Q3 2024 Sandstorm Gold Ltd Earnings Call

Speaker Change: The plant reef boasts a massive 26 meters thick or body, making it highly amenable to mechanized mining methods.

Speaker Change: This photo to the right you can see how that thickness compares to the 29 meter height of the shaft one head frame.

Speaker Change: This thickness is exceptional when compared to the typical one meter thick murasky reef.

Speaker Change: Plot reef is rich in a variety of metals contain significant quantities of platinum palladium rhodium and gold along with notable amounts of nickel and copper.

Speaker Change: This diverse mineral composition sets it apart from the marine SKU beef, which primarily reads platinum or palladium with minimal base metals.

Speaker Change: The flat line nature of plowed reef allows for the use of larger tonnage mechanized mining techniques not only this not only enhances safety and efficiency, but also reduces the environmental footprint of the mining operations.

Speaker Change: Contrast, the verinsky reach narrow and steeply dipping ore bodies, often requires more labor intensive intensive and less mechanized mining methods.

Speaker Change: What I'm pointing out is that compared to all other south African PGM producers Platt reef is head and shoulders above the competition, both safety and efficiency, which is reflected in the industry cost curve that you will see later on.

Speaker Change: Moving on now to wear Ivanhoe is in progress phase. One construction is largely finished with the completed concentrated now in cold commissioning stage. The concentrator will be placed on care and maintenance until each second half of 2025 shaft one.

Speaker Change: Prioritizes the hoisting of waste from the development required to bring forward.

To start a phase two operations.

Speaker Change: Work continues on the updated feasibility study to accelerate <unk> phase II as well as the preliminary economic assessment.

Speaker Change: The new phase III expansion. Both studies are expected to be published in Q1 of 2025.

Speaker Change: <unk> of the five one meter diameter shaft three from the 950 meter level was recently completed and equipping has commenced chefs III is expected to commence hoisting in Q1 2026 with a capacity of approximately 4 million.

Speaker Change: <unk> tons per annum together with the current operating shaft. One total annual hoisting capacity is expected to be 5 million tonnes per annum.

Speaker Change: Additional underground ventilation will now be provided by the new five one meter diameter shaft named shafts for and shaft five drilling up the pilot hole for chef four is complete with the <unk> expect it to start imminently.

Speaker Change: Civil construction of shaft for substation building and ventilation fans are advancing well geotechnical drilling has commenced on the proposed shaft five site.

Speaker Change: Installation of the 1124 tons of internal structural steel inside the <unk> shaft, two which see a picture of right here.

Speaker Change: Headframe continue Pat during the past quarter as well as the installation of the winders and related infrastructure.

<unk> of shaft two to an initial diameter was $3. One is progressing well with approximately 100 meters remaining and completion expected in the coming weeks expansion of the shaft to the final diameter of 10 meters will commence in late 2025, the completion of shaft two will increase.

Speaker Change: Total hoisting capacity for ore and waste development across all sheet, three chefs to 12 million tons per annum.

Speaker Change: It's a lot of discussion about shafts I can tell you.

Speaker Change: Construction of <unk> first five megawatt solar power facility is expected to be complete by year end.

Speaker Change: Power generated by the shaft will support development activities and operations together with other renewable energy sources that are expected to be introduced over time.

Speaker Change: In summary, the planetary project is poised to become one of the world's largest and lowest cost producers of pjm's nickel copper and gold.

Speaker Change: The geologic features.

Speaker Change: And modern mining technique, not only distinguish us from more traditional mariinsky re projects, but will position it as a leader in the mining industry.

Speaker Change: For sandstorm, 30% gold stream means about 10000 ounces per year when phase two starts.

Speaker Change: When they move to the 10 million tons per annum of phase III that represents 15% to 20000 ounces per year for sandstorm, while at that 30% threshold of the Gulfstream.

Speaker Change: The Bottomline is that moving up the timing of phase two at <unk> has big implications for gold coming to sandstorm certainty on phase III will also help crystallize longer term goals.

All estimates as well.

Speaker Change: <unk> still has the opportunity to be one of the biggest contributors of growth to sandstorm portfolio.

Speaker Change: With that I'll hand over the call back to Joanna the operator for our Q&A session and pleased again feel free to ask questions about any of our royalties and streams.

Joanna: Thank you.

Joanna: Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on your Touchtone phone you will hear a pumps that you had has been raised.

Joanna: If you are using a speakerphone please lift the handset before pressing any case.

Yeah.

Speaker Change: Your first question comes from Heiko Ely at H C. Wainwright. Please go ahead.

Heiko Ely: Hey, there happy Friday I Hope you guys are hearing me okay.

Speaker Change: Yeah, Okay cool.

Speaker Change: Perfect Hey earlier on this call you mentioned the material investing knowledge gap in the market.

Speaker Change: Conceptually I'm trying to figure out how we and by we I mean, you and the analyst community can make the skull way or at least decrease the effect of it.

Speaker Change: Can you maybe provide some color on what people are actually missing I mean, you hinted at the fact that some people might not even put enough credence into the fact that the operators are a large scale size etcetera, but besides that I mean, how do you think the analyst community and for that matter of Sandstorm personnel should go about making this more clear.

Speaker Change: <unk>.

Speaker Change: As you know from my research I see that same gap between the share price and the inherent value of the company as well.

Speaker Change: Yes, I think really theirs.

Speaker Change: In terms of what we can do going forward I think is a number of things including <unk>.

Speaker Change: Speaking about them more often providing more clarity as to what stages there at providing more materials for investors not just for institutional investors, but its a retail investors as well.

Speaker Change: Videos presentations, we believe we're going to do are at Investor day for the first time.

Speaker Change: In 2025 and are going to put a significant focus on helping people understand those things with graphics that they can then use going forward and then we'll keep the market up to date with so I think.

Speaker Change: The ball is largely in our court to articulate those things better let me to a certain extent, we're always going to have challenges with articulating those things.

Speaker Change: The streaming and royalty model is a little different than mining company, specifically, because we appeal more to a generalist investor in there just generally less educated as to what is going on in the mining community.

Speaker Change: So that's just that much more important for us to articulate it well.

Speaker Change: Fair enough and then a little bit different question given the election when the U S. Anything in pardon lead US has changed with you in regards to your internal willing less to take certain risks any changes to your internal hurdle in discount rates I mean, obviously the longer term bonds have gone up a little bit.

This week anything that you changed that you apply to certain assets countries et cetera that as much color as youre willing and able to provide on the public call like this.

Speaker Change: I would say generally speaking in the short term no in the sense that we don't plan on doing any material deals in the next year or potentially two years that we don't really have to wrap our heads around what rates of return that we would be buying things out because we don't put a buying things we plan on paying down debt and buying back our shares and getting ready to.

Speaker Change: Size Tomorrow stream option I would say in the longer term looking at the gold markets and although it is anyone's guess, but what's going to happen I do believe that significantly increased deficits in the U S are going to accelerate peoples.

Speaker Change: Purchases of goals over the longer term because it's just.

There is an impending sensitive.

Speaker Change: Ending of the ability of the U S government to borrow at these rates and that's going to come to a head faster.

Speaker Change: So more bullish on gold, but not really changing the way we think about acquisitions.

Speaker Change: Manuel.

Manuel: So much I am looking forward to attending our analyst day next year and I'll get back in queue.

Speaker Change: Thank you.

Speaker Change: Thank you next question comes from Derek Kumar TT Cowen. Please go ahead.

Speaker Change: Thank you and apologies if I missed this earlier in the call Hello stance on balance the capital allocation between debt reduction and share repurchases.

Speaker Change: And does the falling interest rate environment change your views in terms of where you ultimately want to end up.

Speaker Change: Over the longer term I think.

Speaker Change: Falling interest rates do affect us it doesn't really affect us that much quarter to quarter corporate critically Aircard point, there isn't moving the needle.

Dramatically from the fact that we want to use the bulk of our cash flows for debt reduction.

Speaker Change: Last quarter, we bought back $5 million worth of shares payback by $1 billion of debt I think just because of a number of things that happen like working capital going against us last quarter and a couple of other things some small investments we made debt.

Speaker Change: Debt reduction was lower than what you see in future quarters, I'm expecting by Q1 debt reduction to accelerate to close to $30 billion, a quarter and the share buybacks to be somewhere between zero to $5 million this quarter.

Speaker Change: Okay, great. Thank you that answers my question.

Thank you, ladies and gentlemen, as a reminder, should you have any questions. Please press star one.

Speaker Change: Next question comes from Adam <unk> from Scotiabank. Please go ahead.

Speaker Change: Good morning, and thank you for taking my question.

I know that you mentioned that you pursue.

Speaker Change: So right now is debt repayment on share buyback.

Speaker Change: But yet previously advised or sometime that you.

Speaker Change: You are also looking at transactions.

Speaker Change: We then Andre and Lillian.

Speaker Change: So.

Speaker Change: Just to be sure to be clear you are not looking at anything any sort of transactions.

Speaker Change: Nothing in your transactional pipeline.

Speaker Change: For the next two years.

Speaker Change: Just to be clear. So we always look at what is out there to make sure that we're not missing anything. So we are looking to the extent to making sure we don't Miss anything but our our objective is debt reduction first share buyback second and we don't see anything out there that makes us want to change that plan.

Speaker Change: But of course, the exception to that is really that Mara project and really that option that's available to us it's already priced out we know what it's going to cost. So if that were the only thing that we're looking at clearly that helps.

Speaker Change: That will be effectively the best deal in the streaming space going forward between now and the next several years.

Speaker Change: Okay got it.

Speaker Change: When we then where youre looking at like currency, what would you see.

Speaker Change: Okay. I know you said it doesn't make sense, what youre seeing doesn't really make sense.

Speaker Change: So you had some one of jumping book Okay.

Speaker Change: <unk> shown into what you're sort of saying.

Speaker Change: In terms of like the deal like streams or something.

Speaker Change: So I'll be more clear, we don't plan on doing any material deals in the next year other than exercising Morris III motion, if and when it is given to US we will reevaluate that exactly.

Speaker Change: Alright. Thank you thanks for taking.

Speaker Change: Sure.

Speaker Change: Thank you. The next question is a follow up from Derick MA at TD Cowen. Please go ahead.

Speaker Change: Okay can I ask I wanted to ask one question on <unk> could you piece together for us what's happening with entre the arbitration and the ultimate impact of the can it have on Panther and how do you think that's going to resolve itself.

Speaker Change: Yeah, maybe I'll hand, it over to her fan is very close to that situation.

Speaker Change: Thanks for the question Derrick from what I understand is Oh.

Speaker Change: Entre has.

Speaker Change: <unk> continued the arbitration proceedings with <unk> with respect to the transfer of those licenses under the proposed JV.

Speaker Change: I understand there's been some speculation in the market.

Speaker Change: On what that means but as I understand it they continue to move forward on that basis and these things can take time with respect to its impact on sandstorm. The stream is directly with entre and has certain rights and protections under that stream and I think having further clarity on moving those licenses will be a net benefit but in la.

Speaker Change: Run won't impact the timing of expectation of the cash flows that sandstorm expect.

Speaker Change: Alright.

Speaker Change: Yes go ahead Sir.

Speaker Change: We're just going to say what I would add to that is our entree just recently put out some drill results. This week.

Speaker Change: Week that were.

Speaker Change: We put them in the leapfrog and are very very exciting drill results to understand sort of where they are the deposit I think that.

Speaker Change: My conclusion to takeaway from that is at Sandstorm can expect a lot more.

Speaker Change: Gold and copper production under the stream that we have that were previously anticipated.

Right and they have commenced underground development on the JV ground. So it's really about transferring the license.

Speaker Change: Is that correct, yes, yes, yes.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you we have no further questions I will turn the call back over to Mr. Watson for closing comments.

Speaker Change: Alright, Thank you everyone for calling into our call and as always we're here and feel free to give us questions. If he didn't ask them on this call and have a great day.

Speaker Change: Ladies and gentlemen. This concludes your conference for today, we thank you for participating and we ask that you. Please disconnect your lines.