VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 09/19/12 -- Sandstorm Gold Ltd. ("Sandstorm Gold" or the "Company") (TSX VENTURE:SSL)(NYSE MKT:SAND)(NYSE Amex:SAND) is pleased to announce that it has entered into a precious metals purchase agreement with Colossus Minerals Inc. ("Colossus") (TSX:CSI) to purchase an amount of gold and platinum from the Serra Pelada Mine ("Serra Pelada") located in Para, Brazil.

Sandstorm Gold has agreed to purchase an amount equal to 1.5% of the gold and 35% of the platinum produced from Serra Pelada (the "Precious Metals Purchase Agreement"). Pursuant to this agreement, Sandstorm Gold will pay an upfront cash deposit to Colossus of US$60 million and ongoing per ounce payments equal to the lesser of US$400 per ounce of gold and the prevailing market price of gold, and the lesser of US$200 per ounce of platinum and the prevailing market price of platinum.

"Serra Pelada is a fantastic project run by a first-class management team," said Sandstorm Gold President & CEO Nolan Watson. "We are confident that the high-grade nature of the Serra Pelada deposit will contribute to it being a low cost producer for years to come."

As part of the transaction, Sandstorm Gold has also agreed to purchase 35% of the palladium produced from Serra Pelada (the "Palladium Purchase Agreement") in exchange for paying a US$15 million deposit (bringing the total deposit payment made by Sandstorm Gold to US$75 million) plus ongoing payments of US$100 per ounce of palladium. In addition, Sandstorm Gold has entered into a back-to-back agreement with Sandstorm Metals & Energy Ltd. ("Sandstorm Metals") whereby Sandstorm Metals has purchased the Palladium Purchase Agreement from Sandstorm Gold in exchange for issuing a promissory note. The promissory note states that the US$15 million will be repaid to Sandstorm Gold in cash or shares, within one year's time. For more information, see the Sandstorm Metals press release at http://www.sandstormmetalsandenergy.com.

Colossus will have the option, until April 1, 2015, to purchase in whole or in part, up to 50% of the obligation to purchase metals under the Precious Metals Purchase Agreement and the Palladium Purchase Agreement by making a US$48.75 million payment, whereupon the percentage of gold and platinum to be purchased by Sandstorm Gold shall be decreased to 0.75% and 17.5% respectively and the percentage of palladium to be purchased by Sandstorm Metals shall decrease to 17.5%.

About Serra Pelada

Serra Pelada is a high-grade gold-platinum-palladium deposit located in the mineral and mining prolific Carajas region in Para State, northern Brazil. The existing infrastructure and accessibility to the site are excellent due to the close proximity of a number of major mines. During the 1980's, Serra Pelada hosted the largest ever gold rush in Latin America with up to 80,000 artisanal miners producing 2 million ounces of gold, plus platinum and palladium, from a hand dug open pit. Colossus Minerals has been involved in the development of Serra Pelada since 2007 and is targeting initial production by the end of 2013. Serra Pelada is fully permitted and construction is underway. It is expected to be a high grade, low-cost polymetallic producer.

For more information on Serra Pelada, visit the Colossus Mineral's website at http://www.colossusminerals.com/.

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