VANCOUVER, BC, Feb. 21,
2023 /PRNewswire/ - Sandstorm Gold Ltd. ("Sandstorm
Gold Royalties", "Sandstorm" or the "Company") (NYSE: SAND) (TSX:
SSL) has released its results for the fourth quarter and year ended
December 31, 2022 (all figures in
U.S. dollars).
FULL YEAR HIGHLIGHTS
- Record attributable gold equivalent ounces1
of 82,376 ounces (FY 2021 — 67,548 ounces);
- Record revenue of $148.7
million (FY 2021 — $114.9
million);
- Record cash flows from operating activities, excluding
changes in non-cash working capital1 of $109.8 million (FY 2021 — $83.5 million);
- Record net income of $78.5
million (FY 2021 — $27.6
million);
- Average cash cost per attributable gold equivalent
ounce1 of $284
resulting in cash operating margins1 of $1,511 per ounce (FY 2021 — $249 per ounce and $1,539 per ounce respectively);
- Closing of Transformative Acquisitions: The acquisition
of Nomad Royalty Company Ltd. and the BaseCore Metals LP royalty
portfolio propel the Company forward in both size and scale while
solidifying Sandstorm's position amongst its peers as the go-to
mid-tier streaming and royalty company.
-
- BaseCore Portfolio: In July
2022, the Company closed its previously announced agreement
to acquire nine royalties and one stream from BaseCore Metals LP.
The royalty package includes exposure to high-quality, long-life
assets of which three are on currently producing interests,
including a net profits interest on the Antamina copper mine in
Peru.
- Nomad Royalty Company: In August
2022, the Company completed the acquisition of all issued
and outstanding common shares of Nomad Royalty Company Ltd.
("Nomad"). Nomad is a high-growth precious metals-focused royalty
company with a portfolio of 20 royalty and stream assets, of which
seven are on currently producing mines. Through the Nomad
acquisition, Sandstorm adds several high-quality and low-cost
assets to its portfolio, meaningfully increasing Sandstorm's
production profile in both the near and long-term.
- Creation of Strategic Partner, Horizon Copper: In
August 2022, the Company closed a
component of its arrangement with Horizon Copper Corp. ("Horizon
Copper") to spin out a number of assets and retain precious metal
streams along with a portion of debt and equity interest in Horizon
Copper. The transaction repositions Sandstorm as a pure-play
precious metals royalty and streaming company, while creating a key
strategic growth partner for Sandstorm. Horizon Copper's business
intent is to become an aggressive consolidator of quality copper
assets while providing Sandstorm the option to help fund
acquisitions via precious metal by-product streaming
contracts.
- Creation of Sandbox Royalties: In June 2022, Sandstorm and Equinox Gold Corp.
("Equinox") each closed their previously announced purchase and
sale agreements with Sandbox Royalties Corp. ("Sandbox") whereby
Sandbox acquired a portfolio of royalties from both Sandstorm and
Equinox. Sandbox will have exposure to a range of resource
royalties, immediate cash flow from producing royalties, and
significant leverage to strengthening metal prices and resource
growth. Sandstorm and Equinox both hold significant equity
positions in Sandbox, providing the opportunity to participate in
and facilitate the future growth of Sandbox.
- Other Notable Events:
-
- Hod Maden Milestones: With the awarding of the key
permit from the Turkish Ministry of Forestry in 2022, the Hod Maden
project has moved into the next stage of development including
securing project debt financing and initiating early works
construction items.
- Expanded Credit Facility: In August 2022, Sandstorm amended its revolving
credit agreement allowing the Company to borrow up to $625 million. The facility maintains its
sustainability-linked performance targets. As of February 21, 2023, $486
million remains outstanding under the Company's credit
facility.
- Equity Financing: On October 4,
2022, the Company completed an equity financing for
aggregate gross proceeds of $92.1
million. Upon closing of the financing, the majority of the
net proceeds were used to reduce amounts drawn under the Company's
revolving credit facility.
FOURTH QUARTER HIGHLIGHTS
- Attributable gold equivalent ounces1 of
21,753 ounces (Q4 2021 — 16,586 ounces);
- Revenue of $38.4 million
(Q4 2021 — $29.8 million);
- Cash flows from operating activities, excluding changes in
non-cash working capital1 of $29.9 million (Q4 2021 — $22.1 million);
- Net loss of $2.1 million
(Q4 2021 — net income of $7.4
million).
OUTLOOK
Based on the Company's existing royalties, attributable gold
equivalent ounces for 2023 are forecasted to be between 85,000 and
100,000 ounces. The Company is forecasting attributable gold
equivalent production to be approximately 140,000 ounces in
2025.
FINANCIAL RESULTS
During 2022, the Company realized record annual revenue of
$148.7 million compared with
$114.9 million for the comparable
period in 2021. The increase is largely attributable to a 22%
increase in attributable gold equivalent ounces sold and an
increase in the average realized selling price of gold.
Net income was higher during 2022 when compared to the same
period in 2021 due to the increase in revenue as well as a
combination of other factors including a $25.8 million gain on the disposal of streams,
royalties, and other interests, primarily resulting from the sale
of a portfolio of royalties to Sandbox; a $24.9 million gain resulting from the sale of the
Company's equity interest in Hod Maden to Horizon Copper; and a
$12.5 million gain resulting from the
sale of the Company's equity interest in Entrée Resources Ltd. to
Horizon Copper. The year-over-year increase in net income was
partially offset by an increase in depletion expense largely due to
an increase in attributable gold equivalent ounces sold and an
increase in finance expense related to interest paid on the
Company's revolving credit facility, which was drawn down in 2022
to finance the various transactions described above.
STREAMS & ROYALTIES
Of the gold equivalent ounces sold by Sandstorm during the
fourth quarter of 2022, approximately 12% were attributable to
mines located in Canada, 28% from
the rest of North America, 42%
from South America, and 18% from
other countries.
|
THREE MONTHS ENDED
DEC 31, 2022
|
YEAR ENDED DEC 31,
2022
|
|
Revenue
(in millions)
|
Gold Equivalent
Ounces
|
Revenue
(in millions)
|
Gold Equivalent
Ounces
|
Canada
|
$4.5
|
2,583
|
$ 23.5
|
13,061
|
North America excl.
Canada
|
$ 10.8
|
6,187
|
$ 31.0
|
17,433
|
South
America
|
$ 16.4
|
9,110
|
$ 73.5
|
40,305
|
Other
|
$ 6.7
|
3,873
|
$ 20.7
|
11,577
|
Total
|
$
38.4
|
21,753
|
$
148.7
|
82,376
|
Canada
Streams and royalties on Canadian mines contributed 43% less
gold equivalent ounces to Sandstorm when compared to the fourth
quarter of 2021. The change is primarily due to a decrease in
royalty revenue from the Diavik mine in the Northwest Territories, driven by the timing of
sales, production, and diamond prices, as well as a decrease in
royalty revenue from the Bracemac-McLeod mine in Quebec, which discontinued operations in the
second half of 2022.
North America Excluding Canada
The gold equivalent ounces sold from operations located within
North America, but outside of
Canada, contributed 147% more gold
equivalent ounces when compared to the fourth 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 the second quarter of 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 due to a decrease in ounces received and sold from
the Santa Elena mine in
Mexico, largely due to mining
activity on concessions not subject to Sandstorm's gold stream on
the project.
South America
Operations in South America
contributed 3% more gold equivalent ounces sold when compared to
the fourth quarter of 2021. The increase was driven by an increase
in royalty revenue attributable to the Caserones mine in
Chile, and ounces received and
sold from the Cerro Moro mine in Argentina. The increase was offset by a
decrease in royalty revenue attributable to the Aurizona mine in
Brazil as well as a decrease in
revenue attributable to the Chapada copper stream in Brazil, primarily due to a decrease in the
number of copper pounds sold and a decrease in the average realized
selling price of copper.
Other
Streams and royalties on mines in other countries contributed
417% more gold equivalent ounces sold when compared to the fourth
quarter of 2021. This change is primarily due to an increase in
gold equivalent ounces received and sold from the Blyvoor mine in
South Africa and the Bonikro mine
in Côte d'Ivoire. The Blyvoor and Bonikro streams were acquired as
part of the Nomad acquisition in August
2022.
WEBCAST & CONFERENCE CALL DETAILS
A conference call will be held on Wednesday, February 22, 2023 starting at
8:30am PST to further discuss the
fourth quarter and annual 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: 44216908
Webcast URL: https://bit.ly/40FB30k
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) total sales, royalties,
and income from other interests, (ii) attributable gold equivalent
ounce, (iii) average cash cost per attributable gold equivalent
ounce, (iv) cash operating margin, and (v) cash flows from
operating activities excluding changes in non-cash working capital.
Total sales, royalties and income from other interests is a
non-IFRS financial measure and 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. 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.
Attributable gold equivalent ounce is a non-IFRS financial ratio
that uses total sales, royalties, and income from other interests
as a component. Attributable gold equivalent ounce is calculated by
dividing the Company's total sales, royalties, and income from
other interests, less revenue attributable to non-controlling
shareholders for the period, by the average realized gold price per
ounce from the Company's gold streams for the same respective
period. The Company presents 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. 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. Cash operating margin is calculated by
subtracting the average cash cost per attributable gold equivalent
ounce from the average realized gold price per ounce from the
Company's gold streams. 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 financial
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. Refer to pages 60-63 of the
Company's MD&A for the year ended December 31, 2022, which is
available on SEDAR at www.sedar.com, for a numerical reconciliation
of the non-IFRS financial measures described above. The
presentation of these non-IFRS financial measures 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 financial 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.
ABOUT SANDSTORM GOLD ROYALTIES
Sandstorm is a gold royalty company that provides upfront
financing to gold mining companies that are looking for capital and
in return, receives the right to a percentage of the gold produced
from a mine, for the life of the mine. Sandstorm holds a portfolio
of 250 royalties, of which 39 of the underlying mines are
producing. Sandstorm plans to grow and diversify its low cost
production profile through the acquisition of additional gold
royalties. For more information visit: www.sandstormgold.com.
CAUTIONARY STATEMENTS TO U.S. SECURITYHOLDERS
The financial information included or incorporated by reference
in this press release or the documents referenced herein has been
prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards
Board, which differs from US generally accepted accounting
principles ("US GAAP") in certain material respects, and thus are
not directly comparable to financial statements prepared in
accordance with US GAAP.
This press release and the documents incorporated by reference
herein, as applicable, have been prepared in accordance with
Canadian standards for the reporting of mineral resource and
mineral reserve estimates, which differ from the previous and
current standards of the United
States securities laws. In particular, and without limiting
the generality of the foregoing, the terms "mineral reserve",
"proven mineral reserve", "probable mineral reserve", "inferred
mineral resources,", "indicated mineral resources," "measured
mineral resources" and "mineral resources" used or referenced
herein and the documents incorporated by reference herein, as
applicable, are Canadian mineral disclosure terms as defined in
accordance with Canadian National Instrument 43-101 — Standards of
Disclosure for Mineral Projects ("NI 43-101") and the Canadian
Institute of Mining, Metallurgy and Petroleum (the "CIM") — CIM
Definition Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council, as amended (the "CIM Definition
Standards").
For United States reporting
purposes, the United States Securities and Exchange Commission (the
"SEC") has adopted amendments to its disclosure rules (the "SEC
Modernization Rules") to modernize the mining property disclosure
requirements for issuers whose securities are registered with the
SEC under the Exchange Act, which became effective February 25, 2019. The SEC Modernization Rules
more closely align the SEC's disclosure requirements and policies
for mining properties with current industry and global regulatory
practices and standards, including NI 43-101, and replace the
historical property disclosure requirements for mining registrants
that were included in SEC Industry Guide 7. Issuers were required
to comply with the SEC Modernization Rules in their first fiscal
year beginning on or after January 1,
2021. As a foreign private issuer that is eligible to file
reports with the SEC pursuant to the multi-jurisdictional
disclosure system, the Corporation is not required to provide
disclosure on its mineral properties under the SEC Modernization
Rules and will continue to provide disclosure under NI 43-101 and
the CIM Definition Standards. Accordingly, mineral reserve and
mineral resource information contained or incorporated by reference
herein may not be comparable to similar information disclosed by
United States companies subject to
the United States federal
securities laws and the rules and regulations thereunder.
As a result of the adoption of the SEC Modernization Rules, the
SEC now recognizes estimates of "measured mineral resources",
"indicated mineral resources" and "inferred mineral resources." In
addition, the SEC has amended its definitions of "proven mineral
reserves" and "probable mineral reserves" to be "substantially
similar" to the corresponding CIM Definition Standards that are
required under NI 43-101. While the SEC will now recognize
"measured mineral resources", "indicated mineral resources" and
"inferred mineral resources", U.S. investors should not assume that
all or any part of the mineralization in these categories will be
converted into a higher category of mineral resources or into
mineral reserves without further work and analysis. Mineralization
described using these terms has a greater amount of uncertainty as
to its existence and feasibility than mineralization that has been
characterized as reserves. Accordingly, U.S. investors are
cautioned not to assume that all or any measured mineral resources,
indicated mineral resources, or inferred mineral resources that the
Company reports are or will be economically or legally mineable
without further work and analysis. Further, "inferred mineral
resources" have a greater amount of uncertainty and as to whether
they can be mined legally or economically. Therefore, U.S.
investors are also cautioned not to assume that all or any part of
inferred mineral resources will be upgraded to a higher category
without further work and analysis. Under Canadian securities laws,
estimates of "inferred mineral resources" may not form the basis of
feasibility or pre-feasibility studies, except in rare cases. While
the above terms are "substantially similar" to CIM Definitions,
there are differences in the definitions under the SEC
Modernization Rules and the CIM Definition Standards. Accordingly,
there is no assurance any mineral reserves or mineral resources
that the Company may report as "proven mineral reserves", "probable
mineral reserves", "measured mineral resources", "indicated mineral
resources" and "inferred mineral resources" under NI 43-101 would
be the same had the Company prepared the reserve or resource
estimates under the standards adopted under the SEC Modernization
Rules or under the prior standards of SEC Industry Guide 7.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This press release contains "forward-looking statements", within
the meaning of the U.S. Securities Act of 1933, the U.S. Securities
Exchange Act of 1934, the Private Securities Litigation Reform Act
of 1995 and "forward-looking information" within the meaning of
applicable Canadian securities legislation, concerning the
business, operations and financial performance and condition of
Sandstorm Gold Royalties. Forward-looking statements include, but
are not limited to, the impact of general business and economic
conditions; management's expectations regarding Sandstorm's growth;
the future price of gold, silver, copper, iron ore and other
metals, the estimation of mineral reserves and resources,
realization of mineral reserve estimates, the timing and amount of
estimated future production. Forward-looking statements can
generally be identified by the use of forward-looking terminology
such as "may", "will", "expect", "intend", "estimate",
"anticipate", "believe", "continue", "plans", or similar
terminology.
Forward-looking statements are made based upon certain
assumptions and other important factors that, if untrue, could
cause the actual results, performances or achievements of Sandstorm
Gold Royalties to be materially different from future results,
performances or achievements expressed or implied by such
statements. Such statements and information are based on numerous
assumptions regarding present and future business strategies and
the environment in which Sandstorm Gold Royalties will operate in
the future, including the receipt of all required approvals, the
price of gold and copper and anticipated costs. Certain important
factors that could cause actual results, performances or
achievements to differ materially from those in the forward-looking
statements include, amongst others, failure to receive necessary
approvals, changes in business plans and strategies, market
conditions, share price, best use of available cash, gold and other
commodity price volatility, discrepancies between actual and
estimated production, mineral reserves and resources and
metallurgical recoveries, mining operational and development risks
relating to the parties which produce the gold or other commodity
the Company will purchase, regulatory restrictions, activities by
governmental authorities (including changes in taxation), currency
fluctuations, the global economic climate, dilution, share price
volatility and competition.
Forward-looking statements are subject to known and unknown
risks, uncertainties and other important factors that may cause the
actual results, level of activity, performance or achievements of
the Company to be materially different from those expressed or
implied by such forward-looking statements, including but not
limited to: the impact of general business and economic conditions,
the absence of control over mining operations from which the
Company will purchase gold, other commodities or receive royalties
from, and risks related to those mining operations, including risks
related to international operations, government and environmental
regulation, actual results of current exploration activities,
conclusions of economic evaluations and changes in project
parameters as plans continue to be refined, risks in the
marketability of minerals, fluctuations in the price of gold and
other commodities, fluctuation in foreign exchange rates and
interest rates, stock market volatility, as well as those factors
discussed in the section entitled "Risks to Sandstorm" in the
Company's annual report for the financial year ended December 31, 2022 and the section entitled "Risk
Factors" contained in the Company's annual information form dated
March 31, 2022 available at
www.sedar.com. Although the Company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking statements,
there may be other factors that cause results not to be as
anticipated, estimated or intended. There can be no assurance that
such statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. The Company does not
undertake to update any forward-looking statements that are
contained or incorporated by reference, except in accordance with
applicable securities laws.
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SOURCE Sandstorm Gold Ltd.