Sandstorm Gold sees slight increase in Q2 production, revenue

JOHANNESBURG (miningweekly.com) – Canadian gold streaming and royalty company Sandstorm Gold has reported a slight increase in attributable gold equivalent production and revenue for the second quarter of 2017.

The company attributed this to increases from the company's silver and copper stream from the Chapada mine in Brazil, as well as additional gold equivalent ounces sold from the Emigrant, Bachelor Lake and Black Fox mines, in Canada.

As a result, cash flow from operations was higher when compared with the same period last year.

Net income was, however, lower than in the second quarter of 2016, owing to a $0.9-million noncashloss relating to the revaluation of the company's investments, as well as a $.5-million noncash increase in depletion expense, driven by an increase in the number of attributable gold equivalent ounces sold.

The decrease in net income was partially offset by a foreign exchange gain, as well as a decrease in finance expense related to the company's revolving line of credit.

"The focus of the second quarter was closing the acquisition of Mariana Resources and adding the Hot Maden anchor asset to the company's royalty portfolio,” CEO Nolan Watson said in a statement on Friday.

Sandstorm completed its $175-million acquisition of Australian gold explorer Mariana Resources in July; Mariana has now become a wholly owned subsidiary.

Meanwhile, Sandstorm’s producing streams and royalties continued to generate strong free cash flow and, as a result, the company has a healthy balance sheet that it can use to continue pursuing acquisitions and to buy back shares.

Based on the company's existing gold streams and royalties, attributable gold equivalent production for 2017 is forecast to be between 50 000 oz and 55 000 oz.

The company is forecasting attributable gold equivalent production of about 130 000 oz/y in 2022.