JOHANNESBURG (miningweekly.com) – Dual-listed gold streaming and royalty firm Sandstorm Gold has completed its $175-million acquisition of Australian gold explorer Mariana Resources, which has now become a wholly owned subsidiary.
The total consideration paid included 32.83-million new Sandstorm shares issued and a cash consideration of $48-million.
As part of the acquisition, Sandstorm will add Mariana’s Turkey-based Hot Maden anchor asset to its portfolio, which is expected to increase Sandstorm’s attributable gold equivalent ounces to more than 135 000 oz by 2022, as well as increase operating cash flow to more than $100-million – based on a $1 250/oz gold price.
Meanwhile, a preliminary economic assessment projected an after-tax net present value and an internal rate of return for Sandstorm of $1.37-billion and 153% respectively, with estimated all-in sustaining costs of less than $400 /oz.
The acquisition of Mariana will also include exploration properties in Côte d'Ivoire, Turkey and Argentina. Sandstorm has already begun the process of spinning out their exploration properties into a separate public company, with plans to retain net smelter return royalties and equity.
The spin-out process is expected to be completed in six to 12 months and has the potential to add incremental value to the acquisition.
“This deal is truly transformative for the company. Hot Maden is one of the highest-grade undeveloped projects in the world. . . Opportunities to acquire anchor assets like Hot Maden are rare and, with the exploration potential that we see on the property, we anticipate that our 30% interest will continue to grow in value over time,” remarked Sandstorm CEO Nolan Watson.