Release Date: February 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sandstorm Gold Ltd (SAND, Financial) reported strong revenue of USD47 million and operating cash flow of USD36 million in Q4 2024.
- The company has a strong balance sheet with significant cash flow, allowing for strategic capital allocation decisions.
- Sandstorm Gold Ltd (SAND) plans to increase share buybacks, believing its shares are undervalued.
- The company expects production to increase to over 150,000 gold equivalent ounces per year over the next five years.
- Sandstorm Gold Ltd (SAND) has reduced its debt from USD640 million to USD340 million, with plans to lower it further.
Negative Points
- Sandstorm Gold Ltd (SAND) missed its internal GEO production targets for 2024 by 10,700 ounces due to price fluctuations.
- The company provided a conservative production guidance for 2025 of 65,000 to 80,000 ounces, which may seem low to some investors.
- There were abnormal one-time drops in deliveries of copper from Lundin mining assets, affecting Q4 sales.
- Net income for 2024 was USD15.5 million, down from USD42.7 million in 2023, due to valuation adjustments and a one-time payment in 2023.
- The company faces potential risks with certain streams, such as Bear Creek, which could impact future production.
Q & A Highlights
Q: Can you provide more details on the Vatukoula stream and royalty buyback situation?
A: Nolan Watson, President and CEO, explained that the operator stopped paying quite some time ago due to insolvency at the mining level. A large Chinese company is now involved, and they have made a $4 million non-refundable deposit. They must pay an additional $10 million by next month to complete the buyout.
Q: What gives Sandstorm confidence to include Gualcamayo in the formal guidance despite its technical complexities?
A: Nolan Watson noted that the new owner is a well-capitalized multibillion-dollar Argentinian company. The large CapEx number includes sustaining capital, and the upfront capital is not as significant as it appears.
Q: Are there any streams in the portfolio at risk of renegotiation?
A: Nolan Watson mentioned that Americas Gold and Silver has resolved its issues with new management and capital. The remaining concern is Bear Creek, which owes Sandstorm $45 million. However, this could become a positive if the assets are sold.
Q: What are Sandstorm's priorities once the $300 million debt threshold is reached?
A: Nolan Watson emphasized that share buybacks are the top priority, followed by debt reduction. Acquisition growth will only be considered if it offers a higher return than debt reduction.
Q: Can you elaborate on the 2025 guidance and potential risks?
A: Nolan Watson stated that the guidance includes risk adjustments, such as a conservative assumption for Greenstone's ramp-up. The guidance aims to avoid missing targets due to unforeseen issues or price fluctuations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
