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Transaction overview

In July 2017, Sandstorm acquired Mariana Resources and its 30% interest in the high-grade Hod Maden project located in northeastern Turkey. Hod Maden is an anchor asset for Sandstorm and is expected to grow the company’s attributable gold equivalent ounces to more than 135,000 by 2022, increasing annual operating cash flow to more than US$100 million (based on a US$1,250 per ounce gold price). The impact of Hod Maden is a 100% increase in Sandstorm’s future production for consideration of approximately US$175 million in cash and shares of the company.

Hod Maden is expected to be a high-grade, low-cost mining operation. A Preliminary Economic Assessment released in March 2017 estimated an after-tax net present value of US$1.37 billion and an internal rate of return of 153% (100% basis) with estimated all-in sustaining costs of less than US$400 per gold equivalent ounce. The robust economics are underpinned by an Indicated Mineral Resource of 3.43 million gold equivalent ounces (7.1 million tonnes at 12.2 grams per tonne gold and 2.3% copper) based on approximately 15,000 metres of drilling from 52 drill holes using a 0.2 gram per tonne gold equivalent cut-off. More than 60 drill holes have been completed subsequent to the release of the Indicated Resource estimate, with many assay results returning significant mineralization.

The exploration potential at Hod Maden is encouraging as the land package is 74 km2 in size with the current focus being a 7 kilometre alteration zone. The majority of the exploration drilling has been over 1 kilometre of the alteration zone and several exploration targets have been identified along strike and parallel to the identified orebody.

The majority operator Lidya Madencilik is a strong local partner with experience exploring, developing, permitting and operating projects in Turkey. Lidya is part of a large Turkish conglomerate called Çalik Holding and is currently partnered with Alacer Gold Corp. on several projects in Turkey including the producing Çöpler mine and the development-stage Gediktepe and Kartaltepe projects.

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Frequently asked questions

Sandstorm Gold's CEO Nolan Watson and CFO Erfan Kazemi sit down to answer the top questions raised about the Mariana/Hod Maden acquisition.

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A conference call was held on July 6th
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“If we want better results for our
shareholders, then we need to think
differently, be more creative, and work
harder. And I think this transaction
is showing that.”
Nolan Watson
President and CEO

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