SANDSTORM GOLD ROYALTIES ANNOUNCES RECORD 2022 THIRD QUARTER RESULTS

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Overig advies 08/11/2022 06:35
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, 2022 (all figures in U.S. dollars).

THIRD QUARTER HIGHLIGHTS
Record attributable gold equivalent ounces1 of 22,606 ounces (Q3 2021—15,514 ounces);
Record revenue of $39.0 million (Q3 2021—$27.6 million);
Cash flows from operating activities, excluding changes in non-cash working capital1 of $31.3 million (Q3 2021—$20.8 million);
Average cash cost per attributable gold equivalent ounce1 of $323 resulting in cash operating margins1 of $1,383 per ounce (Q3 2021—$238 per ounce and $1,541 per ounce respectively);
Net income of $31.7 million (Q3 2021—$6.6 million); and
Closing of Nomad and BaseCore transactions: In July 2022, Sandstorm closed its previously announced agreement to acquire nine royalties and one stream from BaseCore Metals LP (“BaseCore”). In August 2022, the Company closed its previously announced agreement to acquire all issued and outstanding common shares of Nomad Royalty Company Ltd. (“Nomad”). With the closing of both transactions, Sandstorm adds several high-quality and low-cost assets to its portfolio, which contribute meaningful increases to the Company’s production in both the near and long term.
Sale of Hod Maden interest to Horizon Copper: In August 2022, the Company closed a component of its arrangement with Horizon Copper Corp. (“Horizon Copper”) to spin out certain assets and retain precious metals streams. In consideration for transferring Sandstorm’s 30% interest in Hod Maden and its equity interest in Entrée Resources Ltd., Sandstorm received a flagship gold stream on Hod Maden and a portion of debt and equity in Horizon Copper. The transaction further repositions Sandstorm as a pure-play precious metals royalty and streaming company.
Upsized credit facility and financing: In August 2022, Sandstorm amended its revolving credit agreement allowing the Company to borrow up to $625 million. The credit facility maintains its sustainability-linked performance targets. Subsequent to quarter's end, the Company completed an equity financing for aggregate gross proceeds of $92.1 million on October 4, 2022. Upon closing of the financing, the majority of net proceeds were used to reduce amounts drawn under the Company’s revolving credit facility.
OUTLOOK
Based on the Company’s existing streams and royalties, attributable gold equivalent ounces for 2022 are forecast to be between 80,000 and 85,000 ounces. The Company is forecasting attributable gold equivalent production to be over 150,000 ounces in 2025.

FINANCIAL RESULTS
During the three months ended September 30, 2022, the Company realized record revenue of $39.0 million compared to $27.6 million for the comparable period in 2021. The increase is attributable to a 46% increase in attributable gold equivalent ounces sold, partially offset by a 4% decrease in the average realized selling price of gold. In particular, the increase in revenue was driven in part by several new assets acquired in the Nomad and BaseCore transactions, including revenue attributable to the Antamina NPI royalty and Bonikro gold stream and an increase in revenue attributable to the Mercedes mine which commenced making deliveries in April 2022, with Sandstorm also receiving deliveries in the period from the newly acquired assets that were a part of the Nomad acquisition. Additionally, there was an increase in revenue attributable to the Vatukoula gold stream, which commenced making deliveries in December 2021 and an increase in revenue attributable to the Yamana silver stream primarily due to a 122% increase in the number of silver ounces received and sold in the period, which was partially offset by a decrease in the average realized selling price of silver. The increase in revenue for the third quarter was partially offset by a decrease in revenue attributable to the Chapada copper stream primarily due to a decrease in the average realized selling price of copper, and a decrease in the number of gold ounces sold attributable to the Relief Canyon stream primarily due to the timing of sales.

Net income was higher during the third quarter of 2022 when compared to the same period in 2021. The increase is attributable to the increase in revenue (as described above) as well as a $24.9 million gain resulting from the sale of the Company’s Hod Maden investment to Horizon Copper, a decrease in tax expense largely driven by the recognition of previously unrecognized tax attributes arising from the sale of Hod Maden, and an increase in the gains recognized on the revaluation of the Company’s investments. The increase in net income was partially offset by an increase in finance expense related to interest paid on the Company’s credit facility and an increase in depletion largely due to an increase in attributable gold ounces sold and certain one-time adjustments arising from the Nomad acquisition.

STREAMS & ROYALTIES
Of the gold equivalent ounces sold by Sandstorm during the third quarter of 2022, approximately 18% were attributable to mines located in Canada, 22% from the rest of North America, 46% from South America, and 14% from other countries.

Revenue
(in millions) Gold Equivalent
Ounces
Canada $6.9 4,054
North America excl. Canada $8.5 5,001
South America $18.1 10,375
Other $5.5 3,176
Total $39.0 22,606
Canada
Streams and royalties on Canadian mines contributed 64% more gold equivalent ounces to Sandstorm when compared to the third quarter of 2021. The change is primarily due to the addition of the Highland Valley royalty and CEZinc stream acquired in the BaseCore transaction, an increase in royalty revenue from the Diavik mine in the Northwest Territories driven by diamond price increases and the timing of sales, and an increase in gold ounces received from the Black Fox mine in Ontario. The increase was partially offset by a decrease in royalty revenues from the Bracemac-McLeod mine in Québec, which is in the process of winding down operations.

North America Excluding Canada
The gold equivalent ounces sold from operations located within North America, but outside of Canada, contributed 39% more gold equivalent ounces when compared to the third quarter of 2021. 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 April 2022, with Sandstorm also receiving deliveries in the period from the newly acquired Mercedes assets that were a part of the Nomad acquisition. The increase was partially offset by a decrease in gold ounces received from the Santa Elena mine driven in part by mining activity on concessions not subject to the gold stream, and a decrease in gold equivalent ounces received and sold from Relief Canyon, largely driven by the timing of sales.

South America
Operations in South America contributed 26% more gold equivalent ounces sold when compared to the third quarter of 2021. The increase was driven in part by royalty revenue attributable to the Antamina mine in Peru and the Caserones mine in Chile; both royalties were recently acquired as part of the BaseCore and Nomad transactions, respectively. The increase in revenue was also attributable to a 122% increase in the number of silver ounces received and sold from the Cerro Moro mine under the Yamana silver stream, partially offset by a decrease in the average realized selling price of silver. The increase in gold equivalent ounces was partially offset by a decrease in ounces received under the Chapada copper stream agreement primarily driven by a decrease in the average realized selling price of copper and a decrease in the number of copper pounds sold, as well as a decrease in royalty revenue attributable to the Vale royalties and the Fruta del Norte mine, partially driven by a decrease in the average realized selling price of iron and gold, respectively.

Other
Streams and royalties on mines in other countries contributed 164% more gold equivalent ounces sold when compared to the third quarter of 2021. This change is primarily due to an increase in ounces sold from the Vatukoula mine in Fiji, which commenced making deliveries to Sandstorm in December 2021 and the addition of streams on the Blyvoor mine in South Africa and the Bonikro mine in Côte d’Ivoire, both of which were acquired as part of the Nomad acquisition. The increase was partially offset by a decrease in gold equivalent ounces sold from the Karma mine in Burkina Faso.

WEBCAST & CONFERENCE CALL DETAILS
A conference call will be held on Tuesday, November 8, 2022 starting at 8:30am PST 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: 98780754



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