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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mariana Res | LSE:MARL | London | Ordinary Share | GG00BD3GC324 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 99.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
TIDMMARL
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR
INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
26 April 2017
Recommended Combination
of
Mariana Resources Limited ("Mariana")
and
Sandstorm Gold Ltd ("Sandstorm")
Summary
-- The board of directors of Sandstorm and the Mariana
Independent Directors are pleased to announce that they have reached an
agreement on the terms of a recommended share and cash acquisition by
which the entire issued and to be issued ordinary share capital of
Mariana that Sandstorm does not already own will be acquired by
Sandstorm (the "Combination"). It is intended that the Combination will
be implemented by way of a court-sanctioned scheme of arrangement under
Part VIII of the Companies (Guernsey) Law.
-- Sandstorm currently holds 8,980,243 Mariana Shares,
representing approximately 7.0 per cent. of the issued ordinary share
capital of Mariana, and Mariana Warrants over a further 4,490,122
Mariana Shares.
-- If successful, the Combination will result in Mariana
Shareholders, together, owning approximately 19.0 per cent. of the
ordinary share capital of the enlarged Sandstorm group (the "Combined
Group"), calculated by reference to the fully diluted issued share
capital of Mariana net of Sandstorm's interests in Mariana Shares and
Mariana Warrants.
Terms of the Combination
-- Under the terms of the Combination, Scheme Shareholders will
receive 0.2573 New Sandstorm Shares and 28.75 pence in cash for each
Scheme Share held at the Scheme Record Time.
-- Based on the closing price of US$4.04 per Sandstorm Share on
NYSE MKT and a currency exchange rate of GBP0.7788 per US$, on 25 April
2017 (being the last Business Day before the date of this Announcement),
the terms of the Combination represent:
-- a value of approximately 109.71 pence per Mariana
Share;
-- a value of approximately GBP166.85 million for
Mariana's fully diluted ordinary share capital;
-- a premium of approximately 84.38 per cent. to the
closing price of 59.5 pence per Mariana Share on AIM on 25 April 2017
(being the last Business Day before the date of this Announcement); and
-- a premium of approximately 88.30 per cent. to the
20-day VWAP per Mariana Share of 62.84 pence on AIM to 25 April 2017
(being the last Business Day before the date of this Announcement),
based on the 20-day VWAP per Sandstorm Share of 348.16 pence on NYSE MKT
to the same date and utilising daily close composite exchange rates.
-- If, after the date of this Announcement, any dividend and/or
other distribution is announced, declared or paid in respect of the
Mariana Shares, Sandstorm reserves the right to reduce the Consideration
by an amount up to the amount of such dividend and/or distribution so
announced, declared or paid.
Highlights of the Combination
-- The Combination is expected to create a leading mid-tier
stream and royalty company, delivering significant benefits to
shareholders of Mariana and Sandstorm.
-- Stream and royalty finance involves making an upfront payment
to a mining partner that is in need of capital to build their mine,
refinance their obligations, complete an acquisition or for various
other reasons. In exchange for that upfront payment, Sandstorm receives
the right to purchase a percentage of the gold produced from the mine
(in the case of a stream) or a portion of the revenue generated from the
mine (in the case of a royalty).
-- The Combined Group will have:
-- A diversified portfolio of 155 streams and royalties
including 20 producing, 23 development-stage, 26 advanced
exploration-stage and 86 exploration-stage assets (the "Stream and
Royalty Portfolio"). Of the projects that make up the Stream and Royalty
Portfolio, 63% are located in North America, 19% in South America, 12%
in Asia, 3% in Africa and 3% in Australia.
-- A 30% incorporated joint venture interest ("JV") in
the high-grade, gold-copper, development-stage Hot Maden project in
northeast Turkey ("Hot Maden") which is held by Mariana via the Turkish
company Artmin Madencili Sanayive Tikaret AS.
-- At an appropriate stage post completion of the
Combination, Sandstorm intends to move from the current position of
equity participation in the JV to converting the Combined Group's
interest in the JV into a gold stream, adding significant future cash
flow growth potential to the Stream and Royalty Portfolio. This will
require the Combined Group to identify a purchaser for the JV interest,
with consideration of such sale being a newly created gold stream,
resulting in an effective conversion of the JV interest into a gold
stream. At present the Combined Group has not begun soliciting interest
in a conversion transaction and intends to conduct such solicitation in
the future after Hot Maden has undergone several de-risking and value
creating milestones.
-- Hot Maden is expected to be a straightforward, low
capital cost project with estimated initial construction capital
requirements of US$169 million (approximately US$51 million attributed
to the 30% JV interest). The high-grade nature of the orebody and its
wide mineralized zones provide the potential for a low cost mining
operation, with estimated all-in sustaining costs of less than US$400
per ounce gold-equivalent, which if achieved would lead to significant
cash flow generation from the project.
-- Hot Maden will continue to be managed by Turkish
company Lidya Madencilik Sanayive Ticaret A.S. ("Lidya"), the 70% JV
partner at Hot Maden. Lidya is an experienced Turkish company and is
part of Çalik Holding, a Turkish conglomerate with several business
lines including energy, telecommunication, finance, construction,
textiles and mining. Lidya is currently partnered with Alacer Gold Corp.
on the producing Çöpler mine and the development-stage
Gediktepe and Kartaltepe projects in Turkey.
-- An interest in the remaining exploration properties of
Mariana with a focus on gold, silver and associated metals in Côte
d'Ivoire, Turkey and Argentina (the "Exploration Properties"). Following
completion of the Combination, Sandstorm intends to spin-out the
Exploration Properties into a separate company (the "SpinCo"), with the
Combined Group retaining royalty interests over the Exploration
Properties together with equity in the SpinCo. Sandstorm intends that
the SpinCo would seek external investment, as required, to fund future
exploration costs, with a goal of allowing shareholders of the Combined
Group to maintain significant exposure to the Exploration Properties
without exposure to further investment requirements.
-- Following the Combination, the Combined Group will maintain a
strong balance sheet with significant available liquidity from its
US$110 million revolving credit facility and strong cash flow from
operations to fund Sandstorm's ongoing strategy of future stream and
royalty acquisitions. The Combined Group will also have a portfolio of
equity and debt investments in other mining companies which is intended
to be monetized to support the Combined Group's ongoing acquisition
strategy in due course.
-- Cash currently remaining in the Mariana Group of
approximately US$5 million as at 25 April 2017, being the last Business
Day before the date of this Announcement, which is expected to be
sufficient to fund Mariana's ongoing pro rata share of development
programmes and cash calls for the Hot Maden JV until January 2018 as
well as furthering exploration as prioritised in Mariana's area of
focus.
-- Superior market liquidity for Mariana Shareholders. Over the
last 15 months, the daily dollar trading volume of Sandstorm has
averaged approximately US$10 million between the NYSE MKT and TSX.
-- Experienced management team which has completed more than
US$2 billion in stream and royalty transactions. On completion of the
Combination, Nolan Watson will be President and Chief Executive Officer
of the Combined Group and Glen Parsons will continue to manage the
Exploration Properties furthering the advancement up the development
curve.
Commenting on today's Announcement, John Horsburgh, Non-executive
Chairman of Mariana said:
"The Independent Directors recommend that Mariana Shareholders approve
this Combination. The Combination with a company such as Sandstorm not
only de-risks Mariana's exposure as a single development/production
asset company but provides a stronger diverse platform and ability to
finance the development of the 30% owned high grade gold-copper
discovery at Hot Maden in Turkey. The terms of the Combination represent
a significant and attractive premium to the market price of Mariana
Shares. The Consideration includes a Cash Consideration Amount and a New
Sandstorm Share Consideration Amount component that provides an
opportunity for Mariana Shareholders to participate in the upside of Hot
Maden, as it advances to production, as well as exposure to the existing
Mariana Exploration Properties and the Combined Group's streaming and
royalty portfolio. The Independent Directors have also taken into
account the high liquidity of Sandstorm Shares in arriving at this
recommendation."
Commenting on today's Announcement, Nolan Watson, President and Chief
Executive Officer of Sandstorm said:
"We believe that, by combining Mariana and Sandstorm and subsequently
converting the Hot Maden JV interest into a gold stream, we can unlock
the inherent value of Hot Maden and deliver the optimal outcome for
shareholders without incurring further equity dilution to finance the
interest in Hot Maden. We believe that Hot Maden is a unique asset with
a robust cash flow profile and will be an anchor gold stream asset that
has the potential to more than double Sandstorm's attributable gold
equivalent production once in full operation. We are confident in Lidya
as the operating partner at Hot Maden and we look forward to watching
the project advance towards production and the mineralization expand
through continued exploration.
The Combination is expected to transform the Combined Group into a
leading mid-tier streaming and royalty company and our focus will be
growth by acquisition with the primary objective being to add streams
and royalties on quality projects with exploration upside, with the
balance of Mariana's exploration portfolio contributing to this. We
believe that we are well positioned to continue to execute on our growth
plans with significant available liquidity from our US$110 million
revolving credit facility and a portfolio of equity and debt investments
in other mining companies that we plan to monetize."
Further details of the Combination
-- It is intended that the Combination will be implemented by
means of a Court-sanctioned scheme of arrangement under Part VIII of the
Companies (Guernsey) Law, further details of which are contained in the
full text of this Announcement. However, Sandstorm reserves the right to
implement the Combination by way of a takeover offer (which shall be an
offer for the purposes of section 337 of the Companies (Guernsey) Law),
subject to the Panel's consent and the terms of the Co-operation
Agreement.
-- The Mariana Independent Directors, who have been so advised
by RFC Ambrian Limited ("RFC Ambrian") as to the financial terms of the
Combination, consider the terms of the Combination to be fair and
reasonable. In providing their advice, RFC Ambrian have taken into
account the commercial assessments of the Mariana Independent Directors.
RFC Ambrian is providing independent financial advice to the Mariana
Independent Directors for the purposes of Rule 3 of the Code.
-- The Mariana Independent Directors have also been advised by
Raymond James Ltd. ("Raymond James") as to the financial terms and
certain Canadian capital market aspects of the Combination.
-- Accordingly, the Mariana Independent Directors have
unanimously approved the Combination and intend to recommend that
Mariana Shareholders vote in favour of the Scheme at the Guernsey Court
Meeting and the resolutions to be proposed at the General Meeting as
they have irrevocably undertaken to Sandstorm to do in respect of their
own beneficial holdings of, in aggregate, 905,050 Mariana Shares
representing approximately 0.71 per cent. of the issued ordinary share
capital of Mariana on 25 April 2017 (being the last Business Day prior
to the date of this Announcement).
-- In addition to the irrevocable undertakings from the Mariana
Independent Directors, Sandstorm has also received irrevocable
undertakings from each of Australian Investors Pty Ltd and AngloGold
Ashanti Holdings Plc to vote in favour of the Scheme at the Guernsey
Court Meeting and the resolutions to be proposed at the General Meeting
in respect of, in aggregate, 8,718,089 Mariana Shares, representing
approximately 6.80 per cent. of the issued ordinary share capital of
Mariana on 25 April 2017 (being the last Business Day prior to the date
of this Announcement).
-- Sandstorm has therefore received irrevocable undertakings to
vote in favour of the Scheme at the Guernsey Court Meeting and the
resolutions to be proposed at the General Meeting in respect of, in
aggregate, 9,623,139 Mariana Shares representing, in aggregate,
approximately 7.51 per cent. of the issued ordinary share capital of
Mariana on 25 April 2017 (being the last Business Day prior to the date
of this Announcement).
-- Further details of these irrevocable undertakings, including
the circumstances in which they cease to be binding, are set out in
Appendix 3 to this Announcement.
-- Glen Parsons and Eric Roth have also irrevocably undertaken
to Sandstorm to vote in favour of those resolutions to be proposed at
the General Meeting on which they are entitled to vote in respect of, in
aggregate, 986,621 Mariana Shares representing approximately 0.77 per
cent. of the issued ordinary share capital of Mariana on 25 April 2017
(being the last Business Day prior to the date of this Announcement). As
a consequence of the Retention Arrangements, Glen Parsons and Eric Roth
will not vote on the resolution to approve the Scheme at the Guernsey
Court Meeting.
-- Neither of Ron Ho or Mustafa Aksoy has given an irrevocable
undertaking to Sandstorm on the basis that: (i) Ron Ho is an employee of
Sandstorm; and (ii) Mustafa Aksoy does not hold any Mariana Shares.
-- The Scheme Document, containing further information about the
Combination and notices of the Guernsey Court Meeting and General
Meeting, together with the Forms of Proxy, will be sent to Mariana
Shareholders and (for information only) to principals in the Mariana
Employee Equity Plans and holders of Mariana Warrants as soon as
practicable and, in any event, within 28 days of the date of this
Announcement (unless the Panel agrees otherwise). An expected timetable
of principal events will be included in the Scheme Document. The Scheme
Document will also be available for review on SEDAR under Mariana's
profile at www.sedar.com.
This summary should be read in conjunction with, and is subject to, the
full text of the following Announcement (including its Appendices). The
Combination will be subject to the Conditions and certain further terms
set out in Appendix 1 and to the full terms and conditions to be set out
in the Scheme Document. Appendix 2 contains the sources and bases of
certain information contained in this summary and the following
Announcement. Appendix 3 contains details of the irrevocable
undertakings received by Sandstorm. Appendix 4 contains details of the
Sandstorm Forecast. Appendix 5 contains the definitions of certain terms
used in this summary and the following Announcement.
Joint Webcast and Conference Call Details
A conference call will be held on 26 April 2017 starting at 8:00 am
(Pacific Daylight Time) to further discuss the Combination. To
participate in the conference call, use the following dial-in numbers
and conference ID, or join the webcast using the link below:
North America Toll Free: 888 390 0546
U.K. Local: +44 (0)800 652 2435
Conference ID: 75483188
Webcast URL: http://ow.ly/CDou30bafh0
Enquiries
Sandstorm
Nolan Watson, President & CEO +1 604 689 0234
Adam Spencer, Senior Vice President, Corporate Development +1 416 238 1152
Denver Harris, Investor Relations +1 604 628 1178
KPMG LLP (Financial Adviser to Sandstorm)
Helen Roxburgh
Michael Nicholson +44 (0) 207 311 1000
Mariana
John Horsburgh, Independent Chairman and Non-Executive
Director
Glen Parsons, CEO
Karen Davies, Head of Investor Relations +61 2 8437 4588
RFC Ambrian Limited (Financial Adviser to Mariana)
Stephen Allen
Bhavesh Patel +44 (0) 20 3440 6800
Raymond James Ltd. (Canadian Financial Adviser to
Mariana)
John Willet
Craig McDougal +1 416 777 7000
Blytheweigh (PR Adviser to Mariana)
Tim Blythe
Camilla Horsfall
Megan Ray +44 (0) 207 138 3224
IMPORTANT NOTICE
The technical and scientific information relating to Mariana and its
assets contained in this Announcement has been reviewed and approved for
release by Eric Roth, Mariana's Qualified Person as defined by NI 43-101
- Standards for Disclosure of Mineral Projects. Mr Roth is Mariana's
Chief Operating Officer and Executive Director and holds a Ph.D. in
Economic Geology from the University of Western Australia, is a Fellow
of the Australian Institute of Mining and Metallurgy (AusIMM), and is a
Fellow of the Society of Economic Geologists (SEG). Mr Roth has 25
years of experience in international minerals exploration and mining
project evaluation.
The person responsible for arranging for the release of this
Announcement on behalf of Mariana is Glen Parsons, CEO.
KPMG LLP, which is authorised and regulated in the UK by the FCA, is
acting exclusively as financial adviser to Sandstorm in relation to the
Combination, and is not acting for any other person in relation to such
Combination. KPMG LLP will not be responsible to anyone other than
Sandstorm for providing the protections afforded to its clients nor for
providing advice in relation to the Combination or any other matters
referred to in this Announcement or otherwise.
RFC Ambrian Limited, which is authorised and regulated by the FCA, is
acting exclusively for Mariana and noSHYone else in connection with the
Combination and will not be responsible to anyone other than Mariana for
providing the protections afforded to clients of RFC Ambrian Limited nor
for providing advice in relation to the Combination or any other matters
referred to in this Announcement.
Raymond James Ltd. is acting exclusively as Canadian financial adviser
to Mariana and to the Mariana Independent Directors, and noSHYone else
in connection with the Combination and will not be responsible to anyone
other than Mariana for providing the protections afforded to clients of
Raymond James Ltd. nor for providing advice in relation to the
Combination or any other matters referred to in this Announcement.
Further information
This Announcement is not intended to and does not constitute, or form
part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Combination or otherwise, nor shall there be any sale, issuance or transfer of securities of Mariana in any jurisdiction in contravention of applicable law. The Combination will be made solely by means of the Scheme Document, which will contain the full terms and conditions of the Combination including details of how to vote in respect of the Scheme. Any vote in respect of the Scheme or other response in relation to the Combination should be made only on the basis of the information contained in the Scheme Document. Overseas jurisdictions The availability of the Combination to Mariana Shareholders who are not resident in and citizens of the UK or Guernsey may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the UK or Guernsey should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. Relevant clearances have not been, and will not be, obtained from the securities commission or similar regulatory authority of any province or territory of Canada. Further details in relation to overseas shareholders will be contained in the Scheme Document and Mariana Shareholders are advised to read carefully the Scheme Document and related Forms of Proxy once these have been dispatched. The release, publication or distribution of this Announcement in or into jurisdictions other than the UK or Guernsey may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK or Guernsey should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Combination disclaim any responsibility or liability for the violation of such restrictions by any person. This Announcement has been prepared for the purposes of complying with English law, Guernsey law, certain applicable Canadian securities laws, the AIM Rules, the rules of the London Stock Exchange and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside of England or Guernsey. Copies of this Announcement and the formal documentation relating to the Scheme and the Combination will not be, and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction or any jurisdiction where to do so would violate the laws of that jurisdiction. Notice to US Holders, US Optionholders and US Warrantholders The Combination and the securities to be issued in connection with the Combination have not been approved or disapproved by the SEC or the securities regulatory authority of any state of the United States, nor has the SEC or any such state securities regulatory authority passed upon the fairness or merits of the Combination or upon the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence. The New Sandstorm Shares to be received by Mariana Shareholders in exchange for their Mariana Shares pursuant to the Combination have not been, and will not be, registered under the US Securities Act or the securities laws of any state, district or other jurisdiction of the United States, and such securities are intended to be issued in reliance upon the exemption from the registration requirements of the US Securities Act set forth in Section 3(a)(10) thereof on the basis of the approval of the Guernsey Court, which will be informed of the intention to rely upon such exemption, and similar exemptions under applicable state securities laws. Section 3(a)(10) of the US Securities Act, generally, exempts the issuance of securities issued in exchange for one or more bona fide outstanding securities, from the registration requirements of the US Securities Act where the terms and conditions of such issuance and exchange have been approved by a court of competent jurisdiction that is expressly authorized by law to grant such approval, after a hearing upon the fairness of the substantive and procedural terms and conditions of such issuance and exchange at which all persons to whom the securities will be issued have the right to appear and receive timely and adequate notice thereof, among other conditions and requirements. Mariana Options and Mariana Warrants will remain outstanding under their terms and any securities issuable upon exercise thereof have not been and will not be registered under the U.S. Securities Act or applicable state securities laws. As a result, Mariana Options and Mariana Warrants may not be exercised in the United States or by or on behalf of a US Optionholder or US Warrantholder, as applicable, nor may any New Sandstorm Shares issued upon such exercise be offered or resold in the United States or to or for the account of such a US holder, except pursuant to the terms of such security and pursuant to a registration statement under the U.S. Securities Act or an exemption from applicable registration requirements or in a transaction not subject to the registration requirements of the U.S. Securities Act and applicable state securities laws. The New Sandstorm Shares to be received by Mariana Shareholders upon completion of the Combination may be resold without restriction under the US Securities Act, except in respect of resales by persons who are "affiliates" (within the meaning of Rule 144 under the US Securities Act) of Sandstorm at the time of the Section 3(a)(10) exchange or who have been affiliates of Sandstorm within 90 days before the Section 3(a)(10) exchange or who are affiliates of Sandstorm at the time of such resale or within the 90-day period prior to such resale. Persons who may be deemed to be "affiliates" of an issuer include individuals or entities that control, are controlled by, or are under common control with, the issuer, whether through the ownership of voting securities, by contract, or otherwise, and generally include executive officers and directors of the issuer as well as principal shareholders of the issuer (which includes, among others, 10% shareholders). The financial information on Sandstorm in this Announcement has been extracted or derived (without material adjustment) from Sandstorm's Annual Report and Accounts for the year ended 31 December 2016 and the unaudited interim production results for the three-month period ending 31 March 2017, which are prepared in US Dollars. The financial information on Mariana in this Announcement has been extracted or derived (without material adjustment) from Mariana's Annual Report and Accounts for the year ended 31 December 2016, which are prepared in British Pounds Sterling. In addition, such financial statements and other financial information included or incorporated by reference in this Announcement have been prepared in accordance with IFRS, which differs from US GAAP in certain material respects, and thus are not directly comparable to financial statements prepared in accordance with US GAAP. Information in this Announcement or in the documents incorporated by reference herein concerning the properties and operations of Sandstorm and of Mariana has been prepared in accordance with requirements and standards under securities laws, which differ from the requirements of US securities laws. The terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" used in the Announcement or in the documents incorporated by reference herein are mining terms as defined in accordance with NI 43-101 under guidelines set out in the Definition Standards for Mineral Resources and Mineral Reserves adopted by the Canadian Institute of Mining, Metallurgy and Petroleum Council on 11 December 2005. While the terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are recognized and required by securities laws other than the requirements of US securities laws, they are not recognized by the SEC. Disclosure of contained ounces are or may be permitted disclosure under regulations applicable to Mariana and Sandstorm; however, the SEC normally only permits issuers to report resources as in place tonnage and grade without reference to unit of production measures. As such, certain information contained in the Announcement or in the documents incorporated by reference herein concerning descriptions of mineralization and mineral resources under these standards may not be comparable to similar information made public by US companies subject to reporting and disclosure requirements of the SEC. US Holders should be aware that the Combination described in the Announcement may have tax consequences in the United States and should consult their own tax advisors to determine the particular United States tax consequences to them of the Combination in light of their particular situation, as well as any tax consequences that may arise under the laws of any other relevant foreign, state, local, or other taxing jurisdiction. The enforcement by investors of civil liabilities under the United States federal and state securities laws may be affected adversely by the fact that Sandstorm and Mariana are incorporated or organized under the laws of a jurisdiction other than the United States, that some or all of their officers and directors are and will be residents of countries other than the United States, that some or all of the experts
named in the Announcement may be residents of countries other than the United States, and that all or a substantial portion of the assets of Sandstorm, Mariana and such persons are and will be located outside the United States. As a result, it may be difficult or impossible for US Holders (including US Optionholders and US Warrantholders) to effect service of process within the United States upon Sandstorm or Mariana, as applicable, their respective officers or directors or the experts named herein, or to realize, against them, upon judgments of courts of the United States predicated upon civil liabilities under the federal securities laws of the United States or applicable securities laws of any state within the United States. In addition, US Holders (including US Optionholders and US Warrantholders) should not assume that the courts of Guernsey: (a) would enforce judgments of United States courts obtained in actions against such persons predicated upon civil liabilities under the federal securities laws of the United States or applicable securities laws of any state within the United States; or (b) would enforce, in original actions, liabilities against such persons predicated upon civil liabilities under the federal securities laws of the United States or applicable securities laws of any state within the United States. Notice to Canadian Holders The enforcement by investors of civil liabilities under the Canadian securities laws may be affected adversely by the fact that Mariana is incorporated or organized under the laws of a jurisdiction other than Canada, that some or all of Sandstorm's and Mariana's officers and directors are and will be residents of countries other than Canada, that some or all of the experts named in this Announcement may be residents of countries other than Canada, and that all or a substantial portion of the assets of Sandstorm, Mariana and such persons are and will be located outside Canada. As a result, it may be difficult or impossible for Canadian Holders to effect service of process within Canada upon Mariana, Sandstorm's and Mariana's respective officers or directors or the experts named herein, or to realize, against them, upon judgments of courts of Canada predicated upon liabilities under Canadian securities laws. In addition, Canadian Holders should not assume that the courts of Guernsey: (a) would enforce judgments of Canadian courts obtained in actions against such persons predicated upon civil liabilities under Canadian securities laws; or (b) would enforce, in original actions, liabilities against such persons predicated upon civil liabilities under the Canadian securities laws. The New Sandstorm Shares to be issued pursuant to the Combination will be issued in reliance upon exemptions from the prospectus requirements of securities legislation in each province of Canada. Subject to certain disclosure and regulatory requirements and to customary restrictions applicable to distributions of shares that constitute "control distributions", New Sandstorm Shares may be resold in each province and territory in Canada, subject in certain circumstances, to the usual conditions that no unusual effort has been made to prepare the market or to create demand, no extraordinary commission or consideration is paid and, if the selling shareholder is an insider or officer of Sandstorm, such shareholder has no reasonable grounds to believe that Sandstorm is in default of securities legislation. Canadian Holders should be aware that the Combination described in this Announcement may have tax consequences in Canada and should consult their own tax advisors to determine the particular Canadian tax consequences to them of the Combination in light of their particular circumstances, as well as any tax consequences that may arise under the laws of any other relevant foreign, state, local, or other taxing jurisdiction. Forward-looking statements This Announcement (including information incorporated by reference in this Announcement), oral statements made regarding the Combination, and other information published by Sandstorm and Mariana contain statements which are, or may be deemed to be, "forwardSHYlooking statements" or "forward-looking information" under applicable securities laws (collectively referred to as "forward-looking statements"). ForwardSHYlooking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Sandstorm and Mariana about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forwardSHYlooking statements. The forwardSHYlooking statements contained in this Announcement include statements relating to the expected effects of the Combination on Sandstorm and Mariana, the expected timing and scope of the Combination, production forecasts, plans with respect to the JV interest, plans with respect to the Exploration Properties, estimates of mineral resources, statements with respect to the Hot Maden PEA and other statements other than historical facts. Often, but not always, forwardSHYlooking statements can be identified by the use of forwardSHYlooking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although Sandstorm and Mariana believe that the expectations reflected in such forwardSHYlooking statements are reasonable, Sandstorm and Mariana can give no assurance that such expectations will prove to be correct. By their nature, forwardSHYlooking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forwardSHYlooking statements. These factors include, but are not limited to: the ability to consummate the Combination; the ability to obtain requisite shareholder and stock exchange approvals and the satisfaction of other Conditions on the proposed terms and schedule; the ability of Sandstorm and Mariana to successfully integrate their respective operations and retain key employees; the potential impact of the announcement or consummation of the Combination on relationships, including with employees, suppliers, customers and competitors; and changes in general economic, business and political conditions. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forwardSHYlooking statements. Such forwardSHYlooking statements should therefore be construed in the light of such factors. Neither Sandstorm nor Mariana, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forwardSHYlooking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on these forwardSHYlooking statements. Other than in accordance with their legal or regulatory obligations (including, but not limited to, the AIM Rules), neither Sandstorm nor Mariana is under any obligation, and Sandstorm and Mariana expressly disclaim any intention or obligation, to update or revise any forwardSHYlooking statements, whether as a result of new information, future events or otherwise. With respect to statements on the Sandstorm Forecast, which is included for the purposes outlined herein, readers are cautioned that the information may not be appropriate for other purposes. No profit forecasts or estimates or quantified financial benefits statement Other than in respect of the Sandstorm Forecast, no statement in this Announcement is intended as a profit forecast, profit estimate or quantified financial benefits statement and no statement in this Announcement should be interpreted to mean that earnings per Mariana Share or Sandstorm Share for the current or future financial years would necessarily match or exceed the respective historical published earnings per Mariana Share or Sandstorm Share or to mean that the Combined Group's earnings in the first twelve months following the Combination, or in any subsequent period, following the Combination would necessarily match, or be greater than or be less than, those of Mariana and/or Sandstorm for the relevant preceding financial period or any other period. Disclosure requirements of the Code Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who
deal in the relevant securities of the offeree company or of a
securities exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested
in 1% or more of any class of relevant securities of the offeree company
or of any securities exchange offeror must make a Dealing Disclosure if
the person deals in any relevant securities of the offeree company or of
any securities exchange offeror. A Dealing Disclosure must contain
details of the dealing concerned and of the person's interests and short
positions in, and rights to subscribe for, any relevant securities of
each of (i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously been
disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule
8.3(b) applies must be made by no later than 3.30 pm (London time) on
the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a securities
exchange offeror, they will be deemed to be a single person for the
purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company
and by any offeror and Dealing Disclosures must also be made by the
offeree company, by any offeror and by any persons acting in concert
with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree
and offeror companies in respect of whose relevant securities Opening
Position Disclosures and Dealing Disclosures must be made can be found
in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any
offeror was first identified. You should contact the Panel's Market
Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to
whether you are required to make an Opening Position Disclosure or a
Dealing Disclosure.
Publication on website and SEDAR
A copy of this Announcement will be made available, subject to certain
restrictions relating to persons resident in Restricted Jurisdictions,
on Sandstorm's website at http://www.sandstormgold.com and Mariana's
website at http://www.marianaresources.com by no later than 12 noon
(London time) on the Business Day following this Announcement. For the
avoidance of doubt, the contents of these websites are not incorporated
by reference and do not form part of this Announcement.
This Announcement will also be available on SEDAR under Mariana's
profile at www.sedar.com.
Requesting hard copy documents
In accordance with Rule 30.3 of the Code, a person so entitled may
request a hard copy of this Announcement by contacting RFC Ambrian
Limited during business hours on +44 (0)203 440 6800 or by submitting a
request in writing to RFC Ambrian Limited at Level 5, Condor House, 10
St Paul's Churchyard, London, EC4M 8AL. For persons who receive a copy
of this Announcement in electronic form or via a website notification, a
hard copy of this Announcement will not be sent unless so requested. You
may also request that all future documents, announcements and
information to be sent to you in relation to the Combination should be
in hard copy form.
Electronic Communications
Please be aware that addresses, electronic addresses and certain other
information provided by Mariana Shareholders, persons with information
rights and other relevant persons for the receipt of communications from
Mariana may be provided to Sandstorm during the offer period as required
under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c).
Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Code:
-- Mariana confirms that as at the date of this Announcement it
has in issue and admitted to trading on AIM and TSXV 126,231,768
ordinary shares of 0.1p each (save for 1,977,812 Mariana Shares which
have been issued and are expected to be admitted to trading on AIM and
TSXV on or around 27 April 2017). The ISIN of the ordinary shares is
GG00BD3GC324.
-- Sandstorm confirms that as at the date of this Announcement
it has in issue and admitted to trading on TSX and NYSE MKT 151,994,269
common shares of no par value. The ISIN of the common shares is
CA80013R2063.
-- Sandstorm confirms that as at the date of this Announcement
it has in issue and admitted to trading on TSX 5,002,500 common share
purchase warrants with an exercise price of US$14.00 per common share
that expire on 7 September 2017. The ISIN of the warrants is
CA80013R1313.
-- Sandstorm confirms that as at the date of this Announcement
it has in issue and admitted to trading on TSX 5,043,900 common share
purchase warrants with an exercise price of US$4.00 per common share
that expire on 3 November 2020. The ISIN of the warrants is
CA80013R1644.
Rounding
Certain figures included in this Announcement have been subjected to
rounding adjustments. Accordingly, figures shown for the same category
presented in different tables may vary slightly and figures shown as
totals in certain tables may not be an arithmetic aggregation of figures
that precede them.
Advisory
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR
INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
26 April 2017
Recommended Combination
of
Mariana Resources Limited ("Mariana")
and
Sandstorm Gold Ltd ("Sandstorm")
1 Introduction
The board of directors of Sandstorm and the Mariana Independent
Directors are pleased to announce that they have reached agreement on
the terms of a recommended share and cash acquisition by which the
entire issued and to be issued ordinary share capital of Mariana that
Sandstorm does not already own will be acquired by Sandstorm. It is
intended that the Combination will be implemented by way of a
court-sanctioned scheme of arrangement under Part VIII of the Companies
(Guernsey) Law.
Sandstorm, together with its concert parties, is currently interested in
8,980,243 Mariana Shares, representing approximately 7.0 per cent. of
the issued ordinary share capital of Mariana.
If successful, the Combination will result in Mariana Shareholders,
together, owning approximately 19.0 per cent. of the share capital of
the Combined Group, calculated by reference to the fully diluted issued
share capital of Mariana net of Sandstorm's interests in Mariana Shares
and Mariana Warrants.
2 The Combination
Under the Scheme, which will be subject to the Conditions and further
terms set out in Appendix 1 to this Announcement and to be set out in
the Scheme Document, Scheme Shareholders will receive:
for each Scheme Share 0.2573 New Sandstorm Shares
and
28.75 pence in cash
Based on the closing price of US$4.04 per Sandstorm Share on NYSE MKT
and a currency exchange rate of GBP0.7788 per US$, on 25 April 2017
(being the last Business Day before the date of this Announcement), the
terms of the Combination represent:
-- a value of approximately 109.71 pence per Mariana Share;
-- a value of approximately GBP166.85 million for Mariana's fully diluted
ordinary share capital;
-- a premium of approximately 84.38 per cent. to the closing price of 59.5
pence per Mariana Share on AIM on 25 April 2017 (being the last Business
Day before the date of this Announcement); and
-- a premium of approximately 88.30 per cent. to the 20-day VWAP per Mariana
Share of 62.84 pence on AIM to 25 April 2017 (being the last Business Day
before the date of this Announcement), based on the 20-day VWAP per
Sandstorm Share of 348.16 pence on NYSE MKT to the same date and
utilising daily close composite exchange rates.
If, after the date of this Announcement, any dividend and/or other
distribution is announced, declared or paid in respect of the Mariana
Shares, Sandstorm reserves the right to reduce the Consideration by an
amount up to the amount of such dividend and/or distribution so
announced, declared or paid.
3 Background to and reasons for the Combination
The Boards of Mariana and Sandstorm believe that the Combination will
create a leading mid-tier streaming and royalty company, delivering
significant benefits to the shareholders of the Combined Group.
Sandstorm brings a strong production base, a quality development
pipeline with compelling cash flow growth potential, a base of
exploration assets that provide long-term optionality, a healthy balance
sheet for continued growth and an experienced management team. The
Mariana assets will complement Sandstorm's established Stream and
Royalty Portfolio.
Strong production base
During the financial year ended 31 December 2016, Sandstorm reported
sales of 49,731 attributable gold equivalent ounces from streams and
royalties on 20 producing assets. The average cash cost per ounce of
gold was US$258 during the period resulting in cash operating margins of
US$996 per ounce. Based on Sandstorm's existing streams and royalties,
attributable gold equivalent production for 2017 is forecasted to be
between 45,000 and 55,000 attributable gold equivalent ounces from 20
producing assets, providing diversification benefits to shareholders.
During the first quarter of 2017, Sandstorm sold approximately 15,500
attributable gold equivalent ounces, a record for the company.
Sandstorm's production base is diverse by asset as well as geography,
with an estimated breakdown of forecast gold equivalent production in
2019 by jurisdiction as follows: 46% North America, 44% South America,
10% Other.
High quality development pipeline
The addition of Hot Maden to the Combined Group is expected to improve
the already high quality development pipeline in Sandstorm's Stream and
Royalty Portfolio. Prior to completion of the Combination, the Stream
and Royalty Portfolio includes 20 currently producing and 23
development-stage projects. Hot Maden would add an anchor asset to the
development pipeline and transforms the potential future production
growth for the Combined Group. Assuming completion of the Combination,
the Combined Group is expected to realise attributable gold equivalent
production by year as follows(1) :
Combined Group Attributable Gold Equivalent Production
Calendar Year Estimate (ounces)
2017 45,000 - 55,000
2018 56,200
2019 61,600
2020 65,200
2021 98,400
2022 135,700
2023 129,400
(1 Estimates of gold-equivalent production reflect
metal price assumptions of US$1,250 per ounce of gold,
US$18.00 per ounce of silver and US$2.65 per pound
of copper.)
The attributable gold equivalent production of the Combined Group
represents Sandstorm's estimates of gold equivalent production
associated with the existing Stream and Royalty Portfolio plus the
addition of gold equivalent production estimated from Hot Maden. In the
case of the existing Stream and Royalty Portfolio, the figures represent
estimated future production for each mine at which Sandstorm has a
commodity stream or royalty based on public disclosure, technical
reports and incorporating management estimates where appropriate.
Information regarding the Hot Maden Project has been derived from the
Hot Maden PEA and incorporating management estimates. The Hot Maden PEA
is preliminary in nature as it includes inferred mineral resources that
are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be categorized
as mineral reserves. Mineral resources that are not mineral reserves do
not have demonstrated economic viability, and as such there is no
certainty that the preliminary assessment and economics will be
realised.
Sandstorm believes that the addition of Hot Maden to the Combined Group
will provide the potential to more than double attributable gold
equivalent production once in full operation. It is estimated that full
production may be achieved by 2022, with a half-year of production
occurring as early as 2021 during the commissioning phase. Hot Maden is
envisaged as a conventional underground mine and processing facility
producing concentrates without the use of cyanide. The Hot Maden PEA
released by Mariana (effective date of 1 March 2017) demonstrated robust
estimated economics with an after-tax IRR in excess of 100% and all-in
sustaining costs below US$400 per ounce on a gold-equivalent basis (as
referred to in the Mariana press release dated 17 January 2017). The
high-grade nature of the orebody and the wide intercepts of
mineralisation provide the potential for low-cost mining methods.
Furthermore, the drilling conducted to date has only covered a portion
of the total project area, providing for the potential for exploration
success in the future. At present there are three drill rigs on site
with a plan to complete 20,000 metres of exploration and infill drilling
during 2017.
Sandstorm believes that converting the Hot Maden JV into a gold stream
at the appropriate time would present the best opportunity to unlock the
value of Mariana's minority incorporated JV interest for shareholders in
the Combined Group. Gold stream and royalty companies typically trade at
higher valuation multiples than mining companies, and the cash flow from
Hot Maden would be expected to command a superior valuation as part of a
diversified Stream and Royalty Portfolio within the Combined Group
rather than within a junior mining company.
The operator of Hot Maden, Lidya, is an experienced Turkish company and
is part of Çalik Holding, a Turkish conglomerate with several
business lines including energy, telecommunication, finance,
construction, textiles and mining. In the half-year ended 30 June 2016,
Çalik Holding reported net income of approximately US$228 million
(665 million Turkish Lira converted at the average TRY/US$ exchange rate
of 2.92 TRY/US$ during the six-month period ending 30 June 2016). Lidya
is currently a joint-venture partner with Alacer Gold Corp. on the
producing Çöpler mine (80% Alacer, 20% Lidya) and the
development-stage Gediktepe and Kartaltepe projects (both 50% Alacer,
50% Lidya) in Turkey.
Exploration optionality
Sandstorm's Stream and Royalty Portfolio includes 112 exploration stage
assets and, among them, 26 are considered to be advanced-stage
exploration projects. The royalties on the exploration properties
provide shareholders of the Combined Group with meaningful optionality
for future mineral discoveries. The addition of Mariana's Exploration
Properties complements the exploration optionality in the Stream and
Royalty Portfolio.
The Combined Group will not be an active exploration company and,
therefore, after the Combination, Sandstorm intends to spin-out the
Exploration Properties into a separate SpinCo, with the Combined Group
retaining its royalty interests over the Exploration Properties together
with equity in the SpinCo. Sandstorm intends that the SpinCo would seek
external investment, as required, to fund future exploration costs, with
a goal of allowing shareholders in the Combined Group to retain an
interest in the Exploration Properties without the Combined Group being
required to fund exploration expenses.
Financial strength and future growth
Sandstorm has a strong balance sheet with working capital of US$23.8
million and no bank debt as of 31 December 2016. In addition, Sandstorm
has a portfolio of equity and debt investments in other mining companies
and a US$110 million revolving line of credit. Sandstorm's investments
and its access to the revolving line of credit, along with the free cash
flow generated from the Stream and Royalty Portfolio, will be used along
with Mariana's acquired cash balance to fund future stream and royalty
acquisitions in order to continue growing and diversifying the Combined
Group's asset base as well as funding its share of pro rata cash calls
for the development of the Hot Maden asset.
Other benefits
As a junior mining company, and as a function of the subdued investor
appetite during the last few years in the resource sector, Mariana has
been unable to attract large institutional investors. Conversely, more
than 50% of Sandstorm's investor base is made up of institutional
investors and Sandstorm has averaged approximately US$10 million in
daily US$ trading volume since January 2016.
With the addition of the Mariana assets to the Stream and Royalty
Portfolio, the Combined Group expects to see increased institutional
investor interest, improved liquidity and the potential for a lower cost
of capital.
The Combined Group expects to realise cost saving synergies with
elimination of ongoing listing fees associated with Mariana's listing on
the TSXV and admission to trading on AIM. In addition, following any
spin-out of the Exploration Properties, if the SpinCo were to be
successful in raising external investment, the Combined Group would no
longer be required to fund ongoing exploration costs associated with the
Exploration Properties.
4 Recommendation of the Mariana Independent Directors
The Mariana Independent Directors, who have been so advised by RFC
Ambrian as to the financial terms of the Combination, consider the
Combination to be fair and reasonable. In providing their advice, RFC
Ambrian have taken into account the commercial assessments of the
Mariana Independent Directors. RFC Ambrian is providing independent
financial advice to the Mariana Independent Directors for the purposes
of Rule 3 of the Code.
The Mariana Independent Directors have also been advised by Raymond
James Ltd. as to the financial terms and certain Canadian capital market
aspects of the Combination.
Accordingly, the Mariana Independent Directors have unanimously approved
the Combination and intend to recommend that Mariana Shareholders vote
in favour of the Scheme at the Guernsey Court Meeting and the
resolutions to be proposed at the General Meeting as they have
irrevocably undertaken to do in respect of their own beneficial holdings
of, in aggregate, 905,050 Mariana Shares representing approximately 0.71
per cent. of the issued ordinary share capital of Mariana on 25 April
2017 (being the last Business Day prior to the date of this
Announcement).
In light of their ongoing participation in the Combined Group and the
related remuneration and incentivisation arrangements referred to in
paragraph 10 below, neither Glen Parsons nor Eric Roth, each of whom are
Mariana Directors, have played any part in the consideration of the
Combination or the recommendation of it by the Mariana Independent
Directors.
Ron Ho, who is both a director of Mariana and Vice President, Finance of
Sandstorm, has played no part in the consideration of the Combination or
the recommendation of it by the Mariana Independent Directors.
Mustafa Aksoy, who is both a director of Mariana and a board member and
managing director of Lidya, has played no part in the consideration of
the Combination or the recommendation of it by the Mariana Independent
Directors.
5 Background to and reasons for the recommendation of the
Mariana Independent Directors
The Independent Directors of Mariana intend to recommend the Combination
of Sandstorm and Mariana as it de-risks the Mariana Shareholders'
exposure to a single development/production asset, whilst allowing
exposure to a wider diverse portfolio of assets, through the stock
component of the Combination. Mariana Shareholders will still retain
significant exposure to the upside potential of its current assets,
which as a result of the Combination should reduce the financing risk of
development given the size and financial strength of Sandstorm.
The Consideration under the Combination is also at a premium to the
current market price of Mariana Shares, as well as the recent historical
performance.
The liquidity of Sandstorm Shares provide an opportunity to realise the
value of the New Sandstorm Share Consideration Amount and, if Mariana
Shareholders so choose, to benefit from any potential upside to
Sandstorm's market value.
6 Irrevocable Undertakings
The Mariana Independent Directors have irrevocably undertaken to
Sandstorm to vote in favour of the Scheme at the Guernsey Court Meeting
and the resolutions to be proposed at the General Meeting in respect of,
in aggregate, 905,050 Mariana Shares representing approximately 0.71 per
cent. of the issued ordinary share capital of Mariana on 25 April 2017
(being the last Business Day prior to the date of this Announcement).
In addition to the irrevocable undertakings from the Mariana Independent
Directors, Sandstorm has also received irrevocable undertakings from
each of Australian Investors Pty Ltd and AngloGold Ashanti Holdings Plc
to vote in favour of the Scheme at the Guernsey Court Meeting and the
resolutions to be proposed at the General Meeting in respect of, in
aggregate, 8,718,089 Mariana Shares, representing approximately 6.80 per
cent. of the issued ordinary share capital of Mariana on 25 April 2017
(being the last Business Day prior to the date of this Announcement).
Sandstorm has therefore received irrevocable undertakings to vote in
favour of the Scheme at the Guernsey Court Meeting and the resolutions
to be proposed at the General Meeting in respect of, in aggregate,
9,623,139 Mariana Shares representing, in aggregate, approximately 7.51
per cent. of the issued ordinary share capital of Mariana on 25 April
2017 (being the last Business Day prior to the date of this
Announcement).
Further details of these irrevocable undertakings are set out in
Appendix 3 to this Announcement. If the Combination is subsequently
structured as a takeover offer, all the above undertakings will take
effect as irrevocable undertakings to accept such offer.
Glen Parsons and Eric Roth have also irrevocably undertaken to Sandstorm
to vote in favour of those resolutions to be proposed at the General
Meeting on which they are entitled to vote in respect of, in aggregate,
986,621 Mariana Shares representing approximately 0.77 per cent. of the
issued ordinary share capital of Mariana on 25 April 2017 (being the
last Business Day prior to the date of this Announcement). As a
consequence of the Retention Arrangements, Glen Parsons and Eric Roth
will not vote on the resolution to approve the Scheme at the Guernsey
Court Meeting.
Neither of Ron Ho or Mustafa Aksoy has given an irrevocable undertaking
Sandstorm on the basis that: (i) Ron Ho is an employee of Sandstorm; and
(ii) Mustafa Aksoy does not hold any Mariana Shares.
7 Information relating to Sandstorm
Introduction
Sandstorm is a public corporation incorporated under the laws of the
province of British Columbia, Canada with its headquarters in Vancouver,
British Columbia. The Sandstorm Shares are currently listed on the TSX
(symbol: SSL) and the NYSE MKT (symbol: SAND). Sandstorm has two series
of publicly traded warrants that are listed for trading on the TSX
(symbols: SSL.WT.B and SSL.WT). Sandstorm has a basic market
capitalization of approximately US$614.06 million based upon the closing
price of US$4.04 for a Sandstorm Share on the NYSE MKT on 25 April 2017
(the last Business Day prior to the date of this Announcement).
As at 31 December 2016, Sandstorm had total assets of US$534.9 million,
including cash and cash equivalents of US$21.4 million, investments of
US$61.3 million and loans receivable of US$23.4 million, shareholders'
equity of US$527.3 million and Sandstorm had no outstanding third party
debt (other than accounts payable in the ordinary course of business)
with additional available liquidity from its US$110 million revolving
credit facility.
Sandstorm provides financing to mining companies through stream and
royalty agreements. Stream and royalty finance involves Sandstorm making
an upfront payment to a mining partner that is in need of capital to
build their mine, refinance their obligations, complete an acquisition
or for various other reasons. In exchange for that upfront payment,
Sandstorm receives the right to purchase a percentage of the gold
produced from the mine (in the case of a stream) or a portion of the
revenue generated from the mine (in the case of a royalty). Since 2009,
Sandstorm has compiled a portfolio of 155 streams and royalties, of
which 20 of the underlying mines are currently producing. Sandstorm
plans to continue growing the company through accretive acquisitions of
gold streams and royalties.
Financial Highlights
Highlights for the year ending 31 December 2016:
-- Attributable gold equivalent ounces sold of 49,731 ounces (FY 2015 -
45,146 ounces);
-- Revenue of US$62.4 million (FY 2015 - US$52.7 million);
-- Average cash cost per attributable gold equivalent ounce of US$258
resulting in cash operating margins of US$996 per ounce (FY 2015 - US$300
per ounce and US$867 per ounce respectively);
-- Operating cash flow of US$39.0 million (FY 2015 - US$30.8 million);
-- Net income of US$25.3 million; and
-- The acquisition of the Teck Royalty Package for consideration of US$16.8
million, of which US$1.4 million was paid in cash and US$15.4 million in
Sandstorm Shares. The transaction provides asset diversification,
immediate cash flow and significant cash flow growth potential.
Sandstorm's attributable gold equivalent ounces sold during the 5-year
period ending 31 December 2016 is shown below:
Calendar Year Attributable Gold Equivalent Production (Ounces)
2012 33,514
2013 42,709
2014 44,821
2015 45,146
2016 49,731
The following table summarizes the ounces of gold sold and the
respective revenue received by Sandstorm from each of its producing gold
interests for the year ended 31 December 2016:
Gold Equivalent Sales & Royalty
Property Ounces Sold Revenue (US$000s)
Bachelor Lake Mine 7,358 9,183
Black Fox Mine 4,500 5,617
Chapada Mine 4,839 6,075
Diavik Mine 4,669 5,856
Karma 3,334 4,272
Ming Mine 1,586 2,025
Santa Elena 9,419 11,772
Yamana Silver Stream 2,323 2,926
Other 11,703 14,645
Total 49,731 62,371
During the year ending 31 December 2016, Sandstorm reported record
attributable gold equivalent production during the fourth quarter and
twelve months of 2016, translating to significant growth in revenue.
Revenue for the full 2016 year was up 18% when compared to 2015 and
revenue during the fourth quarter increased by 67% when compared to Q4,
2015. The marked increase in Q4 was a result of a 13% rise in the
average realized selling price of gold and a 48% increase in
attributable gold equivalent ounces sold. Contributions from the Yamana
silver stream, Chapada copper stream, Teck Royalty Package and Karma
gold stream were the main drivers of the growth in gold equivalent
ounces, all of which were not part of the asset mix in 2015. Precious
metal streams and royalties (including diamonds) accounted for 82% of
Sandstorm's revenue during the year, with the other 18% coming primarily
from base metal projects. During the first quarter of 2017 (three-month
period ending 31 March 2017) Sandstorm sold approximately 15,500
attributable gold equivalent ounces, which is a quarterly record high
for Sandstorm.
Track Record of Growth
Over the past two years (from April 2015), Sandstorm has completed
acquisitions of 103 new streams and royalties as described below:
Closing Counterparty Transaction Value Assets Acquired
Period (US$ millions)
April 2015 Gold Royalties Inc. $4.8 13 royalties
June 2015 Pacific Ridge $0.5 3 royalties
Exploration Ltd.
October 2015 Yamana Gold Inc. $152 2 streams and 1
royalty
October 2015 Alexandria Minerals $1 2 royalties
Corp.
January 2016 Teck Resources Ltd. $17 52 royalties
February 2016 Alto Parana Royalty $nil 1 royalty
April 2016 Erdene Resource $1.2 2 royalties
Development Corp.
September 2016 Norilsk Nickel $3.5 5 royalties
January 2017 Condor Resources $0.4 8 royalties
Inc.
January 2017 Kivalliq Energy $0.7 1 royalty
Corp.
March 2017 Pembrook Copper $0.4 10 royalties
Corp.
March 2017 Tower Resources Ltd. $0.4 3 royalties
2017 Outlook
Based on Sandstorm's existing gold streams and royalties, attributable
gold equivalent production for 2017 is forecast to be between 45,000 and
55,000 attributable gold equivalent ounces.
The Sandstorm Forecast in Appendix 4 of this Announcement sets out
Sandstorm's operating cash flow after tax (and before corporate
overhead) forecasts to 2021.
8 Information relating to Mariana
Introduction
Mariana is a non-cellular company incorporated under the laws of
Guernsey with its registered office in Guernsey. Mariana is not
regulated by the Guernsey Financial Services Commission. The Mariana
Shares are currently admitted to trading on AIM (symbol: MARL) and the
TSX-Venture (symbol: MARL). Mariana has a market capitalisation of
approximately GBP76.28 million based upon the closing price of 59.5
pence per Mariana Share on AIM on 25 April 2017, being the last
Business Day before this Announcement.
As at 31 December 2016, Mariana had total assets of GBP13.6 million,
cash and cash equivalents of GBP5.2 million and shareholders' equity of
GBP12.7 million.
Mariana is an exploration and development company with an extensive
portfolio of gold, silver, and copper projects in Turkey, South America
and Côte d'Ivoire. Mariana's most advanced asset is the Hot Maden
gold-copper project in northeast Turkey, which is a joint venture with
Turkish partner Lidya Madencilik (30% Mariana and 70% Lidya). The JV
holds 1 operating licence and 3 exploration licences comprising a total
land area of 73.9 km(2) . On 17 January 2017, Mariana released the
results of the Hot Maden PEA which demonstrated positive potential
economics (after-tax NPV and IRR of US$1.37 billion and 153%,
respectively) based on a development scenario incorporating a 1.0 Mtpa
underground mining operation and processing facility for the production
of two concentrates (a copper-gold concentrate and a gold-pyrite
concentrate).
The Hot Maden PEA was based on the June 2016 mineral resource estimate
completed by RPM, which calculated resources (100% basis) by category
of:
-- Indicated (Main Zone): 7.1 Mt grading 12.2 g/t gold and 2.3% copper for
contained metal of 2.79 Moz of gold and 166 kt of copper (3.43 Moz of
gold equivalent).
-- Inferred (Main Zone): 0.7 Mt grading 2.7 g/t gold and 0.9% copper for
contained metal of 0.06 Moz of gold and 7 kt of copper (0.09 Moz of gold
equivalent).
-- Inferred (Southern Zone): 1.4Mt grading 7.2 g/t gold and 0.7% copper for
contained metal of 0.31 Moz of gold and 10 kt of copper (0.35 Moz gold
equivalent).
Elsewhere in Turkey, Mariana holds a 100% interest in the Ergama
gold-copper project.
On 7 October 2016, Mariana announced the signing of a binding term sheet
to acquire an indirect 80% interest in Côte d'Ivoire-focused
private exploration company Awalé. Through the transaction Mariana
will gain an immediate foothold in an established exploration portfolio
with known gold mineralisation and artisanal gold workings, and which
comprises i) 3 granted contiguous licences (1,191 km(2) ) in the
Bondoukou area, and ii) 4 licences under application (1,593 km(2) ) in
both the Bondoukou and Abengourou areas. The Boundoukou concessions lie
along the southwestern extension of the Birimian Bole-Nangodi greenstone
belt in adjacent Ghana, host to a number of high grade orogenic gold
deposits including Namdini (owned by Cardinal Resources) and Youga
(owned by MNG/Endeavor).
In southern Argentina, Mariana's core gold-silver projects are Las
Calandrias (100%), Sierra Blanca (100%), Los Cisnes (100%), and Bozal
(100%). These projects are part of a 1,000+ km(2) land package in the
Deseado Massif epithermal gold-silver district in mining-friendly Santa
Cruz Province.
In Suriname, Mariana has a direct holding of 10.2% of the Nassau Gold
project. The Nassau gold project is a 280 km(2) exploration concession
located approximately 125 km SE of the capital Paramaribo and
immediately adjacent to Newmont Mining's 4.2Moz gold Merian project.
Mariana is focusing on acquiring new opportunities which complement its
current portfolio.
Hot Maden Selected Drill Results
A total of 107 drill holes have been completed and reported on the Hot
Maden project, a selection of drill results is presented below
demonstrating the high-grade nature of the orebody and the large widths
of intercepts:
Hole # From (m) To (m) Intercept (m) Au Grade (g/t) Cu Grade (%)
HTD-04 25.0 128.0 103.0 9.0 2.17
HTD-05 150.0 163.0 13.0 88.0 2.46
HTD-15 216.0 333.3 117.3 13.9 2.04
HTD-18 292.0 400.2 108.2 3.0 1.35
HTD-34 55.0 126.0 71.0 32.7 1.90
HTD-35 46.8 110.4 63.6 14.5 3.40
HTD-60 167.0 250.3 83.3 15.9 1.57
HTD-62 36.5 132.0 95.5 32.1 3.30
HTD-65 330.5 417.0 86.5 3.4 1.44
HTD-71 210.0 279.6 69.6 62.7 2.68
HTD-72 180.5 215.0 34.5 19.4 1.31
HTD-77 96.0 186.0 90.0 22.6 4.39
HTD-78 294.0 373.0 79.0 14.3 1.59
HTD-85 209.4 270.0 60.6 82.2 1.44
HTD-88 326.0 400.0 74.0 3.0 1.57
HTD-88 422.0 451.0 29.0 0.3 1.31
Hot Maden Preliminary Economic Assessment
The Hot Maden PEA was prepared in accordance with NI 43-101 by
independent mining consultant firm RPM and is available on Mariana's
SEDAR profile at www.sedar.com. Readers should refer to the Hot Maden
PEA for additional information, including data verification and
exploration information.
Note that the Hot Maden PEA is preliminary in nature as it includes
inferred mineral resources that are considered too speculative
geologically to have the economic considerations applied to them that
would enable them to be categorized as mineral reserves. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability, and as such there is no certainty that the
preliminary assessment and economics will be realised.
The JV will continue to work on the technical studies and optimisations
required to complete the PFS, which is anticipated to be completed
during Q4 2017. The PFS will provide higher confidence level mine
designs, mineral processing scenarios, and costing estimates for the Hot
Maden project. Therefore, the result could change over time based on the
updated prices, resource and assumptions.
Summary of the Hot Maden PEA (100% Project Basis)
-- Conceptual development for Hot Maden assumes an all underground mining
operation from a decline and utilizing mechanized transverse and
longitudinal long hole open stoping with engineered fill mining methods.
Mining and processing rates of 0.8 Mtpa, 1.0 Mtpa, and 1.2 Mtpa were
considered, with the base case mining scenario being established at 1.0
Mtpa;
-- Total metal contained in ore processed of 2.67 Moz of gold and 142 kt of
copper over a total project life of 9 years for the base case mining
scenario;
-- Metallurgical test work, through flotation and concentration, completed
to date on the high grade Main Zone mineralisation has indicated high
recoveries of both gold and copper. A variable processing recovery,
dependent on grade, has been applied in the PEA resulting in a project
weighted average recovery of 88% of gold and 90% of copper;
-- Total metal recovered to concentrates of 2.37 Moz of gold and 126 kt of
copper;
-- Post-tax NPV for the base case mining scenario (1.0 Mtpa) of US$1.37
billion excluding pre-development exploration costs (8% discount rate);
-- Post-tax IRR for the base case mining scenario of 153% excluding
acquisition costs; and
-- Total capex (initial + sustaining) of US$261 million.
PEA Parameters
Key parameters utilized in the Hot Maden PEA are indicated in the table
below:
Hot Maden PEA Base Case
Mining Method Underground
Underground Minable Ore 7.4Mt grading 11.25 g/t gold and 1.92% copper
Annual Throughput Base case established at 1.0 Mtpa
Project Life of Mine 9 years
US$1,250 per ounce gold and US$2.75 per pound
Metal Prices copper
Average Recoveries 88% of gold and 90% of copper
Contained Metal 2.67 Moz of gold and 142 kt of copper
Recovered to Concentrates 2.37 Moz of gold and 126 kt of copper
Payable Metal 2.03 Moz of gold and 117 kt of copper
Upfront Capex US$169 million
LOM Project Capex US$261 million
Mining Operating Costs US$31.05 per tonne processed
Processing Operating Costs US$15.13 per tonne processed
G+A Operating Costs US$10.18 per tonne processed
Total Cash Costs US$303 per ounce gold-equivalent
All-in Sustaining Costs US$338 per ounce gold-equivalent
Royalties 2.60% State Royalties, 2.00% NSR to Sandstorm
Corporate Tax Rate 20.0%
Geology and Mineral Resources
The high grade gold-copper mineralisation at Hot Maden occurs within a
N-NE-trending fault zone and is sub-vertical in nature. At least two
styles of gold-copper mineralisation are evident within the Main Zone:
i) the predominant, multiphase quartz-sulphide (pyrite-chalcopyrite) +/-
hematite/jasperoid breccia bodies, and ii) semi-massive to massive
sulphides (pyrite-chalcopyrite). Host rocks are dominantly andesites and
andesitic breccias. Overall, the highest-grade gold mineralisation
(typically >15 g/t Au but locally >100 g/t Au) at Hot Maden lies along
the eastern margin of the Main Zone. Drilling is ongoing but the current
dimensions of the Main Zone are a strike extent of 300m from north to
south, a true width of between 40m and 70m, and a vertical extension
from near surface to >300m depth. Stratabound Zn(-Pb)
(sphalerite-galena) mineralisation also flanks the Main Zone to the east
and locally to the west. In the new Southern Vein Field discovery, host
rocks are dominantly dacitic breccias and gold-copper mineralisation is
associated with quartz-sulphide-bearing veins and vein breccias.
Initial exploration drilling has commenced in the old Russian mining
area, south of the Southern Vein Field.
The Hot Maden PEA was based on the June 2016 mineral resource estimate
prepared by RPM, which used 52 diamond drill holes for a total of
14,862m (3,748m within wireframes) and included contributions from both
the Main Zone and a new Southern Discovery, comprising (on a 100%
basis):
Hot Maden Mineral Resource Estimate - Main Gold-Copper
Zone (2g/t AuEq Cut-Off)
Indicated Mineral Resource
Tonnes Au Cu Zn AuEq Au Cu AuEq
Domain (kt) (g/t) (%) (%) (g/t) (koz) (kt) (koz)
Main Zone LG 463 1.1 1.1 0.3 2.4 17 5 36
Main Zone HG 4,501 3.9 1.9 0.2 6.3 570 87 908
Main Zone UHG 2,086 32.7 3.5 0.1 36.9 2,195 73 2,476
Mixed Gold-Zinc
Zone 17 7.5 3.1 3.6 11.2 4 1 6
Peripheral Lodes 60 2.1 0.4 0.4 2.5 4 - 5
Total 7,127 12.2 2.3 0.2 15.0 2,790 166 3,431
Inferred Mineral Resource
Tonnes Au Cu Zn AuEq Au Cu AuEq
Domain (kt) (g/t) (%) (%) (g/t) (koz) (kt) (koz)
Main Zone LG 395 1.7 0.9 0.03 2.8 21 4 35
Main Zone HG 31 3.9 1.6 0.1 5.8 4 - 6
Main Zone UHG 6 39.1 2.1 0.01 41.6 7 - 8
Mixed Gold-Zinc
Zone 4 1.7 0.4 2.4 2.2 - - -
Peripheral Lodes 282 3.2 0.9 0.1 4.3 29 2 38
Total 718 2.7 0.9 0.1 3.8 62 7 88
Hot Maden Mineral Resource Estimate - Southern Gold-Copper
Zone (2g/t AuEq Cut-Off)
Inferred Mineral Resource
Tonnes Au Cu Zn AuEq Au Cu AuEq
Domain (kt) (g/t) (%) (%) (g/t) (koz) (kt) (koz)
South Zone LG 396 2.8 0.7 - 3.6 35 3 46
South Zone HG 583 5.3 0.7 - 6.1 98 4 114
South Zone UHG 224 22.2 1.0 - 23.4 160 2 169
Mixed Gold-Zinc
Zone 44 9.0 1.0 3.2 10.2 13 - 15
Peripheral Lodes 104 1.9 0.3 - 2.2 6 - 7
Total 1,352 7.2 0.7 0.1 8.1 313 10 351
In the above resource tables Au Equivalence (AuEq) was calculated using
a 100 day moving average of US$1,215/ounce for Au and US$2.13/pound for
Cu as of 29 May 2016. No adjustment has been made for metallurgical
recovery or net smelter return as these remain uncertain at this time.
Based on grades and contained metal for Au and Cu, it is assumed that
both commodities have reasonable potential to be economically
extractable. The formula used for Au equivalent grade is: AuEq g/t = Au
+ [(Cu% x 22.0462 x 2.13)/(1215/31.1035)] and is not adjusted for
assumed metallurgical recovery. Au equivalent ounces are calculated by
multiplying Mineral Resource tonnage by Au equivalent grade and
converting for ounces. The formula used for Au equivalent ounces is:
AuEq Oz = [Tonnage x AuEq grade (g/t)]/31.1035.
Project Economics Summary
Payback
Mining Total After-Tax After-Tax (incl. Project
Scenario Throughput Capex NPV8% IRR dev.) Life
Conservative 0.8 Mtpa US$ 251M US$ 1.28B 130% 2.2 11
Base Case 1.0 Mtpa US$ 261M US$ 1.37B 153% 2.1 9
Bondoukou Project, Côte d'Ivoire
Mariana's acquisition of an 80% interest in Awalé in October 2016
established a presence in Côte d'Ivoire in a region which hosts one
of the largest known prospective underexplored greenstone belts in West
Africa. The exploration portfolio targets the eastern border of the
country and comprises:
-- 3 granted contiguous licences covering 1,191km2 in the Boundoukou area,
and
-- 4 licences under application covering 1,593km2 in both the Bondoukou and
Abengourou area.
Mariana's initial focus will be on the Bondoukou Est concession, where
high grade gold mineralization (up to 36 g/t Au from initial surface
sampling) occurs within a sheeted quartz vein complex that is located at
the contact between a zoned granitoid intrusion and the host
meta-volcanic and meta-sedimentary rocks. Artisanal miners are currently
active at Bondoukou Est and are undertaking shallow mining (generally up
to 30m depth) from higher grade quartz veins that lie within a broadly
NW-SE-trending mineralized corridor interpreted to have a strike extent
of 18 km. Subsequent field activities will focus on other artisanal
workings within the remainder of the Bondoukou Est concession, as well
as workings in the Bondoukou Nord and Nord Est concessions.
Ergama Project, Turkey
The 100% owned Ergama project licence in Balikesir province, western
Turkey, covers an area of 21.6 km(2) , and is located 90km SE of
Teck-Pilot Gold's Halilaga gold-copper project in the highly mineralised
Biga Peninsula, and 230 km WNW of Eldorado Gold's Kisladag gold mine
(2016 production of 211,000 oz gold).
On 29 November 2016, Mariana commenced the drilling of an initial seven
hole diamond drill program being undertaken by drill contractor Ortadogu
Drilling. As at 14 February 2017, three of the seven proposed drill
holes (ERD-01 to ERD-03, for a total of 1,522m) had been completed, with
assays having now been received for the first two holes. Targets to be
tested in this initial drill program include the northern margins of two
porphyry gold-copper targets (the Main Porphyry Target and Porphyry
Target B), in addition to a high grade, vein / fault-hosted epithermal
gold-silver target.
Intercepts from ERD-01 and ERD-02 include:
From To Intercept Au Cu
Drill Hole (m) (m) (m) (g/t) (%) Comments
Phyllic altered andesite /
ERD-01 43.8 109.8 66.0 0.22 <0.1 diorite porphyry
117.8 205.8 88.0 0.19 <0.1
215.8 237.8 22.0 0.25 <0.1
279.8 285.8 6.0 0.20 <0.1
317.8 329.8 12.0 0.20 <0.1
373.8 383.8 10.0 0.21 <0.1
Phyllic altered andesite /
ERD-02 57.0 198.0 141.0 0.23 <0.1 diorite porphyry
226.0 244.0 18.0 0.18 <0.1
274.0 330.0 56.0 0.22 <0.1
340.0 378.0 38.0 0.15 <0.1
470.0 626.4 156.4 0.25 <0.1
Including 570.0 626.4 56.4 0.33 0.12
The drilling completed to date at Ergama appears to confirm a conceptual
model of a porphyry-style gold-copper system underlying, and slightly
offset from, an essentially barren quartz-alunite (+/-clay) "lithocap".
Drill holes ERD-01 and ERD-02 are the first holes to test this model and,
whilst initial results have been positive, both the observed
hydrothermal alteration assemblages and general increase in gold-copper
grades towards the south are suggesting that the key potassic zone (and
likely the most metal-rich part of the system) is located to the south
of current drilling. Permitting of drill holes in this area is currently
in progress, with drilling expected to be undertaken as soon as the
permits are granted.
Argentina Assets
The Las Calandrias project is currently Mariana's most advanced
exploration asset in Argentina. Initial exploration in 2008 led to the
Calandria Sur discovery in 2009. The Calandria Sur deposit represents
the first bulk tonnage epithermal (rhyolite dome hosted) gold-silver
discovery in the Deseado Massif. High grade epithermal gold-silver
mineralization has also been delineated in the Calandria Norte vein /
breccia system. In 2011, Mariana reported the following maiden global
mineral resource estimate for the Las Calandrias project:
-- Indicated: 11.8 Mt grading 1.0 g/t gold and 17.4 g/t silver for contained
metal of 381,000 oz of gold and 6.6 Moz of silver.
-- Inferred: 0.9 Mt grading 0.9 g/t gold and 5.2 g/t silver for contained
metal of 25,900 oz of gold and 144,000 oz of silver.
This maiden resource consisted of contributions from both the bulk
tonnage / disseminated Calandria Sur deposit and the high grade
Calandria Norte vein / breccia system (162,000 t grading 9.35 g/t gold).
Ongoing field activities are focused on deep sensing geophysics and the
evaluation of 4 high grade gold-silver vein / breccia systems located in
the vicinity of the Calandria Norte vein (the La Morena, El Nido Norte,
Las Calandrias Feeders, and Refugio target areas).
The Sierra Blanca project is located in the western portion of the
Deseado Massif. Mariana has been focused on the identification and
delineation of high grade gold-silver shoots within the 22 km strike
extent of the poorly explored, intermediate sulphidation epithermal vein
system. Exploration to date has identified bonanza grade silver in the
oxidized / supergene enriched central portion of the Chala vein, with
assays from channel sampling attaining up to 7,600 g/t Ag and 25.7 g/t
Au. An internal resource has been achieved with expansion potential.
The Los Cisnes project is a prospect that was generated from Mariana's
regional greenfield exploration in 2012 which was focused on rhyolite
dome potential in the eastern Deseado Massif. The project is located
approximately 120 km SSE of Las Calandrias and 75 km SW of Yamana's
Cerro Moro project. The El Brio target is a 700m long vein / breccia
zone up to 3m in width, with 9 surface samples returning grades between
31 and 3,849 g/t silver. The El Solar target is a Calandrias-style
rhyolite dome hosted system with bulk tonnage potential, with float
samples returning 0.5 - 3.4 g/t gold.
9 Financing
The cash consideration payable under the terms of the Combination will
be funded from existing cash resources available to Sandstorm, including
funds which have been drawn down under Sandstorm's existing US$110
million revolving credit facility.
KPMG is satisfied that sufficient resources are available to Sandstorm
to satisfy in full the cash consideration payable to Scheme Shareholders
under the terms of the Combination.
10 Directors, management and employees
Sandstorm recognizes the skills, technical ability and industry
knowledge and experience of the Mariana Board, management and employees
and in particular acknowledges the valuable work that each has performed
to advance the Hot Maden project. Accordingly, Sandstorm expects that
certain members of Mariana's management will continue with the
development of the Combined Group.
Following completion of the Combination, a thorough assessment of the
available skill sets of Mariana's employees will be undertaken and where
practical, and at management's discretion, employees will be
incorporated into the enlarged Sandstorm team. To the extent this is not
possible, this may result in redundancies for those employees not
incorporated into the Combined Group. Sandstorm confirms that, following
implementation of the Combination, the existing contractual and
statutory employment rights of all Mariana employees will be
safeguarded.
On completion of the Combination, Nolan Watson will be the President and
Chief Executive Officer of the Combined Group and Glen Parsons will be
manager of the Exploration Properties. The Mariana Directors have agreed
to resign from the Mariana Board subject to, and with effect from, the
Scheme becoming Effective. The Mariana Directors will each receive
accrued fees, payment for notice periods and expenses due under their
respective letters of appointment, in each case in compensation for loss
of office.
In order to drive value from the Combination, Sandstorm has agreed to
the following retention arrangements in respect of each of Glen Parsons
and Eric Roth (the "Retention Arrangements"):
-- Glen Parsons will, upon the Effective Date, receive an immediate payment
of US$750,000 in return for agreeing to remain with the Combined Group on
a full-time basis for at least 12 months, plus:
-- a bonus payment of US$375,000 to be made upon the successful
completion of a sale or spin-out transaction involving the
exploration properties in Argentina; and
-- a bonus payment of US$375,000 to be made upon the successful
completion of a sale or spin-out transaction involving the
exploration properties in Côte d'Ivoire,
provided in each case that he is still with the Combined Group at the
relevant time; and
-- Eric Roth will, upon the Effective Date, receive an immediate payment of
US$375,000 in return for agreeing to remain with the Combined Group on a
part-time consultancy contract for at least 12 months, plus:
-- a bonus payment of US$187,500 to be made upon the successful
completion of a sale or spin-out transaction involving the
exploration properties in Argentina; and
-- a bonus payment of US$187,500 to be made upon the successful
completion of a sale or spin-out transaction involving the
exploration properties in Côte d'Ivoire,
provided in each case that he is still with the Combined Group at the
relevant time.
The Combination is subject to, among other things, the approval by the
independent Mariana Shareholders of the Retention Arrangements. RFC
Ambrian consider the Retention Arrangements to be fair and reasonable as
far as the independent Mariana Shareholders are concerned.
Sandstorm considers the Retention Arrangements to be critical to the
success of the Combination and, therefore, if the independent Mariana
Shareholders do not pass the relevant resolution at the General Meeting
approving those arrangements, Sandstorm may (at its absolute discretion)
seek to invoke Condition A6 (which appears in Appendix 1 to this
Announcement), which, with the consent of the Panel, would result in the
Combination being withdrawn.
Other than as set out elsewhere in this Announcement, Sandstorm has no
current plans to change the locations of Mariana's places of business or
to redeploy any of Mariana's fixed assets.
11 Mariana Employee Equity Plans
Participants in the Mariana Employee Equity Plans will be contacted
separately regarding the effect of the Combination on their rights (if
any) and appropriate proposals will be made to such participants in due
course. Further details of these proposals will be set out in the Scheme
Document and in separate letters to be sent to participants in the
Mariana Employee Equity Plans.
The right to vote in respect of the Scheme will extend to any Mariana
Shares which are unconditionally issued before the Scheme Voting Record
Time as a result of the exercise of any outstanding rights under the
Mariana Employee Equity Plans.
12 Mariana Warrants
The right to vote in respect of the Scheme (and the entitlement to
receive the Consideration under the Scheme) will extend to any Mariana
Shares which are unconditionally issued before the Scheme Voting Record
Time as a result of the valid exercise of any existing Mariana Warrants.
If Mariana Warrant Holders validly exercise their subscription rights
before the Scheme Record Time, they will be treated as Scheme
Shareholders and receive cash and shares under the terms of the Scheme.
Mariana will seek shareholder approval at the General Meeting for
amendments to the Articles so that if holders of Mariana Warrants
exercise their subscription rights after the Scheme Record Time, the
Mariana Shares that would have been issued to them will automatically be
acquired by Sandstorm and, in return, they would receive Sandstorm
Shares, the number of which will be determined based on the relative
values of the Consideration and the Sandstorm Shares as at the date of
this Announcement, as set out in paragraph 2 (The Combination) of this
Announcement.
Holders of 2015 Warrants are reminded that the subscription period under
the 2015 Warrants expires at 5pm UK time on 27 April 2017 and the 2015
Warrants will be incapable of exercise after that date. The subscription
period under the 2016 Warrants expires on 4 May 2018.
Mariana Warrant Holders will be contacted separately regarding the
effect of the Combination on their rights under the Mariana Warrant
Instruments. Further details will be set out in the Scheme Document.
Mariana Warrant Holders needing advice should consult an independent
financial adviser and/or independent legal adviser.
The Mariana Independent Directors each hold 2015 Warrants over a
combined total of 81,000 Mariana Shares. The Mariana Independent
Directors intend to exercise such 2015 Warrants in full ahead of the
expiry of the subscription period on 27 April 2017.
13 Dividends and Sandstorm Dividend Policy
To date, no dividends have been paid by Sandstorm on Sandstorm Shares
and Sandstorm may not declare or pay any cash dividends in the
foreseeable future. Payment of any future dividends will be at the
discretion of Sandstorm's Board of Directors after taking into account
many factors including Sandstorm's operating results, financial
condition and current and anticipated cash needs.
14 Disclosure of interests in Mariana relevant securities
Sandstorm holds 8,980,243 Mariana Shares, representing approximately 7.0
per cent. of the issued ordinary share capital of Mariana, and 2016
Warrants over a further 4,490,122 Mariana Shares. The strike price of
the 2016 Warrants held by Sandstorm is 25 pence and the subscription period expires on 6 May 2018. David De Witt (Non-Executive Chairman of Sandstorm), together with his spouse, holds 297,585 Mariana Shares, representing approximately 0.2 per cent. of the issued ordinary share capital of Mariana, and 2016 Warrants over a further 475,893 Mariana Shares. Family members of Nolan Watson (President and Chief Executive of Sandstorm) collectively hold 611,578 Mariana Shares, representing approximately 0.5 per cent. of the issued ordinary share capital of Mariana, and 2016 Warrants over a further 713,839 Mariana Shares. Dana Watson has undertaken to donate to charity an amount equivalent to the difference in the value of her Mariana Shares and 2016 Warrants before and after this Announcement, to be calculated by reference to the closing prices per Mariana Share on AIM on 25 April 2017 (being the last Business Day before the date of this Announcement) and on the date of this Announcement. Mary Little (Independent Director of Sandstorm) holds 500 Mariana Shares, representing approximately 0.0004 per cent. of the issued ordinary share capital of Mariana. Sandstorm, together with its concert parties, is therefore interested in an aggregate of 9,889,906 Mariana Shares, representing approximately 7.71 per cent. of the issued ordinary share capital of Mariana and 2016 Warrants over a further 5,679,854 Mariana Shares. Save for those interests, neither Sandstorm, its concert parties nor, so far as Sandstorm or its directors are aware, any other person acting in concert with Sandstorm, has any interest in or right to subscribe for Mariana relevant securities. 15 Structure of the Combination 15.1 Terms and conditions Appendix 1 to this Announcement sets out the Conditions and further terms to which the Combination will be subject, including details of requisite regulatory approvals. 15.2 Scheme of Arrangement It is intended that the Combination will be implemented by way of a court-sanctioned scheme of arrangement between Mariana and the Scheme Shareholders under Part VIII of the Companies (Guernsey) Law (although Sandstorm reserves the right to elect to implement the Combination by way of an Offer, subject to Panel consent and to the terms of the Co-operation Agreement). The procedure involves an application by Mariana to the Guernsey Court to convene the Guernsey Court Meeting to approve the Scheme and upon approval an application to the Guernsey Court to sanction the Scheme and to confirm the transfer of all the Scheme Shares to Sandstorm, in consideration for which Scheme Shareholders who are on the register of members of Mariana at the Scheme Record Time will receive the Consideration (on the basis described in paragraph 2 above). For the purposes of qualifying for the exemption from the registration requirements of the US Securities Act afforded by Section 3(a)(10), Mariana will inform the Guernsey Court prior to the Scheme Court Hearing that its sanctioning of the Scheme will be relied upon by Sandstorm as an approval of the Scheme following a hearing on its substantive and procedural fairness to Mariana Shareholders with respect to the issuance of New Sandstorm Shares to US Holders. To become Effective, the Scheme requires, among other things, the approval of a majority in number of the Scheme Shareholders present and voting in person or by proxy at the Guernsey Court Meeting, representing not less than 75 per cent. in value of the Scheme Shares held by such Scheme Shareholders, together with the sanction of the Guernsey Court and the passing of any additional resolutions necessary to implement the Scheme at the General Meeting. In addition, the Scheme may require the approval of a majority of the minority outstanding Mariana Shares as required under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions. The Scheme will only become Effective if it is sanctioned by the Guernsey Court. The Scheme can only become Effective in accordance with its terms if all the Conditions have been satisfied or, where relevant, waived. Upon the Scheme becoming Effective, it will be binding on Mariana and all Scheme Shareholders irrespective of whether or not they attended or voted at the Guernsey Court Meeting or the General Meeting. The Combination will be conditional upon the Scheme becoming unconditional and becoming effective, subject to the provisions of the Code, by no later than the Long Stop Date or such later date (if any) as Sandstorm and Mariana may, with the consent of the Panel, agree and (if required) the Guernsey Court may allow. 15.3 Publication of the Scheme Document It is expected that the Scheme Document will be sent to Mariana Shareholders as soon as practicable and, in any event, within 28 days of this Announcement (unless the Panel agrees otherwise). 15.4 Delisting and Cancellation of Trading It is intended that dealings in Mariana Shares will be suspended at 5.00 p.m. London time on the Business Day prior to the Effective Date. It is further intended that applications will be made to (i) cancel trading in Mariana Shares on AIM and (ii) delist the Mariana Shares from the TSXV such cancellations and delistings in each case to take effect on or as soon as practicable following the Effective Date. It is also expected that Mariana will make an application to certain Canadian securities commissions after the Effective Date to cease to be a reporting issuer in Canada. 15.5 Indicative Timing The timing of implementation of the Combination will be dependent upon a number of factors including availability of the Guernsey Court and receipt of regulatory approvals. It is expected that the Scheme Document, containing further information about the Combination and notices of the Court Meeting and General Meeting, together with the Forms of Proxy, will be published as soon as practicable and, in any event, within 28 days of this Announcement (unless the Panel agrees otherwise). An expected timetable of principal events will be included in the Scheme Document. 16 Listing, dealings and settlement Applications will be made to the TSX and the NYSE MKT for the New Sandstorm Shares to be listed for trading. The decision on such listings is at the sole discretion of the TSX and NYSE MKT respectively. It is expected that such listings will become effective and that dealings for normal settlement in the New Sandstorm Shares will commence shortly after the Scheme becomes Effective. 17 Overseas shareholders The availability of New Sandstorm Shares under the Combination, and the distribution of this Announcement to persons who are not resident in the UK may be affected by the laws of the relevant jurisdiction in which they are located. Such persons should inform themselves of, and observe any applicable legal or regulatory requirements of, their jurisdiction. Mariana Shareholders who are in doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay. None of the securities to be issued pursuant to the Scheme have been or will be registered under the US Securities Act or the securities laws of any state, district or other jurisdiction of the United States, and it is currently intended that the New Sandstorm Shares will be issued to US Holders pursuant to the exemption from registration under the US Securities Act of 1933, as amended, provided by Section 3(a)(10) under such Act. This Announcement does not constitute an offer for sale of any securities or an offer or an invitation to purchase any securities. Mariana Shareholders are advised to read carefully the Scheme Document and related Forms of Proxy once these have been dispatched. 18 Offer-related Arrangements 18.1 Co-operation Agreement Mariana and Sandstorm have entered into the Co-operation Agreement dated 26 April 2017, pursuant to which Mariana and Sandstorm have agreed to undertake to work co-operatively with each other in order to procure the obtaining of any and all approvals, consents, clearances, permissions and waivers as may be necessary, and the making of all filings as may be necessary, from or under the law, regulations or practices applied by any regulatory authority in connection with the satisfaction of the conditions to the Combination as soon as practicable and to provide each other with such information and assistance as is reasonably necessary for that purpose. The Co-operation Agreement also contains provisions in relation to the Mariana Employee Equity Plans. Further details of these arrangements will be set out in the Scheme Document. 18.2 Confidentiality Agreement On 28 March 2017, Sandstorm and Mariana entered into a confidentiality agreement in relation to the Combination, pursuant to which, amongst other things, Sandstorm undertook, subject to certain exceptions, to keep information relating to Mariana confidential and not to disclose it to third parties. 19 Documents published on a website Copies of the following documents will, by no later than 12.00 p.m. (London time) on the Business Day following the date of this Announcement, be published on Sandstorm's website at http://www.sandstormgold.com and Mariana's website at http://www.marianaresources.com, and will also be available under Mariana's profile on SEDAR at www.sedar.com, and will be made available until the end of the Offer Period: -- a copy of this Announcement; -- the irrevocable undertakings referred to in paragraph 6 and set out in Appendix 3 to this Announcement; -- the Co-operation Agreement; -- the Confidentiality Agreement;
-- the KPMG consent letter in relation to this Announcement dated 26 April 2017; -- the RFC Ambrian consent letter in relation to this Announcement dated 26 April 2017; and -- the Raymond James consent letter in relation to this Announcement dated 25 April 2017. 20 General Your attention is drawn to the further information contained in the Appendices which form part of, and should be read in conjunction with, this Announcement. KPMG has given and has not withdrawn its written consent to the issue of this Announcement with the inclusion of the references to its name in the form and context in which they appear. RFC Ambrian has given and has not withdrawn its written consent to the issue of this Announcement with the inclusion of the references to its name in the form and context in which they appear. Raymond James has given and has not withdrawn its written consent to the issue of this Announcement with the inclusion of the references to its name in the form and context in which they appear. The Combination will be subject to the Conditions and certain further terms set out in Appendix 1 and the further terms and conditions set out in the Scheme Document when issued. Appendix 2 contains the sources and bases of certain information contained in this Announcement. Appendix 3 contains details of the irrevocable undertakings received by Sandstorm. Appendix 4 contains details of the Sandstorm Forecast. Appendix 5 contains the definitions of certain terms used in this Announcement. Enquiries Sandstorm Nolan Watson, President & CEO +1 604 689 0234 Adam Spencer, Senior Vice President, Corporate Development +1 416 238 1152 Denver Harris, Investor Relations +1 604 628 1178 KPMG LLP (Financial Adviser to Sandstorm) Helen Roxburgh Michael Nicholson +44 (0) 207 311 1000 Mariana John Horsburgh, Independent Chairman and Non-Executive Director Glen Parsons, CEO Karen Davies, Head of Investor Relations +61 2 8437 4588 RFC Ambrian Limited (Financial Adviser to Mariana) Stephen Allen Bhavesh Patel +44 (0) 20 3440 6800 Raymond James Ltd. (Canadian Financial Adviser to Mariana) John Willet Craig McDougal +1 416 777 7000 Blytheweigh (PR Adviser to Mariana) Tim Blythe Camilla Horsfall Megan Ray +44 (0) 207 138 3224 KPMG LLP, which is authorised and regulated in the UK by the FCA, is acting exclusively as financial adviser to Sandstorm in relation to the Combination, and is not acting for any other person in relation to such Combination. KPMG LLP will not be responsible to anyone other than Sandstorm for providing the protections afforded to its clients nor for providing advice in relation to the Combination or any other matters referred to in this Announcement or otherwise. RFC Ambrian Limited, which is authorised and regulated by the FCA, is acting exclusively for Mariana and noSHYone else in connection with the Combination and will not be responsible to anyone other than Mariana for providing the protections afforded to clients of RFC Ambrian Limited nor for providing advice in relation to the Combination or any other matters referred to in this Announcement. Raymond James Ltd. is acting exclusively as Canadian financial adviser to Mariana and to the Mariana Independent Directors, and noSHY-one else in connection with the Combination and will not be responsible to anyone other than Mariana for providing the protections afforded to clients of Raymond James Ltd. nor for providing advice in relation to the Combination or any other matters referred to in this Announcement. The technical and scientific information relating to Mariana and its assets contained in this Announcement has been reviewed and approved for release by Eric Roth, Mariana's Qualified Person as defined by NI 43-101. Mr Roth is Mariana's Chief Operating Officer and Executive Director and holds a Ph.D. in Economic Geology from the University of Western Australia, is a Fellow of the Australian Institute of Mining and Metallurgy (AusIMM), and is a Fellow of the Society of Economic Geologists (SEG). Mr Roth has 25 years of experience in international minerals exploration and mining project evaluation. IMPORTANT NOTICE Further information This Announcement is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Combination or otherwise, nor shall there be any sale, issuance or transfer of securities of Mariana in any jurisdiction in contravention of applicable law. The Combination will be made solely by means of the Scheme Document, which will contain the full terms and conditions of the Combination including details of how to vote in respect of the Scheme. Any vote in respect of the Scheme or other response in relation to the Combination should be made only on the basis of the information contained in the Scheme Document. Overseas jurisdictions The availability of the Combination to Mariana Shareholders who are not resident in and citizens of the UK or Guernsey may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the UK or Guernsey should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. Relevant clearances have not been, and will not be, obtained from the securities commission or similar regulatory authority of any province or territory of Canada. Further details in relation to overseas shareholders will be contained in the Scheme Document and Mariana Shareholders are advised to read carefully the Scheme Document and related Forms of Proxy once these have been dispatched. The release, publication or distribution of this Announcement in or into jurisdictions other than the UK or Guernsey may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK or Guernsey should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Combination disclaim any responsibility or liability for the violation of such restrictions by any person. This Announcement has been prepared for the purposes of complying with English law, Guernsey law, certain applicable Canadian securities laws, the AIM Rules, the rules of the London Stock Exchange and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside of England or Guernsey. Copies of this Announcement and the formal documentation relating to the Scheme and the Combination will not be, and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction or any jurisdiction where to do so would violate the laws of that jurisdiction. Notice to US Holders, US Optionholders and US Warrantholders The Combination and the securities to be issued in connection with the Combination have not been approved or disapproved by the SEC or the securities regulatory authority of any state of the United States, nor has the SEC or any such state securities regulatory authority passed upon the fairness or merits of the Combination or upon the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence. The New Sandstorm Shares to be received by Mariana Shareholders in exchange for their Mariana Shares pursuant to the Combination have not been, and will not be, registered under the US Securities Act or the securities laws of any state, district or other jurisdiction of the United States, and such securities are intended to be issued in reliance upon the exemption from the registration requirements of the US Securities Act set forth in Section 3(a)(10) thereof on the basis of the approval of the Guernsey Court, which will be informed in advance of the intention to rely upon such exemption, and similar exemptions under applicable state securities laws. Section 3(a)(10) of the US Securities Act exempts the issuance of securities issued in exchange for one or more bona fide outstanding securities, from the registration requirements of the US Securities Act where, among other matters, the terms and conditions of such issuance and exchange have been approved by a court of competent jurisdiction that is expressly authorized by law to grant such approval, after a hearing upon the fairness of the substantive and procedural terms and conditions of such issuance and exchange at which all persons to whom the securities will be issued have the right to appear and receive timely and adequate notice thereof. The New Sandstorm Shares to be received by Mariana Shareholders upon completion of the Combination may be resold without restriction under the US Securities Act, except in respect of resales by persons who are "affiliates" (within the meaning of Rule 144 under the US Securities Act) of Sandstorm at the time of the Section 3(a)(10) exchange or who have been affiliates of Sandstorm within 90 days before the Section 3(a)(10) exchange or who are affiliates of Sandstorm at the time of such
resale or within the 90-day period prior to such resale. Persons who may be deemed to be "affiliates" of an issuer include individuals or entities that control, are controlled by, or are under common control with, the issuer, whether through the ownership of voting securities, by contract, or otherwise, and generally include executive officers and directors of the issuer as well as principal shareholders of the issuer (which includes, among others, 10% shareholders). Mariana Options and Mariana Warrants will remain outstanding under their terms and any securities issuable upon exercise thereof have not been and will not be registered under the U.S. Securities Act or applicable state securities laws. As a result, Mariana Options and Mariana Warrants may not be exercised in the United States or by or on behalf of a US Optionholder or US Warrantholder, as applicable, nor may any New Sandstorm Shares issued upon such exercise be offered or resold in the United States or to or for the account of such a US holder, except pursuant to the terms of such security and pursuant to a registration statement under the U.S. Securities Act or an exemption from applicable registration requirements or in a transaction not subject to the registration requirements of the U.S. Securities Act and applicable state securities laws. The financial information on Sandstorm in this Announcement has been extracted or derived (without material adjustment) from Sandstorm's Annual Report and Accounts for the year ended 31 December 2016 and the unaudited interim production results for the three-month period ending 31 March 2017, which are prepared in US Dollars. The financial information on Mariana in this Announcement has been extracted or derived (without material adjustment) from Mariana's Annual Report and Accounts for the year ended 31 December 2016, which are prepared in British Pounds Sterling. In addition, such financial statements and other financial information included or incorporated by reference in this Announcement have been prepared in accordance with IFRS, which differs from US GAAP in certain material respects, and thus are not directly comparable to financial statements prepared in accordance with US GAAP. Information in this Announcement or in the documents incorporated by reference herein concerning the properties and operations of Sandstorm and of Mariana has been prepared in accordance with requirements and standards under securities laws, which differ from the requirements of US securities laws. The terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" used in the Announcement or in the documents incorporated by reference herein are mining terms as defined in accordance with NI 43-101 under guidelines set out in the Definition Standards for Mineral Resources and Mineral Reserves adopted by the Canadian Institute of Mining, Metallurgy and Petroleum Council on 11 December 2005. While the terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are recognized and required by securities laws other than the requirements of US securities laws, they are not recognized by the SEC. Disclosure of contained ounces are or may be permitted disclosure under regulations applicable to Mariana and Sandstorm; however, the SEC normally only permits issuers to report resources as in place tonnage and grade without reference to unit of production measures. As such, certain information contained in the Announcement or in the documents incorporated by reference herein concerning descriptions of mineralization and mineral resources under these standards may not be comparable to similar information made public by US companies subject to reporting and disclosure requirements of the SEC. US Holders should be aware that the Combination described in the Announcement may have tax consequences in the United States and should consult their own tax advisors to determine the particular United States tax consequences to them of the Combination in light of their particular situation, as well as any tax consequences that may arise under the laws of any other relevant foreign, state, local, or other taxing jurisdiction. The enforcement by investors of civil liabilities under the United States federal and state securities laws may be affected adversely by the fact that Sandstorm and Mariana are incorporated or organized under the laws of a jurisdiction other than the United States, that some or all of their officers and directors are and will be residents of countries other than the United States, that some or all of the experts named in the Announcement may be residents of countries other than the United States, and that all or a substantial portion of the assets of Sandstorm, Mariana and such persons are and will be located outside the United States. As a result, it may be difficult or impossible for US Holders (including US Optionholders and US Warrantholders) to effect service of process within the United States upon Sandstorm or Mariana, as applicable, their respective officers or directors or the experts named herein, or to realize, against them, upon judgments of courts of the United States predicated upon civil liabilities under the federal securities laws of the United States or applicable securities laws of any state within the United States. In addition, US Holders (including US Optionholders and US Warrantholders) should not assume that the courts of Guernsey: (a) would enforce judgments of United States courts obtained in actions against such persons predicated upon civil liabilities under the federal securities laws of the United States or applicable securities laws of any state within the United States; or (b) would enforce, in original actions, liabilities against such persons predicated upon civil liabilities under the federal securities laws of the United States or applicable securities laws of any state within the United States. Notice to Canadian Holders The enforcement by investors of civil liabilities under the Canadian securities laws may be affected adversely by the fact that Mariana is incorporated or organized under the laws of a jurisdiction other than Canada, that some or all of Sandstorm's and Mariana's officers and directors are and will be residents of countries other than Canada, that some or all of the experts named in this Announcement may be residents of countries other than Canada, and that all or a substantial portion of the assets of Sandstorm, Mariana and such persons are and will be located outside Canada. As a result, it may be difficult or impossible for Canadian Holders to effect service of process within Canada upon Mariana, Sandstorm's and Mariana's respective officers or directors or the experts named herein, or to realize, against them, upon judgments of courts of Canada predicated upon liabilities under Canadian securities laws. In addition, Canadian Holders should not assume that the courts of Guernsey: (a) would enforce judgments of Canadian courts obtained in actions against such persons predicated upon civil liabilities under Canadian securities laws; or (b) would enforce, in original actions, liabilities against such persons predicated upon civil liabilities under the Canadian securities laws. The New Sandstorm Shares to be issued pursuant to the Combination will be issued in reliance upon exemptions from the prospectus requirements of securities legislation in each province of Canada. Subject to certain disclosure and regulatory requirements and to customary restrictions applicable to distributions of shares that constitute "control distributions", New Sandstorm Shares may be resold in each province and territory in Canada, subject in certain circumstances, to the usual conditions that no unusual effort has been made to prepare the market or to create demand, no extraordinary commission or consideration is paid and, if the selling shareholder is an insider or officer of Sandstorm, such shareholder has no reasonable grounds to believe that Sandstorm is in default of securities legislation. Canadian Holders should be aware that the Combination described in this Announcement may have tax consequences in Canada and should consult their own tax advisors to determine the particular Canadian tax consequences to them of the Combination in light of their particular circumstances, as well as any tax consequences that may arise under the laws of any other relevant foreign, state, local, or other taxing jurisdiction. Forward-looking statements This Announcement (including information incorporated by reference in this Announcement), oral statements made regarding the Combination, and other information published by Sandstorm and Mariana contain statements which are, or may be deemed to be, "forwardSHYlooking statements" or "forward-looking information" under applicable securities laws (collectively referred to as "forward-looking statements"). ForwardSHYlooking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Sandstorm and Mariana about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forwardSHYlooking statements. The forwardSHYlooking statements contained in this Announcement include statements relating to the expected effects of the Combination on Sandstorm and Mariana, the expected timing and scope of the Combination, production forecasts, plans with respect to the JV interest, plans with respect to the Exploration Properties, estimates of mineral resources, statements with respect to the Hot Maden PEA and other statements other than historical facts. Often, but not always, forwardSHYlooking statements can be identified by the use of forwardSHYlooking words such
as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although Sandstorm and Mariana believe that the expectations reflected in such forwardSHYlooking statements are reasonable, Sandstorm and Mariana can give no assurance that such expectations will prove to be correct. By their nature, forwardSHYlooking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forwardSHYlooking statements. These factors include, but are not limited to: the ability to consummate the Combination; the ability to obtain requisite shareholder and stock exchange approvals and the satisfaction of other Conditions on the proposed terms and schedule; the ability of Sandstorm and Mariana to successfully integrate their respective operations and retain key employees; the potential impact of the announcement or consummation of the Combination on relationships, including with employees, suppliers, customers and competitors; and changes in general economic, business and political conditions. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forwardSHYlooking statements. Such forwardSHYlooking statements should therefore be construed in the light of such factors. Neither Sandstorm nor Mariana, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forwardSHYlooking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on these forwardSHYlooking statements. Other than in accordance with their legal or regulatory obligations (including, but not limited to, the AIM Rules), neither Sandstorm nor Mariana is under any obligation, and Sandstorm and Mariana expressly disclaim any intention or obligation, to update or revise any forwardSHYlooking statements, whether as a result of new information, future events or otherwise. With respect to statements on the Sandstorm Forecast, which is included for the purposes outlined herein, readers are cautioned that the information may not be appropriate for other purposes. No profit forecasts or estimates or quantified financial benefits statement Other than in respect of the Sandstorm Forecast, no statement in this Announcement is intended as a profit forecast, profit estimate or quantified financial benefits statement and no statement in this Announcement should be interpreted to mean that earnings per Mariana Share or Sandstorm Share for the current or future financial years would necessarily match or exceed the respective historical published earnings per Mariana Share or Sandstorm Share or to mean that the Combined Group's earnings in the first twelve months following the Combination, or in any subsequent period, following the Combination would necessarily match, or be greater than or be less than, those of Mariana and/or Sandstorm for the relevant preceding financial period or any other period. Disclosure requirements of the Code Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure. Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3. Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure. Publication on website and SEDAR A copy of this Announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Sandstorm's website at http://www.sandstormgold.com and Mariana's website at http://www.marianaresources.com by no later than 12 noon (London time) on the Business Day following this Announcement. For the avoidance of doubt, the contents of these websites are not incorporated by reference and do not form part of this Announcement. This Announcement will also be available on SEDAR under Mariana's profile at www.sedar.com. Requesting hard copy documents In accordance with Rule 30.3 of the Code, a person so entitled may request a hard copy of this Announcement by contacting RFC Ambrian Limited during business hours on +44 (0)203 440 6800 or by submitting a request in writing to RFC Ambrian Limited at Level 5, Condor House, 10 St Paul's Churchyard, London, EC4M 8AL. For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested. You may also request that all future documents, announcements and information to be sent to you in relation to the Combination should be in hard copy form. Electronic Communications Please be aware that addresses, electronic addresses and certain other information provided by Mariana Shareholders, persons with information rights and other relevant persons for the receipt of communications from Mariana may be provided to Sandstorm during the offer period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c). Rule 2.9 Disclosure In accordance with Rule 2.9 of the Code: -- Mariana confirms that as at the date of this Announcement it has in issue and admitted to trading on AIM and TSXV 126,231,768 ordinary shares of 0.1p each (save for 1,977,812 Mariana Shares which have been issued and are expected to be admitted to trading on AIM and TSXV on or around 27 April 2017). The ISIN of the ordinary shares is GG00BD3GC324. -- Sandstorm confirms that as at the date of this Announcement it has in issue and admitted to trading on TSX and NYSE MKT 151,994,269 common shares of no par value. The ISIN of the common shares is CA80013R2063. -- Sandstorm confirms that as at the date of this Announcement it has in issue and admitted to trading on TSX 5,002,500 common share purchase warrants with an exercise price of US$14.00 per common share that expire on 7 September 2017. The ISIN of the warrants is CA80013R1313. -- Sandstorm confirms that as at the date of this Announcement it has in issue and admitted to trading on TSX 5,043,900 common share purchase warrants with an exercise price of US$4.00 per common share that expire on 3 November 2020. The ISIN of the warrants is CA80013R1644. Rounding Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category
presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of figures that precede them. Appendix 1 Conditions and Certain Further Terms of the Scheme and the Combination A. Conditions of the Combination The Combination will be conditional upon the Scheme becoming unconditional and becoming Effective, subject to the provisions of the Code, by no later than the Long Stop Date or such later date (if any) as Sandstorm and Mariana may, with the consent of the Panel, agree and (if required) the Guernsey Court may allow. Scheme Approval 1 The Scheme will be conditional upon: (a) approval of the Scheme by a majority in number representing not less than 75 per cent. in value of the Scheme Shareholders (or the relevant class or classes thereof, if applicable) present and voting, either in person or by proxy, at the Guernsey Court Meeting and at any separate class meeting which may be required by the Guernsey Court or at any adjournment of any such meeting not later than the 22nd day after the date for which the Guernsey Court Meeting is originally convened (or such later date, if any, as Sandstorm and Mariana may agree and the Guernsey Court may allow); (b) all resolutions necessary to approve and implement the Scheme and to approve certain related matters being duly passed by the requisite majority or majorities at the General Meeting or at any adjournment of that meeting not later than the 22nd day after the date for which the General Meeting is originally convened (or such later date, if any, as Sandstorm and Mariana may agree and the Guernsey Court may allow); and (c) the sanction of the Scheme with or without modification (but subject to any such modification being acceptable to Sandstorm and Mariana) by the Guernsey Court and the Guernsey Court Meeting to sanction the Scheme being held on or before the 22nd day after the expected date of the Guernsey Court sanction hearing as set out in the Scheme Document (or such later date as Sandstorm and Mariana may agree and the Guernsey Court may allow). In addition, Sandstorm and Mariana have agreed that, subject as stated in Part B below, the Combination will be conditional upon the following matters and, accordingly, the necessary actions to make the Scheme Effective will not be taken unless such conditions (as amended, if appropriate) have been satisfied or, where relevant, waived: Regulatory clearances 2 The Government of the Republic of Côte d'Ivoire, acting through its relevant department or agency, either confirming, on terms reasonably satisfactory to Sandstorm, that no regulatory consents are required for the indirect change of control of Awalé Resources SARL and/or Srika Gold or, if any such consents are required, the Government of the Republic of Côte d'Ivoire, acting through its relevant department or agency, giving the relevant consents on terms reasonably satisfactory to Sandstorm. Listing of New Sandstorm Shares 3 Conditional approval or approval being granted for the New Sandstorm Shares to be listed and posted for trading on the TSX and the NYSE MKT. General third party clearances 4 Excluding any filings required for the purposes of the confirmation or consent referred to in paragraph 2 (to which only paragraph 2 shall apply), all necessary filings or applications, including stock exchange applications, having been made, all necessary waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory or regulatory obligations in any relevant jurisdiction deemed required having been complied with, in each case in connection with the Combination or the acquisition by any member of the Wider Sandstorm Group of any shares or other securities in, or control of, any member of the Wider Mariana Group, where the direct consequence of a failure to make such a notification or filing or to wait for the expiry, lapse, or termination of any such waiting or time period would be unlawful in any relevant jurisdiction or which is material in the context of the Wider Sandstorm Group or the Wider Mariana Group, in each case, taken as a whole, or would be material in the context of the Combination. 5 All Authorisations, including stock exchange approvals, which are necessary or are reasonably considered necessary by Sandstorm in any relevant jurisdiction for or in respect of the Scheme or Combination or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Mariana or any other member of the Wider Mariana Group by any member of the Wider Sandstorm Group or the carrying on by any member of the Wider Mariana Group of its business having been obtained, in terms and in a form reasonably satisfactory to Sandstorm, from all appropriate Third Parties or from any persons or bodies with whom any member of the Wider Mariana Group has entered into contractual arrangements, in each case where the absence of such Authorisation would or might reasonably be expected to have a material adverse effect on the Mariana Group taken as a whole and all such Authorisations remaining in full force and effect and there being no notice or intimation of any intention to revoke, suspend, restrict, modify or not to renew any of the same. 6 Any resolution or resolutions of the independent Mariana Shareholders required to approve and implement the Retention Arrangements being duly passed at the General Meeting in accordance with Rule 16 of the Code. 7 Excluding in relation to the confirmation or consent referred to in paragraph 2 (to which only paragraph 2 shall apply), no Third Party having intervened (as defined below) and there not continuing to be outstanding any statute, regulation or order of any Third Party, in each case which would or might reasonably be expected to: (a) make the Scheme or the Combination or, in each case, its implementation or the acquisition or proposed acquisition by Sandstorm or any member of the Wider Sandstorm Group of any shares or other securities in, or control or management of, Mariana or any member of the Wider Mariana Group void, illegal or unenforceable in any jurisdiction, or otherwise directly or indirectly materially restrain, prevent, prohibit, restrict or materially delay the same or impose additional conditions or obligations with respect to the Scheme or the Combination or such acquisition, or otherwise materially impede, challenge or interfere with the Scheme or Combination or such acquisition, or require amendment to the terms of the Scheme or Combination or the acquisition or proposed acquisition of any Mariana Shares or the acquisition of control or management of Mariana or the Wider Mariana Group by Sandstorm or any member of the Wider Sandstorm Group; (b) materially limit or delay, or impose any material limitations on, the ability of any member of the Wider Sandstorm Group or any member of the Wider Mariana Group to acquire or to hold or to exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities in, or to exercise voting or management control over, any member of the Wider Mariana Group or any member of the Wider Sandstorm Group; (c) require, prevent or materially delay the divestiture or materially alter the terms envisaged for any proposed divestiture by any member of the Wider Sandstorm Group of any shares or other securities in Mariana or of all or any portion of their respective businesses, assets or properties or materially limit the ability of any of them to conduct any of their respective businesses or to own or control any of their respective assets or properties or any part thereof; (d) require any member of the Wider Sandstorm Group or of the Wider Mariana Group to acquire, or to offer to acquire, any shares or other securities (or the equivalent) in any member of either group owned by any third party; (e) materially limit the ability of any member of the Wider Sandstorm Group or of the Wider Mariana Group to conduct or integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider Sandstorm Group or of the Wider Mariana Group; or (f) otherwise materially adversely affect any or all of the business, assets, profits, financial or trading position of any member of the Wider Mariana Group or of the Wider Sandstorm Group. Certain matters arising as a result of any arrangement, agreement, etc. 8 Except as Disclosed, there being no provision of any arrangement, agreement, licence, permit, franchise or other instrument to which any member of the Wider Mariana Group is a party, or by or to which any such member or any of its assets is or are or may be bound, entitled or subject or any circumstance, which, in each case as a consequence of the Scheme or Combination or the acquisition or proposed acquisition of any shares or other securities in, or control of, Mariana or any other member of the Wider Mariana Group by any member of the Wider Sandstorm Group or otherwise, would be expected to result in (in any case to an extent which would reasonably be expected to be material in the context of the Mariana Group taken as a whole): (a) any monies borrowed by or any other indebtedness or liabilities (actual or contingent) of, or any grant available to, any member of the Wider Mariana Group being or becoming repayable or capable of being declared repayable immediately or prior to its stated maturity
date or repayment date or the ability of any member of the Wider Mariana Group to borrow monies or incur any indebtedness being withdrawn or inhibited or becoming capable of being withdrawn or inhibited; (b) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interests of any member of the Wider Mariana Group or any such mortgage, charge or other security interest (wherever created, arising or having arisen) becoming enforceable; (c) any such arrangement, agreement, licence, permit, franchise or instrument, or the rights, liabilities, obligations or interests of any member of the Wider Mariana Group thereunder, being, or becoming capable of being, terminated or adversely modified or affected or any adverse action being taken or any obligation or liability arising thereunder; (d) any asset or interest of any member of the Wider Mariana Group being or falling to be disposed of or charged or ceasing to be available to any member of the Wider Mariana Group or any right arising under which any such asset or interest could be required to be disposed of or could cease to be available to any member of the Wider Mariana Group otherwise than in the ordinary course of business; (e) the creation of any liabilities (actual or contingent) by any member of the Wider Mariana Group other than in the ordinary course of business; (f) the rights, liabilities, obligations or interests of any member of the Wider Mariana Group under any such arrangement, agreement, licence, permit, franchise or other instrument or the interests or business of any such member in or with any other person, firm, company or body (or any arrangement or arrangements relating to any such interests or business) being terminated or adversely modified or affected; or (g) the financial or trading position or the value of any member of the Wider Mariana Group being prejudiced or adversely affected, and no event having occurred which, under any provision of any such arrangement, agreement, licence, permit or other instrument, would or would reasonably be expected to result in any of the events or circumstances which are referred to in paragraphs (a) to (g) of this Condition 6 in any case to an extent which would or might reasonably be expected to be material in the context of the Mariana Group taken as a whole. Certain events occurring since 31 December 2016 9 Except as Disclosed, no member of the Wider Mariana Group having, since 31 December 2016: (a) issued or agreed to issue, or authorised the issue of, additional shares of any class, or securities convertible into or exercisable or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities or transferred or sold any shares out of treasury, other than as between Mariana and wholly-owned subsidiaries of Mariana or any shares issued or shares transferred from treasury upon the exercise of any Mariana Warrants or of any Mariana Options; (b) purchased or redeemed or repaid any of its own shares or other securities or reduced or made any other change to any part of its share capital; (c) recommended, declared, paid or made any dividend or other distribution whether payable in cash or otherwise or made any bonus issue (other than to Mariana or a wholly-owned subsidiary of Mariana); (d) save for intra-Mariana Group transactions, made or authorised any change in its loan capital; (e) save for intra-Mariana Group transactions, entered into, implemented or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merged with, demerged or acquired any body corporate, partnership or business or acquired or disposed of or transferred, mortgaged, charged or created any security interest over any assets or any right, title or interest in any assets (including shares in any undertaking and trade investments) or authorised the same (in each case to an extent which would or might reasonably be expected to be material in the context of the Mariana Group taken as a whole); (f) issued or authorised the issue of, or made any change in or to, any debentures or (save for intra-Mariana Group transactions) incurred or increased any indebtedness or liability (actual or contingent) which in any case would or might reasonably be expected to be material in the context of the Mariana Group taken as a whole; (g) entered into, varied, or authorised any material agreement, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which: (A) is of a long term, onerous or unusual nature or magnitude or which is reasonably likely to involve an obligation of such nature or magnitude; or (B) is likely to restrict the business of any member of the Wider Mariana Group; or (C) is other than in the ordinary course of business, (ii) and which would or might reasonably be expected to be material in the context of the Mariana Group taken as a whole; (h) undertaken: (i) a conversion or transfer under Part V of the Companies (Guernsey) Law; (ii) an amalgamation under Part VI of the Companies (Guernsey) Law; (iii) a migration under Part VII of the Companies (Guernsey) Law; or (iv) an arrangement or reconstruction (other than the Scheme) under Part VIII of the Companies (Guernsey) Law; (i) taken any corporate action or had any legal proceedings instituted or threatened against it or petition presented or order made for its winding-up (voluntarily or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any material part of its assets and revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction which in any case would or might reasonably be expected to be material in the context of the Mariana Group taken as a whole; (j) been unable, or admitted in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business; (k) waived or compromised any claim otherwise than in the ordinary course of business which would or might reasonably be expected to be material in the context of the Mariana Group taken as a whole; (l) made any alteration to its memorandum or articles of incorporation (in each case, other than in connection with the Scheme); (m) entered into, terminated or varied the terms of or made any offer (which remains open for acceptance) to enter into or vary the terms of, any contract, agreement, commitment, transaction or arrangement with any person employed by any member of the Wider Mariana Group, including entering into any such arrangement which would result in any liability of any member of the Wider Mariana Group to make any severance, termination, bonus or other payments to any of its directors or other officers, which would or might reasonably be expected to be material in the context of the Combination or which would or might reasonably be expected to have a material adverse effect on the financial position of the Wider Mariana Group; (n) proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Wider Mariana Group; or (o) other than with the consent of Sandstorm, no action having been taken or proposed by any member of the Wider Mariana Group, or having been approved by Mariana Shareholders or consented to by the Panel, which falls or would fall within or under Rule 21.1 of the Code or which otherwise is or would be materially inconsistent with the implementation by Sandstorm of the Combination on the basis contemplated as at the date of this Announcement. No adverse change, litigation or regulatory enquiry 10 Except as Disclosed, since 31 December 2016: (a) there having been no adverse change or deterioration in the business, assets, financial or trading positions or profit or prospects of any member of the Wider Mariana Group which in any case would or might reasonably be expected to be material in the context of the Mariana Group taken as a whole; (b) no contingent or other liability of any member of the Wider Mariana Group having arisen or become apparent or increased which in any case would or might reasonably be expected to be material in the context of the Mariana Group taken as a whole; (c) no litigation, arbitration proceedings, prosecution or other legal or regulatory proceedings to which any member of the Wider Mariana Group is or may become a party (whether as plaintiff, defendant or otherwise) and no investigation by any Third Party against or in respect of any member of the Wider Mariana Group having been threatened, announced, implemented or instituted by or against or remaining outstanding against or in respect of any member of the Wider Mariana Group which in any such case might reasonably be expected to have a material adverse effect on the Mariana Group taken as a whole; (d) no steps having been taken which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Mariana Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which might reasonably be expected to
have a material adverse effect on the Wider Mariana Group taken as a whole; (e) (other than as a result of the Combination) no enquiry or investigation by, or complaint or reference to, any Third Party having been threatened, announced, implemented, instituted by or against or remaining outstanding against or in respect of any member of the Wider Mariana Group which in any case would or might reasonably be expected to be material in the context of the Mariana Group taken as a whole; and (f) no member of the Wider Mariana Group having conducted its business in breach of any applicable laws and regulations which in any case would or might reasonably be expected to be material in the context of the Mariana Group taken as a whole. No discovery of certain matters 11 Except as Disclosed, Sandstorm not having discovered: (a) that any financial or business or other information concerning the Wider Mariana Group disclosed at any time by or on behalf of any member of the Wider Mariana Group, whether publicly, to any member of the Wider Sandstorm Group or to any of their advisers or otherwise, is misleading or contains any misrepresentation of fact or omits to state a fact necessary to make any information contained therein not misleading to an extent which might reasonably be expected to be material in the context of the Mariana Group taken as a whole; (b) that any member of the Wider Mariana Group is subject to any liability (actual or contingent) which would or might reasonably be expected to be material in the context of the Mariana Group taken as a whole; (c) any past or present member of the Wider Mariana Group has not complied in all material respects with all applicable legislation, regulations or other requirements of any jurisdiction or any Authorisations relating to the use, treatment, storage, carriage, disposal, discharge, spillage, release, leak or emission of any waste or hazardous substance or any substance likely to impair the environment (including property) or harm human health or otherwise relating to environmental matters or the health and safety of any person, or that there has otherwise been any such use, treatment, handling, storage, transport, release, disposal, discharge, spillage, leak or emission (whether or not this constituted a non-compliance by any person with any legislation or regulations and wherever the same may have taken place), which non-compliance would be likely to give rise to any material liability including any penalty for non-compliance (whether actual or contingent) or cost on the part of any member of the Wider Mariana Group; (d) there is or is likely to be any material liability (actual or contingent) to make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of by any past or present member of the Wider Mariana Group under any environmental legislation, regulation, notice, circular or order of any government, governmental, quasi-governmental, state or local government, supranational, statutory or other regulatory body, agency, court, association or any other person or body in any jurisdiction; (e) circumstances exist which would be reasonably likely to lead to any Third Party instituting, or whereby any member of the Wider Sandstorm Group or any present or past member of the Wider Mariana Group would be likely to be required to institute, an environmental audit or take any other steps which would in any such case be reasonably likely to result in any liability (whether actual or contingent) to improve, modify existing or install new plant, machinery or equipment or carry out changes in the processes currently carried out or make good, remediate, repair, re-instate or clean up any land or other asset currently or previously owned, occupied or made use of by any past or present member of the Wider Mariana Group or by any person for which a member of the Wider Mariana Group is or has been responsible or in which any such member may have or previously have had or be deemed to have had any interest which is material in the context of the Wider Mariana Group taken as a whole; or (f) circumstances exist whereby a person would be likely to have any claim in respect of any product or process of manufacture or materials used therein currently or previously manufactured sold or carried out by any past or present member of the Wider Mariana Group which claim would be likely, materially and adversely, to affect any member of the Wider Mariana Group to an extent which is material in the context of the Wider Mariana Group taken as a whole. Anti-corruption, sanctions and criminal property 12 Except as Disclosed, Sandstorm not having discovered that: (a) any: (A) past or present member, director, officer or employee of the Wider Mariana Group; or (B) person that performs or has performed services on behalf of the Wider Mariana Group, has at any time engaged in an activity, practice or conduct which would constitute an offence under the UK Bribery Act 2010, the US Foreign Practices Act of 1977, The Corruption of Foreign Public Officials Act (Canada) 1998, the Prevention of Corruption (Bailiwick of Guernsey) Law, 2003 of or any other applicable anti-corruption legislation, including paid or agree to pay any bribe including any "inducement fee", given or agreed to give any similar gift or benefit or paid or agreed to pay a concealed bank account or fund to or for the account of, any customer, supplier, governmental official or employee, representative of a political party, or other person for the purpose of obtaining or retaining business; (b) any asset of any member of the Wider Mariana Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition); (c) any past or present member, director, officer or employee of the Wider Mariana Group, or any other person for whom any such person may be liable or responsible, has engaged in any business or made any investments in, or made any payments or assets available to or received any funds or asset from: (A) any government, entity, or individual with which US or Canadian or European Union persons (or persons operating in those territories) are prohibited from engaging in activities, doing business or from receiving or making available funds or economic resources, by US, Canadian or European Union laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control or HM Treasury & Customs; or (B) any government, entity or individual targeted by any of the economic sanctions of the United Nations, United States or the European Union or any of its member states; or (d) a member of the Mariana Group has engaged in a transaction which would cause the Sandstorm Group to be in breach of any law or regulation on completion of the Combination, including the economic sanctions administered by the United States Office of Foreign Assets Control or HM Treasury & Customs, or any government, entity or individual targeted by any of the economic sanctions of the United Nations, United States or the European Union or any of its member states. 13 For the purpose of these Conditions: (a) Authorisations means authorisations, orders, grants, recognitions, determinations, certificates, confirmations, consents, licences, clearances, provisions and approvals; (b) Third Party means any central bank, government, government department or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, authority (including any national or supranational anti-trust or merger control authority), court, trade agency, stock exchange, association, institution or professional or environmental body or any other person or body whatsoever in any relevant jurisdiction, including, for the avoidance of doubt, the Panel; and (c) a Third Party shall be regarded as having "intervened" if it has given notice to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or made, proposed or enacted any statute, regulation, decision or order or taken any measures or other steps or required any action to be taken or information to be provided or otherwise having done anything and "intervene" shall be construed accordingly. B. Certain further terms of the Scheme and the Combination 1 Conditions 2 to 11 (inclusive) must be fulfilled, be determined by Sandstorm to be or remain satisfied or (if capable of waiver) be waived by 11.59 p.m. on the date immediately preceding the date of the Scheme Court Hearing, failing which the Scheme will lapse. 2 Notwithstanding the paragraph above and subject to the requirements of the Panel, Sandstorm reserves the right in its sole discretion to waive all or any of Conditions 2 to 11 inclusive, in whole or in part and to proceed with the Scheme Court Hearing prior to the fulfilment, satisfaction or waiver of any of the Conditions 2 to 11 inclusive. 3 Sandstorm shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of Conditions 2 to 11 (inclusive) by a date earlier than the latest date specified above for the fulfilment of that condition, notwithstanding that the other Conditions may at such earlier date have been waived or fulfilled and that there are, at such earlier date, no circumstances indicating that any Condition may not be capable of fulfilment. 4 Fractions of New Sandstorm Shares will not be allotted or issued to holders of Mariana Shares. Fractional entitlements will be
rounded down to the nearest whole number of New Sandstorm Shares. Fractional entitlements of pence payable to holders of Mariana Shares under the Cash Consideration Amount will be rounded down to the nearest whole number of pence. 5 Sandstorm reserves the right to elect to implement the Combination by way of a takeover offer in compliance with the Code (which shall be an offer for the purposes of section 337 of the Companies (Guernsey) Law), subject to the Panel's consent. In such event, such Offer will be implemented by Sandstorm or a wholly-owned subsidiary of Sandstorm on the same terms and conditions (subject to appropriate amendments, including (without limitation) an acceptance condition set at 90 per cent. (or such other percentage (being more than 50 per cent.) as Sandstorm may decide (subject to the Panel's consent) of the shares to which such Offer relates) so far as applicable, as those which would apply to the Scheme. 6 If the Panel requires Sandstorm to make an offer for Mariana Shares under the provisions of Rule 9 of the Code, Sandstorm may make such alterations to the Conditions as are necessary to comply with the provisions of that Rule. 7 The Combination will be subject, inter alia, to the Conditions and certain further terms which are set out in this Appendix 1 and those terms which will be set out in the Scheme Document and such further terms as may be required to comply with the provisions of the AIM Rules for Companies and the provisions of the Code. 8 Mariana Shares will be acquired by Sandstorm fully paid and free from all liens, equitable interests, charges, encumbrances and other third party rights of any nature whatsoever and together with all rights attaching to them, including the right to receive and retain all dividends and distributions (if any) declared, made or payable after the date of this Announcement. If after the date of this Announcement and prior to the Effective Date, any dividend and/or other distribution and/or other return of value is declared, made or paid or becomes payable in respect of Mariana Shares, Sandstorm reserves the right (without prejudice to any right Sandstorm may have with the consent of the Panel, to invoke Condition 7(c) in Part A of this Appendix 1 to this Announcement) to reduce the amount of Consideration payable for such Mariana Shares under the terms of the Combination by an amount equivalent to such dividend, other distribution or return of value. 9 The Scheme will be governed by the laws of the Island of Guernsey and be subject to the jurisdiction of the Courts of Guernsey and to the conditions and further terms set out in this Announcement and in the Scheme Document. The Combination will be subject to the applicable requirements of the London Stock Exchange, the PRA, the Guernsey Financial Services Commission, FSMA, the Code, the TSXV, the TSX, applicable Canadian securities law and US federal securities law (except to the extent that exemptive relief has been granted by the SEC). 10 Any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about and observe any applicable requirements. Further information in relation to overseas shareholders will be contained in the Scheme Document. 11 Under Rule 13.5(a) of the Code, Sandstorm may not invoke a Condition so as to cause the Combination not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the Condition are of material significance to Sandstorm in the context of the Combination. The Conditions contained in paragraph 1 above and, if applicable, any acceptance condition if the Combination is implemented by means of an Offer, are not subject to this provision of the Code. 12 Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition. Appendix 2 Bases and Sources In this Announcement, unless otherwise stated, or the context otherwise requires, the following base and sources have been used: 1 Unless otherwise stated: (a) the financial information on Sandstorm has been extracted or derived (without material adjustment) from Sandstorm's Annual Report and Accounts for the year ended 31 December 2016 and the unaudited interim production results for the three-month period ending 31 March 2017; (b) the financial information on Mariana has been extracted or derived (without material adjustment) from Mariana's Annual Report and Accounts for the year ended 31 December 2016. 2 As at the close of business on 25 April 2017 (being the last business day prior to the date of this Announcement), Mariana had in issue 128,209,580 Mariana Shares. The ISIN Number for Mariana Shares is GG00BD3GC324. 3 As at the close of business on 25 April 2017 (being the last business day prior to the date of this Announcement), Sandstorm had in issue 151,994,269 Sandstorm Shares. The ISIN Number for Sandstorm Shares is CA80013R2063. 4 The fully diluted share capital of Mariana as at 25 April 2017 (being 152,091,026 Mariana Shares) is calculated on the basis of: (a) the number of Mariana Shares referred to in paragraph 2 above, which excludes 190,250 Mariana Shares held as treasury shares on 25 April 2017; and (b) any further Mariana Shares which may be issued on or after the date of this Announcement: (i) on the exercise of options with an exercise price lower than 109.71 pence granted under the Mariana Incentive Stock Option Plan, amounting to 7,717,500 Mariana Shares (which excludes the exercise of options with an exercise price greater than 109.71 pence granted under the Mariana Incentive Stock Option Plan, amounting to 180,000 Mariana Shares) as at 25 April 2017; and (ii) on the exercise of Mariana Warrants, amounting to 15,263,946 Mariana Shares as at 25 April 2017; and (iii) on the vesting of share bonus awards under the Mariana Share Bonus Awards, amounting to 900,000 Mariana Shares as at 25 April 2017. 5 The issued share capital of the Combined Group (being 187,661,365) has been calculated on the basis of: (a) a total number of 151,994,269 Sandstorm Shares in issue on 25 April 2017; and (b) a total number of 35,667,096 New Sandstorm Shares being required to be issued to Mariana Shareholders (excluding Sandstorm) to satisfy the New Sandstorm Share Consideration Amount payable under the terms of the Combination, calculated on the basis of the entire issued and to be issued share capital of Mariana referred to in paragraph 4 of this Appendix 2 less any Mariana Shares held by Sandstorm or in respect of which Sandstorm is interested by virtue of its holding of Mariana Warrants. 6 The value of the consideration to be paid by Sandstorm under the terms of the Combination to Mariana Shareholders (excluding Sandstorm) is GBP152.07 million (or US$195.27 million) has been calculated on the basis of: (a) the fully diluted ordinary share capital of Mariana referred to in paragraph 4 of this Appendix 2 less any Mariana Shares held by Sandstorm or in respect of which Sandstorm is interested by virtue of its holding of Mariana Warrants, representing a net total of 138,620,661 Mariana Shares to be purchased by Sandstorm; (b) total cash consideration (being GBP39.85 million or US$51.17 million) calculated by reference to the consideration cash component of 28.75 pence per Mariana Share; and (c) total share consideration (being GBP112.22 million or US$144.10 million) calculated by reference to the consideration share component of 0.2573 New Sandstorm Shares per Mariana Share, based on the closing price of US$4.04 per Sandstorm Share on NYSE MKT and a currency exchange rate of GBP0.7788 per US$, on 25 April 2017 (being the last Business Day before the date of this Announcement). 7 As at 25 April 2017 (being the last Business Day before the date of this Announcement) there are 7,717,500 options outstanding under the Mariana Incentive Stock Option Plan with an exercise price lower than 109.71 pence. If all of these options are exercised, the aggregate cash consideration received from option holders upon exercise will amount to GBP4.8 million. 8 As at 25 April 2017 (being the last Business Day before the date of this Announcement) there are 1,454,251 2015 Warrants outstanding with an exercise price of 30 pence. If all of these warrants are exercised, the aggregate cash consideration paid by holders of 2015 Warrants will amount to GBP0.4 million. 9 As at 25 April 2017 (being the last Business Day before the date of this Announcement) there are 9,319,570 2016 Warrants outstanding that are not held by Sandstorm, with an exercise price of 25 pence. If all of these warrants are exercised, the aggregate cash consideration paid by holders of 2016 Warrants (excluding Sandstorm) will amount to GBP2.3 million. 10 The market prices of the Mariana Shares are the closing middle market quotations as derived from the Daily Official List. 11 The market prices of the Sandstorm Shares, unless otherwise stated, represent mid-market closing prices on the relevant date(s) on the NYSE MKT as derived from Proquote. 12 VWAP figures are sourced from Bloomberg and, where relevant, are translated from US$ to GBP using the London close composite rate each day prior to averaging. 13 Certain figures included in this Announcement have been subject to rounding adjustments. 14 Unless otherwise stated, where amounts referred to in this Announcement have been translated from US$ to GBP, an exchange rate of 0.7788 has been used, as sourced from Bloomberg on 25 April 2017.
15 Under the heading "Strong production base" in section 3
("Background and reasons for the Combination"), and throughout this
Announcement, Sandstorm has included certain performance measures in
this Announcement that do not have any standardized meaning prescribed
by IFRS including average cash cost per ounce of gold and cash operating
margin. Average cash cost per ounce of gold is calculated by dividing
the total cost of sales, less depletion, by the ounces sold. In the
precious metals mining industry, Sandstorm believes that this is a
common performance measure but does not have any standardized meaning.
Sandstorm believes that, in addition to conventional measures prepared
in accordance with IFRS, certain investors use this information to
evaluate Sandstorm's performance and ability to generate cash flow. Cash
operating margin is calculated by subtracting the average cash cost per
ounce of gold from the average realized selling price per ounce of gold.
Sandstorm presents cash operating margin as it believes that certain
investors use this information to evaluate Sandstorm's performance in
comparison to other companies in the precious metals mining industry who
present results on a similar basis. Sandstorm's royalty income is
converted to an attributable gold equivalent ounce basis by dividing the
royalty income for that period by the average realized gold price per
ounce from Sandstorm's gold streams for the same respective period.
These attributable gold equivalent ounces when combined with the gold
ounces sold from Sandstorm gold streams equal total attributable gold
equivalent ounces sold. The presentation of these non-IFRS measures is
intended to provide additional information and should not be considered
in isolation or as a substitute for measures of performance prepared in
accordance with IFRS. Other companies may calculate these non-IFRS
measures differently. Please refer to Sandstorm management's discussion
and analysis for the year ended 31 December 2016, available at
www.sedar.com, for a reconciliation of non-IFRS measures.
16 Information regarding the Hot Maden Project has been derived
from the Hot Maden PEA. The Hot Maden PEA is preliminary in nature as it
includes inferred mineral resources that are considered too speculative
geologically to have the economic considerations applied to them that
would enable them to be categorized as mineral reserves. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability, and as such there is no certainty that the
preliminary assessment and economics will be realized. Mr. Roth, a
qualified person under NI 43-101, has reviewed the Hot Maden PEA on
behalf of Sandstorm. To the best of Sandstorm's knowledge, information
and belief, there is no new material scientific or technical information
that would make disclosure of the mineral resource or Hot Maden PEA
inaccurate or misleading.
17 Under the headings "Introduction" and "Geology and Mineral
Resources" in Section 8 ("Information relating to Mariana"), gold
equivalence (AuEq) was calculated using a 100 day moving average of
US$1,215/ounce for gold and US$2.13/pound for copper as of 29 May 2016.
No adjustment has been made for metallurgical recovery or net smelter
return as these remain uncertain at this time. Based on grades and
contained metal for gold and copper, it is assumed that both commodities
have reasonable potential to be economically extractable. The formula
used for Au equivalent grade is: AuEq g/t = Au + [(Cu% x 22.0462 x
2.13)/(1215/31.1035)] and is not adjusted for assumed metallurgical
recovery. Au equivalent ounces are calculated by multiplying Mineral
Resource tonnage by Au equivalent grade and converting for ounces. The
formula used for Au equivalent ounces is: AuEq Oz = [Tonnage x AuEq
grade (g/t)]/31.1035.
Appendix 3
Details of Irrevocable Undertakings
The following holders of Mariana Shares have given irrevocable
undertakings to vote in favour of the Scheme at the Guernsey Court
Meeting and the resolutions to be proposed at the General Meeting which
are necessary to implement the Combination and any related transactions
(and to vote against any resolutions which may result in the Combination
not being implemented) in relation to the following Mariana Shares,
respectively:
Directors
Number of Percentage of issued
Name Mariana Shares share capital of Mariana
John Goodwin 62,000 0.05
John Horsburgh 843,050 0.66
Glen Parsons 337,250 0.26
Eric Roth 649,371 0.51
The undertakings referred to above will remain binding if a higher
competing offer for Mariana is made. The undertakings will cease to be
binding if: (i) the Announcement is not made by 5.00 p.m. (London time)
on 26 April 2017 (or such later date as the Company and the Offeror may
agree); or (ii) the Panel consents to Sandstorm not proceeding with the
Combination; or (iii) the Scheme does not become Effective by 31 August
2017 (other than in circumstances where Sandstorm has elected to proceed
by way of takeover offer and such offer has not lapsed or been
withdrawn).
Other shareholders
Number of Percentage of issued
Name Mariana Shares share capital of Mariana
AngloGold Ashanti Holdings PLC 4,898,295 3.82
Australian Investors Pty Ltd 3,819,794 2.98
The undertakings referred to above will remain binding if a higher
competing offer for Mariana is made. The undertakings will cease to be
binding if: (i) the Announcement is not released by 5.00 p.m. (London
time) on 27 April 2017; or (ii) the Panel consents to Sandstorm not
proceeding with the Combination; or (iii) the Scheme does not become
Effective by 31 August 2017 (other than in circumstances where Sandstorm
has elected to proceed by way of takeover offer and such offer has not
lapsed or been withdrawn); or (iv) an offer is announced by a third
party on terms which represent in the reasonable opinion of KPMG LLP (in
the case of Australian Investors Pty Ltd) or RFC Ambrian Limited (in the
case of AngloGold Ashanti Holdings PLC) an improvement of ten per cent
or more on the value of the consideration offered under the Combination.
Appendix 4
Sandstorm Forecast
The following information on Sandstorm's operating cash flow after tax
(and before corporate overhead), which is included in the Sandstorm
Investor Presentation is considered to be a profit forecast for the
purposes of Rule 28 of the Takeover Code. The Panel has agreed that the
Sandstorm Forecast should be treated as an ordinary course profit
forecast, pursuant to Note 2(a) on Rule 28.1.
Calendar Year Operating Cash Flow After-Tax (US$ millions)
2017 US$50
2018 US$47
2019 US$58
2020 US$65
2021 US$65
Basis of preparation and assumptions
The Sandstorm Forecast is a repetition of forecast for the periods set
out above and included in the Sandstorm Investor Presentation. The
Sandstorm Investor Presentation, and hence the Sandstorm Forecast, was
prepared as at or around 1 April 2017 with production figures estimated
at or around 1 January 2017.
It reflects the Sandstorm estimates of expected future cash flows and
cash costs associated with Sandstorm's commodity streams and royalties.
Expected future cash flows reflect the estimated future production for
each mine at which Sandstorm has a commodity stream or royalty based on
public disclosure, technical reports and incorporating management
estimates where appropriate.
Expected future cash flows reflect metal price assumptions of US$1,200
per ounce of gold, US$17.00 per ounce of silver and US$2.50 per pound of
copper. It is also assumed that tax rates will remain materially
unchanged from prevailing rates.
Estimated future cash costs are at a fixed price per commodity unit or
at variable price based on spot which is consistent with the underlying
terms of the commodity stream or royalty.
The Sandstorm Forecast does not include any general and administrative
costs associated with Sandstorm which would otherwise be included in
operating cash flows under IFRS.
Directors' confirmation
The cash flow amounts presented above do not have any standardised
meaning prescribed by IFRS. The Sandstorm Directors have considered the
Sandstorm Forecast and confirm that it remains valid as at the date of
this Announcement, that it has been properly compiled on the basis of
the assumptions set out above, and that the basis of the assessment is
consistent with Sandstorm's prior forecasts.
Appendix 5
Definitions
The following definitions apply throughout this Announcement unless the
context requires otherwise.
GBP, Sterling, the lawful currency of the UK
pence or p
2015 Warrants the warrants issued under the 2015 Warrant Instrument
2015 Warrant the Mariana share warrant instrument dated 21 October
Instrument 2015
2016 Warrants the warrants issued under the 2016 Warrant Instrument
2016 Warrant the Mariana share warrant instrument dated 4 May 2016
Instrument
AIM AIM, a market of the London Stock Exchange
Announcement this announcement made pursuant to Rule 2.7 of the
Code
Articles the articles of incorporation of Mariana, as amended
from time to time
Awalé Awalé Resources SARL
Business Day a day (other than a Saturday, Sunday, public or bank
holiday) on which banks are generally open for business
in London and Guernsey
Canadian holders of Mariana Shares in Canada, resident in Canada
Holders or with a registered address in Canada, and any custodian,
nominee or trustee holding Mariana Shares for persons
in Canada or with a registered address in Canada
Cash 28.75 pence payable per Scheme Share under the terms
Consideration of the Scheme
Amount
Code the City Code on Takeovers and Mergers
Combination the proposed acquisition by Sandstorm of the entire
issued and to be issued ordinary share capital of
Mariana
Combined Group the Sandstorm Group, as enlarged by the Combination
Companies Act the Companies Act 2006, as amended from time to time
Companies the Companies (Guernsey) Law, 2008, as amended from
(Guernsey) Law time to time
Conditions the conditions to the implementation of the Combination
(including the Scheme) as set out in Appendix 1 to
this Announcement and to be set out in the Scheme
Document
Confidentiality the agreement between Sandstorm and Mariana in respect
Agreement of confidential information relating to the proposed
Combination dated 28 March 2017
Consideration the basic consideration payable to Mariana Shareholders
in connection with the Combination comprising a share
component of 0.2573 New Sandstorm Shares per Mariana
Share and a cash component of 28.75 pence per Mariana
Share
Co-operation the agreement between Sandstorm and Mariana in respect
Agreement of the conduct of the Combination dated on or around
the date of this Announcement
Dealing an announcement pursuant to Rule 8 of the Code containing
Disclosure details of dealings in interests in relevant securities
of a party to an offer
Disclosed information disclosed by, or on behalf of, Mariana
in:
(a) Mariana's annual report and accounts for the year
ended 31 December 2016;
(b) this Announcement; or
(c) as otherwise publicly announced by Mariana no
later than one (1) Business Day prior to the date
of this Announcement (by the delivery of an announcement
to Regulatory Information Service)
Effective (i) if the Combination is implemented by way of the
Scheme, the date on which the order of the Guernsey
Court sanctioning the Scheme under Part VIII of the
Companies (Guernsey) Law becomes effective in accordance
with its terms; or
(ii) if the Combination is implemented by way of an
Offer, such Offer having been declared or become unconditional
in all respects in accordance with the Code
Effective Date the date upon which the Scheme becomes Effective
Excluded Shares (i) any Mariana Shares beneficially owned by Sandstorm
or any other member of the Sandstorm Group; (ii) any
Mariana Shares held as treasury shares by Mariana;
and (iii) any other Mariana Shares which Sandstorm
and Mariana agree will not be subject to the Scheme
Exploration the remaining exploration properties of Mariana with
Properties a focus on gold, silver and associated metals in Ivory
Coast, Turkey and Argentina
FCA the Financial Conduct Authority
FSMA Financial Services and Markets Act 2000, as amended
from time to time
Forms of Proxy the forms of proxy in connection with each of the
Guernsey Court Meeting and the General Meeting, which
shall accompany the Scheme Document
General Meeting the general meeting of Mariana to be convened in connection
with the Scheme and in accordance with the Articles,
notice of which will be set out in the Scheme Document,
including any adjournment thereof
g/t grammes per tonne
Guernsey Court the Royal Court of Guernsey
Guernsey Court the meeting of the Scheme Shareholders (other than
Meeting the holders of the Excluded Shares) convened by order
of the Guernsey Court pursuant to section 107 of the
Companies (Guernsey) Law and in compliance with Section
3(a)(10) of the US Securities Act, to consider and,
if thought fit, to approve the Scheme, after a hearing
upon the procedural and substantive fairness of the
terms and conditions of the Scheme at which Mariana
Shareholders have the right to appear, with or without
modification (including any adjournment or postponement
thereof)
Hot Maden a high-grade, gold-copper, development-stage project
in northeast Turkey, in which Mariana holds a 30%
incorporated JV interest via the Turkish company Artmin
Madencili Sanayive Tikaret AS
Hot Maden PEA the technical report entitled "Amended National Instrument
43-101 Technical Report Preliminary Economic Assessment
Hot Maden Gold Copper Project Artvin Province, Turkey"
with an effective date of 1 March 2017
IFRS the International Financial Reporting Standards as
issued by the International Accounting Standards Board
ISIN International Securities Identification Number
IRR internal rate of return
JV joint venture
km(2) square kilometres
KPMG KPMG LLP, a limited liability partnership registered
in England and Wales with registered number OC301540
and which has its registered office at 15 Canada Square,
E14 5GL, United Kingdom
Koz thousand ounces
kt thousand tonnes
Lidya Lidya Madencilik Sanayive Ticaret A.S., incorporated
and registered in Turkey with company number 590086
and registered address Büdere Caddesi No: 163
34394, Zincirlikuyu, Istanbul
London Stock London Stock Exchange plc
Exchange
Long Stop Date 31 August 2017
Mariana Mariana Resources Limited, a non-cellular company
incorporated under the laws of Guernsey with registered
number 44276 and registered address at Granite House,
La Grande Rue, St Martin, Guernsey, GYI 3RS
Mariana the Mariana Incentive Stock Option Plan and the Mariana
Employee Equity Share Bonus Awards
Plans
Mariana Group Mariana and its subsidiary undertakings
Mariana the incentive stock option plan approved by Mariana
Incentive Stock Shareholders on 22 June 2011
Option Plan
Mariana the directors of Mariana that are independent for
Independent the purposes of the Scheme, being John Horsburgh and
Directors John Goodwin
Mariana Options options to subscribe for Mariana Shares granted under
the Mariana Employee Equity Plans
Mariana Share the share bonus awards made by Mariana to each of
Bonus Awards (i) Glen Parsons pursuant to a letter agreement entered
into between Mariana and Glen Parsons on 10 March
2017; and (ii) Eric Roth pursuant to a letter agreement
entered into between Mariana and Eric Roth on 10 March
2017, in each case as announced by Mariana on 1 February
2017 (and, for the avoidance of doubt, excluding the
options to subscribe for Mariana Shares referred to
in those agreements)
Mariana the registered holders of the Mariana Shares
Shareholders
Mariana Shares ordinary shares of 0.1 pence each in the capital of
Mariana
Mariana Warrant the holders of the Mariana Warrants
Holders
Mariana Warrant the 2015 Warrant Instrument and the 2016 Warrant Instrument
Instruments
Mariana the 2015 Warrants and the 2016 Warrants
Warrants
Moz million ounces
Mt million tonnes
Mtpa million tonnes per annum
New Sandstorm 0.2573 Sandstorm Shares payable per Scheme Share under
Share the terms of the Scheme
Consideration
Amount
New Sandstorm the Sandstorm Shares which are to be issued pursuant
Shares to the Scheme
NI 43-101 Canadian National Instrument 43-101 Standards of Disclosure
for Mineral Projects
NPV net present value
NSR net smelter royalty
NYSE MKT the NYSE MKT LLC
Offer if (subject to the consent of the Panel) Sandstorm
elects to effect the Combination by way of a takeover
offer, the offer to be made by or on behalf of Sandstorm
to acquire the entire issued and to be issued ordinary
share capital of Mariana (other than those shares
already held by Sandstorm) on the terms and subject
to the conditions to be set out in the related offer
document
Panel the Panel on Takeovers and Mergers
PFS Preliminary Feasibility Study
PRA the Prudential Regulation Authority
Regulatory any information service authorised from time to time
Information by the FCA for the purpose of disseminating regulatory
Service announcements
Restricted any jurisdiction where local laws or regulations may
Jurisdiction result in significant risk of civil, regulatory or
criminal exposure if information concerning the Combination
is sent or made available to Mariana Shareholders
in that jurisdiction (in accordance with Rule 30.3
of the Code)
Retention the proposed retention arrangements with Glen Parsons
Arrangements and Eric Roth as described in paragraph 10 (Directors,
management and employees) of this Announcement
RFC Ambrian RFC Ambrian Limited
RPM RungePincockMinarco Limited
Scheme the scheme of arrangement under Part VIII of the Companies
(Guernsey) Law to be proposed by Mariana to Mariana
Shareholders in connection with the Combination, with
or subject to any modification, addition or condition
approved or imposed by the Guernsey Court and agreed
by Sandstorm and Mariana
Scheme Court the second hearing before the Guernsey Court on an
Hearing application to sanction the Scheme
Scheme Document the document to be despatched to Mariana Shareholders
and others containing, among other things, the Scheme,
an explanatory statement in compliance with Part VIII
of the Companies (Guernsey) Law and the notices of
the Guernsey Court Meeting and the General Meeting
Scheme Record means the time and date specified in the Scheme Document
Time by reference to which the entitlements of Mariana
Shareholders under the Scheme will be determined,
expected to be 6.00 pm on the Business Day before
the Scheme becomes Effective
Scheme holders of Scheme Shares
Shareholders
Scheme Shares Mariana Shares:
(a) in issue as at the date of the Scheme Document;
(b) (if any) issued after the date of the Scheme Document
and before the Guernsey Court Meeting; and
(c) (if any) issued on or after the Guernsey Court
Meeting but before the Scheme Record Time, in respect
of which the original or any subsequent holder thereof
is, or shall have agreed in writing to be, bound by
the Scheme,
but in each case other than the Excluded Shares
Scheme Voting 6.00 p.m. on the day which is two days before the
Record Time date of the Guernsey Court Meeting or, if the Guernsey
Court Meeting is adjourned, 6.00 p.m. on the day which
is two days before the day of such adjourned meeting
SEC US Securities and Exchange Commission
Sandstorm Sandstorm Gold Ltd, a company incorporated under the
laws of the Province of British Columbia, Canada with
registered address 1400-400 Burrard Street, Vancouver,
British Columbia, Canada V6C 3A6
Sandstorm the information on Sandstorm's operating cash flow
Forecast after tax (and before corporate overhead) which is
included in the Sandstorm Investor Presentation which
is available on Sandstorm's website
Sandstorm Group Sandstorm and its subsidiary undertakings
Sandstorm Sandstorm's latest investor presentation, which is
Investor available on Sandstorm's website
Presentation
Sandstorm Sandstorm common shares
Shares
SpinCo a separate company into which Sandstorm intends to
spin-out the Exploration Properties following completion
of the Combination
Stream and Sandstorm's diversified portfolio of 155 streams and
Royalty royalties including 20 producing, 23 development-stage,
Portfolio 26 advanced exploration-stage and 86 exploration-stage
assets
Substantial a direct or indirect interest in 20 per cent. or more
Interest of the voting equity capital of an undertaking
t tonnes
Teck Royalty the royalty portfolio consisting of 52 royalties acquired
Package by Sandstorm from Teck Resources Limited and its affiliates
in the year ended 31 December 2016
TSX the Toronto Stock Exchange
TSXV the TSX Venture Exchange
UK or United the United Kingdom of Great Britain and Northern Ireland
Kingdom
United States the United States of America, its territories and
of America, possessions, any state of the United States and the
United States District of Columbia
or US
US Exchange Act the United States Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder
(as amended)
US GAAP United States generally accepted accounting principles
US Holders holders of Mariana Shares in the US, resident in the
US or with a registered address in the US, and any
custodian, nominee or trustee holding Mariana Shares
for persons in the US or with a registered address
in the US
US holders of Mariana Options in the US, resident in
Optionholders the US or with a registered address in the US, and
any custodian, nominee or trustee holding Mariana
Options for persons in the US or with a registered
address in the US
US Securities the United States Securities Act of 1933 and the rules
Act and regulations promulgated thereunder (as amended)
US holders of Mariana Warrants in the US, resident in
Warrantholders the US or with a registered address in the US, and
any custodian, nominee or trustee holding Mariana
Warrants for persons in the US or with a registered
address in the US
US$ the lawful currency of the United States
VWAP volume weighted average price
Wider Mariana Mariana and the subsidiaries and subsidiary undertakings
Group of Mariana and associated undertakings (including
any joint venture, partnership, firm or company in
which any member of the Mariana Group is interested
or any undertaking in which Mariana and such undertakings
(aggregating their interests) have a Substantial Interest)
Wider Sandstorm Sandstorm and the subsidiaries and subsidiary undertakings
Group of Sandstorm and associated undertakings (including
any joint venture, partnership, firm or company in
which any member of the Sandstorm Group is interested
or any undertaking in which Sandstorm and such undertakings
(aggregating their interests) have a Substantial Interest)
Yamana Yamana Gold Inc.
For the purposes of this Announcement, subsidiary, subsidiary
undertaking, undertaking, associated undertaking have the meanings given
by the Companies Act.
References to an enactment include references to that enactment as
amended, replaced, consolidated or re-enacted by or under any other
enactment before or after the date of this Announcement. All references
to time in this Announcement are to London time unless otherwise stated.
Recommended Combination Announcement
http://hugin.info/137803/R/2098811/795057.PDF
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Mariana Resources Ltd via Globenewswire
http://www.marianaresources.com/index.php
(END) Dow Jones Newswires
April 26, 2017 02:00 ET (06:00 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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