Sandstorm Gold buys two royalty firms for US$1.1B

Canada’s Sandstorm Gold (TSX: SAND; NYSE: SAND) is growing in scale and size with the acquisitions of one royalty company and an extensive package from another for a combined total of US$1.1 billion.

The company said on Monday it had agreed to buy Nomad Royalty in an all-share transaction valued at US$590 million and agreed to acquire nine royalties and one stream from BaseCore Metals for US$525 million in cash and stock.

Nomad owns a portfolio of 20 royalty and stream assets, seven of which are tied to producing mines, including Antamina copper and zinc mine in Peru, Caserones copper-molybdenum in Chile and Highland Valley, which is Canada’s largest open pit copper mine.

Last year, Nomad’s portfolio contributed US$27 million in revenue and about 16,000 gold-equivalent ounces.

The Caserones copper mine located in Chile’s arid north, close to the border with Argentina. Credit: Minera Lumina Copper Chile.

BaseCore­­­ Metals, a 50-50 joint venture between Glencore (LON: GLEN) and the Ontario Teachers’ Pension Plan Board, holds a portfolio that includes 10 royalty and stream assets, of which three are on currently producing assets.

The transactions, president and chief executive Nolan Watson said, mark the next step in Sandstorm Gold’s strategic growth plan, which seeks solidifying its position amongst its peers as the highest-growth streaming and most liquid mid-tier royalty and streaming company.

“We believe that precious metals and copper are poised to materially outperform the market in the coming years, and we are excited to provide investors with exposure to long-life, high quality, and low-cost assets focused on gold, silver and copper,” Watson noted.

Sandstorm Gold said the transactions will boost 2022 production by 22%, reaching between 80,000 and 85,000 gold-equivalent oz., up from 65,000 to 70,000 gold-equivalent oz. previously guided. The Vancouver-based company said that ultimately, the acquisitions announced will increase its production by 55% to 155,000 oz. in 2025.