Sandstorm Metals & Energy Announces Metal Credit Purchase Agreement with Entree Gold

Sandstorm Metals & Energy Announces Metal Credit Purchase Agreement with Entree 
Gold 
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/15/13 -- Sandstorm
Metals & Energy Ltd. ("Sandstorm Metals" or the "Company") (TSX
VENTURE:SND) is pleased to announce that it has entered into a US$5
million production based metal credit purchase agreement (the "Copper
Funding Agreement") with Entree Gold Inc. ("Entree") (TSX:ETG)(NYSE
MKT:EGI) (via a back-to-back agreement with Sandstorm Gold Ltd.
("Sandstorm Gold") which has entered into a funding agreement related
to precious metals and copper with Entree (the "Funding Agreement"))
to purchase metal equivalent to 2.5% of Entree's 20% share of the
copper produced from the Heruga and Hugo North Extension deposits.
The deposits are on the Entree - Oyu Tolgoi LLC joint venture
property in Mongolia which forms part of the world-class Oyu Tolgoi
copper mining complex. 
Pursuant to the back-to-back agreement, Sandstorm Metals will
purchase the Copper Funding Agreement from Sandstorm Gold in exchange
for US$5 million in shares of Sandstorm Metals. Sandstorm Metals will
issue the shares at a price of CAD$0.45 per share, subject to the
approval of the TSX Venture Exchange. Sandstorm Metals and Sandstorm
Gold allocated the total purchase price payable for the Funding
Agreement as between themselves (by agreeing on the purchase price
payable by Sandstorm Metals for the copper portion) by applying
fundamental net asset value valuation methodologies as are typical
for precious metal and copper metal credit purchase agreements,
respectively. 
As part of the Copper Funding Agreement, Sandstorm Metals will make
ongoing payments to Entree equal to the lesser of the prevailing
market price and US$0.50 per pound of copper (subject to inflationary
adjustments) until approximately 9.1 billion pounds of copper have
been produced from the joint venture property. Thereafter, the
purchase price will increase to the lesser of the prevailing market
price and US$1.10 per pound of copper (subject to inflationary
adjustments). The Copper Funding Agreement does not require the
delivery of physical metal and Entree may use future cash flows from
any of its mineral property interests to purchase and deliver metal
credits to Sandstorm Metals to fulfill the r
equirements under the
Copper Funding Agreement. 
As previously mentioned, Sandstorm Gold has agreed to purchase metal
credits equivalent to 25.7% or 33.8% of Entree's share of the gold
and silver by-products produced from the Heruga and Hugo North
Extension deposits, respectively, in exchange for an upfront cash
deposit of US$35 million. For more information, see the Sandstorm
Gold press release at http://www.sandstormgold.com.  
About Hugo North Extension and Heruga 
Hugo North Extension is one of the world's richest porphyry
copper-gold deposits and Heruga is a world class,
copper-gold-molybdenum porphyry deposit. Both projects are located in
the South Gobi desert of Mongolia, approximately 570 kilometres south
of the capital city of Ulaanbaatar and 80 kilometres north of the
border with China. Hugo North Extension and Heruga are part of the
Oyu Tolgoi mining complex and are being developed by Oyu Tolgoi LLC,
a subsidiary of Turquoise Hill Resources and the Government of
Mongolia, and its project manager Rio Tinto. Entree retains a 20%
interest in the Hugo North Extension and Heruga deposits.  
Hugo North Extension Mineral Reserves - March 29, 2012
(as reported for the entire joint venture property) 


 
----------------------------------------------------------------------------
                                                         Recovered Metal    
                                                    ------------------------
                Tonnage        NSR       Cu       Au           Cu         Au
Classification     (Mt)    (US$/t)      (%)    (g/t)    ('000 lb)       (oz)
----------------------------------------------------------------------------
Probable             27      79.40     1.91     0.74    1,000,000    500,000
----------------------------------------------------------------------------
 
--  From Table 1.4 in NI 43-101 Technical Report on the Lookout Hill
    Property, Omnogovi, Mongolia, AMC Consultants Pty Ltd, March 2012 
--  The block cave shell was defined using a net smelter return (NSR) cut-
    off of $20/t NSR 
--  Metal prices used for calculating the Hugo North Underground NSR are
    copper US$1.80/lb, gold US$750/oz, and silver US$12.00/oz based on long
    term metal price forecasts at the beginning of the mineral reserve work.
    The analysis indicates that the mineral reserve is still valid at these
    metal prices 
--  The NSR has been calculated with assumptions for smelter refining and
    treatment charges, deductions and payment terms, concentrate transport,
    metallurgical recoveries and royalties 
--  For the underground block cave, all material within the shell has been
    converted to Mineral Reserve; this includes low grade Indicated and
    Inferred material assigned zero grade and treated as dilution 
--  Only Indicated Resources were used to report Probable Reserves 
--  Entree - Oyu Tolgoi LLC Joint Venture includes a portion of the Shivee
    Tolgoi license and all of the Javhlant license. The licenses are held by
    Entree and Oyu Tolgoi LLC is the joint venture manager. Entree will
    receive 20% of cash flows after capital and operating costs for material
    originating below 560m and 30% above this depth 
--  The Mineral Reserves are not additive to the Mineral Resources 

 
Hugo North Extension Mineral Resources - February 20, 2007 
(as reported for the entire joint venture property) 


 
----------------------------------------------------------------------------
                                                    Contained Metal         
                                           ---------------------------------
               Tonnage     Cu     Au   CuEq         Cu         Au       CuEq
Classification    (Mt)    (%)  (g/t)    (%)  ('000 lb)       (oz)  ('000 lb)
-------------------------------------------
---------------------------------
Indicated        117.0   1.80   0.61   2.19  4,640,000  2,290,000  5,650,000
----------------------------------------------------------------------------
Inferred          95.5   1.15   0.31   1.35  2,420,000    950,000  2,840,000
----------------------------------------------------------------------------
 
--  From Table 1.1 in NI 43-101 Technical Report on the Lookout Hill
    Property, Omnogovi, Mongolia, AMC Consultants Pty Ltd, March 2012 
--  The mineral resource estimate has an effective date of February 20, 2007
    and was prepared by Scott Jackson, F.AusIMM. from Quantitative Group Pty
    Ltd. 
--  Based on drilling completed as of 01 November, 2006 
--  Copper Equivalent (CuEq) has been calculated using assumed metal prices
    of US$1.35/lb for copper and US$650/oz for gold. The equivalence formula
    was calculated assuming that gold recovery was 91% of copper recovery.
    CuEq was calculated using the formula: CuEq = %Cu + (Au g/t (i)
    19.98)/29.76 
--  Entree - Oyu Tolgoi LLC Joint Venture includes a portion of the Shivee
    Tolgoi license and all of the Javhlant license. The licenses are held by
    Entree and Oyu Tolgoi LLC is the joint venture manager. Entree will
    receive 20% of cash flows after capital and operating costs for material
    originating below 560m and 30% above this depth 
--  The 0.6% CuEq cut-off is used as the base case resource for underground
    bulk mining 
--  Mineral resources that are not mineral reserves do not have demonstrated
    economic viability. 

 
Heruga Mineral Resource - March 30, 2010
(as reported for the entire joint venture property) 


 
----------------------------------------------------------------------------
                                                    Contained Metal         
                                          ----------------------------------
Classifi- Tonnage    Cu    Au     Mo  CuEq        Cu          Au        CuEq
 cation      (Mt)   (%) (g/t)    (%)   (%) ('000 lb)        (oz)   ('000 lb)
----------------------------------------------------------------------------
Inferred      910  0.48  0.49  0.014  0.87 9,570,000  14,000,000  17,390,000
----------------------------------------------------------------------------
 
--  From Table 1.3 in NI 43-101 Technical Report on the Lookout Hill
    Property, Omnogovi, Mongolia, AMC Consultants Pty Ltd, March 2012 
--  The mineral resource estimate has an effective date of March 30, 2010
    and was prepared by Scott Jackson, F.AusIMM. from Quantitative Group Pty
    Ltd. 
--  Based on drilling completed as of 21 June, 2009 
--  Copper Equivalent (CuEq) has been calculated using assumed metal prices
    of US$1.35/lb for copper, US$650/oz for gold and US$10/lb for
    molybdenum. The equivalence formula was calculated assuming that gold
    and molybdenum recovery was 91% and 72% of copper recovery respectively.
    CuEq was calculated using the formula: CuEq = %Cu + ((Au g/t (i) 19.98)
    + (Mo g/t (i) 0.01586))/29.76 
--  Entree - Oyu Tolgoi LLC Joint Venture includes a portion of the Shivee
    Tolgoi license and all of the Javhlant license. The licenses are held by
    Entree and Oyu Tolgoi LLC is the joint venture manager. Entree will
    receive 20% of cash flows after capital and operating costs for material
    originating below 560m and 30% above this depth 
--  The 0.6% CuEq cut-off is used as the base case resource for underground
    bulk mining 
--  Mineral resources that are not mineral reserves do not have demonstrated
    economic viability. 

 
Robert Cann, P.Geo., Entree's Vice President Exploration, is the
Qualified Person under NI 43-101 responsible for reviewing and
approving the technical information contained in this news release. 
For more information, visit the Entree Gold website at
http://www.entreegold.com.  
Fairness Opinion 
National Bank Financial Inc. has provided a fairness opinion to the
board of directors of Sandstorm Metals to the effect that the
consideration paid by Sandstorm Metals pursuant to the Copper Funding
Agreement transaction is fair, from a financial point of view, to
Sandstorm Metals. National Bank Financial Inc. has also provided a
fairness opinion to the board of directors of Sandstorm Gold to the
effect that the consideration paid by Sandstorm Gold pursuant to the
transaction involving the purchase of the Funding Agreement is fair,
from a financial point of view, to Sandstorm Gold.  
National Bank Financial Inc. reviewed the methodologies relating to
the allocation of total purchase price payable for the Funding
Agreement and has provided an opinion to the boards of directors of
Sandstorm Metals and Sandstorm Gold to the effect that the use of
such methodologies to arrive at t
he Funding Agreement purchase price
allocated to Sandstorm Metals (as the purchase price for the copper
portion) is fair, from a financial point of view, to Sandstorm Metals
and Sandstorm Gold. 
ABOUT SANDSTORM METALS & ENERGY 
Sandstorm Metals & Energy Ltd. is the world's first diversified
streaming company. Sandstorm provides upfront financing to resource
companies that are looking for capital and in return, receives a
commodity streaming agreement. This agreement gives Sandstorm the
right to purchase a percentage of the commodity produced, for the
life of the asset, at a fixed price. Sandstorm has acquired a
portfolio of seven commodity streams in copper, palladium, oil,
natural gas and coal. Sandstorm plans to grow its production base
through the acquisition of additional commodity streams. 
Sandstorm Metals & Energy is focused on low cost operations with
excellent exploration potential and strong management teams.
Sandstorm has completed commodity purchase agreements with Colossus
Minerals Inc., Donner Metals Ltd., Entree Gold Inc., Novadx Ventures
Corp. and Thunderbird Energy Corp.  
For more information visit: www.sandstormmetalsandenergy.com. 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION 
Except for the statements of historical fact contained herein, the
information presented constitutes "forward-looking information" or
"forward-looking statements" within the meaning of applicable
Canadian securities legislation. Forward-looking statements can
generally be identified by the use of forward-looking terminology
such as "may", "will", "expect", "intend", "estimate", "anticipate",
"believe", "continue", "plans", or similar terminology.
Forward-looking information is based on reasonable assumptions that
have been made by Sandstorm as at the date of such information and is
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance or
achievements of Sandstorm to be materially different from those
expressed or implied by the forward-looking information, including
but not limited to: the impact of general business and economic
conditions; the absence of control over operations from which
Sandstorm will purchase commodities and risks related to those
operations, including risks related to international operations,
government and environmental regulation, actual results of current
exploration activities, conclusions of economic evaluations and
changes in project parameters as plans continue to be refined;
problems inherent to the marketability of commodities; industry
conditions, including fluctuations in the price of commodities,
fluctuations in foreign exchange rates and fluctuations in interest
rates; stock market volatility; competition; as well as those factors
discussed in the section entitled "Risks to Sands
torm" in Sandstorm's
annual report for the financial year ended December 31, 2011.
Although Sandstorm has attempted to identify important factors that
could cause actual results to differ materially from those contained
in forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can be
no assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not
place undue reliance on forward-looking information. Sandstorm does
not undertake to update any forward-looking information that is
contained or incorporated by reference herein, except in accordance
with applicable securities laws. Sandstorm does not provide any
representation as to its comparability with other companies in its
industry including, but not limited to, Franco-Nevada Corporation,
BHP Billiton and Rio Tinto. 
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release. 
Contacts:
Sandstorm Metals & Energy Ltd.
Nolan Watson
President & Chief Executive Officer
(604) 689-0234 
Sandstorm Metals & Energy Ltd.
Denver Harris
Investor Relations Contact
(604) 628-1178
www.sandstormmetalsandenergy.com
 
 
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