In exchange, Sandstorm Gold will keep with it a flagship $200m gold stream on the Hod Maden project apart from being issued a stake of nearly 34% in Royalty North Partners and debt capital of $95m
Sandstorm Gold has signed a letter of intent (LOI) with Royalty North Partners (RNP) as per which the latter will acquire some non-royalty and non-stream assets from the former, including its 30% stake in the Hod Maden project in Turkey.
In exchange, Sandstorm Gold will retain a flagship $200m gold stream on the Hod Maden project along with a stake of around 34% in Royalty North Partners and debt capital of $95m.
Located in northeastern Turkey, Hod Maden is a development stage gold-copper project.
As per the terms of the LOI, Sandstorm Gold will also transfer its stake of around 25% in Entrée Resources to Royalty North Partners along with a contribution of $10m in cash.
Entrée Resources has a stake of 20% on a portion of the Oyu Tolgoi project in Mongolia in which Sandstorm Gold will retain its stream interest.
In 2022, Sandstorm Gold’s attributable gold equivalent production is anticipated to be 65,000–70,000 ounces. Subject to the closing of the deal, the company forecasts more than 100,000 gold equivalent ounces in 2025.
Through the deal, Sandstorm Gold is moving towards repositioning itself as a pure-play precious metals streaming and royalty firm. At the same time, the company will retain long-term exposure to the strong economics and potential growth of the Hod Maden project.
Sandstorm Gold President and CEO Nolan Watson said: “Streamline is a key theme for Sandstorm this year.
“Our desire is for Sandstorm to be a royalty and streaming company exclusively while ensuring the Company achieves industry-leading growth. The transformation of the Company’s interest in Hod Maden into a gold stream is integral to our corporate strategy of unlocking hidden value in Sandstorm’s portfolio.”
The transaction will be a reverse takeover of Royalty North Partners. Upon its completion, Royalty North Partners will be renamed Horizon Copper or such other name as may be determined.
Horizon Copper will become Sandstorm Gold’s strategic partner to enable collaboration between the parties on future acquisitions. The business objective of Horizon Copper is to grow its existing portfolio of assets actively, with a focus on copper projects.
Sandstorm Gold and Horizon Copper, which are both based in Canada, could partner whereby the former buys streams on the precious metal by-products resulting from the acquisitions of copper projects made by the latter.
The deal is currently anticipated to close in the latter half of this year.