Osisko Gold Royalties, Sandstorm Gold report buoyant Q3 results as output, prices rise

VANCOUVER (miningweekly.com) – Fellow NYSE- and TSX-listed precious metals royalties and streaming firms Osisko Gold Royalties and Sandstorm gold on Wednesday reported significantly increased third-quarter profits as attributable output increased and higher precious metal prices boosted the bottom lines.

Osisko reported record gold output for the quarter ended September of 9 902 oz gold, a 20% increase on the year-earlier comparable period.

Revenue rose 50% year-on-year to C$17.6-million.

Osisko stated that gold royalties earned from the Canadian Malartic mine decreased by 629 oz, or 8%, but were more than offset by the gold royalties earned from the Éléonore, Island Gold and Vezza net smelter return (NSR) royalties.

The company also recorded 1 570 oz of gold from the Éléonore mine, 430 oz of gold from its Island Gold mine NSR royalty and 267 oz of gold from its Vezza NSR royalty in the third quarter, compared with nil in the same quarter of 2015.

The average Canadian-dollar denominated selling price of gold in the quarter was also higher at C$1 743, compared with C$1 485 in the third quarter of 2015.

Cash and cash equivalents of C$392.7-million were recorded at September 30.

Attributable royalty production for 2016 is estimated at 28 000 oz to 29 000 oz gold for the Canadian Malartic mine, between 5 500 oz and 6 200 oz gold for the Éléonore mine and between 1 000 oz and 2 000 oz from other royalties.

SANDSTORM RESULTS
Similarly, Sandstorm Gold also reported positive third-quarter results, lifting attributable gold equivalent ounces (GEOs) sold by 16% year-on-year to 12 588 oz. Output was boosted by 1 763 attributable GEOs sold from the company’s recently acquired Yamana silver stream and Chapada copper stream; as well as 1 250 gold ounces sold from the Karma mine, which announced its first gold production in April.

For the third quarter, revenue was $16.8-million, compared with $12.1-million for the comparable period in 2015. The increase is mainly attributable to a 20% increase in the average realised selling price of gold and to more ounces sold.

Sandstorm reported that the average cash cost per attributable GEO was $255, resulting in cash operating margins of $1 081/oz, an improvement of 17% and 34%, respectively.

Net income for the period totalled $6.9-million, compared with a loss of $5.5-million in the comparable year-earlier period.

Meanwhile, Sandstorm has completed an equity financing for proceeds of $57.5-million, which it used to repay its revolving credit facility. As a result, Sandstorm currently has no bank debt and the entire $110-million revolving credit facility remains available for acquisition purposes.

Based on the company’s existing gold streams and royalties, attributable GEO production for 2016 is forecast to be between 47 000 oz and 50 000 oz. The company is forecasting attributable GEO output of about 65 000 oz/y by 2020.