... "There are some risks that need to be weighed before an investment in STTYF should be made. For instance, while the company has substantial collateral now, if commodity prices collapse further, the company will end up with assets that are worth less than the loan that was issued by them. The company is very dependent of the expertise of its CEO and founder, Mr. Nolan. If anything happens to him, while the company has a continuation plan, no one currently at the company can fulfill the roll as well as the current CEO. Again, if the company ends up having direct ownership of too many mining properties, it may not have enough talent or capital to convert to an operating company.
However, it is my belief that the potential rewards far outweigh the risks in this company. Investors can be comforted by the fact that the management has done this kind of business before, and has delivered an increase in shareholder values each time.
Sandstorm has invested in good projects which will start their production in a couple of years. The cash flows for Sandstorm are expected to increase in the future with the increase in production. The prices of metals and natural gas are expected to increase in the future and the business model of Sandstorm will help the company in leveraging the upward increase in the price. With a unique underlying business model, Sandstorm Metals and Energy can be said to be a good example of a well-managed company." ...
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