Sandstorm Metals & Energy (V.SND) climbs 33% on Sandstorm Gold plan of arrangement

Sandstorm Metals & Energy, a Vancouver-based resource based firm engaged in acquiring base metal and energy purchase agreements from companies that have advanced stage development or operating projects, announced today that the company had entered into a plan of arrangement with Sandstorm Gold where Sandstorm Gold has agreed to purchase all outstanding shares in Sandstorm Metal that aren't already owned by Sandstorm Gold.

According to the new release, Sandstorm Gold has agreed to issue 0.178 of a common share in Sandstorm Gold for each Sandstorm Metal common share along with $0.35 cash per exchanged share.

The consideration was calculated at a 43% premium over the closing of the Sandstorm Metals shares on the TSX Venture Exchange on April 21, 2014 and is also based on the closing price of $5.99 per Sandstorm Gold common share on the aforementioned date.

Terms of the arrangement set the value of Sandstorm Metals at $1.42 per share or an estimated $49.0 million.

The transaction is subject to both shareholder, regulatory approval and customary conditions along with a standard non-solicitation and superior proposal provisions. Sandstorm Gold also has the right to match competing offers.

After completion, current shareholders in Sandstorm will hold approximately 5.2% of the issued and outstanding shares of Sandstorm Gold.

Sandstorm Metals CEO, Nolan Watson, commented, “We are passionate about our business, and we understand that to be successful we need sufficient cash and cash flow to be able to grow.”

He then concluded, “In addition to providing a substantial premium to the market price for Sandstorm Metals shares, this transaction allows Sandstorm Metal's shareholders to participate in the streaming business going forward through Sandstorm Gold, which has a more solid base of assets, substantial cash on hand and significant cash flow from operations.”