VANCOUVER, BC, May 11, 2022
/PRNewswire/ - Sandstorm Gold Ltd. ("Sandstorm Gold Royalties",
"Sandstorm" or the "Company") (NYSE: SAND) (TSX: SSL) has released
its results for the first quarter ended March 31, 2022 (all figures in U.S. dollars).
FIRST QUARTER HIGHLIGHTS
- Record attributable gold equivalent ounces1
of 18,741 ounces (Q1 2021—17,444 ounces);
- Record revenue of $35.4
million (Q1 2021—$31.0 million);
- Record cash flows from operating activities, excluding
changes in non-cash working capital1 of $26.7 million (Q1 2021—$23.0
million);
- Average cash cost per attributable gold equivalent
ounce1 of $283
resulting in cash operating margins1 of $1,604 per ounce (Q1 2021 — $307 per ounce and $1,470 per ounce respectively);
- Net income of $9.1 million
(Q1 2021—$5.0 million); and
- Creation of new strategic partner, Horizon Copper:
-
- Hod Maden Gold Stream: In
February 2022, the Company announced
it has signed a letter of intent, in part, to sell its 30% interest
in Hod Maden to Royalty North Partners Ltd. for consideration, in
part, for a flagship gold stream on Hod Maden and a portion of debt
and equity in the resulting issuer ("Horizon Copper"). With this
transaction, Sandstorm intends to unlock additional value in Hod
Maden through the re-rating of the asset as a gold stream in its
portfolio and further repositions Sandstorm as a pure-play precious
metals royalty and streaming company. The transaction is
conditional upon various closing items and is expected to close in
the second half of 2022. For more information see press release
dated February 17, 2022.
- Antamina Silver Stream and Residual Royalty: Subsequent
to the quarter's end and concurrent to the BaseCore Transaction (as
described below), Sandstorm has partnered with Horizon Copper to
sell a portion of the Antamina copper royalty acquired in the
BaseCore acquisition and in consideration receive a silver stream
on the asset, a residual NPI royalty, a $105
million debenture, equity, and $50
million in cash. The subsequent spin-out of the Antamina
royalty is expected to position Horizon Copper as a competitive
copper company with a portfolio of high quality cash-flowing and
development stage copper assets. For more information, see press
release dated May 2, 2022.
- US$1.1 Billion Portfolio
Transformation: Subsequent to the quarter's end, Sandstorm
announced two transactions totaling $1.1
billion, including the acquisition of Nomad Royalty Company
(the "Nomad Acquisition") and a portfolio of royalty assets from
BaseCore Metals LP (the "BaseCore Transaction"). The combined
transactions are expected to significantly increase Sandstorm's
scale through the addition of several high quality, low-cost assets
maintaining the Company's industry-leading growth and portfolio
diversification. The Nomad Acquisition and BaseCore Transaction are
subject to various closing conditions and are expected to close in
the second half of 2022 and by the third quarter of 2022,
respectively. For more information, see press release dated
May 2, 2022.
- Upsized Credit Facility: Concurrent with the
transactions described above, Sandstorm entered into an agreement
with the Bank of Nova Scotia and
BMO Capital Markets securing a commitment to upsize the Company's
existing revolving credit agreement to borrow up to $500 million with an additional uncommitted
accordion of up to $125 million, for
a total of up to $625 million. The
upsize is contingent upon closing the BaseCore Transaction, and the
accordion of up to $125 million is
contingent on closing the Nomad Acquisition. See press release
dated May 2, 2022 for more
information.
OUTLOOK
Based on the Company's existing royalties and contingent on the
close of the Nomad Acquisition and BaseCore Transaction,
attributable gold equivalent ounces for 2022 is forecast to be
between 80,000 and 85,000 ounces. Subject to the conversion of the
Hod Maden interest into a gold stream and the closing of the Nomad
Acquisition and BaseCore Transaction, the Company is forecasting
attributable gold equivalent production to be 155,000 ounces in
2025.
FINANCIAL RESULTS
During the three months ended March 31,
2022, the Company realized record revenue of $35.4 million compared with $31.0 million for the comparable period in 2021.
The increase is attributable to a 7% increase in attributable gold
equivalent ounces sold as well as a 6% increase in the average
realized selling price of gold. In particular, the increase in
revenue was driven by an increase in revenue attributable to the
Vale Royalties, which were purchased in June
2021, and an increase in revenue attributable to the
Vatukoula gold stream, which commenced making deliveries in
December 2021.
Net income was higher during the first quarter of 2022 when
compared to the same period in 2021 primarily due to the increase
in revenue. Higher net income was also due to a $2.0 million increase in the gains recognized on
the revaluation of the Company's investments compared to the
comparable period in 2021. The year-over-year increase in net
income was partially offset by an increase in depletion largely due
to an increase in attributable gold ounces sold and an increase in
tax expense resulting from higher net income.
STREAMS & ROYALTIES
Of the gold equivalent ounces sold by Sandstorm during the first
quarter of 2022, approximately 18% were attributable to mines
located in Canada, 10% from the
rest of North America, 61% from
South America, and 11% from other
countries.
|
Revenue
(in Millions)
|
Gold Equivalent
Ounces
|
Canada
|
$6.3
|
3,314
|
North America excl.
Canada
|
$3.6
|
1,883
|
South
America
|
$21.5
|
11,410
|
Other
|
$4.0
|
2,134
|
Total
|
$35.4
|
18,741
|
Canada
Streams and royalties on Canadian mines contributed 10% more
gold equivalent ounces to Sandstorm when compared to the first
quarter of 2021. The change is primarily due to an increase in
royalty revenue from the Diavik mine in the Northwest Territories, driven by diamond price
increases. The increase was partially offset by a decrease in
ounces sold from the Ming mine. In April
2022, Rambler Metals & Mining PLC, the operator of Ming,
exercised its option to repurchase the Ming gold stream in exchange
for a payment of $6.7 million in cash
and 1,150 ounces of gold (delivered over the course of 18
months).
North America Excluding Canada
The gold equivalent ounces sold from operations located within
North America, but outside of
Canada, contributed 30% less gold
equivalent ounces when compared to the first quarter of 2021. The
change was primarily driven by a decrease in ounces received from
the Santa Elena mine, partly due to a decrease in production at
Santa Elena as well as the timing of sales. The decrease was
partially offset by an increase in ounces received from the Relief
Canyon mine in Nevada.
South America
Operations in South America
contributed 14% more gold equivalent ounces sold when compared to
the first quarter of 2021. The change is primarily due to an
increase in royalty revenue from the Vale Royalties, which were
purchased in June 2021, and an
increase in gold equivalent ounces sold from the Chapada mine in
Brazil, primarily driven by an
increase in the average selling price of copper. The increase was
partially offset by a decrease in royalty revenue from the Aurizona
mine in Brazil.
Other
Streams and royalties on mines in other countries contributed
22% more gold equivalent ounces sold when compared to the first
quarter of 2021. This change is primarily due to an increase in
ounces sold from the Vatukoula mine in Fiji, which commenced making deliveries to
Sandstorm in December 2021, and an
increase in royalty revenue from the Houndé mine in Burkina Faso. The increase was partially
offset by a decrease in gold equivalent ounces sold from the Karma
mine in Burkina Faso, which was
primarily due to the conclusion of the five-year fixed delivery
period in accordance with the terms of the stream agreement.
WEBCAST & CONFERENCE CALL DETAILS
A conference call will be held on Thursday, May 12, 2022 starting at 8:30am PDT to further discuss the first quarter
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: 30491561
Webcast URL: https://bit.ly/3kzDz4D
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 ("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. 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 in comparison to
other streaming and royalty companies in the precious metals mining
industry. 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 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. 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 in comparison to other streaming and royalty
companies in the precious metals mining industry who present
results on a similar basis. 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 in comparison to other companies
in the precious metals mining industry who present results on a
similar basis. The Company has also used the non-IFRS financial
measure of cash flows from operating activities excluding changes
in non-cash working capital. This measure 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 35-38 of the
Company's MD&A for the three months ended March 31, 2022, which
is available on SEDAR at www.sedar.com, 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.
|
CONTACT INFORMATION
For more information about Sandstorm Gold Royalties, please
visit our website at www.sandstormgold.com or email us at
info@sandstormgold.com.
ABOUT SANDSTORM GOLD ROYALTIES
Sandstorm is a gold royalty company that provides upfront
financing to gold mining companies that are looking for capital and
in return, receives the right to a percentage of the gold produced
from a mine, for the life of the mine. After the closing of the
transactions announced on May 2,
2022, Sandstorm will have acquired a portfolio of 260
royalties, of which 39 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 impact of general business and economic
conditions; the properties underlying the Nomad Acquisition, the
mines underlying the BaseCore Transaction; the expectation that the
various closing conditions of the Hod Maden transaction will be
met; the expectation that the Hod Maden transaction with Horizon
will close; the expectations regarding whether the proposed Nomad
Acquisition and BaseCore Transaction (collectively "The
Transactions") will be consummated, including whether conditions to
the consummation of the Transactions will be satisfied, or the
timing for completing the Transactions; the expectations regarding
the potential benefits and synergies of the Transactions and the
ability of Sandstorm post-completion of the Transactions to
successfully achieve business objectives, including integrating the
companies or assets or the effects of unexpected costs, liabilities
or delays; the expectations regarding the growth potential of
Sandstorm including in scale and production and the anticipated
benefits of the Transactions; the expectations relating to the
entering into of definitive agreements related to the Horizon
Antamina Agreement and the subsequent spin-out of the Antamina NPI,
including the anticipated terms and expected timing thereof;
management's expectations regarding Sandstorm's growth; the future
price of gold, silver, copper, iron ore and other metals, the
estimation of mineral reserves and resources, realization of
mineral reserve estimates, 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, 2021 and the section entitled "Risk
Factors" contained in the Company's annual information form dated
March 31, 2022 available at
www.sedar.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.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/sandstorm-gold-royalties-announces-record-2022-first-quarter-results-301545463.html
SOURCE Sandstorm Gold Ltd.