Sandstorm Gold Royalties Announces 2020 Second Quarter Results

Sandstorm Gold Ltd. (“Sandstorm Gold Royalties”, “Sandstorm” or the “Company”) (NYSE: SAND, TSX: SSL) has released its results for the second quarter ended June 30, 2020 (all figures in U.S. dollars).

SECOND QUARTER HIGHLIGHTS

• Attributable gold equivalent ounces sold¹ of 10,920 ounces (Q2 2019 — 16,356 ounces);
• Revenue of $18.7 million (Q2 2019 — $21.5 million);
• Cash flows from operating activities, excluding changes in non-cash working capital¹ of $13.4 million (Q2 2019 — $14.5 million);
• Average cash cost per attributable gold equivalent ounce¹ of $257 resulting in cash operating margins¹ of $1,458 per ounce (Q2 2019 — $301 per ounce and $1,013 per ounce respectively);
• Net income of $7.1 million (Q2 2019 — net income of $2.4 million);
• Capital: As at June 30, 2020, Sandstorm has a strong balance sheet with over $40 million in cash, over $70 million in equity and debt investments, strong operating cash flows, and an undrawn revolving credit facility of $225 million.
  • Early Warrant Exercise Incentive Program: In April 2020, the Company completed the early warrant exercise incentive program providing proceeds of $50.3 million.
  • Monetization of non-core assets: During the second quarter, the Company received over $25 million in cash from the sale and redemption of a portion of the Company’s debt and equity investments.

OUTLOOK

Due to the unknown long-term effects of the current global health pandemic, Sandstorm withdrew the Company’s 2020 production guidance. Based on the Company’s existing royalties, attributable gold equivalent ounces sold are forecasted to be approximately 125,000 ounces in 2024.

FINANCIAL RESULTS

Sandstorm’s revenue during the second quarter of 2020 was $18.7 million compared with $21.5 million for the comparable period in 2019. The decrease is largely due to a 33% decrease in the attributable gold equivalent ounces sold, partially offset by a 31% increase in the average realized selling price of gold.

Net income was higher when compared to the same period in 2019 primarily due to a $3.7 million increase in the gains recognized on the revaluation of the Company’s investments; whereby a gain of $5.1 million was recognized during the second quarter of 2020 largely driven by an increase in fair value of the Americas Gold and Silver Corp. convertible debenture and Equinox Gold Corp. warrants. Other factors impacting the increase in net income include a $2.1 million decrease in the cost of sales, partly due to a decrease in the attributable gold equivalent ounces sold.