2014-04-21 18:08 ET - News Release
Also News Release (C-SND) Sandstorm Metals & Energy Ltd (2)
Mr. Nolan Watson of Sandstorm Gold reports
SANDSTORM GOLD ANNOUNCES PLAN OF ARRANGEMENT TO ACQUIRE SANDSTORM METALS & ENERGY
Sandstorm Gold Ltd. has entered into a definitive arrangement agreement with Sandstorm Metals & Energy Ltd., pursuant to which Sandstorm Gold will acquire all of the issued and outstanding shares of Sandstorm Metals other than the Sandstorm Metals shares currently owned by the company. The transaction will be implemented by way of a statutory plan of 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 and 35 cents to be paid in cash. The value of the consideration represents a 43-per-cent premium over the closing price of the Sandstorm Metals shares on the TSX Venture Exchange 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 of $5.99 on April 21, 2014. The terms of the arrangement value Sandstorm Metals at $1.42 per share or approximately $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. Completion of the arrangement is also subject to certain approvals of the British Columbia Supreme Court, the Toronto Stock Exchange, the New York Stock Exchange, the TSX Venture Exchange, 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 per cent of the issued and outstanding shares of Sandstorm Gold. The Sandstorm Gold board of directors has approved the arrangement and the transaction is not subject to approval by the shareholders of Sandstorm Gold.
As of the date of this news release, holders of a total of 6.85 million Sandstorm Metals shares, representing approximately 19.8 per cent of the issued and outstanding shares, have entered into lock-up agreements committing them to vote in favour of the arrangement.
Sandstorm Gold's chief executive officer Nolan Watson commented: "Sandstorm's management team is excited to be able to focus all of our future time and attention on gold. The acquisition of Sandstorm Metals will provide Sandstorm Gold shareholders with approximately $4-million of (U.S.) annual royalty revenue from operating mines, as well as royalties on advanced exploration and development assets, including Canadian Zinc Corp.'s Prairie Creek mine and Entree Gold Inc.'s Hugo North Extension and Heruga deposits. In addition, Sandstorm Gold will be able to benefit from the use of Sandstorm Metals non-capital loss carryforwards for tax purposes, as well as cash expected to be received upon the monetization of non-core assets, including various coal, oil and natural gas assets."
Mr. Watson added: "Sandstorm Gold has significant cash on hand, significant cash flow from operations and is debt free. We are in a tremendous position to be able to grow the company through the acquisition of gold streams and royalties, and we will now have our entire team focused solely on this task."
A conference call will be held on Tuesday, April 22, 2014, starting at 9:30 a.m. PDT, to further discuss the arrangement. To participate in the conference call, dial local/international 647-788-4916 or North American toll-free 877-214-4966. It is recommended that participants dial in five minutes prior to the commencement of the conference call. The webcast will also be available on the Sandstorm website.
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. Cormark Securities Inc. is acting as financial adviser to Sandstorm Gold, Cassels Brock & Blackwell LLP is acting as its legal counsel, and Neal, Gerber & Eisenberg LLP is acting as its U.S. securities counsel. Paradigm Capital Inc. is acting as financial adviser to the independent special committee of Sandstorm Metals and Beadle Raven LLP is acting as its legal counsel.
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