Sandstorm GoldSPECULATING ON THE POTENTIAL OF GOLD

MarginRich.com

Overview of businessSandstorm Gold is in the business of mine finance and provides an innovative alternative to mining companies in search of capital without the heavy share dilution that can come with multiple financings. Sandstorm completes gold purchase agreements, or gold streaming deals, offering mining companies an up-front cash payment in exchange for a percentage of all future gold production. Sandstorm is committed to unlocking upside potential while limiting downside risk.

Sandstorm just may be the one…the penny stock that changes your life(if you purchase enough shares to make a difference)!

Sovereign debts are at outrageous highs as a percentage of GDP and tax receipts. Entitlements in developed countries know virtually no bounds. Bank assets around the world are worthless and yet are still not marked to actual value. Worst of all, exotic derivatives underlining the entire financial game stand ready to capsize the whole ship. In a flight to safety against fiat recklessness, gold continues to outperform most assets classes. The table is set for a potentially spectacular rise in Sandstorm’s stock price as the economic fundamentals play themselves out in favor of shareholders’ of Sandstorm Gold and the streaming business model.

Business Concept They conduct detailed due diligence on only high-potential

mining projects with high-quality management and then seed them with cash in return for a permanent cut of a project’s gold production at a fixed price.

For example, Sandstorm is obtaining gold streams for an average of $400/oz. and as of this presentation the current price of gold is around $1,600/oz.

More specifically, a mining company may need $20 million to finalize a mine’s production capacity. Instead of a private placement and dilution, Sandstorm will pay up front all the cash the miner needs for a reasonable clip of the future production without share-counts having to go through the roof for the miner(it’s a win-win situation).

Competition (the big dogs)

Royal Gold(RGLD) is the oldest player in the mining finance game, founded in 1981. Boasting a market cap of $4 billion and led by Tony Jensen, long time successful mining executive, RGLD is well positioned for the advance of gold. They possess current royalties or streams on over 35 producing mines as of today.

Franco-Nevada(FNV) is the 2nd oldest player in the mining finance game, with royalties beginning in 1985. They are a royalty behemoth with a market cap of $5 billion. Led by the legendary Pierre Lassonde with over 200 mineral royalty assets including: gold, silver, oil, diamonds, etc.

Silver Wheaton(SLW) is one of the newest players in the mining finance arena but they have quickly established themselves as big timers by virtually owning the silver streaming space. SLW’s market cap is over $10 billion. The executives running Sandstorm cut their teeth at SLW and are veterans of the streaming model. In fact, Nolan Watson was the first employee ever hired at SLW.

Reasons why a stake in Sandstorm presents less risk than owning shares in a miner

Notice that Sandstorm possesses no direct CapEx risk, only portfolio risk. The streams present a potential call in “perpetuity” on gold production.

The TeamNolan Watson – President, CEO and Director

•Former CFO of SLW, oversaw company as it grew market cap to $11 billion.

•Recipient of multiple awards including top 10 rising stars in mining, early achievement award from the CA Institute.

•Former Director of Investor Relations for SLW.

•Former manager of Investor Relations at Diamond Fields International.

•Former CFO of SNS Silver Corporation.

All graduates of:

Ron Ho – Vice President, Finance

David Awram – Executive VP and Director

Ownership Summary Notice the fact that Sandstorm is literally a “penny-stock”

yet there is already strong institutional ownership, with 400 million fully diluted shares outstanding (Chart 1).

Also note the strong inside ownership position (Chart 2).

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5%3%1%1%1%1%

71%

Libra AdvisorsArias ResourcesWells CapitalT Rowe PriceNolan WatsonDavid AwramDeutsche BankDavid De WittOthers

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David

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De Witt $(5,000,000)

$- $5,000,000

$10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000

Value of Latest Change Total Value

Total Value

(2)

Four Current Producing Gold Streams (2 more online in 2012)

ProjectCost

Au/OzUpfront

Payment% of Gold

Est. Annual

Production

Life of Mine

Aurizona (2011) $400 $17,800,000 17% 60,000 11

Santa Elena

(2011)$350 $12,000,000 20% 35,000 8

Summit(2011) $400 $4,000,000 50% 10,000 8

Black Fox(2011) $500 $56,300,000 12% 110,000 11

Ming(2012) $400 $20,000,000 25% 13,000 10

Bachelor Lake

(2012)$500 $20,000,000 20% 60,000 3.5

Growth Factors Sandstorm has financed 7 total gold streams in just two short

years, which is remarkable considering Sandstorm’s market cap of only $400 million.

One more stream coming online in 2013 from Donner Metals – The Bracemac-Macleod mine co-owned by Xstrata will provide Sandstorm with 17.5% of the deposit’s total annual gold production, which is expected to be 10,000 oz/yr.

Current producing streams will be able to fund additional investments but it is likely shareholders will see one more round of financing to lock in investment capital at fair rates before the cost of capital and the price of gold both potentially move too high, too quick against Sandstorm.

Schedule of gold “production” growth – 5 years

Source: Sandstorm

Theoretical Share Price Growth by 2015 (a few different scenarios to

consider)

Share Price = $4.00•EPS = $0.10•P/E = 40•Gold Price =

$2,000

Share Price = $12.75•EPS = $0.17•P/E = 75•Gold Price =

$3,500

Share Price = $30.00•EPS = $0.24•P/E = 125•Gold Price =

$5,000 Calculation assumptions: 1. 400M shares outstanding 2. 50,000 oz/yr

“production” 3. COS at 23% of revenue 4. SG&A at 9% of revenue 5. Depletion at 24% of revenue 6. Taxes at 5% of revenue 7. Basic EPS used

Potential Share Price Growth(continued) & the Gold Thesis

Based on the previous slide, it’s easy to see where a several thousand shares equity stake in Sandstorm Gold at today’s prices of under a dollar a share could possibly be very lucrative in just 2 or 3 years in. We’re talking about life-changing wealth, potentially.

Speculation in gold shares is based on the thesis that the price of gold will continue to rise thus driving up the margins of the gold mining/royalty/streaming companies; leading to mass accumulation of shares and driving share prices higher and higher.

Major Factors in favor of a higher gold price:

A. Currency debasement and monetization of debtsB. Dow/Gold ratio parityC. Central bank accumulationD. Divergence of the paper and physical marketE. Massive monetary inflationF. Completion of a hard-asset cycleG. Fear & GreedH. Negative real interest rates

Important Trends to Watch in the Continued Rise in Gold

Downside Risks The price of gold has peaked already or will in the near future and begins to

drop.

Sandstorm’s funded projects fail to produce gold at the expected levels that warranted the initial investment.

Canada institutes an income tax on royalty/stream companies negating Sandstorm’s tax-free status in the haven of Barbados.

The USA institutes a windfall tax or greatly increases the capital gains tax on precious metals related equities.

Sandstorm merges with or is acquired by another company before shareholders can achieve the returns I foresee in light of gold’s potential future performance.

Extremely low barriers to entry in the streaming/royalty business. Any group of cashed up financiers with a top level geology team can enter the field and begin to encroach upon Sandstorm’s opportunities within the junior miner sector.

Public Exposure Covered by the well

known but smaller investment banks of Canada:

I came across Sandstorm by dumb luck trolling the message board of another gold stock on Yahoo back in very early 2010. Sandstorm was intriguing enough for me to conduct extensive due diligence.

As the price of Sandstorm works past $3 and a potential uplist becomes reality, this company will receive much more media hype.

Major newsletter coverage already:

A. John DoodyB. Matt Badiali via Stansberry via AgoraC. Peter Krauth via AgoraD. Travis Johnson – The Stock GumshoeE. Jay Taylor

The Bottom Line The Chiefs are basically all-in with Sandstorm so they either

make the company a success or they lose out on a considerable sum of money via their stock options.

Full Disclosure - I am already invested in this company and sister as a result of the spin-off.

Sandstorm trades in America as a Pink Sheet Over The Counter listing – symbol SNDXF. It trades in Canada on the Venture Exchange – symbol SSL.

This play is not for children. It can be traded with stops. It can be bought and held. The volatility will be wide ranging as this is a resource based penny stock. My recommendation is to hold your nose and buy and then leave it alone until gold potentially sells at multiples of today’s prices. Good luck!