Sandstorm Gold Royalties Announces 2024 Third Quarter Results
VANCOUVER, BC, Nov. 7, 2024 /PRNewswire/ - Sandstorm Gold Ltd. ("Sandstorm Gold Royalties", "Sandstorm" or the "Company") (NYSE:SAND) (TSX:SSL) has released its financial results for the third quarter ended September 30, 2024 (figures in U.S. dollars unless otherwise indicated).
Financial Highlights
$44.7 million of revenue compared to $41.3 million in Q3 2023;
17,359 attributable gold equivalent ounces1 compared to 21,123 ounces in Q3 2023;
$37.0 million in cash flows from operating activities, excluding changes in non-cash working capital1, compared to $33.9 million in Q3 2023;
Cash operating margins1 of $2,215 per attributable gold equivalent ounce, compared to $1,699 per ounce in Q3 2023, marking the second consecutive quarter of record operating margins; and
$5.8 million of net income compared to net income of $0.01 million in Q3 2023.
Corporate Updates
First Gold Deliveries and Commercial Production at Greenstone
The Company received the first gold deliveries under its Greenstone gold stream following the mine's first gold pour in May 2024. Equinox Gold Corp. ("Equinox Gold") reported that Greenstone produced 42,400 ounces of gold in the third quarter and announced commercial production on November 6, 2024.
Balance Sheet Deleveraging
The Company continues to focus on deleveraging its balance sheet following several royalty and stream acquisitions in 2022. For the nine months ended September 30, 2024, the Company made net repayments of $56 million on its revolving credit facility. As of November 7, 2024, a balance of $369 million remains outstanding on the credit facility with an undrawn and available balance of $256 million.
Capital Allocation
As part of the Company's commitment to returning capital back to shareholders, the Company purchased approximately 1.1 million common shares for total consideration of $6.1 million during the nine months ended September 30, 2024.
In September 2024, the Company declared a dividend of C$0.02 per share, which was paid on October 25, 2024.
Outlook
Based on the Company's existing streams and royalties and the year-to-date outperformance of gold prices relative to other commodities, attributable gold equivalent ounces for 2024 are forecasted to be between 70,000 and 75,000 ounces. The Company's production forecast is expected to reach approximately 125,000 attributable gold equivalent ounces within the next five years, based solely on streams and royalties that the Company has bought and paid for.
Financial Results
For the three months ended September 30, 2024, the Company realized quarterly revenue of $44.7 million compared to $41.3 million for the comparable period in 2023. Approximately 70% of the Company's revenue in the third quarter was attributable to precious metals, 22% from copper, and 8% from other commodities.
Revenue (in millions)
Gold Equivalent Ounces
Precious Metals
$31.4
12,472
Copper
$9.6
3,417
Other
$3.7
1,470
Total
$44.7
17,359
When compared to the same period in 2023, the increase in revenue was driven by a 31% increase in the average realized selling price of gold partially offset by an 18% decrease in attributable gold equivalent ounces sold. Increased revenue was primarily supported by higher prices for the Company's principal commodities of gold, silver, and copper. However, the outperformance of gold prices relative to silver, copper, and iron ore prices drove a decrease of gold equivalent ounces year-over-year. In addition, year-over-year gold equivalent ounces were impacted by the restructuring of the Company's stream interests at Mercedes, expected lower grades at Cerro Moro, and lower revenues at Copper Mountain due to true-up payments recognized in the third quarter of 2023. Offsetting these changes, the Company realized higher deliveries from its Bonikro stream and maiden deliveries from Greenstone as noted above. Greenstone deliveries are expected to improve in the coming quarters as the mine ramps-up to commercial production levels.
The Company had cash operating margins of $2,215 per attributable gold equivalent ounce (compared to $1,699 per ounce for the comparable period in 2023), marking the second consecutive quarter of record operating margins. Cash flows from operating activities excluding changes in non-cash working capital for the three months ended September 30, 2024, were $37.0 million (compared to $33.9 million in the third quarter of 2023) and the Company realized net income of $5.8 million (compared to $0.01 million for the comparable period in 2023). The change was driven by a $3.4 million increase in revenue as described above, a $2.4 million decrease in depletion expense which was in line with the decrease in attributable gold equivalent ounces sold, and a $1.1 million decrease in finance expense resulting from repayments of the Company's revolving credit facility, which had an outstanding balance of $456 million as at September 30, 2023 and $379 million as at September 30, 2024. The increase in cash flows was partially offset by a $1.2 million increase in income tax expense.
Stream & Royalty Portfolio
During the third quarter of 2024, the Company sold 17,359 gold equivalent ounces attributable to its diversified streaming and royalty portfolio. Approximately 17% of the gold equivalent ounces sold were attributable to mines located in Canada, 14% from the rest of North America, 50% from South America, and 19% from other countries.
Revenue (in millions)
Gold Equivalent Ounces
Canada
$7.5
2,996
North America excl. Canada
$6.3
2,431
South America
$22.9
8,715
Other
$8.0
3,217
Total
$44.7
17,359
Canada
Streams and royalties on Canadian mines contributed approximately 18% less revenue and 37% less gold equivalent ounces to Sandstorm when compared to the third quarter of 2023. The change was primarily driven by a decrease in attributable gold equivalent ounces sold from the Copper Mountain mine in British Columbia, whereby Sandstorm received a true-up payment in the third quarter of 2023. The decrease was partially offset by gold ounces attributable to the Greenstone mine in Ontario, which began making deliveries under the stream in the third quarter of 2024.
GREENSTONE GOLD MINE
Following the first gold pour in May 2024, Equinox Gold announced commercial production at its Greenstone gold mine on November 6, 2024, based on operating progress achieved in October. Equinox Gold reported that Greenstone produced 42,400 ounces of gold in the third quarter at ...
