UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2024
Commission File Number: 001-35617
Sandstorm Gold Ltd.
(Translation of registrant’s name into English)
Suite 3200 - 733 Seymour Street
Vancouver, British Columbia
V6B 0SB Canada
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.
EXHIBIT INDEX
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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SANDSTORM GOLD LTD. |
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Date: August 1, 2024 |
By: |
/s/ Erfan Kazemi |
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Name: Erfan Kazemi |
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Title: Chief Financial Officer |
EXHIBIT 99.1
August 1, 2024
Sandstorm Gold Royalties
Announces
2024 Second Quarter Results
Vancouver, BC | Sandstorm Gold Ltd. (“Sandstorm
Gold Royalties”, “Sandstorm” or the “Company”) (NYSE: SAND, TSX: SSL) has released its financial results
for the second quarter ended June 30, 2024 (figures in U.S. dollars unless otherwise indicated).
Financial Highlights
| • | $41.4 million of revenue compared to $49.8 million in Q2 2023; |
| • | 17,414 attributable gold equivalent ounces1 compared to 24,504 ounces in Q2 2023; |
| • | $32.6 million in cash flows from operating activities, excluding changes in non-cash working capital1, compared
to $38.0 million in Q2 2023; |
| • | Cash operating margins1 of $2,043 per attributable gold equivalent ounce, representing a new record for the Company,
compared to $1,744 per ounce in Q2 2023; |
| • | $10.5 million of net income compared to net income of $2.7 million in Q2 2023. |
Corporate Updates
Greenstone Pours First Gold
On May 23, 2024, Equinox Gold Corp. (“Equinox
Gold”) announced that it had completed its first gold pour at its 100% owned Greenstone gold mine in Ontario, Canada. Sandstorm
holds a gold stream on the Greenstone mine whereby the Company is entitled to purchase 2.375% of gold produced at the mine until 120,333
ounces are delivered, and then 1.583% of gold produced thereafter. Sandstorm will make ongoing payments equal to 20% of the spot price
of gold per ounce plus an additional payment of up to $30 per ounce in ESG contributions. Subsequent to quarter end, Sandstorm received
its first deliveries under the Greenstone stream. Deliveries are expected to ramp-up through the second half of 2024, with Equinox Gold
targeting commercial production in the third quarter 2024.
Balance Sheet Deleveraging Continues
During the second quarter, the Company continued
to focus on deleveraging its balance sheet and made $27 million in net debt repayments. As at August 1, 2024, the Company’s revolving
credit facility had an outstanding balance of $383 million and the undrawn and available balance remaining is $242 million.
To further expedite this repayment schedule,
the Company continued its strategy of monetizing non-core assets during the three months ended June 30, 2024. In May, the Company closed
the first part of the previously announced transaction to sell a portfolio of non-core assets, including the Company's Highland Valley
Copper royalty, for cash consideration of $15.4 million. While further monetization of the Company’s investment portfolio is possible,
subject to market conditions, the Company does not intend to monetize further royalty or stream assets.
Capital Allocation
As part of the Company’s commitment to
returning capital back to shareholders, the Company purchased 457,125 common shares for total consideration of $2.5 million during the
six months ended June 30, 2024. Subsequent to quarter end, the Company purchased and cancelled approximately 90,000 of its common shares.
In June 2024, the Company declared a dividend
of C$0.02 per share, which was paid on July 26, 2024.
Outlook
Based on the Company’s existing streams
and royalties, attributable gold equivalent ounces for 2024 are forecasted to be between 75,000 and 85,000 ounces. The Company’s
production forecast is expected to reach approximately 125,000 attributable gold equivalent ounces within the next five years.
Financial Results
For the three months ended June 30, 2024, the
Company realized quarterly revenue of $41.4 million compared to $49.8 million for the comparable period in 2023. Approximately 67% of
the Company’s revenue in the second quarter was attributable to precious metals, 23% from copper, and 10% from other commodities.
|
Revenue (in millions) |
Gold Equivalent Ounces |
Precious Metals |
$27.6 |
11,943 |
Copper |
$9.7 |
3,706 |
Other |
$4.1 |
1,765 |
Total |
$41.4 |
17,414 |
When compared to the same period in 2023, the
decrease in revenue was attributable to a 29% decrease in attributable gold equivalent ounces sold, partially offset by a 17% increase
in the average realized selling price of gold. The decrease in revenue was driven by several factors including, (i) a $5.6 million decrease
attributable to the Company’s Mercedes gold and silver streams as a result of the expected conclusion of the fixed gold delivery
period at the end of 2023 and the restructuring of the gold and silver streams that closed in January 2024, (ii) a $2.7 million decrease
in revenue attributable to the Cerro Moro silver stream due to a decrease in mine head grades and the corresponding decrease in silver
stream sales, (iii) a $1.2 million decrease in revenue attributable to the Antamina mine following a reduction in the Company’s
royalty entitlement as a result of the partial disposition of the royalty to Horizon Copper Corp. in the second quarter of 2023, and,
(iv) a $1.3 million decrease in revenue attributable to the Company's Aurizona royalty as a result of a geotechnical event at the mine
leading to a pause in mining. The decrease in revenue was partially offset by a $1.6 million increase in revenue attributable to the Chapada
copper stream primarily due to increases in the number of pounds of copper sold and the average realized selling price of copper.
Cash flows from operating activities for the
three months ended June 30, 2024, were $34.4 million and the Company realized net income of $10.5 million, compared with $42.1 million
in cash flows from operating activities and net income of $2.7 million for the comparable period in 2023. The change is due to a combination
of factors including, (i) a $12.3 million increase in gains recognized on the revaluation of the Company’s investments including
a $7.4 million gain recognized as a result of the settlement of the Company's debenture due from Versamet Royalties Corporation ("Versamet",
previously named Sandbox Royalties) by way of conversion to common shares of Versamet, and (ii) a $7.3 million decrease in depletion expense,
primarily due to a decrease in attributable gold equivalent ounces sold. The change was partially offset by an $8.5 million decrease in
revenue and a $4.8 million increase in tax expense.
Stream & Royalty Portfolio
Of the gold equivalent ounces sold by the Company
during the second quarter of 2024, approximately 17% were attributable to mines located in Canada, 22% from the rest of North America,
42% from South America, and 19% from other countries.
|
Revenue (in millions) |
Gold Equivalent Ounces |
Canada |
$6.9 |
2,983 |
North America excl. Canada |
$8.7 |
3,800 |
South America |
$18.2 |
7,381 |
Other |
$7.6 |
3,250 |
Total |
$41.4 |
17,414 |
Canada
Streams and royalties on Canadian mines contributed
approximately 8% more gold equivalent ounces to Sandstorm when compared to the second quarter of 2023. The increase was primarily driven
by an increase in attributable gold equivalent ounces sold from the CEZinc smelter in Quebec and an increase in royalty revenue from the
Copper Mountain mine in British Columbia. In May, Sandstorm announced the sale of its Copper Mountain royalty to Evolve Strategic Element
Royalties Ltd. but retains the next $10 million of royalty revenues from the asset. The increase in attributable ounces sold was partially
offset by a decrease in ounces sold from the Black Fox mine in Ontario and a decrease in royalty revenue attributable to the Diavik mine
in Northwest Territories.
North America Excluding Canada
Gold equivalent ounces sold from operations located
within North America, but outside of Canada, contributed 49% less gold equivalent ounces when compared to the second quarter of 2023.
The change was primarily driven by a decrease in ounces attributable to the Company's Mercedes gold and silver streams as result of the
expected conclusion of the fixed gold delivery period at the end of 2023 and the restructuring of the gold and silver streams that closed
in January 2024.
South America
Operations in South America contributed 33% less
gold equivalent ounces sold when compared to the second quarter of 2023. The change was driven by a decrease in silver ounces received
and sold attributable to the Cerro Moro mine in Argentina partially offset by the average realized selling price of silver, which increased
from an average of $25.00 per ounce during the three months ended June 30, 2023, to an average of $27.76 per ounce during the equivalent
period in 2024. The change was also due to a decrease in royalty revenue attributable to the Antamina mine in Peru following the partial
disposition of the royalty to Horizon Copper Corp. in the second quarter of 2023, which reduced the Company’s royalty entitlement,
partially offset by revenue related to the Antamina silver stream which was received as consideration for the partial disposition of the
Antamina royalty in 2023. The decrease was partially offset by a 56% increase in the number of pounds of copper sold from the Chapada
copper mine, as well as an increase in the average realized selling price of copper which increased from an average of $4.01 per pound
during the three months ended June 30, 2023 to an average of $4.22 per pound during the equivalent period in 2024.
Other
Streams and royalties on mines in other countries
contributed approximately the same number of gold equivalent ounces sold when compared to the second quarter of 2023. An increase in royalty
revenue attributable to the Ivrindi mine in Türkiye and Houndé mine in Burkina Faso was partially offset by slight decreases
in the number of attributable ounces sold from the Bonikro mine in Côte d’Ivoire and Blyvoor mine in South Africa.
Webcast & Conference Call
Details
A conference call will be held on Friday, August
2, 2024, starting at 8:30am PDT to further discuss the second 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: 76079285
Webcast URL: https://app.webinar.net/wA1ReLWxba0
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
Accounting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards” or "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.
| (i) | 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 and ability to generate cash flow in comparison to other streaming and
royalty companies in the precious metals mining industry. |
| (ii) | 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. |
| (iii) | 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 and ability to generate cash flow
in comparison to other streaming and royalty companies in the precious metals mining industry who present results on a similar basis. |
| (iv) | 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 and ability to generate cash flow in comparison to other streaming and royalty
companies in the precious metals mining industry that present results on a similar basis. |
| (v) | Cash flows from operating activities excluding changes in non-cash working capital is a non-IFRS financial measure that 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 31-33 of the
Company’s MD&A for the quarter ended June 30, 2024, which is available on SEDAR+ at www.sedarplus.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.
Erfan Kazemi |
Mark Klausen |
Chief Financial Officer |
Corporate Communications |
604 689 0234 |
604 628 1164 |
ABOUT
SANDSTORM GOLD ROYALTIES
Sandstorm
is a precious metals-focused royalty company that provides upfront financing to mining companies and receives the right to a percentage
of production from a mine, for the life of the mine. Sandstorm holds a portfolio of over 230 royalties, of which 41 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, statements regarding the Company’s intention to monetize further royalty or
stream assets; the future price of gold, silver, copper, iron ore and other metals, the estimation of mineral reserves and resources,
realization of mineral reserve estimates, and 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, 2023 and the section entitled “Risk Factors” contained in the Company’s annual information
form dated March 27, 2024 available at www.sedarplus.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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