Sandstorm's Strategic Merger with Royal Gold: A Value-Creating Opportunity Backed by Proxy Advisors

The recent announcement of Sandstorm Gold Royalties' merger with Royal Gold Inc. has sent ripples through the precious metals sector, positioning the combined entity as a dominant force in the royalty and streaming industry. Valued at $3.5 billion, the all-share transaction—alongside Royal Gold's simultaneous $196 million acquisition of Horizon Copper Corp.—represents a strategic consolidation of three high-quality portfolios into a single, diversified platform. With proxy advisory firms like Institutional Shareholder Services (ISS) endorsing the dealRoyal Gold to Acquire Sandstorm Gold Royalties and Horizon Copper Forming Large-Scale Industry-Leading Streaming and Royalty Company^[1], the merger has already garnered significant credibility as a value-creating proposition for shareholders.

Strategic Rationale: Scale, Diversification, and Organic Growth

The merger's strategic logic is rooted in the complementary strengths of the two companies. Royal Gold, a long-standing leader in the gold streaming and royalty sector, will now inherit Sandstorm's robust portfolio of 135 assets, expanding its total holdings to over 393Royal Gold to Acquire Sandstorm Gold Royalties and Horizon Copper Forming Large-Scale Industry-Leading Streaming and Royalty Company^[1]. This scale not only enhances operational efficiency but also diversifies revenue streams across geographies and asset types. For instance, the combined entity will gain access to critical development projects such as Glencore's MARA, SSR Mining's Hod Maden, and Solaris' Warintza—assets with significant upside potentialRoyal Gold to Acquire Sandstorm Gold Royalties and Horizon Copper Forming Large-Scale Industry-Leading Streaming and Royalty Company^[1].

Bill Heissenbuttel, Royal Gold's CEO, emphasized that the deal aligns with the company's long-term vision of becoming a “leading North American precious metals streaming and royalty company”Royal Gold to Acquire Sandstorm Gold Royalties and Horizon Copper Forming Large-Scale Industry-Leading Streaming and Royalty Company^[1]. By integrating Sandstorm's expertise in gold streaming with Royal Gold's established royalty infrastructure, the merger creates a hybrid model that mitigates risk while amplifying growth opportunities. This is particularly relevant in a macroeconomic environment where gold's role as a safe-haven asset remains intact, and streaming companies benefit from rising gold prices without the operational burdens of miningRoyal Gold to Acquire Sandstorm Gold Royalties and Horizon Copper Forming Large-Scale Industry-Leading Streaming and Royalty Company^[1].

Shareholder Value Creation: Premiums, Liquidity, and Balance Sheet Strength

From a shareholder value perspective, the terms of the merger are compelling. Sandstorm shareholders will receive 0.0625 Royal Gold shares for each Sandstorm share held, representing a 21% premium to the 20-day volume-weighted average price and a 17% premium to the July 3 closing priceRoyal Gold to Acquire Sandstorm Gold Royalties and Horizon Copper Forming Large-Scale Industry-Leading Streaming and Royalty Company^[1]. This premium, coupled with the 23% ownership stake in the combined company, ensures immediate value creation while providing exposure to a larger, more liquid platformRoyal Gold to Acquire Sandstorm Gold Royalties and Horizon Copper Forming Large-Scale Industry-Leading Streaming and Royalty Company^[1].

The all-share structure also preserves equity alignment between the two entities. Post-merger, Royal Gold shareholders will own 77% of the combined company, reflecting their existing market capitalization dominanceRoyal Gold to Acquire Sandstorm Gold Royalties and Horizon Copper Forming Large-Scale Industry-Leading Streaming and Royalty Company^[1]. This structure avoids cash dilution and leverages Royal Gold's strong balance sheet, which now includes Horizon Copper's copper assets—a strategic addition that diversifies the portfolio beyond goldRoyal Gold to Acquire Sandstorm Gold Royalties and Horizon Copper Forming Large-Scale Industry-Leading Streaming and Royalty Company^[1]. Analysts note that the combined entity's asset base and financial flexibility position it to pursue further accretive acquisitions or increase distributions to shareholdersRoyal Gold to Acquire Sandstorm Gold Royalties and Horizon Copper Forming Large-Scale Industry-Leading Streaming and Royalty Company^[1].

Proxy Advisors Endorse the Deal: A Vote of Confidence

The merger's approval by proxy advisory firms underscores its strategic and financial merits. ISS, a leading independent advisor, has explicitly recommended that Sandstorm shareholders vote in favor of the arrangementRoyal Gold to Acquire Sandstorm Gold Royalties and Horizon Copper Forming Large-Scale Industry-Leading Streaming and Royalty Company^[1]. The firm cited the 21% premium, the strategic benefits of joining a larger entity, and the absence of dissenting director votes as key factorsRoyal Gold to Acquire Sandstorm Gold Royalties and Horizon Copper Forming Large-Scale Industry-Leading Streaming and Royalty Company^[1]. Similarly, other proxy advisors have highlighted the deal's potential to enhance long-term shareholder returns through economies of scale and operational synergiesProxy advisors recommend Sandstorm shareholders approve Royal Gold deal^[2].

With shareholder meetings scheduled for October 9, 2025, and proxy voting closing on October 7 for Sandstorm shareholdersRoyal Gold to Acquire Sandstorm Gold Royalties and Horizon Copper Forming Large-Scale Industry-Leading Streaming and Royalty Company^[1], the path to finalization appears clear. This timeline suggests the merger will close by year-end, allowing the combined company to capitalize on 2025's favorable gold market conditions.

Conclusion: A Win-Win for the Sector and Shareholders

The Sandstorm-Royal Gold merger is a textbook example of strategic consolidation in the precious metals sector. By combining scale, diversification, and a premium-laden structure, the deal creates a platform poised for sustained growth. Proxy advisors' endorsements further validate the transaction's alignment with shareholder interests, reducing the risk of regulatory or activist challenges. For investors, this merger represents not just a vote of confidence in the gold streaming model but also a rare opportunity to participate in a newly minted industry leader.