Sandstorm Gold Ltd. (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.

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.

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.