Sandstorm Gold Announces US$10 Million Contribution to Luna Gold's Aurizona Expansion
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 10, 2012) - Sandstorm Gold Ltd. ("Sandstorm" or the "Company") (TSX VENTURE:SSL)(NYSE MKT:SAND) is pleased to announce that it has agreed to contribute up to US$10 million in capital towards the phase 1 production expansion project ("Phase 1 Expansion") at Luna Gold Corp.'s ("Luna") Aurizona Mine ("Aurizona"). Sandstorm's contribution towards the Phase 1 Expansion will be equal to 17% of the capital costs incurred by Luna towards the Phase 1 Expansion to a maximum contribution of US$10 million. In addition, Sandstorm has committed to issue, if requested by Luna, a US$20 million non-revolving loan facility with a three year term, which may only be used to fund the Phase 1 Expansion and associated exploration costs. In conjunction with Sandstorm's capital contribution, Luna has provided the Company with a contractual guarantee that Aurizona will complete its ramp up to 125,000 ounces of annual gold production by the end of 2013.
"The Phase 1 Expansion Project at Aurizona will increase Sandstorm's cash flow and is an important next step for Luna as they assess Phase 2 expansion", said Sandstorm President & CEO Nolan Watson. "Aurizona is Sandstorm's flagship asset and this capital contribution demonstrates our commitment to being a strong partner with Luna for years to come."
In accordance with Sandstorm's gold stream agreement with Luna, Sandstorm is entitled to purchase 17% of the life of mine gold produced from Aurizona, at a per ounce price of US$400. |
