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Sandstorm Gold removes guidance due to global pandemic uncertainty

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(Kitco News) - Sandstorm Gold has released its results for the third quarter ended September 30, 2020. The companies share price has fallen since the release and this could be due to the fact that revenue during the third quarter of 2020 was $23.3 million compared with $25.8 million for the comparable period in 2019. Interestingly, the decrease is largely due to a 30% decrease in the attributable gold equivalent ounces sold but partially offset by a 29% increase in the average realized selling price of gold.

Elsewhere in the report Net income came in at $6.5 million vs Q3 2019 net income of $6.2 million. The attributable gold equivalent ounces sold of 12,068 ounces vs 17,289 ounces in Q3 2019.

In the report, the firm said "Due to the unknown long-term effects of the current global health pandemic, Sandstorm withdrew the Company’s 2020 production guidance. Based on the Company’s existing royalties, attributable gold equivalent ounces sold are forecasted to be approximately 125,000 ounces in 2024." The removal of the production guidance could cause some uncertainty for investors.  On the plus side, the report confirmed "Sandstorm has a strong balance sheet with over $70 million in cash and over $65 million in equity and debt investments. When combined with an undrawn revolving credit facility of $225 million, strong operating cash flows, and the sale of non-core investments, Sandstorm expects to have significant capital available to propel the Company into the next phase of growth.".

Looking at the daily price chart it seems that investors have reduced their holdings in the firm. The volume at the bottom shows a spike of selling as the price moved lower. The key feature on the chart is the falling wedge formation. It has now broken to the downside and the bottom of the structure has been used as resistance for another move lower today (Friday 30th October). 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.