Sandstorm Gold swings to Q3 loss despite record sales
TORONTO (miningweekly.com) – Gold streaming firm Sandstorm Gold this week said it had swung to a third-quarter loss despite reporting record quarterly sales.
During the three months ended September 30, the Vancouver-based company booked a noncash impairment charge of $3.2-million related to the conversion of the Bracemac-McLeod gold stream into a 0.6% net smelter return royalty, and an increase of about $1.5-million in expenses arising from the Premier Royalty business combination.
Sandstorm reported a net loss of $2-million, compared with income of $15.4-million in the same period a year earlier.
Revenues were relatively flat year-on-year at $15.35-million, despite gold sales rising 5.5% to 9 570 oz. The average realised gold price, however, fell 20.5% over the past year to $1 324/oz.
Sandstorm in August announced that it had entered into an arrangement agreement to buy smaller gold streaming company Premier Royalty in an all-scrip deal valued at C$28.3-million.
The company had also remitted a $10-million loan to Luna Gold, subject to a coupon rate of 12%, that would mature on June 30, 2017. The proceeds from the loan would be used towards the Phase 1 expansion and exploration activities at Luna’s Aurizona mine, in Brazil.
Based on the existing gold streams and excluding any attributable production relating to Premier Royalty, Sandstorm expected 2013 attributable production to range between 33 000 oz and 37 000 gold-equivalent ounces, increasing to about 60 000 oz/y of gold equivalent by 2016.
This growth would be driven by the company’s portfolio of gold streams with mines, most of which were either currently producing or expected to start production by 2015.
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