UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of February, 2024
Commission File Number: 001-35617
Sandstorm Gold Ltd.
(Translation of registrant’s name into English)
Suite 3200 – 733 Seymour Street
Vancouver, British Columbia
V6B 0SB Canada
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.
EXHIBIT INDEX
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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SANDSTORM GOLD LTD. |
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Date: February 15, 2024 |
By: |
/s/ Erfan
Kazemi |
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Name: Erfan Kazemi |
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Title: Chief Financial Officer |
EXHIBIT 99.1
February
15, 2024 | VANCOUVER, BC
Sandstorm
Gold Royalties
Announces Record 2023 Annual
Results
Sandstorm Gold Ltd. (“Sandstorm Gold Royalties”,
“Sandstorm” or the “Company”) (NYSE: SAND, TSX: SSL) has released its financial results for the fourth quarter
and year ended December 31, 2023 (all figures in U.S. dollars).
Full
Year Highlights
| • | Record attributable gold equivalent ounces1 of 97,245 ounces (FY 2022 - 82,376 ounces); |
| • | Record revenue of $179.6 million (FY 2022 - $148.7 million); |
| • | Record total sales, royalties, and income from other interests1 of $191.4 million (FY 2022 - $148.7 million); |
| • | Record cash flows from operating activities, excluding changes in non-cash working capital1 of $151.1 million (FY
2022 - $109.8 million); |
| • | Net income of $42.7 million (FY 2022 - $78.5 million); |
| • | Average cash cost per attributable gold equivalent ounce1 of $223 resulting in cash operating margins1
of $1,706 per ounce (FY 2022 - $284 per ounce and $1,511 per ounce respectively); |
| • | Debt Reduction and Monetization Efforts: De-levering remains a top priority for Sandstorm. As of February 15, 2024, the Company
had $421 million drawn and outstanding on the credit facility. To further expedite debt repayment, the Company is undergoing a process
to monetize between $40-$100 million of non-core assets by the end of 2024. Accordingly, in the fourth quarter of 2023, Sandstorm closed
its previously announced agreement to sell the El Pilar and Blackwater Royalties for total consideration of $25.0 million comprised of
cash and common shares. The Company anticipates that consideration from future monetization efforts will consist entirely of cash. Sandstorm’s
financial position continues to strengthen, with current available capital totaling over $200 million. |
| • | Credit Facility Renewal: In September 2023, Sandstorm renewed its revolving credit facility, allowing the Company to borrow
up to $625 million for a four year term. |
| • | Closing of Antamina Transaction: In June 2023, Sandstorm closed the final component of its previously announced arrangement
with Horizon Copper Corp. (“Horizon Copper”) to sell a portion of the Company's Antamina royalty in consideration for a silver
stream, debt, equity, and cash. |
| • | Mercedes Stream Amendment: In January 2024, Sandstorm closed its previously announced transaction to amend its existing gold
and silver stream agreements on the Mercedes mine with Bear Creek Mining Corporation (“Bear Creek”) and to refinance certain
other debt investments of Bear Creek that it holds. In exchange for the stream amendments, Sandstorm received a 1.0% NSR on Bear Creek’s
wholly-owned Corani project in Peru, one of the world’s largest fully permitted silver deposits, and $10 million of additional consideration
in the form of a combination of Bear Creek common shares and debt. |
Fourth
Quarter Highlights
| • | Attributable gold equivalent ounces1 of 23,250 ounces (Q4 2022 - 21,753 ounces); |
| • | Revenue of $44.5 million (Q4 2022 - $38.4 million); |
| • | Total sales, royalties, and income from other interests1 of $46.3 million (Q4 2022 - $38.4 million); |
| • | Cash flows from operating activities, excluding changes in non-cash working capital1 of $36.5 million (Q4 2022 -
$29.9 million); |
| • | Net income of $24.5 million (Q4 2022 - net loss of $2.1 million). |
Outlook
Based on the Company’s existing royalties,
attributable gold equivalent ounces for 2024 are forecasted to be between 75,000 and 90,000 ounces. The Company’s production forecast
is expected to reach approximately 125,000 attributable gold equivalent ounces within the next five years.
Annual
Financial Results
During 2023, the Company realized record annual
revenue of $179.6 million compared with $148.7 million for the comparable period in 2022. The Company also had record total sales, royalties,
and income from other interests of $191.4 million during the year ($148.7 million for the comparable period in 2022). The increase in
revenue is attributable to a 12% increase in attributable gold equivalent ounces sold2,
as well as a 7% increase in the average realized selling price of gold.
The Company had cash flows from operating activities
of $152.8 million and net income of $42.7 million during 2023, compared with cash flows from operating activities of $106.9 million and
net income of $78.5 million for the comparable period in 2022. The increase in cash flows from operating activities is largely driven
by an increase in revenue and contractual payments relating to the Mt. Hamilton royalty. The decrease in net income is due to a combination
of factors including:
| • | Certain gains recognized during 2022 which did not occur during 2023, including: |
| i. | a $24.9 million gain resulting from the sale of the Company’s Hod Maden interest to Horizon Copper; |
| ii. | $25.8 million in gains on disposal of stream, royalty, and other interests, primarily related to the sale of a portfolio of royalties
to Sandbox Royalties Corporation (“Sandbox Royalties”); and |
| iii. | a $12.5 million gain resulting from the sale of the Company’s equity interest in Entrée Resources Ltd. to Horizon Copper. |
| • | A $22.2 million increase in finance expense in 2023 compared to 2022, primarily related to interest paid on the Company’s revolving
credit facility, which was drawn down in the third quarter of 2022 to finance acquisitions made in 2022; and |
| • | A $15.6 million increase in depletion expense in 2023 compared to 2022, partly driven by an increase in attributable gold equivalent
ounces sold. |
The decrease in net income was partially offset
by:
| • | A $30.9 million increase in revenue, as described above; |
| • | A $13.9 million increase in the gains recognized on the revaluation of the Company’s investments, mostly driven by an increase
in the fair value of the Company's Sandbox Royalties and Horizon Copper debentures; |
| • | $11.8 million in other income primarily related to a one-time contractual payment from the Company's Mt. Hamilton royalty; and |
| • | A $4.0 million gain on the disposal of the Company's Blackwater and El Pilar royalties to Sandbox Royalties. |
Streams
& Royalties
Of the gold equivalent ounces sold by Sandstorm
during the fourth quarter of 2023, approximately 12% were attributable to mines located in Canada, 22% from the rest of North America,
44% from South America, and 22% from other countries.
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THREE MONTHS ENDED Dec 31, 2023 |
Year ended Dec 31, 2023 |
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Revenue
(in millions) |
Gold Equivalent Ounces |
Revenue
(in millions) |
Gold Equivalent Ounces |
Canada |
$3.7 |
2,828 |
$ 23.3 |
13,013 |
North America excl. Canada |
$ 10.2 |
5,216 |
$ 38.4 |
25,101 |
South America |
$ 20.7 |
10,116 |
$ 91.3 |
45,355 |
Other |
$ 9.9 |
5,090 |
$ 26.6 |
13,776 |
Total |
$ 44.5 |
23,250 |
$ 179.6 |
97,245 |
Canada
Streams and royalties on Canadian mines contributed
9% more gold equivalent ounces to Sandstorm when compared to the fourth quarter of 2022. The change is primarily due to an increase in
gold equivalent ounces from a number of different royalties within the Company’s portfolio.
North America Excluding Canada
Gold equivalent ounces sold from operations located
within North America, but outside of Canada, contributed 16% less gold equivalent ounces when compared to the fourth quarter of 2022.
The change was primarily driven by a decrease in gold equivalent ounces received and sold from the Mercedes mine in Mexico, largely due
to the timing of sales, whereby, 600 gold ounces were delivered by December 31, 2023 but were sold in the subsequent quarter, and a decrease
in gold equivalent ounces sold from the Relief Canyon mine in Nevada. The decrease was partially offset due to an increase in royalty
revenue from the Cosalá mine in Mexico.
South America
Operations in South America contributed 11% more
gold equivalent ounces sold when compared to the fourth quarter of 2022. The increase was driven by an increase in royalty revenue attributable
to the Caserones mine in Chile, as a result of increased production rates and copper prices, and an increase in gold equivalent ounces
received and sold from the Antamina mine in Peru.
Other
Streams and royalties on mines in other countries
contributed 31% more gold equivalent ounces sold when compared to the fourth quarter of 2022. This change is primarily due to an increase
in royalty revenue from the Houndé mine in Burkina Faso as well as an increase in revenue from several different royalties within
the Company’s portfolio. The increase was partially offset by a decrease in gold equivalent ounces received and sold from the Bonikro
stream in Côte d’Ivoire largely due to the timing of sales, whereby, 811 ounces were delivered by December 31, 2023, but sold
in the subsequent quarter.
Webcast
& Conference Call Details
A conference call will be held on Friday, February
16, 2024 starting at 8:30am PST to further discuss the fourth quarter and annual results. To participate in the conference call, use the
following dial-in numbers and conference ID, or join the webcast using the link below:
International: (+1) 416-764-8688
North American Toll-Free: (+1) 888-390-0546
Conference ID: 31083956
Webcast URL: https://bit.ly/3OjOzC8
Note 1
Sandstorm has included certain
performance measures in this press release that do not have any standardized meaning prescribed by International Financial Reporting Standards
Accounting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards” or "IFRS")
including, (i) total sales, royalties, and income from other interests, (ii) attributable gold equivalent ounce, (iii) average cash cost
per attributable gold equivalent ounce, (iv) cash operating margin, and (v) cash flows from operating activities excluding changes in
non-cash working capital.
| (i) | Total sales, royalties and income from other interests is a non-IFRS financial measure and is calculated by taking total revenue which
includes sales and royalty revenue, and adding contractual income relating to royalties, streams and other interests excluding gains and
losses on dispositions. The Company presents Total Sales, Royalties and Income from other interests as it believes that certain investors
use this information to evaluate the Company’s performance and ability to generate cash flow in comparison to other streaming and
royalty companies in the precious metals mining industry. |
| (ii) | Attributable gold equivalent ounce is a non-IFRS financial ratio that uses total sales, royalties, and income from other interests
as a component. Attributable gold equivalent ounce is calculated by dividing the Company’s total sales, royalties, and income from
other interests, less revenue attributable to non-controlling shareholders for the period, by the average realized gold price per ounce
from the Company’s gold streams for the same respective period. The Company presents Attributable Gold Equivalent ounce as it believes
that certain investors use this information to evaluate the Company’s performance in comparison to other streaming and royalty companies
in the precious metals mining industry that present results on a similar basis. |
| (iii) | Average cash cost per attributable gold equivalent ounce is calculated by dividing the Company’s cost of sales, excluding depletion
by the number of attributable gold equivalent ounces. The Company presents average cash cost per Attributable Gold Equivalent ounce as
it believes that certain investors use this information to evaluate the Company’s performance and ability to generate cash flow
in comparison to other streaming and royalty companies in the precious metals mining industry who present results on a similar basis. |
| (iv) | Cash operating margin is calculated by subtracting the average cash cost per attributable gold equivalent ounce from the average realized
gold price per ounce from the Company’s gold streams. The Company presents cash operating margin as it believes that certain investors
use this information to evaluate the Company's performance and ability to generate cash flow in comparison to other streaming and royalty
companies in the precious metals mining industry that present results on a similar basis. |
| (v) | Cash flows from operating activities excluding changes in non-cash working capital is a non-IFRS financial measure that is calculated
by adding back the decrease or subtracting the increase in changes in non-cash working capital to or from cash provided by (used in) operating
activities. The Company presents cash flows from operating activities excluding changes in non-cash working capital as it believes that
certain investors use this information to evaluate the Company's performance in comparison to other streaming and royalty companies in
the precious metals mining industry that present results on a similar basis. |
Refer to pages 34-36 of the
Company’s MD&A for the year ended December 31, 2023, which is available on SEDAR+ at www.sedarplus.ca, for a numerical reconciliation
of the non-IFRS financial measures described above. The presentation of these non-IFRS financial measures is intended to provide additional
information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
Other companies may calculate these non-IFRS financial measures differently.
Note 2
Excluding attributable ounces related to contractual payments (primarily relating
to a one-time contractual payment from the Company’s Mt. Hamilton royalty) which are included in other income.
CONTACT
Information
For more information about Sandstorm Gold Royalties,
please visit our website at www.sandstormgold.com or email us at info@sandstormgold.com.
ERFAN KAZEMI |
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KIM BERGEN |
CHIEF FINANCIAL OFFICER |
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CAPITAL MARKETS |
604 689 0234 |
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604 628 1164 |
ABOUT SANDSTORM GOLD
ROYALTIES
Sandstorm
is a precious metals-focused royalty company that provides upfront financing to mining companies and receives the right to a percentage
of production from a mine, for the life of the mine. Sandstorm holds a portfolio of approximately 250 royalties, of which 40 of the underlying
mines are producing. Sandstorm plans to grow and diversify its low cost production profile through the acquisition of additional gold
royalties. For more information visit: www.sandstormgold.com.
CAUTIONARY STATEMENTS
TO U.S. SECURITYHOLDERS
The financial
information included or incorporated by reference in this press release or the documents referenced herein has been prepared in accordance
with International Financial Reporting Standards as issued by the International Accounting Standards Board, which differs from US generally
accepted accounting principles (“US GAAP”) in certain material respects, and thus are not directly comparable to financial
statements prepared in accordance with US GAAP.
This press
release and the documents incorporated by reference herein, as applicable, have been prepared in accordance with Canadian standards for
the reporting of mineral resource and mineral reserve estimates, which differ from the previous and current standards of the United States
securities laws. In particular, and without limiting the generality of the foregoing, the terms “mineral reserve”, “proven
mineral reserve”, “probable mineral reserve”, “inferred mineral resources,”, “indicated mineral resources,”
“measured mineral resources” and “mineral resources” used or referenced herein and the documents incorporated
by reference herein, as applicable, are Canadian mineral disclosure terms as defined in accordance with Canadian National Instrument 43-101
- Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum
(the “CIM”) - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended (the
“CIM Definition Standards”).
For United
States reporting purposes, the United States Securities and Exchange Commission (the “SEC”) has adopted amendments to its
disclosure rules (the “SEC Modernization Rules”) to modernize the mining property disclosure requirements for issuers whose
securities are registered with the SEC under the Exchange Act, which became effective February 25, 2019. The SEC Modernization Rules more
closely align the SEC’s disclosure requirements and policies for mining properties with current industry and global regulatory practices
and standards, including NI 43-101, and replace the historical property disclosure requirements for mining registrants that were included
in SEC Industry Guide 7. Issuers were required to comply with the SEC Modernization Rules in their first fiscal year beginning on or after
January 1, 2021. As a foreign private issuer that is eligible to file reports with the SEC pursuant to the multi-jurisdictional disclosure
system, the Corporation is not required to provide disclosure on its mineral properties under the SEC Modernization Rules and will continue
to provide disclosure under NI 43-101 and the CIM Definition Standards. Accordingly, mineral reserve and mineral resource information
contained or incorporated by reference herein may not be comparable to similar information disclosed by United States companies subject
to the United States federal securities laws and the rules and regulations thereunder.
As a result
of the adoption of the SEC Modernization Rules, the SEC now recognizes estimates of “measured mineral resources”, “indicated
mineral resources” and “inferred mineral resources.” In addition, the SEC has amended its definitions of “proven
mineral reserves” and “probable mineral reserves” to be “substantially similar” to the corresponding CIM
Definition Standards that are required under NI 43-101. While the SEC will now recognize “measured mineral resources”, “indicated
mineral resources” and “inferred mineral resources”, U.S. investors should not assume that all or any part of the mineralization
in these categories will be converted into a higher category of mineral resources or into mineral reserves without further work and analysis.
Mineralization described using these terms has a greater amount of uncertainty as to its existence and feasibility than mineralization
that has been characterized as reserves. Accordingly, U.S. investors are cautioned not to assume that all or any measured mineral resources,
indicated mineral resources, or inferred mineral resources that the Company reports are or will be economically or legally mineable without
further work and analysis. Further, “inferred mineral resources” have a greater amount of uncertainty and as to whether they
can be mined legally or economically. Therefore, U.S. investors are also cautioned not to assume that all or any part of inferred mineral
resources will be upgraded to a higher category without further work and analysis. Under Canadian securities laws, estimates of “inferred
mineral resources” may not form the basis of feasibility or pre-feasibility studies, except in rare cases. While the above terms
are “substantially similar” to CIM Definitions, there are differences in the definitions under the SEC Modernization Rules
and the CIM Definition Standards. Accordingly, there is no assurance any mineral reserves or mineral resources that the Company may report
as “proven mineral reserves”, “probable mineral reserves”, “measured mineral resources”, “indicated
mineral resources” and “inferred mineral resources” under NI 43-101 would be the same had the Company prepared the
reserve or resource estimates under the standards adopted under the SEC Modernization Rules or under the prior standards of SEC Industry
Guide 7.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING INFORMATION
This press
release contains "forward-looking statements", within the meaning of the U.S. Securities Act of 1933, the U.S. Securities Exchange
Act of 1934, the Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of
applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of Sandstorm Gold
Royalties. Forward-looking statements include, but are not limited to the future price of gold, silver, copper, iron ore and other metals,
the estimation of mineral reserves and resources, realization of mineral reserve estimates, and the timing and amount of estimated future
production. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”,
“will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”,
“continue”, “plans”, or similar terminology.
Forward-looking
statements are made based upon certain assumptions and other important factors that, if untrue, could cause the actual results, performances
or achievements of Sandstorm Gold Royalties to be materially different from future results, performances or achievements expressed or
implied by such statements. Such statements and information are based on numerous assumptions regarding present and future business strategies
and the environment in which Sandstorm Gold Royalties will operate in the future, including the receipt of all required approvals, the
price of gold and copper and anticipated costs. Certain important factors that could cause actual results, performances or achievements
to differ materially from those in the forward-looking statements include, amongst others, failure to receive necessary approvals, changes
in business plans and strategies, market conditions, share price, best use of available cash, gold and other commodity price volatility,
discrepancies between actual and estimated production, mineral reserves and resources and metallurgical recoveries, mining operational
and development risks relating to the parties which produce the gold or other commodity the Company will purchase, regulatory restrictions,
activities by governmental authorities (including changes in taxation), currency fluctuations, the global economic climate, dilution,
share price volatility and competition.
Forward-looking
statements are subject to known and unknown risks, uncertainties and other important factors that may cause the actual results, level
of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking
statements, including but not limited to: the impact of general business and economic conditions, the absence of control over mining operations
from which the Company will purchase gold, other commodities or receive royalties from, and risks related to those mining operations,
including risks related to international operations, government and environmental regulation, actual results of current exploration activities,
conclusions of economic evaluations and changes in project parameters as plans continue to be refined, risks in the marketability of minerals,
fluctuations in the price of gold and other commodities, fluctuation in foreign exchange rates and interest rates, stock market volatility,
as well as those factors discussed in the section entitled “Risks to Sandstorm” in the Company’s annual report for the
financial year ended December 31, 2023 and the section entitled “Risk Factors” contained in the Company’s annual information
form dated March 23, 2023 available at www.sedarplus.com. Although the Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results
not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance
on forward-looking statements. The Company does not undertake to update any forward-looking statements that are contained or incorporated
by reference, except in accordance with applicable securities laws.
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