sandstorm metals and energy presentation
TRANSCRIPT
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April 2011
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ABOUT SANDSTORM METALS & ENERGY
SANDSTORM METALS & ENERGY WAS SPUN OUT OF SANDSTORMRESOURCES LTD. (TSX-V: SSL)
24 months ago Sandstorm Resources was a shell company with a$4 million market cap and is now a diversified gold streamingcompany with a $290M market cap
FOCUSED ON AGGRESSIVE GROWTH BY ACQUIRING:
Energy Streams (Coal, Oil, Natural Gas, Uranium, Geothermal etc.)
Base Metal Streams (Copper, Nickel, Zinc, Lead etc.)
Bulk Commodity Streams (Iron Ore etc.)
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MANAGEMENT & BOARD
Management
, ,
David Awram (B.Sc, Geologist) EVP, former Director of IR at Silver Wheaton
Justin Cochrane (CFA) EVP, former VP at National Bank Financial
Claudia Tornquist EVP, former GM of Bus. Eval. at Rio Tinto
Dan Gundersen (P. Eng.)VP, former VP Engineering at DeeThree
Exploration
John BudreskiVice-Chairman, Cormark SecuritiesFormer President & CEO of Orion Securities
Director of Bear Creek, Nautilus Minerals,av eFormer Director of Arequipa and Peru Copper
Andy Swarthout President & CEO of Bear Creek Mining
Marcel de Groot Chairman of Luna Gold Corp.
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COAL STREAM & ROYALTY ACQUISITIONS
SANDSTORM HAS ACQUIRED SIX COAL STREAMS & TWO OILSTREAMS
1. Three Coal Streams from NovaDX - US$38 Million
2. Three Coal Streams from Royal Coal - US$11 Million
3. A 2.7% Ro alt on all assets from Ro al Coal US 3 Million
4. Two Oil Streams from Terrex Energy - $15 Million
After these acquisitions, Sandstorm still has US$21M forfuture acquisitions.
After these acquisitions, Sandstorm still has US$21M forfuture acquisitions.
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NAV BY COMMODITY
Sandstorm Metals & Energy will
US$75 per ton, thermal coal for
US$55 per ton, and oil for $15/bbl(plus transport costs &
50%30%.
Current contract prices for Metcoal are in excess of $200/t and for
Met Coal Thermal Coal Oil
erma coa are n excess oUS$70 /t.
50 % of the Value is fromMetallurgical Coal Streams.
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CURRENT STREAMS
Oil Streams in Alberta
Coal Streams in Tennessee, Alabama andKentucky
100% OF ASSETSIN POLITICALLY STABLE
.
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TERREX ENERGY: ENHANCED OIL RECOVERY
Two Creek
, Status EOR / Chemical flood implementation within 30 months
Production Peak production of 70k bbl/yr by 2014
Cash Flow Guarantee Guaranteed payback, plus penalties if EOR is delayed.
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MCOAL: HIGH VALUE COAL IN IDEAL LOCATION
Rex No.1 Mine
, Status Under development, expected to be complete by end of 2011
Production 500k tons per annum (2P reserves of 32M tons)
, ,
Cash Flow Guarantee Guaranteed payback in 5 years
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MCOAL: HIGH VALUE COAL IN IDEAL LOCATION
Rosa Mine Asset Auger Met Coal mine in Alabama, USA Status In production. Wash plant being constructed expected to be complete
by end of 2011 Production 150k tons per annum Coal Stream Terms 25% for several years, decreasing to 16% at $75/t Cash Flow Guarantee Guaranteed payback in 5 yearsIkerd Properties , ,
coal mines in Kentucky, USA Status Mix of operating and soon to be operating Production 320k tons per annum
, Cash Flow Guarantee Guaranteed payback in 5 years
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ROYAL COAL CURRENT PRODUCTION
Big Branch & Big Branch Extension
Asset Hi h ualit 12 500btu+ low sulfur thermal coal mine in Kentuck Status In production at Big Branch. Currently developing Big Branch
Extension Production 500k tons per annum increasing to 800k tons per annum
Coal Stream Terms 18% for several years, decreasing to 12% at $55/t
Cash Flow Guarantee Guaranteed payback in 5 years
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ROYAL COAL HIGH QUALITY NEAR TERM
SID Mine sse g qua y , u+ ow su ur erma coa m ne n en uc y Status Beginning development. Completion expected by end of 2011 Production 500k tons per annum
oa ream erms or severa years, ecreas ng o a
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COAL STREAMS: SIGNIFICANT CASH FLOW
Production for 2014NovaDXMet Coal
NovaDXThermal Coal
Royal CoalThermal Coal
Terrex Total
Production
490 kt 477 kt 1,360 kt 350 k bbl
Sandstorm %25%
droppingto 16%
25%dropping to
16%
18%dropping to 12%
+2.7% GOR
25% Two Creek15% Strathmore
= 20% Avg
Sandstorm Production 122 kt 112 kt 281 kt 65 k bbl
Sandstorm Revenue(US$185/t Met Coal, US$80 / tThermal Coal, $100 Oil)
US$22.7 M US$9.0 M US$22.5 M US$6.5 M US$60.7 M
Sandstorm Costs(US$75/t Met Coal, US$55/tThermal Coal, $15 Oil + royalty)
(US$9.2 M) (US$6.2 M) (US$15.5 M) (US$2.6 M) (US$33.5 M)
Sandstorm Before Tax
Before Tax Operating Cash Flow = $27MBefore Tax Operating Cash Flow = $27M
Cash Flow. . . . .
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ESTIMATED BEFORE TAX OPERATING
$50
$30
$40
xCash
Flo
illions)
US$250/t Met Coal, US$120/t Thermal Coal, $120 Oil
$10
$20
st.BeforeT
(USDm
US$185/t Met Coal, US$80/t Thermal Coal, $100 Oil
$0
2011 2012 2013 2014
, ,
With an increasing coal price environment,these Coal Streams can generate significant annual cash flow.
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ESTIMATED BEFORE TAX FREE CASH FLOW
Number ExercisePrice
CurrentOutstandin
Treasury Stock DilutionCalculation
Shares Issued & Outstanding 229M n/a 229M 229M
Options 7M US$0.56 n/a 0M
Warrants (expire December 23,2012)
111M US$0.70 n/a 0M
Total Pro-Forma 229M 229M
The US$0.70 warrants trade under the symbol SND.WT
Exercise of warrants and options would bring in approx. US$78M
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CONCLUSIONS
6 Coal Streams and 2 Oil Streams provide the following characteristics:
Immediate cash flow
Primary exposure to metallurgical coal Significant future cash flow growth / expansion
Significant asset risk diversification
Company risk diversification
$21M for future acquisitions
Contractually guaranteed payback of 5 years, on 20+ year coal assets
The first step in the creation of a large diversified,world class, cash flowing company.
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