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Sandstorm Gold Ltd. and Mariana Resources Ltd. Announce Recommended Combination to Create Leading Mid-Tier Streaming Company

Published: 05/04/2017

Team: Jennifer Traub, Jen Hansen, Chris Hersh, Belinda Chiu

On April 26, 2017, as amended on May 4, 2017, Sandstorm Gold Ltd. entered into a combination agreement with Mariana Resources Ltd. to create what is expected to be a leading mid-tier stream and royalty company.

Under the terms of the combination, Mariana shareholders will receive 28.75 pence in cash and 0.2573 of a Sandstorm share for each one Mariana share held. The combination values Mariana at approximately 110 pence per Mariana share based on the closing price of US$4.04 per Sandstorm share on the NYSE MKT and a currency exchange rate of £0.7788 per USD, on April 25, 2017. The terms of the combination represent a premium of approximately 84% to the closing price of 59.50 pence per Mariana share on April 25, 2017 and a premium of approximately 88% to the 20-day VWAP per Mariana share. Upon completion, the combination will result in Mariana shareholders, together, owning approximately 19.0% of the ordinary share capital of the combined company. Sandstorm holds 8,980,243 Mariana shares, representing approximately 7.0% of the issued ordinary share capital of Mariana, and Mariana warrants over a further 4,490,122 Mariana shares.

The Mariana shares will be acquired by Sandstorm by means of a Court-sanctioned scheme of arrangement under Part VIII of the Companies (Guernsey) Law. The Mariana independent directors have unanimously approved the combination and intend to recommend that Mariana shareholders vote in favour of the combination. 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.

Cassels Brock is acting for Sandstorm with a team that includes Jennifer Traub, Jen Hansen (Securities, Mining and M&A) and Chris Hersh and Belinda Chiu (Competition).