Sandstorm Gold Ltd. (NYSE: SAND) (TSX: SSL) has released its financial results for the first quarter ended March 31, 2024 (all figures in U.S. dollars).

First Quarter Highlights

• Revenue of $42.8 million (Q1 2023 — $44.0 million);
• Attributable gold equivalent ounces¹ of 20,316 ounces (Q1 2023 — 28,368 ounces);
• Cash flows from operating activities, excluding changes in non-cash working capital¹ of $32.9 million (Q1 2023 — $42.7 million, which included a $10 million, one-time contractual payment from the Company’s Mt. Hamilton royalty);
• Record cash operating margins¹ of $1,782 per attributable gold equivalent ounce (Q1 2023 — $1,652 per ounce).
• Balance sheet and capital allocation update: The Company has continued to focus on de-levering its balance sheet and made $20 million in net repayments on its revolving credit facility during the first quarter. Subsequent to quarter end, the Company announced the sale of select non-core, non-precious metals assets for $21.0 million in cash as well as the renewal of its Normal Course Issuer Bid.
  • Sale of select non-core, non-precious metals assets: In May, the Company announced it had signed a definitive purchase agreement with Evolve Strategic Element Royalties Ltd. to sell a package of royalties (including Highland Valley Copper, Seymour Lake, and any future royalty proceeds exceeding $10 million from Copper Mountain) (the “Evolve Transaction”) for cash consideration of $21.0 million. The Evolve Transaction is expected to close within the second quarter of 2024. Upon completion of the Evolve Transaction, Sandstorm will have completed the sale of over $50 million of non-core royalty and equity investments since the third quarter of 2023, which includes cash consideration of approximately $40 million. While further monetization of the Company’s investment portfolio is possible, subject to market conditions, the Company does not intend to monetize further royalty or stream assets. For further details about the Evolve Transaction, see the Company’s press release dated May 2, 2024.
  • Renewal of Normal Course Issuer Bid: In conjunction with accelerated deleveraging driven by recent non-core asset sales and the current commodity price environment, Sandstorm announced in May that the Board of Directors has approved the use of the renewed Normal Course Issuer Bid, which allows the Company to purchase up to 20 million of its common shares from time to time when management believes the common shares are undervalued by the market.

Outlook

Based on the Company’s existing streams and 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.

Financial Results

For the three months ended March 31, 2024, the Company realized quarterly revenue of $42.8 million compared with $44.0 million for the comparable period in 2023. The change in revenue is largely attributable to a 12% decrease in attributable gold equivalent ounces sold, excluding attributable ounces related to contractual payments, partially offset by a 10% increase in the average realized selling price of gold.

Cash flows from operating activities were $32.4 million and the Company realized a net loss of $3.9 million, compared with $39.9 million in cash flows from operating activities and net income of $15.6 million for the comparable period in 2023. The change is due to a combination of factors including a $10.0 million decrease in other income related to a one-time contractual payment from the Company’s Mt. Hamilton royalty received during the three months ended March 31, 2023, and a $9.2 million increase in losses recognized on the revaluation of the Company’s investments driven by the changes in the fair value of investments in debentures.

Streams & Royalties

Of the gold equivalent ounces sold by the Company during the first quarter of 2024, approximately 13% were attributable to mines located in Canada, 15% from the rest of North America, 46% from South America, and 26% from other countries.

Canada

Streams and royalties on Canadian mines contributed approximately the same number of gold equivalent ounces to Sandstorm when compared to the first quarter of 2023. An increase in gold equivalent ounces sold from the Black Fox mine in Ontario was partially offset by a decrease in gold equivalent ounces received and sold from the CEZinc smelter in Québec and a decrease in royalty revenue attributable to the Diavik mine in Northwest Territories. Gold equivalent ounces from Canadian mines are expected to accelerate in the latter half of 2024 with the ramp-up of deliveries from the Company’s Greenstone stream.

North America Excluding Canada

Gold equivalent ounces sold from operations located within North America, but outside of Canada, contributed 65% less gold equivalent ounces when compared to the first quarter of 2023. The change was primarily driven by a decrease in gold equivalent ounces attributable to a one-time contractual payment related to the Mt. Hamilton royalty that was received in the first quarter 2023 as well as a decrease in the number of gold equivalent ounces received and sold from the Santa Elena mine in Mexico where, as expected, production has transitioned to deposits not covered under Sandstorm’s royalty claim. The decrease was partially offset by an increase in gold equivalent ounces sold from the Relief Canyon mine in Nevada, due to the timing of sales, and an increase in royalty revenue from the Cosalá mine in Mexico.

South America

Operations in South America contributed 34% less gold equivalent ounces sold when compared to the first quarter of 2023. The change was driven by a decrease in royalty revenue attributable to the Antamina mine in Peru following the partial disposition of the royalty to Horizon Copper Corp. in the second quarter of 2023, which reduced the Company’s royalty entitlement, as well as a one-time adjustment to the asset retirement obligation at the Antamina mine to reflect updates related to a recently approved mine plan and other working capital adjustments. The change was also due to a decrease in revenue attributable to the Cerro Moro silver stream primarily due to grade sequencing at the mine, as well as a decrease in the average realized selling price of silver during the three months ended March 31, 2024, compared to the equivalent period in 2023. The decrease was partially offset by an increase in revenue related to the Caserones mine in Chile, primarily due to the timing of sales.

Other

Streams and royalties on mines in other countries contributed 88% more gold equivalent ounces sold when compared to the first quarter of 2023. This change was driven by an increase in attributable gold equivalent ounces sold from the Bonikro mine in Côte d’Ivoire, partially due to the timing of sales, as well as an increase in royalty revenue attributable to the Ivrindi royalty in Türkiye.

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 240 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.