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Sandstorm Gold: The Gold Streaming And Royalty Business

Sandstorm Gold Ltd. (SAND)

What is the Sandstorm's business model?

The company is financing gold mining projects through a gold "streaming" arrangement. A gold streaming arrangement means that Sandstorm makes an upfront payment to a gold miner in need of cash:

  1. To finance its capital expenditure for a mine project completion or its expansion.
  2. To refinance its financial obligations.
  3. To complete an acquisition.
  4. To satisfy any decisions that necessitate a quick influx of cash.

And, in exchange for this upfront payment, Sandstorm will purchase a certain percentage of the gold produced by the mine for the life of the mine and at a fixed per unit cost.

For example, Sandstorm invested an upfront cash payment of $20 million to help Metanor Resources (MEAOF) to develop its Bachelor Lake project in Québec.

In return for this cash payment, SAND received a gold streaming agreement to purchase 20% of the gold produced… Read More …