VANCOUVER, April 21,
2014 /CNW/ - Sandstorm Metals & Energy Ltd. ("Sandstorm
Metals") (TSX-V: SND) has entered into a definitive arrangement
agreement ("Arrangement Agreement") with Sandstorm Gold Ltd.
("Sandstorm Gold") (NYSE MKT: SAND) (TSX: SSL) (pursuant to which
Sandstorm Gold will acquire all of the issued and outstanding
shares (the "Sandstorm Metals Shares") of Sandstorm Metals other
than the Sandstorm Metals Shares currently owned by Sandstorm Gold.
The transaction will be implemented by way of a statutory plan of
arrangement (the "Arrangement") under the Business Corporations Act
(British Columbia).
Upon completion of the Arrangement, Sandstorm
Gold will issue to each holder of a Sandstorm Metals Share 0.178 of
a common share of Sandstorm Gold (each whole common share, a
"Sandstorm Gold Share") and CAD$0.35
to be paid in cash (together, with the fractional Sandstorm Gold
Share, the "Consideration"). The value of the Consideration
represents a 43% premium over the closing price of the Sandstorm
Metals Shares on the TSX Venture Exchange (the "TSXV") on
April 21, 2014, the last day of
trading prior to the announcement of the Arrangement, and based on
the closing price of the Sandstorm Gold Shares on the Toronto Stock
Exchange (the "TSX") of CAD$5.99 on
April 21, 2014. The terms of
the Arrangement value Sandstorm Metals at $1.42 per share or approximately CAD$49 million.
The Arrangement is subject to the approval of at
least two-thirds of the votes cast by Sandstorm Metals shareholders
at an annual general and special meeting of Sandstorm Metals
shareholders, which is expected to be held on May 27, 2014. As the Arrangement is a
business combination for the purposes of Multilateral Instrument
61-101, the resolution approving the Arrangement resolution must
also be passed by a majority of the votes cast by Sandstorm Metals'
shareholders present in person or represented by proxy at the
meeting, after excluding votes cast in respect of the shares that
are held by interested parties, being Sandstorm Gold and the common
directors of Sandstorm Gold and Sandstorm Metals. Completion
of the Arrangement is also subject to certain approval(s) of the
British Columbia Supreme Court, the TSX, the NYSE MKT, the TSXV,
the receipt of all other necessary regulatory and third party
approvals, and other customary conditions. In addition, the
Arrangement Agreement includes standard non-solicitation and
superior proposal provisions and Sandstorm Metals has provided
Sandstorm Gold with certain other customary rights, including a
right to match competing offers. Following the completion of the
Arrangement, current shareholders of Sandstorm Metals, excluding
Sandstorm Gold, will hold approximately 5.2% of the issued and
outstanding shares of Sandstorm Gold.
None of the securities to be issued pursuant to
the Arrangement Agreement have been or will be registered under the
United State Securities Act of 1933, as amended (the "U.S.
Securities Act"), or any state securities laws, and any securities
issued in the Arrangement are anticipated to be issued in reliance
upon available exemptions from such registration requirements
pursuant to Section 3(a)(10) of the U.S. Securities Act and
applicable exemptions under state securities laws. This press
release does not constitute an offer to sell or the solicitation of
an offer to buy any securities.
As of the date of this press release, holders of
a total of 6.85 million Sandstorm Metals Shares, representing
approximately 19.8% of the issued and outstanding shares, have
entered into lock-up agreements committing them to vote in favour
of the Arrangement.
Sandstorm's CEO Nolan
Watson commented, "We are passionate about our business, and
we understand that to be successful we need sufficient cash and
cash flow to be able to grow. In addition to providing a
substantial premium to the market price for Sandstorm Metals
shares, this transaction allows Sandstorm Metal's shareholders to
participate in the streaming business going forward through
Sandstorm Gold, which has a more solid base of assets, substantial
cash on hand and significant cash flow from operations."
A conference call will be held on Tuesday, April 22, 2014 starting at 8:30am PDT to further discuss the Arrangement. To
participate in the conference call use the dial-in numbers below.
It is recommended that participants dial in five minutes prior to
the commencement of the conference call. To access an audio webcast
of the conference call, click here. The webcast will also be
available on the Sandstorm website.
Local/International: 647-788-4916
North American Toll-Free: 877-214-4966
Details of the Arrangement, including a summary
of the terms and conditions of the Arrangement Agreement, will be
disclosed in a Management Information Circular of Sandstorm Metals
which will be mailed to shareholders of Sandstorm Metals and will
also be available on SEDAR at www.sedar.com.
Paradigm Capital Inc. is acting as financial
advisor and has provided a fairness opinion to the Independent
Special Committee of Sandstorm Metals to the effect that the
Consideration offered under the Arrangement is fair, from a
financial point of view, to the shareholders of Sandstorm Metals,
other than Sandstorm Gold.
ABOUT SANDSTORM METALS & ENERGY
Sandstorm Metals & Energy Ltd. is a
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 at a mine, for the life of the mine, at a fixed price.
Sandstorm has acquired a portfolio of two commodity streams and
three net smelter return royalties in copper, lead, natural gas,
palladium and zinc. Sandstorm plans to grow and diversify 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 stream and
royalty agreements with Canadian Zinc Corp., Colossus Minerals
Inc., Entrée Gold Inc., Glencore Xstrata plc and Gordon Creek
Energy Inc.
For more information visit:
www.sandstormmetalsandenergy.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 Metals & Energy Ltd.
("Sandstorm Metals"). Forward-looking statements include, but are
not limited to, statements with respect to the annual general and
special meeting of Sandstorm Metals; the completion of the
Arrangement, including the receipt of court and stock exchange
approvals, and the entering into of lock-up agreements with certain
holders of Sandstorm Metals Shares. 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 Metals
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 Metals 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 Metals' annual
report for the financial year ended December
31, 2013. Although Sandstorm Metals 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 Metals 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 Metals 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.
SOURCE Sandstorm Metals & Energy Ltd.