Sandstorm Gold Ltd. SAND announced a preliminary record for gold equivalent ounces (GEO) sold and revenue in the third quarter of 2022.
SAND sold nearly 22,600 attributable GEOs during the quarter. This performance marks a jump of 46% compared to the 15,514 ounces of GEO sold in the third quarter of 2021. Sandstorm Gold generated preliminary revenues of $38.9 million during the quarter in question, up 41% compared to to the reported figure of $27.6 million a year ago.
Preliminary cost of sales, excluding depletion for the September quarter, was $7.3 million, higher than the $3.7 million reported in the third quarter of 2021. This led to cash operating margins d approximately $1,383 per GEO attributable in the quarter under review, 10% lower than the $1,541 per GEO in the prior year quarter.
The results for the third quarter of 2022 benefited from the solid performance of the second quarter. SAND reported attributable GEOs of 19,200 ounces for the June quarter, reflecting a 7% year-over-year increase. Revenue increased 36% year over year to $36 million.
Sandstorm Gold completed the previously announced acquisition of Nomad Royalty Company Ltd in August 2022. This acquisition significantly increased the size and scale of SAND, cementing its status as the most liquid mid-tier royalty and streaming company with strong growth prospects. The acquisition adds high-quality, low-cost assets, and is expected to drive revenue to nearly 90% of precious metals by 2025. The takeover also strengthens SAND’s financial strength, giving it the flexibility to continue growing and return capital to its shareholders.
Under the agreement, SAND transferred 30% of its stake in the Hod Maden project and 25% of its stake in Entree Resources Ltd, to Horizon Copper. She also paid $10 million in cash to Horizon Copper. Under the terms of the Hod Maden Gold Stream, Horizon will sell ounces equal to 20% of all gold produced from Hod Maden (on a 100% basis) to Sandstorm Gold at a price equal to 50% of the gold spot price. gold up to 405,000 ounces of gold are delivered. Once the target is achieved, Horizon Copper will sell 12% of the gold produced for the life of mine to Sandstorm Gold for a price equal to 60% of the spot price of gold.
Sandstorm Gold currently has a portfolio of 250 royalties, of which 39 underlying mines are now active. SAND plans to expand and diversify its low-cost production profile by acquiring additional gold royalties.
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Sandstorm Gold shares have fallen 17.6% over the past year, compared to a 10% decline for the industry.
Zacks Ranking and Stocks to Consider
Sandstorm Gold currently carries a Zacks Rank #3 (Hold).
Some top-ranked stocks in the base materials space are Albemarle Society ALB, ATI Inc. ATI and Brigham Minerals MNRL, each currently showing a Zacks rank #1 (Strong Buy). You can see today’s full list of Zacks #1 stores ite.
Albemarle forecasts a profit growth rate of 427% for the current year. The Zacks consensus estimate for ALB’s current-year earnings has been revised up 19% in the past 60 days.
ALB’s earnings have exceeded the Zacks consensus estimate in each of the past four quarters, averaging 24.2%. The stock has gained about 27% over the past year.
ATI forecasts a profit growth rate of 1,454% for the current year. ATI’s consensus earnings estimate for the current year has been revised up 23% in the past 60 days.
ATI’s earnings have exceeded the Zacks consensus estimate for the past four quarters, averaging 130.4%. ATI has gained about 66% over the past year.
Brigham Minerals forecasts a profit growth rate of 151% for the current year. The Zacks consensus estimate for MNRL’s current-year revenue has been revised up 8% in the past 60 days.
Brigham Minerals has a four-quarter earnings surprise of 13.9%. MNRL grew by about 35% in one year.
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