Sandstorm Gold (SSL.TO, SAND) has announced a portfolio update with not less than 10 Net Smelter Royalties having been added to the portfolio. 8 of the 10 royalties are based on gold projects in Nevada which Tarsis Resources (TCC.V) has just acquired from Sandstorm, and the value of these royalties will be close to zero and should only be seen as some kind of bet on the future.
What’s more interesting is Sandstorm’s NSR purchase on the Bombore gold project in Burkina Faso, owned by Orezone Gold (ORE.TO). Sandstorm is paying $3M to purchase a 0.45% NSR with the option to increase this to 1.2% for an additional $5M in cash payments. The total purchase price of the royalty will be $8M for a 1.2% NSR which is actually very expensive and will only benefit Sandstorm Gold if both the hard rock phase of the project will be mined and if the gold price increases further.
It looks like royalty and streaming companies are having a hard time to secure new projects and it doesn’t look like any of these 10 new royalties will generate a meaningful cash flow within the next 2-3 years.
> Click here to go to Sandstorm’s website
Disclosure: The author holds no position in any of the companies mentioned. Please see our disclaimer for current positions.
