Sandstorm is focused on low cost, profitable operations with excellent exploration potential and management teams focused on accretive growth in politically stable jurisdictions.
A Non-Operating Mining Company
Building and operating mines is very difficult work. Mines, in the best of situations, have countless operational processes to coordinate and perform in synchronization in order to function economically. Include the fact that many mines are in remote locations with little infrastructure for support and mining becomes difficult work, requiring a very specialized team of well-trained professionals.
Sandstorm's expertise lies not in the building or operating mines, but in the evaluation, analysis and valuation of mining assets and in structuring volumetric production payments that are accretive to both Sandstorm and its partners. Sandstorm aims to be intricately involved in financing its partners for the long term, and therefore, endeavors to ensure that both parties come out winners in each transaction.
Sandstorm leaves the job of building and operating the mines to its partners while using its expertise to supply them with financial support. This allows Sandstorm to grow in an accretive manner while creating an attractive vehicle for the public to invest in.
Volumetric Production Payments
Volumetric Production Payments (VPP's) involve Sandstorm making an upfront payment, and in return, receiving a percentage of one or more of the precious metals that are produced at a mine over the life of the asset. Commonly, with a VPP, Sandstorm would also make a fixed payment, at the time of delivery, for each ounce of precious metal delivered. This fixed payment is predetermined at the beginning of the contract to ensure Sandstorm's costs are fixed regardless of any cost increases that may be experienced at a particular mine. Every year Sandstorm Resources intends to complete two to three precious metal VPP transactions with companies in the mining sector.