Welcome!

News Feed Item

Sandstorm Gold Announces Financial Results For Q2, 2014; Reiterates 2014 Guidance

VANCOUVER, Aug. 13, 2014 /PRNewswire/ - Sandstorm Gold Ltd. ("Sandstorm" or the "Company") (NYSE MKT: SAND, TSX: SSL) has released its unaudited results for the second quarter ended June 30, 2014 (all figures in U.S. dollars).

— SECOND QUARTER HIGHLIGHTS

  • Strong balance sheet with over $110 million in cash at June 30, 2014.
  • Revenue of $13.2 million.
  • Attributable Gold Equivalent ounces sold1 of 10,149 ounces.
  • Average cash cost per ounce1 of $310 resulting in cash operating margins1 of $986 per ounce.
  • Operating cash flow of $9.4 million.
  • Net income of $3.0 million.
  • Remitted a $10 million loan to Luna Gold Corp. ("Luna") in accordance with its previously announced commitment to issue a non-revolving loan facility to Luna.
  • Acquired 100% of the issued and outstanding shares of Sandstorm Metals & Energy Ltd. ("Sandstorm Metals"), allowing Sandstorm management to focus on gold transactions going forward.

"The second quarter results demonstrated the value of diversification in our portfolio. Although a few of our streaming partners had challenging quarters and posted lower than expected production numbers, Sandstorm still recorded strong operating cash flow and earnings," said Sandstorm President & CEO, Nolan Watson. Watson added, "We are confident reiterating this year's attributable gold equivalent production guidance of 40,000 to 50,000 ounces of gold."

— FINANCIAL RESULTS

Revenue and Gold Sales
Revenue was $13.2 million in the second quarter of 2014, generated from the sale of 10,149 attributable gold equivalent ounces. Revenue declined slightly compared with the comparable period in 2013, largely due to an 8% decrease in the average realized selling price of gold which was partially offset by an 8% increase in the number of attributable gold equivalent ounces sold.

Costs and Expenses
The average cash cost per attributable ounce was $310 during the period, resulting in a cash operating margin of $986 per ounce. The lower cash cost per attributable ounce decreased by 6% compared to the second quarter of 2013, due to an increase in the percentage of revenue coming from royalties as the Company continues to grow and diversify its asset base. The Company reduced administrative expenses by $1.7 million compared with the comparable period in 2013.

Earnings and Operating Cash Flow
For the three months ended June 30, 2014, net income and cash flow from operations were $3.0 million and $9.4 million, respectively, compared with a net loss and cash flow from operations of $15.2 million and $8.5 million for the comparable period in 2013. The change is attributable to a combination of factors including a $1.7 million decrease in administration expenses, a one-time gain of $2.6 million related to the acquisition of Sandstorm Metals, a number of non-recurring items and a non-cash charge of $1.2 million relating to the Company's Bracemac-McLeod royalty.

Balance Sheet
Total assets increased by $76.3 million from December 31, 2013 to June 30, 2014 primarily resulting from the assets acquired from the Sandstorm Metals business combination, operating cash flows and the exercise of warrants. The increase was partially offset by depletion expense and by a non-cash impairment charge on the Bracemac-McLeod royalty. At the end of the second quarter, the Company had $111.4 million in cash and cash equivalents and working capital of $109.4 million. In addition, the Company has $100.0 million in available capital under its undrawn revolving bank debt facility.

— STREAMS AND ROYALTIES

The Company's stream and royalty segments for the three months ended June 30, 2014 are summarized in the table below:









In $000's

Attributable

ounces sold

Sales and

royalty

revenues

Cost of

sales

(excluding

depletion)

Depletion

Impairment

Income

(loss)

before

taxes

Cash flow

from

operations

Aurizona

2,334

$ 3,004

$943

$276

-

$1,785

$4,614

Bachelor Lake

2,494

3,268

1,247

1,482

-

539

2,304

Black Fox

1,334

1,715

678

953

-

84

1,037

Ming

567

745

-

451

-

294

745

Santa Elena

774

992

274

471

-

248

781

Royalties

2,646

3,429

-

3,070

(1,215)

(856)

3,151

Corporate

-

-

-

-

-

330

(3,249)

Consolidated

10,149

$13,153

$3,142

$6,703

$(1,215)

$2,424

$9,383

Attributable gold equivalent ounces sold were 10,149 in the quarter, an increase of 8% from the comparable period in 2013. The increase is largely attributable to increased production from Metanor Resources Inc.'s ("Metanor") Bachelor Lake mine in Quebec, Canada ("Bachelor Lake") and Rambler Metals & Mining PLC's ("Rambler") Ming mine in Newfoundland, Canada ("Ming Mine") and partially offset by a decrease in production from Primero Mining Corp.'s ("Primero") Black Fox mine in Ontario, Canada ("Black Fox") and SilverCrest Mines Inc.'s Santa Elena Mine in Mexico ("Santa Elena").

Bachelor Lake Mine
Compared to the second quarter of 2013, an additional 940 gold ounces were sold from the Bachelor Lake Mine. The increase is primarily related to the mine reaching commercial production and the continued ramp up of operations. Metanor recently announced positive results from its underground drilling campaign at Bachelor Lake. The intention of the campaign is to increase the resources at the mine.

Ming Mine
A 64% increase in gold ounces sold from the Ming Mine was recorded compared to the second quarter of 2013. The increase was primarily related to Sandstorm's gold purchase entitlement increasing to 33% for the 2014 fiscal year (which resulted from low metallurgical recoveries obtained in 2013 triggering contract safeguards). Rambler recently released a favorable preliminary economic assessment that identifies the potential for an expansion of the Ming Mine into the lower footwall zone following additional value optimization studies and a feasibility study.

Black Fox Mine
Attributable gold equivalent ounces sold from the Black Fox Mine decreased by 24% compared to the second quarter of 2013. The decrease was primarily driven from insufficient underground development resulting in lower production during the three months ended June 30, 2014. Primero intends on making greater investments in underground development in an effort to improve mining and processing targets going forward.

Santa Elena Mine
There was a 48% decrease in gold ounces sold from Santa Elena largely related to SilverCrest transitioning, during the second quarter of 2014, from an open pit, heap leach operation to an underground mine and milling circuit. Despite the reduction in production, SilverCrest has maintained its annual guidance as it expects mine operations, during the second half of 2014, will realize higher metal recoveries and achieve full production through the mill.

Aurizona Mine
Sandstorm sold 2,334 ounces of attributable gold from Aurizona during the quarter, and although it was a slight decrease from the comparable period in 2013, it was a 42% decrease from the first quarter of 2014. The decrease was due to above average rainfall at the Aurizona mine which negatively impacted Luna's ability to access ore in the pit. As a consequence, Luna processed a higher amount of lower grade ore from the stockpile which resulted in lower gold production. Luna has revised its 2014 production guidance to a range of 75,000 to 80,000 ounces of gold.

In accordance with its previously announced commitment, the Company remitted a $20.0 million loan to Luna (whereby $10.0 million was advanced in 2013 and the remaining $10.0 million commitment was remitted in April 2014). The non-revolving loan is subject to interest at a rate of 12% per annum, subject to certain conditions, and will mature on June 30, 2017.

Subsequent to quarter end, the Company entered into a strategic investment agreement (the "Investment Agreement") with Luna, as part of which, Sandstorm participated in a Luna non-brokered private placement. Pursuant to the Investment Agreement, Sandstorm purchased 19.5 million shares of Luna, which when combined with the 8.5 million shares of Luna already owned by the Company, resulted in Sandstorm becoming the largest shareholder of Luna, owning approximately 19.8% of Luna's issued and outstanding shares. The Investment Agreement allowed Sandstorm to appoint one member to Luna's board of directors. The transaction aligns the interests of Luna and Sandstorm and allows both companies to work together in unlocking as much value as possible for their respective shareholders.

Royalties
Gold equivalent ounces sold attributable to royalties totaled 2,646 in the quarter, an increase of 35% from the comparable period in 2013. The royalty revenue was generated from 9 producing mines.

— OUTLOOK

Based on the existing gold streams and royalties, attributable gold equivalent production for 2014 is forecasted to be between 40,000 to 50,000 attributable gold equivalent ounces, increasing to approximately 60,000 attributable gold equivalent ounces per annum by 2017. This growth is largely driven by the Company's portfolio of gold streams with mines, most of which are either currently producing or expected to commence production by 2015.

— WEBCAST AND CONFERENCE CALL DETAILS

A conference call will be held on Thursday, August 14, 2014 starting at 8:30am PDT to further discuss the second quarter results. To participate in the conference call, use the following dial-in numbers:

Local/International: 647-788-4916
North American Toll-Free: 877-214-4966

It is recommended that participants dial in five minutes prior to the commencement of the conference call. An audio webcast of the conference call can be accessed via the following link, http://ow.ly/A5oJJ, and will also be available on the Sandstorm website.

Sandstorm's Management's Discussion and Analysis (MD&A) and Financial Statements for the second quarter will be accessible on the Company's website and on SEDAR at www.sedar.com. The Company has also completed a Form 6-K filing with the SEC that will be accessible on EDGAR at www.sec.gov/edgar.shtml. Shareholders can request a hard copy of the MD&A and Financial Statements by emailing [email protected].

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 (IFRS) including average cash cost per ounce of gold and cash operating margin. Average cash cost per ounce of gold is calculated by dividing the total cost of sales, less depletion, by the ounces sold. In the precious metals mining industry, this is a common performance measure but does not have any standardized meaning. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Cash operating margin is calculated by subtracting the average cash cost per ounce of gold from the average realized selling price per ounce of gold. The Company presents cash operating margin as it believes that certain investors use this information to evaluate the Company's performance in comparison to other companies in the precious metals mining industry who present results on a similar basis. The Company's royalty income is converted to an attributable gold equivalent ounce basis by dividing the royalty income for that period by the average realized gold price per ounce from the Company's gold streams for the same respective period. These Attributable Gold Equivalent ounces when combined with the gold ounces sold from the Company's Gold Streams equal total Attributable Gold Equivalent ounces sold. The presentation of these non-IFRS 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 measures differently.

ABOUT SANDSTORM GOLD

Sandstorm Gold Ltd. is a gold streaming company. Sandstorm provides upfront financing to gold mining companies that are looking for capital and in return, receives a gold streaming agreement. A gold stream gives Sandstorm the right to purchase a percentage of the gold produced from a mine, for the life of the mine, at a fixed price per ounce. Sandstorm has acquired a portfolio of ten streams and twenty-eight royalties, fourteen of which are producing gold. Sandstorm plans to grow and diversify its low cost production profile through the acquisition of additional gold streams.

For more information visit: www.sandstormgold.com

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 applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of Sandstorm Gold Ltd. ("Sandstorm"). Forward-looking statements include, but are not limited to, statements with respect to the future price of gold, 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 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 will operate in the future, including the price of gold 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, gold 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 Sandstorm 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 Sandstorm 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 Sandstorm will purchase gold 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, 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 Sandstorm's annual report for the financial year ended December 31, 2013 available at www.sedar.com. Although Sandstorm 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. Sandstorm does not undertake to update any forward looking statements that are contained or incorporated by reference, except in accordance with applicable securities laws.

SOURCE Sandstorm Gold Ltd.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Father business cycles and digital consumers are forcing enterprises to respond faster to customer needs and competitive demands. Successful integration of DevOps and Agile development will be key for business success in today’s digital economy. In his session at DevOps Summit, Pradeep Prabhu, Co-Founder & CEO of Cloudmunch, covered the critical practices that enterprises should consider to seamlessly integrate Agile and DevOps processes, barriers to implementing this in the enterprise, and pr...
Sensors and effectors of IoT are solving problems in new ways, but small businesses have been slow to join the quantified world. They’ll need information from IoT using applications as varied as the businesses themselves. In his session at @ThingsExpo, Roger Meike, Distinguished Engineer, Director of Technology Innovation at Intuit, showed how IoT manufacturers can use open standards, public APIs and custom apps to enable the Quantified Small Business. He used a Raspberry Pi to connect sensors...
The principles behind DevOps are not new - for decades people have been automating system administration and decreasing the time to deploy apps and perform other management tasks. However, only recently did we see the tools and the will necessary to share the benefits and power of automation with a wider circle of people. In his session at DevOps Summit, Bernard Sanders, Chief Technology Officer at CloudBolt Software, explored the latest tools including Puppet, Chef, Docker, and CMPs needed to...
Let’s face it, embracing new storage technologies, capabilities and upgrading to new hardware often adds complexity and increases costs. In his session at 18th Cloud Expo, Seth Oxenhorn, Vice President of Business Development & Alliances at FalconStor, will discuss how a truly heterogeneous software-defined storage approach can add value to legacy platforms and heterogeneous environments. The result reduces complexity, significantly lowers cost, and provides IT organizations with improved effi...
It's easy to assume that your app will run on a fast and reliable network. The reality for your app's users, though, is often a slow, unreliable network with spotty coverage. What happens when the network doesn't work, or when the device is in airplane mode? You get unhappy, frustrated users. An offline-first app is an app that works, without error, when there is no network connection.
Data-as-a-Service is the complete package for the transformation of raw data into meaningful data assets and the delivery of those data assets. In her session at 18th Cloud Expo, Lakshmi Randall, an industry expert, analyst and strategist, will address: What is DaaS (Data-as-a-Service)? Challenges addressed by DaaS Vendors that are enabling DaaS Architecture options for DaaS
One of the bewildering things about DevOps is integrating the massive toolchain including the dozens of new tools that seem to crop up every year. Part of DevOps is Continuous Delivery and having a complex toolchain can add additional integration and setup to your developer environment. In his session at @DevOpsSummit at 18th Cloud Expo, Miko Matsumura, Chief Marketing Officer of Gradle Inc., will discuss which tools to use in a developer stack, how to provision the toolchain to minimize onboa...
Companies can harness IoT and predictive analytics to sustain business continuity; predict and manage site performance during emergencies; minimize expensive reactive maintenance; and forecast equipment and maintenance budgets and expenditures. Providing cost-effective, uninterrupted service is challenging, particularly for organizations with geographically dispersed operations.
SYS-CON Events announced today that Catchpoint Systems, Inc., a provider of innovative web and infrastructure monitoring solutions, has been named “Silver Sponsor” of SYS-CON's DevOps Summit at 18th Cloud Expo New York, which will take place June 7-9, 2016, at the Javits Center in New York City, NY. Catchpoint is a leading Digital Performance Analytics company that provides unparalleled insight into customer-critical services to help consistently deliver an amazing customer experience. Designed...
When building large, cloud-based applications that operate at a high scale, it’s important to maintain a high availability and resilience to failures. In order to do that, you must be tolerant of failures, even in light of failures in other areas of your application. “Fly two mistakes high” is an old adage in the radio control airplane hobby. It means, fly high enough so that if you make a mistake, you can continue flying with room to still make mistakes. In his session at 18th Cloud Expo, Lee...
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
DevOps is not just last year’s buzzword. Companies with DevOps practices are 2.5x more likely to exceed profitability, market share, and productivity goals. But how do you enable high performance? What can you do right now to start? Find out from DevOps experts including Gene Kim, co-author of "The Phoenix Project," and the Dynatrace Center of Excellence.
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 ad...
SYS-CON Events announced today that Column Technologies will exhibit at SYS-CON's @DevOpsSummit at Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Established in 1998, Column Technologies is a global technology solutions provider with over 400 employees, headquartered in the United States with offices in Canada, India, and the United Kingdom. Column Technologies provides “Best of Breed” technology solutions that automate the key DevOps principal...
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.