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Sandstorm Gold says feasibility for Hod Maden delivers $1.05 billion NPV

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(Kitco News) - Sandstorm Gold (NYSE: SAND) (TSX: SSL) today announced positive results from the Hod Maden feasibility study (FS).

The company said that the project, located in Turkey, and in which Sandstorm has a 30% interest, has a post-tax NPV of $1.05 billion, using a 5% discount rate, as well as an IRR of 36% and payback period of 2 years. The all-in sustaining cost for gold with copper as a by-product credit is $334 per ounce. Upfront capital cost is $309 million.

The project has proven and probable mineral reserves of 2.45 million ounces of gold and 287 million pounds of copper, as well as a 13-year mine life with annual average production of approximately 195,000 gold equivalent ounces, with an average head grade of 11.1 grams per tonne of gold equivalent.

The FS contemplates Hod Maden as an underground mine divided into two distinct mining zones with a modified drift and fill technique applied to the upper mine area and a long hole stoping technique applied to the lower mine area. The concentrates will be transported to a port located on the Black Sea in Turkey for shipment to smelting facilities.

Importantly, the company noted that with the release of the FS, the Hod Maden project moves into the next stage of development. The operator, Lidya Madencilik, commenced the application process for the forestry permit. Production from Hod Maden is currently expected in the second half of 2024.

"The release of the Hod Maden Feasibility Study is a major turning point for not only the project, but for Sandstorm as well," commented president and CEO Nolan Watson. "When we purchased the stake in Hod Maden back in 2017, we knew that it would be a major growth catalyst for Sandstorm, and the positive results of this study spell out just how transformational it will be once in production."

Sandstorm Gold Royalties is a gold royalty company that provides upfront financing to gold mining companies that are looking for capital and in return, receives the right to a percentage of the gold produced from a mine, for the life of the mine. The company has acquired a portfolio of 229 royalties, of which 28 of the underlying mines are producing.

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