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Gold/Mining/Energy : Sandstorm Gold
SAND 12.120.0%Oct 24 9:30 AM EST
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From: PaperPerson6/6/2011 2:13:02 PM
1 Recommendation   of 1133
 
some of the new gold ore being found by Luna Gold at its Aurizona is quite deep -- below 300 meters.

this suggests to me that sandstorm will be able to exercise its option to buy into an underground mine there in brazil as well.

quoting from sandstorm site:

"Sandstorm has acquired 17% of the life of mine gold production from Aurizona for an upfront payment of US$17.8 million in cash and 5.5 million common shares of Sandstorm plus ongoing per ounce payments equal to the lesser of US$400 and the then prevailing market price per ounce of gold. Sandstorm will not be required to contribute to capital or exploration expenditures in respect of the mining operations of Aurizona.

"If Luna decides to develop an underground mine on Aurizona, Sandstorm will also have the right (but not the obligation) to purchase 17% of the payable gold from the underground mine, at a per-ounce price equal to the lesser of US$500 and the prevailing market price, in exchange for paying 17% of the capital expenditures incurred to determine the economic viability and to construct the underground mine.

here is the luna release, which has a chart showing the depth at which gold is being found. some of it will be pittable, some i would guess would need conventional underground mining to get to it.

lunagold.com
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