TSX SSL NYSE.MKT SAND AUGUST 4TH, 2017
2017 Second Quarter Results Conference Call AUGUST 4TH, 2017 - - PowerPoint PPT Presentation
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
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
3
Corporate Update
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
5
Financial Discussion
6
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
7
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
8
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
9
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
10
Asset Update
11
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
12
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)
13
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
14
Exploration Stage Deals
15 15
Bayan Khundii
O P E R A T O R
Erdene Resource Development Corp.
ASSET UPDATES 3/4
16 16
Rabbit North
ASSET UPDATES 4/4
ROYALTY
2% NSR
OPERATOR
Tower Resources Ltd.
LOCATION
Canada
STAGE
Exploration
17 15 17