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Sandstorm Gold Ltd.
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Sandstorm Gold Ltd. - TSX-V:SSL
Reserves and Resources

The Reserves and Resources in this MD&A reflect the reserves and resources for the mines at which the Company has Gold Streams, adjusted where applicable to reflect the Company's percentage entitlement to gold produced from the mines.

Proven and Probable Reserves Attributable to Sandstorm (1)


  PROVEN PROBABLE PROVEN & PROBABLE
  Tonnes
kt		 Grade
Au g/t		 Contained
oz		 Tonnes
kt		 Grade
Au g/t		 Contained
oz		 Tonnes
kt		 Grade
Au g/t		 Contained
oz
Aurizona (3,4,6-8,10-14,16) 241 1.46 11,390 2,677 1.36 112,880 2,918 1.37 124,270
Santa Elena (18-21,24) - - - 959 1.81 55,712 959 1.81 55,712
Ming (26,27,28-30) 209 3.24 21,636 183 2.61 15,340 392 2.40 36,976
Black Fox -- Stockpile & Open Pit
(35,36,37,39,42,43)		 42 1.60 2,214 379 3.20 39,350 421 3.04 41,564
Black Fox -- Underground
(35,36,38,40,42,43)		 - - - 352 5.90 67,201 352 5.90 67,201
Bachelor Lake (45,46) 39 8.33 10,349 130 7.10 29,687 168 7.38 40,036
Summit (48-50) - - - 171 4.44 24,405 171 4.44 24,405
Bracemac-McLeod (52-54,58-59) 488 0.39 6,120 164 0.54 2,853 652 0.43 8,973
Total     51,709     347,428     399,137


Measured and Indicated Resources Attributable to Sandstorm (1,2)


  MEASURED INDICATED MEASURED & INDICATED
  Tonnes
kt		 Grade
Au g/t		 Contained
oz		 Tonnes
kt		 Grade
Au g/t		 Contained
oz		 Tonnes
kt		 Grade
Au g/t		 Contained
oz
Aurizona (5,9,15-16) 255 1.44 11,730 3,336 1.29 142,001 3,591 1.33 153,731
Santa Elena (18-21,23,25) - - - 1,381 1.62 71,860 1,381 1.62 71,860
Santa Elena --
Underground
(17-20,23-24)		 - - - 198 1.83 11,666 198 1.83 11,666
Ming (25,26,27,31-33) 411 2.47 32,664 3,004 0.35 34,262 3,415 0.61 66,926
Black Fox --
Open Pit (34-37,39-41)		 - - - 380 4.40 54,264 380 4.40 54,264
Black Fox --
Underground
(34-36,38-41)		 - - - 301 7.20 69,502 301 7.20 69,502
Bachelor Lake (44-47) 39 8.80 10,901 130 7.49 31,270 169 7.79 42,171
Bracemac-McLeod (51-53,55-57,59) 455 0.45 6,580 180 0.48 3,248 635 0.48 9,829
Total     61,875     418,073     479,949


Inferred Resources to Sandstorm (1,2)

  INFERRED
  Tonnes kt Grade Au g/t Contained oz
Aurizona (5,9,15-16) 1,859 1.14 68,340
Santa Elena (17-20,22,26) 1,240 0.78 31,040
Santa Elena -- Underground
(17-20,23,24)		 376 1.53 18,494
Ming (25,26,27,31-33) 591 1.83 34,695
Black Fox -- Open Pit
(34-36,38-41)		 80 2.60 6,717
Black Fox -- Underground
(34-38,39-41)		 14 5.80 2,585
Bachelor Lake (44-47) 85 6.52 17,873
Summit (48-50) 16 4.44 2,261
Bracemac-McLeod(51-53,55-57,59) 460 1.06 15,673
Total     197,678


Notes:
  1. All Mineral Reserves and Mineral Resources have been calculated in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") and NI 43-101.
  2. Mineral Resources which are not Mineral Reserves, have not demonstrated economic viability.

    For the Aurizona Mine:
  3. Aurizona Mineral Reserves are fully included in the Mineral Resources.
  4. Aurizona Reserves are reported as of July 13, 2010.
  5. Aurizona Resources are reported as of January 15, 2009.
  6. The mineral reserves estimates set out in the table above have been prepared by Bret C. Swanson, MAusIMM, of SRK, who is a qualified person under NI 43-101. The mineral reserves are classified as proven and probable and are based on the CIM Standards.
  7. Reserves are based on a gold price of $750 per ounce.
  8. Full mining recovery is assumed.
  9. The mineral resources estimates set out in the table above have been prepared by Leah Mach, C.P.G., M.Sc., Principal Resource Geologist of SRK, who is a qualified person under NI 43-101. The mineral resources are classified as measured,indicated and inferred and are based on the CIM Standards.
  10. Mine reserves are diluted along mineralized boundary to block model SMU of 10mx10mx6m.
  11. An internal CoG of 0.35g/t Au was used on Saprolite Rock within the pit design; an internal CoG of 0.37g/t Au was used on Transition Rock within the pit design; an internal CoG of 0.41g/t Au was used on Fresh Rock within the pit design.
  12. Internal CoG determination includes metallurgical recoveries of 95% in Saprolite, 93% in Transition, and 91% in Fresh ore.
  13. Saprolite is rock between topography and an interpreted floor surface marking the change from highly to moderately weathered rock; Transition is rock between an (upper) interpreted Saprolite floor surface and an interpreted moderately weathered rock floor surface; and Fresh rock is rock below an (upper) interpreted Transition floor surface.
  14. Gold ounces do not include metallurgical recovery losses.
  15. Based on 0.3 grams per tonne cut-off grade.
  16. Numbers have been rounded.

    For the Santa Elena Mine:
  17. Santa Elena Mineral Resources are inclusive of Mineral Reserves.
  18. Santa Elena Reserves and Resources are reported as of January 2011.
  19. The mineral reserves and resources estimates set out in the tables above have been prepared by Nathan Eric Fier, C.P.G., P.Eng., Chief Operating Officer of SilverCrest, who is a qualified person under NI 43-101. The mineral reserves are classified as probable and the mineral resources are classified as indicated and inferred and are based on the CIM Standards.
  20. Adjusted and depleted for 2010 mine production.
  21. Mineral reserves are estimated using a long-term gold price of $1,000 per ounce, a long-term silver price of $18 per ounce, and a cut-off grade of 0.38 g/t Au equivalent at applied metallurgical recoveries.
  22. Mineral resources are estimated using a long-term gold price of $1,000 per ounce, a long-term silver price of $18 per ounce, and a cut-off grade of 0.38 g/t Au equivalent at applied metallurgical recoveries.
  23. Underground mineral resources are estimated using a long-term gold price of $1,000 per ounce, a long-term silver price of $18 per ounce, and a cut-off grade of 1.77 g/t Au equivalent at applied metallurgical recoveries.
  24. Numbers have been rounded.

    For the Ming Mine:
  25. Ming Mineral Reserves are fully included in the Mineral Resources.
  26. Ming Reserves and Resources are reported as of August 9, 2010.
  27. The mineral reserves and resources estimates have been reviewed and verified by Larry Pilgrim, P. Geo., Chief Geologist of Rambler, who is a qualified person under NI 43-101.
  28. No inferred material is included in the reserve tabulation.
  29. An underground cut-off was set at $70 per tonne for all longhole mining methods.
  30. Cut-off reserves are based on 15% dilution, 90% mining recovery, copper recovery of 92.4%, and gold recovery of 66.4%.
  31. Cut-off grades of 1.0 per cent copper for the massive sulphides, 1.25 grams per tonne of gold for the 1806 zone, and 1.25 per cent copper for the stringer sulphides.
  32. Mineral resources are estimated using long-term prices of $2.50 per pound of copper, $1,000 per ounce of gold, and $15 per ounce of silver. Zinc does not contribute to the revenues.
  33. Numbers have been rounded

    For the Black Fox Mine:
  34. Black Fox Mineral Reserves are fully included in the Mineral Resources.
  35. Black Fox Reserves and Resources are reported as of October 31, 2010.
  36. The mineral reserves and resources have been reviewed and verified by Richard Allan, Vice President and Chief Operating Officer of Brigus, who is a qualified person under NI 43-101.
  37. Cut-off grade for the open-pit reserves and resources is 0.88 g/t Au.
  38. Cut-off grade for the underground reserves and resources is 2.54 g/t Au.
  39. Metal prices used for initial cut-off calculations are $1,150 per ounce for 88% of the gold sold and $500 per ounce of gold sold through the Black Fox Gold Stream.
  40. The estimated underground reserves include 10% unplanned dilution at 0 g/t from the backfill and 15% planned dilution at 1 g/t from the walls for a total dilution of 25%. The estimated open pit reserves include 30% dilution at 0 g/t and a 95% mining recovery factor for both. The higher average gold grades for the open pit and underground in the Indicated Resources compared to the Probable Reserves are the result of no dilution being applied to Indicated Resources.
  41. The mineral resources were estimated using the ordinary kriging method.
  42. The mineral reserves were estimated from the life of mine plan, which defined sustaining capital requirements and mine operating costs, to demonstrate that these reserves can be economically extracted and processed. Mining losses and dilution were determined based on sub-surface geotechnical conditions, the mining method and equipment capabilities for each area of the mine.
  43. Contained metal in estimated reserves remains subject to metallurgical recovery losses.

    For the Bachelor Lake Mine:
  44. Bachelor Lake Mineral Reserves are fully included in the Mineral Resources.
  45. Bachelor Lake Reserves and Resources are reported as of December, 2010.
  46. The mineral reserves and resources have been reviewed and verified by Pascal Hamelin, P. Eng., Ing, who is a qualified person under NI 43-101.
  47. The underground mineral reserves have been calculated using a cut-off grade of 3.43 g/t Au, recovery of 90%, and dilution of 10% in the stoping areas.

    For the Summit Mine:
  48. Summit Mineral Reserves and Resources are reported as of December 2010.
  49. The mineral reserves and resources have been reviewed and verified by Douglas F. Irving, P.Eng, who is a qualified person under NI 43-101.
  50. The mineral reserves and resources are in-place, diluted material. The individual intercept grades have been cut to a maximum of 0.45 ounce Au and 45 ounce Ag per ton. For the Bracemac-McLeod Property:
  51. Bracemac-McLeod Mineral Reserves are fully included in the Mineral Resources.
  52. Bracemac-McLeod Reserves and Resources are reported as of September 2010.
  53. The mineral reserves and resources have been approved by Robin Adair, Vice President Exploration for Donner, who is a qualified person under NI 43-101.
  54. After applying dilution, losses and a 95% mining recovery, the tonnage of each stope was integrated into the mineral reserves provided its net smelter return value was greater than or equal to $65 per tonne, which represents the average preliminary operating cost estimated for the Bracemac-McLeod Property (comprised of mining, ore processing and general and administration costs). This process did not modify the resource block model envelopes.
  55. Bracemac-McLeod Mineral Resources are estimated under the definition of the Australian Code for Mineral Resources and Ore Reserves Reporting of Exploration Results, using a net smelter return ("NSR") cut-off value of $43.77.
  56. Metal prices used in the calculation of the NSR are: $0.80 per pound of zinc, $2.50 per pound of copper, $12.00 per ounce of silver and $1,000 per ounce of gold, using an exchange rate of C$1.00 = US$1.04.
  57. Except for the inferred mineral resource category, the resource calculation used the inverse distance squared method for all zones, using the Gemcom software. The results were then transferred into the Surpac software to initiate engineering design and scheduling. Inferred mineral resources in the McLeod Deep zone were estimated using a 3D polygonal method, with the Gemcom software.
  58. Gold is recovered as a by-product of the copper concentrates and as such, recovery is estimated at 29%.
  59. Sandstorm is also entitled to the Gold Equivalent of other precious metals not reflected in the gold Bracemac-McLeod Mineral Reserves and Resources.


 
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