Saturday, May 05, 2012

Sandstorm Gold (v.ssl) AGM May 4, 2012

AGM was well attended as they had to add another row of chairs to the Connaught Room at the Met Hotel. After the formal meeting was over, Sandstorm Gold CEO Nolan Watson made a presentation of where SSL is. Four of the five directors reelected were present with only Awram at some site doing due diligence.

The vote was 98% in favour of the consolidation at 1 to 5. Heavily influenced by the larger institutions/funds. Sandstorm Gold now has 70M shares outstanding. The consolidation process should be completed by Wednesday May 9, 2012.

They are in the middle of the application process to getting into NYSE-AMEX. Ticker has been chosen already. Watson stated the timeframe to be listed on the Amex is by the end of year, if not sooner. My understanding is that when Silver Wheaton did the same exercise, it took only a couple months.

SSL has $35 M cash on hand, $50 M LOC, and $3M in Cash Flow per month and growing.

Expecting $70 M cash flow around 2016/7. Likely will be paying taxes by then, stabilizing CF at $70M. Watson mentioned Franco is 15 times CF, SSL is 12 times. Thinks they can equal Franco's CF.

Have 7 stream deals. 5 of 7 producing.

Silvercrest - waiting on 2 things - 1) potentially building mill at Santa Elena, which would get 85%-90% of the gold out whereas it's roughly 67% for heap leaching method and 2) waiting for pre-feability for underground mine (SSL has option to get a piece of the action).

Rambler in Nwefoundland, paid for 25% of the gold byproduct in a copper VMS play. Over the last year, they may have found a mini gold mine. Maybe 3 times as big as first thought when they did deal.

Metanor may surprise to the upside.

I asked how SSL get their percentage of gold from the miners. Basically, on the first batch of refined gold, SSL gets the percentage amount, so if 17%, then 17% of the first batch goes to SSL. Also asked about low barrier to entry into the gold streaming space, Watson answered that it might seem so but says it's actually hard to get into the space.
Time spent by Nolan Watson - roughly 50/50 between the 2 companies but depending on which company has the deals.

Bottom line - They seem to able to execute on their plans fast and evidently, are going places. It'll be a fun ride.