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Gold/Mining/Energy : Sandstorm Gold
SAND 12.120.0%Oct 24 9:44 AM EST
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From: LoneClone8/7/2014 9:41:14 PM
   of 1133
 
From Canaccord today:

Sandstorm Gold* (SSL : TSX : $6.92), Net Change:
-0.45, % Change:
-6.11%, Volume: 763,473

Waiting for a permanent solution, creates temporary overhang?

Canaccord Genuity Mining Analyst Rahul Paul has lowered his target price on Sandstorm Gold due to reduced Aurizona forecasts and an increased risk profile. Paul believes the uncertainty regarding a permanent solution to problems faced by Luna Gold (LGC)has significantly increased SSL’s risk profile. SSL’s equity investment in LGC should alleviate any concerns regarding a funding shortfall to the end of 2015, but longer-term challenges remain: the 17% stream remains a bigger burden than LGC can handle, capital requirements to sustain throughput levels with harder ore are still uncertain and LGC may not be able to fund such an expansion on its own. Paul believes that ultimately a permanent solution may be tied to a restructuring of the Aurizona stream in LGC’s favour or additional help from SSL in funding a crushing/grinding expansion at Aurizona to handle harder ore. As the largest LGC shareholder, SSL will likely be incentivized to help LGC. However, it is difficult to speculate on the timing and certainty of a permanent solution. In the interim, there is a risk that the process could take several months and could be an overhang on the SSL share price.
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