VANCOUVER, BC, Feb. 15, 2024 /CNW/ – Sandstorm Gold Ltd. (“Sandstorm Gold Royalties”, “Sandstorm” or the “Company”) (NYSE:SAND) (TSX:SSL) has released its financial results for the fourth quarter and year ended December 31, 2023 (all figures in U.S. dollars).
Record attributable gold equivalent ounces1 of 97,245 ounces (FY 2022 — 82,376 ounces);
Record revenue of $179.6 million (FY 2022 — $148.7 million);
Record total sales, royalties, and income from other interests1 of $191.4 million (FY 2022 — $148.7 million);
Record cash flows from operating activities, excluding changes in non-cash working capital1 of $151.1 million (FY 2022 — $109.8 million);
Net income of $42.7 million (FY 2022 — $78.5 million);
Average cash cost per attributable gold equivalent ounce1 of $223 resulting in cash operating margins1 of $1,706 per ounce (FY 2022 — $284 per ounce and $1,511 per ounce respectively);
Debt Reduction and Monetization Efforts: De-levering remains a top priority for Sandstorm. As of February 15, 2024, the Company had $421 million drawn and outstanding on the credit facility. To further expedite debt repayment, the Company is undergoing a process to monetize between $40–$100 million of non-core assets by the end of 2024. Accordingly, in the fourth quarter of 2023, Sandstorm closed its previously announced agreement to sell the El Pilar and Blackwater Royalties for total consideration of $25.0 million comprised of cash and common shares. The Company anticipates that consideration from future monetization efforts will consist entirely of cash. Sandstorm’s financial position continues to strengthen, with current available capital totaling over $200 million.
Credit Facility Renewal: In September 2023, Sandstorm renewed its revolving credit facility, allowing the Company to borrow up to $625 million for a four year term.
Closing of Antamina Transaction: In June 2023, Sandstorm closed the final component of its previously announced arrangement with Horizon Copper Corp. (“Horizon Copper”) to sell a portion of the Company’s Antamina royalty in consideration for a silver stream, debt, equity, and cash.
Mercedes Stream Amendment: In January 2024, Sandstorm closed its previously announced transaction to amend its existing gold and silver stream agreements on the Mercedes mine with Bear Creek Mining Corporation (“Bear Creek”) and to refinance certain other debt investments of Bear Creek that it holds. In exchange for the stream amendments, Sandstorm received a 1.0% NSR on Bear Creek’s wholly-owned Corani project in Peru, one of the world’s largest fully permitted silver deposits, and $10 million of additional consideration in the form of a combination of Bear Creek common shares and debt.
Attributable gold equivalent ounces1 of 23,250 ounces (Q4 2022 — 21,753 ounces);
Revenue of $44.5 million (Q4 2022 — $38.4 million);
Total sales, royalties, and income from other interests1 of $46.3 million (Q4 2022 — $38.4 million);
Cash flows from operating activities, excluding changes in non-cash working capital1 of $36.5 million (Q4 2022 — $29.9 million);
Net income of $24.5 million (Q4 2022 — net loss of $2.1 million).
Based on the Company’s existing royalties, attributable gold equivalent ounces for 2024 are forecasted to be between 75,000 and 90,000 ounces. The Company’s production forecast is expected to reach approximately 125,000 attributable gold equivalent ounces within the next five years.
During 2023, the Company realized record annual revenue of $179.6 million compared with $148.7 million for the comparable period in 2022. The Company also had record total sales, royalties, and income from other interests of $191.4 million during the year ($148.7 million for the comparable period in 2022). The increase in revenue is attributable to a 12% increase in attributable gold equivalent ounces sold2, as well as a 7% increase in the average realized selling price of gold.
The Company had cash flows from operating activities of $152.8 million and net income of $42.7 million during 2023, compared with cash flows from operating activities of $106.9 million and net income of $78.5 million for the comparable period in 2022. The increase in cash flows from operating activities is largely driven by an increase in revenue and contractual payments relating to the Mt. Hamilton royalty. The decrease in net income is due to a combination of factors including:
Certain gains recognized during 2022 which did not occur during 2023, including:
i. a $24.9 million gain resulting from the sale of the Company’s Hod Maden interest to Horizon Copper;
ii. $25.8 million in gains on disposal of stream, royalty, and other interests, primarily related to the sale of a portfolio of royalties to Sandbox Royalties Corporation (“Sandbox Royalties”); and
iii. a $12.5 million gain resulting from the sale of the Company’s equity interest in Entrée Resources Ltd. to Horizon Copper.
A $22.2 million increase in finance expense in 2023 compared to 2022, primarily related to interest paid on the Company’s revolving credit facility, which was drawn down in the third quarter of 2022 to finance acquisitions made in 2022; and
A $15.6 million increase in depletion expense in 2023 compared to 2022, partly driven by an increase in attributable gold equivalent ounces sold.
The decrease in net income was partially offset by:
A $30.9 million increase in revenue, as described above;
A $13.9 million increase in the gains recognized on the revaluation of the Company’s investments, mostly driven by an increase in the fair value of the Company’s Sandbox Royalties and Horizon Copper debentures;
$11.8 million in other income primarily related to a one-time contractual payment from the Company’s Mt. Hamilton royalty; and
A $4.0 million gain on the disposal of the Company’s Blackwater and El Pilar royalties to Sandbox Royalties.
Of the gold equivalent ounces sold by Sandstorm during the fourth quarter of 2023, approximately 12% were attributable to mines located in Canada, 22% from the rest of North America, 44% from South America, and 22% from other countries.
THREE MONTHS ENDED DEC 31, 2023
YEAR ENDED DEC 31, 2023
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