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Sandstorm Gold lifted by Q4 results

Published: 15:48 11 Mar 2014 EDT

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Sandstorm Gold (NYSE MKT:SAND) (TSE:SSL) shares jumped on Tuesday after the company reported record gold sales and revenue in the fourth quarter. 

The gold streaming company, which provides upfront financing to gold miners in return for a gold streaming agreement, reported record revenue of $15.8 million for the three months to December 31, and gold sales of 10,523 ounces.

It recorded a net loss of $39.9 million, however, mainly due to a non-cash impairment charge of $52.2 million tied to its gold streaming deal at Serra Pelada.

"Amidst a challenging gold price environment in 2013, our streaming partners demonstrated the economic strength of their mining operations as the average all-in cost of the mines underlying our four key streams was close to $1,000 per ounce by the end of the year," said president and CEO Nolan Watson.

"Our focus is building shareholder value by growing and diversifying our production base and cash flow through the acquisition of streams and royalties."

Sandstorm had a big year in 2013, when it acquired all the shares of Premier Royalty, and bought a 1% net smelter royalty on the Paul Isnard gold project in French Guiana owned by Columbus Gold and on the Prairie Creek property in Northwest Territories, Canada from Canadian Zinc Corp. It also signed a streaming agreement with Entree Gold to purchase nearly 26% and 34%, respectively, of Entree's 20% share of the gold and silver produced from the Heruga and Hugo North deposits in Mongolia.

Looking ahead, the company said that forecast 2014 production is anticipated between 40,000 to 50,000 ounces of gold equivalent, based on its existing gold streams, increasing to 60,000 ounces by 2016. Most of this growth is expected from mines that are currently producing under its agreements, or are expected to begin production next year.

Shares of Sandstorm were lately up 5.9% at C$6.08 late Tuesday afternoon, earlier rising to as high as $6.18 in Toronto.

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