North American Metals & Mining first: BMO helps Sandstorm Gold Royalties achieve ESG goals with Sustainability-Linked Loan

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Oct 06, 2021, 16:30 ET

Sandstorm is the first precious metals royalty company and one of the first North American metals & mining companies to have a Sustainability-Linked Loan structured with internal and customized Key Performance Indicators

New financing deal aligned with BMO's Purpose commitment for a sustainable future and BMO's ambition to be their clients' lead partner in the transition to a net zero world

TORONTO, Oct. 6, 2021 /PRNewswire/ - BMO Financial Group (TSX: BMO) (NYSE: BMO), acting as sole Sustainability Structuring Agent, has announced a financing deal with royalty company Sandstorm Gold Ltd. ("Sandstorm" or "Sandstorm Gold Royalties"). Adopting a Sustainability-Linked Loan structure as part of its 2021 revolving credit facility renewal enables Sandstorm to link its ESG strategy and cost of capital, reinforcing and demonstrating its commitment to sustainability.

The deal introduces a margin adjustment incentive mechanism tied to Sandstorm's commitment to continue building strong workforce diversity and maintaining its solid ESG governance, while furthering sustainability and climate-related disclosure developments in the mining and metals industry through its investments.

"We're pleased to announce that Sandstorm is the first royalty company with a credit facility linked to sustainability goals. With this credit agreement, Sandstorm is helping to lead a new era of corporate lending that benefits shareholders while promoting corporate responsibility," said Erfan Kazemi, Sandstorm's Chief Financial Officer.

"We're excited to support Sandstorm's environmental and social sustainability objectives through this new financing. Deals like this are aligned to BMO's Purpose to Boldly Grow the Good in business and life, and to the way we work with clients across industries both to serve their needs and work toward a more sustainable future," said Jonathan Hackett, Head, Sustainable Finance, BMO Capital Markets. "Our experience as a leading global metals and mining practice, combined with our expertise in sustainable finance, makes us the ideal partner in helping Sandstorm reach its goals."

Sustainability-Linked Revolving Credit Facility

The new Sustainability-Linked 4-Year, $350 million Revolving Credit Facility includes terms that reduce or increase the borrowing costs as sustainability performance targets are met or missed. The performance determinants are comprised of:

External ESG Rating: Maintain or improve an ESG rating of "A" from MSCI Inc.
Diversity & Inclusion: Increase diversity at the leadership level to 50 per cent
Alignment with ESG Reporting Standards: Increase percentage of assets' alignment with sustainability and climate related reporting standards and frameworks

BMO continues to work closely with clients in their transition to a more sustainable future as part of its commitment to deploy $300 billion in sustainable lending and underwriting to companies pursuing sustainable outcomes by 2025.

In December 2019, BMO provided Maple Leaf Foods Inc. with the first Sustainability-Linked Loan in Canada. In other firsts, last February BMO provided the first labelled Green Loan in Canadian history to Atlantic Packaging to finance a new 100 per cent recycled containerboard facility and worked with Atlantic Packaging to establish a Green Financing Framework. In May, it provided an SLL to Gibson Energy to help the company achieve its ESG targets; in doing so Gibson became the first North American public energy company to transition its principal syndicated revolving credit facility fully into a sustainability-linked revolving credit facility.

Being its clients' lead partner in the transition to a net zero world also aligns with BMO's establishment of a dedicated Energy Transition Group in June, 2021 along with the newly introduced BMO Climate Institute, in order to support clients in their pursuit of opportunities driven by the increasing momentum of the global economy's shift in production and consumption of energy.

BMO's leadership on sustainability has been recognized on numerous rankings:

Ranked 15^th on The Wall Street Journal's 2020 list of the 100 Most Sustainably Managed Companies in the World, third overall on Social Capital – BMO was the only North American bank included
Top North American bank on Corporate Knights' 2021 Global 100 Most Sustainable Corporations in the World for the second year in a row
Ranked in the top 10 per cent of banks globally on the 2020 Dow Jones Sustainability Index, and the top North American bank
Scored an A- on the 2020 CDP Climate Change disclosure
Ethisphere^® Institute's 2020 list of the World's Most Ethical Companies^®
Corporate Knights 2021 Best 50 Corporate Citizens in Canada
Joint winner of Environmental Finance's 2021 Lead Manager of the Year, Social Bonds – Local Authority/Municipality category

For more information on BMO's commitment to a sustainable future, please visit the bank's Sustainability Report. To learn more about sustainable finance at BMO click here. For BMO's climate ambition, visit our Climate page.

About BMO Financial Group
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider - the 8th largest bank, by assets, in North America. With total assets of $971 billion as of July 31, 2021, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.

SOURCE BMO Financial Group