Sandstorm to trade on NYSE; posts record year

Yamana Gold’s Cerro Moro gold-silver mine is southern Argentina, which has one of Sandstorm’s many streaming agreements. Source: Sandstorm Gold Ltd.

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Sandstorm Gold Ltd. [SSL-TSX; SAND-NYSE American] on Friday February 14 said 2019 was a record-breaking year for the company.

It sold attributable ounces of 63,829 in 2019, achieving both a new record and an 11% increase from 57,646 ounces in 2018, which had previously ranked as the highest yearly total in the company’s history.

Sandstorm also posted record revenue of $89.4 million, a 22% increase from $73.2 million in 2018. Net income of $16.4 million was well ahead of $5.9 million in 2018.

The shares advanced on the news, rising 3.8% or 35 cents to $9.49 on volume of 618,502 shares traded. The shares trade in a 52-week range of $9.90 and $6.70.

Sandstorm is a royalty financing company that seeks to acquire gold and other metals purchase agreements and royalties from companies that have advanced stage projects or operating mines.

In return for making upfront payments to acquire a gold stream, Sandstorm receives the right to purchase, at a fixed price per ounce, or at a fixed percentage of the spot price, a percentage of a mine’s gold, silver and other commodity production for the life of the mine.

The company has a portfolio of over 190 royalties, producing cash flow from 23 producing mines.

Contributions from the Yamana Gold Inc. [YRI-TSX; AUY-NYSE] silver stream was the main driver of growth in the number of ounces sold during 2019. Sandstorm also received its first delivery from Yamana’s Cerro Moro Mine in Argentina during the second quarter of 2019. Cerro Morro was expected to produce 6.0 million ounces of silver and 130,000 ounces of gold in 2019.

Based on the company’s existing royalties, attributable gold equivalent ounces sold for 2020 is expected to be between 60,000 and 70,000 ounces. That number is expected to increase to 125,000 ounces by 2024, the company said.

Meanwhile, Sandstorm reported better than expected fourth quarter revenue of $24 million, beating the consensus estimate of $23 million.

By comparison the company posted revenue of $17.5 million in the fourth quarter of 2018.

The company also said it sold 16,113 attributable gold ounces in the fourth quarter, up from 14,182 ounces in the same period last year.  Of the gold equivalent ounces sold by Sandstorm during the fourth quarter of 2019, approximately 23% were attributable to mines in Canada, 18% were from the rest of North America, 44% was from South America and the balance of 15% was from other countries.

Net income in the quarter jumped to $5.3 million in the quarter from $2.7 million a year ago.

The company said its revolving credit facility was amended allowing the company to borrow up to $225 million with an additional uncommitted accordion of up to $75 million, for a total facility of $300 million for acquisitions and general corporate purposes. The tenure of the facility is four years and is extendable by mutual consent of Sandstorm and the banking syndicate.

Sandstorm also said it has received approval from the New York Stock Exchange to transfer the listing of its common shares from the NYSE American Exchange to the NYSE. The company expects to begin trading on the NYSE on February 21, 2020.

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