Sandstorm Gold Ltd (NYSE: SAND) Acquires Royalty Assets And Multiple Cash-Flowing Stream Worth $138 Million Increases 2021 Guidance

Sandstorm Gold Ltd (NYSE: SAND) has made it official that the company has strengthened its portfolio with producing assets and immediate cash flow through the execution of a $30 million gold stream and royalty agreement (the VGML Stream) with Vatukoula Gold Mines PTE Limited (VGML) and the purchase of a royalty package on a portion of Vale SA (Vale) operations at a net purchase price of $108 million (the Vale Royalties, and collectively with the VGML Stream, the Royalties).

Advantages of the acquisitions for Sandstorm Gold Ltd

Instant cash flow, vale royalties, increased production guidance, asset diversification, and quality, among others, are a few key advantages of the acquisitions. It is learned for the next five years, the royalties are estimated to contribute additional revenue of anywhere between $12 and $15 million per year. 

A source from Sandstorm Gold Ltd has confirmed that the company has acquired 9.3 million units of Vale SA’s participating royalties. The recent acquisition will provide holders with the life of mine net sales royalties on a division of Vale SA’s producing and exploration assets, a source from the corporate house confirmed. 

Meanwhile, with the latest acquisition, Sandstorm Gold Ltd has increased its 2021 production guidance to 62,000–69,000 gold equivalent ounces. With the inclusion of the latest Royalties, the portfolio of Sandstorm Gold Ltd has seen a spike. The company owns as many as 229 streams, and royalties of them, 29 of the underlying mines, are currently in production.

Here is what Sandstorm Gold Ltd will gain from the Vatukoula Gold Mines PTE Limited (VGML) stream and royalty

Sandstorm Gold Ltd has executed a $30 million gold stream and royalty on the producing Vatukoula Mine in Fiji with Vatukoula Gold Mines PTE Limited. With this business deal coming through, Sandstorm Gold Ltd will receive 25,920 ounces of gold over six years, followed by 2.55% to 2.9% of the gold production from the Vatukoula Mine mining licenses deal. 

It has also come to light that for every ounce of gold delivered from the Vatukoula Gold Mines PTE Limited (VGML) mines stream, the spot price of 20% will be paid by Sandstorm Gold Ltd to Vatukoula Gold Mines PTE Limited (VGML). 

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