VANCOUVER, BC, Nov. 3, 2021 /CNW/ - 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, 2021 (all figures in U.S. dollars unless stated otherwise).

INITIATION OF DIVIDEND PROGRAM

Sandstorm is pleased to announce that the Company's Board of Directors has approved the initiation of the Company's quarterly dividend program. Sandstorm currently intends to declare and pay its first quarterly dividend of approximately C$0.02 per common share in the first quarter of 2022. In accordance with the rules of the Toronto Stock Exchange and the New York Stock Exchange, as applicable, Sandstorm will issue a press release at the time each quarterly dividend is declared.

The declaration, timing, amount, and payment of Sandstorm's first and all future dividends will be subject to the discretion and approval of the Board of Directors. The Company will review the dividend program on an ongoing basis and may amend it at any time depending on the Company's then current financial position, capital allocation framework, profitability, cash flow, debt covenant compliance, legal requirements and other factors considered relevant. As such, no assurances can be made that any future dividends will be declared and/or paid. Dividends paid to shareholders outside Canada (non-resident investors) will be subject to Canadian non-resident withholding taxes.

"At Sandstorm, we've built a globally diversified royalty and streaming portfolio comprised of low-cost assets generating significant cash flow," stated Nolan Watson, President & CEO. "We are very pleased that Sandstorm is able to sustainably support a dividend program while maintaining a competitive industry position that enables the continued growth of our asset base—both for the benefit of shareholders."

THIRD QUARTER HIGHLIGHTS

Attributable gold equivalent ounces1 of 15,514 ounces (Q3 2020 — 12,068 ounces);

Revenue of $27.6 million (Q3 2020 — $23.3 million);

Cash flows from operating activities, excluding changes in non-cash working capital1 of $20.8 million (Q3 2020 — $18.0 million);

Average cash cost per attributable gold equivalent ounce1 of $238 resulting in cash operating margins1 of $1,541 per ounce (Q3 2020 — $258 per ounce and $1,670 per ounce respectively);

Net income of $6.6 million (Q3 2020 —$6.5 million);

Expanded Credit Facility: On October 6, 2021, Sandstorm amended its revolving credit agreement allowing the Company to borrow up to $350 million and incorporating sustainability-linked performance targets to become the first royalty company to establish an Environment, Social, and Governance ("ESG") linked credit facility ("ESG Revolving Facility"). The ESG Revolving Facility incorporates sustainability-linked incentive pricing terms that allow Sandstorm to reduce borrowing costs as the Company's sustainability performance targets are met. The tenure of the facility is four years and is extendable by mutual consent of Sandstorm and the banking syndicate.

Normal Course Issuer Bid: Under Sandstorm's normal course issuer bid, the Company purchased and cancelled approximately 2.3 million shares for total consideration of $14.2 million during the third quarter of 2021. Subsequent to quarter end, Sandstorm purchased an additional 1.3 million shares for consideration of $8.2 million.
OUTLOOK

Based on the Company's existing royalties, attributable gold equivalent ounces for 2021 is forecast to be between 64,000 and 69,000 ounces. The Company is forecasting attributable gold equivalent production to be over 125,000 ounces in 2025.

FINANCIAL RESULTS

Sandstorm's revenue during the third quarter of 2021 was $27.6 million compared with $23.3 million for the comparable period in 2020. The increase is largely due to a 29% increase in the attributable gold equivalent ounces, partially offset by an 8% decrease in the average realized selling price of gold.

Net income was higher when compared to the same period in 2020 primarily due to an increase in revenue, partially offset by a $1.5 million decrease in gains recognized on the revaluation of the Company's investments. The increase in net income was also partially offset by an increase in depletion expense largely due to an increase in attributable gold equivalent ounces sold.

STREAMS & ROYALTIES

Of the gold equivalent ounces sold by Sandstorm during the third quarter of 2021, approximately 16% were attributable to mines located in Canada, 23% from the rest of North America, 53% from South America, and 8% from other countries.


Revenue
(in millions)
Gold Equivalent
Ounces
Canada $4.4 2,470
North America excl. Canada $6.4 3,605
South America $14.6 8,233
Other $2.2 1,206
Total $27.6 15,514

Canada

Streams and royalties on Canadian mines contributed 38% more gold equivalent ounces to Sandstorm when compared to the third quarter of 2020. The change is primarily due to an increase in gold equivalent ounces sold from the Black Fox mine in Ontario and an increase in royalty revenue from the Diavik mine in the Northwest Territories.

North America Excluding Canada

The gold equivalent ounces sold from operations located within North America, but outside of Canada, contributed 11% more gold equivalent ounces when compared to the third quarter in 2020. The change was driven by an increase in gold equivalent ounces sold from the Relief Canyon mine in Nevada. The increase was partially offset by a decrease in gold equivalent ounces sold from the Santa Elena mine in Mexico.

South America

Operations in South America contributed 84% more gold equivalent ounces when compared to the third quarter of 2020. The change is primarily due to an increase in royalty revenue from the Vale Royalties and an increase in gold equivalent ounces sold from the Chapada mine in Brazil.

Other

Streams and royalties on mines in other countries contributed 53% less gold equivalent ounces sold when compared to the third quarter of 2020. The change is primarily due to a decrease in gold equivalent ounces sold from the Karma mine in Burkina Faso. The decrease from Karma is primarily due to the conclusion of the five-year fixed delivery period in the first quarter of 2021, reducing Sandstorm's gold stream entitlement to 1.625% of production. In contrast, in the third quarter of 2020, Sandstorm's entitlement was 1,250 ounces per quarter.

WEBCAST & CONFERENCE CALL DETAILS

A conference call will be held on Thursday, November 4, 2021 starting at 8:30am PDT to further discuss the third 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) 416-764-8688
North American Toll-Free: (+1) 888-390-0546
Conference ID: 04667263
Webcast URL: https://bit.ly/3j99cl2

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 (i) average cash cost per attributable gold equivalent ounce, (ii) total sales, royalties and income from other interests, (iii) average realized gold price per attributable gold equivalent ounce, (iv) cash operating margin, and (v) 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. The Company presents average cash cost per attributable gold equivalent ounce as it believes that certain investors use this information to evaluate the Company's performance in comparison to other streaming and royalty companies in the precious metals mining industry who present results on a similar basis. Total sales, royalties and income from other interests is calculated by taking total revenue which includes sales and royalty revenue, and adding contractual income relating to royalties, streams and other interests excluding gains and losses on dispositions. Refer to page 30 of the MD&A for a numerical reconciliation of the total sales, royalties, and income from other interests. The Company presents total sales, royalties, and income from other interests as it believes that certain investors use this information to evaluate the Company's performance in comparison to other streaming and royalty companies in the precious metals mining industry. Average realized gold price per attributable gold equivalent ounce is calculated by dividing the Company's total sales, royalties, and income from other interests by the number of attributable gold equivalent ounces. The Company presents average realized gold price per attributable gold equivalent ounce as it believes that certain investors use this information to evaluate the Company's performance in comparison to other streaming and royalty 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 gold 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 and royalty 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, including adjustments for contractual income relating to those interests, is converted to an attributable gold equivalent ounce basis by dividing the royalty and other commodity revenue, including adjustments for contractual income relating to those interests, 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 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.

CONTACT INFORMATION

For more information about Sandstorm Gold Royalties, please visit our website at www.sandstormgold.com or email us at info@sandstormgold.com