Sandstorm Metals & Energy Converts Bracemac-McLeod Stream Into 3% NSR Royalty

VANCOUVER, Sept. 3, 2013 /CNW/ - Sandstorm Metals & Energy Ltd. ("Sandstorm Metals" or the "Company") (TSX-V: SND) is pleased to announce that it has converted its copper stream (the "Copper Stream") along with Sandstorm Gold Ltd.'s ("Sandstorm Gold") gold stream (the "Gold Stream") on the Bracemac-McLeod Mine ("Bracemac-McLeod") into a 3% net smelter returns royalty ("NSR") based on 100% of production from Bracemac-McLeod. Bracemac-McLeod is located in Matagami, Quebec and is owned and operated by a subsidiary of Glencore Xstrata plc ("Glencore"). The 3% NSR will be split between Sandstorm Metals and Sandstorm Gold (together "Sandstorm") based on the respective funds contributed to Donner Metals Ltd. ("Donner") in relation to the Copper Stream and Gold Stream, resulting in Sandstorm Metals receiving 80% of the proceeds from the 3% NSR (equivalent to a 2.4% NSR) and Sandstorm Gold receiving 20% of the proceeds from the 3% NSR (equivalent to a 0.6% NSR).

Sandstorm Metal's Copper Stream agreement with Donner entitled the Company to purchase 24.5% of the copper produced from Bracemac-McLeod at US$0.80 per lb. Donner held a 35% participating interest in Bracemac-McLeod (the "Joint Venture") but recently announced its inability to meet the cash calls under their Development and Operating Agreement with Glencore (see Donner press release dated August 13, 2013). Sandstorm Metals had the option to remedy the default by making the cash call payments to Glencore however this would have required Sandstorm Metals to raise a significant amount of equity. In order to avoid diluting shareholders, Sandstorm Metals and Sandstorm Gold have agreed the following with Donner and Glencore:

• Glencore has issued a 3% NSR to Sandstorm Metals on 100% of production from Bracemac-McLeod, which will be split 80% Sandstorm Metals and 20% Sandstorm Gold, in exchange for Donner's 35% participating interest in the Joint Venture and an option to acquire the Donner shares held by Sandstorm Metals.


• Sandstorm Metals and Sandstorm Gold have relinquished the Copper Stream and the Gold Stream respectively.


• Sandstorm Metals will issue 1,333,334 shares of Sandstorm Metals (at a deemed price of $1.50 per share) to Donner and Donner has provided each of Glencore and Sandstorm Metals with an irrevocable and unconditional release and discharge of any claim by Donner against Glencore or Sandstorm Metals and Donner agreed to an orderly completion of the transactions.


• After the proceeds from the 3% NSR exceed $49 million, from that point forward, Sandstorm will pay a 1% NSR to Donner out of the proceeds of the 3% NSR.

Sandstorm's President and CEO Nolan Watson commented, "Although Sandstorm had the ability to assume and maintain ownership of the 35% joint venture in the event of a Donner default, the ongoing capital requirements would have required raising a considerable amount of capital resulting in significant dilution for shareholders. This transaction allows us to avoid dilution and the 3% NSR will begin generating cash flow in the fourth quarter of this year, transitioning Sandstorm Metals into a cash flowing company."


ABOUT SANDSTORM METALS & ENERGY

Sandstorm Metals & Energy Ltd. is the world's first diversified streaming company. Sandstorm provides upfront financing to resource companies that are looking for capital and in return, receives a commodity streaming agreement. This agreement gives Sandstorm the right to purchase a percentage of the commodity produced, for the life of the asset, at a fixed price. Sandstorm has acquired a portfolio of three commodity streams and two NSR royalties in copper, palladium, zinc-lead and natural gas. Sandstorm plans to grow its production base through the acquisition of additional commodity streams.

Sandstorm Metals & Energy is focused on low cost operations with excellent exploration potential and strong management teams. Sandstorm has completed royalty and commodity purchase agreements with Canadian Zinc Corp., Colossus Minerals Inc., a subsidiary of Glencore Xstrata plc, Entrée Gold Inc. and Thunderbird Energy Corp.

For more information visit: www.sandstormmetalsandenergy.com


CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

Except for the statements of historical fact contained herein, the information presented constitutes "forward-looking information" or "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans", or similar terminology. Forward-looking information is based on reasonable assumptions that have been made by Sandstorm as at the date of such information and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Sandstorm to be materially different from those expressed or implied by the forward-looking information, including but not limited to: the impact of general business and economic conditions; the absence of control over operations from which Sandstorm will purchase commodities and risks related to those operations, including risks related to international operations, government and environmental regulation, actual results of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined; problems inherent to the marketability of commodities; industry conditions, including fluctuations in the price of commodities, fluctuations in foreign exchange rates and fluctuations in interest rates; stock market volatility; competition; as well as those factors discussed in the section entitled "Risks to Sandstorm" in Sandstorm's annual report for the financial year ended December 31, 2012. Although Sandstorm has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Sandstorm does not undertake to update any forward-looking information that is contained or incorporated by reference herein, except in accordance with applicable securities laws. Sandstorm does not provide any representation as to its comparability with other companies in its industry including, but not limited to, Franco-Nevada Corp., BHP Billiton and Rio Tinto.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



Contact

Sandstorm Metals & Energy Ltd.
Nolan Watson, President & Chief Executive Officer
(604) 689-0234

Denver Harris, Investor Relations Contact
(604) 628-1178