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Sandstorm Gold (SAND) Posts Preliminary Record Revenues for Q4

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Zacks Equity Research
·3 min read
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Sandstorm Gold Ltd. SAND recently announced preliminary record revenues for the fourth quarter and full year 2020. Notably, fourth quarter and fiscal 2020 revenues improved 24% and 4%, respectively, on a year-over-year basis primarily driven by higher gold prices.

Delving into the Details

During fourth-quarter 2020, the company sold approximately 15,800 attributable gold equivalent ounces. This was 2% lower than the 16,113 ounces gold equivalent ounces sold in fourth-quarter 2019. Nevertheless, revenues were record $29.7 million in the quarter under review, up 24% from the prior-year quarter as higher gold prices offset the impact of lower gold equivalent ounces sold.

Preliminary cost of sales, excluding depletion for the fourth quarter, was $3.9 million leading to cash operating margins of approximately $1,630 per attributable gold equivalent ounce.

In 2020, Sandstorm Gold sold approximately 52,200 attributable gold equivalent ounces, which was 18% lower than the prior year. This was primarily due to the impacts of COVID-19 related shutdowns. The company reported preliminary record revenues of $93 million in 2020 that indicates an improvement of 4% from 2019 courtesy of higher gold prices.

In the earlier part of 2020, miners had to shut down operations as per government mandates to curb the spread of the coronavirus pandemic. However, pandemic induced apprehensions regarding the global economic growth fueled safe haven demand for gold through the year. Gold even shot past the $2,000 an ounce threshold for the first time in August 2020. Overall for 2020, gold prices gained 25%. Rising gold prices bode well for companies like Sandstorm Gold.

The company had earlier withdrawn its production guidance for 2020 citing the uncertainty surrounding the long-term effects of the coronavirus pandemic. Based on the company’s existing royalties, attributable gold equivalent ounces sold are anticipated to be approximately 125,000 ounces in 2024.

Sandstorm Gold is a gold royalty company, which provides upfront financing to gold miners that are looking for capital. In return, the company receives the right to a percentage of the gold produced from a mine, for the life of the mine. It has a portfolio of 202 royalties, of which 24 of the underlying mines are producing. Sandstorm Gold plans to grow and diversify its low-cost production profile through acquisition of additional gold royalties.

Price Performance

Shares of the company have gained 4.7% in the past year, compared with the industry’s rally of 29.7%.

Zacks Rank & Stocks to Consider

Sandstorm Gold currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space ArcelorMittal MT, BHP Group Limited BHP and Impala Platinum Holdings Ltd. IMPUY. All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ArcelorMittal has a projected earnings growth rate of 287% for the current year. The company’s shares have gained around 44% in the past year.

BHP Group has an expected earnings growth rate of 49% for the ongoing year. Shares of the company shares have appreciated 30% over the past year.

Impala Platinum Holdings has an estimated earnings growth rate of 132% for 2021. In a years time, the stock has gained nearly 31%.

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Sandstorm Gold Ltd (SAND) : Free Stock Analysis Report
 
BHP Group Limited (BHP) : Free Stock Analysis Report
 
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