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May 26, 2022
Equinox Gold Corp. (“Equinox Gold”) (TSX: EQX, NYSE American: EQX) and Sandstorm Gold Ltd. (“Sandstorm Gold Royalties” or “Sandstorm”) (NYSE: SAND, TSX: SSL) are pleased to announce the creation of Sandbox Royalties Corp. (“Sandbox Royalties” or “Sandbox”), a new diversified metals royalty company. Equinox Gold and Sandstorm have each entered into definitive purchase and sale agreements (the “Definitive Agreements”) with Rosedale Resources Ltd. (“Rosedale”) whereby Rosedale will acquire a portfolio of royalties from Equinox Gold for consideration of $28.4 million in common shares of Rosedale and from Sandstorm for consideration of $65 million comprising $32.1 million in common shares of Rosedale and $32.9 million in a promissory note convertible into common shares of Rosedale (collectively, the “Transaction”). Upon closing, Rosedale intends to change its corporate name to Sandbox Royalties Corp. In this press release, Rosedale is used to refer to the company before closing and Sandbox is used to refer to the company after closing. All dollar figures are in US dollars unless otherwise stated.
Christian Milau, CEO of Equinox Gold, commented: “Equinox Gold has surfaced tremendous value as a significant and supportive shareholder of Solaris Resources and i-80 Gold, our previous spin-out companies, and intends to continue that track record with Sandbox Royalties. Greg Smith will be an exceptional leader for Sandbox Royalties. His industry knowledge and corporate development skills have been integral to Equinox Gold’s growth and success over the last five years. Greg will continue to represent Equinox Gold on the boards of Solaris Resources and i-80 Gold and will transition from President of Equinox Gold to assume the new role of President and CEO of Sandbox Royalties. We look forward to working closely with him as a supportive partner in this new venture.”
Ross Beaty, Chairman of Equinox Gold, commented: “Sandbox Royalties will create immediate and future value for Equinox Gold from our portfolio of royalties and will continue our close relationship with Sandstorm. Greg Smith will focus on building Sandbox Royalties while Equinox Gold slows its M&A activities to focus on developing our peer-leading internal growth pipeline including our new Santa Luz gold mine in Brazil, which is ramping up to commercial production, our large expansion projects at Los Filos, Aurizona and Castle Mountain, and our major in-construction gold mine at Greenstone.”
Nolan Watson, President & CEO of Sandstorm, commented: “Over the last several months, Sandstorm has been actively working on finding unique and strategic ways to unlock value for our shareholders. With the creation of Sandbox, a diversified royalty company, we are taking royalties that don’t currently receive their warranted value within Sandstorm’s existing portfolio and surfacing their value so that our shareholders can benefit now. Sandbox Royalties will join our growing list of strategic partners, with which we can team up on future transactions and garner the most value across a broad spectrum of royalties in terms of size and metal type.”
On closing of the Transaction, Sandbox will hold a portfolio of 23 metals royalties across a range of assets and jurisdictions, including the existing royalties held by Rosedale. The royalties acquired from Sandstorm and Equinox Gold will contribute meaningful portfolio diversification through several producing and development stage assets.
Royalties to be acquired from Sandstorm (the “Sandstorm Portfolio”) include:
The Sandstorm Portfolio also includes 1.0% NSR royalties on a portion of the Ajax copper-gold project in British Columbia, the Buffelsfontein gold project in South Africa and the Cuiu Cuiu gold project in Brazil, and a 2.0% NSR royalty on the Wiluna uranium project in Australia.
Equinox Gold Portfolio
Royalties to be acquired from Equinox Gold (the “Equinox Gold Portfolio”) include:
In addition, the Equinox Gold Portfolio includes a note receivable from a subsidiary of Gold Mountain Mining Corp. with a face value of C$3 million due in full in May 2023, and C$3 million in cash.
Under the terms of the Definitive Agreements, Rosedale will acquire (a) the Sandstorm Portfolio for $65 million comprising 58.9 million common shares of Rosedale at a price of C$0.70 per share and a $32.9 million 10-year secured convertible promissory note, and (b) the Equinox Gold Portfolio for $28.4 million payable in 51.9 million common shares of Rosedale at a price of C$0.70 per share.
Post-completion of the Transaction, Sandbox intends to seek a public listing on a Canadian stock exchange. Listing of Sandbox is subject to approval of the applicable stock exchange. There is no guarantee that Sandbox will receive approval for such listing.
In connection with the Transaction, Rosedale will undertake a non-brokered private placement financing of common shares of Rosedale at C$0.70 per share for minimum gross proceeds of C$5 million (the “Financing”) with such Financing expected to close concurrently with the Transaction. Proceeds from the Financing will be used for the acquisition of additional royalties and streams and for general corporate purposes.
Before considering the Financing, on closing of the Transaction, Sandbox will have 173.1 million shares outstanding with Sandstorm holding a 34% basic interest in Sandbox and Equinox Gold holding a 30% basic interest in Sandbox. Each of Sandstorm and Equinox Gold will enter into an investor rights agreement with Sandbox providing for, among other things, customary anti-dilution provisions and board representation rights. The Transaction and the Financing are expected to be completed by the end of June 2022 or such other date as the parties may agree, and closing will be subject to customary approvals and closing conditions.
ABOUT EQUINOX GOLD
Equinox Gold is a Canadian mining company operating entirely in the Americas, with six operating gold mines, a mine in commissioning, and a clear path to achieve more than one million ounces of annual gold production from a pipeline of development and expansion projects. Equinox Gold’s common shares are listed on the TSX and the NYSE American under the trading symbol EQX. Further information about Equinox Gold’s portfolio of assets and long-term growth strategy is available at www.equinoxgold.com or by email at [email protected]
Equinox Gold Contacts
Christian Milau, Chief Executive Officer
Rhylin Bailie, Vice President Investor Relations
Tel: +1 604-558-0560
Email: [email protected]
ABOUT SANDSTORM GOLD ROYALTIES
Sandstorm is a gold royalty company that provides upfront financing to gold mining companies that are looking for capital and in return, receives the right to a percentage of the gold produced from a mine, for the life of the mine. After the transactions announced on May 2, 2022 close, Sandstorm will have acquired a portfolio of more than 250 royalties, of which 39 of the underlying mines are producing. Sandstorm plans to grow and diversify its low-cost production profile through the acquisition of additional gold royalties. For more information visit www.sandstormgold.com or email [email protected]
Sandstorm Gold Royalties Contacts
Kim Bergen, VP Capital Markets
Tel: +1 604-628-1164
Email: [email protected]
ABOUT ROSEDALE RESOURCES
Rosedale Resources is a private Canadian metals royalty company holding a diverse portfolio of 11 exploration and development stage royalties on assets in Peru, Africa and Asia, a portfolio of public company shares in exploration-stage Canadian mining companies and a treasury of C$7.4 million.
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