Sandstorm tables update on royalty portfolio
Sandstorm Gold Ltd. [SSL-TSX, SAND-NYSE American] has released an update of recent developments from its portfolio of royalty assets, including the Hod Maden project in northeastern Turkey and Greenstone gold project in Ontario.
Following the recent purchase of Nomad Royalty Co. Acquisition [NSR-TSX, NYSE] and a basket of royalties and streams from BaseCore Metals Royalty LP, Sandstorm’s portfolio consists of 260 streams and royalties, of which 39 of the underlying assets are cash-flowing with no asset contributing more than 15% of the company’s consensus net asset value.
As a result of the acquisition, Sandstorm increased its 2022 production guidance by approximately 22% from 65,000 to 70,000 gold equivalent ounces (GEO) to 80,000 to 85,000 Geo, while increasing long-term production guidance by 55% from 100,000 GEOs to 155,000 Geos 2025.
In the latest update, Sandstorm said Lidya Madencilik Sanayi ve Ticaret A.S., the majority owner and operator of Hod Maden has been advancing the project as all major permits have been received, with the final permit from the Ministry of Forests. The Environmental Impact Assessment was approved in 2021, another project milestone.
Meanwhile, Sandstorm said Lidya has commenced two out of four planned early works projects for the site. All four are expected to be underway and completed by the start of the fourth quarter of 2022.
Sandstorm has a gold stream on the Hod Maden project, allowing the company to purchase 20% of gold produced (on a 100% basis) for continuing payments at a price equal to 50% of the gold spot price until 405,000 ounces of gold are delivered. After the delivery threshold has been reached, the gold stream will entitle Sandstorm to purchase 12% of the gold produced for the life of the mine at a price equal to 60% of the gold spot price. Sandstorm also holds a 2.0% net smelter return royalty on Hod Maden.
Sandstorm said Equinox Gold Corp. [EQX-TSXV, EQXGF-OTC] has released an update on its progress at the Greenstone project. It said the project is approximately 46% complete and on track for the first gold pour in the first half of 2024.
Greenstone is expected to be one of the largest gold mines in Canada, producing more than 400,000 ounces of gold annually for the first five years, and more than 5.0 million ounces over its initial 14-year mine-life.
Sandstorm has a gold stream agreement to buy 2.37% of the gold produced at Greenstone (on a 100% basis) up to a maximum of 120,333 ounces delivered, then 1.58% of the gold thereafter. Sandstorm will make continuing payments for each ounce of gold purchased equal to 20% of the spot price. Sandstorm will also make an additional payment of up to $30 per ounce in ESG (environmental, social and governance) contributions.
In addition, Sandstorm released an update on Lundin Gold Inc.’s [LUG-TSX, Nasdaq Stockholm] progress at its Fruta del Norte gold project in Ecuador. It said Lundin has increased its 2022 production guidance to between 430,000 and 460,000 ounces from 405,000 to 445,000 ounces. Sandstorm has an 0.9% NSR royalty on the precious metals produced from the Fruta del Norte project.
On October 13, 2022, Sandstorm shares closed at $6.54 and currently trade in a 52-week range of $11.61 and $6.29.