Sandstorm Gold (TSX: SSL) has monetized several non-precious metals assets in an effort to deleverage its balance sheet. The assets were sold in a package deal with Evolve Strategic Element Royalties, a private operator that is led by two executives that previously served with Nomad Royalty Company.
The asset package sold by Sandstorm includes six royalties that are primarily focused on copper operations. Assets sold include:
- Highland Valley Copper: 0.5% net profits interest on the mine operated by Teck Resources.
- Copper Mountain North Pit: 2.5 – 5.0% net smelter returns royalty at the north pit of the mine, which is operated by Hudbay Minerals.
- Seymour Lake: 1.5% NSR for the lithium project that covers the Seymour deposit, but not the Root Project being developed by Green Technology Metals.
- Obalski: 1.0 – 1.5% NSR on the copper-zinc project operated by TomaGold.
- Scott Lake: A $1.0 – $4.0 million payment upon commercial production being achieved at Yorbeau Resources’ project.
- Saints-Leinster & Scotia: 2.5% NSR on the nickel projects owned by Future Battery Metals and Shine Resoures.
Total consideration for the package amounts to $21.0 million in cash, in combination with the next $10.0 million in proceeds from the Copper Mountain Royalty. Sandstorm indicated that based on the analyst consensus net asset value of the package, the sale occurred at 1.0x street consensus NAV, while Sandstorm is claiming an internal rate of return of 20.0% on the sale.
The transaction, once closed, will result in over $50 million in non-core assets having been sold since Q3 2023. Further monetization of Sandstorms portfolio is not said to be planned at this time.
Production guidance for 2024 remains at 75,000 – 90,000 gold equivalent ounces, which is to climb to 125,000 ounces within the next five years. The company meanwhile indicated that it has renewed its normal course issuer bid.
Sandstorm Gold last traded at $7.58 on the TSX.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
