What I hate is a reverse stock split. I will sure get out of this stock now.
SANDSTORM GOLD ANNOUNCES PROPOSED SHARE CONSOLIDATION
Sandstorm Gold Ltd. is proposing a consolidation of its issued and outstanding common shares on the basis of
one postconsolidation common share for up to every five preconsolidation common shares, with the final
consolidation ratio to be set by the company's board of directors within the range approved by the shareholders.
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"A consolidation would enable Sandstorm to pursue a dual listing on a U.S. stock exchange, which could open
the door to a large base of potential new investors," said president and chief executive officer Nolan Watson.
"This would be an exciting next step as we continue to grow the company."
If approved, the consolidation would reduce the company's 347,408,871 issued and outstanding common shares
to approximately 69,481,774 common shares. The exercise or conversion price of outstanding stock options
would be proportionately adjusted based upon the final consolidation ratio. The company's listed warrants
would not be consolidated, and the exercise price and/or the number of common shares issuable under the
warrants would also be proportionately adjusted based on the final consolidation ratio. The proposed
consolidation is subject to the approval of the TSX Venture Exchange and Sandstorm's shareholders.
Full details regarding the proposed consolidation are included in the information circular mailed on April 5,
2012, to all Sandstorm shareholders of record on March 28, 2012, and posted on SEDAR in connection with the
annual and special meeting of shareholders, which is scheduled to be held on Friday, May 4, 2012. No
assurances can be given that the company will be successful in achieving a listing of its securities on a U.S.
exchange.
EDITOR’S COMMENT: I usually don’t like rollbacks but in this case it makes perfect sense for two reasons:
First and most importantly the company is an earnings growth curve that provides enormous upside growth in
intrinsic value. Unlike non producing juniors that are highly speculative, rollbacks almost always result in lower
market caps in the short run. Secondly, as a follow up to #1, a rollback will increase the share price required to
get the company listed on a more senior exchange in New York and with that will come an expanded universe
of investors into this rapidly growing company. I think the proposed 1 for 5 rollback is the right thing to do at
this time in this company’s history.
