- See News Release (C-SND) Sandstorm Metals & Energy Ltd (2)
- Mr. Nolan Watson of Sandstone Metals reports
- SANDSTORM METALS & ENERGY CONVERTS BRACEMAC-MCLEOD STREAM INTO 3% NSR ROYALTY
. Sandstorm Metals & Energy Ltd. has converted its copper stream along with Sandstorm Gold Ltd.'s gold stream on the Bracemac-McLeod mine into a 3-per-cent net smelter returns royalty (NSR) based on 100 per cent of production from Bracemac-McLeod. Bracemac-McLeod is located in Matagami, Quebec and is owned and operated by a subsidiary of Glencore Xstrata plc ("Glencore"). The 3% NSR will be split between Sandstorm Metals and Sandstorm Gold (together "Sandstorm") based on the respective funds contributed to Donner Metals Ltd. ("Donner") in relation to the Copper Stream and Gold Stream, resulting in Sandstorm Metals receiving 80% of the proceeds from the 3% NSR (equivalent to a 2.4% NSR) and Sandstorm Gold receiving 20% of the proceeds from the 3% NSR (equivalent to a 0.6% NSR).

Sandstorm Metal's Copper Stream agreement with Donner entitled the Company to purchase 24.5% of the copper produced from Bracemac-McLeod at US$0.80 per lb. Donner held a 35% participating interest in Bracemac-McLeod (the "Joint Venture") but recently announced its inability to meet the cash calls under their Development and Operating Agreement with Glencore (see Donner press release dated August 13, 2013). Sandstorm Metals had the option to remedy the default by making the cash call payments to Glencore however this would have required Sandstorm Metals to raise a significant amount of equity. In order to avoid diluting shareholders, Sandstorm Metals and Sandstorm Gold have agreed the following with Donner and Glencore:

Glencore has issued a 3% NSR to Sandstorm Metals on 100% of production from Bracemac-McLeod, which will be split 80% Sandstorm Metals and 20% Sandstorm Gold, in exchange for Donner's 35% participating interest in the Joint Venture and an option to acquire the Donner shares held by Sandstorm Metals.

Sandstorm Metals and Sandstorm Gold have relinquished the Copper Stream and the Gold Stream respectively.

Sandstorm Metals will issue 1,333,334 shares of Sandstorm Metals (at a deemed price of $1.50 per share) to Donner and Donner has provided each of Glencore and Sandstorm Metals with an irrevocable and unconditional release and discharge of any claim by Donner against Glencore or Sandstorm Metals and Donner agreed to an orderly completion of the transactions.

After the proceeds from the 3% NSR exceed $49 million, from that point forward, Sandstorm will pay a 1% NSR to Donner out of the proceeds of the 3% NSR.

Sandstorm's President and CEO Nolan Watson commented, "Although Sandstorm had the ability to assume and maintain ownership of the 35% joint venture in the event of a Donner default, the ongoing capital requirements would have required raising a considerable amount of capital resulting in significant dilution for shareholders. This transaction allows us to avoid dilution and the 3% NSR will begin generating cash flow in the fourth quarter of this year, transitioning Sandstorm Metals into a cash flowing company."

We seek Safe Harbor.