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Sandstorm Gold buys two royalty firms for $1.1 billion

Chapada copper-gold mine in Goiás state, Brazil. (Image courtesy of Sandstorm Gold.)

Canada’s Sandstorm Gold (NYSE, TSX: SAND) is growing in scale and size with the acquisitions of one royalty company and an extensive package from another for a combined total of $1.1 billion.

The company said on Monday it had agreed to buy Nomad Royalty in an all-share transaction valued at $590 million (C$755m) and agreed to acquire nine royalties and one stream from BaseCore Metals for $525 million in cash and stock.

Nomad owns a portfolio of 20 royalty and stream assets, seven of which are tied to producing mines, including Antamina copper and zinc mine in Peru, Caserones copper-molybdenum in Chile and Highland Valley, which is Canada’s largest open pit copper mine.

Last year, Nomad’s portfolio contributed $27 million in revenue and about 16,000 gold equivalent ounces.

BaseCore­­­ Metals, a 50-50 joint venture between Glencore (LON: GLEN) and the Ontario Teachers’ Pension Plan Board, holds a portfolio that includes ten royalty and stream assets, of which three are on currently producing assets.

The transactions, president and chief executive Nolan Watson said, mark the next step in Sandstorm Gold’s strategic growth plan, which seeks to solidify its position among its peers as the highest-growth and most liquid mid-tier royalty and streaming company.

“We believe that precious metals and copper are poised to materially outperform the market in the coming years, and we are excited to provide investors with exposure to long-life, high quality, and low-cost assets focused on gold, silver and copper,” Watson noted.

Sandstorm Gold said the transactions will boost 2022 production by 22%, reaching between 80,000 and 85,000 gold equivalent ounces, up from 65,000 to 70,000 gold equivalent ounces previously guided. The Vancouver-based company said that ultimately, the acquisitions will increase its production by 55% to 155,000 ounces in 2025.