Sandstorm Gold (SSL) Q3 2024 earnings summary

Executive summary

• Achieved record operating margins in Q3 2024, driven by higher commodity prices despite lower gold-equivalent ounces due to portfolio mix and ramp-up timing at Greenstone.

• Revenue reached $44.7 million in Q3 2024, up from $41.3 million in Q3 2023, with $26.7 million from streaming contracts and $18 million from royalties.

• Net income rose to $5.8 million, up from near zero in Q3 2023, supported by higher revenues and lower depletion and finance expenses.

• Sandstorm Gold Royalties operates a diversified, gold-focused royalty and streaming portfolio with over 230 royalties, 41 cash-flowing assets, and 30+ development assets globally, emphasizing built-in growth and long-life mines.

• The company is positioned for significant production growth, with guidance for attributable gold equivalent production of 80,000–155,000 ounces in 2024 and a target of 180,000 ounces by 2029, supported by key assets entering production.

Financial highlights

• Q3 revenue: $44.7 million, up year-over-year, with record cash operating margins of $2,215/oz at an average realized gold price of $2,520/oz.

• Cash flow from operating activities (excluding non-cash working capital): $37 million, up from $33.9 million in Q3 2023.

• Debt reduced to $369 million as of early Q4, with $10 million repaid in the first five weeks of Q4.

• Portfolio cash flows are forecasted to grow from $160 million in 2025 to $250 million in 2029, assuming gold at $2,300/oz.

• Attributable production: 17,400 GEOs in Q3 2024, lower than anticipated due to higher gold prices reducing GEO conversion from other metals.

Outlook and guidance

• 2024 production guidance updated to 70,000–75,000 GEOs due to higher gold prices and Greenstone ramp-up.

• 2024 attributable gold equivalent production guidance is 80,000–155,000 ounces, with long-term growth to 180,000 ounces by 2029.

• Five-year outlook targets 125,000–155,000 GEOs annually, more than doubling current production, based on existing streams and royalties.

• Built-in growth is underpinned by ramp-up of Greenstone, Platreef, Hod Maden, and MARA, with key investment decisions and construction milestones expected over the next five years.

• No intention to issue new shares; preference for share buybacks and continued deleveraging.