Bachelor Lake is a greenstone hosted, structurally controlled alkali-magmatic gold deposit that was host to a producing mine during the 1980’s. Metanor Resources acquired the property in 2004 and undertook major upgrades to the existing mine and mill infrastructure including the installation of a carbon-in-pulp process plant as well as 160 metres in shaft development work. The current shaft has reached depths of more than 725 metres, allowing exploration and development on three additional levels.
The Bachelor Lake mine restarted production in 2013 as a long-hole underground mining operation with mill capacity of 700 tonnes per day. The mill has averaged recoveries of between 96% and 98% since its commissioning. The Bachelor Lake deposit remains open in several directions and exploration diamond drilling is ongoing in order to replace mined ounces of gold.
Sandstorm entered into a gold stream agreement with Metanor in January 2011 to purchase 20% of the gold produced from Bachelor Lake at a per ounce price of US$500. The agreement was amended and as of October 1, 2017 Sandstorm will receive a minimum of 1,500 ounces of gold per quarter until 12,000 ounces of gold have been delivered. The gold stream will then convert into a 3.9% NSR royalty. For consideration of the amendment, Sandstorm also received a 3.9% NSR on Metanor's Barry project and US$2.0 million in Metanor common shares.
The 3.9% NSR royalties on Bachelor and Barry can be reduced to 1.8% by making a US$2.0 million payment to Sandstorm in each case.