Sandstorm Gold Royalties: High-Grade Discoveries Fuel Royalty Growth and Investment Opportunity

Sandstorm Gold Royalties (SAND:TSX) is positioning itself as a leader in the precious metals sector through its diversified portfolio of streaming and royalty assets. Recent drilling results across key projects—including Santa Elena (Mexico), Fruta del Norte (Ecuador), Hugo North Extension (Mongolia), and Odienné (Côte d'Ivoire)—are unlocking new value by extending mine lives, boosting grades, and ensuring robust cash flows for years to come. For investors, these developments underscore a compelling opportunity to capitalize on undervalued royalty potential.

The Power of High-Grade Discoveries

Sandstorm's strategy hinges on acquiring stakes in projects with the potential for grade extensions and new deposits. Recent drilling results across its portfolio are delivering precisely that:

1. Santa Elena, Mexico: A Silver-Gold Bonanza

At Santa Elena, First Majestic Silver Corp. has identified the Santo Niño vein, a high-grade gold-silver discovery with intercepts of 8.38 g/t gold and 248 g/t silver over 1.91 meters, including a stunning 27.5 g/t gold segment. Sandstorm holds a 20% gold stream here, entitling it to 20% of the mine's gold production at a fixed cost of $487/oz. With the vein system open in multiple directions and nine active drilling rigs, production could rise steadily. This discovery not only boosts near-term cash flows but also extends the mine's life, securing Sandstorm's returns for decades.

2. Fruta del Norte, Ecuador: Record Drilling Unlocks Value

Lundin Gold's 2025 drilling program at Fruta del Norte—a record 108,000 meters—has uncovered high-grade gold intercepts like 72.80 g/t over 7.95 meters. Sandstorm's 0.9% net smelter return (NSR) royalty covers all targets, directly benefiting from Lundin's aggressive exploration. With mineralization expanding at depth and along strike, the mine's life could stretch beyond current estimates. This means Sandstorm's royalty income will grow alongside production, a rare combination in the sector.

3. Hugo North Extension, Mongolia: Copper-Gold Depth Adds Lifespan

The Hugo North Extension (HNE) project, part of the Oyu Tolgoi mine, delivered 260 meters of 3.29% copper and 2.08 g/t gold in recent assays. Sandstorm's 0.33% copper stream and 4.47% gold/silver royalty positions it to profit as underground development advances. Drilling has extended mineralization 200 meters below the proposed Lift 2 block cave, suggesting deeper lifts (e.g., Lift 3) could become viable. While licensing delays pose risks, the project's scale and grade continuity ensure long-term value for Sandstorm.

4. Odienné, Côte d'Ivoire: High-Grade Gold Growth

Awalé Resources' drilling at Odienné uncovered 12.0 g/t gold over 26.0 meters, part of a district-scale gold system. Sandstorm's 2% NSR royalty here gains from ongoing exploration, which has only tested 5 km of a 20 km target. With plans for an 18,000-meter drill campaign, Odienné could evolve into a multi-feed mine, boosting Sandstorm's revenue as production ramps up.

Compounding Impact on Cash Flows

The cumulative effect of these discoveries is profound. Grade extensions and mine-life expansions mean Sandstorm's royalties are not just growing but becoming more durable. For example:
- Santa Elena's 20% gold stream could see production increase by 15-20% as Santo Niño is developed.
- Fruta del Norte's extended mine life could push Sandstorm's NSR revenue from the project to $20M+ annually by RequestMethod: POST2027.
- Hugo North Extension's deeper mineralization adds 10+ years to Sandstorm's copper and gold streams.

Why Invest Now?

Sandstorm's stock trades at a 30% discount to its net asset value (NAV), according to analyst estimates, despite its portfolio's recent successes. Key catalysts for a revaluation include:
1. Production Guidance Upgrades: Partner mines like Santa Elena and Fruta del Norte will likely raise output targets in 2025 Q3 reports.
2. Royalty Diversification: New deposits like Odienné reduce Sandstorm's reliance on gold, adding exposure to copper and silver.
3. Low Cost Structure: Sandstorm's streaming model requires no capital for exploration, ensuring all upside flows to its bottom line.

Risks to Consider

• Licensing Delays at HNE: Oyu Tolgoi's tax disputes could slow development timelines.
• Commodity Prices: Gold/silver/copper volatility may affect near-term revenue.
• Geopolitical Risks: Projects in Ecuador and Mongolia face regulatory uncertainties.

Conclusion: Buy SAND for Long-Term Gains

Sandstorm Gold Royalties is a contrarian buy at current prices. Its portfolio of high-grade discoveries and extended mine lives positions it to deliver steady, low-risk returns. With $400M in cash and no debt, the company can acquire new royalties at attractive terms. For income investors and precious metals bulls, SAND offers a rare blend of growth and stability—ideal for a volatile market.

Investment Thesis:
- Buy: SAND at $15.50 (June 6, 2025 price) with a 12-month target of $22.
- Hold: If gold prices remain range-bound or macro risks rise.
- Sell: Only if multiple projects face sustained operational delays.

Sandstorm's recent drilling highlights are not just incremental wins—they're building blocks for a royalty powerhouse. Investors who act now can secure a stake in a company poised to outperform as its assets deliver on their potential.