Sandstorm Metals & Energy Announces Second Quarter Results

Sandstorm Metals & Energy Ltd. (“Sandstorm” or the “Company”) (TSX-V: SND) has released its unaudited results for the second quarter ended June 30, 2013 (all figures in U.S. dollars).

Second Quarter Summary

• Acquired a 1.2% base metal NSR on the Prairie Creek project located in the Northwest Territories, Canada from Canadian Zinc Corporation for $6.8 million.
• Net loss of $13.4 million primarily due to a non-cash impairment charge of $12.1 million related to the natural gas stream with Thunderbird Energy Corp. (“Thunderbird”).

Sandstorm President & CEO Nolan Watson commented, “During, and subsequent to the end of the second quarter, the financial challenges facing some of our partner companies have been at the forefront. We have been working extremely hard to maximize value for shareholders in the current market climate and will continue to do so.”

Current Streams

Sandstorm has a portfolio of 4 commodity streams and 1 net smelter return (“NSR”) base metal royalty including:

Serra Pelada Mine - Palladium Stream
Sandstorm has a palladium stream with Colossus Minerals Inc. (“Colossus”) to purchase 35% of the palladium produced from the Serra Pelada Mine (“Serra Pelada”) at $100 per ounce. Serra Pelada is a high-grade gold-platinum-palladium mine that is expected to initiate gold production at the end of 2013, with platinum and palladium production beginning at the end of 2014. Colossus has substantially completed its bulk sample program, is continuing development within the Central Mineralized Zone and is building a stockpile of ore ahead of process plant commissioning. Colossus recently announced that it had encountered challenges with dewatering wells and pumps in the Central Mineralized Zone at Serra Pelada but Sandstorm does not currently anticipate this to affect the aforementioned development timeline for the platinum/palladium flotation circuit.

Bracemac-McLeod Mine - Copper Stream
Sandstorm has a copper stream with Donner Metals Ltd. (“Donner”) to purchase 24.5% of the copper produced from the Bracemac-McLeod Mine (“Bracemac-McLeod”) at $0.80 per pound (subject to adjustment if the spot price of copper falls below $2.75 per pound, in which case the payments will decrease to $0.55 per pound). Bracemac-McLeod is operated by Glencore Xstrata Plc (“Glencore Xstrata”) and the mine has initiated production. The Company amended its copper stream agreement with Donner, to waive the requirement for Donner to sell copper to Sandstorm during the 2013 calendar year. This amendment has been made in order to better allow Donner to meet its working capital obligations that arise under its joint venture agreement with project operator Glencore Xstrata. Donner recently raised approximately CAD$3 million through a brokered private placement but will need additional funds to maintain their joint venture interest in Bracemac-McLeod. Donner continues to pursue financing alternatives in order to meet the ongoing financial obligations under the joint venture.

Hugo North Extension and Heruga - Copper Stream
Sandstorm has a copper stream with Entrée Gold Inc. (“Entrée”) to purchase 2.5% of Entrée’s 20% share of the copper produced from the Heruga and Hugo North Extension deposits at $0.50 per pound. The deposits are on the Entrée - Oyu Tolgoi LLC joint venture property which forms part of the world-class Oyu Tolgoi copper mining complex.

Prairie Creek Project - Zinc-Lead Royalty
Sandstorm has a 1.2% base metals NSR on the Prairie Creek Project (“Prairie Creek”) owned by Canadian Zinc Corporation (“Canadian Zinc”). Prairie Creek is a zinc, silver and lead project that currently reports a proven and probable mineral reserve of 5.2 million tonnes grading 9.4% zinc, 151 grams per tonne silver and 9.5% lead. Sandstorm has granted Canadian Zinc an option, exercisable prior to November 30, 2015, to repurchase the NSR provided that Canadian Zinc enters into a commodity stream with Sandstorm that has an upfront deposit of no less than $90 million. In addition, Canadian Zinc has provided Sandstorm with a right of first refusal on any future royalty or commodity stream financing for Prairie Creek. Canadian Zinc holds permits for the exploration and development of Prairie Creek and is moving through the final stages of the Type A Water License which is required to operate the mine. Lead sulphide, zinc sulphide and lead oxide concentrates will be produced at site and then transported to a smelter. Exploration drilling around the mine site and north of the existing resources is ongoing.

Gordon Creek Property - Natural Gas Stream
Sandstorm has a natural gas stream with Thunderbird to purchase 35% of the natural gas produced from the Gordon Creek Property (“Gordon Creek”) at $1.00 per mcf (plus 20% of the price received that is above $4.00 per mcf). Given Thunderbird’s negative working capital, Sandstorm has been in discussion with the company to modify the terms of the natural gas stream to better allow Thunderbird to raise additional third party capital. These factors and the lack of progress with respect to Thunderbird’s drilling commitments prompted the Company to evaluate its investment in Thunderbird. As a result of its review and circumstances specific to certain assets, the Company recorded an impairment charge to the Thunderbird natural gas stream in the amount of $12.1 million during the three months ended June 30, 2013. Sandstorm believes any future restructuring associated with Thunderbird will provide Sandstorm the opportunity to extract value from its initial investment.

Sandstorm’s second quarter results for the period ended June 30, 2013 are available on SEDAR atwww.sedar.com and on the Company website at www.sandstormmetalsandenergy.com. The Company will not be holding a conference call in conjunction with the second quarter results, but intends to hold a corporate update conference call during the third quarter.