Sandstorm Metals & Energy Ltd. has entered into a palladium purchase agreement with Colossus Minerals Inc., via a back-to-back agreement with Sandstorm Gold Ltd., to purchase an amount of palladium from the Serra Pelada mine located in Para, Brazil.

Sandstorm Metals has agreed to purchase an amount equal to 35 per cent of the palladium produced from Serra Pelada. Pursuant to this back-to-back agreement, Sandstorm Metals will pay an upfront cash deposit of $15-million (U.S.) to Sandstorm Gold in cash or shares, within one year's time. Sandstorm Metals will make per ounce payments equal to the lesser of $100 (U.S.) per ounce of palladium and the prevailing market price of palladium.

"Serra Pelada is a fantastic project run by a first-class management team," said president and chief executive officer, Nolan Watson. "We expect Serra Pelada to be producing in the near term and the palladium stream will generate consistent cash flow to Sandstorm."

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 palladium under the palladium purchase agreement by making a $9.75-million (U.S.) payment, whereupon the percentage of palladium to be purchased by Sandstorm Metals shall be decreased from 35 per cent to 17.5 per cent.

As part of the transaction, Sandstorm Gold has agreed to purchase 1.5 per cent of the gold and 35 per cent of the platinum produced from Serra Pelada in exchange for paying a $60-million (U.S.) deposit to Colossus (bringing the total deposit made by Sandstorm Gold to $75-million (U.S.)). For more information, see the Sandstorm Gold press release.

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