An anonymous director reports

SANDSTORM GOLD ROYALTIES ANNOUNCES RECORD 2023 ANNUAL RESULTS

Sandstorm Gold Ltd. has released its financial results for the fourth quarter and year ended Dec. 31, 2023 (all figures are in United States dollars).

Full year highlights

• Record attributable gold equivalent ounces of 97,245 ounces (FY 2022 (full year 2022) -- 82,376 ounces);
• Record revenue of $179.6-million (FY 2022 -- $148.7-million);
• Record total sales, royalties and income from other interests of $191.4-million (FY 2022 -- $148.7-million);
• Record cash flows from operating activities, excluding changes in non-cash working capital of $151.1-million (FY 2022 -- $109.8-million);
• Net income of $42.7-million (FY 2022 -- $78.5-million);
• Average cash cost per attributable gold equivalent ounce of $223 resulting in cash operating margins of $1,706 per ounce (FY 2022 -- $284 per ounce and $1,511 per ounce respectively);
• Debt reduction and monetization efforts: Delevering remains a top priority for Sandstorm. As of Feb. 15, 2024, the company had $421-million drawn and outstanding on the credit facility. To further expedite debt repayment, the company is undergoing a process to monetize between $40-million to $100-million of non-core assets by the end of 2024. Accordingly, in the fourth quarter of 2023, Sandstorm closed its previously announced agreement to sell the El Pilar and Blackwater Royalties for total consideration of $25.0-million comprising cash and common shares. The company anticipates that consideration from future monetization efforts will consist entirely of cash. Sandstorm's financial position continues to strengthen, with current available capital totalling over $200-million.
• Credit facility renewal: In September, 2023, Sandstorm renewed its revolving credit facility, allowing the company to borrow up to $625-million for a four-year term.
• Closing of Antamina transaction: In June, 2023, Sandstorm closed the final component of its previously announced arrangement with Horizon Copper Corp. to sell a portion of the company's Antamina royalty in consideration for a silver stream, debt, equity and cash.
• Mercedes stream amendment: In January, 2024, Sandstorm closed its previously announced transaction to amend its existing gold and silver stream agreements on the Mercedes mine with Bear Creek Mining Corp. and to refinance certain other debt investments of Bear Creek that it holds. In exchange for the stream amendments, Sandstorm received a 1.0-per-cent NSR (net smelter return) on Bear Creek's wholly owned Corani project in Peru, one of the world's largest fully permitted silver deposits, and $10-million of additional consideration in the form of a combination of Bear Creek common shares and debt.

Fourth quarter highlights

• Attributable gold equivalent ounces of 23,250 ounces (Q4 2022 -- 21,753 ounces);
• Revenue of $44.5-million (Q4 2022 -- $38.4-million);
• Total sales, royalties and income from other interests of $46.3-million (Q4 2022 -- $38.4-million);
• Cash flows from operating activities, excluding changes in non-cash working capital of $36.5-million (Q4 2022 -- $29.9-million);
• Net income of $24.5-million (Q4 2022 -- net loss of $2.1-million).

Outlook

Based on the company's existing royalties, attributable gold equivalent ounces for 2024 are forecasted to be between 75,000 and 90,000 ounces. The company's production forecast is expected to reach approximately 125,000 attributable gold equivalent ounces within the next five years.

Annual financial results

During 2023, the company realized record annual revenue of $179.6-million compared with $148.7-million for the comparable period in 2022. The company also had record total sales, royalties and income from other interests of $191.4-million during the year ($148.7-million for the comparable period in 2022). The increase in revenue is attributable to a 12-per-cent increase in attributable gold equivalent ounces sold, as well as a 7-per-cent increase in the average realized selling price of gold.

The company had cash flows from operating activities of $152.8-million and net income of $42.7-million during 2023, compared with cash flows from operating activities of $106.9-million and net income of $78.5-million for the comparable period in 2022. The increase in cash flows from operating activities is largely driven by an increase in revenue and contractual payments relating to the Mt. Hamilton royalty. The decrease in net income is due to a combination of factors including:

• Certain gains recognized during 2022 which did not occur during 2023, including:
  • A $24.9-million gain resulting from the sale of the company's Hod Maden interest to Horizon Copper;
  • $25.8-million in gains on disposal of stream, royalty and other interests, primarily related to the sale of a portfolio of royalties to Sandbox Royalties Corp.;
  • A $12.5-million gain resulting from the sale of the company's equity interest in Entree Resources Ltd. to Horizon Copper.
• A $22.2-million increase in finance expense in 2023 compared with 2022, primarily related to interest paid on the company's revolving credit facility, which was drawn down in the third quarter of 2022 to finance acquisitions made in 2022;
• A $15.6-million increase in depletion expense in 2023 compared with 2022, partly driven by an increase in attributable gold equivalent ounces sold.

The decrease in net income was partially offset by:

• A $30.9-million increase in revenue, as described herein;
• A $13.9-million increase in the gains recognized on the revaluation of the company's investments, mostly driven by an increase in the fair value of the company's Sandbox Royalties and Horizon Copper debentures;
• $11.8-million in other income primarily related to a one-time contractual payment from the company's Mt. Hamilton royalty;
• A $4.0-million gain on the disposal of the company's Blackwater and El Pilar royalties to Sandbox Royalties.

Streams and royalties

Of the gold equivalent ounces sold by Sandstorm during the fourth quarter of 2023, approximately 12 per cent were attributable to mines located in Canada, 22 per cent from the rest of North America, 44 per cent from South America and 22 per cent from other countries.

Canada

Streams and royalties on Canadian mines contributed 9 per cent more gold equivalent ounces to Sandstorm when compared with the fourth quarter of 2022. The change is primarily due to an increase in gold equivalent ounces from a number of different royalties within the company's portfolio.

North America excluding Canada

Gold equivalent ounces sold from operations located within North America, but outside of Canada, contributed 16 per cent less gold equivalent ounces when compared with the fourth quarter of 2022. The change was primarily driven by a decrease in gold equivalent ounces received and sold from the Mercedes mine in Mexico, largely due to the timing of sales, whereby, 600 gold ounces were delivered by Dec. 31, 2023, but were sold in the subsequent quarter, and a decrease in gold equivalent ounces sold from the Relief Canyon mine in Nevada. The decrease was partially offset due to an increase in royalty revenue from the Cosala mine in Mexico.

South America

Operations in South America contributed 11 per cent more gold equivalent ounces sold when compared with the fourth quarter of 2022. The increase was driven by an increase in royalty revenue attributable to the Caserones mine in Chile, as a result of increased production rates and copper prices, and an increase in gold equivalent ounces received and sold from the Antamina mine in Peru.

Other

Streams and royalties on mines in other countries contributed 31 per cent more gold equivalent ounces sold when compared with the fourth quarter of 2022. This change is primarily due to an increase in royalty revenue from the Hounde mine in Burkina Faso as well as an increase in revenue from several different royalties within the company's portfolio. The increase was partially offset by a decrease in gold equivalent ounces received and sold from the Bonikro stream in Ivory Coast largely due to the timing of sales, whereby 811 ounces were delivered by Dec. 31, 2023, but sold in the subsequent quarter.

Webcast and conference call details

A conference call will be held on Friday, Feb. 16, 2024, starting at 8:30 a.m. PT to further discuss the fourth quarter and annual results. To participate in the conference call, use the following dial-in numbers and conference ID:

International:   1-416-764-8688

North American toll-free:   1-888-390-0546

Conference ID:  31083956

About Sandstorm Gold Ltd.

Sandstorm is a precious-metals-focused royalty company that provides upfront financing to mining companies and receives the right to a percentage of production from a mine, for the life of the mine. Sandstorm holds a portfolio of approximately 250 royalties, of which 40 of the underlying mines are producing. Sandstorm plans to grow and diversify its low-cost production profile through the acquisition of additional gold royalties.

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