Sandstorm Gold Ltd. (“Sandstorm Gold Royalties”, “Sandstorm” or the “Company”) (NYSE: SAND, TSX: SSL) has released its results for the third quarter ended September 30, 2023 (all figures in U.S. dollars).

THIRD QUARTER HIGHLIGHTS
Revenue of $41.3 million (Q3 2022 — $39.0 million);
Attributable gold equivalent ounces1 of 21,123 ounces (Q3 2022 — 22,606 ounces);
Cash flows from operating activities, excluding changes in non-cash working capital1 of $33.9 million (Q3 2022 — $31.3 million);
Average cash cost per attributable gold equivalent ounce1 of $220 resulting in cash operating margins1 of $1,699 per ounce (Q3 2022 — $323 per ounce and $1,383 per ounce respectively);
Net income of $0.0 million (Q3 2022 — $31.7 million);
Renewed Credit Facility: In September 2023, Sandstorm renewed its revolving credit facility, allowing the Company to borrow up to $625 million and extending the term for an additional two years, maturing in September 2027.
Bear Creek Amendment: In September 2023, Sandstorm announced that it had agreed to amend its existing gold and silver stream agreements with Bear Creek Mining Corporation (“Bear Creek”) and to refinance certain other debt investments of Bear Creek that it holds. In exchange for the stream amendments, Sandstorm will receive a 1.0% NSR royalty on Bear Creek’s wholly-owned Corani project in Peru—one of the world’s largest fully permitted silver deposits—and $10 million of additional consideration in the form of a combination of Bear Creek common shares and debt. Concurrently, Bear Creek undertook an equity financing transaction for gross proceeds of C$9.5 million, which closed on October 5, 2023. The restructuring is subject to several closing conditions and is expected to close in the fourth quarter of 2023.
Non-Core Asset Sales: In September 2023, the Company announced its intention to monetize between $40–$100 million in non-core assets by the end of 2024 with a focus on accelerating repayment of the Company’s outstanding debt. The Company has since engaged advisors to lead a process to sell certain non-core assets. Subsequent to quarter-end, Sandstorm reached an agreement with Sandbox Royalties Corp. to sell the El Pilar and Blackwater royalties for total consideration of $25 million, including a cash payment of $10 million. The transaction is expected to close in the fourth quarter of 2023 and is subject to certain closing conditions.
OUTLOOK
Based on the Company’s existing streams and 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 September 30, 2023, the Company realized quarterly revenue of $41.3 million compared with $39.0 million for the comparable period in 2022. The increase in revenue is largely attributable to a 13% increase in the average realized selling price of gold partially offset by a 7% decrease in attributable gold equivalent ounces sold.

The Company had cash flows from operating activities of $31.9 million and net income of $0.0 million for the three month period, compared with cash flows from operating activities of $25.1 million and net income of $31.7 million for the comparable period in 2022. The change in net income is due to a combination of factors, including a $24.9 million gain that was recognized during the three months ended September 30, 2022, resulting from the sale of the Company’s Hod Maden interest to Horizon Copper, and a decrease in the gains recognized on the revaluation of the Company’s investments whereby, a loss of $4.0 million was recognized by the Company during the three months ended September 30, 2023; while during the three months ended September 30, 2022, the Company recognized a gain of $1.9 million.

Other contributing factors to the change in net income include a $4.3 million decrease in deferred income tax recovery largely driven by the one-time recognition of previously unrecognized tax attributes arising from the sale of Hod Maden during the three months ended September 30, 2022 and a $3.3 million increase in finance expense, primarily related to interest paid on the Company’s credit facility that was drawn down to finance acquisitions made in 2022. The change in net income was partially offset by a $2.4 million increase in revenue.

STREAMS & ROYALTIES
Of the attributable gold equivalent ounces sold by Sandstorm during the third quarter of 2023, approximately 23% were attributable to mines located in Canada, 17% from the rest of North America, 49% from South America, and 11% from other countries.

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