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Sandstorm Gold's 1Q revenue boosted by higher prices

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(Kitco News) - Royalty company Sandstorm Gold Ltd. (NYSE: SAND, TSX: SSL) said late Thursday that it posted higher revenue in the first quarter but ended with a net loss due to non-recurring items.

Meanwhile, due to uncertainty surrounding the global COVID-19 pandemic, Sandstorm withdrew its 2020 production guidance.

Revenue during the first quarter rose to $21.3 million from $18.2 million for the comparable period in 2019, Sandstorm said. The company said the increase is largely due to a 23% increase in the average realized selling price of gold to $1,593 an ounce, partially offset by a 5% decrease in gold-equivalent ounces sold.

The company listed a net loss of $10.3 million, or 6 cents per share, compared to net income of $2.5 million, or a penny, in the first quarter of 2019. The turnaround was primarily due to certain non-recurring items that were recognized during the first quarter of 2020, including an $8.9 million non-cash impairment charge, Sandstorm said.

“The impairment charge was primarily related to the Dravidian royalty as a result of adverse diamond market conditions, partly exacerbated by the COVID-19 pandemic,” Sandstorm said in its earnings report. “Other factors impacting the decrease in net income include a $5.9 million loss recognized on the revaluation of the company’s investments, largely driven by the change in fair value of the Americas Gold and Silver Corp. convertible debenture.”

The company sold 13,393 gold-equivalent ounces from January through March, compared to 14,071 a year ago.

Based on existing royalties, the company projected that gold-equivalent ounces sold will be approximately 125,000 ounces in 2024.

Sandstorm said it intends to initiate an at-the-market equity program allowing it to issue $140 million worth of common shares to the public from “time to time.” The company said the program would be used if Sandstorm requires capital for an acquisition. However, Sandstorm said it would not be permitted to purchase common shares under its normal course issuer bid at any time that the company is distributing shares under the at-the-market program.

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