DESIGNATED NEWS RELEASE
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.
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 has acquired a
portfolio of 229 royalties, of which 28 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.
The disclosure and information contained or referenced herein
uses mineral reserve and mineral resource classification terms that
comply with reporting standards in Canada, and mineral reserve and mineral
resource estimates are made in accordance with Canadian NI 43-101
and the Canadian Institute of Mining, Metallurgy and Petroleum —
CIM Definition Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council, as amended (the "CIM Definition
Standards"). These standards differ significantly from the mineral
reserve disclosure requirements of the United States Securities
Exchange Commission (the "SEC") set forth in Industry Guide 7.
Consequently, information regarding mineralization contained or
referenced herein is not comparable to similar information that
would generally be disclosed by U.S. companies under Industry Guide
7 in accordance with the rules of the SEC. Further, the SEC has
adopted amendments to its disclosure rules to modernize the mineral
property disclosure requirements for issuers whose securities are
registered with the SEC under the Securities Exchange Act of 1934
("Exchange Act"). These amendments became effective February 25, 2019 (the "SEC Modernization Rules")
and, commencing for registrants with their first fiscal year
beginning on or after January 1,
2021, the SEC Modernization Rules replaced the historical
property disclosure requirements included in SEC Industry Guide
7. As a foreign private issuer that files its annual report
on Form 40-F with the SEC pursuant to the multi-jurisdictional
disclosure system, the Company 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. The SEC Modernization Rules include
the adoption of terms describing mineral reserves and mineral
resources that are "substantially similar" to the corresponding
terms under the CIM Definition, but 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 mineral reserve or mineral resource
estimates under the standards adopted under the SEC Modernization
Rules. U.S. investors are also cautioned that while the SEC
recognizes "measured mineral resources", "indicated mineral
resources" and "inferred mineral resources" under the Modernization
Rules, investors should not assume that any part or all of the
mineralization in these categories will ever be converted into a
higher category of mineral resources or into mineral reserves.
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, investors are
cautioned not to assume that any measured mineral resources,
indicated mineral resources, or inferred mineral resources that the
Company reports are or will be economically or legally mineable.
Further, "inferred mineral resources" have a greater amount of
uncertainty as to their existence 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 the "inferred
mineral resources" exist. Under Canadian securities laws, estimates
of "inferred mineral resources" may not form the basis of
feasibility or pre-feasibility studies, except in rare cases.
For the above reasons, information contained or referenced herein
regarding descriptions of our mineral reserve and mineral resource
estimates is not comparable to similar information made public by
U.S. companies subject to reporting and disclosure requirements of
the SEC under either Industry Guide 7 or SEC Modernization
Rules.
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 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 Company's plans with respect to payment of
dividends, the dates and amounts of such payments, the expectation
that various closing conditions of the Vatukoula Stream will be
met, the expectation that the Vatukoula Stream will close, 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, including the increases to production guidance,
the offer and sale of Common Shares under the at-the-market equity
program (the "ATM Program"), including the timing and amounts
thereof, the use of any proceeds from the ATM Program, and
statements with respect to the Company's proposed normal course
issuer bid ("NCIB") and the number of Common Shares that may be
purchased under the NCIB. 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 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, 2020 and the section entitled "Risk
Factors" contained in the Company's annual information form dated
March 30, 2021 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.