Sandstorm Gold Ltd. (NYSEMKT: SAND, TSX:SSL) announced a partnership with Franco-Nevada Corporation that will see both companies entering into a US$120 million gold stream agreement with True Gold Mining Inc. (TSXV: TGM) with respect to its Karma Project in Burkina Faso, West Africa.
According to the press release:
In exchange for US$100 million in funding, True Gold is obligated to deliver 100,000 ounces of gold over five years, and thereafter an amount of refined gold equal to 6.5% of the equivalent production at the Karma Project. In addition, Sandstorm and Franco-Nevada have provided True Gold with an 18 month option to increase funding by up to US$20 million (“Increase Option”) in exchange for eight quarterly deliveries totaling up to 30,000 ounces of gold, based on the pro-rata portion of the amount drawn thereunder, starting 18 months from when the first tranche under the Increase Option is drawn down.
Sandstorm’s Senior Executive Vice President and Co-Founder, David Awram commented,:
Sandstorm is excited to partner with True Gold as their Karma Project is expected to be an economically robust project with excellent exploration upside, run by a highly experienced and capable management team. As the first syndicated gold stream, this transaction is a milestone event for the streaming and royalty sector. Streaming finance has become a mainstream source of funding in the mining industry and I expect we will see more syndicated transactions in the future.
Meanwhile, Mark O’Dea, Executive Chairman of True Gold stated:
The Franco-Nevada/Sandstorm funding package demonstrated the strongest solution in terms of cost of capital, operational flexibility, alignment of business interests and long-term partnership benefits, which we believe will provide maximum benefits to our shareholders.
|Otis Gold Corp. (TSXV:OOO) is a near-term producer with an NI 43-101 resource 520,000 ounces of drill-indicated gold at its Kilgore Project in Idaho. Work is scheduled to begin soon at the North Target area of the Kilgore Gold Project. Connect with Otis Gold Corp and never miss a catalyst.|