Vancouver, British Columbia | Sandstorm Gold Ltd. (“Sandstorm Gold Royalties”, “Sandstorm” or the “Company”) (NYSE American: SAND, TSX: SSL) has released its results for the fourth quarter and year ended December 31, 2018 (all figures in U.S. dollars).

FOURTH QUARTER HIGHLIGHTS
•Attributable gold equivalent ounces sold1 of 14,182 ounces (Q4 2017 – 12,032 ounces);
•Revenue of $17.5 million (Q4 2017 - $15.4 million);
•Cash flows from operating activities, excluding changes in non-cash working capital1 of $10.9 million (Q4 2017 – $9.6 million);
•Net income of $2.7 million (Q4 2017 – $0.7 million);
•Credit Facility Amendment: The Company’s revolving credit facility was increased to $225 million for acquisitions and general corporate purposes. The tenure of the facility is four years and is extendable by mutual consent of Sandstorm and the majority of the banking syndicate.

FULL YEAR HIGHLIGHTS
•Record attributable gold equivalent ounces sold1 of 57,646 ounces (FY 2017 – 54,633 ounces);
•Record revenue of $73.2 million (FY 2017 - $68.3 million);
•Average cash cost per attributable gold equivalent ounce of $278 resulting in cash operating margins1 of $991 per ounce (FY 2017 - $280 per ounce and $970 per ounce respectively);
•Cash flows from operating activities, excluding changes in non-cash working capital1 of $48.1 million (FY 2017 – $44.0 million);
•Net income of $5.9 million (FY 2017 – $10.5 million);
•Significant Acquisitions: Immediate/near term cash flow, strong counterparties, and significant exploration upside ?In January 2019, the Company acquired a 0.9% NSR 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. The royalty was acquired from a private third party for $32.8 million in cash and covers more than 644 square kilometres, including all 30 mining concessions held by Lundin Gold.
-In January 2018, the Company acquired a 2% NSR on the producing Houndé gold mine in West Africa which is owned and operated by Endeavour Mining Corporation. The royalty was acquired from Acacia Mining PLC for $45 million in cash and covers the Kari North and Kari South tenements, representing approximately 500 square kilometres of the Houndé property package.

•Normal Course Issuer Bid: Under Sandstorm’s normal course issuer bid, the Company purchased and cancelled approximately 4.8 million common shares in 2018.

OUTLOOK
Based on the Company’s existing royalties, attributable gold equivalent ounces sold for 2019 is forecast to be between 63,000 and 73,000 ounces. The Company is forecasting attributable gold equivalent production of over 140,000 ounces in 2023.

FINANCIAL RESULTS
Over the course of the 2018 year, the Company realized annual records for both revenue and attributable gold equivalent ounces sold of $73.2 million and 57,646 ounces respectively. The records represent a 7% increase in revenue and a 6% increase in attributable gold equivalent ounces sold compared to the 2017 year. A notable contributor to the record gold sales and revenue figures was the addition of the Houndé royalty with $6.7 million in additional revenue being recognized from Houndé in 2018. In addition, the Company realized an increase in annual attributable production from the Karma gold stream, the Chapada copper stream and the Santa Elena gold stream among others.

Net income was lower when comparing the 2018 year to the 2017 year due to factors such as a decrease in gains recognized on the revaluation of investments and certain items that were recognized in 2017 that did not recur in 2018 such as gains related to the Bachelor Lake gold stream amendment, the settlement of certain debt securities in Equinox Gold Corp. (“Equinox Gold”) and a royalty repurchase by Orezone Gold Corporation. The year over year decline in net income was offset by a decrease in non-cash impairments and a decrease in depletion expense. Changes to depletion expenses were partly driven by an adjustment to the number of ounces in the depletable base due to various factors including the conversion of exploration upside into resources and reserves.

SHARE BUYBACK PROGRAM
During the fourth quarter of 2018, Sandstorm announced that the Company’s Board of Directors approved the purchase of up to 18.3 million of its common shares (“Common Shares”) by the end of 2019, subject to Toronto Stock Exchange approval (the “Buyback”). Since the announcement of the Buyback on November 15, 2018, Sandstorm has bought back approximately 4.7 million shares.

Under the Company’s current Normal Course Issuer Bid (“NCIB”), Sandstorm has the option to purchase up to 9.2 million Common Shares until April 4, 2019. As of February 19, 2019, the Company has purchased 7.2 million Common Shares, leaving 2.0 million Common Shares still available to purchase under the current NCIB. After the current NCIB expires on April 4, 2019, the Company plans to seek approval for a new NCIB from the TSX. Subject to TSX approval, the new NCIB would provide Sandstorm the ability to purchase the remaining shares under the Buyback.

For more information regarding the current NCIB, see Sandstorm’s press releases dated March 29, 2018 and November 15, 2018 at www.sandstormgold.com or on Sandstorm’s Sedar profile at www.sedar.com.

The actual number of Common Shares that may be purchased and the timing of such purchases will be determined by the Company. Decisions regarding purchases will be based on market conditions, share price, best use of available cash, and other factors. Any securities acquired under the NCIB will be cancelled.

STREAMS & ROYALTIES

Of the gold equivalent ounces sold by Sandstorm during the fourth quarter of 2018, approximately 32% were attributable to mines located in Canada, 25% from the rest of North America and 43% from South America and other countries.

THREE MONTHS ENDED DEC. 31, 2018

YEAR ENDED DEC. 31, 2018
Revenue (in millions)
Gold Equivalent Ounces
Revenue (in millions)
Gold Equivalent Ounces

Canada $5.7 4,573 $25.1 19,817
North America excl. Canada $4.3 3,496 $14.8 11,652
South America & Other $7.5 6,113 $33.3 26,177
Total $17.5 14,182 $73.2 57,646

Canada

Streams and royalties on Canadian mines contributed 15% fewer gold equivalent ounces to Sandstorm when compared to the fourth quarter of 2017. The change is primarily due to a decrease in gold equivalent ounces sold from the Black Fox mine in Ontario and in royalty revenue from the Bracemac-McLeod mine in Québec, offset by increases from the Diavik mine in the Northwest Territories and the Bachelor Lake mine in Québec.

North America Excluding Canada

The gold equivalent ounces sold from operations located within North America, but outside of Canada, increased by 167% compared to the fourth quarter in 2017. The changes were driven by an increase in gold equivalent ounces sold from the Santa Elena mine in Mexico and in royalty revenue from the Emigrant Springs mine in Nevada, offset by a decrease in royalty revenue from the San Andres mine in Honduras.

South America & Other

Operations in South America and other countries contributed 14% more gold equivalent ounces when compared to the fourth quarter of 2017. The change is primarily due to the addition of royalty revenue from the Houndé mine in Burkina Faso, offset 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.

Aurizona Royalty

Equinox Gold announced in early 2019 that construction is nearing completion at the Aurizona mine in Brazil and that commissioning of the process plant is underway. Commercial production is expected around the end of the first quarter of 2019. Aurizona is expected to produce between 85,000 to 105,000 ounces of gold in 2019, and average 136,000 ounces of gold per year over the life of the mine.

Activities during 2019 at Aurizona will focus on a preliminary assessment of the potential for an underground mine at Aurizona, updating the resource based on near-mine drilling completed during 2017 and 2018, and continuing exploration at Tatajuba and other targets to extend the open-pit mine life.

For more information refer to www.equinoxgold.com and see the press release dated January 8, 2019.

Sandstorm has a 3% - 5% sliding scale NSR royalty on the Aurizona project. At gold prices less than or equal to US$1,500 per ounce, the royalty is a 3% NSR. In addition, Sandstorm holds a 2% NSR royalty on the Aurizona Greenfields property, a package of exploration ground adjacent to the Aurizona project.

WEBCAST & CONFERENCE CALL DETAILS

A conference call will be held on Wednesday, February 20, 2019 starting at 8:30am PST to further discuss the fourth 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:

Local/International: (+1) 201 389 0899
North American Toll-Free: (+1) 877 407 0312
Conference ID: 13687067


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