A BMO Capital Markets report reviewed the numbers
and how they stack up to others' forecasts.
In a Feb. 19 research note, analyst Andrew Kaip reported that BMO Capital
Markets increased its target price on Sandstorm Gold
Ltd. (SSL:TSX; SAND:NYSE.MKT) to US$6 per share from US$4.75 "to
incorporate the more positive 2019 outlook." The company's stock, rated
Market Perform, is currently trading below the peer average, at around
US$5.80 per share.
Sandstorm's adjusted earnings per share for Q4/18 was $0.01, in line with
BMO's estimate of $0.01 and the Street's projection of $0.02.
The company generated $10.6 million in cash flow in Q4/18, slightly below
BMO's $11.1 million forecast. Free cash flow was $3.1 million, as a result of
funding for Hod Maden and acquisitions.
As for Q4/18 sales, Sandstorm sold about 14,200 ounces of gold equivalent
(14.2 Koz Au eq). In 2018, it achieved guidance for sales of 56–60 Koz Au eq
with 57.6 Koz sold.
At the end of 2018, the company had $5.9 million in cash and cash
equivalents. Its revolving credit facility is $225 million, having been
increased in Q4/18. To date, Sandstorm purchased 7.2 million of the 9.2
million common shares available via its normal course issuer bid and that are
expiring at the start of April 2019.
For 2019, Sandstorm guided to production of 63–73 Koz, which compares to
BMO's expected 64 Koz. Further out, in 2023, the company is targeting nearly
double that, 140-plus Koz.
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Disclosures from BMO Capital Markets, Sandstorm Gold, Feb. 19, 2019
IMPORTANT DISCLOSURES
Analyst's Certification
I, Andrew Kaip, hereby certify that the views expressed in this report
accurately reflect my personal views about the subject securities or issuers.
I also certify that no part of my compensation was, is, or will be, directly
or indirectly, related to the specific recommendations or views expressed in
this report.
Analysts who prepared this report are compensated based upon (among
other factors) the overall profitability of BMO Capital Markets and their
affiliates, which includes the overall profitability of investment banking
services. Compensation for research is based on effectiveness in generating
new ideas and in communication of ideas to clients, performance of
recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets
Limited are not registered as research analysts with FINRA. These analysts
may not be associated persons of BMO Capital Markets Corp. and therefore may
not be subject to the FINRA Rule 2241 restrictions on communications with a
subject company, public appearances and trading securities held by a research
analyst account.
Company Specific Disclosures
Disclosure 2: BMO Capital Markets has provided investment banking services
with respect to Sandstorm Gold and Lundin Gold within the past 12 months.
Disclosure 4: BMO Capital Markets or an affiliate has received compensation
for investment banking services from Sandstorm Gold and Lundin Gold within
the past 12 months.
Disclosure 5: BMO Capital Markets or an affiliate received compensation for
products or services other than investment banking services within the past
12 months from Sandstorm Gold.
Disclosure 6A: Sandstorm Gold and Lundin Gold is a client (or was a client)
of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets
Limited or an affiliate within the past 12 months: A) Investment Banking
Services
Disclosure 6B: Sandstorm Gold is a client (or was a client) of BMO Nesbitt
Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an
affiliate within the past 12 months: B) Non-Investment Banking Securities
Related Services
Disclosure 6C: Sandstorm Gold is a client (or was a client) of BMO Nesbitt
Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an
affiliate within the past 12 months: C) Non-Securities Related Services.
Disclosure 8A: BMO Capital Markets or an affiliate has a financial interest
in 1% or more of any class of the equity securities of Sandstorm Gold.
Disclosure 8C: BMO Capital Markets or an affiliate has a financial interest
in 0.5% or more in the issued share capital of Sandstorm Gold.
Disclosure 16: A research analyst has extensively viewed the material
operations of Lundin Gold.
Disclosure 17: Lundin Gold has paid or reimbursed some or all of the research
analyst's travel expenses.
For Important Disclosures on the stocks discussed in this report,
please click here.
