Sandstorm Metals & Energy Ltd.

TSX VENTURE : SND


Sandstorm Metals & Energy Ltd.

September 21, 2012 07:00 ET

Sandstorm Metals & Energy Announces Restructuring Initiatives at Novadx

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 21, 2012) -

NOT FOR DISTRIBUTION TO U.S. 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" or the "Company") (TSX VENTURE:SND) is pleased to announce a proposed restructuring of Novadx Ventures Corp. ("Novadx") which includes new management, an equity offering, a restructuring of the coal stream agreement and a change in the company name.

Novadx has appointed Daniel Roling as President and CEO. Mr. Roling was previously the President and CEO of National Coal Corp., a southern Appalachian coal producer, from August 2006 until it was sold in December 2010. While at National Coal Corp. Mr. Roling restructured the management team and the assets, improving the operating efficiency and financial health of National Coal Corp., while significantly increasing the reserve base and doubling coal production. Prior to serving at National Coal Corp., Mr. Roling was First Vice President and Global Senior Metals and Mining Analyst at Merrill Lynch, where he was employed for 25 years. Mr. Roling is both a Certified Public Accountant and a Chartered Financial Analyst, and is a long-standing member of the National Coal Council.

Novadx has entered into an agency agreement with Casimir Capital Ltd. to launch an offering of special warrants, at a price of CDN$0.05 per special warrant, with the intent to raise gross proceeds of between US$15 million and US$25 million (the "Offering"). Sandstorm has agreed to subscribe for up to US$5 million of the Offering.

In the event that Novadx is successful in securing not less than US$15 million in external financing, Sandstorm has agreed, subject to the approval of Novadx shareholders, to restructure its existing coal stream agreements with Novadx on the following basis:

  • US$10 million will convert into Novadx equity, at an effective price of CDN$0.05 per share;

  • US$10 million will convert into a secured convertible debenture of Novadx, due 5 years from the closing date of the Offering and bearing interest of 8%, which is not payable until maturity. Sandstorm has the option to convert the debenture into equity of Novadx at CDN$0.10 per share. Novadx can repay the principal and interest outstanding, in whole or in part, subject to Sandstorm's conversion right; and

  • US$10 million will convert into a gross overriding royalty (the "Royalty") at the rate of US$4.50 per ton of coal sold from the Rex and Rosa Mines, for the life of the mines, until such time as Sandstorm receives royalty income of US$10 million plus an after-tax IRR of 12%, at which time the Royalty rate shall decrease to US$2.00 per ton of coal.

"The proposed restructuring of Novadx puts Sandstorm in an excellent position to profit from our invested capital", said Sandstorm President and CEO Nolan Watson. "We are confident that through the recapitalization and adjustments to the management team, Novadx has the opportunity to achieve long-term success."

As part of the restructuring initiative, Novadx intends to change its name to Blackpaw Coal Corp.

ABOUT SANDSTORM METALS & ENERGY

Sandstorm Metals & Energy Ltd. is a growth focused resource based company that seeks to complete commodity purchase agreements with companies that have advanced stage development or operating projects. A commodity purchase agreement involves Sandstorm making an upfront cash payment to its partners and in exchange, Sandstorm receives the right to purchase a percentage of the commodity produced for the life of the asset, at a fixed price per unit. Sandstorm helps other companies in the resource industry grow their business, while acquiring attractive assets in the process.

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., Novadx Ventures Corp., Terrex Energy Inc., 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 Sandstorm" 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.

Contact Information

  • 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