Sandstorm Gold Ltd. (NYSEMKT:SAND): Acquisition of Premier Royalty


Dallas, Texas 10/08/2013 (Financialstrend) – In August Sandstorm Gold Ltd. (NYSEMKT:SAND) had made the headlines with its announcement to acquire Premier Royalty. In a deal which was valued at Canadian $28.3 million the gold mining company has struck an “all-stock deal” with Premier. SAND paid Premier its shares in exchange of Premier Royalty shares which were valued at Canadian $0.89 per share for the purpose of this deal.

As of October 7, the stock of SAND is trading at $5.02 per share down 1.95% from its previous day close. The stock has been under severe pressure over the past few quarters. It has shed close to 15% of its value over the past 3- days and by nearly 62% in the past 12 months.

On October 4, the Vancouver based Sandstorm Gold Ltd. had announces the formal conclusion of the acquisition process. It announced that it had acquired all the outstanding shares of common stock issued by Premier Royalty Inc. The acquisition received an overwhelming vote of confidence from the share holders of Permier on September 30. The deal has also been consummated by the Ontario Superior Court of Justice on October 3. Thanks to the deal, Sandstorm has managed to acquire a cash trench of $90 million. In addition, it has added to its portfolio “9 gold streams and 25 gold royalties”.  An added advantage for SAND from the acquisition is the establishment of a steady stream of revenue. This is due to the fact that the portfolio has 13 royalty bearing properties which are producing gold.

At current valuations, the stock is trading at 67% below its 52 week high valuation of $4.75 per share and is up only by 5.68% from its 52 week low pricing in spite of the cash infusion from the acquisition. The firm has total of 94 million shares outstanding post the  merger.