Sandstorm Metals & Energy Ltd.
TSX VENTURE : SND

Sandstorm Metals & Energy Ltd.

December 09, 2010 15:57 ET

Sandstorm Metals & Energy Announces Increased Equity Financing to Cdn$80 Million

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 9, 2010) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES.

Sandstorm Metals & Energy Ltd. ("Sandstorm Energy" or the "Corporation") (TSX VENTURE:SND) is pleased to announce that it has increased its previously announced equity financing from a maximum Cdn$60 million to a maximum of Cdn$80 million. The Corporation has entered into an agreement, as amended, with a syndicate of agents led by Cormark Securities Ltd. and including Paradigm Capital Inc., National Bank Financial Inc. and NCP Northland Capital Partners Inc. (collectively the "Agents") to issue, on a private placement "best efforts" basis, up to 177,800,000 special warrants (the "Special Warrants") at a price of Cdn$0.45 per Special Warrant for gross proceeds of approximately Cdn$80 million (the "Offering"). In addition, the Corporation has agreed to grant to the Agents an option to purchase up to an additional 15% of the number of Special Warrants sold under the Offering at a price of Cdn$0.45 per Special Warrant, on the same terms and conditions as the Offering, exercisable at any time, in whole or in part, until the closing of the Offering. In the event that the option is exercised in its entirety, the aggregate gross proceeds of the Offering to Sandstorm Energy will be approximately Cdn$92 million.

Each Special Warrant will entitle the holder thereof to receive one unit (a "Unit") on the exercise or deemed exercise of the Special Warrant without payment of any additional consideration. Each Unit will consist of one common share of the Corporation (a "Common Share") and one-half of one Common Share purchase warrant (a whole warrant a "Warrant"). Each Warrant will entitle the holder to acquire one Common Share at a price of US$0.70 for a period of two years following the date of closing of the Offering, subject to adjustment as described below.

The Corporation will use its commercially reasonable best efforts to file a prospectus qualifying the distribution of the Common Shares and Warrants and to have a receipt for a final prospectus issued by the securities commissions in Canada by January 21, 2011. In the event that the Corporation has not received a receipt for a final prospectus within 60 days of closing, the terms of the Warrants will be extended from two years to five years and the exercise price per Warrant will be reduced from US$0.70 to US$0.65.

The net proceeds of the Offering will be used to fund the upfront consideration for each of the NovaDX Transaction (US$38 million), the Royal Coal Transaction (US$11 million), the Royalty (US$3 million), and for future streaming acquisitions and for general corporate and working capital purposes.

The Offering is expected to close on or about December 23, 2010 and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals, including the approval of the TSXV.

The securities offered have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Cautionary Note Regarding Forward-Looking Information

Except for the statements of historical fact contained herein, the information presented constitutes "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information is based on reasonable assumptions that have been made by Sandstorm Energy 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 Energy 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 mining operations from which Sandstorm Energy will purchase coal 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; problems inherent to the marketability of minerals; industry conditions, including fluctuations in the price of metals, fluctuations in foreign exchange rates and fluctuations in interest rates; stock market volatility and competition. Although Sandstorm Energy 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 Energy 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 Energy 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, Rio Tinto and Western Coal.

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.

Contact Information

  • Sandstorm Metals & Energy Ltd.
    Nolan Watson
    President and Chief Executive Officer
    (604) 689-0234
    or
    Sandstorm Metals & Energy Ltd.
    Denver Harris
    Investor Relations Contact
    (604) 689-0234
    www.sandstormmetalsandenergy.com