Sandstorm Gold Ltd. (SSL.TO) | Investment Case

1. Company Snapshot

1.a. Company Description

Sandstorm Gold Ltd.operates as a gold royalty company.The company focuses on acquiring royalties and gold and other metals purchase agreements (streams) from companies that have advanced stage development projects or operating mines.

It offers upfront payments for companies to acquire a stream or royalty and receives the right to purchase a percentage of a mine's production for the life of the mine at a fixed price per unit or at a fixed percentage of the spot price.The company has a portfolio of 230 streams and royalties.It primarily has operations in Canada, Mexico, the United States, Mongolia, Burkina Faso, Ecuador, South Africa, Ghana, Botswana, Cote D'Ivoire, Argentina, Brazil, Chile, Peru, Egypt, Ethiopia, Guyana, Paraguay, French Guiana, Turkey, Sweden, Fiji, and Australia.

The company was formerly known as Sandstorm Resources Ltd.and changed its name to Sandstorm Gold Ltd.in February 2011.

Sandstorm Gold Ltd.was incorporated in 2007 and is headquartered in Vancouver, Canada.

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1.b. Last Insights on SSL

Sandstorm Gold's recent performance was negatively driven by its third quarter 2024 earnings miss, where EPS fell short of expectations. The company's revenue growth of 8.2% year-over-year to $44.7 million was not enough to offset the disappointment. Additionally, the recent exploration update on its portfolio, which showed no significant advancements, may have contributed to the negative sentiment. Furthermore, the company's peers, such as Cleveland-Cliffs, have also reported disappointing earnings, which may have weighed on Sandstorm Gold's performance. National Bank of Canada maintained its Outperform rating and C$10.75 price target, but this may not be enough to offset the current negative sentiment.

1.c. Company Highlights

Last Price	16.15
Change Percentage	-2.12%
Open	15.95
Previous Close	16.5
Market Cap ( Millions)	4735
Volume	834360
Year High	18.38
Year Low	7.47
M A 50	16.19
M A 200	12.3

FCF Yield	3.33%
Dividend Yield	0.50%
ROE	2.42%
Debt / Equity	22.06%
Net Debt / EBIDTA	207.30%
Price To Book	2.4
Price Earnings Ratio	99.43
Price To FCF	30.07
Price To sales	17.68
EV / EBITDA	25.13

2. Sandstorm Gold Shines with Record Q2 2025 Earnings

Sandstorm Gold reported a stellar Q2 2025, with revenue reaching a record $51.4 million and operating margins of $2,981 per ounce. The strong performance was driven by high gold prices and robust production at key assets such as Greenstone and Bonikro. However, attributable gold equivalent ounce (GEO) production was down year-over-year due to the outperformance of gold against other commodities. The company's EPS came in at $0.07011, slightly below estimates of $0.083. Despite this, robust operating cash flow of $37.7 million supported deleveraging efforts, demonstrating the company's ability to generate cash.

Publication Date: Sep -02

                                    📋 Highlights
                                    Record Revenue and Margins::
                                                Q2 2025 revenue hit $51.4M with $2,981/ounce operating margins, driven by high gold prices and production at Greenstone/Bonikro.
Acquisition by Royal Gold::
                                                Pending $1.3B acquisition by Royal Gold, set to close in Q4 2025, will diversify Royal Gold’s portfolio and reduce Sandstorm’s leverage.
Greenstone Production Growth::
                                                Q2 2025 saw a 15% quarter-over-quarter production increase due to higher mining rates and milling efficiency.
Platreef Expansion Plans::
                                                Phase 1 targets 100,000 ounces/year by Q4 2025, with Phases 2-3 aiming to make it a top global PGM producer.
Fruta del Norte Exploration::
                                                Lundin Gold discovered new high-grade gold zones and a copper-gold porphyry system, expanding 2025 drilling by 30%.

                                

Operational Highlights

The company's operational performance was a key driver of its financial success. Greenstone demonstrated significant production improvements, with a 15% quarter-over-quarter increase in Q2 2025, driven by increased mining rates and efficient milling. Additionally, Platreef is on track for first production in Q4 2025 with Phase 1, targeting 100,000 ounces annually, while Fruta del Norte's exploration program unveiled extraordinary results, discovering new high-grade gold zones and a large copper-gold porphyry system.

Valuation and Outlook

With a P/E Ratio of 96.25 and an EV/EBITDA of 24.92, Sandstorm Gold's valuation suggests that the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 15.7%, which may justify some of the premium. However, the company's ROE of 2.42% and ROIC of 3.23% indicate that there is still room for improvement in terms of returns. The pending acquisition by Royal Gold, expected to close in Q4 2025, is likely to create a diversified portfolio of high-quality assets for both companies.

Financial Leverage

Sandstorm Gold's Net Debt / EBITDA ratio stands at 2.12, indicating a moderate level of leverage. The company's ability to generate robust operating cash flow is supporting its deleveraging efforts, which is a positive sign for investors. With a Free Cash Flow Yield of 4.32%, the company is generating significant cash relative to its market capitalization.

3. NewsRoom

RGLD's Deal With SAND & Horizon Nears Completion After Approval Grant

Oct -20

Source: zacks.com

Horizon Copper Closes Arrangement with Royal Gold

Oct -20

Source:

Sandstorm Gold Royalties Closes Arrangement with Royal Gold

Oct -20

Source:

Royal Gold Completes Sandstorm Gold and Horizon Copper Acquisitions to Create a Premier Growth Company in the Gold Streaming and Royalty Sector

Oct -20

Source:

How the Narrative Around Sandstorm Gold Is Evolving Amid Analyst Upgrades and New Risks

Oct -18

Source:

Sandstorm Gold (TSX:SSL): Evaluating Valuation After Recent Share Price Rally

Oct -18

Source:

Sandstorm Gold Royalties Receives Court Approval for Arrangement with Royal Gold

Oct -15

Source:

Horizon Copper Receives Court Approval for Arrangement with Royal Gold

Oct -15

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.73%)

6. Segments

Other

Expected Growth: 15%

Sandstorm Gold's 15% growth driven by increasing gold prices, strong mine operating performances, and strategic acquisitions. Royalty revenue growth is fueled by rising production from its portfolio of mines, including the Hod Maden and Yanacocha mines. Additionally, the company's diversified asset base and disciplined cost management contribute to its robust growth profile.

Cerro Moro

Expected Growth: 18%

Cerro Moro's 18% growth is driven by increasing gold and silver production, improved operating efficiencies, and higher metal prices. The mine's high-grade ore and low cash costs also contribute to its strong performance. Additionally, Sandstorm Gold's strategic investments and partnerships have enhanced Cerro Moro's growth potential.

Mercedes

Expected Growth: 16%

Mercedes' 16% growth from Sandstorm Gold Ltd. is driven by increasing gold prices, rising production volumes, and strategic acquisitions. Additionally, the company's focus on cost reduction, operational efficiencies, and exploration of new mining sites contribute to its growth momentum.

Antamina

Expected Growth: 12%

Antamina's 12% growth is driven by increased copper and zinc production, favorable commodity prices, and operational efficiencies. The mine's high-grade ore and low operating costs also contribute to its strong performance. Additionally, Sandstorm Gold's streaming agreement provides a stable source of revenue, further supporting Antamina's growth.

Chapada

Expected Growth: 14%

Chapada's 14% growth is driven by increasing gold prices, improved operational efficiency, and successful exploration efforts. The mine's high-grade ore and low cash costs also contribute to its strong performance. Additionally, Sandstorm Gold's strategic investments and partnerships have enhanced Chapada's growth potential.

Caserones

Expected Growth: 11%

Caserones' 11% growth is driven by increased copper and gold production, improved ore grades, and enhanced processing recoveries. Additionally, favorable copper prices and a weaker Chilean peso contribute to the growth. Sandstorm Gold's streaming agreement and offtake contracts also provide a stable source of revenue, supporting the mine's expansion and exploration initiatives.

Aurizona

Expected Growth: 13%

Aurizona's 13% growth is driven by increased gold production, improved operating efficiencies, and higher gold prices. The mine's expansion and optimization efforts have led to higher throughput and recovery rates, resulting in increased output. Additionally, Sandstorm Gold's strategic investments and partnerships have enhanced the mine's operational capabilities, further contributing to its growth.

Relief Canyon

Expected Growth: 17%

Relief Canyon's 17% growth is driven by increasing gold production, improved ore grades, and enhanced processing recoveries. Additionally, Sandstorm Gold's strategic investments in exploration and development, coupled with a favorable gold price environment, contribute to the mine's growth momentum.

Bonikro

Expected Growth: 10%

Bonikro's 10% growth is driven by increasing gold production, improved ore grades, and enhanced processing recoveries. Additionally, Sandstorm Gold's strategic investments in exploration and development, coupled with a favorable gold price environment, contribute to the mine's growth. Furthermore, operational efficiencies and cost savings initiatives implemented by the management team also support the growth momentum.

Fruta Del Norte

Expected Growth: 19%

Fruta Del Norte's 19% growth is driven by increasing gold production, high-grade ore processing, and efficient operations. Strong exploration results, reserve growth, and a solid balance sheet also contribute to its upward momentum. Additionally, Sandstorm Gold's strategic partnership and streaming agreements provide a stable source of revenue, further fueling growth.

Vale Royalties

Expected Growth: 9%

Vale Royalties' 9% growth is driven by increasing gold prices, rising production volumes from Sandstorm Gold's diversified asset base, and a strong balance sheet enabling strategic acquisitions. Additionally, the company's streaming model provides a low-cost and scalable structure, allowing for margin expansion and cash flow growth.

Hounde

Expected Growth: 16%

Hounde's 16% growth is driven by increasing gold production, improved ore grades, and enhanced processing recoveries. Additionally, Sandstorm Gold's strategic investments in exploration and development, coupled with a favorable gold price environment, have contributed to the mine's expansion.

Blyvoor

Expected Growth: 15%

Blyvoor's 15% growth is driven by increased gold production, improved operational efficiencies, and enhanced mine planning. The mine's high-grade ore body and low cash costs also contribute to its growth. Additionally, Sandstorm Gold's strategic investments and partnerships have optimized resource allocation, further boosting production and revenue.

7. Detailed Products

Gold Production

Sandstorm Gold Ltd. is a gold streaming company that provides upfront financing for gold mining projects in exchange for a percentage of the gold produced.

Silver Streaming

In addition to gold, Sandstorm also provides financing for silver mining projects, giving the company a diversified portfolio of precious metals.

Copper Streaming

Sandstorm also provides financing for copper mining projects, further diversifying its portfolio of metals.

Royalty Income

Sandstorm also generates revenue through royalties on gold, silver, and copper production from various mining projects.

8. Sandstorm Gold Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Sandstorm Gold Ltd. is moderate due to the availability of alternative gold mining companies.

Bargaining Power Of Customers

The bargaining power of customers is low for Sandstorm Gold Ltd. as the company has a diversified customer base and is not heavily reliant on a single customer.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for Sandstorm Gold Ltd. as the company relies on a few key suppliers for its mining operations.

Threat Of New Entrants

The threat of new entrants is high for Sandstorm Gold Ltd. due to the relatively low barriers to entry in the gold mining industry.

Intensity Of Rivalry

The intensity of rivalry is high for Sandstorm Gold Ltd. due to the competitive nature of the gold mining industry and the presence of several established players.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	23.34%
Debt Cost	9.29%
Equity Weight	76.66%
Equity Cost	9.29%
WACC	9.29%
Leverage	30.44%

11. Quality Control: Sandstorm Gold Ltd. passed 5 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Torex Gold Resources

A-Score: 5.7/10

Value: 6.0

Growth: 6.7

Quality: 7.5

Yield: 0.0

Momentum: 10.0

Volatility: 4.0

1-Year Total Return ->

Calibre Mining

A-Score: 5.3/10

Value: 8.1

Growth: 5.9

Quality: 5.5

Yield: 0.0

Momentum: 6.0

Volatility: 6.3

1-Year Total Return ->

IAMGOLD

A-Score: 5.2/10

Value: 4.9

Growth: 6.0

Quality: 7.1

Yield: 0.0

Momentum: 10.0

Volatility: 3.0

1-Year Total Return ->

Idaho Strategic Resources

A-Score: 4.9/10

Value: 0.0

Growth: 9.7

Quality: 8.0

Yield: 0.0

Momentum: 10.0

Volatility: 1.7

1-Year Total Return ->

Sandstorm Gold

A-Score: 4.7/10

Value: 1.3

Growth: 3.0

Quality: 7.0

Yield: 0.0

Momentum: 10.0

Volatility: 7.0

1-Year Total Return ->

Equinox Gold

A-Score: 4.5/10

Value: 2.5

Growth: 6.9

Quality: 4.3

Yield: 0.0

Momentum: 9.5

Volatility: 3.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

18.89%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.29%

Sandstorm Gold Ltd. - CA80013R2063

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on SSL

1.c. Company Highlights

Expensive

Average Quality

Average Growth

Earnings Miss

Revenues Miss

Medium Volatility

Earnings Beats

Better Quality

Strong Momentum

Revenues Beats

Average Yield

2. Sandstorm Gold Shines with Record Q2 2025 Earnings

Operational Highlights

Valuation and Outlook

Financial Leverage

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.73%)

6. Segments

Other

Expected Growth: 15%

Cerro Moro

Expected Growth: 18%

Mercedes

Expected Growth: 16%

Antamina

Expected Growth: 12%

Chapada

Expected Growth: 14%

Caserones

Expected Growth: 11%

Aurizona

Expected Growth: 13%

Relief Canyon

Expected Growth: 17%

Bonikro

Expected Growth: 10%

Fruta Del Norte

Expected Growth: 19%

Vale Royalties

Expected Growth: 9%

Hounde

Expected Growth: 16%

Blyvoor

Expected Growth: 15%

7. Detailed Products

Gold Production

Silver Streaming

Copper Streaming

Royalty Income

8. Sandstorm Gold Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Sandstorm Gold Ltd. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.e Scoring ^Insights

12.f DCF ^BETA