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Equinox Gold and Sandstorm Gold Royalties launch Sandbox Royalties

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Global Mining Review,

Equinox Gold Corp. and Sandstorm Gold Ltd have announced the creation of Sandbox Royalties Corp., a new diversified metals royalty company.

Equinox Gold and Sandstorm have each entered into definitive purchase and sale agreements with Rosedale Resources Ltd, whereby Rosedale will acquire a portfolio of royalties from Equinox Gold for consideration of US$28.4 million in common shares of Rosedale and from Sandstorm for consideration of US$65 million comprising US$32.1 million in common shares of Rosedale and US$32.9 million in a promissory note convertible into common shares of Rosedale. Upon closing, Rosedale intends to change its corporate name to Sandbox Royalties Corp. In this article, Rosedale is used to refer to the company before closing and Sandbox is used to refer to the company after closing.

Sandbox highlights:

  • A new, well-funded, and diversified metals royalty company: Sandbox will have exposure to a range of resource royalties, including gold, silver, copper, zinc, graphite, and uranium; immediate cash flow from producing royalties; a strong treasury; and significant leverage to strengthening metal prices and resource growth.
  • Top mining jurisdictions: Sandbox’s royalty portfolio assets are primarily located in mining-friendly jurisdictions in the Americas and Europe.
  • Experienced management: Sandbox will be led by Greg Smith as President and Chief Executive Officer, Marcel de Groot as Chair of the board, Victoria McMillan as Chief Financial Officer, and Craig Rollins as General Counsel.
  • Supportive shareholders: Sandstorm and Equinox Gold will hold a 34% and 30% basic interest, respectively, in Sandbox, providing the opportunity to participate in and facilitate future growth of Sandbox.

Christian Milau, CEO of Equinox Gold, comments:

“Equinox Gold has surfaced tremendous value as a significant and supportive shareholder of Solaris Resources and i-80 Gold, our previous spin-out companies, and intends to continue that track record with Sandbox Royalties. Greg Smith will be an exceptional leader for Sandbox Royalties. His industry knowledge and corporate development skills have been integral to Equinox Gold’s growth and success over the last five years. Greg will continue to represent Equinox Gold on the boards of Solaris Resources and i-80 Gold and will transition from President of Equinox Gold to assume the new role of President and CEO of Sandbox Royalties. We look forward to working closely with him as a supportive partner in this new venture.”

Ross Beaty, Chairman of Equinox Gold, comments:

“Sandbox Royalties will create immediate and future value for Equinox Gold from our portfolio of royalties and will continue our close relationship with Sandstorm. Greg Smith will focus on building Sandbox Royalties, while Equinox Gold slows its M&A activities to focus on developing our peer-leading internal growth pipeline, including our new Santa Luz gold mine in Brazil, which is ramping up to commercial production, our large expansion projects at Los Filos, Aurizona and Castle Mountain, and our major in-construction gold mine at Greenstone.”

Nolan Watson, President & CEO of Sandstorm, comments:

“Over the last several months, Sandstorm has been actively working on finding unique and strategic ways to unlock value for our shareholders. With the creation of Sandbox, a diversified royalty company, we are taking royalties that don’t currently receive their warranted value within Sandstorm’s existing portfolio and surfacing their value so that our shareholders can benefit now. Sandbox Royalties will join our growing list of strategic partners, with which we can team up on future transactions and garner the most value across a broad spectrum of royalties in terms of size and metal type.”

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