PRECIOUS METALS

Sandstorm sets record Q3

Canada-based Sandstorm Gold Royalties recorded record sales and revenue of 22,600 attributable gold-equivalent ounces and US$38.9 million, respectively, in the third quarter of 2022, according to preliminary results.

 Sandstorm's assets

Sandstorm's assets

That compares to 15,514 attributable GEOs and US$27.6 million in revenue for the same period last year.

The company said that its preliminary cost of sales, excluding depletion for the three months, was US$7.3 million, resulting in cash operating margins of approximately US$1,383 per attributable GEO, which compares to US$3.7 million and US$1,541 per attributable GEO for the third quarter last year.

National Bank of Canada Financial Markets analyst Shane Nagle said Sandstorm's operating margin of US$31.6 million beat NBF's forecast of US$27.7 million. The sales were ahead of NBF's estimate of 19,126 GEOs.

"Q3 included incremental GEOs from closing of the Nomad and BaseCore portfolio acquisitions, which due to timing of deliveries, likely accounted for the difference," he said.

He said that NBF estimates a positive impact of about US$3.9 million to its Q3 EBITDA assumption, or a positive cash flow per share impact of US$0.02/share compared to its current US$0.07/share estimate.  

"Importantly, we remain in line with 2022 guidance of 80,000-85,000 GEOs at ~83,200 GEOs," Nagle said.

Sandstorm's share price was up 1.56% day on day at C$7.18 (US$5.23) on 6 October.

NBF has a target price of C$11.50 for the company.

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