VANCOUVER, Aug. 14, 2013 /PRNewswire/ – Sandstorm Gold Ltd. (“Sandstorm” or the
“Company”) (NYSE MKT:SAND, TSX:SSL) and Premier Royalty Inc. (“Premier
Royalty”) (TSX:NSR) are pleased to announce that they have entered into
an arrangement agreement (the “Arrangement Agreement”) pursuant to
which Sandstorm will acquire 100% of the outstanding common shares in
the capital of Premier Royalty (the “Premier Royalty Shares”), other
than the common shares of Premier Royalty currently owned by Sandstorm,
by way of a plan of arrangement under section 182 of the Business
Corporations Act (Ontario) (the “Arrangement”).

Summary of the Arrangement

Premier Royalty shareholders will receive common shares of Sandstorm
(the “Sandstorm Shares”) on the basis of 0.145 of a Sandstorm Share for
each Premier Royalty Share held. The Arrangement values the Premier
Royalty Shares at approximately C$0.89 per Premier Royalty Share, which
represents a premium of 16% to the 20-day volume weighted average
trading price of the Premier Royalty Shares on the Toronto Stock
Exchange (the “TSX”) of approximately C$0.77. Based on Sandstorm’s
closing share price on August 13, 2013, the total value of this
transaction would be approximately C$28.3 million.

In accordance with the terms of the outstanding warrants to acquire
Premier Royalty Shares (each, a “Premier Royalty Warrant”), each holder
of a Premier Royalty Warrant outstanding immediately prior to the
effective time of the Arrangement will receive on subsequent exercise
of such holder’s Premier Royalty Warrant, in accordance with its terms,
for the same aggregate consideration payable for such warrant, 0.145 of
a Sandstorm Share.

In addition, in accordance with the terms of the outstanding options to
acquire Premier Royalty Shares (each, a “Premier Royalty Option”), each
holder of a Premier Royalty Option outstanding immediately prior to the
effective time of the Arrangement will receive on subsequent exercise
of such holder’s Premier Royalty Option, in accordance with its terms,
for the same aggregate consideration payable for such option, 0.145 of
a Sandstorm Share.

The Arrangement is subject to the approval of at least two-thirds of the
votes cast by Premier Royalty shareholders at a special meeting of
Premier Royalty shareholders, which is expected to be held in September
2013. The Arrangement is a related party transaction for purposes of
Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Prior to executing the Arrangement Agreement, the Board
of Directors of Premier Royalty obtained a formal valuation from
Paradigm Capital Inc. as required by MI 61-101. The valuation was prepared under the supervision of a special
committee of the Board of Directors of Premier Royalty consisting of
independent directors. The valuation will be included in the management
information circular being mailed to shareholders of Premier Royalty.
The approval of the disinterested shareholders of Premier Royalty will
be required in order for the Arrangement to proceed, however, all
shareholders of Premier Royalty will be treated on the same basis and
no additional consideration or benefit is available to any shareholder
of Premier Royalty.

Completion of the Arrangement is also subject to the approval of the
Ontario Superior Court of Justice, the TSX, the receipt of all other
necessary regulatory and third party approvals, and other customary
conditions. In the event that the Arrangement is not completed under
certain circumstances, Premier Royalty has agreed to pay Sandstorm a
termination fee equal to C$2 million. In addition, the Arrangement
Agreement includes standard non-solicitation and superior proposal
provisions and Premier Royalty has provided Sandstorm with certain
other customary rights, including a right to match competing offers.
Full details of the transaction will be included in the management
information circular of Premier Royalty to be mailed to Premier Royalty
shareholders in due course.

A copy of the Arrangement Agreement will be filed under each of
Sandstorm’s and Premier Royalty’s profiles on SEDAR at www.sedar.com.

Voting Support and Board Approval

Prior to entering into the Arrangement Agreement, Sandstorm and Premier
Royalty entered into support and voting agreements with certain
shareholders of Premier Royalty (together, the “Locked-Up
Shareholders”), collectively holding approximately 17.4% of the issued
and outstanding shares of Premier Royalty, whereby the Locked-Up
Shareholders have agreed to vote their Premier Royalty Shares in favour
of the Arrangement at the special meeting of Premier Royalty
shareholders. As at the date hereof, Sandstorm owns an aggregate of
46,678,221 Premier Royalty Shares, representing approximately 59.5% of
the outstanding Premier Royalty Shares (51.6% on a fully-diluted
basis). In addition, Sandstorm currently owns Premier Royalty Warrants
to acquire an additional 6,965,676 Premier Royalty Shares.

The Board of Directors of Premier Royalty, other than those who have
declared an interest in the Arrangement and abstained from voting, have
unanimously approved the transaction and will unanimously recommend
that Premier Royalty shareholders vote in favour of the Arrangement.
Each director and senior officer of Premier Royalty has indicated that
they intend to vote in favour of the Arrangement.

The Sandstorm Board of Directors has unanimously approved the
transaction and Sandstorm does not require, and the transaction is not
subject to, approval by the shareholders of Sandstorm. The issuance of
the Sandstorm Shares, including those issuable on exercise of the
Premier Royalty Warrants and the Premier Royalty Options on a
post-closing basis, is subject to approval by the TSX.

Sandstorm’s legal counsel is Cassels Brock & Blackwell LLP, Premier
Royalty’s legal counsel is Bennett Jones LLP and the special committee
of the Board of Directors of Premier Royalty was advised by Blake,
Cassels & Graydon LLP.

None of the securities to be issued pursuant to the Arrangement
Agreement have been or will be registered under the United State
Securities Act of 1933, as amended (the “U.S. Securities Act”), or any
state securities laws, and any securities issued pursuant to the
Arrangement are anticipated to be issued in reliance upon available
exemptions from such registration requirements pursuant to Section
3(a)(10) of the U.S. Securities Act and applicable exemptions under
state securities laws. This press release does not constitute an offer
to sell or the solicitation of an offer to buy any securities.

ABOUT SANDSTORM GOLD

Sandstorm Gold Ltd. is a gold streaming company. Sandstorm provides
upfront financing for gold mining companies that are looking for
capital and in return receives a gold streaming agreement. This
agreement gives Sandstorm the right to purchase a percentage of the
life of mine gold produced, at a fixed price. Sandstorm is a
non-operating gold mining company with a portfolio of ten gold streams,
six of which are producing gold, and three NSR royalties. Sandstorm
plans to grow and diversify its low cost production profile through the
acquisition of additional gold streams.

Sandstorm is focused on low cost operations with excellent exploration
potential and strong management teams. Sandstorm has completed gold
purchase or royalty agreements with Brigus Gold Corp., Canadian Zinc
Corp., Colossus Minerals Inc., Columbus Gold Corp., Donner Metals Ltd.,
Entr e Gold Inc., Luna Gold Corp., Magellan Minerals Ltd., Metanor
Resources Inc., Mutiny Gold Ltd., Santa Fe Gold Corp., SilverCrest
Mines Inc., Rambler Metals and Mining plc and Solitario Exploration &
Royalty Corp.

For more information visit: www.sandstormgold.com.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

This press release contains “forward-looking statements”, within the
meaning of the U.S. Securities Act of 1933, the U.S. Securities
Exchange Act of 1934, the Private Securities Litigation Reform Act of
1995 and “forward-looking information” within the meaning of applicable
Canadian securities legislation (referred to as forward-looking
statements below), concerning the business, operations and financial
performance and condition of Sandstorm. Forward-looking statements
include, but are not limited to, statements with respect to the
completion of the Arrangement, including the receipt of court and
shareholder approval; the integration of Premier Royalty’s business
with Sandstorm’s business; the future price of gold; the estimation of
mineral reserves and resources; realization of mineral reserve
estimates; and the timing and amount of estimated future production.
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 statements are made based upon certain assumptions and
other important factors that, if untrue, could cause the actual
results, performances or achievements of Sandstorm to be materially
different from future results, performances or achievements expressed
or implied by such statements. Such statements and information are
based on numerous assumptions regarding present and future business
strategies and the environment in which Sandstorm will operate in the
future, including the price of gold and anticipated costs. Certain
important factors that could cause actual results, performances or
achievements to differ materially from those in the forward-looking
statements include, amongst others, the ability to complete the
Arrangement; the receipt of necessary approvals; the inability to
satisfy the conditions to the Arrangement; the inability to achieve the
benefits of the Arrangement; gold price volatility; discrepancies
between actual and estimated production; mineral reserves and resources
and metallurgical recoveries; mining operational and development risks
relating to the parties which produce the gold Sandstorm will purchase;
regulatory restrictions; activities by governmental authorities
(including changes in taxation); currency fluctuations; the global
economic climate; dilution; share price volatility and competition.

Forward-looking statements are subject to known and unknown risks,
uncertainties and other important 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 such
forward-looking statements, including but not limited to: the impact of
general business and economic conditions, the absence of control over
mining operations from which Sandstorm will purchase gold and risks
related to those mining 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, risks in the marketability of minerals,
fluctuations in the price of gold, fluctuation in foreign exchange
rates and interest rates, stock market volatility, 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,
2012 available at www.sedar.com. Although Sandstorm has attempted to identify important factors that
could cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can be
no assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements. Sandstorm does not
undertake to update any forward looking statements that are contained
herein, except in accordance with applicable securities laws.

SOURCE Sandstorm Gold Ltd.