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Sandstorm Gold reports positive year-end results

19th March 2015

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Precious metals streaming firm Sandstorm Gold on Wednesday reported that fourth-quarter and year-end earnings were back in the black as reduced administrative costs and no significant special items boosted the bottom line.

For the three months ended December 31, net income was $2.6-million, compared with a net loss of $39.9-million for the comparable period in 2013. For the full year, net income was $11.5-million, compared with a net loss of $74.6-million in 2013.

Revenue for the quarter slipped to $12.5-million, down from $15.8-million in the comparable period in 2013, while the full-year revenue of $56.5-million, was also lower than the $59.8-million recorded a year earlier. The decrease was mainly attributable to a decrease in the gold price.

Sandstorm sold 10 424 attributable gold-equivalent ounces in the fourth quarter and a record 44 821 oz for the full year.

The average cash cost were $308/oz for the three months and $321/oz for the full year, resulting in cash operating margins of $890/oz for the fourth quarter and $939/oz for the year.

The company had reduced administrative expenses by $6.7-million for the full year. The decrease was mainly attributable to the successful implementation of a cost reduction programme.

“During 2014, our team was able to grow our asset base with the addition of 11 new streams and royalties; we generated significant free cash flow from our existing portfolio and worked through a number of challenges that arose due to the volatile gold price environment. I believe that 2015 will be a strong year for Sandstorm as we use our available capital to aggressively pursue new transactions and grow our future production and cash flow,” Sandstorm president and CEO Nolan Watson said.

In the year under review, Sandstorm had partnered with Franco-Nevada in a $120-million gold stream deal with True Gold Mining, which was developing the Karma gold project, in Burkina Faso. The gold stream was syndicated between Franco-Nevada and Sandstorm with Franco-Nevada providing 75% of the funding and Sandstorm providing the remaining 25% of the funding. The transaction was the first syndicated gold stream between two royalty and streaming companies.

Based on the company’s existing gold streams and royalties, it expected 2015 output to range between 36 000 oz and 44 000 oz of attributable gold equivalent. The company expected output of about 45 000 oz/y in 2018.

Despite initially falling in early morning trade, Sandstorm’s TSX-listed stock traded 3.32% higher on Thursday at about C$4.05 apiece.

Edited by Creamer Media Reporter

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