Mr. Nolan Watson reports

SANDSTORM GOLD ANNOUNCES FINANCIAL RESULTS FOR Q2, 2014; REITERATES 2014 GUIDANCE

Sandstorm Gold Ltd. has released its unaudited results for the second quarter ended June 30, 2014 (all figures in U.S. dollars).

Second quarter highlights:

• Strong balance sheet with over $110-million in cash at June 30, 2014;
• Revenue of $13.2-million;
• Attributable gold equivalent ounces sold of 10,149 ounces;
• Average cash cost per ounce of $310, resulting in cash operating margins of $986 per ounce;
• Operating cash flow of $9.4-million;
• Net income of $3.0-million;
• Remitted a $10-million loan to Luna Gold Corp. in accordance with its previously announced commitment to issue a non-revolving loan facility to Luna;
• Acquired 100 per cent of the issued and outstanding shares of Sandstorm Metals & Energy Ltd., allowing Sandstorm management to focus on gold transactions going forward.

"The second quarter results demonstrated the value of diversification in our portfolio. Although a few of our streaming partners had challenging quarters and posted lower-than-expected production numbers, Sandstorm still recorded strong operating cash flow and earnings," said Sandstorm president and chief executive officer Nolan Watson.

Mr. Watson added, "We are confident reiterating this year's attributable gold equivalent production guidance of 40,000 to 50,000 ounces of gold."

Financial results

Revenue and gold sales

Revenue was $13.2-million in the second quarter of 2014, generated from the sale of 10,149 attributable gold equivalent ounces. Revenue declined slightly compared with the comparable period in 2013, largely due to an 8-per-cent decrease in the average realized selling price of gold, which was partially offset by an 8-per-cent increase in the number of attributable gold equivalent ounces sold.

Costs and expenses

The average cash cost per attributable ounce was $310 during the period, resulting in a cash operating margin of $986 per ounce. The lower cash cost per attributable ounce decreased by 6 per cent, compared with the second quarter of 2013, due to an increase in the percentage of revenue coming from royalties, as the company continues to grow and diversify its asset base. The company reduced administrative expenses by $1.7-million, compared with the comparable period in 2013.

Earnings and operating cash flow

For the three months ended June 30, 2014, net income and cash flow from operations were $3.0-million and $9.4-million, respectively, compared with a net loss and cash flow from operations of $15.2-million and $8.5-million for the comparable period in 2013. The change is attributable to a combination of factors, including a $1.7-million decrease in administration expenses, a one-time gain of $2.6-million related to the acquisition of Sandstorm Metals, a number of non-recurring items and a non-cash charge of $1.2-million relating to the company's Bracemac-McLeod royalty.

Balance sheet

Total assets increased by $76.3-million from Dec. 31, 2013, to June 30, 2014, primarily resulting from the assets acquired from the Sandstorm Metals business combination, operating cash flows and the exercise of warrants. The increase was partially offset by depletion expense and by a non-cash impairment charge on the Bracemac-McLeod royalty. At the end of the second quarter, the company had $111.4-million in cash and cash equivalents, and working capital of $109.4-million. In addition, the company has $100.0-million in available capital under its undrawn revolving bank debt facility.

                STREAM AND ROYALTY SEGMENTS FOR THE THREE MONTHS ENDED JUNE 30, 2014
                                       (in thousands of dollars)

                       Attributable   Sales and   Cost of sales   Depletion   Impairment   Income         Cash
                        ounces sold     royalty       excluding                             (loss)   flow from
                                       revenues       depletion                            before   operations
                                                                                            taxes   

Aurizona                    $ 2,334     $ 3,004         $   943     $   276      $     -  $ 1,785      $ 4,614
Bachelor Lake                 2,494       3,268           1,247       1,482            -      539        2,304
Black Fox                     1,334       1,715             678         953            -       84        1,037
Ming                            567         745               -         451            -      294          745
Santa Elena                     774         992             274         471            -      248          781
Royalties                     2,646       3,429               -       3,070       (1,215)    (856)       3,151
Corporate                         -           -               -           -            -      330       (3,249)
Consolidated                 10,149      13,153           3,142       6,703       (1,215)   2,424        9,383

Attributable gold equivalent ounces sold were 10,149 in the quarter, an increase of 8 per cent from the comparable period in 2013. The increase is largely attributable to increased production from Metanor Resources Inc.'s Bachelor Lake mine in Quebec, Canada, and Rambler Metals & Mining PLC's Ming mine in Newfoundland, Canada, and partially offset by a decrease in production from Primero Mining Corp.'s Black Fox mine in Ontario, Canada, and Silvercrest Mines Inc.'s Santa Elena mine in Mexico.

Bachelor Lake mine

Compared with the second quarter of 2013, an additional 940 gold ounces were sold from the Bachelor Lake mine. The increase is primarily related to the mine reaching commercial production and the continued ramp-up of operations. Metanor recently announced positive results from its underground drilling campaign at Bachelor Lake. The intention of the campaign is to increase the resources at the mine.

Ming mine

A 64-per-cent increase in gold ounces sold from the Ming mine was recorded, compared with the second quarter of 2013. The increase was primarily related to Sandstorm's gold purchase entitlement increasing to 33 per cent for the 2014 fiscal year (which resulted from low metallurgical recoveries obtained in 2013, triggering contract safeguards). Rambler recently released a favourable preliminary economic assessment that identifies the potential for an expansion of the Ming mine into the lower footwall zone following additional value optimization studies and a feasibility study.

Black Fox mine

Attributable gold equivalent ounces sold from the Black Fox mine decreased by 24 per cent compared with the second quarter of 2013. The decrease was primarily driven from insufficient underground development resulting in lower production during the three months ended June 30, 2014. Primero intends on making greater investments in underground development in an effort to improve mining and processing targets going forward.

Santa Elena mine

There was a 48-per-cent decrease in gold ounces sold from Santa Elena, largely related to Silvercrest transitioning, during the second quarter of 2014, from an open-pit, heap-leach operation to an underground mine and milling circuit. Despite the reduction in production, Silvercrest has maintained its annual guidance as it expects mine operations, during the second half of 2014, will realize higher metal recoveries and achieve full production through the mill.

Aurizona mine

Sandstorm sold 2,334 ounces of attributable gold from Aurizona during the quarter and, although it was a slight decrease from the comparable period in 2013, it was a 42-per-cent decrease from the first quarter of 2014. The decrease was due to above-average rainfall at the Aurizona mine, which negatively impacted Luna's ability to access ore in the pit. As a consequence, Luna processed a higher amount of lower-grade ore from the stockpile, which resulted in lower gold production. Luna has revised its 2014 production guidance to a range of 75,000 to 80,000 ounces of gold. In accordance with its previously announced commitment, the company remitted a $20.0-million loan to Luna (whereby $10.0-million was advanced in 2013, and the remaining $10.0-million commitment was remitted in April, 2014). The non-revolving loan is subject to interest at a rate of 12 per cent per year, subject to certain conditions, and will mature on June 30, 2017.

Subsequent to quarter-end, the company entered into a strategic investment agreement with Luna, as part of which, Sandstorm participated in a Luna non-brokered private placement. Pursuant to the investment agreement, Sandstorm purchased 19.5 million shares of Luna, which, when combined with the 8.5 million shares of Luna already owned by the company, resulted in Sandstorm becoming the largest shareholder of Luna, owning approximately 19.8 per cent of Luna's issued and outstanding shares. The investment agreement allowed Sandstorm to appoint one member to Luna's board of directors. The transaction aligns the interests of Luna and Sandstorm, and allows both companies to work together in unlocking as much value as possible for their respective shareholders.

Royalties

Gold equivalent ounces sold attributable to royalties totalled 2,646 in the quarter, an increase of 35 per cent from the comparable period in 2013. The royalty revenue was generated from nine producing mines.

Outlook

Based on the existing gold streams and royalties, attributable gold equivalent production for 2014 is forecasted to be between 40,000 to 50,000 attributable gold equivalent ounces, increasing to approximately 60,000 attributable gold equivalent ounces per year by 2017. This growth is largely driven by the company's portfolio of gold streams with mines, most of which are either currently producing or expected to commence production by 2015.

Webcast and conference call details

A conference call will be held on Thursday, Aug. 14, 2014, starting at 8:30 a.m. PDT, to further discuss the second quarter results. To participate in the conference call, use the following dial-in numbers:

Local/international:  647-788-4916

North American toll-free:  877-214-4966

It is recommended that participants dial in five minutes prior to the commencement of the conference call. An audio webcast of the conference call will also be available on the Sandstorm website. Sandstorm's management's discussion and analysis (MD&A), and financial statements, for the second quarter will be accessible on the company's website and on SEDAR. The company has also completed a Form 6-K filing with the SEC that will be accessible on EDGAR.

We seek Safe Harbor.