Ltd. has entered into a precious metals purchase agreement with Colossus Minerals Inc. to purchase an amount of gold and platinum from the Serra Pelada mine located in Para, Brazil.

Sandstorm Gold has agreed to purchase an amount equal to 1.5 per cent of the gold and 35 per cent of the platinum produced from Serra Pelada. Pursuant to this agreement, Sandstorm Gold will pay an upfront cash deposit to Colossus of $60-million (U.S.) and per ounce payments equal to the lesser of $400 (U.S.) per ounce of gold and the prevailing market price of gold, and the lesser of $200 (U.S.) per ounce of platinum and the prevailing market price of platinum.

"Serra Pelada is a fantastic project run by a first-class management team," said Sandstorm Gold's president and chief executive officer, Nolan Watson. "We are confident that the high-grade nature of the Serra Pelada deposit will contribute to it being a low-cost producer for years to come."

As part of the transaction, Sandstorm Gold has also agreed to purchase 35 per cent of the palladium produced from Serra Pelada in exchange for paying a $15-million (U.S.) deposit (bringing the total deposit payment made by Sandstorm Gold to $75-million (U.S.)) plus payments of $100 (U.S.) per ounce of palladium. In addition, Sandstorm Gold has entered into a back-to-back agreement with Sandstorm Metals & Energy Ltd. whereby Sandstorm Metals has purchased the palladium purchase agreement from Sandstorm Gold in exchange for issuing a promissory note. The promissory note states that the $15-million (U.S.) will be repaid to Sandstorm Gold in cash or shares, within one year's time. For more information, see the Sandstorm Metals press release.

Colossus will have the option, until April 1, 2015, to purchase in whole or in part, up to 50 per cent of the obligation to purchase metals under the precious metals purchase agreement and the palladium purchase agreement by making a $48.75-million (U.S.) payment, whereupon the percentage of gold and platinum to be purchased by Sandstorm Gold shall be decreased to 0.75 per cent and 17.5 per cent, respectively, and the percentage of palladium to be purchased by Sandstorm Metals shall decrease to 17.5 per cent.

About Serra Pelada

Serra Pelada is a high-grade gold-platinum-palladium deposit located in the mineral- and mining-prolific Carajas region in Para state, northern Brazil. The existing infrastructure and accessibility to the site are excellent due to the close proximity of a number of major mines. During the 1980s, Serra Pelada hosted the largest-ever gold rush in Latin America with up to 80,000 artisanal miners producing two million ounces of gold, plus platinum and palladium, from a hand-dug open pit. Colossus Minerals has been involved in the development of Serra Pelada since 2007 and is targeting initial production by the end of 2013. Serra Pelada is fully permitted and construction is under way. It is expected to be a high-grade, low-cost polymetallic producer.

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