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Press release from Marketwire

Sandstorm Metals & Energy Announces Metal Credit Purchase Agreement with Entree Gold

Friday, February 15, 2013

Sandstorm Metals & Energy Announces Metal Credit Purchase Agreement with Entree Gold08:00 EST Friday, February 15, 2013VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 15, 2013) - Sandstorm Metals & Energy Ltd. ("Sandstorm Metals" or the "Company") (TSX VENTURE:SND) is pleased to announce that it has entered into a US$5 million production based metal credit purchase agreement (the "Copper Funding Agreement") with Entrée Gold Inc. ("Entrée") (TSX:ETG)(NYSE MKT:EGI) (via a back-to-back agreement with Sandstorm Gold Ltd. ("Sandstorm Gold") which has entered into a funding agreement related to precious metals and copper with Entrée (the "Funding Agreement")) to purchase metal equivalent to 2.5% of Entrée's 20% share of the copper produced from the Heruga and Hugo North Extension deposits. The deposits are on the Entrée - Oyu Tolgoi LLC joint venture property in Mongolia which forms part of the world-class Oyu Tolgoi copper mining complex.Pursuant to the back-to-back agreement, Sandstorm Metals will purchase the Copper Funding Agreement from Sandstorm Gold in exchange for US$5 million in shares of Sandstorm Metals. Sandstorm Metals will issue the shares at a price of CAD$0.45 per share, subject to the approval of the TSX Venture Exchange. Sandstorm Metals and Sandstorm Gold allocated the total purchase price payable for the Funding Agreement as between themselves (by agreeing on the purchase price payable by Sandstorm Metals for the copper portion) by applying fundamental net asset value valuation methodologies as are typical for precious metal and copper metal credit purchase agreements, respectively.As part of the Copper Funding Agreement, Sandstorm Metals will make ongoing payments to Entrée equal to the lesser of the prevailing market price and US$0.50 per pound of copper (subject to inflationary adjustments) until approximately 9.1 billion pounds of copper have been produced from the joint venture property. Thereafter, the purchase price will increase to the lesser of the prevailing market price and US$1.10 per pound of copper (subject to inflationary adjustments). The Copper Funding Agreement does not require the delivery of physical metal and Entrée may use future cash flows from any of its mineral property interests to purchase and deliver metal credits to Sandstorm Metals to fulfill the requirements under the Copper Funding Agreement.As previously mentioned, Sandstorm Gold has agreed to purchase metal credits equivalent to 25.7% or 33.8% of Entrée's share of the gold and silver by-products produced from the Heruga and Hugo North Extension deposits, respectively, in exchange for an upfront cash deposit of US$35 million. For more information, see the Sandstorm Gold press release at http://www.sandstormgold.com. About Hugo North Extension and HerugaHugo North Extension is one of the world's richest porphyry copper-gold deposits and Heruga is a world class, copper-gold-molybdenum porphyry deposit. Both projects are located in the South Gobi desert of Mongolia, approximately 570 kilometres south of the capital city of Ulaanbaatar and 80 kilometres north of the border with China. Hugo North Extension and Heruga are part of the Oyu Tolgoi mining complex and are being developed by Oyu Tolgoi LLC, a subsidiary of Turquoise Hill Resources and the Government of Mongolia, and its project manager Rio Tinto. Entrée retains a 20% interest in the Hugo North Extension and Heruga deposits. Hugo North Extension Mineral Reserves - March 29, 2012 (as reported for the entire joint venture property)Recovered MetalClassificationTonnage (Mt)NSR (US$/t)Cu (%)Au (g/t)Cu ('000 lb)Au (oz)Probable2779.401.910.741,000,000500,000From Table 1.4 in NI 43-101 Technical Report on the Lookout Hill Property, Ömnögovi, Mongolia, AMC Consultants Pty Ltd, March 2012 The block cave shell was defined using a net smelter return (NSR) cut-off of $20/t NSR Metal prices used for calculating the Hugo North Underground NSR are copper US$1.80/lb, gold US$750/oz, and silver US$12.00/oz based on long term metal price forecasts at the beginning of the mineral reserve work. The analysis indicates that the mineral reserve is still valid at these metal prices The NSR has been calculated with assumptions for smelter refining and treatment charges, deductions and payment terms, concentrate transport, metallurgical recoveries and royalties For the underground block cave, all material within the shell has been converted to Mineral Reserve; this includes low grade Indicated and Inferred material assigned zero grade and treated as dilution Only Indicated Resources were used to report Probable Reserves Entrée - Oyu Tolgoi LLC Joint Venture includes a portion of the Shivee Tolgoi license and all of the Javhlant license. The licenses are held by Entrée and Oyu Tolgoi LLC is the joint venture manager. Entrée will receive 20% of cash flows after capital and operating costs for material originating below 560m and 30% above this depth The Mineral Reserves are not additive to the Mineral Resources Hugo North Extension Mineral Resources - February 20, 2007 (as reported for the entire joint venture property)Contained MetalClassificationTonnage (Mt)Cu (%)Au (g/t)CuEq (%)Cu ('000 lb)Au (oz)CuEq ('000 lb)Indicated117.01.800.612.194,640,0002,290,0005,650,000Inferred95.51.150.311.352,420,000950,0002,840,000From Table 1.1 in NI 43-101 Technical Report on the Lookout Hill Property, Ömnögovi, Mongolia, AMC Consultants Pty Ltd, March 2012 The mineral resource estimate has an effective date of February 20, 2007 and was prepared by Scott Jackson, F.AusIMM. from Quantitative Group Pty Ltd. Based on drilling completed as of 01 November, 2006 Copper Equivalent (CuEq) has been calculated using assumed metal prices of US$1.35/lb for copper and US$650/oz for gold. The equivalence formula was calculated assuming that gold recovery was 91% of copper recovery. CuEq was calculated using the formula: CuEq = %Cu + (Au g/t * 19.98)/29.76 Entrée - Oyu Tolgoi LLC Joint Venture includes a portion of the Shivee Tolgoi license and all of the Javhlant license. The licenses are held by Entrée and Oyu Tolgoi LLC is the joint venture manager. Entrée will receive 20% of cash flows after capital and operating costs for material originating below 560m and 30% above this depth The 0.6% CuEq cut-off is used as the base case resource for underground bulk mining Mineral resources that are not mineral reserves do not have demonstrated economic viability. Heruga Mineral Resource - March 30, 2010 (as reported for the entire joint venture property)Contained MetalClassificationTonnage (Mt)Cu (%)Au (g/t)Mo (%)CuEq (%)Cu ('000 lb)Au (oz)CuEq ('000 lb)Inferred9100.480.490.0140.879,570,00014,000,00017,390,000From Table 1.3 in NI 43-101 Technical Report on the Lookout Hill Property, Ömnögovi, Mongolia, AMC Consultants Pty Ltd, March 2012 The mineral resource estimate has an effective date of March 30, 2010 and was prepared by Scott Jackson, F.AusIMM. from Quantitative Group Pty Ltd. Based on drilling completed as of 21 June, 2009 Copper Equivalent (CuEq) has been calculated using assumed metal prices of US$1.35/lb for copper, US$650/oz for gold and US$10/lb for molybdenum. The equivalence formula was calculated assuming that gold and molybdenum recovery was 91% and 72% of copper recovery respectively. CuEq was calculated using the formula: CuEq = %Cu + ((Au g/t * 19.98) + (Mo g/t * 0.01586))/29.76 Entrée - Oyu Tolgoi LLC Joint Venture includes a portion of the Shivee Tolgoi license and all of the Javhlant license. The licenses are held by Entrée and Oyu Tolgoi LLC is the joint venture manager. Entrée will receive 20% of cash flows after capital and operating costs for material originating below 560m and 30% above this depth The 0.6% CuEq cut-off is used as the base case resource for underground bulk mining Mineral resources that are not mineral reserves do not have demonstrated economic viability. Robert Cann, P.Geo., Entrée's Vice President Exploration, is the Qualified Person under NI 43-101 responsible for reviewing and approving the technical information contained in this news release.For more information, visit the Entrée Gold website at http://www.entreegold.com. Fairness OpinionNational Bank Financial Inc. has provided a fairness opinion to the board of directors of Sandstorm Metals to the effect that the consideration paid by Sandstorm Metals pursuant to the Copper Funding Agreement transaction is fair, from a financial point of view, to Sandstorm Metals. National Bank Financial Inc. has also provided a fairness opinion to the board of directors of Sandstorm Gold to the effect that the consideration paid by Sandstorm Gold pursuant to the transaction involving the purchase of the Funding Agreement is fair, from a financial point of view, to Sandstorm Gold. National Bank Financial Inc. reviewed the methodologies relating to the allocation of total purchase price payable for the Funding Agreement and has provided an opinion to the boards of directors of Sandstorm Metals and Sandstorm Gold to the effect that the use of such methodologies to arrive at the Funding Agreement purchase price allocated to Sandstorm Metals (as the purchase price for the copper portion) is fair, from a financial point of view, to Sandstorm Metals and Sandstorm Gold.ABOUT SANDSTORM METALS & ENERGYSandstorm Metals & Energy Ltd. is the world's first diversified streaming company. Sandstorm provides upfront financing to resource companies that are looking for capital and in return, receives a commodity streaming agreement. This agreement gives Sandstorm the right to purchase a percentage of the commodity produced, for the life of the asset, at a fixed price. Sandstorm has acquired a portfolio of seven commodity streams in copper, palladium, oil, natural gas and coal. Sandstorm plans to grow its production base through the acquisition of additional commodity streams.Sandstorm Metals & Energy is focused on low cost operations with excellent exploration potential and strong management teams. Sandstorm has completed commodity purchase agreements with Colossus Minerals Inc., Donner Metals Ltd., Entrée Gold Inc., Novadx Ventures Corp. and Thunderbird Energy Corp. For more information visit: www.sandstormmetalsandenergy.com.CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATIONExcept for the statements of historical fact contained herein, the information presented constitutes "forward-looking information" or "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans", or similar terminology. Forward-looking information is based on reasonable assumptions that have been made by Sandstorm as at the date of such information and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Sandstorm to be materially different from those expressed or implied by the forward-looking information, including but not limited to: the impact of general business and economic conditions; the absence of control over operations from which Sandstorm will purchase commodities and risks related to those operations, including risks related to international operations, government and environmental regulation, actual results of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined; problems inherent to the marketability of commodities; industry conditions, including fluctuations in the price of commodities, fluctuations in foreign exchange rates and fluctuations in interest rates; stock market volatility; competition; as well as those factors discussed in the section entitled "Risks to Sandstorm" in Sandstorm's annual report for the financial year ended December 31, 2011. Although Sandstorm has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Sandstorm does not undertake to update any forward-looking information that is contained or incorporated by reference herein, except in accordance with applicable securities laws. Sandstorm does not provide any representation as to its comparability with other companies in its industry including, but not limited to, Franco-Nevada Corporation, BHP Billiton and Rio Tinto.FOR FURTHER INFORMATION PLEASE CONTACT: Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Contact Information: Sandstorm Metals & Energy Ltd.Nolan WatsonPresident & Chief Executive Officer(604) 689-0234Sandstorm Metals & Energy Ltd.Denver HarrisInvestor Relations Contact(604) 628-1178www.sandstormmetalsandenergy.com