Sandstorm Metals & Energy Agrees to Acquire Oil and Gas Streams

Sandstorm Metals & Energy Ltd. is pleased to announce that it has entered into an oil and gas purchase agreement on currently producing oil and natural gas properties located in the Two Creek and Strathmore areas of Alberta, Canada.

Sandstorm has entered into the oil purchase agreement (the “Agreement”) with Terrex Energy Inc. whereby the Corporation has agreed to purchase (a) 25% of all oil, natural gas and natural gas liquids produced for the life of the Two Creek Jurassic A pool and for 5 years of the Two Creek Jurassic B pool (the “Two Creek Property”), and (b) 15% of all oil, natural gas and natural gas liquids produced from the Strathmore property. Pursuant to the Agreement, Sandstorm will provide an upfront deposit (the “Upfront Deposit”) to Terrex in the amount of $14.7 million plus ongoing per-unit payments of $15.00 per barrel of oil delivered, $1.00 per mcf of gas delivered, and $8.00 per barrel of natural gas liquids delivered. Sandstorm will also pay the direct transportation and royalty costs associated with its share of oil, natural gas and natural gas liquids.

Aside from the Upfront Deposit and ongoing payments, the Corporation is not required to contribute to any capital, exploration or operating expenditures in respect of the assets which are the subject of the Agreement. Terrex has provided the Corporation with a guarantee that Sandstorm will receive minimum before tax cash flows of $0.5 million in 2011, $1.1 million in 2012, $1.8 million in 2013, $2.2 million in 2014, $2.6 million in 2015, $2.4 million in 2016, $2.2 million in 2017 and $1.9 million in 2018 thus providing a 100% guaranteed return of capital. Terrex has also provided minimum development commitments including the drilling of two wells at Two Creek, and the implementation of chemical flood enhanced oil recovery (“EOR”) program at both Two Creek and Strathmore. The Corporation has granted Terrex the right to buy back half of the future production under the Agreement, for a period of 24 months, upon Terrex making a payment of $9.6 million to Sandstorm, upon receipt of which, the percentage of production Sandstorm is entitled to purchase shall be decreased to 12.5% at the Two Creek Property and 7.5% at the Strathmore property. The Agreement is conditional on Terrex completing the acquisition of the Two Creek Property, and also on receipt by Terrex of approval of the TSX Venture Exchange.

“We are very excited about the opportunity we see in the oil and gas sector,” stated Nolan Watson, President and Chief Executive Officer of Sandstorm, “this transaction is the first step in what we believe will be a significant growth sector for Sandstorm.”