Sandstorm Gold Ltd. (“Sandstorm” or the “Company”) (NYSE MKT: SAND, TSX: SSL) has released its results for the third quarter ended September 30, 2015 (all figures in U.S. dollars).

THIRD QUARTER HIGHLIGHTS
•Attributable Gold Equivalent ounces sold1 of 10,834;
•Revenue of $12.1 million;
•Average cash cost per Attributable Gold Equivalent ounce1 of $307 resulting in cash operating margins1 of $809 per ounce;
•Operating cash flow of $8.2 million;
•Net loss of $5.5 million;
•On October 27, 2015, the Company entered into three agreements with Yamana Gold Inc. (“Yamana”) that included commodity streams from up to five of Yamana's mining projects. For consideration of $152 million in cash and 15 million warrants of the Company, Sandstorm received a multi-asset silver stream that includes production from Chapada, Minera Florida and Cerro Moro, a copper stream on Chapada, and an early deposit gold stream on Agua Rica;
•On October 26, 2015, the Company amended its revolving credit agreement, to allow the Company to borrow up to $110 million for acquisition purposes. As part the Yamana transaction, the Company fully drew on the $110 million in available credit; and
•On November 3, 2015, the Company completed an equity financing for aggregate gross proceeds of $28.8 million. Upon closing of the equity financing, the majority of the net proceeds were used to reduce the balance of the Company’s revolving credit facility.

Sandstorm President & CEO Nolan Watson commented, “The cash flow generated from our diversified base of streams and royalties has enabled us to make a number of acquisitions over the course of 2015. We are on track to meet our 2015 attributable production guidance and with the recent stream acquisition with Yamana, the Company’s growth profile is expected to increase by up to 55% over the next four years.”

FINANCIAL RESULTS

Revenue and Gold Sales

Revenue was $12.1 million in the third quarter of 2015, generated from the sale of 10,834 Attributable Gold Equivalent ounces at an average realized selling price of $1,116 per ounce. Revenue in the third quarter of 2014 was $15.6 million, the 22% decrease in 2015 attributed to a 12% decrease in the average realized selling price of gold and a 12% decrease in the number of Attributable Gold Equivalent ounces sold.

Costs and Expenses

The average cash cost per attributable ounce was $307 during the quarter, resulting in a cash operating margin of $809 compared to $308 and $959 respectively for the third quarter of 2014. Project evaluation costs increased by $0.2 million compared to the third quarter of 2014 due to increased corporate activity which was partially offset by a $0.2 million decrease in corporate administration expenses, largely driven by the Company’s implementation of a cost reduction program.

Earnings and Operating Cash Flow

For the three months ended September 30, 2015, the net loss and cash flow from operations were $5.5 million and $8.2 million, respectively, compared with net income and cash flow from operations of $2.1 million and $10 million for the comparable period in 2014. The change is attributable to a combination of factors including a $4.4 million non-cash loss on the revaluation of the Company’s investments.

STREAMS AND ROYALTIES

The Company’s stream and royalty segments for the three months ended September 30, 2015 are summarized in the table below:


In $000’s

Attributable ounces sold Sales and royalty revenues Cost of sales
(excluding depletion) Depletion Income (loss) before taxes

Cash flow from operations
Aurizona 2,527 $ 2,818 $ 1,031 $ 299 $ 1,488 $ 1,787
Bachelor Lake 1,559 1,751 780 927 44 971
Black Fox 1,381 1,529 715 1,062 (248) 814
Diavik 1,228 1,370 - 1,342 28 2,054
Ming 425 481 - 507 (26) 481
Santa Elena 2,226 2,476 795 1,503 178 1,681
Royalties 1,488 1,661 - 2,416 (755) 1,963
Corporate - - - - (5,857) (1,517)
Consolidated 10,834 $ 12,086 $ 3,321 $ 8,056 $ (5,148) $ 8,234

Attributable Gold Equivalent ounces sold for the three months ended September 30, 2015 was 10,834 ounces compared with 12,282 ounces for the comparable period in 2014. The 12% decrease from 2014 is largely attributable to a 35% decrease in gold ounces sold from the Bachelor Lake Mine in Quebec (“Bachelor Lake”), operated by Metanor Resources Inc. (“Metanor”), and a 15% decrease in gold ounces sold from Aurizona Mine in Brazil (“Aurizona”), operated by Luna Gold Corp. (“Luna”). The aforementioned decreases in production were partially offset by a 36% increase in gold ounces sold from the Santa Elena Mine in Mexico (“Santa Elena”), an operation run by First Majestic Silver Corp. (“First Majestic”).

Santa Elena Mine

Gold deliveries from Santa Elena increased by 36% compared to the third quarter of 2014 primarily attributable to solid production from the property and an improvement in the mining of underground stopes. A pre-feasibility study and open pit resource update was recently filed, showing 8 years of silver and gold production at Santa Elena. First Majestic recently closed its previously announced transaction whereby it acquired SilverCrest Mines Inc.

Sandstorm has a gold stream to purchase 20% of the gold produced at Santa Elena at a per ounce price of $357. When Sandstorm’s attributable production from Santa Elena reaches 50,000 ounces of gold, the on-going per ounce payments will increase to US$450.

Bachelor Lake Mine

Compared to the third quarter of 2014, there was a 15% decrease in gold ounces sold from Bachelor Lake, primarily related to the mine experiencing lower feed grade which was largely driven by higher than expected dilution from some stopes. Metanor is conducting exploration drilling at Bachelor Lake from underground and at surface and has recently released positive drill results from its activities. For detailed results refer to the Metanor website at www.metanor.ca.

Sandstorm has a gold stream to purchase 20% of the gold production at Bachelor Lake for US$500 per ounce.

Aurizona Mine

Gold ounces sold from the Aurizona mine was 15% lower when compared to the third quarter of 2014. Luna ceased milling operations during the quarter and finalized preparations to place the processing plant into care and maintenance following the processing of the stockpiled ore. Luna has initiated a pre-feasibility study for the restart of the Aurizona Mine.

The Company has a 3% to 5% sliding scale net smelter returns (“NSR”) royalty on the production from Aurizona. At gold prices less than or equal to $1,500 per ounce, the royalty is a 3% NSR.

OUTLOOK
Based on the Company’s existing gold streams and royalties, production for 2015 is forecasted to be between 43,000 to 46,000 Attributable Gold Equivalent ounces. The Company is forecasting Attributable Gold Equivalent production of approximately 65,000 ounces per annum by 2019.

SUBSEQUENT EVENTS

Yamana Transaction

On October 27, 2015, the Company entered into three agreements with Yamana that included commodity streams from up to five of Yamana's mining projects. For consideration of $152 million in cash and 15 million warrants of the Company, Sandstorm received a multi-asset silver stream that includes production from Chapada, Minera Florida and Cerro Moro, a copper stream on Chapada, and an early deposit gold stream on Agua Rica. The transaction provides:
•Imminent Cash Flow: New silver and copper streams are expected to contribute $10 million of cash flow annually starting in 2016, increasing to $20 million annually by 2019 representing a 55% increase in the Company’s 2019 forecasted cash flow;
•Asset Diversification: Multi-asset silver stream that includes production from Chapada, Minera Florida and Cerro Moro, a copper stream on Chapada, and an Early Deposit Gold Stream on Agua Rica;
•Downside Protection: 24-month silver stream backstop from the El Peñon mine if Cerro Moro does not reach production by 2019;
•Asset Quality: The projects underlying the transaction are low cost, economically robust assets with significant exploration upside;
•Improved Counterparty Profile: Approximately 90% of Sandstorm’s cash flow to come from majors, mid-tiers and debt-free junior mining companies by 2019; and
•Precious Metal Focus: Precious metals and diamonds to contribute over 80% of the Company’s cash flow by 2019.

Revolving Credit Facility

On October 26, 2015, the Company amended its revolving credit agreement, allowing the Company to borrow up to $110 million (the “Revolving Loan”) from a syndicate of banks including the Bank of Nova Scotia, Bank of Montreal, National Bank of Canada, and Canadian Imperial Bank of Commerce. The amounts drawn on the Revolving Loan remain subject to interest at LIBOR plus 3.00% – 4.25% per annum, and the undrawn portion of the Revolving Loan remains subject to a standby fee of 0.75% – 1.05% per annum, dependent on the Company’s leverage ratio. On October 26, 2015 and as part of the Yamana transaction, the Company fully drew on its credit facility.

Equity Financing

On November 3, 2015 the Company completed a public offering of 10,087,800 units at a price of $2.85 per unit, for gross proceeds of $28.8 million. Each unit was comprised of one common share of the Company and one-half of one listed warrant. In connection with the offering, the Company paid agent fees of $1.4 million, representing 5% of the gross proceeds. The amount attributable to com¬mon shares was $27.1 million, with the remainder allocated to the warrants. As previously announced, the net proceeds from the public offering were primarily used to reduce the balance of the Company’s Revolving Loan.

OTHER

Normal Course Issuer Bid

On December 15, 2014, the Company announced that it intended to proceed with a normal course issuer bid (“NCIB”). Under the NCIB, the Company may, until December 16, 2015, purchase up to 5,882,879 common shares, representing 5% of the Company’s issued and outstanding common shares of 117,657,587 as of December 11, 2014. The NCIB provides the Company with the option to purchase its common shares from time to time when the Company’s management believes that the Common Shares are undervalued by the market.

During the nine months ended September 30, 2015 and pursuant to the NCIB, the Company purchased and returned to treasury an aggregate of 518,123 common shares.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

This press release contains "forward-looking statements", within the meaning of the U.S. Securities Act of 1933, the U.S. Securities Exchange Act of 1934, the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of Sandstorm. Forward-looking statements include, but are not limited to, statements with respect to the future price of gold, the estimation of mineral reserves and resources, realization of mineral reserve estimates, and the timing and amount of estimated future production. Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans”, or similar terminology.

Forward-looking statements are made based upon certain assumptions and.... etc. etc.