Sandstorm Gold Ltd. (TSX VENTURE:SSL) is pleased to announce that it has acquired a 2.4% net smelter returns royalty (“NSR”) on the Mt. Hamilton gold project from Solitario Exploration & Royalty Corp. (NYSE MKT:XPL)(TSX:SLR) and Ely Gold & Minerals Inc. (TSX VENTURE:ELY). Mt. Hamilton is located in Nevada, U.S.A. and is held by Mt. Hamilton LLC (“MH-LLC”) which is 80% owned by Solitario and 20% owned by Ely Gold. As consideration, Sandstorm will make an upfront cash payment to MH-LLC of US$6 million upon signing the agreement and a future cash remittance of US$4 million on January 15, 2013.
If MH-LLC enters into a gold stream agreement with Sandstorm that has an upfront deposit of no less than US$30 million, MH-LLC will have the option, for a period of 30 months, to repurchase up to 100% of the NSR for US$12 million. In addition, MH-LLC has provided Sandstorm with a right of first refusal on any future royalty or gold stream financing for the Mt. Hamilton project.
“Using a small amount of cash on hand, we have secured a royalty on an excellent project and we are well positioned to complete a gold stream as Mt. Hamilton progresses to the construction stage,” said Sandstorm President & CEO Nolan Watson. “Solitario has been successful in developing the asset to date and we believe there is significant upside potential.”
[emphasis ours]
