July 13, 2011 / 3:50 PM / 6 years ago

UPDATE 1-Sandstorm Gold signs gold purchase deal with Donner Metals

* To buy gold and gold equivalent equal to 17.5 pct of Quebec project output

* Says to pay Donner $5 mln

* Separately, Sandstorm Metals & Energy signs $25 mln natural gas deal with Thunderbird (Follows alerts)

July 13 (Reuters) - Canada’s Sandstorm Gold Ltd said the company and Donner Metals Ltd sealed a deal for a share in the gold output at Donner’s property in Quebec.

Sandstorm Gold said it would purchase an amount of gold and gold equivalent, equal to 17.5 percent of the production from the Bracemac-McLeod Property in which Donner has a 35 percent joint venture interest.

The property, which is in Matagami, Quebec, is operated by Xstrata Canada Corp .

Under the terms, Sandstorm Gold will pay Donner $5 million in June next year.

Sandstorm Gold shares were one of the most heavily traded on the Toronto Venture Exchange on Wednesday morning, while Donner’s stock was one of the top traded with a 15 percent rise.

Separately, Thunderbird Energy Corp said it signed a $25 million hydrocarbon purchase agreement with Sandstorm Metals & Energy Ltd , under which Sandstorm Metals can purchase 35 percent of all natural gas produced from Thunderbird’s Gordon Creek property.

Both Sandstorm Gold and Sandstorm Metals, which are headed by Nolan Watson, have signed a cooperation agreement whereby the two companies will work together to complete metal streaming transactions and share joint operating expenses.

Shares of Calgary, Albert-based Thunderbird, which were trading at 13.5 Canadian cents, rose as much as 29 percent on Wednesday morning on the Toronto Venture Exchange.

Sandstorm Metal shares were the second-most traded on the Toronto Venture Exchange and were down 10 percent at 53 Canadian cents in late morning trade. (Reporting by Amruta Sabnis in Bangalore; Editing by Gopakumar Warrier)

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