VANCOUVER, BC, May 10, 2023
/CNW/ - 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, 2023 (all figures in U.S. dollars).
FIRST QUARTER HIGHLIGHTS
- Record attributable gold equivalent ounces1
of 28,368 ounces (Q1 2022 — 18,741 ounces);
- Record revenue of $44.0
million (Q1 2022 — $35.4
million);
- Record total sales, royalties, and income from other
interests1 of $54.0
million (Q1 2022 — $35.4
million);
- Record cash flows from operating activities, excluding
changes in non-cash working capital1 of $42.7 million (Q1 2022 — $26.7 million);
- Net income of $15.6
million (Q1 2022 — $9.1
million);
- Average cash cost per attributable gold equivalent
ounce1 of $230
resulting in cash operating margins1 of $1,652 per ounce (Q1 2022 — $283 per ounce and $1,604 per ounce respectively);
- SSR Mining assumes operational control of Hod Maden
project: SSR Mining Inc. ("SSR Mining") recently announced that
it has reached an agreement with Lidya Madencilik ("Lidya") to
acquire up to a 40% interest in Hod Maden and assume operational
control of the project. SSR Mining is an experienced international
mining company with producing assets located in the United States, Türkiye, Canada and Argentina. SSR Mining has expertise in project
exploration, construction, mining and processing as well as an
existing partnership with Lidya on the producing Çöpler mine. SSR
Mining will continue early-works construction activities at Hod
Maden with its development team mobilizing to site immediately. SSR
Mining will assume the project finance process that is currently
underway while working to advance Hod Maden to a full construction
decision in 2024. SSR Mining anticipates commercial production to
commence in 2027.
- Renewal of Normal Course Issuer Bid: In April, Sandstorm
renewed its normal course issuer bid allowing the Company to
purchase up to 24.0 million of the Company's common shares from
time to time when Sandstorm's management believes that the shares
are undervalued by the market.
OUTLOOK
Based on the Company's existing royalties, attributable gold
equivalent ounces for 2023 are forecasted to be between 90,000 and
100,000 ounces. The Company's production forecast is expected to
reach approximately 125,000 attributable gold equivalent ounces
within the next five years, with a sustainable average annual
production of approximately 110,000 attributable gold equivalent
ounces over the next 15 years.
FINANCIAL RESULTS
For the three months ended March 31,
2023, the Company realized record quarterly revenue of
$44.0 million compared with
$35.4 million for the comparable
period in 2022. The Company also had record total sales, royalties,
and income from other interests of $54.0
million during the quarter ($35.4
million for the comparable period in 2022), which includes
$10.0 million in other contractual
income related to a one-time contractual payment from the Company's
Mt. Hamilton royalty. The increase
in revenue is largely attributable to a 23% increase in
attributable gold equivalent ounces sold, excluding attributable
ounces related to the Mt. Hamilton
contractual payment.
Net income and cash flows from operating activities were
$15.6 million and $39.9 million, respectively, compared with net
income of $9.1 million and cash flows
from operating activities of $22.4
million for the comparable period in 2022. The increase is
partially attributable to an $8.6
million increase in revenue (as described above) as well as
the $10.0 million in contractual
income related to the Mt. Hamilton
contractual payment and a $2.9
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 Horizon Copper debenture. The increases were
partially offset by a $9.3 million
increase in finance expense, primarily related to interest paid on
the Company's revolving credit facility, and a $6.9 million increase in depletion expense,
partly driven by an increase in attributable gold equivalent ounces
sold.
STREAMS & ROYALTIES
Of the gold equivalent ounces sold by Sandstorm during the first
quarter of 2023, approximately 9% were attributable to mines
located in Canada, 32% from the
rest of North America, 49% from
South America, and 10% from other
countries.
|
Revenue
(in Millions)
|
Gold Equivalent
Ounces
|
Canada
|
$5.0
|
2,641
|
North America excl.
Canada
|
$6.8
|
8,947
|
South
America
|
$26.7
|
13,883
|
Other
|
$5.5
|
2,897
|
Total
|
$44.0
|
28,368
|
Canada
Streams and royalties on Canadian mines contributed 20% less
gold equivalent ounces to Sandstorm when compared to the first
quarter of 2022. The change is primarily due to a decrease in
royalty revenue from the Diavik mine in the Northwest Territories, driven by the timing of
sales, production rates, and diamond prices, as well as a decrease
in royalty revenue from the Bracemac-McLeod mine in Quebec, which discontinued operations in the
second half of 2022. The decrease was partially offset by an
increase in gold equivalent ounces received and sold from the
CEZinc smelter in Quebec, which
was acquired as part of the Nomad Royalty acquisition in
August 2022.
North America Excluding Canada
The gold equivalent ounces sold from operations located within
North America, but outside of
Canada, contributed 93% more gold
equivalent ounces when compared to the first quarter of 2022,
excluding attributable ounces related to the Mt. Hamilton contractual payment which is included
in Other Income. The change was primarily driven by an increase in
gold equivalent ounces received and sold from the Mercedes mine in
Mexico, which commenced making
deliveries to Sandstorm in the second quarter of 2022, and an
increase in the number of attributable ounces sold from the
Santa Elena mine in Mexico, partly due to the timing of sales. The
increase was partially offset by a decrease in ounces received and
sold from the Relief Canyon mine in Nevada, largely due to the timing of
sales.
South America
Operations in South America
contributed 22% more gold equivalent ounces sold when compared to
the first quarter of 2022. The increase was largely driven by an
increase in royalty revenue from the Antamina mine in Peru and the Caserones mine in Chile, both of which were acquired in the
second half of 2022, as well as an increase in royalty revenue
attributable to the Fruta del Norte mine in Ecuador and the Aurizona mine in Brazil. The change was partially offset by a
decrease in the number of ounces received and sold attributable to
the Cerro Moro mine in Argentina
and revenue attributable to the Vale Royalties, largely due to the
timing of sales.
Other
Streams and royalties on mines in other countries contributed
36% more gold equivalent ounces sold when compared to the first
quarter of 2022. This change is primarily due to an increase in
gold equivalent ounces received and sold from the Blyvoor mine in
South Africa and the Bonikro mine
in Côte d'Ivoire. The Blyvoor and Bonikro streams were acquired as
part of the Nomad Royalty acquisition in August 2022.
WEBCAST & CONFERENCE CALL DETAILS
A conference call will be held on Thursday, May 11, 2023, 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: 22359231
Webcast URL: https://bit.ly/3LK1FYz
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 and ability to generate cash flow 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, 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. 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. 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. 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 29–32 of the Company's MD&A for
the three months ended March 31, 2023, 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.
|
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. Sandstorm holds a portfolio
of 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 impact of general business and economic
conditions; 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, 2022 and the section entitled "Risk
Factors" contained in the Company's annual information form dated
March 23, 2023 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.
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SOURCE Sandstorm Gold Ltd.