Vancouver, British Columbia | Sandstorm Gold Ltd. (“Sandstorm Gold Royalties”, “Sandstorm” or the “Company”) (NYSE American: SAND, TSX: SSL) has released its results for the first quarter ended March 31, 2019 (all figures in U.S. dollars).

FIRST QUARTER HIGHLIGHTS
•Attributable gold equivalent ounces sold 1) of 14,071 ounces (Q1 2018 – 14,685 ounces);
•Revenue of $18.2 million (Q1 2018 – $19.5 million);
•Cash flows from operating activities, excluding changes in non-cash working capital1 of $12.1 million (Q1 2018 – $13.4 million);
•Average cash cost per attributable gold equivalent ounce1 of $241 resulting in cash operating margins1 of $1,050 per ounce (Q1 2018 – $276 per ounce and $1,050 per ounce respectively);
•Net income of $2.5 million (Q1 2018 – $0.4 million).

SIGNIFICANT ACQUISITIONS:
•In January 2019, the Company acquired a 0.9% net smelter returns (“NSR”) royalty on the precious metals produced from the Fruta del Norte gold project in Ecuador, which is currently under construction and owned by Lundin Gold Inc. (“Lundin Gold”). The royalty was acquired from a private third party for $32.8 million in cash and covers a land package of more than 644 square kilometres in size, including all 30 mining concessions held by Lundin Gold. For more information on this acquisition, see Sandstorm’s press release dated January 18th, 2019.
•In April 2019, the Company announced that it had entered into a $42.5 million financing package with Americas Silver Corporation which includes a $25 million precious metal stream and NSR royalty on the Relief Canyon gold project in Nevada, USA, a $10 million convertible debenture and a $7.5 million private placement. Under the terms of the precious metals stream, Sandstorm is entitled to receive 32,022 ounces of gold over a 5.5 year period, after which, the Company will purchase 4% of the gold or silver produced from the Relief Canyon project for ongoing per ounce cash payments equal to 30% - 65% of the spot price of gold or silver. In addition, Sandstorm will also receive a 1.4% - 2.8% NSR royalty on the area surrounding the Relief Canyon mine. For more information on this acquisition, see Sandstorm’s press release dated April 3rd, 2019.

OUTLOOK
Based on the Company’s existing royalties, attributable gold equivalent ounces sold for 2019 is forecasted to be between 63,000 and 70,000 ounces. The Company is forecasting attributable gold equivalent production of over 140,000 ounces in 2023.

In early April, Sandstorm received its first silver delivery from Cerro Moro under the Yamana silver stream agreement. This delivery, which amounted to 300,000 silver ounces, represented the maximum quarterly amount under the stream agreement. Cerro Moro is expected to produce 6.0 million silver ounces in 2019.

FINANCIAL RESULTS

Sandstorm’s revenue during the first quarter of 2019 was $18.2 million compared with $19.5 million for the comparable period in 2018. The decrease is largely due to a 4% decrease in the attributable gold equivalent ounces sold and a 3% decrease in the average realized selling price of gold.

Net income was higher when compared to the same period in 2018 partly due to certain non-recurring items that were recognized during the first quarter of 2018, including a $4.5 million non-cash impairment charge relating to the Gualcamayo royalty. Other factors impacting the increase in net income include a $1.2 million gain on the revaluation of the Company’s investments, largely driven by the change in fair value of the Equinox convertible debenture, and a $0.9 million decrease in cost of sales. The increase in net income was partially offset by a $0.4 million increase in finance expense related to the Company drawing on its revolving credit facility during the first quarter of 2019.

STREAMS & ROYALTIES: Q1 UPDATES

Of the gold equivalent ounces sold by Sandstorm during the first quarter of 2019, approximately 40% were attributable to mines located in Canada, 13% from the rest of North America, 20% from South America and 27% from other countries.

THREE MONTHS ENDED MAR 31, 2019
Revenue (in millions) Gold Equivalent Ounces

Canada $7.3 5,658
North America excl. Canada $2.4 1,877
South America $3.6 2,758
Other $4.9 3,778
Total $18.2 14,071

Canada
Streams and royalties on Canadian mines contributed 5,658 of the attributable gold equivalent ounces sold during the first quarter of 2019, a 1% increase compared to the first quarter of 2018. The change is primarily due to increases in gold equivalent ounces sold from the Ming mine in Newfoundland and in royalty revenue from the Thunder Creek mine in Ontario. The increases were partially offset by decreases in gold equivalent ounces sold from the Black Fox mine in Ontario and in royalty revenue from the Bracemac-McLeod mine in Québec.

North America Excluding Canada
The attributable gold equivalent ounces sold from operations located within North America, but outside of Canada, decreased by 18% compared to the first quarter in 2018. The changes were driven primarily by a decrease in gold ounces sold from the Santa Elena mine in Mexico.

South America
Operations in South America contributed 27% less gold equivalent ounces when compared to the first quarter of 2018. The change was driven by a decrease in gold equivalent ounces from the Yamana silver stream on the Minera Florida mine in Chile and the Chapada mine in Brazil.

Other
Streams and royalties on mines in other countries contributed 26% more gold equivalent ounces sold when compared to the first quarter of 2018. The change is primarily due to increases in gold equivalent ounces sold from the Karma mine in Burkina Faso and in royalty revenue from the Houndé mine in Burkina Faso.

WEBCAST & CONFERENCE CALL DETAILS

A conference call will be held on Wednesday, May 8, 2019 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) 201 389 0899
North American Toll-Free: (+1) 877 407 0312
Conference ID: 13690127

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 average cash cost per attributable gold equivalent ounce, average realized gold price per attributable ounce, cash operating margin, and cash flows from operating activities excluding changes in non-cash working capital. 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 sold. The Company presents average cash cost per ounce as it believes that certain investors use this information to evaluate the Company’s performance in comparison to other streaming companies in the precious metals mining industry who present results on a similar basis. Average realized gold price per attributable ounce is calculated by dividing the Company’s revenue by the number of attributable gold equivalent ounces sold. The Company presents average realized gold price per attributable ounce as it believes that certain investors use this information to evaluate the Company’s performance in comparison to other streaming companies in the precious metals mining industry that 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 selling price per attributable gold equivalent ounce. 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 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 companies in the precious metals mining industry that present results on a similar basis. Sandstorm has included attributable gold equivalent ounces as a performance measure in this press release which does not have any standardized meaning prescribed by IFRS. The Company’s royalty and other commodity stream revenue is converted to an attributable gold equivalent ounce basis by dividing the royalty and other commodity stream revenue for that period by the average realized gold price per ounce from the Company’s gold streams for the same respective period. These attributable gold equivalent ounces when combined with the gold ounces sold from the Company’s gold streams equal total attributable gold equivalent ounces sold and may be subject to change. The presentation of this non-IFRS measure 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 measures differently.

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https://www.sandstormgold.com/news/press-releases/sandstorm-gold-royalties-announces-2019-first-quarter-results

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