SND Presentation | Risk | Coal

The World’s First Diversified Streaming Company

Sandstorm Metals & Energy was launched 8 months ago and has acquired:

$52M - Met Coal and Thermal Coal from NovaDX and Royal Coal ABOUT SANDSTORM METALS & ENERGY
Sandstorm Metals & Energy (TSXV-SND) is the world’s first base metal and energy streaming company. Sandstorm Metals & Energy was launched in December 2010 and has since acquired 9 commodity streams. Sandstorm Metals & Energy has a sister company called Sandstorm Gold (TSXV-SSL) which has 7 gold streams and a market capitalization of +$400 million.

02

MANAGEMENT & BOARD
Management Nolan Watson (CA, CFA) - President & CEO
Former CFO of Silver Wheaton

Non-Executive Directors John Budreski - Vice-Chairman,
Cormark Securities Former President & CEO of Orion Securities

David Awram (B.Sc, Geologist) - EVP
Former Director of IR at Silver Wheaton

David DeWitt - Director of Bear Justin Cochrane (CFA) - EVP
Former VP at National Bank Financial Creek, Nautilus Minerals Former Director of Arequipa and Peru Copper

Claudia Tornquist (M. Eng., MBA) - EVP
Former GM of Business Evaluation at Rio Tinto

Andy Swarthout - CEO of Bear
Creek Mining

Dan Gundersen (P. Eng., CFA) - VP
Former VP Engineering at DeeThree Exploration

Marcel de Groot - Chairman of Luna
Gold Corp.

03

SANDSTORM METALS & ENERGY LAUNCHED 1 YEAR AGO AND HAS ACQUIRED:

FIVE COAL STREAMS
Met coal and Thermal Coal from NovaDX and Royal Coal

$ 44M

TWO OIL STREAMS
Terrex Energy

$ 15M

ONE NATURAL GAS STREAM
Thunderbird Energy

$ 25M

ONE COPPER STREAM
Donner Metals

$ 20M

04

NAV BY COMMODITY

Natural Gas
Sandstorm cost per unit: $1 / mcf (plus 20% of price above $4 / mcf for royalties)

Cash

Oil
Sandstorm cost per unit: $15 / bbl (plus transport and government royalties)

16% 9% 12%
Thermal Coal
Sandstorm cost per unit: $55 / t

19%

27% 17%
Metallurgical Coal
Sandstorm cost per unit: $75 / t

Copper
Sandstorm cost per unit: $0.80 / lb

05

SANDSTORM METALS & ENERGY: CURRENT STREAMS

Quebec
Copper Stream

Alberta
Oil Streams

Tennessee, Alabama, Kentucky Utah
Natural Gas Stream Coal Streams

100% of assets in North America
06

DONNER METALS
Copper Stream
Asset

Bracemac-McLeod Mine
Production
21M lbs of copper per annum

Underground zinc mine, with copper by-product in Quebec – Operated by Xstrata. Expected to be in the lowest cash cost quartile. Ore to be milled at Xstrata owned Matagami mill.

Copper Stream Terms
17.5% of mine production at $0.80 / lb ($0.55/lb if Cu price is < $2.75)

Status
Under development, expected to be complete by end of 2012

Cash Flow Guarantee
Guaranteed payback in 5 years

07

COPPER STREAM: EXPLORATION UPSIDE
N296°
03 06
25EXT

N116°

BRACEMAC ZONES
17 78 6 M-26 M-25 ASR-3 84 81 42 50 M-14

MCLEOD ZONES
St. Pat Zone
67
M-18 3 BR-2

SURFACE

Bracemac Zones Mining Reserve

27

5 BR-8A

79

6EXT 33EXT

36

86
28EXT 85 75 83 10EXT

87
80 77

37 5

45

40 West McLeod Zone M-28 Inferred Resource 0.16Mt @ 2.2%Zn, 2.6% Cu, 24g/t Ag, 0.2g/t Au 03 21 44

48 02 49

45 63 55 52

McLeod Zone Mining Reserve
15

-200m
06

64

73
60 12 62 24

-400m
14

53

38.09% Zn / 0.15m
76 76W1 16A

57 61 66

71

68

74
56 54 19

9EXT 90-7 33 32

59

65
Open
17

75

72

Stringer Zone Indicated Resource -600m 0.24Mt@ 1.0%Zn, 1.25% Cu

-800m

sill

06EXT 04EXT

?
31

bbro

MCL-09-01

f Ga

30 Magnetite

Open

McLeod Gabbro

est s

Area of Current Mine Development - 4 year mine life on current mining reserves
12000 E

ide o

Deep 20W1 Inferred resources 2.47Mt@ 9.2% Zn, 1.22% Cu, 40g/t Ag, 1.1g/t Au 20
13000 E

20W2

18

Open
03-W1 02-W5 02-W2 34-W1 09-02

-1000m
0m 200 m

On w

Open

34

02-W6 02-W7

Open

Composite section

Composite section

Bracemac Multi sulphide lenses at different stratigraphic levels
Hole pierce points projected to vertical long section. Distances between holes are shortened in this perspective.

FOOTWALL ALTERATION Strong Chlorite “Pipe” Alteration Gabbro Sill Other Dykes Sulphides in Mine Plan Sulphide Resources Cu Stringer Possible extension of Sulphides

DRILL HOLE PIERCE POINTS Massive Sulphides Semi Massive and Stringer Sulphides

14000 E

e Op n

-1200m

08

THUNDERBIRD ENERGY
Natural Gas Stream
Asset
Natural Gas project in Utah, USA

Gordon Creek
Gas Stream Terms
35% at $1/mcf plus 20% above $4/mcf

Status
Under development, rst wells to be complete by Q1 2012 with full production by 2014

Cash Flow Guarantee
Guaranteed payback in 7 years

Production
5 bcf per annum

09

NOVADX
Asset

Metallurgical Coal Stream

Rex No. 1 Mine
Production
500k tons per annum (2P reserves of 32M tons)

Underground Met Coal mine in Tennessee, USA

Status
Under development, expected to be complete by Q3 2013

Coal Stream Terms
25% for several years, decreasing to 16%, at $75/t

Cash Flow Guarantee
Guaranteed payback in 5 years

10

NOVADX
Asset

Metallurgical Coal Stream

Rosa Mine
Coal Stream Terms
25% for several years, decreasing to 16% at $75/t

Auger and strip Met Coal mine in Alabama, USA

Status
In commercial production

Cash Flow Guarantee
Guaranteed payback in 5 years

Production
150k tons per annum

11

OTHER STREAMS

OPERATOR

PROJECTS

Big Branch

SID Mine

All Assets

Two Creek & Strathmore

LOCATION

Kentucky, USA

Kentucky, USA

Kentucky, USA

Alberta, Canada

COMMODITY

Thermal Coal

Thermal Coal

Thermal Coal

Oil Streams

STATUS

Producing 18% for several years and 12% thereafter

Development 18% for several years and 12% thereafter

Producing/Development 2.7% GRR

Producing/Development 25% of Two Creek and 15% of Strathmore

COMMODITY STREAM TO SND

ONGOING PAYMENT

$55/ton 400,000 tons per annum increasing to 700,000 tons

$55/ton 500,000 tons

N/A N/A

$15/bbl Peak Production of 345k bbl/yr

ESTIMATED ANNUAL PRODUCTION

NOTES

Guaranteed payback in 5 years

Guaranteed payback in 5 years

Guaranteed payback in 7 years

12

PRODUCTION SCHEDULES

Two Creek Strathmore Big Branch SID Mine Rosa Mine
*POLYMER FLOOD

*POLYMER FLOOD

OIL AND GAS OIL AND GAS THERMAL COAL THERMAL COAL METALLURGICAL COAL

Rex No. 1 Gordon Creek Bracemac-McLeod
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014

METALLURGICAL COAL NATURAL GAS COPPER

Q2 2014

Q3 2014

Terrex Energy

Royal Coal

NovaDX

Thunderbird Energy

Donner Metals

13

ESTIMATED OPERATING CASH FLOW

$35
Donner Metals

$30

$25 Est. After Tax Cash Flow (USD millions)

Thunderbird Energy

$20
Terrex Energy

$15
Royal Coal Royalty Royal Coal

$10

NovaDX

$5

2012

2013

2014

2015

2016

Price Assumptions: US$160/t Met Coal, US$70/t Thermal Coal, US$80/bbl Oil, US$4.50/mcf Natural Gas, US$2.50/lb Copper

14

MAXIMIZING UPSIDE POTENTIAL MINIMIZING DOWNSIDE RISK

$30
Base Case

$25 Est. After Tax Cash Flow (USD millions)

$20

Total Cash Flow Guarantees

$15 $10

$5

2012

2013

2014

2015

2016

Base Case Price Assumptions:

US$160/t Met Coal US$70/t Thermal Coal

US$80/bbl Oil US$3.50/mcf Natural Gas

US$3.00/lb Copper

15

CASH FLOW GUARANTEES LIMIT RISK

CASH FLOW GUARANTEES
+ Cash on Hand

MARKET CAPITALIZATION

$ 10

$ 20

$ 30

$ 40

$ 50

$ 60

$ 70

$ 80

$ 90

$ 100 $ 110

$ 120

$ 130

$ 140 $ 150

USD millions

16

PEER COMPARISON
20

EV/Cash Flow

16.7 15 14.7 14.9 12.0 10 8.9 5 3.3 0
Sandstorm Metals Sandstorm Gold Anglo Paci c Group International Royalty Company Franco Nevada Silver Wheaton Royal Gold

14.1

Diversi ed Commodities

Precious Metals

1. 2. 3.

Based on 2013 estimates. Comparators using Bloomberg estimates on January 10, 2012 Post issue Sandstorm based on Company estimates for Enterprise Value and Cash Flow International Royalty Company’s multiple based on acquisition price divided by 2 year forward cash ow estimates

17

NINE

COMMODITY STREAMS DIVERSIFIED COMMODITIES

5x

2x

1x

1x

FIVE
$ 99M

15% 8% 14% 13%

20%

15% 8% 30% 14% 13%

20%

15% 8% 30% 14% 13%

20%

15% 8% 30% 14% 13%

20%

15% 8% 30% 14% 13%

20%

30%

In cash ow guarantees Sandstorm is creating a diversi ed, world class, cash owing company.

18

19

CURRENT SHARE CAPITAL
Number Exercise Price Current Outstanding Treasury Stock Dilution Calculation

Shares Issued & Outstanding Options Warrants (expire December 23, 2012)

318 M 15 M 155 M

-$0.48 US$0.70

318 M ---

318 M 0M 0M

Total

318 M

318 M

Institutional Holdings

Shares (millions)

% of Shares Outstanding

Libra Advisors Arias Resource Capital Wellington Management Sentry Select Capital Mawer Investment Management Total Insiders & Key Individuals

41.1 35.5 32.7 15.0 10.0 19.1

12.9% 11.2% 10.3% 4.7% 3.2% 6%

· The US$0.70 warrants trade under the symbol SND.WT · Exercise of warrants and options would bring in approx. US$113M

20

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
Except for the statements of historical fact contained herein, the information presented constitutes “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information is based on reasonable assumptions that have been made by the Corporation as at the date of such information and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Sandstorm to be materially different from those expressed or implied by the forward-looking information, including but not limited to: the impact of general business and economic conditions; the absence of control over mining operations from which Sandstorm will purchase gold and risks related to those mining operations, including risks related to international operations, government and environmental regulation, actual results of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be re ned; problems inherent to the marketability of minerals; industry conditions, including uctuations in the price of metals, uctuations in foreign exchange rates and uctuations in interest rates; stock market volatility; competition; as well as those factors discussed in the section entitled “Risk Factors” in Sandstorm’s nal short form prospectus as well as in Sandstorm’s annual information form incorporated by reference in such prospectus. Although Sandstorm has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Sandstorm does not undertake to update any forward-looking information that is contained or incorporated by reference herein, except in accordance with applicable securities laws CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES This presentation uses the terms “Measured”, “Indicated” and “Inferred” Resources. U.S. investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. “Inferred Mineral Resources” have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. U.S. investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. U.S. investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable.

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