Gold royalty, streaming panelist to provide investment strategy insight

Mining executives and investors have shown increased interest in gold streaming and royalty company Sandstorm Gold’s investment strategy in the current capital-challenged environment where there is extreme scarcity of equity and debt capital.

As such, Sandstorm Gold cofounder and senior executive VP David Awram will be a panellist on alternative funding for resource companies at the 2016 Investing in African Mining Indaba.

“Considering that a record amount of money has been invested in mining companies through streams and royalties in the past year, the panel should make for a very relevant discussion,” he tells Mining Weekly.

Sandstorm has five royalty interests in Africa – two in Burkina Faso, two in South Africa and one in Ghana.

Awram states that the largest African contributor to the company’s cash flow will be from its gold stream interest in gold miner True Gold’s Karma project, in Burkina Faso, which is expected to begin producing gold this year.

True Gold has defined five mineral deposits that comprise the Karma project, with probable gold reserves of 949 000 oz. Construction of Karma’s major mining infrastructure began in September 2014 and includes a heap leach pad that will process leachable material from five openpits. The mine is expected to produce an average of 97 000 oz/y of gold over eight-and-a-half years.

Awram explains that one of the advantages of the Mining Indaba is the exposure it provides for African assets that are not understood in the North American or European markets. The event helps attract capital to these assets that, in turn, grows the African mining industry and provides opportunities for the development of African communities.

The conference also enables Sandstorm to connect with companies that it does not typically see at events in North America, says Awram. “We like to keep tabs on the assets in Africa and the Mining Indaba is the best place for us to do that . . . Africa is showing strong signs of a dynamic future and the Indaba is a good way to observe those trends.”

He emphasises the importance of observing the current trends in the continent’s mining industry, since “we don’t regularly visit Africa”, adding that he hopes to discuss these trends with investors.

Sandstorm will connect with several companies to secure updates on various projects that it has been following, while learning about new projects.

“This year’s Indaba is shaping up to host some very interesting deliberations,” Awram states, suggesting that the discussions on infrastructure investment and investment from Asia might take centre stage. This is especially the case considering the $60-billion investment for Africa pledged by Chinese president Xi Jinping in December 2015.

In addition, Awram is particularly interested in the panels and keynote sessions regarding financing, as well as mergers and acquisitions, as these are issues that are facing the entire mining industry and are “both urgent and dynamic”.

“I would also like to attend the panel on diamonds – since we are new to investing in that commodity – and gain an African perspective.”

He further identifies the panel on Taking the Sustainability of Mining Beyond the Cycles as one of interest, owing to increased discussion on the multigenerational impact of mining on all stakeholders.

Awram, who has attended the last four Indabas, notes that it is “always wonderful” to come to South Africa and Cape Town.

“It’s a long way to come, so you want to maximise your time and be efficient in your meetings. “I try to arrange many meetings in advance, but it is also important to leave plenty of flexibility in my schedule for new-found opportunities and contacts. Something new and interesting always pops up at this conference.”