Nolan Watson is a self-made millionaire who started Sandstorm Gold and Sandstorm Financing from $0, and grew it into a multi-million dollar business in a few short years. Miners and resource extractors desperate for financing find Watson’s company a great source of financing for their projects. And that’s how Sandstorm makes its money.
But the questions are: In today’s high-risk mining and mine-financing environment, can the Sandstorm model really work? Is it worth spending time and money hearing Nolan Watson speak about his business model when the risks associated are so high?
Is The Business Model REALLY Sound?
When investors and financers like the Sandstorm team take to the podium, they often speak to an audience that include financial wizards and executives from resource extraction companies. These individuals are astute business leaders and will only make a deal if they see a sound business proposition. So:
- When Nolan Watson and his team offer to finance a project mining company executives listen to the proposals very carefully
- Given the current tightening of finances for small and mid-cap mining companies, the industry sees Sandstorm as one of the few practical alternatives for financing their operations
- Miners desperate for capital see good value in locking the FUTURE price of their commodities as part of a deal in order to access financing NOW
It is in this context therefore that Watson makes his case to his audience. And under the current conditions the business model delivers a win-win deal to all parties involved.
Are The Risks Really Worth Taking?
In reality, financiers like Sandstorm are adept at mitigating a lot of the down-side risks to their deals. But in return, they are able to capture tremendous up-side potential. For instance, imagine a Gold mining company seeking finance from Nolan Watson 2 years ago and willing to lock its gold price at $450 an ounce for the next 10 or 30 years. With Gold prices soaring above $1,000 for most of that time (and even reaching $1,400 an ounce for a period!), Watson’s team would have made some lofty profits indeed!
The above is NOT a hypothetical case but a real-life example of what financers like Watson have done over the last few years. While the risk-adjusted returns for Sandstorm are extremely attractive, miners get access to ready finance. And that’s what draws miners to listen to what Watson has to say.
Time Well Spent!
Listening to Nolan Watson speak and share his thoughts on financing mining and resource companies is definitely time well spent. But individual Australians interested in building their own fortunes may find great value spending time reading Stuart Zadel’s book, Think and Grow Rich. A FREE hardcopy is available online to anyone that wishes to order it.
While the book might be all you need to start down your path to accumulating wealth, you might also consider attending an informative wealth creation seminar to further your wealth building prowess. Register your FREE ticket today because I know how quickly seats fill up for a cracker of an event like this!!!