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Dec. 6, 2013 /PRNewswire/ - Sandstorm Gold Ltd. ("Sandstorm") (NYSE MKT: SAND, TSX: SSL) announces a status update related to Colossus Minerals Inc. ("Colossus" or "the Company") and their efforts to secure funding for the balance of the expenses required to commence production at the Serra Pelada Mine in
Brazil ("Serra Pelada").
In a press release dated
November 14, 2013, Colossus announced that development delays at Serra Pelada had resulted in a change to the anticipated production start date at the mine and that additional capital would be needed. The management team at Colossus has estimated that
US$70 million is required in order to meet the Company's existing obligations and progress Serra Pelada to production.
At this time, the board of directors of Colossus has decided to cease underground development at Serra Pelada in order to reduce ongoing costs. The Company intends to continue with the dewatering program at the mine and commence underground definition drilling in connection with the preparation of a National Instrument 43-101 compliant resource estimate for Serra Pelada. Roscoe Postle Associates Inc. has been hired to complete the resource estimate which is expected by the end of December, 2013.
Given that Colossus has material negative working capital, the Company will need additional funding in order to proceed with the strategy outlined by its board of directors. Sandstorm will be reviewing its investment in the Company for a partial or full impairment as there can be no assurance that adequate funding will be available for Colossus in the future.
ABOUT SANDSTORM GOLD
Sandstorm Gold Ltd. is a gold streaming company. Sandstorm provides upfront financing to gold mining companies that are looking for capital and in return, receives a gold streaming agreement. This agreement gives Sandstorm the right to purchase a percentage of the gold produced from a mine, for the life of the mine, at a fixed price per ounce. Sandstorm has acquired a portfolio of nine gold streams and twenty-five gold royalties, of which thirteen of the underlying mines are producing gold. Sandstorm plans to grow and diversify its low cost production profile through the acquisition of additional gold streams.