Sandstorm Gold Ltd.

Good morning. My name is Kavita and I'll be your conference operator today. At this time, I would like to welcome everyone to the Sandstorm Gold Royalty's first quarter conference call. All lines have been placed on mute to prevent any background noise. Please be aware that some of the commentary may contain forward-looking statements. There can be no assurance that the forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one key on your telephone keypad. If you would like to withdraw your question, please press the pound key. Thank you. Mr. Watson, you may begin your conference.

Thank you, Kavita. Good morning, everyone, and thank you for calling into this first quarter earnings call for 2021. As normal this morning, I'll provide a brief update on the company, and then Irfan, our CFO, is going to walk us through the first quarter results, and then Dave Orem will provide an update on some of the assets. After that, we'll turn it over to the operator for a question and answer period, and if anyone has any questions that does not need to be part of the live Q&A, you can ask those questions through the web portal, and we'll ensure that each question we get there will get a direct response from you after this call. At this time, we're going to be going through a prepared PowerPoint presentation on the web portal, so if you're able to, please turn your attention there now. Overall, the first quarter for Sandstorm was fantastic. We had a record number of gold equivalent ounces sold of over 17,000 ounces. We had record revenue of $31 million, and we had record operating cash flows, excluding working capital changes, of $23 million. By all accounts, our business was performing well. And it's for this reason that we're raising the bottom end of our annual production guidance up to 55,000 ounces so that our revised guidance range is between 55,000 to 62,000 gold equivalent ounces. So we're still on track for another record year of annual sales. It's important to note that starting now in the second quarter, the gold stream that we have on Endeavor's Karma mine in Burkina Faso is done, the fixed delivery period of the contract, and Sandstorm now has an effective 1.6% NSR. So the deliveries from Karma are expected to be lower by about 1,000 ounces per quarter going forward. However, As many of you are aware, we have a number of other development assets at various stages of development, and we're expecting more growth in annual production over the next years than any of our other streaming and royalty competitors. Now, Sandstorm has record amounts of capital available to allocate to either new deals or dividends or share buybacks. And as we stand here today, Sandstorm has over $150 million U.S. in the bank, plus we have approximately $60 million U.S. in equity and debt investments and other mining companies that can all be liquidated if need be. we are going to be allocating capital to what I mentioned on the last quarter earnings call of all three alternatives being new deals and dividends and share buybacks. And we've got a slide here that you can see that discusses the share buyback part. We bought back a material number of our shares each year for four years running now. And during the first quarter, we were able to pick up almost a million of Sandstorm shares and have them cancelled. So the value per share for our main shareholders is continuing to increase And over the past four years, our average cost per share has been only $5.20 US. So we think we've done a very good job of picking our spots. And we think it's been a prudent form of capital allocation for us. And we're going to continue in this spirit going forward. One of the things that makes us excited to buy background shares is not only how well the portfolio is doing from a cash flow generating perspective, but also how incredibly well the exploration upside story continues to unfold over time. We finally completed all of the number crunching for the last year, and it turns out that 2020 was the fifth straight year in a row that more gold ounces have been found on our royalty grounds than have been mined. This is an amazing track record that is exciting to us. In 2020, Sandstorm received 52,000 attributable gold equivalent ounces of production compared to 54,000 new ounces attributable to sandstorm being found through exploration. And what I find even more interesting is that the actual number of ounces attributable to sandstorm that was found was even higher than 54,000 ounces. And what we've done is we've chosen to be conservative in how we show these figures because under one of our streams, a new technical team has decided to take a more conservative set of assumptions on the resource calculation and has what we believe temporarily decreased their ounces on the books. And we have netted those ounces off against the ounces found so that the 54,000 ounce number represents a true net ounces found figure. Year after year, our portfolios continue to not only set new records in revenue and cash flow, but it also continues to replace the ounces mined with new ounces found. And before I hand it over to Irfan, I would like to remind everyone of a few important catalysts that we see for Sandstorm in 2021, starting with one of our key assets, hot modern. As I've said in the past, 2021 is expected to be a catalyst-rich year for the asset, with both a feasibility study and an EIA expected to be granted imminently with the granting of the EPCM contract to build the mine later in the year. It's still our expectation that both the feasibility study and the granting of the EIA should occur in the second quarter. However, this week, due to COVID, the government of Turkey has implemented a countrywide lockdown to contain the virus, and we're still assessing what impact, if any, this will have on the expected timelines. I think it's safe to say we're all tired of COVID, but we certainly want our partners and our employees to stay safe, and we understand that this means a slight delay in timelines. Another important catalyst this year is potential deals. I won't belabor this point, but I'm still expecting this year to be an above-average year for new deals and likely the highest level of new deals the past few years for us. Having said that, deals aren't done until they're actually done. So I'll let the actual deals, if any, speak for themselves. The next catalyst that's worth remembering, and which I've already touched on, is the return of capital to shareholders through either share buybacks or dividends. We've had the benefit of discussing this further at the board level recently, and we're targeting a decision one way or another, if not by the end of this year, then early next year. We have an incredibly strong balance sheet, a fantastic and diversified portfolio that's generating record cash flow. And so it's my belief that paying a small but sustainable and growing dividend is effectively imminent. We're very pleased with how well our portfolio is performing and the opportunities we see to grow the portfolio. And so with that, I'm going to hand it over to Irfan.

Great. Thank you, Nolan. Hello to everyone joining us today. It's been a great quarter for Sandstrom, as Nolan's mentioned. I'd like to take some time to walk through the financial results in more detail. The chart on the left of this slide shows Sandstorm's attributable gold equivalent ounces sold, as well as sales and loyalty revenue for the last four quarters. If you've been tuning into these conference calls for a while, you may recall at the end of 2019 that Sandstorm was realizing quarterly records on a regular basis. At the time, I mentioned that we were excited for this record-breaking trend to continue. After a year of unprecedented change and global upheaval, I'm pleased to say that Sandstorm has once again hit a new quarterly record. Moving to the next slide, we can make a few comparisons between the first quarter of 2020 and 2021. Biometrics listed here, Sandstorm's financial performance was stronger in the first quarter of this year compared to the first quarter of last year. Total revenue was a record $31 million. an increase of 45% compared to the same period in 2020. A Tribal gold equivalent ounces sold with a new quarterly record at 17,444 ounces, an increase of 30% compared to the same period in 2020. These results were supported by a relatively strong gold market in the first quarter, with an average realized gold price of $1,777 per ounce. For comparison, the average realized gold price in the first quarter of 2020 was just under $1,600 per ounce. Average cash cost was $307 per attribute allowance, which translated to cash operating margins of $1,470 per ounce and a new quarterly record of $23.7 million in cash flows from operating activities. Net income came in at $5 million for the quarter compared to a net loss of $10.3 million in the first quarter of 2020. The next slide provides a breakdown of the quarterly production results by cash flowing asset. The Yamana Silver Stream was once again the leader with over 4,700 attributable gold equivalent ounces sold. This represents a 12% increase in silver ounces sold compared to the first quarter of 2020. The Saramora silver stream has benefited from an increase in the silver price. Sandstorm realized an average selling price of approximately $25 per ounce during the quarter compared to approximately $18 per ounce of silver in the first quarter of last year. A similar story can be told for the Chapada copper stream. Sandstorm received a 29% increase in the number of copper pounds from Chapada during the quarter and realized a 36% increase in the average selling price of copper compared to the first quarter of 2020. The result was a total of 2,588 attributable gold criminal ounces sold from the stream. Other notable changes in production when compared to 2020 include the addition of the Relief Canyon stream, which began fixed gold deliveries to Sandstorm in May 2020. An increase in production attributable to the Fruta del Norte mine, which commenced commercial production in February 2020, and an increase in royalty revenue from the Bracemak McLeod mine. Production from the Carman mine in Burkina Faso also increased in the first quarter compared to the previous year, partly related to timing of sales. and the delay in deliveries compared to the prior quarter in 2020. The first quarter also marks the end of the five-year period under the Karma Gold Stream that allowed Sandstorm to purchase 25,000 ounces of gold for ongoing per ounce payments equal to 20% of the spot price. And as Nolan mentioned, as of April 1st, Sandstorm's Gold Stream agreement time was now closer to 1.63% of gold produced at the Karma mine for the same ongoing per ounce payment. The operator, Endeavour Mining, is forecasting between 80,000 and 90,000 ounces of gold to be produced at Carmine in 2021. This final slide depicts the first quarter revenues by region and metal type. Sandstorm's portfolio continues to be well diversified with mines operating in stable jurisdictions around the globe. In the first quarter, 90% of revenues came from mines operating in the Americas, with approximately one-third of revenues coming from North American mines. The majority of revenues came from precious metals, with nearly half attributable to gold operations, with another 27% from silver. 17% of revenues came from copper this quarter, which provided good exposure to rising base metal prices. Overall, it was a very good start to the year for Sandstorm shareholders. We finished the quarter with over $140 million in cash and over $52 million in equity and debt investments. Sandstorm's balance sheet is strong and ready to support the next growth step for the company. Based on the company's existing streams and royalties, again, we have updated our forecast for attributable gold-to-cone ounces sold to be between 55,000 and 62,000 ounces in 2021. And with that, I'll turn things over to Dave.