Sandstorm (SAND) Gets Shareholders' Nod for Nomad Buyout

Sandstorm Gold Ltd.SAND recently announced that its shareholders approved the issuing of Sandstorm shares related to its previous agreement to acquire all issued and outstanding shares of Nomad Royalty Company Ltd. NSR for $590 million. Per the agreement, Nomad shareholders will receive upfront consideration of 1.21 Sandstorm sharesfor each common share of Nomad.

Sandstorm entered into this agreement on May 1. In 2021, Nomad’s royalty and stream assets portfolio contributed revenues of $27 million and gold equivalent ounce (GEO) of approximately 16,000. Sandstorm anticipates Nomad's production to grow to approximately 40,000 GEO by 2025. Through this buyout, Sandstorm will add several high-quality and low-cost assets while accelerating its production in the near and long term. The deal is likely to close in the second half of 2022.

On July 14, Sandstorm closed the acquisition of nine royalties and one stream from BaseCore Metals LP. The total consideration for the deal comprised a $425 million cash payment, partly funded by the previously-announced extended credit facility and issuance of 13.5 million shares amounting to $100 million. SAND also teamed up with Royalty North Partners Ltd. to sell a portion of a copper royalty acquired in the BaseCore Transaction and retain a silver stream on the asset.

These deals will strengthen Sandstorm’s portfolio with immediate and long-term growth while positioning it as the highest-growth streaming and royalty company. The company’s management stated that precious metals and copper would likely outperform the market in the coming years. It will provide its investors with long-life, high quality and low-cost assets focused on gold, silver and copper.

Sandstorm reported earnings per share (EPS) of 20 cents in the second-quarter 2022, which beat the Zacks Consensus Estimate of 5 cents. The bottom line surged 400% year over year on higher revenues.

Sandstorm Gold’s total revenues amounted to a record $36 million, up 36% year over year. The upside is driven by a 7% increase in attributable gold equivalent ounces sold and a 4% increase in gold’s average realized selling price. The company reported record attributable gold equivalent ounces of 19,276 ounces compared with 18,004 ounces in the prior-year quarter.

Total cost of sales came in at $16.3 million compared with the year-ago quarter’s $12.9 million. Gross profit climbed 46% year over year to $19.7 million. The gross margin was 54.8% in the second quarter compared with the prior-year quarter’s 51.1%.

The average cash cost per attributable gold equivalent ounce was $273 in the second quarter, up from $227 per ounce in the prior-year quarter. Cash operating margins were $1,593 per attributable gold equivalent ounce in second-quarter 2022, up from $1,569 per ounce in the prior-year quarter.

Sandstorm Gold had cash and cash equivalents of $18.5 million at the end of the second quarter compared with $16.2 million held at the 2021-end. Net cash provided by operating activities in the first half of 2022 was $55.6 million, up from the prior-year period’s $43.7 million.

Sandstorm Gold is on track to achieve attributable gold equivalent ounces between 80,000 ounces and 85,000 ounces in 2022. The company continues to expect its 2025 guidance for attributable gold equivalent production to be 155,000 ounces, subject to the conversion of the Hod Maden interest into a gold stream.

Some other players in the Mining – Gold industry, Barrick Gold GOLD and Agnico Eagle Mines AEM recently came out with their second-quarter 2022 results.

Barrick recorded adjusted EPS of 24 cents, beating the Zacks Consensus Estimate of 23 cents. GOLD recorded total sales of $2,859 million, missing the Zacks Consensus Estimate of $3,159 million. Top-line figure declined 1% year over year. Barrick has a trailing four quarters earnings surprise of 9.60%, on average.

Agnico Eagle reported adjusted EPS of 75 cents in the second quarter, which surpassed the Zacks Consensus Estimate of 57 cents per share. The company generated revenues of $1,581.1 million, up 60.6% year over year. The top line surpassed the Zacks Consensus Estimate of $1,568 million. Agnico has a trailing four quarters earnings surprise of 20.76%, on average.

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