Mr. Nolan Watson reports

SANDSTORM GOLD ANNOUNCES 2016 SECOND QUARTER RESULTS

Sandstorm Gold Ltd. has released its results for the second quarter ended June 30, 2016 (all figures are in U.S. dollars).

Second quarter highlights:

• Attributable gold equivalent ounces sold (1) of 12,517 ounces (second quarter 2015: 12,901 ounces);
• Revenue of $15.7-million (second quarter 2015: $15.4-million);
• Average cash cost per attributable gold equivalent ounce of $261 resulting in cash operating margins (1) of $994 per ounce (second quarter 2015: $304 per ounce and $892 per ounce, respectively);
• Operating cash flow of $8.9-million (second quarter 2015: $9.5-million);
• Net income of $5.2-million (second quarter 2015: $13.4-million loss);
• Amended its revolving credit facility, extending the term to four years (maturing in July, 2020); the revolving credit facility allows the company to borrow up to $110-million for acquisition purposes, from a syndicate of banks, including Bank of Nova Scotia, Bank of Montreal, National Bank of Canada and Canadian Imperial Bank of Commerce;
• Subsequent to quarter-end, Sandstorm completed an equity financing for aggregate gross proceeds of $57.5-million; upon closing of the financing, the majority of the net proceeds was used to reduce the balance of the company's revolving credit facility; as a result, the company currently has no bank debt, and the entire $110-million revolving credit facility remains available for acquisition purposes.

Sandstorm's president and chief executive officer, Nolan Watson, remarked: "During the first half of 2016, Sandstorm has added 55 royalties to the company's asset base, and has generated $18.4-million in net income and $18.6-million in cash flow from operations. We have used the operating cash flow and the proceeds from our recent equity raise to pay our debt down to zero, and we now have over $110-million in available capital to pursue acquisitions. There are a wide range of deals that we are working on presently, from small deals on exploration-stage assets to large transactions on cash-flowing mines."

Outlook

Based on the company's existing gold streams and royalties, attributable gold equivalent production for 2016 is forecasted to be between 43,000 to 50,000 ounces. The company is forecasting attributable gold equivalent production of approximately 65,000 ounces per annum by 2020.

Financial results

Precious metals and diamonds accounted for 88 per cent of the revenue generated during the second quarter with the rest coming from base metals. Revenue ($15.7-million) was slightly higher when compared with the second quarter of 2015, due to a 5-per-cent increase in the average realized selling price of gold, partially offset by a 3-per-cent decrease in the number of attributable gold equivalent ounces sold.

Cash flow from operations of $8.9-million was lower, and net income of $5.2-million was higher when compared with the same period in 2015. The factors contributing to the changes included a $6.0-million gain on the revaluation of the company's investments, a $3.0-million decrease in depletion expense and a $1.3-million increase in interest expense, as well as certain items recognized during the second quarter of 2015 that did not recur in 2016.

Streams and royalties: second quarter updates

The company's revenue was generated by 19 producing assets during the second quarter of 2016. Of the gold equivalent ounces delivered to Sandstorm, 77 per cent was from operations run by major and mid-tier mining companies. Approximately 40 per cent of the ounces was produced at mines located in Canada, 34 per cent from the rest of North America, and 26 per cent from South America and other countries.

                         STREAMS AND ROYALTIES
  
                                          Three months ended June 30, 2016           
                                 Revenue (in millions)      Gold equivalent ounces

Canada                                         $ 6.29                        5,055
North America excluding Canada                 $ 5.34                        4,203
South America and other                        $ 4.07                        3,259
Total                                         $ 15.71                       12,517

Canada

Gold equivalent ounces attributable to Canadian mines made up 40 per cent of the company's total ounces in second quarter 2016 and were 18 per cent lower when compared with the second quarter of 2015. The decline was due to timing of shipments that affected gold ounces sold from the Ming mine in Newfoundland, the Bachelor Lake mine in Quebec and the Black Fox mine in Ontario. Specifically, 1,400 gold ounces were received as at June 30, 2016, but were sold subsequent to quarter-end.

Primero Mining Inc. operates Black Fox and has focused its recent exploration efforts at the Froome zone target. The Froome zone is located approximately 800 metres west of Black Fox, and Primero has delineated long intervals with significant gold mineralization at the target. Primero is evaluating the deposit as a medium-term alternative to complement Black Fox ore to fill the mill beyond the end of 2017.

North America excluding Canada

Gold equivalent ounces from the rest of North America (excluding Canada) increased by 26 per cent compared with 2015 and accounted for 34 per cent of the ounces sold during the second quarter. One of the factors driving the increase was an 11-per-cent rise in gold ounces sold from the Santa Elena mine in Mexico operated by First Majestic Silver Corp.

First Majestic is continuing the development of the new San Salvador ramp at Santa Elena. This new ramp is scheduled to connect to the Main vein area by the end of 2016. Once completed, the transportation of ore by trucks is expected to reduce haulage bottlenecks and increase underground production capacity.

South America and other

Attributable gold equivalent ounces from South America and the rest of the world were consistent with the ounces sold during second quarter 2015, and made up approximately 26 per cent of Sandstorm's total gold equivalent production during the quarter. The addition of copper and silver from the streams on Yamana Gold Inc.'s Chapada and Minera Florida mines during the quarter more than offset the loss of gold ounces due to the temporary closure of the Aurizona mine in Brazil.

Metal deliveries under the Yamana streams are subject to monthly maximums and therefore prone to significant volatility with respect to the timing of shipments. Contractually, there is an annual true-up mechanism, which takes into account the timing and shipment of these monthly deliveries. The company is currently anticipating a true-up for these timing differences.

Webcast and conference call details

A conference call will be held on Aug. 4, 2016, starting at 8 a.m. PDT, to further discuss the second quarter results. To participate in the conference call, use the following dial-in numbers and conference ID, or join the webcast:

Local/international:  416-764-8609

North American toll-free:  888-390-0605

Conference ID:  68945360

The Sandstorm management's discussion and analysis 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 Securities and Exchange Commission that will be accessible on EDGAR. Shareholders can request a hard copy of the MD&A and financial statements by e-mailing info@sandstormltd.com.

(1) Sandstorm has included certain performance measures in this press release that do not have any standardized meaning prescribed by international financial reporting standards, including average cash cost per ounce of gold and cash operating margin. Average cash cost per ounce of gold is calculated by dividing the total cost of sales, less depletion, by the ounces sold. In the precious metals mining industry, this is a common performance measure but does not have any standardized meaning. The company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the company's performance and ability to generate cash flow. Cash operating margin is calculated by subtracting the average cash cost per ounce of gold from the average realized selling price per ounce of gold. The company presents cash operating margin as it believes that certain investors use this information to evaluate the company's performance in comparison with other companies in the precious metals mining industry, which present results on a similar basis. The company's royalty income is converted to an attributable-gold-equivalent-ounce basis by dividing the royalty income for that period by the average realized gold price per ounce from the company's gold streams for the same respective period. These attributable gold equivalent ounces when combined with the gold ounces sold from the company's gold streams equal total attributable gold equivalent ounces sold. The presentation of these non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate these non-IFRS measures differently.

We seek Safe Harbor.