Sandstorm Gold Announces Metal Credit Purchase Agreement with Entree Gold

Sandstorm Gold Announces Metal Credit Purchase Agreement with Entree Gold 
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/15/13 -- Sandstorm
Gold Ltd. ("Sandstorm" or the "Company") (TSX:SSL)(NYSE MKT:SAND) is
pleased to announce that it has entered into a US$55 million
financing package with Entree Gold Inc. ("Entree") (TSX:ETG)(NYSE
MKT:EGI) which includes a US$40 million production based metal credit
purchase agreement (the "Funding Agreement"), a CAD$10 million
private placement and a US$5 million net smelter returns royalty. 
FUNDING AGREEMENT 
Sandstorm has agreed to purchase metal credits equivalent to 25.7% or
33.8% of Entree's 20% share of the gold and silver by-products
produced from the Heruga and Hugo North Extension deposits,
respectively. 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. Sandstorm will pay an upfront cash
deposit of US$35 million to Entree and ongoing payments equal to the
lesser of the prevailing market price and US$220 per ounce of gold
and US$5 per ounce of silver (subject to inflationary adjustments)
until approximately 8.6 million ounces of gold and 40.3 million
ounces of silver have been produced from the joint venture property.
Thereafter, the purchase price will increase to the lesser of the
prevailing market price of US$500 per ounce of gold and US$10 per
ounce of silver (subject to inflationary adjustments). 
The 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 to
fulfill the requirements under the Funding Agreement. Under the
Funding Agreement, Entree has granted to Sandstorm a right of first
refusal on future production-based funding agreements, subject to
certain exceptions, on its joint venture interest in Mongolia. 
As part of the Funding Agreement, the Company has also agreed to
purchase metal credits equivalent to 2.5% of Entree's share of copper
produced from the Heruga and Hugo North Extension deposits in
exchange for an upfront cash deposit of US$5 million (bringing the
total deposit payment made by the Company to US$40 million) and
ongoing payments
 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). In addition,
Sandstorm has entered into a back-to-back agreement with Sandstorm
Metals & Energy Ltd. ("Sandstorm Metals") whereby Sandstorm Metals
has purchased the copper portion of the Funding Agreement 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 and Sandstorm Metals
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. For more
information, see the Sandstorm Metals press release at
http://www.sandstormmetalsandenergy.com. 
PRIVATE PLACEMENT 
Sandstorm has agreed to purchase 17,857,142 common shares of Entree
(the "Shares") at a price of CAD$0.56 per Share (the "Purchase
Price") for a total conside
ration of approximately CAD$10 million.
The private placement is expected to close on or about March 1, 2013.
Following the completion of the private placement and before taking
into account any exercise by Rio Tinto International Holding Limited
of its pre-emptive rights, Sandstorm will own 12% of the issued and
outstanding shares of Entree. The Shares will be subject to a 4-month
hold period. The private placement is subject to Toronto Stock
Exchange and NYSE MKT approval. Sandstorm has agreed that it will
vote its Shares as Entree's board of directors specifies with respect
to any proposed acquisition of Entree, provided the potential
acquirer agrees to execute and deliver to Sandstorm a deed of
adherence to the Funding Agreement. 
NSR ROYALTY 
Sandstorm has agreed to purchase a 0.4% NSR royalty on the future
sale of any metals and minerals derived from a portion of the Ann
Mason Project (which includes the Ann Mason and Blue Hill deposits)
in Nevada. In consideration for the royalty, Sandstorm will make a
US$5 million payment to Entree. In addition, Entree has granted
Sandstorm a right of first refusal on any future royalty or metal
stream financing for the Ann Mason Project. 
"Although this transaction represents only 4% of Sandstorm's current
market valuation, we believe that it will provide a material base of
precious metal cash flow for many decades," said Sandstorm President
and CEO, Nolan Watson. "We are pleased to have teamed up with Entree
Gold and their management team on these world-class deposits." 
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 x
    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        
               Tonnage   Cu    Au    Mo CuEq        Cu         Au       CuEq
Classification    (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 x 19.98) +
    (Mo g/t x 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 manage
r. 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 

 
ABOUT ANN MASON AND BLUE HILL 
The Ann Mason Project (Project) is located in west-central Nevada,
approximately 75 km southeast of Reno within the historical Yerington
Mining District. Ann Mason is a copper-molybdenum porphyry deposit
with the characteristics of a typical, large copper-molybdenum
porphyry system. Projected to the surface, the 0.15% Cu envelope
covers an area approximately 2.3 km northwest and up to 1.3 km
northeast. At depth, this envelope extends more than a kilometre
below surface. The mineralization remains open in most directions. 
Blue Hill is a copper oxide and sulphide deposit located
approximately 1.5 km northwest of the Ann Mason deposit. Several
other under explored copper oxide and sulphide targets are located
throughout the Project area. 


 
Ann Mason Mineral Resources - August 14, 2012                               
                                                                            
                   Cutoff  Tonnage     Cu     Mo     Au     Ag     Cu     Mo
Classification     (Cu %)     (Mt)    (%)    (%)  (g/t)  (g/t)  (Blb)  (Blb)
----------------------------------------------------------------------------
Indicated            0.20    1,137   0.33  0.006   0.02   0.57   8.15   0.15
----------------------------------------------------------------------------
Inferred             0.20      873   0.29  0.004   0.03   0.65   5.59   0.08
----------------------------------------------------------------------------
 
--  From Table 1.1 in Preliminary Economic Assessment on the Ann Mason
    Project, Nevada, USA, AGP Mining Consultants, October 2012 
--  The mineral resource estimate has an effective date of August 14, 2012
    and was prepared by Scott Jackson, F.AusIMM from Quantitative Group Pty
    Ltd. 
--  Due to rounding some of the totals may not sum exactly 
 
Blue Hill Inferred Mineral Resources - July 31, 2012                        
                                                                            
                       Cutoff  Tonnage      Cu       Cu     Mo     Au     Ag
Zone                   (Cu %)     (Mt)     (%)   (Mlbs)    (%)  (g/t)  (g/t)
----------------------------------------------------------------------------
Oxide                    0.10    47.44    0.17   179.37      -      -      -
----------------------------------------------------------------------------
Mixed                    0.10    24.69    0.18    98.12      -      -      -
----------------------------------------------------------------------------
Oxide/Mixed Sub-total    0.10    72.13    0.17   277.49      -      -      -
----------------------------------------------------------------------------
Sulphide                 0.15    49.86    0.23   253.46  0.005   0.01    0.3
----------------------------------------------------------------------------
 
--  From Table 1.2 in Preliminary Economic Assessment on the Ann Mason
    Project, Nevada, USA, AGP Mining Consultants, October 2012 
--  The mineral resource estimate has an effective date of July 31, 2012 and
    was prepared by M. Waldegger, P. Geo. from AGP 
--  Summations within the tables may not agree due to rounding. 
--  Molybdenum, gold and silver were estimated for the Sulphide only 
--  Contained metal values are in-situ and not in consideration of
    metallurgical recoveries 

 
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 to the effect that the consideration
paid by Sandstorm pursuant to the Funding Agreement transaction is
fair, from a financial point of view, to Sandstorm. National Bank
Financial Inc. has also 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 transaction involving the
purchase of the copper portion of the Funding Agreement is fair, from
a financial point of view, to Sandstorm Metals. 
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 and Sandstorm Metals to the effect that the use of such
methodologies to arrive at the portion of the 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 and Sandstorm Metals. 
ABOUT SANDSTORM GOLD 
Sandstorm Gold Ltd. is a gold streaming company. Sandstorm provides
upfront financing for gold mining companies that are looking for
capital. In return, Sandstorm receives a gold streaming agreement.
This agreement gives Sandstorm the right to purchase a percentage of
the life of mine gold produced, at a fixed price. Sandstorm is a
non-operating gold mining company with a portfolio of nine gold
streams, five of which are producing gold, and three NSR royalties.
Sandstorm plans to grow and diversify its low cost production profile
through the acquisition of additional gold streams. 
Sandstorm is focused on low cost operations with excellent
exploration potential and strong management teams. Sandstorm has
completed gold purchase or royalty agreements with Brigus Gold Corp.,
Colossus Minerals Inc., Donner Metals Ltd., Entree Gold Inc., Luna
Gold Corp., Magellan Minerals Ltd., Metanor Resources Inc., Mutiny
Gold Ltd., Santa Fe Gold Corp., SilverCrest Mines Inc., Ram
bler
Metals and Mining plc and Solitario Exploration & Royalty Corp. 
For more information visit: www.sandstormgold.com. 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION 
This press release contains "forward-looking statements", within the
meaning of the U.S. Securities Act of 1933, the U.S. Securities
Exchange Act of 1934, the Private Securities Litigation Reform Act of
1995 and applicable Canadian securities legislation, concerning the
business, operations and financial performance and condition of
Sandstorm Gold Ltd. ("Sandstorm"). Forward-looking statements
include, but are not limited to, statements with respect to the
future price of gold, the estimation of mineral reserves and
resources, realization of mineral reserve estimates, the timing and
amount of estimated future production. 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 statements are made based upon certain assumptions
and other important factors that, if untrue, could cause the actual
results, performances or achievements of Sandstorm to be materially
different from future results, performances or achievements expressed
or implied by such statements. Such statements and information are
based on numerous assumptions regarding present and future business
strategies and the environment in which Sandstorm will operate in the
future, including the price of gold and anticipated costs. Certain
important factors that could cause actual results, performances or
achievements to differ materially from those in the forward-looking
statements include, amongst others, gold price volatility,
discrepancies between actual and estimated production, mineral
reserves and resources and metallurgical recoveries, mining
operational and development risks relating to the parties which
produce the gold Sandstorm will purchase, regulatory restrictions,
activities by governmental authorities (including changes in
taxation), currency fluctuations, the global economic climate,
dilution, share price volatility and competition. 
Forward-looking statements are subject to known and unknown risks,
uncertainties and other important 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 such
forward-looking statements, including but not limited to: the impact
of general business and economic conditions, the absence of control
over mining operations from which Sandstorm will purchase gold and
risks related to those mining 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, risks in the marketability of minerals,
fluctuations in the price of gold, fluctuation in foreign exchange
rates and interest rates, stock market volatility, as well as those
factors discussed in the section entitled "Risks to Sandstorm" in
Sandstorm's annual report for the financial year ended December 31,
2011 available at www.sedar.com. Although Sandstorm has attempted to
identify important factors that could cause actual results to differ
materially from those contained in forward-looking statements, there
may be other factors that cause results not to be as anticipated,
estimated or intended. There can be no assurance that such statements
will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements. Sandstorm does not undertake to update
any forward looking statements that are contained or incorporated by
reference, except in accordance with applicable securities laws. 
Neither the TSX Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Exchange) accepts
responsibility for the adequacy or accuracy of this release. 
Contacts:
Sandstorm Gold Ltd.
Nolan Watson
President & Chief Executive Officer
(604) 689-0234 
Sandstorm Gold Ltd.
Denver Harris
Investor Relations Contact
(604) 628-1178
www.sandstormgold.com
 
 
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