2017 Second Quarter Results Conference Call AUGUST 4TH, 2017 - - PowerPoint PPT Presentation

2017 second quarter results conference call
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2017 Second Quarter Results Conference Call AUGUST 4TH, 2017 - - PowerPoint PPT Presentation

2017 Second Quarter Results Conference Call AUGUST 4TH, 2017 NYSE.MKT SAND TSX SSL CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION Except for the statements of historical fact contained herein, the information presented constitutes


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TSX SSL NYSE.MKT SAND AUGUST 4TH, 2017

2017 Second Quarter Results Conference Call

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Except for the statements of historical fact contained herein, the information presented constitutes "forward-looking statements", within the meaning of the U.S. Securities Act of 1933, the U.S. Securities Exchange Act of 1934, the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of Sandstorm Gold Ltd. (“Sandstorm”). Forward-looking statements include, but are not limited to, statements with respect to planned exploration, guidance on estimated production, cash flow and information and expectations about the acquisition of Mariana, the future price of gold, the estimation of mineral reserves and resources, realization of mineral reserve estimates, the timing and amount of estimated future production. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans”, or similar terminology. Forward-looking statements are made based upon certain assumptions and other important factors that, if untrue, could cause the actual results, performances or achievements of Sandstorm to be materially different from future results, performances or achievements expressed or implied by such statements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which Sandstorm will operate in the future, including the price of gold and anticipated costs. Certain important factors that could cause actual results, performances or achievements to differ materially from those in the forward-looking statements include, amongst others, the ability to successfully integrate operations and realize the anticipated benefits, gold price volatility, discrepancies between actual and estimated production, mineral reserves and resources and metallurgical recoveries, mining operational and development risks relating to the parties which produce the gold Sandstorm will purchase, regulatory restrictions, activities by governmental authorities (including changes in taxation), currency fluctuations, the global economic climate, dilution, share price volatility and competition. Forward-looking statements are subject to known and unknown risks, uncertainties and other important factors that may cause the actual results, level of activity, performance or achievements of Sandstorm to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: delays or failure to complete the transactions described herein, failure to obtain shareholder or regulatory approvals, the impact of general business and economic conditions, the absence of control over mining operations from which Sandstorm will purchase gold and risks related to those mining operations, including risks related to international operations, government and environmental regulation, actual results of current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined, risks in the marketability of minerals, fluctuations in the price of gold, fluctuation in foreign exchange rates and interest rates, stock market volatility, as well as those factors discussed in the section entitled “Risks to Sandstorm” in Sandstorm’s annual report for the financial year ended December 31, 2016 available at www.sedar.com. Although Sandstorm has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated

  • r intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Accordingly, readers should not place undue reliance on forward-looking statements. Sandstorm does not undertake to update any forward looking statements that are contained or incorporated by reference, except in accordance with applicable securities laws.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

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3

Corporate Update

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4

Average AISC below $600

95%

83% 12% 5%

71%

25% 46% 30%

100%

Majors Mid-tiers Juniors

2010 2017 2022

Ounces Based On Counterparty

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5

Financial Discussion

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Financial Results Highlights

15,558 12,750 $18,824 $16,463 $16,815 13,245 12,588

Q2 Q1 Q4 Q3

$16,066

Q2 Q1 Q4 Q3

average realized gold price Attributable Gold Equivalent Ounces Sold Sales & Royalty Revenue in US$000’s

2016 2017 2016 2017 $1,210 $1,336 $1,243 $1,260

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Financial Results Highlights

Sales & Royalty Revenues For the three months ended June 30, 2017

BY REGION

37%

Canada

25%

North America ex Canada

27%

South America

11%

Other

Sales & Royalty Revenues For the three months ended June 30, 2017

BY METAL

73%

Precious Metals

6%

Diamonds

21%

Base Metals and Other

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In $000s June 30, 2017

Total revenue $ 16,066 Attributable Gold Equivalent ounces sold 12,750 Sales $ 11,835 Royalty revenue 4,231 Average realized gold price per attributable ounce 1,260 Average cash cost per attributable ounce 290 Cash flows from operating activities 11,112 Net (loss) income (1,909)

Summary of Quarterly Results

Quarters Ended

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Cash Flow From Operating Activities

$2M $4M $6M $14M $12M $10M $8M

Q2 2016 Q2 2017

Quarterly Comparison Half-Year Comparison

$4M $8M $12M $28M $24M $20M $16M

HY 2016 HY 2017

24% 24%

$8,935,000 $11,112,000 $23,050,000 $18,620,000

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10

Asset Update

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Cerro Moro

STREAM

20% of silver produced until 7M

  • zs delivered. 9% silver stream

thereafter.

ONGOING PAYMENT

30% of the spot price of silver

OPERATOR

Yamana Gold Inc.

LOCATION

Argentina

STAGE

Development

ASSET UPDATES 1/4

PROGRESS HIGHLIHTS

Construction slightly ahead of

schedule.

Senior mine-site management

positions in place.

439 metres of underground

development in the first six months of 2017.

A total of $178M is planned to

be spent for the year.

› YTD spend is $77M A total of 70% of the total

capital for the project has been committed.

Commisioning is on track for

completion by the end of Q1 2018, with a ramp-up to commence thereafter.

2017 Exploration Budget $8.0 Million

35,000m DDH

2017–2020 Goal

Find sufficient mineral

resources to extend mine life beyond 10 years

Total scout drilling = 35,000m Follow up & infill = 89,000m

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Aurizona

ROYALTY

3%–5% NSR (gold price dependent)

OPERATOR

Trek Mining Inc.

LOCATION

Brazil

STAGE

Development

ASSET UPDATES 2/4

2017 FEASIBILITY HIGHLIGHTS Gold Price (Base case) $1,250/oz FX Rate BRL 3.3 : USD 1 M&I Resource 1.4 Moz/28.3 Mt @ 1.57 g/t Au P&P Reserve 971 koz/19.8 Mt @ 1.52 g/t Au Initial Mine Life 6.5 years Total Production (LOM) 885,700 oz gold Strip Ratio / Recovery 5.7:1 / 91% Cash Cost (LOM)1 $691/oz AISC (LOM) $754/oz Initial Capital $131M ($148/oz) Payback (after tax) 2.8 years

$197M

NPV5% AFTER-TAX

34%

IRR AFTER-TAX

136 koz

GOLD PER YEAR

40%

MARGIN

1 For IFRS accounting purposes, some stripping costs may be capitalized and included in sustaining capital instead of in operating costs.

PROCESSING PRODUCTION PROFILE

Throughput: 8,000 tpd Average recovery: 91% Average grade: 1.52 g/t Au Average: 136,000 oz Au/yr Initial 6.5-year mine life

0.5 0.7 0.9 1.1 1.3 1.5 1.7 20 40 60 80 100 120 140 160

1 2 3 4 5 6 7

Annual Gold Production (koz)

YEAR Average Grade (g/t)

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Tatajuba: 4km strike; plan to drill in H2-2017 Piaba West: Potential 900m extension

  • f Piaba deposit;

drilling underway Genipapo: Limited drilling Piaba North: Undrilled

> 10 DRILL

READY TARGETS

> 50 km

CUMULATIVE STRIKE

TATAJUBA CONVERTING TO MINING PERMIT AGGRESSIVE EXPLORATION UNDERWAY

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Exploration Stage Deals

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Bayan Khundii

O P E R A T O R

Erdene Resource Development Corp.

ASSET UPDATES 3/4

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Rabbit North

ASSET UPDATES 4/4

ROYALTY

2% NSR

OPERATOR

Tower Resources Ltd.

LOCATION

Canada

STAGE

Exploration

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