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SANDSTORM METALS & E Message Board

  • fruitvale3067 fruitvale3067 Oct 1, 2012 2:15 PM Flag

    Recent news from the Novadx stream

    It looks like Novadx has hired a new CEO and are going after an stock offering. Along with this, is a modification to the Sandstorm stream. It's probably best to go the the Novadx site and view the latest news release for this event. Below is the Sandstorm stream restructure, but there is more to this news release.

    "In the event that the Company is successful in securing not less than US$15 million in external financing, Sandstorm has also agreed to restructure its existing coal stream agreements with Novadx on the following basis:

    a) US$10 million will convert into Novadx equity, at an effective price of CDN$0.05 per share, through the same instrument as utilized in the Offering;


    b) US$10 million will convert into a secured convertible debenture of Novadx, due 5 years from the closing date of the Offering and bearing interest of 8%, which is not payable until maturity. Sandstorm has the option to convert the debenture into equity of Novadx at CDN $0.10 per share. Subject to Sandstorm's conversion right, Novadx can repay the principal and interest outstanding, in whole or in part, at any time, by paying an amount equal the principle amount and interest outstanding thereon, plus an amount equal to the amount by which the value of the shares issuable on conversion would exceed the principle amount (the "Convertibility Premium"). At Novadx's option, the Convertibility Premium may be paid in cash or shares issuable at a price equal to the 20 day VWAP; and

    c) The balance, of approximately US$10 million, will convert into a gross overriding royalty at the rate of US$4.50 per ton of coal sold from the Rex and Rosa Mines , for the life of the mines, until such time as Sandstorm receives royalty income of US$10 million plus an after-tax IRR of 12%, at which time the Gross Overriding Royalty rate shall decrease to US$2.00 per ton.

    In addition, following completion of the Offering the Company is proposing a consolidation of its issued and outstanding common shares on the basis of one (1) post-consolidation common share for up to every ten (10) pre-consolidation common shares, with the final consolidation ratio to be set by the Company's Board of Directors.

    Certain aspects of the proposed restructuring plan remain subject to the approval of the Company's Shareholders at its Annual and Special Meeting of the Shareholders to be held on November 20 th, 2012 and the approval of the TSX Venture Exchange.

    Sentiment: Strong Buy

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