BUY Recommendation:Sandstorm Metals and Energy LTD

(STTYF)

Key Investment Points

• Historically successful management

• Unique business model

• Highly undervalued

• Strong technical indicators

• Timing = OPPORTUNISTIC

• Competitors next to none!

Industry Overview“The Mining sector comprises establishments that

extract naturally occurring mineral solids, such as

coal and ores; liquid minerals, such as crude

petroleum; and gases, such as natural gas. The term

mining is used in the broad sense to include

quarrying, well operations, beneficiating (e.g.,

crushing, screening, washing, and flotation), and

other preparation customarily performed at the mine

site, or as a part of mining activity.”

THE DEPARTMENT OF LABOR

--Bureau of Statistics--

Industry Overview

• Strong yet volatile outlook for metals/mining industry

• Current focus continued growth through expanded production.

• The demand for metals/energy faces no foreseeable threats.

• Mining = incredibly capital intensive difficult MKT entry

•Only a handful of blue chip companies have the means to reach production.

•E&P(exploration and production) miners are often weeded out

altogether.

•The potential profits for these “junior miners” are rarely realized.

• Projects that lack funding are abandoned INCLUDING many

with fundamentally sound operational strategies.

•Against this economic setting, Sandstorm has spotted what it hopes to be a MORE than just

“golden” opportunity.

02/02/12 Original purchase at $1.43/

share

05/09/12 5:1 Reverse stock split

Adjusted Cost Basis $7.15

57.2% return over 9 months

82.7% annualized return

( exploration and production

Business Model

Refined Management

Streaming Method

Corporate Structure

Industry Dynamics

Gold StreamingONLY

DIVERSIFIED STREAMING

CopperPalladium

Natural GasCoalOil

“A Sandstorm investment maximizes investment

potential while minimizing

downside risks.”

(taken from SAND Buy Presentation)

YES right time = right now!!

Steady upward trend

Moving averages in ideal positions respective to one another and to price

Volume rising comfortably with price indicating growing trading/investment activity within Sandstorm Metals & Energy

45º

30º

We are looking for “broken stocks” rather than “broken companies”.

In this situation we have the following :

Strong ManagementProven Business ModelQuality Investor RelationsStrong Balance SheetFinancial Liquidity

an early stage company dabbling in a historically volatile industry!!!

PERCEPTION

of the avg investor

Markers of a fundamentally

sound company

Prev Close: 0.4852wk Range:

.24-.60

Avg Vol (3m):

781,652

Market Cap:

158.13M

Current Eval

118.7M

EPS (ttm): .01Div & Yield: N/AForward P/E: ***

Investment Information

2 Year Price Graph

SWOT Analysis

Strengths Unique streaming method Historical success in our portfolioExperienced exploration and development research teams Established Infrastructure ZERO debtLow overhead

Weaknesses Some projects are bound to be halted Sandstorm has the aforementioned “immunity” to price fluctuation. However, their project companies do not. Sandstorm profits rely on their success up to the point of production.

Opportunities Donner Metals scheduled for production Established Infrastructure Diversification of streamsPotential for new discoveriesLarge cash flows

ThreatsAlthough Sandstorm has the aforementioned “immunity” to price fluctuation, the companies it finances do not. Failure of selected projects = no stream to speak ofGovernment regulations and policies on commodities are susceptible to change

Sector : Industrials & Materials Industry Group: Investment Company Current Holdings: GE, XYL, SAND, UPS Target Sector Allocation: 8.23% Current Sector Allocation: 11.89% , $19,431.16

BUY 20,000 shares of STTYF at a limit price of $.50 ($10,000, approx. 2% of portfolio)

Holding Period/Exit Strategy: 2-3 years; consider selling if stock splits and reaches estimated peak, if price falls below $.30, or if fundamentals change dramatically

Portfolio Placement / Recommendation