January 18, 2019

Vancouver, British Columbia | Sandstorm Gold Ltd. (“Sandstorm Gold Royalties”, “Sandstorm” or the “Company”) (NYSE American: SAND, TSX: SSL) is pleased to announce that the Company has acquired a 0.9% net smelter returns royalty (“NSR Royalty”) on precious metals produced from the Fruta del Norte gold project in Ecuador (“Fruta del Norte”), currently under construction by Lundin Gold Corporation (“Lundin Gold”).

The NSR Royalty was acquired from a private third party for US$32.75 million in cash and covers more than 644 square kilometres, including all 30 mining concessions held by Lundin Gold. The Fruta del Norte Mineral Reserve contains 5.0 million ounces of gold in 17.8 million tonnes (“Mt”) of ore with an average grade of 8.7 grams per tonne (“g/t”) as of September 2018, ranking it amongst the highest-grade gold projects in the world.


  • Near-Term Cash Flow: Lundin expects to pour first gold at Fruta del Norte in the fourth quarter of 2019, with commercial production expected in the first half of 2020. Fruta del Norte’s average annual production is expected to exceed 330,000 ounces of gold per year over the first 13 years of the operation at an all-in-sustaining cost of US$583 per ounce. Current reserves support a 15 year initial mine life.
  • Exploration Upside: The royalty covers precious metals production from all 644 square kilometres of concessions held by Lundin Gold, plus an additional one kilometre area of interest around the property. Exploration potential at Fruta del Norte remains excellent, with multiple early and advanced exploration targets already identified. Exploration is currently focused on the Suarez pull-apart basin, the structure that hosts the Fruta del Norte gold deposit.
  • Strong Partner: Lundin Gold is backed by Lukas Lundin, an established mining entrepreneur, and its management team has significant mine development and operating experience.

Click the link below to view the presentation that summarizes the Fruta del Norte royalty acquisition:


Fruta del Norte is one of the most significant gold discoveries of the past 20 years, ranking as one of the highest-grade gold projects globally. The project is Lundin Gold’s flagship asset and is located 139 kilometres east-northeast of Loja, Ecuador’s fourth largest city.

The project’s Mineral Reserves support average annual production exceeding 330,000 ounces of gold during the first 13 years at an estimated all-in-sustaining cost of US$583 per ounce. The operation is designed as a 1.3 Mt per annum underground mine. The process plant will use gravity, flotation, and carbon-in-leach (“CIL”) circuits to recover gold to both concentrate and doré, with combined metallurgical recoveries estimated at 91.7% for gold.
Development Status
Fruta del Norte’s development is reported to be on time and on budget with the first gold pour expected during the fourth quarter of 2019. As of December 31, 2018, Lundin Gold announced that construction was 45% complete and the overall engineering was 85% complete.

A total of 4.5 kilometres of underground mine development was achieved at the end of 2018, with daily advance rates above target levels. Mine development has now reached the Fruta del Norte orebody, having passed under the Machinaza River and through the Machinaza Fault without significant water inflows.

Sandstorm’s royalty covers all 644 square kilometres of mining concessions held by Lundin Gold, covering the highly prospective Suarez pull-apart basin. Located in the basin’s northeast corner, the Fruta del Norte deposit measures 1.7 kilometres along strike, 700 metres down dip and generally ranges between 150 and 300 metres in width.

Since the start of 2016, Lundin Gold has doubled the strike length of the Suarez pull-apart basin to 16 kilometres, identifying several new epithermal gold targets within this trend. While Lundin Gold has been primarily focused on development of the existing Fruta del Norte deposit, early exploration has also advanced on the Puenta-Princesa and Barbasco targets among others.

Outside the Suarez pull-apart basin, Lundin Gold has identified several additional exploration targets, highlighting the prospective nature of Lundin Gold’s mineral concessions. The targets include epithermal gold-silver targets such as Gata Salvaje and the Emperador area as well as a variety of copper porphyry targets.

Figure 1: Fruta del Norte Claim Map



Lundin Gold released an updated project estimate (“UPE”) on September 19, 2018, which involved a thorough review of the mine plan, a re-estimate of the capital and operating costs, and an update to the project schedule. The UPE should be read in conjunction with the Technical Report entitled “Fruta del Norte – NI 43-101 Technical Report on Feasibility Study” (the “Technical Report”) filed by Lundin Gold in June 2016, with an effective date of April 30, 2016.


Probable Mineral Reserves1,2,3,4,5,6,7,8,9

Technical Report
(April 30, 2016)
(September 19, 2018)
Tonnes (Mt) 15.5 17.8
Gold Grade (g/t) 9.7 8.7
Gold Contained Ounces (in millions) 4.8 5.0
Silver Grade (g/t) 12.7 12.1
Silver Contained Ounces (in millions) 6.3 7.0
  1. Except as set out below, the assumptions, parameters and risks associated with the results of the Technical Report for the Project, the Mineral Resource and Mineral Reserve estimates included therein, and the UPE, are as set out in the Technical Report.
  2. All Mineral Reserves in this table are Probable Mineral Reserves. No Proven Mineral Reserves were estimated.
  3. UPE estimates are as at September 19, 2018.
  4. Mineral Reserves were estimated using the following key inputs: Gold Price = $1,250/oz, Transverse Stoping = $48/t, Overhand D&F = $81/t, Underhand D&F = $71/t, Process/Surface Ops/G&A = $58/t, Dilution Factor = 10%, Concentrate Transport & Treatment = $9/t, Royalty = $71/oz, Gold Metallurgical Recovery = 91.7%
  5. Gold cut-off grades for the different mining methods are as follows: Transverse Stope = 3.8 g/t, Overhand D&F = 5.0 g/t, Underhand D&F = 5.0 g/t
  6. The average silver metallurgical recovery is 81.6%. The silver price assumption was $20/oz. Silver was not considered in the calculation of the cut-off grade.
  7. Tonnages are rounded to the nearest 1,000 t, gold grades are rounded to one decimal place, and silver grades are rounded to one decimal place. Tonnage and grade measurements are in metric units; contained gold and silver are reported as thousands of troy ounces.
  8. Rounding as required by reporting guidelines may result in summation differences.
  9. For information with respect to the key assumptions, parameters and risks associated with the results of the Technical Report for the Project, the Mineral Resource and Mineral Reserve estimates included therein and other technical information, please refer to the Technical Report filed on SEDAR at

Mineral Resources1,2,3,4,5,6

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