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Glencore sells royalty package to Sandstorm Gold

Friday, July 15th, 2022

Sandstorm Gold has acquired BaseCore Metals, an entity jointly owned by commodities trader and miner Glencore and Ontario Pension Plan Board (OTPP), for $525-million in cash and shares, it was announced this week.

The consideration comprised $425-million in cash and the balance in common shares, Glencore and Sandstorm Gold announced in separate statements.

“The closing of the BaseCore transaction is the first part of an exciting new chapter for Sandstorm,” commented Sandstorm president and CEO Nolan Watson.

“The addition of this royalty package will contribute meaningful immediate and long-term growth to the company’s portfolio and help position Sandstorm as the go-to midtier royalty company,” he added.

BaseCore was created in 2017 as a joint venture partnership focused on base metals streams and royalties. Glencore contributed a portfolio of selected royalties, which were valued at $300-million at the inception of the partnership with OTPP.

Glencore said it would receive $300-million in cash and Sandstorm shares for its 50% interest in BaseCore, including retained cash on balance sheet that would be distributed to Glencore after which the intention was to collapse the business.

The royalty package includes a 1.66% net profits interest (NPI) on the Antamina copper mine, a 1.0% stream on production from CEZinc, a 2.0% net smelter return royalty on the Horne 5 gold project, and a 0.5% NPI on the Highland Valley Copper mine.

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