{"id":12528,"date":"2023-11-11T08:51:49","date_gmt":"2023-11-11T08:51:49","guid":{"rendered":"https:\/\/infundpros.com\/news\/sandstorm-gold-royalties-it-could-have-been-better-nysesand\/"},"modified":"2023-11-11T08:51:51","modified_gmt":"2023-11-11T08:51:51","slug":"sandstorm-gold-royalties-it-could-have-been-better-nysesand","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=12528","title":{"rendered":"Sandstorm Gold Royalties: It Could Have Been Better (NYSE:SAND)"},"content":{"rendered":"
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Introduction<\/h2>\n

Vancouver-based Sandstorm Gold Ltd.<\/strong> (SAND) released its third quarter 2023 results on November 6, 2023.<\/p>\n

Note:<\/strong> My earlier articles on Sandstorm Gold, which were released on August 14 and October 9, 2023, have been updated in this article. Since 2015, I have been regularly following SAND quarterly results.<\/span><\/p>\n

With approximately 250 streams and royalties as of September 30, 2023, 39 of the underlying assets in Sandstorm’s portfolio are cash-flowing, and no asset contributes more than 15% to the company’s consensus net asset value.<\/p>\n

1\u20133Q23 Results Snapshot<\/strong><\/h2>\n

It was a decent quarter with a significant gold equivalent production of 21,123 Au Eq. Oz<\/strong> (22,606 Au Eq. Oz last year) and revenues of $41.32 million, <\/strong>with $22.50 million<\/strong> in sales and $18.83 million<\/strong> in royalty.<\/p>\n

The average GEO price increased this quarter from $1,706 per ounce in 3Q22 to $1,919 per ounce<\/span><\/strong>.<\/span><\/p>\n

The average cash costs for the three months ended September 30, 2023, were $220<\/strong> per attributable gold equivalent ounce.<\/p>\n

Net loss was $0.24 million, or $0.00 per share,<\/strong> in 3Q23, compared to an income of $31.88 million in the comparable quarter a year ago.<\/p>\n

SAND Quarterly Gold Equivalent Production per Mine: 2Q23 versus 3Q23<\/p>\n

\"Chart\"<\/span>
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SAND Production per Mine 2Q23 versus 3Q23 (Fun Trading)<\/span><\/p>\n<\/figcaption><\/figure>\n

As we can see, Cerro Moro, Fruta Del Norte, and Mercedes, among others, were down sequentially.<\/p>\n

2: Investment Thesis<\/strong><\/h2>\n

Because I disagree with the management’s acquisition approach over the last few years, I have always been reluctant to fully invest in Sandstorm. Although expansion seems great for the company, the stockholders have not benefited much from it.<\/p>\n

On the other hand, the stock is now quite attractive, well below $4.6, and I am accumulating. I believe the gold industry is about to turn bullish.<\/p>\n

The price of an ounce of gold is currently between $1,950 and $2,020, enabling SAND to generate good free cash flow, but the market is still reluctant to support this sector. Nonetheless, things are improving. The market is waiting for the FED to make it obvious that interest rates will pause early in 2024.<\/p>\n

If you’re a new investor looking for opportunities in the streaming and royalty space, starting a medium-term SAND position right now is reasonable. The stock is forming a good support around $4.50<\/strong>, and it is time to accumulate. However, I strongly recommend trading LIFO for about 60%<\/strong> of your entire position.<\/p>\n

3: Stock Performance: Still lagging its peers.<\/strong><\/h2>\n

Sandstorm Gold is still lagging behind its peers and is down 13%<\/strong> on a one-year basis. The market appears unconvinced by SAND’s expansion strategy and is waiting for a fundamental turnaround, which is not happening now.<\/p>\n

\"Chart\"
Data by YCharts<\/figcaption><\/figure>\n

Sandstorm Gold: Financial Results history Snapshot ending 3Q23: The Raw Numbers<\/strong> <\/h2>\n

Note: All numbers are in US dollars.<\/strong><\/h3>\n

<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n<\/colgroup>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Sandstorm Gold<\/strong><\/td>\n3Q22<\/strong><\/td>\n4Q22<\/strong><\/td>\n1Q23<\/strong><\/td>\n2Q23<\/strong><\/td>\n3Q23<\/strong><\/td>\n<\/tr>\n
Revenues in dollars<\/td>\n38.95<\/td>\n38.45<\/td>\n43.98\/53.98*<\/td>\n49.84<\/td>\n41.32<\/td>\n<\/tr>\n
Net Income to shareholders in dollars<\/td>\n31.68<\/td>\n-2.36<\/td>\n15.67<\/td>\n2.05<\/td>\n-0.24<\/td>\n<\/tr>\n
EBITDA in dollars<\/td>\n53.02<\/td>\n30.36<\/td>\n43.77<\/td>\n33.30<\/td>\n26.62<\/td>\n<\/tr>\n
EPS Diluted<\/td>\n0.13<\/td>\n-0.05<\/td>\n0.05<\/td>\n0.01<\/td>\n0.00<\/td>\n<\/tr>\n
Cash From Operating Activities in Millions<\/td>\n25.09<\/td>\n26.27<\/td>\n39.92<\/td>\n42.14<\/td>\n31.95<\/td>\n<\/tr>\n
CAPEX in $million<\/td>\n489.01<\/td>\n88.65<\/td>\n3.35<\/td>\n11.83<\/td>\n2.75<\/td>\n<\/tr>\n
FCF in $million<\/td>\n-463.92<\/td>\n-62.38<\/td>\n36.57<\/td>\n30.32<\/td>\n29.20<\/td>\n<\/tr>\n
Total cash in $ million (incl. short-term note)<\/td>\n12.56<\/td>\n10.80<\/td>\n7.92<\/td>\n24.95<\/td>\n13.79<\/td>\n<\/tr>\n
Bank Debt in Millions<\/td>\n524.0<\/td>\n497.5<\/td>\n475.0<\/td>\n467.0<\/td>\n456.0<\/td>\n<\/tr>\n
Shares outstanding diluted in millions<\/td>\n244.75<\/td>\n301.28<\/td>\n301.26<\/td>\n300.67<\/td>\n296.17<\/td>\n<\/tr>\n
Dividend per share in $<\/td>\n0.015<\/td>\n0.015<\/td>\n0.015<\/td>\n0.015<\/td>\n0.015<\/td>\n<\/tr>\n
Production<\/strong><\/td>\n3Q22<\/strong><\/td>\n4Q22<\/strong><\/td>\n1Q23<\/strong><\/td>\n2Q23<\/strong><\/td>\n3Q23<\/strong><\/td>\n<\/tr>\n
In K Au Eq.<\/td>\n22.61<\/td>\n21.75<\/td>\n28.37<\/td>\n24.50<\/td>\n21.12<\/td>\n<\/tr>\n
Gold price<\/td>\n1,706<\/td>\n1,746<\/td>\n1,882<\/td>\n1,972<\/td>\n1,919<\/td>\n<\/tr>\n<\/table>\n

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