VANCOUVER, Aug. 3, 2016 /PRNewswire/ - Sandstorm Gold Ltd. ("Sandstorm" or the "Company") (NYSE MKT: SAND, TSX: SSL) has released its results for the second quarter ended June 30, 2016 (all figures in U.S. dollars).  

— SECOND QUARTER HIGHLIGHTS

• Attributable gold equivalent ounces sold¹ of 12,517 ounces (Q2 2015 – 12,901 ounces);
• Revenue of $15.7 million (Q2 2015 - $15.4 million);
• Average cash cost per attributable gold equivalent ounce of $261 resulting in cash operating margins¹ of $994 per ounce (Q2 2015 - $304 per ounce and $892 per ounce respectively);
• Operating cash flow of $8.9 million (Q2 2015 – $9.5 million);
• Net income of $5.2 million (Q2 2015 – $13.4 million loss);
• The Company amended its revolving credit facility, extending the term to four years (maturing in July 2020). The revolving credit facility allows the Company to borrow up to $110 million for acquisition purposes, from a syndicate of banks including The Bank of Nova Scotia, Bank of Montreal, National Bank of Canada and Canadian Imperial Bank of Commerce; and
• Subsequent to quarter end, Sandstorm completed an equity financing for aggregate gross proceeds of $57.5 million. Upon closing of the financing, the majority of the net proceeds were used to reduce the balance of the Company's revolving credit facility. As a result, the Company currently has no bank debt and the entire $110 million revolving credit facility remains available for acquisition purposes.

Sandstorm's President & CEO Nolan Watson remarked, "During the first half of 2016, Sandstorm has added 55 royalties to the Company's asset base, and has generated $18.4 million in net income and $18.6 million in cash flow from operations. We have used the operating cash flow and the proceeds from our recent equity raise to pay our debt down to zero and we now have over $110 million in available capital to pursue acquisitions. There are a wide range of deals that we are working on presently, from small deals on exploration stage assets to large transactions on cash flowing mines."

— OUTLOOK

Based on the Company's existing gold streams and royalties, attributable gold equivalent production for 2016 is forecasted to be between 43,000 – 50,000 ounces. The Company is forecasting attributable gold equivalent production of approximately 65,000 ounces per annum by 2020.

— FINANCIAL RESULTS

Precious metals and diamonds accounted for 88% of the revenue generated during the second quarter with the remainder coming from base metals. Revenue ($15.7 million) was slightly higher when compared to the second quarter of 2015, due to a 5% increase in the average realized selling price of gold, partially offset by a 3% decrease in the number of attributable gold equivalent ounces sold.

Cash flow from operations of $8.9 million was lower and net income of $5.2 million was higher when compared to the same period in 2015. The factors contributing to the changes included a $6.0 million gain on the revaluation of the Company's investments, a $3.0 million decrease in depletion expense, a $1.3 million increase in interest expense, as well as certain items recognized during the second quarter of 2015 that did not recur in 2016.

— STREAMS & ROYALTIES: Q2 UPDATES

The Company's revenue was generated by 19 producing assets during the second quarter of 2016. Of the gold equivalent ounces delivered to Sandstorm, 77% were from operations run by major and mid-tier mining companies. Approximately 40% of the ounces were produced at mines located in Canada, 34% from the rest of North America and 26% from South America and other countries.

Canada
Gold equivalent ounces attributable to Canadian mines made up 40% of the Company's total ounces in Q2 2016 and was 18% lower when compared to the second quarter of 2015. The decline was due to timing of shipments that affected gold ounces sold from the Ming Mine in Newfoundland, the Bachelor Lake mine in Quebec and the Black Fox mine in Ontario ("Black Fox"). Specifically, 1,400 gold ounces were received as at June 30, 2016 but were sold subsequent to quarter end.

Primero Mining Inc. ("Primero") operates Black Fox and has focused its recent exploration efforts at the Froome zone target. The Froome zone is located approximately 800 metres west of Black Fox and Primero has delineated long intervals with significant gold mineralization at the target. Primero is evaluating the deposit as a medium term alternative to complement Black Fox ore in order to fill the mill beyond the end of 2017.

North America ex Canada
Gold equivalent ounces from the rest of North America (excluding Canada) increased by 26% compared to 2015 and accounted for 34% of the ounces sold during the second quarter. One of the factors driving the increase was an 11% rise in gold ounces sold from the Santa Elena mine in Mexico ("Santa Elena") operated by First Majestic Silver Corp. ("First Majestic").

First Majestic is continuing the development of the new San Salvador ramp at Santa Elena. This new ramp is scheduled to connect to the Main Vein area by the end of 2016. Once completed, the transportation of ore via trucks is expected to reduce haulage bottlenecks and increase underground production capacity.

South America & Other
Attributable gold equivalent ounces from South America and the rest of the world was consistent with the ounces sold during Q2 2015, and made up approximately 26% of Sandstorm's total gold equivalent production during the quarter. The addition of copper and silver from the streams on Yamana Gold Inc.'s Chapada and Minera Florida mines ("Yamana Streams") during the quarter more than offset the loss of gold ounces due to the temporary closure of the Aurizona mine in Brazil.

Metal deliveries under the Yamana Streams are subject to monthly maximums and therefore prone to significant volatility with respect to the timing of shipments. Contractually, there is an annual true-up mechanism which takes into account the timing and shipment of these monthly deliveries. The Company is currently anticipating a true-up for these timing differences.

— WEBCAST AND CONFERENCE CALL DETAILS

A conference call will be held on Thursday, August 4, 2016 starting at 8:00am PDT to further discuss the second quarter results. To participate in the conference call, use the following dial-in numbers and conference ID, or join the webcast using the link below:

Local/International: 416-764-8609
North American Toll-Free: 888-390-0605
Conference ID: 68945360
Webcast URL:  http://ow.ly/1gB9302FIWx

The Sandstorm Management 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].

ABOUT SANDSTORM GOLD

Sandstorm Gold Ltd. is a gold streaming and royalty company. Sandstorm provides upfront financing to gold mining companies that are looking for capital and in return, receives the right to a percentage of the gold produced from a mine, for the life of the mine. Sandstorm has acquired a portfolio of 131 streams and royalties, of which 20 of the underlying mines are producing. Sandstorm plans to grow and diversify its low cost production profile through the acquisition of additional gold streams and royalties.

For more information visit: www.sandstormgold.com

SOURCE Sandstorm Gold Ltd.