Sandstorm Metals & Energy Announces Amendment to the Coal Stream Agreement with Royal Coal


VANCOUVER, BRITISH COLUMBIA--(Marketwire -12/22/11)- Sandstorm Metals & Energy Ltd. ("Sandstorm") (TSX-V: SND.V - News) has announced it has amended the coal purchase agreement with Royal Coal Corp. ("Royal Coal") (TSX-V: RDA.V - News).

Under the terms of the agreement announced on November 26, 2010, Sandstorm is entitled to purchase 18% of the first six million tons of coal produced and 12% of the life of mine coal produced thereafter from the Big Branch Mine, the Big Branch Extension and the SID Mine for US$55 per ton. As part of the agreement, Royal Coal provided a guarantee that Sandstorm would receive minimum cash flows of US$2 million in 2011 and US$2.5 million in each of 2012, 2013, 2014 and 2015.

Sandstorm has amended the agreement whereby the requirement for Royal Coal to deliver the fixed percentage of coal will be deferred until December 31, 2012. This amendment is contingent upon Royal Coal raising Cdn$5 million by means of an equity financing. Under the amended coal purchase agreement a total of US$4.4 million will be due to Sandstorm by June 30, 2013, which represents the unpaid portion of the 2011 cash flow guarantee and the US$2.5 million 2012 cash flow guarantee, with interest. In addition, the cash flow guarantees to Sandstorm of US$2.5 million in each of 2013, 2014 and 2015 remain. The coal purchase agreement is senior secured against all of the assets of Royal Coal.

In August 2011, Sandstorm provided US$3 million in a bridge loan to Royal Coal for the purposes of purchasing the Charlene load-out facility. Royal Coal has agreed to settle the bridge loan by making monthly payments to Sandstorm in the amount of US$375,000 beginning in January 2012. The bridge loan is subject to interest at a rate of 15% per annum.

The 2.7% gross revenue royalty that Sandstorm acquired on the Big Branch Mine, the Big Branch Extension and the SID Mine is still required to be paid on a monthly basis.

Sandstorm President and CEO Nolan Watson commented, "The flexibility that we have extended to Royal Coal in repaying their obligations allows them to focus on increasing their production and cash flow in the short to medium term."


Sandstorm Metals & Energy Ltd. is a growth focused resource based company that seeks to complete commodity purchase agreements with companies that have advanced stage development or operating projects. A commodity purchase agreement involves Sandstorm making an upfront cash payment to its partners and in exchange, Sandstorm receives the right to purchase a percentage of the commodity produced for the life of the asset, at a fixed price per unit. Sandstorm helps other companies in the resource industry grow their business, while acquiring attractive assets in the process.

Sandstorm Metals & Energy is focused on low cost operations with excellent exploration potential and strong management teams. Sandstorm has completed commodity purchase agreements with Novadx Ventures Corp., Royal Coal Corp., Terrex Energy Inc., Donner Metals Ltd. and Thunderbird Energy Corp.

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Cautionary Note Regarding Forward-Looking Information

Except for the statements of historical fact contained herein, the information presented constitutes "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information is based on reasonable assumptions that have been made by Sandstorm as at the date of such information and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Sandstorm to be materially different from those expressed or implied by the forward-looking information, including but not limited to: the impact of general business and economic conditions; the absence of control over mining operations from which Sandstorm will purchase gold and risks related to those mining operations, including risks related to international operations, government and environmental regulation, actual results of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined; problems inherent to the marketability of minerals; industry conditions, including fluctuations in the price of metals, fluctuations in foreign exchange rates and fluctuations in interest rates; stock market volatility; competition; as well as those factors discussed in the section entitled "Risks to Sandstorm" in Sandstorm's annual report for the financial year ended December 31, 2010. Although Sandstorm has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Sandstorm does not undertake to update any forward-looking information that is contained or incorporated by reference herein, except in accordance with applicable securities laws. Sandstorm does not provide any representation as to its comparability with other companies in its industry including, but not limited to, Silver Wheaton Corp., Royal Gold, Inc., and Franco-Nevada Corporation.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.


Sandstorm Metals & Energy Ltd.
Nolan Watson
President and Chief Executive Officer
(604) 628-0234
Sandstorm Metals & Energy Ltd.
Denver Harris
Investor Relations Contact
(604) 628-1178

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