Sandstorm Gold Royalties (Sandstorm) is a mining investor with a difference. It provides financing for precious metal mining companies in the form of a streaming transaction, whereby Sandstorm exchanges an upfront cash payment for a percentage of production or revenues from a mine. (Also known as a volumetric production payment transaction, this method of financing originated in the oil and gas industry.) In mining and exploration and development, financing of this type has found favor with some small and medium-sized companies, because it enables them to raise capital and, at the same time, retain full ownership of their property.
“Streaming deals have also been done with large companies, such as Barrick, Glencore and Vale, so it is the whole range of companies that will do these transactions,” said David Awram, co-founder and senior executive vice-president of Sandstorm. In addition, streaming does not dilute their equity position. The Sandstorm business model is not only different, it’s also effective. Although it’s a small company (22 employees in Vancouver, two more in Toronto), it has a market capitalization of close to US $1 billion.
Awram says Sandstorm deals primarily in gold and silver. “We talk to lots of juniors for our exploration-sized deals,” said Awram. “But, since 2014, the bulk of our streaming transactions have been with large mid-cap to large companies, such as Yamana Gold, Rio Tinto and Endeavour Mining.”
Over the course of a year Sandstorm will look at 150-200 different projects, says Awram. “We’ll examine about one-half of that number closely and then make six to eight transactions,” he said. “In the first nine months of 2019, we’ve invested close to $80 million on five or six different companies.”
In business since 2008, Sandstorm has invested in a total of almost 200 different royalties and streams. “It gives exploration companies valuable third-party validation,” said Awram. “Our investment in them is like a testimonial that they’re a good long-term investment.”
However new and different it is, Sandstorm must contend with the same challenge that is faced by every company in mining and mineral exploration: How do you explain complex mineralogical concepts to non-geologist investors and stakeholders in such a way that they can understand them right away?
Realizing its presentations needed to be improved so it could tell its story to a broader market, Sandstorm chose VRIFY as its presentation tool. Developed in Vancouver, VRIFY’s technology combines interactive 360-degree imagery and 3D models with traditional corporate content such as .pdfs, photos and two-dimensional tables to deliver a powerful and easy to understand visual picture of the companies and properties in which Sandstorm has invested. “To really understand something geological, you need to see it in three dimensions,” said Awram. “Three-D makes the value proposition clearer to everyone. It contains concrete, detailed information in easy to comprehend pictures.”
Awram says VRIFY shows a project’s big picture today and how it will look in the future. “It allows us to communicate our story clearly and on multiple platforms,” he said. “It takes presentations to the next level.”
Stephen de Jong, founder and CEO of VRIFY, says the company’s mission is to facilitate better investment decisions.
VRIFY’s presentation tools enable companies to communicate their value with three-dimensional models, virtual tours and interactive presentations. “Until now we have relied on two-dimensional tools to convey three-dimensional stories,” he said. “People want information simplified, readily accessible, and presented in a digestible manner they can understand without needing to have an advanced academic degree.” de Jong says VRIFY can help BC juniors take advantage of changes taking place in the industry. “We’ve started to see positive spending trends in mining recently, but there is still a lot of untapped capital out there,” he said. The mineral exploration industry is innovating to operate more effectively and sustainably, de Jong says. “But, on the communications side, most public companies are still marketing themselves the same way they did 20 or 30 years ago,” he said.
Below is an example of VRIFY’s interactive presentation technology, VRIFY Deck, which integrates 360-degree imagery and 3D models with corporate content. Click the arrows to explore.
In de Jong’s opinion, the more companies start to replace outdated two-dimensional tools with interactive, visually compelling three-dimensional presentations that communicate their value proposition to investors, the more the industry will start to reap the benefits of greater transparency. “I believe that the VRIFY platform has the potential to attract more investors back into the resource sector and capitalize on the momentum we’ve been seeing in BC,” he said.
As raising capital remains a challenge for many juniors, new innovative tools that make it easier to invest and provides more information and options are welcome. See VRIFY at the Innovation Hub at Roundup 2020. Register at roundup.amebc.ca.