Chapada is an open pit gold-copper mine located 270 kilometres northwest of Brasília in Goiás state, Brazil and has been in production since 2007. The ore is treated through a flotation plant with capacity of 22 million tonnes per annum. The Chapada operations have a mine life of over 20 years based on the most recent Proven and Probable Reserves and the mine is projected to produce approximately 116,000 ounces of gold, 122 million pounds of copper and 270,000 ounces of silver during the 2016 year.
Sandstorm has a stream agreement to purchase an amount of copper from Chapada, equal to:
- 4.2% of the copper produced, up to a maximum of 3.9 million pounds of copper annually, until Yamana has delivered to Sandstorm 39 million pounds of copper; then
- 3.0% of the copper produced until, on a cumulative basis, Yamana has delivered 50 million pounds of copper to Sandstorm; then
- 1.5% of the copper produced thereafter for the life of the mine.
Sandstorm will make ongoing payments for each pound of copper equal to 30% of the spot price per pound of copper. Sandstorm made an upfront payment of US$70 million to acquire the stream in October 2015.