Welcome to my review of Sandstorm Gold Ltd.!
Are you interested in investing in physical gold? or different types of assets?
However, you want exposure to gold but are looking for better returns.
And investing in gold mines feels too risky.
What about a gold investment that reduces the risk of mining stocks while typically outperforming the gold price?
If so, maybe Sandstorm Gold Ltd. is the one for you?
Well, in this Sandstorm Gold Ltd review, we are going to know how they operate and if you should invest in them!
Sandstorm Gold Ltd. Summary Review
- Name: Sandstorm Gold Royalty
- Website: https://www.sandstormgold.com/
- CEO/Owner: Nolan Watson and David Awram
- Price: Varies
- Rating: 4.2/5.0
What is Sandstorm Gold Ltd.?
Nolan Watson and David Awram founded Sandstorm Gold Ltd. in 2008 with the objective of securing gold royalties from mines. Today, Sandstorm Gold Royalties holds a portfolio of 250 royalties on mines around the world. Plus, they also have 39 assets in production with many more in development.
They don’t operate the mines, so there's limited exposure to common operational risks.
More so, their stringent due diligence process allows them to select some of the best mines in the world, providing stable cash flow and more exploration upside than any other gold royalty company.
The company has a large portfolio of streams and royalties on mines around the world.
When a mine reaches production, Sandstorm receives either a percentage of revenue (in the case of a royalty) or metal production (in the case of a “stream”) from the mining operator.
This business model reduces many of the operational risks to Sandstorm that many mining companies face.
What is a Gold Royalty?
A gold royalty is simply a contract that gives the owner (i.e. a gold royalty company) rights to a portion of the final product. This can be a percentage of revenue or actual gold production (called a "stream").
Gold royalty companies pay an upfront sum for royalty rights and use these contracts to finance mining companies in need of capital.
Since royalties typically cover the life of a mine, gold royalty companies benefit from the exploration upside that may extend the life of the mine and increase the amount of revenue (or gold) they receive from the mine at no additional cost.
Here are the stages of having gold royalties:
Difference of Royalties and Streaming Agreement
Gold royalties and gold streams are very similar contracts. The primary difference is what the owner of the contract (the royalty company) receives in return for the upfront capital investment.
In a royalty contract, the owner receives a percentage of revenue, called a Net Smelter Returns royalty (NSR), or a percentage of profit, called a Net Profit Interest royalty (NPI).
In a streaming contract, the owner receives a percentage of the gold (or other by-products) produced from the mine. The royalty company then sells the gold at the current spot price in the open market to make a profit.
A Gold Royalty or a Mining Company? Where Should I Invest?
Mining is a tough business and investing in operating companies can bring a lot of risks. Getting a gold mine into production requires enormous amounts of capital and many years. Once a mine is in production, there are also numerous operational risks that companies face.
On the other hand, with a gold royalty company, investors gain access to a large diversified mining portfolio that has been vetted by experienced geologists and mining engineers. This means that even if some projects never make it into production, a royalty company’s cash flow typically remains strong, even in a market downturn.
If you want to read about a mining company that is doing well recently, then I suggest you read my review of AngloGold Ashanti.
How to Invest?
Investors may purchase shares of Sandstorm Gold Ltd. on either the New York Stock Exchange (NYSE) under the ticker symbol SAND or the Toronto Stock Exchange (TSX) under the ticker symbol SSL. Below, you can see the 1 year trend of Sandstorm Gold Ltd. stock price in the NYSE.
Analyst Reviews and Ratings (2023)
Since this company does not deal with customers directly, we can only turn to expert opinions on what they think about this company. The data in this Sandstorm Gold Ltd review is from January 26, 2023.
- WSJ - Overweight
- Yahoo Finance - Buy
- Barrons - Overweight
Now, what does this actually mean? Well, overweight at first glance sounds like a negative rating. However, this means that the price of the stock should be higher than what it is now. This means that analysts believes that the price of Sandstorm Gold Ltd. has the potential to climb. So, this means that if you invest in them now you can earn positive returns.
However, I must warn you that these are not conclusive data and their stock might lose value instead of gaining value as what the analyst says. With that, I recommend you invest at your own risk or diversify your portfolio.
If you want to diversify your investments then I recommend you invest in precious metals. You can read more about precious metals companies below:
However, out of all these companies I recommend you check out Goldco!
What I Like About Sandstorm Gold Ltd.
As an investment company, Sandstorm Gold Ltd. has promising figures. From their Future Gold Production, Recorded Cash Flow, Growing Asset Portfolio, to their Diversified Global Assets, all are growing in a steady reliable manner.
Well-acknowledged and rated
Sandstorm Gold Ltd. is well-recognized in the industry.
- Rated A by the MSCI
- Sustainalytics: RANKED 4TH of 115 = Precious Metals Industry—2020
- Sustainalytics: RANKED 3RD of 86 = Gold Subindustry—2020
- Member of the World Gold Council
- Member of the United Nations Global Compact
What I Don't Like About Sandstorm Gold Ltd.
You won't own royalties
To clear things up, investors in Sandstorm own shares of the company, but not the actual royalties. The streaming and royalty contracts are between Sandstorm Gold Ltd. and the mining company that is developing or operating the mine.
Not an IRA company
Since you will be investing in a company under the world market, you're not that safe from the different risks that investment poses.
Unlike investing in the value of gold itself, you'll be investing in Sandstorm Gold Ltd.
Even though all investments have risks, it is better to invest in something that's tested!
Is Sandstorm Gold Ltd. a SCAM?
To conclude this Sandstorm Gold Ltd review, Sandstorm Gold Ltd. is NOT A SCAM.
However, stock markets are affected by plenty of factors.
Stock market volatility is largely caused by uncertainty, which can be influenced by interest rates tax changes, inflation rates, and other monetary policies but it is also affected by industry changes and national and global events.
Thus, unlike investing in physical gold or other precious metals, you are not that immune to different factors that influence the market.
Investing always includes risks.
However, you should choose those that are tested to protect your money like physical gold.
If you're interested in doing so, I would recommend GOLDCO.
It is the MOST TRUSTED IRA COMPANY IN THE UNITED STATES.
They have helped set up thousands of precious metals IRAs for people seeking a way to diversify and protect their retirement savings.
More so, they have more than a decade of experience and thousands of satisfied customers! You may know more about them by clicking below:
Thank you for reading this Sandstorm Gold Ltd. Review! 🙂