Sandstorm Resources Acquires Gold Stream From Metanor Resources' Bachelor Lake Gold Project
08:30 EST Monday, January 17, 2011
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 17, 2011) - Sandstorm Resources Ltd. (TSX VENTURE:SSL) -
Announcement Highlights:
Sandstorm has entered into a gold purchase agreement with Metanor Resources on its Bachelor Lake Gold Project in Quebec, Canada
Sandstorm to purchase 20% of the life of mine gold production
Sandstorm will make staged upfront payments totaling US$20 million
Sandstorm will pay US$500 per ounce as an ongoing payment
Metanor recently released the results of a pre-feasibility study on the Bachelor Lake Gold Project which is expected to begin production in 2012
Sandstorm Resources Ltd. ("Sandstorm") is pleased to announce that it has entered into a gold purchase agreement with Metanor Resources Inc. ("Metanor") (TSX-V: MTO). Sandstorm has agreed to purchase 20% of the life of mine gold produced from Metanor's Bachelor Lake Gold Project ("Bachelor Lake Mine") located in Quebec, Canada for US$20 million plus ongoing per ounce payments equal to the lesser of US$500 (the "Per Ounce Payments") and the then prevailing market price per ounce of gold. Sandstorm will be making staged payments to Metanor as follows: (i) US$5 million, from cash on hand, upon signing of the agreement, (ii) US$9 million, from cash on hand, once Metanor has achieved certain funding conditions, expected to be completed in the first half of 2011, and (iii) US$6 million, from operating cash flow, on September 1, 2011. Metanor has provided a guarantee that Sandstorm will receive a minimum of US$20 million in pre-tax cash flow over the next six years. NCP Northland Capital Partners Inc. acted as Sandstorm's advisors, for which it will receive a fee with respect to this transaction.
About The Bachelor Lake Gold Project
Bachelor Lake is a greenstone hosted gold mine located outside of Val d'Or in Quebec, Canada. On January 4, 2011, Metanor released the findings from a pre-feasibility study at Bachelor Lake showing underground production of approximately 200,000 ounces over an initial three and a half year mine life, and the Bachelor Lake Gold Project has significant exploration upside. Production is expected to begin during 2012 with a ramp up to full commercial production by the end of 2012.
The Bachelor Lake Mine is projected to produce an average of 60,000 ounces of gold per year and will be utilizing the low cost, long hole mining method along with an existing, and fully functional, operating mill and surface infrastructure. Metanor also recently announced that it will be investing CAD$1.4 million in definition drilling to increase the known measured and indicated mineral resources at Bachelor Lake.
"We are very pleased with the acquisition of the Bachelor Lake gold stream," stated Nolan Watson, President and Chief Executive Officer of Sandstorm Resources. Mr. Watson continued, "Bachelor Lake gives us further diversification in a low risk geographic area with significant expansion and exploration upside."
Underground Mineral Resources - Inclusive of Reserves (1)
The following table sets out the estimated underground mineral resources for the Bachelor Lake Mine as of December, 2010:
Bachelor Hewfran Total
Measured Tonnes 177,898 14,696 192,594
Grade (g/t) 8.83 8.50 8.80
Oz of gold 50,487 4,018 54,504
Indicated Tonnes 465,928 183,069 648,997
Grade (g/t) 7.63 7.14 7.49
Oz of gold 114,329 42,024 156,352
Total Measured + Indicated Tonnes 643,826 197,765 841,591
Grade (g/t) 7.96 7.24 7.79
Oz of gold 164,815 46,042 210,857
Inferred Tonnes 207,517 218,630 426,148
Grade (g/t) 6.76 6.30 6.52
Oz of gold 45,083 44,283 89,366
(1) Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Underground Mineral Reserves (2)
The following table sets out the estimated underground mineral reserves for the Bachelor Lake Mine as of December, 2010:
Bachelor Hewfran Total
Proven Tonnes 178,359 14,734 193,093
Grade (g/t) 8.36 8.05 8.33
Oz of gold 47,930 3,814 51,743
Probable Tonnes 467,135 183,543 650,679
Grade (g/t) 7.23 6.76 7.10
Oz of gold 108,538 39,895 148,433
Total Proven-Probable Tonnes 645,494 198,278 843,772
Grade (g/t) 7.54 6.86 7.38
Oz of gold 156,467 43,710 200,177
(2) The underground mineral reserves have been calculated using a cut-off grade of 3.43 g/t, recovery of 90%, and dilution of 10% in the stoping areas.
Qualified Person
Pascal Hamelin, P.Eng., Ing, General Manager of Operations for the Bachelor Lake Mine, is the Qualified Person under NI 43-101 responsible for reviewing and approving the technical information contained in this news release. Sandstorm will file a technical report on SEDAR in support of this news release within 45 days of the date of this news release.
For more information on the Bachelor Lake Gold Mine, please visit the Metanor website at www.metanor.ca.
ABOUT SANDSTORM RESOURCES
Sandstorm Resources Ltd. is a growth focused resource based company that seeks to complete gold purchase agreements with companies that have advanced stage development projects or operating mines. A gold purchase agreement involves Sandstorm making an upfront cash payment to its partners and in exchange, receives a percentage of the gold produced for the life of the mine. Sandstorm helps other companies in the resource industry grow their business, while acquiring attractive assets in the process.
Sandstorm is focused on low cost operations with excellent exploration potential and strong management teams. Sandstorm has completed gold purchase agreements with Luna Gold Corp., SilverCrest Mines Inc., Santa Fe Gold Corporation, Rambler Metals and Mining plc and Brigus Gold Corp. |
