Dallas, Texas 09/18/2013 (Financialstrend) – On August 14 the Sandstorm Gold Ltd. (NYSEMKT:SAND) announced the signing of agreement to take over 100% of outstanding shares of Premium Royalty. This share acquisition would not include the 46,678,221 common shares and 6,965,676 warrants of Premium Royalty that Sandstorm already owned as part of its investments.
Current premier royalty share holders will get common share of Sandstorm proportionate to their holdings. They will get 0.145 share of Sandstorm for every 1 share of Premier Royalty share they own. At current valuations it means that each Premier Royalty share is worth $0.89 CAD. In context to Premier Royalty investor, this translates to a 16% premium on the weighted average trading price of Premier Royalty shares at that time.
On the public announcement of this takeover bid, the share price of Sandstorm Gold Ltd. Went up 18% in a span of 9 trading days . Since then the shares have fallen 22% to be currently trading at $5.5 as of close of business on September 17. At current valuations, the shares are trading around 64% lower than its 52 week high and 15% above its 52 week low price. Its current market capitalization is $498 million with total outstanding shares of 90.2 million. On an 65 day average, the daily trading volume is around the 781,565 shares while on September 17, there was a total of 397,775 shares of Sandstorm that got traded.
In its attempt to acquire more streams of gold, the company has closed the agreement with Mutiny gold to develop Deflector project in Western Australia on August 19. SAND was previously known as Sandstorm Resources. It is a gold streaming company that funds other gold mining companies that are on the lookout for capital. In exchange, the company enters into a gold streaming agreement. Based on this arrangement, the company currently has six gold streaming agreements in vogue.