Sandstorm Gold

A N N U A L   R E P O R T

Corporate & Shareholder Information 

Stock Exchange Listings

Board of Directors

Andrew T. Swarthout 

David Awram 

David E. De Witt 

John P. A. Budreski 

Mary L. Little 

Nolan Watson 

Vera Kobalia

Corporate Offices

Vancouver Head Office 

Suite 1400, 400 Burrard Street 

Vancouver, British Columbia 

V6C 3A6

T 604 689 0234 
F 604 689 7317

info@sandstormgold.com 

www.sandstormgold.com 

Toronto Office 

Suite 503, 36 Lombard Street 

Toronto, Ontario 

M5C 2X3

Toronto Stock Exchange 

TSX: SSL

New York Stock Exchange 

NYSE: SAND

Transfer Agent

Computershare Investor Services 

2nd Floor, 510 Burrard Street 

Vancouver, British Columbia 

V6C 3B9

T 604 661 9400

Corporate Secretary

Christine Gregory

Auditors

PricewaterhouseCoopers LLP 

PricewaterhouseCoopers Place 

Suite 1400, 250 Howe Street 

Vancouver, British Columbia 

V6C 3S7

T 604 806 7000 
F 604 806 7806

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2021 Q4SECTION 1Company ProfileS E C T I O N   1

Corporate Profile

Message to Our Shareholders 

Global Asset Map 

Management & Technical Team 

Board of Directors 

S E C T I O N   2

Management's Discussion & Analysis

Company Highlights 

Overview and Outlook 

Key Producing Assets 

Other Producing Assets 

Development Assets 

Summary of Annual Results 

Summary of Quarterly Results 

Quarterly Commentary 

S E C T I O N   3

Consolidated Financial Statements

Financial Position 

Income (Loss)  

Comprehensive Income (Loss) 

Cash Flow 

Changes in Equity 

Notes to the Consolidated Financial Statements 

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30

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37

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03

Q4 2021SECTION 1Company Profile“ I   B E L I E V E   G O L D   I S   W E L L - 

P O S I T I O N E D   T O   F U L F I L L   I T S   R O L E 

A S   A   R E L I A B L E   S T O R E   O F   V A L U E 

O V E R   T H E   C O M I N G   D E C A D E . ”

04

2021 Q4SECTION 1Company ProfileA   M E S S A G E

F R O M   P R E S I D E N T   &   C E O

N O L A N   W A T S O N

At the outset of 2021, I spoke about what I considered to be three 

major catalysts for Sandstorm’s growth: 1) new cash-flowing deals, 

2) share buybacks and potential dividends, and 3) the de-risking 

of Hod Maden. I am pleased to say that we achieved all three goals 

during the year. Despite these accomplishments, the gold market 

has struggled to realize meaningful gains over the past 18 months 

following an impressive run-up in early 2020. I continue to be 

a firm believer that the fundamentals for gold are favourable—

perhaps the most favourable I’ve seen over the course of my 20+ 

year career. Hyperinflation, stratospheric levels of global debt, 

and continued uncertainty amongst world governments have 

investors actively pursuing new venues to store their wealth. With 

ballooning cryptocurrency markets, real estate valuations, and 

other real assets, I believe gold is well-positioned to fulfill its role 

as a reliable store of value over the coming decade. The question 

is—how  can  we  best  take  advantage  of  a  rising  gold  market?

05

Q4 2021SECTION 1Company ProfileGold investors buy royalty and stream-
ing companies for better risk-adjusted 
returns compared to other gold invest-
ments. At Sandstorm, we accomplish 
this through our primary mandate of 
strategic capital deployment in an effort 
to curate a diversified portfolio of pre-
cious metal assets. In 2021, Sandstorm 
allocated more capital than ever before 
in the history of the company. This 
year the team allotted $213 million in 
accretive royalty and streaming deals, 
further diversifying our portfolio with 
stable, long-term cash-flowing assets 
with excellent exploration upside (a 
staple characteristic of Sandstorm’s 
portfolio). With Sandstorm cash-flow-
ing over $80 million a year, we have 
made significant strides in diversifying 
our royalty portfolio and the way in 
which we return capital to sharehold-

ers. We were able to take advantage 
of an under-appreciated gold market 
this year and bought back $34 million 
worth of Sandstorm shares (5.5 million 
shares) through our active buyback 
program. While we are not always able 
to purchase shares due to blackout and 
regulatory reasons, we have consis-
tently demonstrated our ability to time 
the purchase of shares at idyllic prices. 
Since announcing our buyback program 
in late 2018, we’ve acquired shares on 
average at a 20% discount to the average 
share price (calculated November 15, 
2018–December 31, 2021). 2021 also 
marked the declaration of Sandstorm’s 
inaugural  dividend—something  I 
personally have been anticipating for 
several years now. This is one more 
indication that Sandstorm is a stable 
and maturing company and one that 

$213 M

A record year of royalty 

and streaming deals

$8 3. 5 M

2021 Cash Flows from 

Operations (excluding non-

cash working capital)

$3 4 M

Total Consideration of 

shares bought back in 2021 

(5.5 million shares)

Development & Exploration

Producing Assets

Vatukoula

Diavik

Ming

Thunder Creek & 144 Gap

Black Fox

HM Claim

Triangle Zone

Bracemac-McLeod

Altintepe

Relief Canyon

Emigrant

Gold Bar

Sao Francisco

Mercedes

Santa Elena

Fruta del Norte

Karma

Houndé

Aurizona

Sossego

The Northern System

Chapada

MWS

Gualcamayo

Don Nicolas

Cerro Moro

Forrestania

06

2021 Q4SECTION 1Company ProfileEnvironment

+55%

Increase to $350 million 

credit facility linked to 

sustainability goals

Social

will  reward  shareholders  for  their 
loyalty and commitment. Recently, 
I was reflecting on the early years of 
Sandstorm and what it looked like as 
a small start-up over a decade ago. I 
am very proud that Sandstorm today 
is able to make record-sized deals, buy 
back shares, and initiate a sustainable 
dividend policy all at the same time—we 
have certainly come a long way as a 
company.

In addition to the free-cash-flow gen-
erating machine that Sandstorm has 
become, we were also able to increase 

•  The world’s first royalty 

company with a sustainability-
linked credit facility.

our credit facility by 55% through a 
new sustainability-linked revolving 
loan—the  world’s  first  for  a  royalty 
company. With this new credit agree-
ment, Sandstorm has access to lower 
interest  terms  by  meeting  various 

Governance

ESG  goals.  “ESG”  is  the  buzzword 
of  the  day  for  many  investors  and 
funds, but it has been fundamental 
to the core of Sandstorm’s business 
since the beginning. As financiers of 
mining projects, we have always been 
thoughtful and strategic in how and 
where we deploy capital with the goal 
of influencing sustainable communi-
ty development at a local level. The 
increase in available capital provides 
Sandstorm with the firepower needed 
to bid on larger, game-changing deals 
benefiting  shareholders  while  also 
promoting corporate responsibility and 
fortifying our position as an industry 
leader in sustainability. 

Whenever we announce a new deal 
at Sandstorm, I get a lot of questions 
from investors about the terms, poten-
tial upside, and generally what I see 
as the benefit of the particular asset. 
While I’m happy to talk deal-specifics, 
I view asset acquisitions through the 
role they play in the larger context 
of Sandstorm’s portfolio. Our job as 
capital allocators is to use the money 
shareholders have entrusted to us and 
build a robust portfolio with strong 

07

Q4 2021SECTION 1Company Profile7Moz

Vatukoula has produced more 

than 7 million ounces of gold 

over the last 85+ years

cash flows over many years to come. 
This year we added a number of signif-
icant assets that play important roles 
in the overall portfolio. 

Our largest acquisition this year was 
the Vale royalty package. The package 
includes royalties on several producing 
and development assets in Brazil owned 
and  operated  by  one  of  the  largest 
mining companies in the world. The 
Northern System—which currently 
includes the majority of cash-flowing 
assets in the package—began produc-
tion in 1984 and currently has a mine 
life set to extend well into the 2030s. 
Adding these assets to Sandstorm’s 
portfolio created a steady stream of 
cash flow for many years to come. 

Along with the Vale deal, we announced 
a Gold Stream on the Vatukoula gold 
mine in Fiji. Despite travel challenges 
resulting from the global pandemic, 
our technical team was able to conduct 
thorough on-site due diligence on this 
mine that has produced more than 7 
million ounces of gold over the last 85+ 
years. Through the vetting and review 
process, our team became more excited 

about the exploration potential at the 
country’s only producing gold mine. 
The deal provides immediate cash flow 
to Sandstorm via fixed gold deliveries 
that  provide  stability  over  the  first 
five and a half years, with additional 
exploration upside afterwards. The new 
funding and Sandstorm’s partnership 
will allow Vatukoula to realize many 
operational efficiencies and various 
expansion efforts that we expect will 
return a longer mine life and increase 
production in the years to come. 

Since Sandstorm began, we’ve been 
forging a partnership business model 
in the royalty and streaming industry. 
Unlike  traditional  bank  financing, 
which  is  often  too  risk-averse  and 
skittish for mining investments, the 
royalty  business  has  a  unique  op-
portunity to offer custom financing 
solutions to mining companies. Our 
deep  understanding  and  expertise 
in the industry is the ideal platform 
for  providing  intelligent  capital  to 
mining companies. This was evident 
in Sandstorm’s final deal of 2021 where 
we helped facilitate Bear Creek’s ac-
quisition of Equinox Gold’s Mercedes 

Sossego Mine, Vale Royalty Package — Brazil

Vatukoula Gold Mine — Fiji

08

2021 Q4SECTION 1Company ProfileMercedes Gold-Silver Mine — Mexico

Hod Maden — Turkey

+$1B

Hod Maden after-tax NPV

Impact  Assessment  (EIA)  by  the 
Turkish  government  and  the  sub-
sequent  release  of  the  Feasibility 
Study. The EIA, a critical milestone 
to advancing any mine, passed through 
the public consultation period with 
no comments—a rarity in the mining 
application process. The granting of the 
EIA is a significant step in Hod Maden’s 
development and has green-lighted a 
number of other important next steps, 
including the Feasibility Study. The 
positive results from the study released 
in the fourth quarter reaffirmed the 
incredible economics of the project. 
With an after-tax NPV of over $1 billion, 
Hod Maden is a significant growth cat-
alyst for Sandstorm once production 
commences. As a management team, 
we’re excited to see this asset come 
online and we are encouraged by the 
hard work that Lidya Madencilik—
our partner and the operator of Hod 
Maden—has done to move the asset 
forward.

mine in Mexico. Sandstorm was fa-
miliar with the Mercedes mine and 
our team recognized the exploration 
potential within it. We knew it needed a 
company like Bear Creek, which has the 
expertise and drive to invest in the ex-
ploration work required to realize the 
mine’s full potential. The acquisition 
was transformational for Bear Creek, 
transitioning from an exploration/
development company to a producer. 
Providing a large majority of the funds 
for the transaction, Sandstorm created 
a custom financing package offering 
fixed returns on the investment with 
exposure to exploration upside through 
the Gold Stream, debt and equity in-
struments. In conjunction with the 
Vatukoula transaction, the Mercedes 
deal increases Sandstorm’s production 
profile in the short term with long-term 
optionality, including exposure to Bear 
Creek’s flagship silver asset.

New deals aside, 2021 was also a trans-
formational year for Sandstorm’s port-
folio regarding one of our flagship assets, 
Hod Maden. This year the Hod Maden 
project was significantly de-risked with 
the granting of the Environmental 

09

Q4 2021SECTION 1Company Profile“ A   Y E A R   O F   S I G N I F I C A N T   C H A N G E 

A T   S A N D S T O R M   T H A T   W I L L   I N V O L V E 

A   N U M B E R   O F   M O V I N G   P A R T S . ”

10

2021 Q4SECTION 1Company ProfileFor a royalty company, we recognize the 
unique nature of Hod Maden’s owner-
ship structure. Since we acquired the 
asset in 2017, we’ve explored various 
options to transform our interest in 
Hod Maden into a more traditional 
Gold Stream. Along with this annual 
report, our team is excited to announce 
that we have taken the first steps in 
converting Hod Maden into a Gold 
Stream with the launch of a strategic 

•  If Sandstorm is to continue to 
grow, we need to think bigger.

base metals partner. We believe this 
will help realize the full value of this 
extraordinary asset for shareholders 
and streamline Sandstorm as a pure-
play streaming and royalty company.

The transformation of Sandstorm’s 
net profits interest in Hod Maden into 
a stream is part of a larger strategy for 
the Company—unlocking unrealized 
value. Over the years we’ve built the 
company to include assets of tremen-
dous value, but we understand that 
not everything is given appropriate 
value by the market. Going forward, 
our management team is working on 
ways to realize this value for share-
holders, including thinking of new and 
innovative ways to grow the company. 
Over the last 18 months, it has become 
increasingly clear that if Sandstorm is 
to continue to grow, we need to think 
bigger. In 2022, we’re working harder 
than ever to close larger accretive deals, 
streamline our portfolio to reflect a 
robust pure-play royalty company, and 
ensure that Sandstorm is a company 
shareholders are proud to own.

Earlier I considered the question of how we take advantage of a 

rising gold market. Everything we’ve done to date—new accretive 

deals, initiating a dividend, buying back shares—is to ensure 

Sandstorm is “spring-loaded” and ready to pop when the gold 

industry comes back in favour. However, we’re not waiting for 

the gold market—the time to grow is now. This will be a year of 

significant change at Sandstorm that will involve a number of 

moving parts and big moves. I can assure you that your management 

team is focused on growing Sandstorm in responsible, creative and 

exciting ways. We’re thrilled that you are a part of this company, 

and we can’t wait to show you what’s in store for 2022 and beyond.

11

Q4 2021SECTION 1Company ProfileM A N A G E M E N T   &   T E C H N I C A L   T E A M

4

1

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2

7

3

8

10

11

5

9

1 

NOLAN WATSON FCPA, FCA, CFA 

7 

KEITH LASKOWSKI Mining Geologist, MSc, QP 

PRESIDENT & CEO

VP, GEOLOGY

2 

DAVID AWRAM B.Sc, Geologist 

8 

LIVIA DANILA CPA, CA 

SENIOR EXECUTIVE VP

VP, CORPORATE CONTROLLER

3 

ERFAN KAZEMI CPA, CA, CFA 

9 

SARAH FORD CPA, CA, CFA 

CFO

VP, FINANCIAL PLANNING & ANALYSIS

4 

TOM BRUINGTON P.E., M.Sc. 

10 

KIM BERGEN CFA 

EXECUTIVE VP, PROJECT EVALUATION

VP, CAPITAL MARKETS

5 

RON HO CPA, CA, CFA 

SENIOR VP, FINANCE

11 

IAN GRUNDY CPA, CA, CFA 

VP, CORPORATE DEVELOPMENT

6 

IMOLA GÖTZ M.Sc., P.Eng. 

VP, MINING & ENGINEERING

12

2021 Q4SECTION 1Company ProfileB O A R D   O F   D I R E C T O R S

4

1

5

2

6

3

7

1 

DAVID E. DE WITT 

5 

ANDREW T. SWARTHOUT 

CHAIRMAN

DIRECTOR

2 

MARY L. LITTLE 

6 

NOLAN WATSON 

DIRECTOR

DIRECTOR

3 

JOHN P. A. BUDRESKI 

7 

DAVID AWRAM 

DIRECTOR

DIRECTOR

4 

VERA KOBALIA 

DIRECTOR

13

Q4 2021SECTION 1Company Profile14

2021 Q4THIS PAGE INTENTIONALLY LEFT BLANK 
 
FINANCIAL REPORTS

Annual Report

20
21

SANDSTORM GOLD LTD.

DECEMBER 31ST, 2021

Q416

THIS PAGE INTENTIONALLY LEFT BLANKS E C T I O N   2

Management's Discussion 
and Analysis

For The Year Ended December 31, 2021

This management’s discussion and analysis (“MD&A”) for Sandstorm Gold Ltd. 

and its subsidiary entities (collectively “Sandstorm”, “Sandstorm Gold” or the 

“Company”) should be read in conjunction with the audited consolidated financial 

statements of Sandstorm for the year ended December 31, 2021 and related notes 

thereto which have been prepared in accordance with International Financial 

Reporting Standards as issued by the International Accounting Standards Board 

(“IFRS”). The information contained within this MD&A is current to February 17, 

2022 and all figures are stated in U.S. dollars unless otherwise noted.

17

SECTION 2

Management's Discussion and Analysis

2021 Q4

Company Highlights

RECORD OPERATING RESULTS

 ▶ Total Sales, Royalties and Income from other 

Another record year in terms of net income, 
revenue, cash flow and Attributable Gold 
Equivalent 1 ounces.

 ▶ Net income for the three months and year 

ended December 31, 2021 was $7.4 million and 
$27.6 million, respectively, compared with 
net income of $10.5 million and $13.8 million 
for the comparable periods in 2020. Net 
income for the most recently completed year 
represented a record for the Company.

 ▶ Attributable Gold Equivalent ounces1 (as 

defined hereinafter), for the three months 
and year ended December 31, 2021 were 
16,586 ounces and 67,548 ounces, respectively, 
compared with 15,795 ounces and 52,176 
ounces for the comparable periods in 2020. 
Attributable Gold Equivalent ounces for the 
most recently completed year represented a 
record for the Company.

 ▶ Revenue for the three months and year 

ended December 31, 2021 was $29.8 million 
and $114.9 million, respectively, compared 
with $29.7 million and $93.0 million for the 
comparable periods in 2020. Revenue for the 
most recently completed year represented a 
record for the Company.

18

interests1 (as defined hereinafter) for the three 
months and year ended December 31, 2021 was 
$29.8 million and $120.7 million, respectively, 
compared with $29.7 million and $93.0 
million for the comparable periods in 2020. 
Total Sales, Royalties and Income from other 
interests1 for the most recently completed year 
represented a record for the Company.

 ▶ Cash flows from operating activities, excluding 
changes in non-cash working capital1, for the 
three months and year ended December 31, 
2021 were $22.1 million and $83.5 million, 
respectively, compared with $22.5 million 
and $68.3 million for the comparable periods 
in 2020. Cash flows from operating activities, 
excluding changes in non-cash working 
capital1 for the most recently completed year 
represented a record for the Company.

 ▶ Cost of sales, excluding depletion, for the 

three months and year ended December 31, 
2021 were $3.7 million and $16.8 million, 
respectively, compared with $3.9 million 
and $14.0 million for the comparable periods 
in 2020.

 ▶ Average cash costs1 for the three months and 
year ended December 31, 2021 of $224 and 
$249 per Attributable Gold Equivalent ounce, 
respectively, compared with $248 and $269 
per Attributable Gold Equivalent ounce for the 
comparable periods in 2020.

Q4 2021

Management's Discussion and Analysis

SECTION 2

 ▶ Cash operating margins1 for the three months 
and year ended December 31, 2021 were $1,574 
and $1,539 per Attributable Gold Equivalent 
ounce, respectively, compared with $1,632 and 
$1,514 per Attributable Gold Equivalent ounce 
for the comparable periods in 2020.

1 

Refer to section on non-IFRS and other measures of this MD&A.

SIGNIFICANT ACQUISITIONS

Over $150 million in transactions on cash 
flowing assets:

 ▶

 ▶

 ▶

In May 2021, the Company acquired a 
package of royalties for consideration of $7 
million. The package includes 21 royalties 
on development, advanced exploration and 
exploration stage projects located in Nevada 
and Montana.

In June 2021, the Company acquired a diverse 
package of Vale Royalties which provide 
holders with life of mine net sales royalties on 
certain of Vale’s producing and exploration 
assets. The royalties provide exposure to 
several of Vale’s long-life, low-cost assets and 
are expected to contribute to Sandstorm’s 
portfolio for several decades.

In June 2021, the Company agreed to acquire 
a Gold Stream on the operating Vatukoula 
gold mine in Fiji in exchange for a $30 
million upfront deposit. The stream entitles 
Sandstorm to purchase 25,920 ounces of gold 
over a 5.5-year period and thereafter 2.55%–
2.9% of the gold produced from the mine for 
ongoing per ounce cash payments equal to 
20% of the spot price of the gold. In addition to 
the Gold Stream, Sandstorm will also receive 
an effective 0.45% NSR on certain prospecting 
licenses.

 ▶

In December 2021, the Company announced 
a $60 million financing package with Bear 
Creek Mining to facilitate its acquisition of 
the producing Mercedes gold-silver mine 
in Mexico from Equinox Gold Corp. The 
financing package includes a $37.5 million 
Gold Stream and a $22.5 million convertible 
debenture. The transaction is expected to 
close by March 31, 2022 and gold deliveries 
to Sandstorm will commence immediately 
thereafter.

HOD MADEN MILESTONES AND CONVERSION 

TO GOLD STREAM

With Hod Maden’s recent approval of the 
Environmental Impact Assessment and the 
release of the feasibility study, the Company has 
entered into an agreement to sell its interest and 
receive a flagship Gold Stream.

 ▶

 ▶

In October 2021, the Hod Maden 
project received the final approval of the 
Environmental Impact Assessment for the 
project from the Ministry of Environment and 
Urbanization of Turkey. The approval marks 
the next development phase and triggers 
several key catalysts including the application 
for the final permits and initiating long-lead 
construction items. 

In November 2021, the Company announced 
the results of the Hod Maden Feasibility Study, 
for which Sandstorm holds a 30% interest. The 
study projects a pre-tax net present value (5% 
discount rate) of $1.3 billion and an internal 
rate of return of 41%. The study also outlines 
total production of more than 2.5 million gold 
equivalent ounces over a 13 year mine life and 
it is expected that gold will be produced at an 
all-in sustaining cost on a by-product basis of 
$334 per ounce1.

19

SECTION 2

Management's Discussion and Analysis

2021 Q4

 ▶

Subsequent to year end, the Company 
announced that it had reached an agreement 
with Royalty North Partners Ltd. to sell 
its 30% interest in Hod Maden and its 
equity interest in Entrée. In consideration, 
Sandstorm will receive a flagship Gold 
Stream on Hod Maden and a portion of debt 
and equity in the resulting New-Co. The 
transaction is subject to various closing 
conditions and is expected to close in the 
second half of 2022. With this transaction, 
Sandstorm intends to unlock additional value 
in Hod Maden through the re-rating of the 
asset as a Gold Stream in its portfolio and 
further repositions Sandstorm as a pure-
play precious metals royalty and streaming 
company.

1 

Refer to section on non-IFRS and other measures of this MD&A.

INAUGURAL DIVIDEND AND OTHER

Increased lending capacity and an 
inaugural dividend.

 ▶ On October 6, 2021, Sandstorm amended 

its revolving credit agreement allowing the 
Company to borrow up to $350 million, 
and incorporated sustainability-linked 
performance targets to become the first 
royalty company to establish an Environment, 
Social, and Governance linked credit facility. 
The ESG Revolving Facility incorporates 
sustainability-linked incentive pricing terms 
that allow Sandstorm to reduce borrowing 
costs as the Company’s sustainability 
performance targets are met. The tenure of 
the facility is four years and is extendable by 
mutual consent of Sandstorm and the banking 
syndicate.

 ▶ On December 15, 2021 Sandstorm declared 

its inaugural dividend of CAD$0.02 per share, 
paid on January 28, 2022 and each quarter 
thereafter, subject to annual increases.

 ▶ During the year ended December 31, 2021 and 
under the Company’s normal course issuer 
bid, the Company purchased and cancelled 
approximately 5.5 million common shares for 
total consideration of $34.2 million.

20

Q4 2021

Management's Discussion and Analysis

SECTION 2

Overview

Outlook

Sandstorm is a growth-focused company that seeks to 

Based  on  the  Company’s  existing  Streams  and 

acquire royalties and gold and other metals purchase 

royalties,  attributable  Gold  Equivalent  ounces 

agreements (“Gold Streams” or “Streams”) from 
companies that have advanced stage development 

(individually and collectively referred to as “At-
tributable Gold Equivalent”) are forecasted to be 

projects or operating mines. In return for making 

between 65,000–70,000 ounces in 2022. Subject to 

upfront payments to acquire a Stream, Sandstorm 

the conversion of the Hod Maden interest into a Gold 

receives the right to purchase, at a fixed price per 

Stream, the Company is forecasting Attributable 

ounce or at a fixed percentage of the spot price, a 

Gold Equivalent production to be over 100,000 

ounces in 2025.

percentage of a mine’s gold, silver, or other commod-
ity (“Gold Equivalent” as further defined herein)1 
production for the life of the mine. Sandstorm helps 

other companies in the resource industry grow 

their businesses, while acquiring attractive assets in 

the process. The Company is focused on acquiring 

Streams and royalties from mines with low pro-

duction costs, significant exploration potential and 

strong management teams. The Company currently 

has 230 Streams and royalties, of which 29 of the 

underlying mines are producing. 

1 

Refer to section on non-IFRS and other measures of this MD&A.

21

SECTION 2

Management's Discussion and Analysis

2021 Q4

 — KEY PRODUCING ASSETS

Yamana Silver Stream 

• YAMANA GOLD INC.

The Company has a silver stream on Yamana Gold Inc.’s (“Yamana”) gold-silver 

Cerro Moro mine, located in Santa Cruz, Argentina (the “Cerro Moro Mine” or 

“Cerro Moro”). Under the terms of the Yamana silver stream, Sandstorm has agreed 

to purchase for ongoing per ounce cash payments equal to 30% of the spot price of 

silver, an amount of silver from Cerro Moro equal to 20% of the silver produced (up 

to an annual maximum of 1.2 million ounces of silver), until Yamana has delivered 

to Sandstorm 7.0 million ounces of silver; then 9% of the silver produced thereafter.

Based on the cumulative ounces of silver purchased to-date, the Company’s current 

silver entitlement is 20%.

The Cerro Moro Mine, which commenced commercial production in 2018, is located 

approximately 70 kilometres southwest of the coastal port city of Puerto Deseado 

in the Santa Cruz province of Argentina. Cerro Moro contains several high-grade 

epithermal gold and silver deposits, some of which will be mined via open pit and 

some via underground mining methods.

Chapada Copper Stream 

• LUNDIN MINING CORPORATION

The Company has a copper stream on Lundin Mining Corporation’s (“Lundin 

Mining”) open pit copper-gold Chapada mine located 270 kilometres northwest of 

Brasília in Goiás State, Brazil (“Chapada” or the “Chapada Mine”). Under the terms 

of the Lundin Mining copper stream, Sandstorm has agreed to purchase, for ongoing 

per pound cash payments equal to 30% of the spot price of copper, an amount of 

copper from the Chapada Mine equal to:

i. 

4.2% of the copper produced (up to an annual maximum of 3.9 million pounds of copper) 

until the mine has delivered 39 million pounds of copper to Sandstorm; then

ii. 

3.0% of the copper produced until, on a cumulative basis, the mine has delivered 50 million 

pounds of copper to Sandstorm; then

iii. 

1.5% of the copper produced thereafter, for the life of the mine.

Based on the cumulative pounds of copper purchased to-date, the Company’s current 

copper entitlement is 4.2%.

22

Q4 2021

Management's Discussion and Analysis

SECTION 2

Chapada has been in production since 2007 and is a relatively low-cost South 

American copper-gold operation. The ore is treated through a flotation plant with 

processing capacity of 24 million tonnes (“Mt”) of ore per annum. In October 2019, 

an updated technical report was filed which outlines production through 2050. For 

more information, visit the Lundin Mining website at www.lundinmining.com.

Vale Royalties 

• VALE S.A.

Sandstorm holds a diverse package of royalties on several of Vale S.A.’s (“Vale”) 

assets located in Brazil. These royalties provide holders with life of mine net sales 

royalties on seven producing mines and several exploration properties covering a 

total area of interest of 15,564 square kilometres (the “Vale Royalties” or the “Vale 

Royalty Package”). Sandstorm’s attributable portion of the Vale Royalty Package 

is as follows:

Copper and Gold

 Ƚ 0.03% net sales royalty on the Sossego copper-gold mine; and

 Ƚ 0.06% net sales royalty on copper and gold and a 0.03% net sales royalty 

on all other minerals from certain assets.

Iron Ore

 Ƚ 0.05% net sales royalty on iron ore sales from the Northern System; and

 Ƚ 0.05% net sales royalty on iron ore sales from a portion of the Southeastern 

System (subject to certain thresholds described below).

Other

 Ƚ 0.03% of net sales proceeds in the event of an underlying asset sale on 

certain assets.

Vale is one of the world’s largest low-cost iron mining companies, contributing 

approximately 15% of global iron ore supply. Vale’s iron ore production is in the first 

quartile of the cost curve and the Northern and Southeastern Systems have reserve 

weighted mine lives of 30 years.

NORTHERN SYSTEM

The Northern System is comprised of three mining complexes: Serra Sul, Serra 

Norte, and Serra Leste located in the Carajas District. In 2020, the Northern System 

produced 192 Mt of iron ore. Production capacity was 206 Mt at the end of 2020. 

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Management's Discussion and Analysis

2021 Q4

Vale expects that production capacity will reach a long-term target of 240 to 260 

Mt, which would be achieved via the approved expansion at Serra Sul and other 

growth projects.

Mining commenced in 1984 at Serra Norte and, based on current Mineral Reserves, 

is currently expected to run through the late-2030s. Serra Sul began production in 

2016 and is expected to produce through the late-2050s.

SOUTHEASTERN SYSTEM

The Southeastern System is comprised of three mining complexes: Itabira, Minas 

Centrais, and Mariana located in Minas Gerais. These complexes will start contrib-

uting to the Vale Royalties once a cumulative sales threshold of 1.7 billion tonnes 

of iron ore has been reached, which Vale most recently estimated would occur in 

2024 or 2025. Sandstorm estimates that approximately 70% of iron sales from the 

Southeastern System are covered by the Vale Royalties. Vale expects production 

capacity to increase to 93 Mt by the end of 2022 from current levels of 70 Mt in 2021.

Houndé Royalty 

• ENDEAVOUR MINING CORPORATION

The Company has a 2% net smelter returns royalty (“NSR”) based on the production 

from the Houndé gold mine located in Burkina Faso, West Africa (“Houndé” or the 

“Houndé Mine”) which is owned and operated by Endeavour Mining Corporation 

(“Endeavour”).

The royalty covers the Kari North and Kari South tenements (the “Houndé Tene-

ments”), representing approximately 500 square kilometres of the Houndé property 

package. The Houndé Tenements host a Proven and Probable Mineral Reserve 

containing 2.1 million ounces of gold within 39.2 million tonnes of ore with an 

average grade of 1.7 grams per tonne gold. This Reserve is based on an economic 

cut-off grade of 0.5 grams per tonne gold. The Reserve Estimate is effective as of 

December 31, 2019 and includes the Vindaloo deposit, Kari West, stockpiles and 

the Bouéré deposit.

Houndé is an open pit gold mine with a 4.0 million tonne per year processing 

plant using a gravity circuit and a carbon-in-leach plant. Endeavour announced 

an updated Inclusive Resource on November 12, 2020, which includes 3.3 million 

ounces of Measured and Indicated Resources contained in 61.6 million tonnes of 

ore with an average grade of 1.75 grams per tonne gold and 0.45 million ounces of 

Inferred Resources contained in 7.6 million tonnes of ore with an average grade of 1.9 

grams per tonne gold at the Vindaloo, Kari Center, Kari Gap, Kari South, Kari West, 

Bouéré and stockpile areas combined, all of which are included within the Houndé 

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Management's Discussion and Analysis

SECTION 2

Tenements (based on a 0.5 grams per tonne cut-off grade). On January 17, 2022, 

Endeavour announced Mineral Resource additions at Kari Centre-Gap-South and 

Vindaloo South of 262,000 ounces of Measured and Indicated Resources contained 

in 18.9 million tonnes of ore with an average grade of 1.28 grams per tonne gold and 

11,000 ounces of Inferred Resources contained in 0.2 million tonnes of ore with an 

average grade of 1.41 grams per tonne gold (based on a 0.5 grams per tonne gold 

cut-off grade). See www.endeavourmining.com for more information.

Santa Elena Gold Stream 

• FIRST MAJESTIC SILVER CORP.

The Company has a Gold Stream to purchase 20% of the life of mine gold produced 

from First Majestic Silver Corp.’s (“First Majestic”) open pit and underground 

Santa Elena mine, located in Mexico (the “Santa Elena Mine”), for a per ounce cash 

payment equal to the lesser of $468 and the then prevailing market price of gold.

The Santa Elena Mine was successfully transitioned from an open pit heap leach 

operation to an underground mining and milling operation and commercial production 

for the 3,000 tonne per day processing plant was declared in 2014. On November 

24, 2021, First Majestic released an updated Technical Report for the Santa Elena 

Mine. The updated mine plan incorporates production from both the Santa Elena 

Mine and the nearby Ermitaño project, the latter of which is not subject to the 

Company’s Gold Stream.

Aurizona Gold Royalty 

• EQUINOX GOLD CORP.

The Company has a 3%–5% sliding scale NSR on the production from Equinox Gold 

Corp.’s (“Equinox”) open pit Aurizona mine, located in Brazil (“Aurizona” or the 

“Aurizona Mine”) which achieved commercial production in 2019. At gold prices less 

than or equal to $1,500 per ounce, the royalty is a 3% NSR. At gold prices between 

$1,500 and $2,000 per ounce, the royalty is a 4% NSR. At gold prices above $2,000 

per ounce, the royalty is a 5% NSR. The royalty is calculated based on sales for the 

month and the average monthly gold price. In addition, Sandstorm holds a 2% NSR on 

Equinox’s greenfields exploration ground. At any time prior to the commencement of 

commercial production at the greenfields exploration ground, Equinox can purchase 

one-half of the greenfields NSR for a cash payment of $10 million.

On September 20, 2021, Equinox announced a positive Pre-Feasibility Study for 

an expansion to the Aurizona mine through the development of an underground 

mine which could be operated concurrently with the existing open-pit mine and 

is subject to the Company’s 3%–5% sliding scale NSR. The assessment outlines 

25

SECTION 2

Management's Discussion and Analysis

2021 Q4

total production of 1.5 million ounces of gold over an eleven-year mine life and 

includes estimated Proven and Probable Mineral Reserves of 1.66 million ounces 

of gold (contained in 32.3 million tonnes at 1.6 grams per tonne gold with a cut-off 

grade of 0.35–0.47 grams per tonne for open-pit and 1.8 grams per tonne gold for 

underground) with an expected average annual production of 137,000 ounces. The 

Pre-Feasibility Study also includes an updated Mineral Resource estimate whereby 

the total Measured & Indicated Resources (exclusive of reserves) increased to an 

estimated 868,000 ounces contained in 18.1 million tonnes at 1.5 grams per tonne 

gold (cut-off grade of 0.3 grams per tonne for open pit and 1.0 grams per tonne for 

underground resources). For more information refer to www.equinoxgold.com.

Fruta del Norte Royalty 

• LUNDIN GOLD INC.

The Company has a 0.9% NSR on the precious metals produced from Lundin Gold 

Inc.’s (“Lundin Gold”) Fruta del Norte gold mine located in Ecuador (“Fruta del 

Norte” or “Fruta del Norte Mine”), which commenced commercial production in 

February 2020.

The royalty covers approximately 646 square kilometres, including all 29 mining 

concessions held by Lundin Gold. The Fruta del Norte Mineral Reserve contains an 

estimated 5.24 million ounces of gold in 20.3 million tonnes of ore with an average 

grade of 8.03 grams per tonne, as of December 31, 2020, ranking it amongst the 

highest-grade gold projects in the world (based on cut-off grade of 3.8 grams per 

tonne and 4.4 grams per tonne depending on mining method).

In 2021, Lundin Gold commenced an 11,000-metre drill program at Barbasco and 

Puente Princesa. Both targets are located south of Fruta del Norte within the same 

geological structure known as the Suarez Pull-Apart Basin and are located within 

the area of interest of the Company’s royalty. Recently, Lundin Gold announced 

that it had completed a plant expansion which increased the mill’s throughput from 

3,500 tonnes per day to 4,200 tonnes per day.

Vatukoula Gold Stream 

• VATUKOULA GOLD MINES PTE LIMITED

In December 2021, the Company closed its previously announced gold purchase 

agreement which entitles it to purchase 25,920 ounces of gold over a 5.5-year period 

(the “Fixed Delivery Period”) and thereafter 2.55%–2.9% of the gold produced 

from Vatukoula Gold Mines PTE Limited’s (“VGML”) underground gold mine 

located in Fiji (“Vatukoula” or the “Vatukoula Mine”) for ongoing per ounce cash 

26

Q4 2021

Management's Discussion and Analysis

SECTION 2

payment equal to 20% of the spot price of the gold. In addition to the Gold Stream, 

Sandstorm will also receive an effective 0.45% NSR on certain prospecting licenses 

plus a five-kilometre area of interest. 

Under the terms of the agreement, during the first 1.5 years of the Fixed Delivery 

Period, Sandstorm will receive 3,040 ounces of gold per year, increasing to 5,340 

ounces of gold per year during the final four years of the Fixed Delivery Period. 

After which, Sandstorm will receive a variable proportion of gold produced from 

the Vatukoula Mine for the life of the mine.

As of the date of this MD&A, the Company had remitted $27 million of the $30 

million purchase price, with the remaining amount subject to various milestones. 

The Vatukoula Mine has produced more than 7 million ounces of gold over the last 

85 years. Since 2013, annual mine production has averaged 30,000–40,000 ounces 

per year. With a portion of the stream proceeds, VGML plans to expand underground 

operations with a production target of 50,000–70,000 ounces per year in the next 

three to five years.

Mercedes Gold Stream 

• BEAR CREEK MINING CORPORATION

In December 2021, the Company entered into a $60 million financing package with 

Bear Creek Mining Corporation (“Bear Creek”) to facilitate Bear Creek’s acquisition 

of the producing Mercedes gold-silver mine in Sonora, Mexico (“Mercedes” or the 

“Mercedes Mine”) from Equinox. The financing package includes a $37.5 million 

Gold Stream on the Mercedes Mine and a $22.5 million convertible debenture, both 

of which are payable on closing. 

Under the terms of the Gold Stream, Sandstorm has agreed to purchase 25,200 

ounces of gold over a 3.5 year period (the “Fixed Delivery Term”) and thereafter 

4.4% of the gold produced from Mercedes Mine. During the Fixed Delivery Term, 

Sandstorm will make ongoing per ounce cash payment equal to 7.5% of the spot 

price of the gold. After the receipt of the fixed deliveries, the ongoing per ounce cash 

payment will increase to 25% of the spot price of the gold.

The $22.5 million convertible debenture bears an interest rate of 6% per annum and 

has a term of 3 years. Sandstorm has the right to convert the principal amount of 

the debenture into common shares of Bear Creek, at any time prior to the maturity 

date, at a 35% premium, or as approved by the TSX-V, to Bear Creek’s share price 

on closing of the transaction.

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SECTION 2

Management's Discussion and Analysis

2021 Q4

The transaction, which is expected to close by March 31, 2022, is subject to various 

closing conditions and the Fixed Delivery Term will begin on the earlier of the 

closing date or April 2022.

The Mercedes district has been the focus of mining activities dating back to the 

1880s. Commercial production commenced at the Mercedes Mine in 2011 and the 

mine has produced over 800,000 ounces of gold. The Mercedes’ mill has a current 

capacity of 2,000 tonnes per day, with gold recoveries averaging approximately 95% 

over the past five years. Proven and Probable Reserves as at December 2020 totaled 

2.6 million tonnes grading 3.9 grams per tonne gold and 29.2 grams per tonne silver, 

containing 325,000 ounces of gold and 2.45 million ounces of silver (based on a 2.1 

grams per tonne gold cut-off grade, except Diluvio which is based on a 2.0 grams per 

tonne gold cut-off grade). Mercedes has a strong track record of reserve replacement 

and Bear Creek intends on expanding its exploration program.

Relief Canyon Gold Stream 

• AMERICAS GOLD AND SILVER CORPORATION

The Company has a precious metal stream on the Relief Canyon gold project in 

Nevada, U.S.A. (“Relief Canyon” or the “Relief Canyon Mine”), which is owned and 

operated by Americas Gold and Silver Corporation (“Americas Gold”). Under the 

terms of the Stream, Sandstorm is entitled to receive 32,022 ounces of gold over a 

5.5 year period which began in the second quarter of 2020 (the “Fixed Deliveries”). 

After receipt of the Fixed Deliveries, the Company has agreed to purchase 4% of 

the gold and silver produced from the Relief Canyon Mine for ongoing per ounce 

cash payments equal to 30%–65% of the spot price of gold or silver, with the range 

dependent on the concession’s existing royalty obligations. In addition, Sandstorm 

will also receive a 1.4%–2.8% NSR on the area surrounding the Relief Canyon mine.

Americas Gold may elect to reduce the 4% Stream and NSR on the Relief Canyon 

mine by delivering 4,000 ounces of gold to Sandstorm (the “Purchase Option”). The 

Purchase Option may be exercised by Americas Gold at any time and is subject to 

a 10% annual premium. Upon exercising the Purchase Option, the 4% Stream will 

decrease to 2% and the NSR will decrease to 1%.

In January 2021, Americas Gold announced that it had achieved commercial 

production at the Relief Canyon Mine. Since then, the ramp up of operations has 

been challenging and the operation has proceeded with run-of-mine heap leaching 

with continued efforts to resolve metallurgical challenges. The mine is located in 

Nevada, U.S.A. at the southern end of the Pershing Gold and Silver Trend, which 

hosts other projects such as Coeur Mining Inc.’s Rochester mine.

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Management's Discussion and Analysis

SECTION 2

Black Fox Gold Stream 

• MCEWEN MINING INC.

The Company has a Gold Stream to purchase 8% of the life of mine gold produced 

from McEwen Mining Inc.’s (“McEwen”) open pit and underground Black Fox mine, 

located in Ontario, Canada (the “Black Fox Mine”), and 6.3% of the life of mine 

gold produced from McEwen’s Black Fox Extension, which includes a portion of 

McEwen’s Pike River concessions, for a per ounce cash payment equal to the lesser 

of $577 and the spot price of gold.

The Black Fox Mine began operating as an open pit mine in 2009 (depleted in 2015) 

and transitioned to underground operations in 2011. McEwen continues to invest 

in an exploration program which includes surface and underground drilling. For 

more information refer to www.mcewenmining.com.

Karma Gold Stream 

• ENDEAVOUR MINING CORPORATION

The Company has a Gold Stream which entitles it to purchase 25,000 ounces of gold 

over a five-year period and thereafter 1.625% of the gold produced from Endeavour’s 

open pit heap leach Karma gold mine located in Burkina Faso, West Africa (“Karma” 

or the “Karma Mine”) for ongoing per ounce cash payment equal to 20% of the spot 

price of gold. The Gold Stream, which on a gross basis requires Endeavour to deliver 

100,000 ounces of gold over a five-year period starting March 31, 2016 and thereafter 

6.5% of the equivalent gold production at the Karma Mine, is syndicated 75% and 25% 

between Franco-Nevada Corp. and Sandstorm, respectively. With the conclusion, in 

March 2021, of the five-year delivery period, Sandstorm’s Gold Stream entitlement 

is now at 1.625%.

Bracemac-McLeod Royalty 

• GLENCORE PLC

Sandstorm has a 3% NSR based on 100% of the production from the Bracemac-Mc-

Leod property located in Matagami, Quebec, Canada (“Bracemac-McLeod” or the 

“Bracemac-McLeod Mine”) which is owned and operated by a subsidiary of Glencore 

PLC (“Glencore”).

The Bracemac-McLeod Mine is a high-grade volcanogenic massive sulphide deposit 

located in the historic and prolific Matagami mining district of Quebec. Continuous 

mining and milling operations have been active in the Matagami district for over fifty 

years with ten previously operating mines and one other currently producing mine. 
The Bracemac-McLeod Mine began initial production in the second half of 2013 and 

mining is scheduled to conclude in 2022.

29

SECTION 2

Management's Discussion and Analysis

2021 Q4

Diavik Diamond Royalty 

• RIO TINTO PLC

The Company has a 1% gross proceeds royalty based on the production from the 

Diavik mine located in Lac de Gras, Northwest Territories, Canada (“Diavik” or 

the “Diavik Mine”) which is owned and operated by Rio Tinto PLC (“Rio Tinto”).

The Diavik Mine is Canada’s largest diamond mine. The mine began producing 

diamonds in January 2003 and has since produced more than 100 million carats 

from three kimberlite pipes (A154 South, A154 North, and A418). In the fourth 

quarter of 2018, Rio Tinto announced that it had achieved commercial production 

at its fourth open pit diamond pipe (A21).

 — OTHER PRODUCING ASSETS

Ming Gold Stream 

• RAMBLER METALS & MINING PLC

The Company has a Gold Stream to purchase approximately 25% of the first 175,000 

ounces of gold produced and 12% of the life of mine gold produced thereafter, from 

Rambler Metals & Mining PLC’s (“Rambler”) Ming copper-gold mine, located in 

Newfoundland, Canada (“Ming” or the “Ming Mine”). There are no ongoing per 

ounce payments required by Sandstorm in respect of the Ming Mine Gold Stream. 

In the event that the metallurgical recoveries of gold at the Ming Mine are below 

85%, the percentage of gold that Sandstorm shall be entitled to purchase shall be 

increased proportionally. Based on 2020 metallurgical recoveries, Sandstorm’s 2021 

gold purchase entitlement was adjusted to 31%.

The Ming Mine has been in operation since 2012 and continued production is 

expected from both the high-grade Massive Sulphide Zone and the Lower Footwall 

Zone. For more information refer to www.ramblermines.com.

Gualcamayo Royalty 

• MINEROS S.A.

The Company has a 1% NSR on the Gualcamayo gold mine (the “Gualcamayo Mine”) 

which is located in San Juan province, Argentina and is owned and operated by 

Mineros S.A. (“Mineros”). The Gualcamayo Mine is an open pit, heap leach operation. 

Mineros is a Latin American gold producer with operations in Argentina, Colombia, 

and Nicaragua.

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Management's Discussion and Analysis

SECTION 2

Thunder Creek Royalty 

• PAN AMERICAN SILVER CORP.

The Company has a 1% NSR on the gold produced from the Thunder Creek and 144 

properties (“Thunder Creek” or the “Thunder Creek Mine”) which are part of the 

Timmins West mine complex in Ontario, Canada which is owned and operated by 

Pan American Silver Corp. Thunder Creek is an underground mine that has been in 

production since 2010 and has produced more than 500,000 ounces of gold.

Mine Waste Solutions Royalty 

• HARMONY GOLD MINING COMPANY LIMITED

The Company has a 1% NSR on the gold produced from Mine Waste Solutions 

tailings recovery operation (“MWS”) which is located near Stilfontein, South Africa, 

and is owned and operated by Harmony Gold Mining Company Limited. MWS is a 

gold and uranium tailings recovery operation. The operation re-processes multiple 

tailings dumps in the area through three production modules, the last of which was 

commissioned in 2011.

HM Claim 

• AGNICO EAGLE MINES LIMITED

The Company has a 2% NSR on a part of the Macassa mine complex located in 

Kirkland Lake, Ontario, Canada (“HM Claim”), which is owned and operated by 

Agnico Eagle Mines Limited. The Kirkland Lake mining camp has been a prolific 

gold producer since mining began there in 1914. The HM Claim is an area that hosts 

the easterly extension of the south mine complex and is located southeast of the #2 

shaft at the Macassa mine.

Triangle Zone 

• ELDORADO GOLD CORP.

The Company has a 2% NSR on a part of the Triangle zone located within the 

Lamaque gold project located in Quebec, Canada (“Triangle Zone”), which is owned 

and operated by Eldorado Gold Corp. (“Eldorado”). The Triangle Zone is an Archean 

greenstone-hosted orogenic lode gold deposit and the royalty covers a portion of the 

Triangle Zone’s reserves and resources. Eldorado achieved commercial production 

in March 2019. 

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Management's Discussion and Analysis

2021 Q4

Emigrant Springs Royalty 

• NEWMONT CORPORATION

The Company has a 1.5% NSR, payable by Newmont Corporation (“Newmont”), on 

a portion of the Emigrant Springs gold mine (the “Emigrant Springs Mine”) which 

is located in the Carlin Trend in Nevada, U.S.A. The Emigrant Springs Mine is 

owned by Nevada Gold Mines LLC which is a joint venture owned 61.5% by Barrick 

Gold Corporation (“Barrick”) and 38.5% by Newmont and operated by Barrick. 

The Emigrant Springs Mine is an open pit, heap leach operation that has been in 

production since the third quarter of 2012.

 — DEVELOPMENT ASSETS

Hod Maden 

• LIDYA MADENCILIK SANAYI VE TICARET A.S.

The Company has a 30% net profits interest and a 2% NSR on the Hod Maden 

gold-copper project, which is located in Artvin Province, northeastern Turkey (the 

“Hod Maden Project” or “Hod Maden”). The project is operated and co-owned by a 

Turkish partner, Lidya Madencilik Sanayi ve Ticaret A.S. (“Lidya”), which owns the 

remaining interest in the project. Lidya is a strong local partner with experience 

exploring, developing, permitting, and operating projects in Turkey. Lidya is part 

of a large Turkish conglomerate called Çalik Holding and is currently involved in 

several projects in Turkey including a partnership with SSR Mining Inc. on the 

producing Çöpler mine.

In October 2021, the Hod Maden project received the final approval of the Environ-

mental Impact Assessment (“EIA”) for the project from the Ministry of Environment 

and Urbanization of Turkey. 

In November 2021, a Feasibility Study was released. The results of which demonstrate 

a Proven and Probable Mineral Reserve of 2.5 million ounces of gold and 129,000 

tonnes of copper being mined over a 13-year mine life (8.7 million tonnes at 8.8 

grams per tonne gold and 1.5% copper or 11.1 grams per tonne gold equivalent using 

a breakeven cut-off value of $82/tonne and incremental cut-off values of $63 per 

tonne for stopes and $40 per tonne for development). The study projects a pre-tax net 

present value (5% discount rate) of $1.3 billion and an internal rate of return of 41%. 

It is estimated that gold will be produced at an all-in sustaining cost on a by-product 

basis1 of $334 per ounce. For more information refer to www.sandstormgold.com.

With the approval of the EIA and release of the Feasibility Study, Hod Maden moves 

into the next stage of development including the application for the final permits 

and initiating long-lead construction items.

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Management's Discussion and Analysis

SECTION 2

Subsequent to year end, the Company announced that it had reached an agreement 

with Royalty North Partners Ltd. to sell its 30% interest in Hod Maden and its equity 

interest in Entrée. In consideration, Sandstorm will receive a flagship Gold Stream 

on Hod Maden and a portion of debt and equity in the resulting issuer (“New-Co”). 

The transaction is subject to various closing conditions and is expected to close 

in the second half of 2022. The accounting for the transaction will be finalized on 

closing based on the facts and circumstances at that time. With this transaction, 

Sandstorm intends to unlock additional value in Hod Maden through the re-rating 

of the asset as a Gold Stream in its portfolio and further repositions Sandstorm as 

a pure-play precious metals royalty and streaming company.

New-Co will become a strategic partner to Sandstorm that will allow both companies 

to collaborate on future acquisitions. New-Co’s business intent is to actively grow its 

existing portfolio of assets, with a focus on base metal projects. The two companies 

may partner together whereby Sandstorm purchases streams on the precious metal 

by-products from the base metal project acquisitions made by New-Co.

1 

Refer to section on non-IFRS and other measures of this MD&A.

Hugo North Extension & Heruga Gold Stream 

• ENTRÉE RESOURCES LTD.

The Company has a Gold Stream with Entrée Resources Ltd. (“Entrée”) to purchase 

an amount equal to 5.62% and 4.26%, respectively, of the gold and silver produced 

from the Hugo North Extension and Heruga deposits located in Mongolia, (the 

“Hugo North Extension” and “Heruga”, respectively) for per ounce cash payments 

equal to the lesser of $220 per ounce of gold and $5 per ounce of silver and the then 

prevailing market price of gold and silver, respectively. Additionally, Sandstorm 

has a copper stream to purchase an amount equal to 0.42% of the copper produced 

from Hugo North Extension and Heruga for per pound cash payments equal to the 

lesser of $0.50 per pound of copper and the then prevailing market price of copper.

The Company is not required to contribute any further capital, exploration, or 

operating expenditures to Entrée.

The Hugo North Extension is a copper-gold porphyry deposit and Heruga is a 

copper-gold-molybdenum porphyry deposit. Both projects are located in the South 

Gobi Desert of Mongolia, approximately 570 kilometres south of the capital city of 

Ulaanbaatar and 80 kilometres north of the border with China. The Hugo North 

Extension and Heruga are part of the Oyu Tolgoi mining complex and are managed by 

Oyu Tolgoi LLC, a subsidiary of Turquoise Hill Resources Ltd. and the Government 

of Mongolia, and its project manager Rio Tinto PLC. Entrée retains a 20% interest 

in the Hugo North Extension and Heruga.

33

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Management's Discussion and Analysis

2021 Q4

Entrée recently announced the completion of an updated Feasibility Study on 

its interest in the Entrée/Oyu Tolgoi joint venture property. The updated report 

aligns Entrée’s disclosure with that of other Oyu Tolgoi project stakeholders on 

development of the first lift of the underground mine. Entrée further announced that 

optimization studies on Panel 1 are currently underway which have the potential to 

further improve Lift 1 economics for the Entrée/Oyu Tolgoi joint venture.

Hackett River Royalty 

• GLENCORE PLC

The Company has a 2% NSR on the Hackett River property located in Nunavut, 

Canada (the “Hackett River Project” or “Hackett River”) which is owned by a 

subsidiary of Glencore.

Hackett River is a silver-rich volcanogenic massive sulphide deposit and is one of 

the largest undeveloped projects of its kind. The property contains four massive 

sulphide bodies that occur over a 6.6 kilometre strike length. A Preliminary Eco-

nomic Assessment updated in 2010 evaluated a possible large-scale open pit and 

underground operation, processing up to 12,000 tonnes per day. The most recent 

Glencore Reserves and Resources statement, effective December 31, 2020, reported 

27.1 million tonnes of Indicated Resources containing 4.5% zinc and 130.0 grams 

per tonne silver plus 60.0 million tonnes of Inferred Resources with 4.0% zinc and 

150.0 grams per tonne silver. For more information refer to www.glencore.com and 

the Technical Report dated July 26, 2010 under Sabina Gold & Silver Corp.’s profile 

on www.sedar.com.

Lobo-Marte Royalty 

• KINROSS GOLD CORPORATION

The Company has a 1.05% NSR on production from the Lobo-Marte project located 

in the Maricunga gold district of Chile (the “Lobo-Marte Project” or “Lobo-Marte”) 

which is owned by Kinross Gold Corporation (“Kinross”).

In the fourth quarter of 2021, Kinross announced the results of a Feasibility Study 

for the Lobo-Marte Project. The study estimates a new Probable Mineral Reserve of 

6.7 million ounces contained in 160.7 million tonnes at an average grade of 1.3 grams 

per tonne gold with additional Indicated Resources of 2.4 million ounces contained 

in 99.4 million tonnes at an average grade of 0.7 grams per tonne gold and Inferred 

Resources of 0.4 million ounces contained in 18.5 million tonnes at an average grade 

of 0.75 grams per tonne gold. Kinross estimates a total life of mine production of 

approximately 4.7 million gold ounces during a 16-year mine life, which includes 

34

Q4 2021

Management's Discussion and Analysis

SECTION 2

14 years of mining followed by two years of residual processing. Reserves and 

Resources are estimated based on appropriate cut-off grades calculated using $1,200 

per ounce gold prices. For more information refer to www.kinross.com.

Agi Dagi & Kirazli Royalty 

• ALAMOS GOLD INC.

The Company has a $10 per ounce royalty based on the production from the Agi 

Dagi and the Kirazli gold development projects located in the Çanakkale Province 

of northwestern Turkey (“Agi Dagi” and “Kirazli”, respectively) which are both 

owned by Alamos Gold Inc. (“Alamos Gold”). The royalty is payable by Newmont 

and is subject to a maximum of 600,000 ounces from Agi Dagi and a maximum of 

250,000 ounces from Kirazli.

A 2017 Feasibility Study on Agi Dagi and a 2017 Feasibility Study on Kirazli con-

templated both projects as stand-alone open pit, heap leach operations. Under the 

respective studies, Agi Dagi is expected to produce an average of 177,600 ounces of 

gold per year over a 6-year mine life while Kirazli is expected to produce an average 

of 104,000 ounces of gold per year over a 5-year mine life. For more information 

refer to www.alamosgold.com.

Prairie Creek Royalty 

• NORZINC LTD.

The Company has a 1.2% NSR on the Prairie Creek project (the “Prairie Creek 

Project”) located in the Northwest Territories, Canada and owned by NorZinc 

Ltd. (“NorZinc”). The Prairie Creek Project is a zinc, silver and lead project that is 

100%-owned by NorZinc and based on a 2017 Feasibility Study has an estimated 

Proven and Probable Mineral Reserve of 8.1 million tonnes containing 8.6% zinc, 

124.2 grams per tonne silver and 8.1% lead. For more information, refer to www.

norzinc.com.

Mt. Hamilton Royalty 

• WATERTON PRECIOUS METALS FUND II CAYMAN, LP

The Company has a 2.4% NSR on the Mt. Hamilton gold project (the “Mt. Hamilton 

Project”). The Mt. Hamilton Project is located in White Pine County, Nevada, U.S.A. 

and is owned by Waterton Precious Metals Fund II Cayman, LP.

35

SECTION 2

Management's Discussion and Analysis

2021 Q4

 — REVOLVING CREDIT FACILITY

In October 2021, Sandstorm amended its revolving credit agreement, allowing the 

Company to borrow up to $350 million and incorporating sustainability-linked 

performance targets to establish an Environment, Social, and Governance (“ESG”) 

linked credit facility (“ESG Revolving Facility”). The ESG Revolving Facility is 

for general corporate purposes, from a syndicate of banks including The Bank of 

Nova Scotia, Bank of Montreal, National Bank of Canada, Canadian Imperial Bank 

of Commerce, and Royal Bank of Canada (the “Syndicate”). The term of the ESG 

Revolving Facility is for four years and is extendable by mutual consent of Sandstorm 

and the Syndicate. The amounts drawn on the ESG Revolving Facility are subject 

to interest at LIBOR plus 1.875%–3.0% per annum, and the undrawn portion of the 

ESG Revolving Facility is subject to a standby fee of 0.422%–0.675% per annum, 

both of which are dependent on the Company’s leverage ratio.

The ESG Revolving Facility incorporates sustainability-linked incentive pricing terms 

that allow Sandstorm to reduce the borrowing costs from the interest rates described 

above as the Company’s ESG performance targets are met. These targets focus on 

increasing the Company’s producing assets which report under sustainability and 

climate related standards as well as maintaining and improving the Company’s own 

external ESG rating and ensuring diverse representation at the senior management 

and board levels. As of the date of the MD&A, there are no amounts drawn under 

the ESG Revolving Facility and the full $350 million remains available.

36

Q4 2021

Management's Discussion and Analysis

SECTION 2

Summary of Annual Results

TEAR ENDED

In $000s (except for per share and per ounce amounts)

Dec. 31, 2021

Dec. 31, 2020

Dec. 31, 2019

Total revenue

Attributable Gold Equivalent ounces1

Sales

Royalty revenue

Average realized gold price per attributable ounce1

Average cash cost per attributable ounce1

Cash flows from operating activities

Net income

Basic income per share

Diluted income per share

Total assets

Total long-term liabilities

$

$

114,860

$

93,025

$

67,548

52,176

71,722

$

58,660

$

43,138

1,788

249

81,139

27,622

0.14

0.14

620,858

20,873

34,365

1,783

269

65,616

13,817

0.07

0.07

649,921

8,345

89,434

63,829

63,602

25,832

1,401

286

57,339

16,397

0.09

0.09

623,175

48,414

1 

Refer to section on non-IFRS and other measures of this MD&A.

 Attributable Gold 
Equivalent ounces1

 Sales & Royalty Revenue

 Total Sales, Royalties, 

and Income from other 
interests 1

 Average realized gold 
price per attributable 
ounce 1

$120.7M

$114.9M

$89.4M

$93.0M

$73.2M

63,829oz

57,646oz

67,548oz

52,176oz

$1,783

$1,788

$1,401

$1,269

2018

2019

2020

2021

2018

2019

2020

2021

1 

Refer to section on non-IFRS and other measures of this MD&A.

37

SECTION 2

Management's Discussion and Analysis

2021 Q4

The Company’s operating segments for the year ended December 31, 2021 are summarized in the table below:

Attributable 
Gold 
Equivalent 
ounces

Sales and 
royalty 
revenues

Cost of sales 
excluding 
depletion

Depletion 
expense

Stream, 
Royalty 
and Other 
Interests 
Impairments

Gain on Vale 
Royalties 
financial 
instrument

Income 
(loss) 
before taxes

Cash flows 
from 
operating 
activities

5,506 $

9,844 $

- $

815 $

- $

- $

9,029 $

9,444

In $000s  
(except for ounces sold)

Product

Aurizona

Black Fox

GOLD

GOLD

Bracemac-McLeod1

VARIOUS

Chapada

Diavik

Fruta del Norte

Houndé

Karma

Relief Canyon

Santa Elena

COPPER

DIAMONDS

GOLD

GOLD

GOLD

GOLD

GOLD

Vale Royalties

IRON ORE

Yamana silver 
stream

Other2

Corporate

Consolidated

2,315

3,071

8,465

4,268

3,562

2,127

2,269

5,879

5,498

5,740

4,154

5,487

1,309

-

15,118

4,541

7,647

6,367

3,803

4,065

10,499

9,786

4,398

-

-

-

824

-

2,568

1,888

1,545

2,963

3,372

2,304

1,610

1,935

4,711

280

-

1,444

-

-

-

-

-

-

-

-

-

(5,887)

957

3,942

7,614

4,275

4,063

2,193

1,306

5,788

6,938

8,841

2,845

4,995

10,577

7,097

4,465

3,802

3,241

10,499

7,357

198

-

-

-

7,442

17,857

5,402

8,658

(22,937)

(9,896)

SILVER

14,245

25,460

7,603

10,415

VARIOUS

4,603

8,232

-

-

-

-

2,422

-

408

-

67,548 $ 114,860 $

16,845 $

35,704 $

408 $ (5,887) $

44,853 $

81,139

1 

2 

Royalty revenue from Bracemac-McLeod consists of $2.8 million from copper and $2.7 million from zinc.

Includes royalty revenue from gold of $7.6 million and other base metals of $0.6 million.

The Company’s operating segments for the year ended December 31, 2020 are summarized in the table below:

In $000s  
(except for ounces sold)

Product

Aurizona

Black Fox

GOLD

GOLD

Bracemac-McLeod1

VARIOUS

Chapada

Diavik

Fruta del Norte

Houndé

Karma

Relief Canyon

Santa Elena

Yamana silver 
stream

Other2

Corporate

Consolidated

Attributable 
Gold 
Equivalent 
ounces

Sales and 
royalty 
revenues

Cost of sales 
excluding 
depletion

Depletion 
expense

Stream, 
Royalty 
and Other 
Interests 
Impairments

Income 
(loss) 
before taxes

Other

Cash flows 
from 
operating 
activities

4,958 $

8,850 $

- $

1,067 $

- $

- $

7,783 $

7,950

2,137

1,634

5,585

1,489

1,815

4,874

4,584

3,819

5,526

3,693

2,946

9,904

2,716

3,302

8,740

8,184

7,096

9,749

1,194

-

3,021

-

-

-

1,619

-

2,552

1,014

1,485

2,914

2,085

1,256

3,816

3,843

2,820

312

COPPER

DIAMONDS

GOLD

GOLD

GOLD

GOLD

GOLD

SILVER

10,912

19,199

5,660

10,119

-

-

-

-

-

-

1,485

1,461

3,969

7,862

392

(7,623)

2,500

3,234

6,883

3,075

1,408

6,633

6,438

7,096

7,100

2,046

4,924

2,722

4,276

6,885

-

-

-

-

-

-

-

3,420

13,540

5,238

7,553

VARIOUS

4,843

8,646

-

-

-

-

2,393

1,015

-

-

135

(12,310)

(7,794)

52,176 $

93,025 $

14,046 $

33,124 $

8,877 $

527 $

24,276 $

65,616

Royalty revenue from Bracemac-McLeod consists of $1.4 million from copper and $1.5 million from zinc.

Includes royalty revenue from gold of $8.1 million and other base metals of $0.5 million.

1 

2 

38

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Q4 2021

Management's Discussion and Analysis

SECTION 2

FY 2021

Attributable Gold Equivalent Ounces Sold

 Q1  

 Q2  

 Q3  

 Q4

Yamana silver stream

Chapada

Relief Canyon

Vale Royalties

Aurizona

Santa Elena

Diavik

Fruta del Norte

Bracemac-McLeod

Black Fox

Karma

Houndé

Other

FY 2021

FY 2021

Attributable Gold Equivalent Ounces by Region

Attributable Gold Equivalent Ounces by Metal

 Precious Metals

 Base Metals

 Diamonds

6%

18%

36%

26%

 North America

 Canada

 South America

 Other

7%

57%

14,245oz

8,465oz

5,879oz

5,740oz

5,506oz

5,498oz

4,268oz

3,562oz

3,071oz

2,315oz

2,269oz

2,127oz

4,603oz

39

68%SECTION 2

Management's Discussion and Analysis

2021 Q4

In $000s (except for per share and per ounce amounts)

Dec. 31, 2021

Sep. 30, 2021

Jun. 30, 2021

Mar. 31, 2021

Total revenue

Attributable Gold Equivalent ounces1

Sales

Royalty revenue

Average realized gold price per attributable ounce1

Average cash cost per attributable ounce1

Cash flows from operating activities

Net income

Basic income per share

Diluted income per share

Total assets

Total long-term liabilities

$

$

29,821

$

27,596

$

26,446

$

16,586

15,514

18,004

15,772

$

16,879

$

17,487

$

14,049

1,798

224

19,505

7,395

0.04

0.04

620,858

20,873

10,717

1,779

238

17,914

6,622

0.03

0.03

640,920

17,425

8,959

1,796

227

19,998

8,636

0.04

0.04

648,741

14,342

30,997

17,444

21,584

9,413

1,777

307

23,722

4,969

0.03

0.03

638,659

10,723

In $000s (except for per share and per ounce amounts)

Dec. 31, 2020

Sep. 30, 2020

Jun. 30, 2020

Mar. 31, 2020

Total revenue

Attributable Gold Equivalent ounces1

Sales

Royalty revenue

Average realized gold price per attributable ounce1

Average cash cost per attributable ounce1

Cash flows from operating activities

Net income (loss)

Basic income (loss) per share

Diluted income (loss) per share

Total assets

Total long-term liabilities

$

$

29,696

$

23,267

$

18,730

$

15,795

12,068

10,920

17,560

$

14,187

$

12,580

$

12,136

1,880

248

19,806

10,504

0.05

0.05

649,921

8,345

9,080

1,928

258

18,085

6,518

0.03

0.03

608,748

3,638

6,150

1,715

257

12,351

7,137

0.04

0.04

607,471

3,096

21,332

13,393

14,333

6,999

1,593

314

15,374

(10,342)

(0.06)

(0.06)

576,316

53,221

1 

Refer to section on non-IFRS and other measures of this MD&A.

40

Summary of Quarterly ResultsQUARTERS ENDEDQ4 2021

Management's Discussion and Analysis

SECTION 2

Summary of Quarterly Results

QUARTERS ENDED

 Attributable Gold 
Equivalent ounces1

 Sales & Royalty Revenue

 Total Sales, Royalties, 

and Income from other 
interests 1

 Average realized gold 
price per attributable 
ounce 1

$31.0M

$32.3M

$26.4M

$27.6M

$29.8M

$1,777

$1,796

$1,779

$1,798

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2 0 2 1

2 0 2 1

1 

Refer to section on non-IFRS and other measures of this MD&A.

Changes in sales, net income, and cash flows from operating activities from quarter 

to quarter are affected primarily by fluctuations in production at the mines, the 

timing of shipments, changes in the price of commodities, as well as acquisitions 

of Streams and royalty interests and the commencement of operations of mines 

under construction. For more information refer to the quarterly commentary below.

41

15,514oz16,586oz18,004oz17,444ozSECTION 2

Management's Discussion and Analysis

2021 Q4

The Company’s operating segments for the three months ended December 31, 2021 
are summarized in the table below:

In $000s 
(except for ounces sold)

Aurizona

Black Fox

Bracemac-McLeod1

Chapada

Diavik

Fruta del Norte

Houndé

Karma

Relief Canyon

Santa Elena

Vale Royalties

Yamana silver stream

Other

Corporate

Consolidated

Product

GOLD

 GOLD 

 VARIOUS 

 COPPER 

DIAMONDS 

GOLD

GOLD

 GOLD 

GOLD

 GOLD 

IRON ORE

 SILVER 

 GOLD 

Attributable 
Gold 
Equivalent 
ounces

Sales 
and royalty 
revenues

Cost of sales 
excluding 
depletion

Depletion 
expense

Income (loss)  
before taxes

Cash flows 
from operating 
activities

1,833

$

3,297

$

-

$

188

$

3,109

$

2,347

730

727

2,183

2,366

872

376

299

1,334

986

890

2,930

1,060

-

1,321

1,307

3,924

4,254

1,567

675

538

2,388

1,774

1,600

5,268

1,908

-

414

-

1,179

-

-

-

107

-

461

-

595

454

747

639

569

264

256

1,130

50

666

1,546

2,323

-

-

472

-

312

853

1,998

3,615

998

411

175

1,258

1,263

934

1,399

1,436

907

1,261

2,745

4,184

1,152

94

431

2,388

1,810

198

3,722

1,907

(6,164)

(3,641)

16,586

$

29,821

$

3,707

$

8,353

$

11,597

$

19,505

1 

Royalty revenue from Bracemac-McLeod consists of $0.7 million from copper and $0.6 million from zinc.

The Company’s operating segments for the three months ended December 31, 2020  
are summarized in the table below:

In $000s 
(except for ounces sold)

Aurizona

Black Fox

Bracemac-McLeod1

Chapada

Diavik

Fruta del Norte

Houndé

Karma

Relief Canyon

Santa Elena

Yamana silver stream

Other2

Corporate

Consolidated

Product

GOLD

GOLD

VARIOUS 

COPPER

DIAMONDS

GOLD

GOLD

GOLD

GOLD

GOLD

SILVER

VARIOUS

Attributable 
Gold 
Equivalent 
ounces

Sales 
and royalty 
revenues

Cost of sales  
excluding 
depletion

Depletion 
expense

Income (loss) 
before taxes

Cash flows 
from 
operating 
activities

1,445

$

2,716

$

-

$

226

$

2,490

$

555

454

1,550

612

1,040

1,580

834

1,667

1,080

3,405

1,573

-

1,037

853

2,914

1,149

1,955

2,970

1,566

3,152

2,025

6,401

2,958

-

312

-

875

-

-

-

304

-

500

1,931

-

-

263

394

778

12

648

1,058

698

1,238

61

2,715

438

-

462

459

1,261

1,137

1,307

1,912

564

1,914

1,464

1,755

2,520

15,795

$

29,696

$

3,922

$

8,529

$

15,914

$

19,806

(1,331)

(2,767)

2,516

727

1,123

2,039

1,000

680

2,231

1,104

3,152

1,445

4,471

2,085

Royalty revenue from Bracemac-McLeod consists of $0.5 million from copper and $0.4 million from zinc.

Includes royalty revenue from gold of $2.9 million and other base metals of $0.1 million.

1 

2 

42

Q4 2021

Management's Discussion and Analysis

SECTION 2

 — THREE MONTHS ENDED DECEMBER 31, 2021 COMPARED TO 

THE THREE MONTHS ENDED DECEMBER 31, 2020

For the three months ended December 31, 2021, net income and cash flows from 

operating activities were $7.4 million and $19.5 million, respectively, compared with 

$10.5 million and $19.8 million for the comparable period in 2020. The decrease in 

net income is primarily attributable to:

 Ƚ A $3.1 million decrease in the gains recognized on the revaluation of the 

Company’s investments; whereby, a loss of $0.2 million was recognized 

by the Company during the three months ended December 31, 2021; 

while during the three months ended December 31, 2020 the Company 

recognized a gain of $2.9 million mostly driven by an increase in the fair 

value of the Americas Gold convertible debenture.

For the three months ended December 31, 2021, revenue was $29.8 million compared 

with $29.7 million for the comparable period in 2020. The increase is attributable 

to a 5% increase in Attributable Gold Equivalent Ounces sold partially offset by an 

4% decrease in the average realized selling price of gold. In particular, the increase 

in revenue was driven by:

 Ƚ A $3.1 million increase in revenue attributable to the Diavik mine largely 

due to diamond price increases, the receipt of previously unrecognized 

royalty payments and the timing of sales;

 Ƚ A $1.6 million increase in revenue attributable to the Vale Royalties, which 

were purchased in June 2021; and

 Ƚ A $1.0 million increase in revenue attributable to the Chapada copper 

stream primarily due to an increase in the average realized selling price 

of copper which increased from an average of $2.96 per pound during the 

three months ended December 31, 2020 to an average of $4.16 per pound 

during the equivalent period in 2021; 

Partially offset by:

 Ƚ A $2.3 million decrease in revenue attributable to the Houndé Mine largely 

driven by a 76% decrease in the number of Attributable Gold Equivalent 

ounces sold. The decrease is primarily due to mine sequencing whereby 

Endeavour is currently mining areas of the Houndé Mine not subject to 

the Company’s royalty;

43

SECTION 2

Management's Discussion and Analysis

2021 Q4

 Ƚ A $1.1 million decrease in revenue attributable to the Yamana silver stream 

primarily due to a 15% decrease in the number of silver ounces sold, as 

well as a decrease in the average realized selling price of silver which 

decreased from an average of $23.83 per ounce during the three months 

ended December 31, 2020 to an average of $23.05 per ounce during the 

equivalent period in 2021; and

 Ƚ A $1.0 million decrease in revenue attributable to the Karma Mine largely 

driven by an 64% decrease in the number of Attributable Gold Equivalent 

Ounces sold. The decrease is primarily due to the conclusion of the 

five-year fixed delivery period in accordance with the terms of the Gold 

Stream in the first quarter of 2021, reducing Sandstorm’s Gold Stream 

entitlement to 1.625% of production. In contrast, in the fourth quarter 

of 2020, Sandstorm’s entitlement was 1,250 ounces per quarter.

 — YEAR ENDED DECEMBER 31, 2021 COMPARED TO 

THE YEAR ENDED DECEMBER 31, 2020

For the year ended December 31, 2021, net income and cash flows from operating 

activities were $27.6 million and $81.1 million, respectively, compared with net 

income and cash flows from operating activities of $13.8 million and $65.6 million 

for the comparable period in 2020. The increase in net income is attributable to an 

increase in revenue (described in greater detail below) as well as:

 Ƚ An $8.5 million decrease in non-cash impairment charges; whereby, the 

Company recorded a $0.4 million impairment related to certain royalties 

within the Company’s Other segment during the year ended December 

31, 2021; while for the comparable period in 2020 the Company recorded 

an impairment of $8.9 million related to the Company’s Diavik royalty 

and certain other royalties within the Company’s Other segment; and

 Ƚ A $5.9 million gain on the revaluation of the Company’s financial instrument 

related to the Vale Royalties which was both entered into and disposed 

of during the year ended December 31, 2021;

Partially offset by:

 Ƚ An increase in tax expense of $6.8 million primarily as a result of the 

increase in net income;

44

Q4 2021

Management's Discussion and Analysis

SECTION 2

 Ƚ A $5.5 million decrease in the gains recognized on the revaluation of the 

Company’s investments; whereby, a loss of $1.7 million was recognized by 

the Company during the year ended December 31, 2021, primarily driven 

by the change in fair value of the Americas Gold convertible; while during 

the year ended December 31, 2020 the Company recognized a gain of $3.8 

million primarily driven by the change in fair value of the Company’s 

Equinox warrants;

 Ƚ A $2.8 million increase in cost of sales, excluding depletion partly due to 

an increase in Attributable Gold Equivalent ounces sold; and

 Ƚ A $2.6 million increase in depletion expense also partly due to an increase 

in Attributable Gold Equivalent ounces sold.

For the year ended December 31, 2021, revenue was $114.9 million compared with 

$93.0 million for the comparable period in 2020. The increase is largely attributable 

to a 29% increase in Attributable Gold Equivalent ounces sold. In particular, the 

increase in revenue was driven by:

 Ƚ A $6.3 million increase in revenue attributable to the Yamana silver 

stream primarily due to an increase in the average realized selling price 

of silver which increased from an average of $19.18 per ounce during the 

year ended December 31, 2020 to an average of $24.84 per ounce during 

the equivalent period in 2021;

 Ƚ A $5.2 million increase in revenue attributable to the Chapada copper 

stream primarily due to an increase in the average realized selling price 

of copper which increased from an average of $2.73 per pound during the 

year ended December 31, 2020 to an average of $4.04 per pound during 

the equivalent period in 2021; 

 Ƚ A $4.9 million increase in royalty revenue attributable to the Diavik mine 

largely due to diamond price increases and the timing of sales;

 Ƚ A $4.4 million increase in revenue attributable to the Vale Royalties, which 

was acquired in June 2021; 

 Ƚ A $3.4 million increase in sales revenue attributable to the Relief Canyon 

Gold Stream which commenced making fixed deliveries to Sandstorm in 

May 2020;

 Ƚ A $3.1 million increase in revenue attributable to the Fruta del Norte Mine 

largely driven by a 96% increase in the Attributable Gold Equivalent ounces 

sold. The increase in ounces is attributable to the fact that during the year 

45

SECTION 2

Management's Discussion and Analysis

2021 Q4

ended December 31, 2020, production at Fruta del Norte was impacted 

by a temporary suspension of operations due to concerns over the spread 

of COVID-19 as well as the initial ramp up to commercial production; 

whereas in the comparable period in 2021, the mine was operating with 

fewer COVID-19 related disruptions and with the benefit of optimization 

efforts undertaken in 2021 by Lundin Gold; and

 Ƚ A $2.5 million increase in royalty revenue attributable to the Brace-

mac-McLeod mine largely due to commodity price increases;

Partially offset by:

 Ƚ A $4.9 million decrease in revenue attributable to the Houndé Mine largely 

driven by a 56% decrease in the number of Attributable Gold Equivalent 

ounces sold. The decrease is primarily due to mine sequencing whereby 

Endeavour is currently mining areas of the Houndé mine not subject to 

the Company’s royalty; and

 Ƚ A $4.1 million decrease in revenue attributable to the Karma Mine largely 

driven by a 51% decrease in the number of gold ounces sold. The decrease 

is primarily due to the conclusion of the five-year fixed delivery period in 

accordance with the terms of the Gold Stream in the first quarter of 2021, 

reducing Sandstorm’s Gold Stream entitlement to 1.625% of production. 

In contrast, during the year ended December 31, 2020, Sandstorm’s 

entitlement was 1,250 ounces per quarter.

 — THREE MONTHS ENDED DECEMBER 31, 2021 COMPARED TO 

THE OTHER QUARTERS PRESENTED

When comparing net income of $7.4 million and cash flow from operating activities 

of $19.5 million for the three months ended December 31, 2021 with net income/

loss and cash flow from operating activities for the other quarters presented, the 

following items impact comparability:

 Ƚ An $8.9 million non-cash impairment charge relating to the Company’s 

Diavik royalty and certain other royalties within its Other segment was 

recognized during the three months ended March 31, 2020.

 Ƚ A $5.9 million gain on the revaluation of the Company’s financial instrument 

related to the Vale Royalties which was both entered into and disposed 

of during the three months ended June 30, 2021.

46

Q4 2021

Management's Discussion and Analysis

SECTION 2

 Ƚ A $2.4 million non-cash impairment charge relating to the Company's 

Diavik royalty was recognized during the three months ended December 

31, 2019.

 Ƚ The Company recognized gains and losses with respect to the revaluation 

of its investments, which were primarily driven by changes in the fair 

value of the Equinox and Americas Gold convertible debentures. These 

gains/losses were recognized as follows:

 • During the three months ended December 31, 2021, a loss of $0.2 million was recognized;

 • During the three months ended September 30, 2021, a gain of $0.2 million was recognized;

 • During the three months ended June 30, 2021, a gain of $0.1 million was recognized;

 • During the three months ended March 31, 2021, a loss of $1.8 million was recognized;

 • During the three months ended December 31, 2020, a gain of $2.9 million was recognized;

 • During the three months ended September 30, 2020, a gain of $1.7 million was recognized;

 • During the three months ended June 30, 2020, a gain of $5.1 million was recognized; and

 • During the three months ended March 31, 2020, a loss of $5.9 million was recognized. 

 Ƚ With the exception of 2020, Attributable Gold Equivalent ounces had seen 

an overall increase as a result of the acquisition of various assets including 

the Vale Royalty acquisition during the three months ended June 30, 2021, 

the Houndé royalty acquisition during the three months ended March 31, 

2018, the Teck Resources Limited royalty package which consists of 52 

royalties and was purchased during the three months ended March 31, 

2016 and the Yamana silver stream and Chapada copper stream which 

were acquired in the three months ended December 31, 2015. In 2020, 

Attributable Gold Equivalent ounces decreased as a result of COVID-19 

related temporary suspensions at the mines from which Sandstorm 

receives royalty revenue or deliveries under its Streams.

 — CHANGE IN TOTAL ASSETS

Total assets decreased by $20.1 million from September 30, 2021 to December 31, 

2021 as a result of (i) repurchases of the Company’s shares in accordance with its 

normal course issuer bid; (ii) depletion expense; and (iii) a decrease in the Hod Maden 

interest due to the depreciation of the Turkish Lira, which is the functional currency 

of the entity that holds the Hod Maden interest, relative to the U.S. dollar, which 
is the presentation currency of Sandstorm Gold Ltd; partially offset by cash flow 

from operating activities. The depreciation in the Turkish Lira as well as a decrease 

in the valuation of investments were largely responsible for the losses recognized 

47

SECTION 2

Management's Discussion and Analysis

2021 Q4

through other comprehensive income for the three months ended December 31, 

2021. Total assets decreased by $7.8 million from June 30, 2021 to September 30, 

2021 as a result of (i) repurchases of the Company’s shares in accordance with its 

normal course issuer bid; (ii) depletion expense; (iii) a decrease in the valuation of 

investments; and (iv) a decrease in the Hod Maden interest due to the depreciation 

of the Turkish Lira; partially offset by cash flow from operating activities. The 

depreciation in the Turkish Lira as well as a decrease in the valuation of investments 

were largely responsible for the losses recognized through other comprehensive 

income for the three months ended September 30, 2021. Total assets increased 

by $10.1 million from March 31, 2021 to June 30, 2021 as a result of cash flow from 

operating activities partially offset by (i) a decrease in the Hod Maden interest due 

to the depreciation of the Turkish Lira; and (ii) depletion expense. The depreciation 

in the Turkish Lira as well as a decrease in the valuation of investments were largely 

responsible for the losses recognized through other comprehensive income for the 

three months ended June 30, 2021. Total assets decreased by $11.3 million from 

December 31, 2020 to March 31, 2021 as a result of (i) a decrease in the valuation 

of investments; (ii) a decrease in the Hod Maden interest due to the depreciation 

of the Turkish Lira; (iii) depletion expense and (iv) repurchases of the Company’s 

shares in accordance with its normal course issuer bid; partially offset by cash flow 

from operating activities. The depreciation in the Turkish Lira as well as a decrease 

in the valuation of investments were largely responsible for the losses recognized 

through other comprehensive income for the three months ended March 31, 2021. 

Total assets increased by $41.2 million from September 30, 2020 to December 31, 

2020 as a result of (i) cash flow from operating activities and (ii) an increase in the 

Hod Maden interest due to the appreciation of the Turkish Lira; partially offset by 

depletion expense. The appreciation in the Turkish Lira as well as an increase in the 

valuation of investments were largely responsible for the gains recognized through 

other comprehensive income for the three months ended December 31, 2020. Total 

assets increased by $1.3 million from June 30, 2020 to September 30, 2020 as a result 

of cash flow from operating activities; partially offset by (i) a decrease in the Hod 

Maden interest due to a devaluation of the Turkish Lira; and (ii) depletion expense. 

The depreciation in the Turkish Lira was largely responsible for the loss recognized 

through other comprehensive income for the three months ended September 30, 

2020. Total assets increased by $31.2 million from March 31, 2020 to June 30, 2020 as 

a result of (i) $50.3 million in cash received upon the exercise of warrants as a result 

of the early warrant exercise incentive program; and (ii) an increase in the valuation 

of investments; partially offset by (i) a decrease in the Hod Maden interest due to a 

devaluation of the Turkish Lira; and (ii) depletion expense. The depreciation in the 

Turkish Lira, partially offset by the increase in the valuation of investments, was 

largely responsible for the loss recognized through other comprehensive income 

for the three months ended June 30, 2020. 

48

Q4 2021

Management's Discussion and Analysis

SECTION 2

 — NON-IFRS AND OTHER MEASURES

The Company has included, throughout this document, certain performance 

measures, including (i) total sales, royalties and income from other interests, (ii) 

average cash cost per Attributable Gold Equivalent ounce, (iii) average realized 

gold price per Attributable Gold Equivalent ounce, (iv) cash operating margin, (v) 

cash flows from operating activities excluding changes in non-cash working capital 

and (vi) all-in sustaining cost (“AISC”) per gold ounce on a by-product basis. The 

presentation of these non-IFRS measures is intended to provide additional infor-

mation and should not be considered in isolation or as a substitute for measures 

of performance prepared in accordance with IFRS. These non-IFRS measures do 

not have any standardized meaning prescribed by IFRS, and other companies may 

calculate these measures differently.

i. 

Total Sales, Royalties and Income from Other Interests is a new non-IFRS measure in the 

year and is calculated by taking total revenue which includes Sales and Royalty Revenue, 

and adding contractual income relating to royalties, streams and other interests excluding 

gains and losses on dispositions. The Company presents Total Sales, Royalties and Income 

from other interests as it believes that certain investors use this information to evaluate 

the Company’s performance in comparison to other streaming and royalty companies in 

the precious metals mining industry. Figure 1.1 provides a reconciliation of Total Sales, 
Royalties and Income from other interests.

Figure 1.1 

In $000s

3 Months Ended 
Dec. 31, 2021

3 Months Ended 
Dec. 31, 2020

Year Ended 
Dec. 31, 2021

Year Ended 
Dec. 31, 2020

Total Revenue

$

29,821

$

29,696

$

114,860

$

93,025

ADD:

Gain on revaluation of Vale 
Royalties financial instrument1

EQUALS:

Total Sales, Royalties, and Income 
from other interests

-

-

5,887

-

$

29,821

$

29,696

$

120,747

$

93,025

1 

During the year ended December 31, 2021, the Company entered into and disposed of certain derivative 
financial instruments relating to the market value of the Vale Royalties, resulting in fair value gains of $5.9 
million recognized within net income.

ii. 

Average cash cost per Attributable Gold Equivalent ounce is calculated by dividing 

the Company’s cost of sales, excluding depletion by the number of Attributable Gold 

Equivalent ounces. The Company presents average cash cost per Attributable Gold 

Equivalent ounce as it believes that certain investors use this information to evaluate 

the Company’s performance in comparison to other streaming and royalty companies 

in the precious metals mining industry who present results on a similar basis. Figure 1.2 
provides a reconciliation of average cash cost of gold on a per ounce basis.

49

 
SECTION 2

Management's Discussion and Analysis

2021 Q4

Figure 1.2 

In $000s 
(except for ounces and per ounce amounts)

3 Months Ended 
Dec. 31, 2021

3 Months Ended 
Dec. 31, 2020

Year Ended 
Dec. 31, 2021

Year Ended 
Dec. 31, 2020

Cost of Sales, excluding depletion1

$

3,707

$

3,922

$

16,845

$

14,046

DIVIDED BY:

Total Attributable Gold Equivalent 
ounces2

EQUALS:

Average cash cost (per Attributable 
Gold Equivalent ounce)

16,586

15,795

67,548

52,176

$

224

$

248

$

249

$

269

1 

2 

Cost of Sales, excluding depletion, includes cash payments made for Gold Equivalent ounces associated with 
commodity streams.

The Company's royalty and other commodity stream revenue, including adjustments for contractual income 
relating to those interests (see item i above), is converted to an Attributable Gold Equivalent ounce basis by 
dividing the royalty and other commodity revenue, including adjustments for contractual income relating to 
those interests, for that period by the average realized gold price per ounce from the Company's Gold Streams 
for the same respective period. These Attributable Gold Equivalent ounces, when combined with the gold 
ounces sold from the Company's Gold Streams, equal total Attributable Gold Equivalent ounces.

iii.  Average realized gold price per Attributable Gold Equivalent ounce is calculated by dividing 

the Company’s Total Sales, Royalties, and Income from other interests (described further 

in item i above) by the number of Attributable Gold Equivalent ounces. The Company 

presents average realized gold price per Attributable Gold Equivalent ounce as it believes 

that certain investors use this information to evaluate the Company’s performance in 

comparison to other streaming and royalty companies in the precious metals mining 

industry that present results on a similar basis. Figure 1.3 provides a reconciliation of 
average realized gold price per Attributable Gold Equivalent ounce.

Figure 1.3 

In $000s 
(except for ounces and per ounce amounts)

3 Months Ended 
Dec. 31, 2021

3 Months Ended 
Dec. 31, 2020

Year Ended 
Dec. 31, 2021

Year Ended 
Dec. 31, 2020

Total Sales, Royalties, and Income 
from other interests1

DIVIDED BY:

Total Attributable Gold Equivalent 
ounces

EQUALS:

Average realized gold price (per 
Attributable Gold Equivalent ounce)

$

29,821

$

29,696

$

120,747

$

93,025

16,586

15,795

67,548

52,176

$

1,798

$

1,880

$

1,788

$

1,783

1 

Prior to June 30, 2021, average realized gold price was calculated by dividing Total Revenue, rather than Total 
Sales, Royalties and Income from other interests, by Total Attributable Gold Equivalent ounces. The change in 
the measure did not result in a change to prior periods.

50

 
 
Q4 2021

Management's Discussion and Analysis

SECTION 2

iv.  Cash operating margin is calculated by subtracting the average cash cost per Attributable 

Gold Equivalent ounce from the average realized gold price per Attributable Gold Equivalent 

ounce. The Company presents cash operating margin as it believes that certain investors 

use this information to evaluate the Company’s performance in comparison to other 

streaming and royalty companies in the precious metals mining industry that present 

results on a similar basis.

v. 

Cash flows from operating activities excluding changes in non-cash working capital 

is calculated by adding back the decrease or subtracting the increase in changes in 

non-cash working capital to or from cash provided by (used in) operating activities. The 

Company presents cash flows from operating activities excluding changes in non-cash 

working capital as it believes that certain investors use this information to evaluate the 

Company’s performance in comparison to other streaming and royalty companies in 

the precious metals mining industry that present results on a similar basis. Figure 1.4 

provides a reconciliation of cash flows from operating activities excluding changes in 

non-cash working capital.

Figure 1.4 

In $000s 

3 Months Ended 
Dec. 31, 2021

3 Months Ended 
Dec. 31, 2020

Year Ended 
Dec. 31, 2021

Year Ended 
Dec. 31, 2020

Cash flows from operating activities

$

19,505

$

19,806

$

81,139

$

65,616

ADD:

Changes in non-cash working 
capital

EQUALS:

Cash flows from operating activities 
excluding changes in non-cash 
working capital

2,586

2,725

2,341

2,722

$

22,091

$

22,531

$

83,480

$

68,338

vi.  The Company has also used the non-IFRS measure of all-in sustaining cost per gold ounce 

on a by-product basis. With respect to the Hod Maden project, all-in sustaining cost per gold 

ounce on a by-product basis is calculated by deducting copper revenue from the summation 

of certain costs (operating costs, royalties, treatment, refining & transport costs, sustaining 

capital, G&A, and other costs). The resulting figure is then divided by the payable gold ounces 

produced. The Company presents all-in sustaining cost per gold ounce on a by-product 

basis as it believes that certain investors use this information to evaluate the Company’s 

performance in comparison to other companies in the precious metals mining industry 

that present results on a similar basis. The calculation of the measure is shown below. 

[Operating Costs ($678 million) + Royalties ($349 million) + Treatment, Refining and 

Transport Costs ($193 million) + Sustaining Capital ($116 million) + G&A ($96 million) 

+ Other Costs ($57 million) - Copper Revenue ($812 million)] / Payable Gold Ounces 

(2,027k oz) = $334 AISC per ounce.

51

 
 
SECTION 2

Management's Discussion and Analysis

2021 Q4

 — LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2021, the Company had cash and cash equivalents of $16.2 million 

(December 31, 2020 — $113.8 million) and working capital (current assets less current 

liabilities) of $26.3 million (December 31, 2020 — $120.9 million). As of the date of the 

MD&A, the Company has no bank debt and the entire $350 million revolving credit 

facility remains available for future acquisitions and general corporate purposes.

During the year ended December 31, 2021, the Company generated cash flows 

from operating activities of $81.1 million compared with $65.6 million during the 

comparable period in 2020. When comparing the change, the primary drivers were an 

increase in the number of Attributable Gold Equivalent ounces sold and an increase 

in the average realized selling price of silver and copper.

During the year ended December 31, 2021, the Company had net cash outflows 

from investing activities of $143.9 million which were primarily the result of (i) the 

acquisition of stream, royalty and other interests including the Vale Royalties, the 

Vatukoula Gold Stream, and other royalties; and (ii) the acquisition of $13.0 million 

in investments and other; partially offset by $22.4 million of proceeds from the sale 

and redemption of a portion of the Company’s debt and equity investments. During 

the year ended December 31, 2020, the Company had net cash inflows from investing 

activities of $33.7 million which were primarily the result of the proceeds from the 

sale and redemption of a portion of the Company’s debt and equity investments 

including the Company’s convertible debenture due from Equinox; partially offset 

by (i) the acquisition of $15.9 million in investments and other and (ii) a $3.3 million 

investment in the Company’s Hod Maden interest.

During the year ended December 31, 2021, the Company had net cash outflows 

from financing activities of $34.2 million primarily related to the redemption of the 

Company’s common shares under the Company’s normal course issuer bid (“NCIB”). 

During the year ended December 31, 2020, the Company had net cash inflows from 

financing activities of $7.7 million primarily related to (i) a $41.0 million draw down 

on its revolving credit facility and (ii) $77.6 million in proceeds from the exercise 

of warrants and stock options; partially offset by (i) the subsequent repayment of 

$86.0 million under the same revolving credit facility as well as $1.4 million in related 

interest expense; and (ii) $23.5 million related to the redemption of the Company’s 

common shares under the NCIB.

52

Q4 2021

Management's Discussion and Analysis

SECTION 2

 — COMMITMENTS AND CONTINGENCIES

In connection with its Streams, the Company has committed to purchase the following:

Stream

Black Fox

Chapada

Entrée

Karma

Relief Canyon

Santa Elena

Vatukoula

% of Life of Mine Gold or 
Relevant Commodity 5, 6, 7, 8, 9, 10

8%

4.2%

Per Ounce Cash Payment: 
lesser of amount below and 
the then prevailing market 
price of commodity 
(unless otherwise noted) 1, 2, 3, 4

$577

30% of copper spot price

5.62% on Hugo North Extension and 
4.26% on Heruga

$220

1.625%

20% of gold spot price

32,022 ounces over 5.5 years and 
4% thereafter

20%

Varies

$468

25,920 ounces over 5.5 years and 
2.9% thereafter

20% of gold spot price

Yamana silver stream

20%

30% of silver spot price

1 

2 

Subject to an annual inflationary adjustment.

For the Relief Canyon stream, after receipt of 32,022 gold ounces (the cost of which is nil), the Company 
is entitled to purchase 4.0% of the gold and silver produced from the Relief Canyon Mine for ongoing per 
ounce cash payments equal to 30%–65% of the spot price of gold or silver, with the range dependent on the 
concession’s existing royalty obligations.

3 

For the Entrée Gold Stream, after approximately 8.6 million ounces of gold have been produced from the joint 
venture property, the price increases to $500 per gold ounce.

4  For the Entrée silver stream, percentage of life of mine is 5.62% on Hugo North Extension and 4.26% on 

Heruga which the Company can purchase for the lesser of the prevailing market price and $5 per ounce of 
silver until 40.3 million ounces of silver have been produced from the entire joint venture property. Thereafter, 
the purchase price will increase to the lesser of the prevailing market price and $10 per ounce of silver.

5 

For the Entrée Gold and silver stream, percentage of life of mine is 5.62% on Hugo North Extension and 4.26% 
on Heruga if the minerals produced are contained below 560 metres in depth.

6  For the Entrée Gold and silver stream, percentage of life of mine is 8.43% on Hugo North Extension and 6.39% 

on Heruga if the minerals produced are contained above 560 metres in depth.

7 

8 

For the Entrée copper stream, the Company has committed to purchase an amount equal to 0.42% of the 
copper produced from the Hugo North Extension and Heruga deposits. If the minerals produced are contained 
above 560 metres in depth, then the commitment increases to 0.62% for both the Hugo North Extension and 
Heruga deposits. Sandstorm will make ongoing per pound cash payments equal to the lesser of $0.50 and the 
then prevailing market price of copper, until 9.1 billion pounds of copper have been produced from the entire 
joint venture property. Thereafter, the ongoing per pound payments will increase to the lesser of $1.10 and the 
then prevailing market price of copper.

For the Chapada copper stream, the Company has committed to purchase an amount equal to 4.2% of the 
copper produced (up to an annual maximum of 3.9 million pounds of copper) until the mine has delivered 39 
million pounds of copper to Sandstorm; then 3.0% of the copper produced until, on a cumulative basis, the 
mine has delivered 50 million pounds of copper to Sandstorm; then 1.5% of the copper produced thereafter, 
for the life of the mine.

9  Under the terms of the Yamana silver stream, Sandstorm has agreed to purchase an amount of silver from 

Cerro Moro equal to 20% of the silver produced (up to an annual maximum of 1.2 million ounces of silver), until 
Yamana has delivered to Sandstorm 7.0 million ounces of silver; then 9.0% of the silver produced thereafter.

10  Under the terms of the Vatukoula stream, after receipt of 25,920 gold ounces (the cost of which is 20% of 

the spot price), the Company is entitled to purchase 2.9% for the first 100,000 ounces of gold produced in a 
calendar year, and 2.55% for the volume of production above 100,000 ounces.

53

SECTION 2

Management's Discussion and Analysis

2021 Q4

As previously disclosed, Sandstorm became aware that a third party commenced legal 

proceedings against it in a Brazilian court. The proceedings involve severance owed 

to former employees of Colossus Mineração Ltda., a Brazilian subsidiary company 

of Colossus Minerals Inc. (an entity with which Sandstorm entered into a Stream). 

Since these severance claims, estimated to be approximately $8 million, remain 

outstanding, the claimants are seeking to recoup their claims from Sandstorm. 

Sandstorm intends on defending itself as it believes the case is without merit.

Subject to certain milestones, the Company has $3 million remaining to remit with 

respect to the Vatukoula Gold Stream agreement. The Vatukoula Gold Stream is 

further discussed in the Key Producing Assets section of this MD&A.

Sandstorm entered into an agreement to subscribe for shares of Americas Gold in 
an amount up to $10.8 million in 2022, at the option of Americas Gold. 

In December 2021, the Company announced a $60 million financing package with 

Bear Creek Mining to facilitate its acquisition of the producing Mercedes gold-silver 

mine in Mexico from Equinox Gold Corp. The financing package includes a $37.5 

million Gold Stream and a $22.5 million convertible debenture. The transaction is 

expected to close by March 31, 2022 and gold deliveries to Sandstorm will commence 

immediately thereafter.

 — SHARE CAPITAL

As of February 17, 2022, the Company had 191,807,882 common shares outstanding. 

As disclosed previously, the funds from the issuance of share capital have been used 

to finance the acquisition of Streams and royalties (recent acquisitions are described 

earlier in greater detail) and pay down debt.

Under the Company’s NCIB, the Company is able, until April 6, 2022, to purchase 

up to 19.1 million common shares. The NCIB provides the Company with the option 

to purchase its common shares from time to time. Under the Company’s previous 

and current NCIB and during the year ended December 31, 2021, the Company 

purchased and cancelled approximately 5.5 million common shares for $34.2 million.

The Company has an at-the-market equity program (the “ATM Program”) whereby 

it is permitted to issue up to an aggregate of $140 million worth of common shares 

from treasury at prevailing market prices to the public through the Toronto Stock 

Exchange, the New York Stock Exchange, or any other marketplace on which the 

common shares are listed, quoted or otherwise trade. The volume and timing of 

distributions under the ATM Program is determined at the Company’s sole discretion, 

54

Q4 2021

Management's Discussion and Analysis

SECTION 2

subject to applicable regulatory limitations. The ATM Program is effective until May 

2022, unless terminated prior to such date by the Company. To-date, the Company 

has not utilized or sold any shares under the ATM Program.

In December 2021 the Company declared its inaugural dividend of CAD$0.02 per 

share. The full amount of the dividend of $3.1 million was paid in cash in January 2022.

A summary of the Company’s share purchase options as of February 17, 2022 
is as follows:

Year of expiry

Number 
outstanding

Vested

Exercise price 
per share 
(range) (CAD) 1

Weighted average 
exercise price 
per share (CAD) 1

2022

2023

2024

2025

2026

760,582

760,582

5.50–15.00

3,118,332

3,118,332

1,427,000

2,812,000

2,968,000

951,338

937,340

-

11,085,914

5,767,592

5.92

8.89

9.43

7.18

5.53

5.92

8.89

9.43

-

6.93

1  Weighted average exercise price of options that are exercisable.

As  of  February  17,  2022,  the  Company  had  1,991,500  restricted  share  rights 

outstanding.

 — KEY MANAGEMENT COMPENSATION

The remuneration of directors and those persons having authority and responsibility for 
planning, directing, and controlling activities of the Company is as follows:

In $000s

Salaries and benefits

Share-based payments

Total key management compensation expense

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020

$

$

2,588

4,368

6,956

$

$

1,561

4,068

5,629

55

SECTION 2

Management's Discussion and Analysis

2021 Q4

 — FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash and cash equivalents, trade 

receivables and other, short-term and long-term investments, loans receivable which 

are included in other current assets, and trade and other payables. The Company’s 

short and long-term investments are initially recorded at fair value and subsequently 

revalued to their fair market value at each period end based on inputs such as equity 

prices. Investments are acquired for strategic purposes and may be disposed of from 

time to time. The fair value of the Company's other financial instruments, which 

include cash and cash equivalents, trade receivables and other, loans receivable 

which are included in other assets, and trade and other payables, approximate their 

carrying values at December 31, 2021. 

Credit Risk

The Company’s credit risk is limited to cash and cash equivalents, loans receivable 

which are included in other assets, trade and other receivables and the Company’s 

investments in convertible debentures. The Company’s trade and other receivables 

are subject to the credit risk of the counterparties who own and operate the mines 

underlying Sandstorm’s royalty portfolio. In order to mitigate its exposure to credit 

risk, the Company closely monitors its financial assets and maintains its cash deposits 

in several high-quality financial institutions. The impact of expected credit losses 

on trade receivables and financial assets held at amortized cost is not material.

Currency Risk

Financial instruments that impact the Company’s net income (loss) or other 

comprehensive income (loss) due to currency fluctuations include cash and cash 

equivalents, trade and other receivables and trade and other payables denominated 

in Canadian dollars. Based on the Company's Canadian dollar denominated monetary 

assets and monetary liabilities at December 31, 2021, a 10% increase (decrease) of 

the value of the Canadian dollar relative to the United States dollar would not have 

a material impact on net income or other comprehensive income.

Other Risks

Sandstorm holds common shares, convertible debentures, warrants and investments 

of other companies with a combined fair market value as at December 31, 2021 of 

$24.1 million (December 31, 2020 — $46.9 million). In addition, Sandstorm also 

56

Q4 2021

Management's Discussion and Analysis

SECTION 2

holds common shares of Entrée with a fair value as at December 31, 2021 of $31.7 

million which are classified as an investment in associate and accounted for using 

the equity method. The daily exchange traded volume of these shares, including the 

shares underlying the warrants, may not be sufficient for the Company to liquidate 

its position in a short period of time without potentially affecting the market value 

of the shares. The Company is subject to default risk with respect to any debt 

instruments. The Company is exposed to equity price risk as a result of holding these 

investments in other mining companies. The Company does not actively trade these 

investments. Based on the Company's investments held as at December 31, 2021, a 

10% increase (decrease) in the equity prices of these investments would not have a 

material impact on net income and would increase (decrease) other comprehensive 

income by $2.1 million.

 — OTHER RISKS TO SANDSTORM

The primary risk factors affecting the Company are set forth below. For additional 

discussion of risk factors, please refer to the Company’s Annual Information Form 

dated March 30, 2021, which is available on www.sedar.com.

The Chapada Mine, the Cerro Moro Mine, the Diavik Mine, the Aurizona Mine, the 

Fruta del Norte Mine, the Relief Canyon Mine, the Santa Elena Mine, the Karma Mine, 

the Ming Mine, the Black Fox Mine, the Hugo North Extension and Heruga deposits, 

the Mt. Hamilton Project, the Gualcamayo Mine, the Emigrant Springs Mine, the 

Thunder Creek Mine, MWS, HM Claim, Triangle Zone, the Prairie Creek Project, 

the Bracemac-McLeod Mine, the Hod Maden Project, the Hackett River Project, 

the Lobo-Marte Project, Agi Dagi and Kirazli, the Houndé Mine, Vatukoula Mine, 

the Vale Royalty Package, the Mercedes Mine, and other royalties and commodity 

streams in Sandstorm’s portfolio are hereafter referred to as the “Mines”.

Risks Relating to Mineral Projects

To the extent that they relate to the production of gold or an applicable commodity 

from, or the operation of, the Mines, the Company will be subject to the risk factors 

applicable to the operators of such Mines. Whether the Mines will be commercially 

viable depends on a number of factors, including cash costs associated with extraction 

and processing, the particular attributes of the deposit, such as size, grade, and 

proximity to infrastructure, as well as metal prices which are highly cyclical and 

government regulations, including regulations relating to prices, taxes, royalties, land 

tenure, land use, importing and exporting of minerals and environmental protection. 

The Mines are also subject to other risks that could lead to their shutdown and 

57

SECTION 2

Management's Discussion and Analysis

2021 Q4

closure including flooding and weather related events, the failure to receive permits 

or having existing permits revoked, collapse of mining infrastructure including 

tailings pond, as well as community or social related issues. The exact effect of these 

factors cannot be accurately predicted, but the combination of these factors may 

result in the Mines becoming uneconomic resulting in their shutdown and closure. 

The Company is not entitled to purchase gold, other commodities, receive royalties 

or receive economic benefit from its interest in the Hod Maden Project, if no gold 

or applicable commodity is produced from the Mines.

No Control Over Mining Operations

With respect to its Streams and royalties, the Company has no contractual rights 

relating to the operation or development of the Mines. Except for any payments which 

may be payable in accordance with applicable completion guarantees or cash flow 

guarantees, the Company will not be entitled to any material compensation if these 

mining operations do not meet their forecasted gold or other production targets in 

any specified period or if the Mines shut down or discontinue their operations on a 

temporary or permanent basis. The Mines may not commence commercial production 

within the time frames anticipated, if at all, and there can be no assurance that the 

gold or other production from such properties will ultimately meet forecasts or 

targets. At any time, any of the operators of the Mines or their successors may decide 

to suspend or discontinue operations. The Company is subject to the risk that the 

Mines shut down on a temporary or permanent basis due to issues including, but not 

limited to economics, lack of financial capital, floods, fire, mechanical malfunctions, 

social unrest, expropriation, and other risks. There are no guarantees the Mines 

will achieve commercial production, ramp-up targets, or complete expansion plans. 

These issues are common in the mining industry and can occur frequently.

Government Regulations

The Mines are subject to various foreign laws and regulations governing prospecting, 

exploration, development, production, exports, taxes, labour standards, waste 

disposal, protection and remediation of the environment, reclamation, historic and 

cultural resources preservation, mine safety and occupational health, handling, 

storage and transportation of hazardous substances and other matters. It is possible 

that the risks of expropriation, cancellation or dispute of licenses could result 

in substantial costs, losses, and liabilities in the future. The costs of discovering, 

evaluating, planning, designing, developing, constructing, operating, and closing the 

Mines in compliance with such laws and regulations are significant. It is possible 

that the costs and delays associated with compliance of such laws and regulations 

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Management's Discussion and Analysis

SECTION 2

could become such that the owners or operators of the Mines would not proceed 

with the development of or continue to operate the Mines. Moreover, it is possible 

that future regulatory developments, such as increasingly strict environmental 

protection laws, regulations, and enforcement policies thereunder, and claims for 

damages to property and persons resulting from the Mines could result in substantial 

costs and liabilities in the future.

International Operations

The operations with respect to the Company’s gold, other precious metals and other 

interests are conducted in Canada, Mexico, the United States, Mongolia, Burkina 

Faso, Ecuador, South Africa, Ghana, Botswana, Cote D’Ivoire, Argentina, Brazil, 

Chile, Peru, Egypt, Ethiopia, Guyana, Paraguay, French Guiana, Turkey, Sweden, 

Fiji and Australia and as such, the Mines are exposed to various levels of political, 

economic and other risks and uncertainties. These risks and uncertainties include, 

but are not limited to, terrorism, international sanctions, hostage taking, military 

repression, crime, political instability, currency controls, extreme fluctuations in 

currency exchange rates, high rates of inflation, labour unrest, the risks of war or 

civil unrest, expropriation and nationalization, renegotiation or nullification of 

existing concessions, licenses, permits, approvals and contracts, illegal mining, 

changes in taxation policies, restrictions on foreign exchange and repatriation, 

changing political conditions, and governmental regulations. Changes, if any, in 

mining or investment policies or shifts in political attitude may adversely affect 

the operations or profitability of the Mines in these countries. Operations may be 

affected in varying degrees by government regulations with respect to, but not limited 

to, restrictions on production, price controls, export controls, currency remittance, 

income taxes, expropriation of property, foreign investment, maintenance of claims, 

environmental legislation, land use, land claims of local people, water use, mine safety 

and the rewarding of contracts to local contractors or require foreign contractors 
to employ citizens of, or purchase supplies from, a particular jurisdiction. Any 

adverse developments with respect to Lidya, its cooperation or in its exploration, 

development, permitting and operation of the Hod Maden Project in Turkey may 

adversely affect the Company’s 30% net profits interest in the project. There are no 

assurances that the Company will be able to successfully convert its 30% interest 

in the Hod Maden Project into a commodity stream or royalty nor are there any 

assurances that the Company may be able to maintain its interest in Hod Maden if 

sanctions are imposed on Turkey or Lidya and its related entities. Any changes or 

unfavorable assessments with respect to (i) the validity, ownership, or existence 

of the Entrée concessions; as well as (ii) the validity or enforceability of Entrée’s 

joint venture agreement with Oyu Tolgoi LLC may adversely affect the Company’s 

profitability or profits realized under the Entrée Stream and the Entrée investment 

59

SECTION 2

Management's Discussion and Analysis

2021 Q4

in associate. The Serra Pelada royalty cash flow or profitability may be adversely 

impacted if the Cooperative de Mineração dos Garimpeiros de Serra Pelada, which 

hold a 25% interest in the Serra Pelada Mine, continue to take unfavorable actions. 

In addition, Colossus Minerals Inc.’s Brazilian subsidiary has payables in excess 

of $30 million and accordingly, there is a risk that they may be unable to repay 

their debts, resulting in insolvency and loss of any rights to the Serra Pelada mine. 

A failure to comply strictly with applicable laws, regulations and local practices 

relating to mineral right applications and tenure, could result in loss, reduction 

or expropriation of entitlements, or the imposition of additional local or foreign 

parties as joint venture partners with carried or other interests. The occurrence of 

these various factors and uncertainties cannot be accurately predicted and could 

have an adverse effect on the Mines.

Income Taxes

No assurance can be given that new taxation rules will not be enacted or that existing 

rules will not be applied in a manner which could result in the Company’s past and 

future profits being subject to increased levels of income tax. The Company’s prior 

years’ Canadian tax returns may be audited by the Canada Revenue Agency (“CRA”), 

and no assurances can be given that tax matters, if they so arise, will be resolved 

favorably. The CRA completed an audit of Sandstorm Gold Ltd.’s 2009 — June 2015 

tax returns and issued a corresponding finalization letter in February 2019. Based 

on the letter received, there would be no adverse implications for the Company’s 

financial statements if the Company accepted the CRA’s proposed adjustments. The 

majority of the Company’s Streams and royalties have been entered into directly by 

Canadian based subsidiaries and are therefore subject to Canadian tax.

Commodity Prices for Metals Produced from the Mines 

The price of the Company’s common shares and the Company’s financial results may 

be significantly adversely affected by a decline in the price of gold, silver, copper, 

and/or iron ore (collectively, the “Metals”). The price of the Metals fluctuates widely, 

especially in recent years, and is affected by numerous factors beyond the Company’s 

control, including but not limited to, the sale or purchase of the Metals by various 

central banks and financial institutions, interest rates, exchange rates, inflation or 

deflation, fluctuation in the value of the U.S. dollar and foreign currencies, global 

and regional supply and demand, and the political and economic conditions of 

major gold, silver, copper and iron ore producing countries throughout the world. 

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Management's Discussion and Analysis

SECTION 2

In the event that the prevailing market price of the Metals are at or below the price 

at which the Company can purchase such commodities pursuant to the terms of 

the Stream agreements associated with the metal interests, the Company will not 

generate positive cash flow or earnings. Declines in market prices could cause an 

operator to reduce, suspend or terminate production from an operating project or 

construction work at a development project, which may result in a temporary or 

permanent reduction or cessation of revenue from those projects, and the Company 

might not be able to recover the initial investment in Streams and royalties. 

Diamond Prices and Demand for Diamonds

The price of the Company’s common shares and the Company’s financial results 

may be significantly adversely affected by a decline in the price and demand for 

diamonds. Diamond prices fluctuate and are affected by numerous factors beyond 

the control of the Company, including worldwide economic trends, worldwide levels 

of diamond discovery and production, and the level of demand for, and discretionary 

spending on, luxury goods such as diamonds. Low or negative growth in the worldwide 

economy, renewed or additional credit market disruptions, natural disasters or the 

occurrence of terrorist attacks or similar activities creating disruptions in economic 

growth could result in decreased demand for luxury goods such as diamonds, thereby 

negatively affecting the price of diamonds. Similarly, a substantial increase in the 

worldwide level of diamond production or the release of stocks held back during 

recent periods of lower demand could also negatively affect the price of diamonds. In 

each case, such developments could have a material adverse effect on the Company’s 

results of operations.

Information Systems and Cyber Security

The Company’s information systems, and those of its counterparties under the 

precious metal purchase agreements and vendors, are vulnerable to an increasing 

threat of continually evolving cybersecurity risks. Unauthorized parties may attempt 

to gain access to these systems or the Company’s information through fraud or other 

means of deceiving the Company’s counterparties.

The Company’s operations depend, in part, on how well the Company and its suppliers, 

as well as counterparties under the commodity purchase and royalty agreements, 

protect networks, equipment, information technology systems and software against 
damage from a number of threats. The failure of information systems or a component 

of information systems could, depending on the nature of any such failure, adversely 

impact the Company’s reputation and results of operations.

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Management's Discussion and Analysis

2021 Q4

Although to date the Company has not experienced any material losses relating to 

cyber-attacks or other information security breaches, there can be no assurance 

that the Company will not incur such losses in the future. The Company’s risk and 

exposure to these matters cannot be fully mitigated because of, among other things, 

the evolving nature of these threats. As a result, cyber security and the continued 

development and enhancement of controls, processes and practices designed to 

protect systems, computers, software, data and networks from attack, damage or 

unauthorized access remain an area of attention.

Key Management

The Company is dependent upon the services of a small number of key management 

personnel who are highly skilled and experienced. The Company’s ability to manage 

its activities will depend in large part on the efforts of these individuals. The Company 

faces intense competition for qualified personnel, and there can be no assurance 

that the Company will be able to attract and retain such personnel. The loss of the 

services of one or more of such key management personnel could have a material 

adverse effect on the Company.

Environmental

All phases of mining and exploration operations are subject to environmental 

regulation pursuant to a variety of government laws and regulations. Environmental 

legislation is becoming stricter, with increased fines and penalties for non-compliance, 

more stringent environmental assessments of proposed projects and heightened 

responsibility for companies and their officers, directors, and employees. Continuing 

issues with tailings dam failures at other companies’ operations may increase 

the likelihood that these stricter standards and enforcement mechanisms will be 
implemented in the future. There can be no assurance that possible future changes 

in environmental regulation will not adversely affect the operations at the Mines, 

and consequently, the results of Sandstorm’s operations. Failure by the operators 

of the Mines to comply with these laws, regulations and permitting requirements 

may result in enforcement actions, including orders issued by regulatory or judicial 

authorities causing operations to cease or be curtailed, and may include corrective 

measures requiring capital expenditures, installation of additional equipment, or 

remedial actions. The occurrence of any environmental violation or enforcement 

action may have an adverse impact on the operations at the Mines, Sandstorm’s 

reputation and could adversely affect Sandstorm’s results of operations. 

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Management's Discussion and Analysis

SECTION 2

Government regulation relating to emission levels (such as carbon taxes) and 

energy efficiency is becoming more prevalent and stringent. While some of the costs 

associated with reducing emissions may be offset by increased energy efficiency 

and technological innovation, Sandstorm expects that increased government reg-

ulation will result in increased costs at some operations at the Mines if the current 

regulatory trend continues. All of Sandstorm’s mining interests are exposed to 

climate-related risks through the operations at the Mines. Climate change could 

result in challenging conditions and extreme weather that may adversely affect the 

operations at the Mines and there can be no assurances that mining operations 

will be able to predict, respond to, measure, monitor or manage the risks posed as 

a result of climate change factors.

Solvency Risk of Counterparties

The price of the common shares and the Company’s financial results may be signifi-

cantly affected by the Mines operators’ ability to continue as a going concern and 

have access to capital. The lack of access to capital could result in these companies 

entering bankruptcy proceedings and as a result, Sandstorm may not be able to 

realize any value from its respective Streams or royalties.

As the Company’s revolving facility is secured against the Company’s assets, to the 

extent Sandstorm defaults on its debt or related covenants, the lenders may seize 

on their security interests. The realization of security or default could materially 

affect the price of the Company’s common shares and financial results.

The Company’s Vale Royalties are publicly traded on Brazil’s National Debenture 

System. The daily exchange traded volume of the Vale Royalties may not be sufficient 

for the Company to liquidate its position in a short period of time without potentially 

affecting their market value.

Health Crises and Other

Global markets have been adversely impacted by emerging infectious diseases 

and/or the threat of outbreaks of viruses, other contagions, or epidemic diseases, 

including currently, the novel COVID-19. A significant new outbreak or continued 

outbreaks of COVID-19 could result in a widespread crisis that could adversely affect 

the economies and financial markets of many countries, resulting in an economic 

downturn which could adversely affect the Company’s business and the market price 

of the common shares. Many industries, including the mining industry, have been 

impacted by these market conditions. If increased levels of volatility continue or 

63

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Management's Discussion and Analysis

2021 Q4

in the event of a rapid destabilization of global economic conditions, it may result 

in a material adverse effect on commodity prices, demand for metals, availability 

of credit, investor confidence, and general financial market liquidity, all of which 

may adversely affect the Company’s business and the market price of the Company’s 

securities. In addition, there may not be an adequate response to emerging infectious 

diseases, or significant restrictions may be imposed by a government, either of which 

may impact mining operations. There are potentially significant economic and social 

impacts, including labour shortages and shutdowns, delays and disruption in supply 

chains, social unrest, government or regulatory actions or inactions, including 

quarantines, declaration of national emergencies, permanent changes in taxation 

or policies, decreased demand or the inability to sell and deliver concentrates and 

resulting commodities, declines in the price of commodities, delays in permitting 

or approvals, suspensions or mandated shut downs of operations, governmental 

disruptions or other unknown but potentially significant impacts. At this time, the 

Company cannot accurately predict what effects these conditions will have on its 

operations or financial results, due to uncertainties relating to the ultimate geographic 

spread, the duration of the outbreak, and the length restrictions or responses that 

have been or may be imposed by the governments. Given the global nature of the 

Company’s operations, the Company may not be able to accurately predict which 

operations will be impacted or if those impacted will resume operations. Any new 

outbreaks or the continuation of the existing outbreaks or threats of any additional 

outbreaks of a contagion or epidemic disease could have a material adverse effect 

on the Company, its business and operational results.

 — OTHER

Critical Accounting Estimates

The preparation of consolidated financial statements in conformity with IFRS 

requires management to make estimates and assumptions that affect the reported 

amount of assets and liabilities and disclosure of contingent liabilities at the date 

of the consolidated financial statements, and the reported amounts of revenues and 

expenditures during the periods presented. Notes 2 and 3 of the Company’s 2021 

annual consolidated financial statements describe all of the significant accounting 

policies as well as the significant judgments and estimates.

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Management's Discussion and Analysis

SECTION 2

Disclosure Controls and Procedures

Disclosure controls and procedures are designed to provide reasonable assurance that 

all relevant information is gathered and reported to senior management, including 

the Company’s Chief Executive Officer and the Chief Financial Officer, on a timely 

basis so that appropriate decisions can be made regarding public disclosure. The 

Company’s system of disclosure controls and procedures includes, but is not limited 

to, the Disclosure Policy, the Code of Conduct, the Stock Trading Policy, Corporate 

Governance, the effective functioning of the Audit Committee and procedures in 

place to systematically identify matters warranting consideration of disclosure by 

the Audit Committee.

As at the end of the period covered by this Management’s Discussion and Analysis, 

management of the Company, with the participation of the Chief Executive Officer 

and the Chief Financial Officer, evaluated the effectiveness of the Company’s 

disclosure controls and procedures as required by National Instrument 52-109 in 

Canada (“NI 52-109”) and under the Securities Exchange Act of 1934, as amended, 

in the United States. The evaluation included documentation review, enquiries and 

other procedures considered by management to be appropriate in the circumstances. 

Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer 

have concluded that, as of December 31, 2021, the disclosure controls and procedures 

(as defined in National Instrument 52-109 Certification of Disclosure in Issuers’ 

Annual and Interim Filings (“NI 52-109”) and Rules 13(a)-15(e) under the Securities 

Exchange Act of 1934, as amended) were effective to provide reasonable assurance 

that information required to be disclosed in the Company’s annual and interim filings 

and other reports filed or submitted under applicable securities laws, is recorded, 

processed, summarized and reported within time periods specified by those laws 

and that material information is accumulated and communicated to management of 

the Company, including the Chief Executive Officer and the Chief Financial Officer, 

as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining effective 

internal control over financial reporting as such term is defined in the rules of the 

National Instrument 52-109 in Canada and under the Securities Exchange Act of 

1934, as amended, in the United States. The Company’s internal control over financial 

reporting is designed to provide reasonable assurance regarding the reliability of 

the Company’s financial reporting for external purposes in accordance with IFRS.

65

SECTION 2

Management's Discussion and Analysis

2021 Q4

The Company’s internal control over financial reporting includes: 

 Ƚ Maintaining records, that in reasonable detail, accurately and fairly reflect 

our transactions and dispositions of the assets of the Company;

 Ƚ Providing reasonable assurance that transactions are recorded as necessary 

for preparation of the consolidated financial statements in accordance 

with IFRS;

 Ƚ Providing reasonable assurance that receipts and expenditures are made 

in accordance with authorizations of management and the directors of 

the Company; and

 Ƚ Providing reasonable assurance that unauthorized acquisition, use or 

disposition of Company assets that could have a material effect on the 

Company's consolidated financial statements would be prevented or 

detected on a timely basis.

The Company’s internal control over financial reporting may not prevent or detect 

all misstatements because of inherent limitations. Additionally, projections of any 

evaluation of effectiveness to future periods are subject to the risk that controls may 

become inadequate because of changes in conditions or deterioration in the degree of 

compliance with the Company’s policies and procedures. Management assessed the 

effectiveness of the Company’s internal control over financial reporting as of December 

31, 2021 based on the criteria set forth in Internal Control - Integrated Framework (2013) 

issued by the Committee of Sponsoring Organizations of the Treadway Commission 

(COSO). Based on this assessment, management has concluded that, as of December 

31, 2021, the Company’s internal control over financial reporting is effective and no 

material weaknesses were identified.

Changes in Internal Controls

There were no changes in internal controls of the Company during the year ended 

December 31, 2021 that have materially affected, or are likely to materially affect, 

the Company’s internal control over financial reporting.

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Management's Discussion and Analysis

SECTION 2

Limitations of Controls and Procedures

The Company’s management, including the Chief Executive Officer and the Chief 

Financial Officer, believe that any disclosure controls and procedures or internal 

controls over financial reporting, no matter how well conceived and operated, can 

provide only reasonable, not absolute, assurance that the objectives of the control 

system are met. Further, the design of a control system must reflect the fact that there 

are resource constraints, and the benefits of controls must be considered relative to 

their costs. Because of the inherent limitations in all control systems, they cannot 

provide absolute assurance that all control issues and instances of fraud, if any, 

within the Company have been prevented or detected. These inherent limitations 

include the realities that judgments in decision-making can be faulty, and that 

breakdowns can occur because of simple error or mistake. Additionally, controls 

can be circumvented by the individual acts of some persons, by collusion of two or 

more people, or by unauthorized override of the control. The design of any systems 

of controls also is based in part upon certain assumptions about the likelihood of 

future events, and there can be no assurance that any design will succeed in achieving 

its stated goals under all potential future conditions. Accordingly, because of the 

inherent limitations in a cost-effective control system, misstatements due to error 

or fraud may occur and not be detected.

New and Amended Accounting Policies

The following new IFRS was effective and implemented for the annual period as 

of January 1, 2021. Pronouncements that are not applicable to the Company have 

been excluded from this note. 

Interest Rate Benchmark Reform — Phase 2

In August 2020, the International Accounting Standards Board issued Interest 

Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 

4 and IFRS 16) (“IBOR Amendments”), which is applied to potential changes in 

contractual cash flows of a financial asset or financial liability as a result of replacing 

an interest rate benchmark with an alternative benchmark rate. The Company has 

adopted the IBOR Amendments retrospectively. The new standard did not have a 

material impact on the Company’s annual financial statements.

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SECTION 2

Management's Discussion and Analysis

2021 Q4

FORWARD LOOKING STATEMENTS

This MD&A and any exhibits attached hereto and incorporated herein, if any, contain “forward-looking statements”, within the meaning of the U.S. 

Securities Act of 1933, as amended, the U.S. Securities Exchange Act of 1934, as amended, the United States Private Securities Litigation Reform Act of 

1995, and applicable Canadian and other securities legislation, concerning the business, operations and financial performance and condition of Sandstorm. 

Forward-looking information is provided as of the date of this MD&A and Sandstorm does not intend, and does not assume any obligation, to update this 

forward-looking information, except as required by law.

Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is 

expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and 

phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking 

information is based on reasonable assumptions that have been made by Sandstorm as at the date of such information and is subject to known and unknown 

risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Sandstorm to be materially 

different from those expressed or implied by such forward-looking information, including but not limited to: the impact of general business and economic 

conditions; the Chapada Mine, the Cerro Moro Mine, the Houndé Mine, the Ming Mine, the Gualcamayo Mine, the Fruta del Norte Mine, the Santa Elena 

Mine, the Black Fox Mine, the Aurizona Mine, the Relief Canyon Mine, the Karma Mine, the Emigrant Springs Mine, the Thunder Creek Mine, MWS, HM 

Claim, Triangle Zone, the Hugo North Extension and Heruga deposits, the mines underlying the Sandstorm portfolio of royalties, the Diavik Mine, the Mt. 

Hamilton Project, the Prairie Creek Project, the Hod Maden Project, the Hackett River Project, the Lobo-Marte Project, Agi Dagi and Kirazli, the Vatukoula 

Mine, the Vale Royalty Package, the Mercedes Mine, or the Bracemac-McLeod Mine; the absence of control over mining operations from which Sandstorm 

will purchase gold or other commodities, or receive royalties from and risks related to those mining operations, including risks related to international 

operations, government and environmental regulation, actual results of current exploration activities, conclusions of economic evaluations and changes in 

project parameters as plans continue to be refined; problems inherent to the marketability of minerals; industry conditions, including fluctuations in the 

price of metals, fluctuations in foreign exchange rates and fluctuations in interest rates; government entities interpreting existing tax legislation or enacting 

new tax legislation in a way which adversely affects Sandstorm; the aggregate value of common shares which may be issued pursuant to the ATM Program, 

the Company’s expected use of the net proceeds of the ATM Program, the number or aggregate value of common shares which may be purchased under the 

NCIB, audits being conducted by the CRA and available remedies, the expectation that the various closing conditions of the Hod Maden transaction will 

be met, the expectation that the Hod Maden transaction with New-Co will close, management’s expectations regarding Sandstorm’s growth; stock market 

volatility; competition; as well as those factors discussed in the section entitled “Risks to Sandstorm” herein and those risks described in the section entitled 

“Risk Factors” contained in Sandstorm’s most recent Annual Information Form for the year ended December 31, 2020 available at www.sedar.com and 

www.sec.gov and incorporated by reference herein.

Forward-looking information in this MD&A includes, among other things, disclosure regarding: the impact of COVID-19 on the business, the aggregate 

value of common shares which may be issued pursuant to the ATM Program, the Company’s expected use of the net proceeds of the ATM Program, audits 

being conducted by the CRA and available remedies, management’s expectations regarding Sandstorm’s growth, Sandstorm’s existing Gold Streams and 

royalties as well as its future outlook, the Mineral Reserve and Mineral Resource estimates for each of the Chapada Mine, the Cerro Moro Mine, the Houndé 

Mine, the Ming Mine, the Gualcamayo Mine, the Fruta del Norte Mine, the Santa Elena Mine, the Black Fox Mine, the Aurizona Mine, the Relief Canyon 

Mine, the Karma Mine, the Emigrant Springs Mine, the Thunder Creek Mine, MWS, HM Claim, Triangle Zone, the Hugo North Extension and Heruga 

deposits, the mines underlying the Sandstorm portfolio of royalties, the Diavik Mine, the Mt. Hamilton Project, the Prairie Creek Project, the Hod Maden 

Project, the Hackett River Project, the Lobo-Marte Project, Agi Dagi and Kirazli, the Vatukoula Mine, the Vale Royalty Package, the Mercedes Mine, and 

the Bracemac-McLeod Mine. Forward-looking information is based on assumptions management believes to be reasonable, including but not limited to 

the continued operation of the mining operations from which Sandstorm will purchase gold, other commodities or receive royalties from, no material 

adverse change in the market price of commodities, that the mining operations will operate in accordance with their public statements and achieve their 

stated production outcomes, and such other assumptions and factors as set out therein.

Although Sandstorm has attempted to identify important factors that could cause actual actions, events or results to differ materially from those contained 

in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can 

be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such 

information. Accordingly, readers should not place undue reliance on forward-looking information.

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Management's Discussion and Analysis

SECTION 2

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying consolidated financial statements of Sandstorm Gold Ltd. and all the information in this 

annual report are the responsibility of management and have been approved by the Board of Directors.

The consolidated financial statements have been prepared by management on a going concern basis in 

accordance with International Financial Reporting Standards as issued by the International Accounting 

Standards Board (“IFRS”). When alternative accounting methods exist, management has chosen those it 

deems most appropriate in the circumstances. Financial statements are not exact since they include certain 

amounts based on estimates and judgments. Management has determined such amounts on a reasonable basis 

in order to ensure that the financial statements are presented fairly, in all material respects. Management 

has prepared the financial information presented elsewhere in the annual report and has ensured that it is 

consistent with that in the financial statements.

Sandstorm Gold Ltd. maintains systems of internal accounting and administrative controls in order to provide, 

on a reasonable basis, assurance that the financial information is relevant, reliable and accurate and that the 

Company's assets are appropriately accounted for and adequately safeguarded.

The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial 

reporting and is ultimately responsible for reviewing and approving the financial statements. The Board 

carries out this responsibility principally through its Audit Committee.

The Audit Committee is appointed by the Board, and all of its members are independent directors. The Audit 

Committee meets at least four times a year with management, as well as the external auditors, to discuss 

internal controls over the financial reporting process, auditing matters and financial reporting issues, to 

satisfy itself that each party is properly discharging its responsibilities, and to review the quarterly and the 

annual reports, the financial statements and the external auditors' report. The Audit Committee reports 

its findings to the Board for consideration when approving the financial statements for issuance to the 

shareholders. The Audit Committee also considers, for review by the Board and approval by the shareholders, 

the engagement or reappointment of the external auditors. The consolidated financial statements have 

been audited by PricewaterhouseCoopers LLP, Chartered Professional Accountants, in accordance with the 

standards of the Public Company Accounting Oversight Board (United States) on behalf of the shareholders. 

PricewaterhouseCoopers LLP has full and free access to the Audit Committee.

“Nolan Watson” 
President & Chief Executive Officer 

“Erfan Kazemi”
Chief Financial Officer

February 17, 2022

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Management's Discussion and Analysis

2021 Q4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Sandstorm Gold Ltd.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial position of Sandstorm Gold Ltd. 

and its subsidiaries (together, the Company) as of December 31, 2021 and 2020, and the related consolidated 

statements of income (loss), comprehensive income (loss), cash flow and changes in equity for the years then 

ended, including the related notes (collectively referred to as the consolidated financial statements). We 

also have audited the Company's internal control over financial reporting as of December 31, 2021, based on 
criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring 
Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, 

the financial position of the Company as of December 31, 2021 and 2020, and the results of its financial 

performance and its cash flows for years then ended in conformity with International Financial Reporting 

Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company 

maintained, in all material respects, effective internal control over financial reporting as of December 31, 
2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining 

effective internal control over financial reporting, and for its assessment of the effectiveness of internal 

control over financial reporting, included in the accompanying Management’s Report on Internal Control 

over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial 

statements and on the Company's internal control over financial reporting based on our audits. We are a public 

accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) 

and are required to be independent with respect to the Company in accordance with the U.S. federal securities 

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan 

and perform the audits to obtain reasonable assurance about whether the consolidated financial statements 

are free of material misstatement, whether due to error or fraud, and whether effective internal control over 

financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of 

material misstatement of the consolidated financial statements, whether due to error or fraud, and performing 

procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding 

the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the 

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Q4 2021

Management's Discussion and Analysis

SECTION 2

accounting principles used and significant estimates made by management, as well as evaluating the overall 

presentation of the consolidated financial statements. Our audit of internal control over financial reporting 

included obtaining an understanding of internal control over financial reporting, assessing the risk that a 

material weakness exists, and testing and evaluating the design and operating effectiveness of internal control 

based on the assessed risk. Our audits also included performing such other procedures as we considered 

necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance 

regarding the reliability of financial reporting and the preparation of financial statements for external 

purposes in accordance with generally accepted accounting principles. A company’s internal control over 

financial reporting includes those policies and procedures that (i) pertain to the maintenance of records 

that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the 

company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation 

of financial statements in accordance with generally accepted accounting principles, and that receipts and 

expenditures of the company are being made only in accordance with authorizations of management and 

directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection 

of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on 

the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect 

misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk 

that controls may become inadequate because of changes in conditions, or that the degree of compliance with 

the policies or procedures may deteriorate.

Critical Audit Matters 

The critical audit matter communicated below is a matter arising from the current period audit of the consol-

idated financial statements that was communicated or required to be communicated to the audit committee 

and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and 

(ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit 

matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and 

we are not, by communicating the critical audit matter below, providing a separate opinion on the critical 

audit matter or on the accounts or disclosures to which it relates.

71

SECTION 2

Management's Discussion and Analysis

2021 Q4

Assessment of impairment indicators of stream, royalty and other interests and 
of the Hod Maden and other investments in associates

As described in Notes 3, 5 and 6 to the consolidated financial statements, the Company’s stream, royalty and 

other interests carrying amount was $473.7 million and the Hod Maden and other investments in associates 

carrying amount was $84.6 million as of December 31, 2021. Management assesses whether any indication of 

impairment exists at the end of each reporting period for each stream, royalty and other interest and for the 

Hod Maden and other investments in associates, including assessing whether there are observable indications 

that the asset’s value has declined during the period. If such an indication exists, the recoverable amount 

of the interest is estimated in order to determine the extent of the impairment (if any). Management uses 

judgment when assessing whether there are indicators of impairment, such as significant changes in future 

commodity prices, discount rates, operator reserve and resource estimates or other relevant information 

received from the operators that indicates production from the interests will not likely occur or may be 

significantly reduced in the future.

The principal considerations for our determination that performing procedures relating to the assessment of 

impairment indicators of stream, royalty and other interests and of the Hod Maden and other investments in 

associates is a critical audit matter are (i) the judgment by management when assessing whether there were 

indicators of impairment related to significant changes in future commodity prices, discount rates, operator 

reserve and resource estimates or other relevant information received from the operators that indicates 

production from the interests will not likely occur or may be significantly reduced in the future; (ii) a high 

degree of auditor judgment, subjectivity and effort in performing procedures and evaluate audit evidence 

related to management’s assessment of impairment indicators of stream, royalty and other interests and of 

the Hod Maden and other investments in associates.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with 

forming our overall opinion on the consolidated financial statements. These procedures included testing the 

effectiveness of controls relating to management’s review of the assessment of impairment indicators of stream, 

royalty and other interests and of the Hod Maden and other investments in associates. These procedures 

also included, among others, evaluating the reasonableness of management's assessment of indicators of 

impairment for a sample of stream, royalty and other interests and of the Hod Maden and other investments 
in associates, related to significant changes in future commodity prices, discount rates, operator reserve and 

resource estimates or other relevant information received from the operators that indicates production from 

the interests will not likely occur or may be significantly reduced in the future, by considering (i) the current 

and past performance of the underlying mining operation associated with the interest; (ii) external market 

and industry data; (iii) the publicly disclosed information by operators of the underlying mining operation 

associated with the interests; and (iv) consistency with evidence obtained in other areas of the audit.

/S/ PricewaterhouseCoopers LLP 
Chartered Professional Accountants 

Vancouver, Canada 
February 17, 2022

We have served as the Company's auditor since 2016. 

72

 
S E C T I O N   3

Consolidated Financial 
Statements

For The Year Ended December 31, 2021

73

SECTION 3

Consolidated Financial Statements

2021 Q4

Consolidated Statements of Financial Position 

Expressed in U.S. Dollars ($000s) 

ASSETS

CURRENT

Cash and cash equivalents

Trade and other receivables

Other current assets

Short-term investments

NON-CURRENT

Stream, royalty and other interests

Hod Maden and other investments in associates

Investments

Other long-term assets

Total assets

LIABILITIES

CURRENT

Trade and other payables

NON-CURRENT

Deferred income tax liabilities

Lease liabilities and other

EQUITY

Share capital

Reserves

Retained earnings

Note

December 31, 2021

December 31, 2020

$

$

$

$

$

$

$

7

5

6

7

10

16,166

$

113,776

12,144

5,294

-

8,011

737

1,852

33,604

$

124,376

473,651

$

84,589

24,056

4,958

620,858

$

356,612

112,906

45,084

10,943

649,921

7,347

$

3,434

18,294

$

2,579

28,220

$

5,477

2,868

11,779

719,730

18,902

10,951

9

$

694,675

$

18,903

35,569

Accumulated other comprehensive loss

(156,509)

(111,441)

Total liabilities and equity

Commitments and contingencies (note 14)

Subsequent Event (note 16)

$

$

592,638

620,858

$

$

638,142

649,921

ON BEHALF OF THE BOARD:

“Nolan Watson”, Director “David De Witt”, Director

74

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

Q4 2021

Consolidated Financial Statements

SECTION 3

Consolidated Statements of Income (Loss) 

Expressed in U.S. Dollars ($000s) 

Except for per share amounts

Sales

Royalty revenue

Cost of sales, excluding depletion 

Depletion 

Total cost of sales

Gross profit

EXPENSES AND OTHER (INCOME)

 ȯ Administration expenses1

 ȯ Project evaluation1

 ȯ Gain on revaluation of Vale Royalties financial instrument

 ȯ Loss (gain) on revaluation of investments

 ȯ Finance expense

 ȯ Finance income

 ȯ Other

 ȯ Stream, royalty and other interests impairments

 ȯ Foreign exchange loss

Income before taxes

Current income tax expense

Deferred income tax expense 

Net income for the year

Basic earnings per share

Diluted earnings per share

 Note

15

15

15

15

11

11

7

7

5

10

10

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020

$

$

$

71,722

43,138

114,860

16,845

35,704

52,549

$

58,660

34,365

93,025

14,046

33,124

47,170

62,311

$

45,855

10,198

$

7,770

(5,887)

1,659

2,135

(481)

1,011

408

645

44,853

3,029

14,202

17,231

27,622

0.14 

0.14 

$

$

$

$

$

$

8,335

5,533

-

(3,830)

2,107

(315)

527

8,877

345

24,276

2,864

7,595

10,459

13,817

0.07 

0.07 

$

$

$

$

$

$

$

$

$

$

$

$

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

 ȯ Basic

 ȯ Diluted

9 (d)

9 (d)

193,974,313

197,823,480

187,507,754

196,907,840

1 

Equity settled share-based compensation (a non-cash item) is 
included in administration expenses and project evaluation

$

6,002

$

5,652

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

75

 
 
SECTION 3

Consolidated Financial Statements

2021 Q4

Consolidated Statements of Comprehensive Income (Loss) 

Expressed in U.S. Dollars ($000s)

 Note

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020

Net income for the year

OTHER COMPREHENSIVE LOSS FOR THE YEAR

ITEMS THAT MAY SUBSEQUENTLY BE RECLASSIFIED TO NET INCOME:

 ȯ Currency translation differences 

ITEMS THAT WILL NOT SUBSEQUENTLY BE RECLASSIFIED 

TO NET INCOME:

 ȯ (Loss) gain on FVTOCI investments

6

 ȯ Tax recovery (expense) on FVTOCI investments

Total other comprehensive loss for the year

Total comprehensive (loss) income for the year

$

$

$

$

27,622

$

13,817

(34,541)

$

(23,052)

(11,847)

1,320

(45,068)

(17,446)

$

$

18,212

(2,346)

(7,186)

6,631

76

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

Q4 2021

Consolidated Financial Statements

SECTION 3

Consolidated Statements of Cash Flow  

Expressed in U.S. Dollars ($000s)

Note

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020

Cash flow from (used in):

OPERATING ACTIVITIES

 ȯ Net income for the year

ITEMS NOT AFFECTING CASH:

 ȯ Depletion and depreciation 

 ȯ Deferred income tax expense 

 ȯ Share-based payments

 ȯ Gain on revaluation of Vale Royalties financial instrument 

 ȯ Loss (gain) on revaluation of investments

 ȯ Stream, royalty and other interests impairments

 ȯ Interest expense and financing amortization

 ȯ Unrealized foreign exchange loss

 ȯ Other

 ȯ Changes in non-cash working capital

INVESTING ACTIVITIES

 ȯ Acquisition of stream, royalty, and other interests

 ȯ Proceeds from disposal of investments and other

 ȯ Acquisition of investments and other assets

 ȯ Investment in Hod Maden interest

7

5

12

5

6

FINANCING ACTIVITIES

 ȯ Redemption of common shares (normal course issuer bid)

9 (a)

 ȯ Interest paid

 ȯ Proceeds on exercise of warrants, options and other

 ȯ Bank debt drawn

 ȯ Bank debt repaid

Effect of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents — beginning of the year

Cash and cash equivalents — end of the year

Supplemental cash flow information (note 12)

$

$

$

$

$

$

$

$

$

$

27,622

36,177

14,202

6,002

(5,887)

1,659

408

2,072

589

636

(2,341)

81,139

(152,697)

22,362

(13,018)

(559)

(143,912)

(34,173)

(1,169)

1,122

-

-

(34,220)

(617)

(97,610)

113,776

$

$

$

$

$

$

$

$

$

16,166

$

13,817

33,611

7,595

5,652

-

(3,830)

8,877

1,935

346

335

(2,722)

65,616

(3,476)

56,381

(15,916)

(3,312)

33,677

(23,524)

(1,361)

77,579

41,000

(86,000)

7,694

(182)

106,805

6,971

113,776

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

77

SECTION 3

Consolidated Financial Statements

2021 Q4

Consolidated Statements of Changes in Equity 

Expressed in U.S. Dollars ($000s)  

SHARE CAPITAL

RESERVES

Note

Number

Amount

Share 
Options and 
Restricted 
Share Rights

Share 
Purchase 
Warrants

Retained 
Earnings 
(Deficit)

Accumulated 
Other 
Comprehensive 
Loss

Total

At January 1, 2020

177,227,941

$

657,551

$

15,796

$

4,670

$

(2,866)

$

(104,255)

$

570,896

Options exercised

9 (b)

1,253,430

5,421

(1,334)

-

Warrants exercised and expired

21,091,325

82,105

-

(6,739)

Vesting of restricted share rights

279,567

1,212

(1,212)

Acquisition and cancellation of common 
shares (normal course issuer bid)

Share-based payments

Share issuance costs 

Total comprehensive income (loss)

(4,599,020)

(23,524)

-

-

-

-

-

5,652

(3,035)

-

-

-

At December 31, 2020

195,253,243

$

719,730

$

18,902

$

Options exercised

9 (b)

855,761

Vesting of restricted share rights

995,865

4,386

4,955

(1,046)

(4,955)

Acquisition and cancellation of common 
shares (normal course issuer bid)

9 (a)

(5,451,415)

(34,173)

-

Share-based payments

Share issuance costs

Dividends declared

Total comprehensive income (loss)

-

-

-

-

-

6,002

(223)

-

-

-

-

-

At December 31, 2021

191,653,454

$

694,675

$

18,903

$

-

-

-

2,069

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

13,817

(7,186)

4,087

75,366

-

(23,524)

5,652

(966)

6,631

$

10,951

$

(111,441)

$

638,142

-

-

-

-

-

(3,004)

-

-

-

-

-

3,340

-

(34,173)

6,002

(223)

(3,004)

27,622

(45,068)

(17,446)

$

35,569

$

(156,509)

$

592,638

78

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.

Q4 2021

Notes to the Consolidated  Financial Statements

SECTION 3

Notes to the Consolidated  
Financial Statements

December 31, 2021 | Expressed in U.S. Dollars

1  NATURE OF OPERATIONS

Sandstorm Gold Ltd. was incorporated under the 
Business Corporations Act of British Columbia 
on March 23, 2007. Sandstorm Gold Ltd. and its 
subsidiary entities (collectively “Sandstorm”, 
“Sandstorm Gold” or the “Company”) is a re-
source-based company that seeks to acquire 
gold and other metals purchase agreements 
(“Gold Streams” or “Streams”) and royalties 
from companies that have advanced stage devel-
opment projects or operating mines. In return 
for making an upfront payment to acquire a 
Stream or royalty, Sandstorm receives the right 
to purchase, at a fixed price per unit or at a fixed 
percentage of the spot price, a percentage of a 
mine’s production for the life of the mine (in 
the case of a Stream) or a portion of the revenue 
generated from the mine (in the case of a royalty).

The head office, principal address and registered 
office of the Company are located at Suite 1400, 
400 Burrard Street, Vancouver, British Columbia, 
V6C 3A6.

These consolidated financial statements were 
authorized for issue by the Board of Directors 
of the Company on February 17, 2022.

2  SUMMARY OF SIGNIFICANT 
ACCOUNTING POLICIES

A  Statement of Compliance

These consolidated financial statements, in-
cluding comparatives, have been prepared in 
accordance with International Financial Re-
porting Standards as issued by the International 
Accounting Standards Board (“IFRS”).

B  Basis of Presentation

These consolidated financial statements have 
been prepared on a historical cost basis except 
for certain financial instruments, which are 
measured at fair value.

The consolidated financial statements are pre-
sented in United States dollars, and all values 
are rounded to the nearest thousand except as 
otherwise indicated.

C  Principles of Consolidation

These consolidated financial statements include 
the accounts of the Company and its subsidiaries 

(all wholly owned), Sandstorm Gold (Canada) 

Ltd., Bridgeport Gold Inc., Inversiones Mineras 

79

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

Australes Holdings (BVI) Inc., Inversiones Min-

allocation is finalized, the adjustment is allocated 

eras Australes S.A., Premier Royalty U.S.A. Inc., 

to the identifiable assets and liabilities acquired. 

SA Targeted Investing Corp., Sandstorm Metals & 

Subsequent changes to the estimated fair value 

Energy (Canada) Holdings Ltd., Sandstorm Met-

of contingent consideration are recorded in the 

als & Energy (Canada) Ltd., Sandstorm Metals 

Consolidated Statements of Income (Loss).

& Energy (US) Inc., Mariana Resources Limited 

and Mariana Turkey Limited. Subsidiaries are 

fully consolidated from the date the Company 

obtains control and continue to be consolidated 

until the date that control ceases. Control is 

achieved when the Company is exposed to, or has 

rights to, variable returns from its involvement 

with the entity and has the ability to affect those 

returns through its power over the entity.

All intercompany balances, transactions, rev-

enues and expenses have been eliminated on 

consolidation.

When the cost of the acquisition exceeds the fair 

values of the identifiable net assets acquired, 

the difference is recorded as goodwill. If the 

fair value attributable to the Company’s share 

of the identifiable net assets exceeds the cost of 

acquisition, the difference is recognized as a gain 

in the Consolidated Statements of Income (Loss).

Non-controlling interests represent the fair 

value of net assets in subsidiaries, as at the date 

of acquisition, which are not held by the Company 

and are presented in the equity section of the 

Consolidated Statements of Financial Position.

D  Business Combinations

E 

Investments in Associates

On the acquisition of a business, the acquisi-

tion method of accounting is used, whereby the 

purchase consideration is allocated to the iden-

tifiable assets and liabilities on the basis of fair 

value at the date of acquisition. Provisional fair 

values allocated at a reporting date are finalized 

as soon as the relevant information is available, 

within a period not to exceed twelve months 

from the acquisition date with retrospective 
restatement of the impact of adjustments to 

those provisional fair values effective as at the 

acquisition date. Incremental costs related to 

acquisitions are expensed as incurred.

When the amount of purchase consideration is 

contingent on future events, the initial cost of the 

acquisition recorded includes an estimate of the 

fair value of the contingent amounts expected 

to be payable in the future. When the fair value 

of contingent consideration as at the date of 

acquisition is finalized before the purchase price 

An associate is an entity over which the Company 

has significant influence and is neither a sub-

sidiary nor a joint arrangement. The Company 

has significant influence when it has the power 

to participate in the financial and operating 

policy decisions of the associate but does not 

have control or joint control over those policies. 

The Company accounts for its investments in 

associates using the equity method. Under the 

equity method, the Company’s investments 

in associates are initially recognized at cost 

when acquired and subsequently increased or 

decreased to recognize the Company’s share of 

net income and losses of the associate, after any 

adjustments necessary to give effect to uniform 

accounting policies, any other movement in 

the associate’s reserves, and for impairment 

losses after the initial recognition date. The 

Company’s share of income and losses of the 

80

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

associate is recognized in net income during the 

On acquisition of a stream, royalty or other 

period. Dividends received from the associate 

interest, an allocation of its cost is attributed 

are accounted for as a reduction in the carrying 

to the exploration potential of the interest and 

amount of the Company’s investment.

is recorded as a non-depletable asset on the 

F  Goodwill

acquisition date. The value of the exploration 

potential is accounted for by reference to IFRS 

6, Exploration and Evaluation of Mineral Re-

The Company allocates goodwill arising from 

sources and is not depleted until such time as 

business combinations to each cash-generating 

the technical feasibility and commercial viability 

unit or group of cash-generating units that are 

have been established at which point the value 

expected to receive the benefits from the business 

of the asset is accounted for by reference to IAS 

combination. Irrespective of any indication 

16, Property, Plant and Equipment.

of impairment, the recoverable amount of the 

cash-generating unit or group of cash-generating 

units to which goodwill has been allocated is 

tested annually for impairment and when there is 

an indication that the goodwill may be impaired. 

Any impairment is recognized as an expense 

immediately. Any impairment of goodwill is not 

subsequently reversed.

G  Stream, Royalty and Other Interests

H 

Impairment of Stream, Royalty and 
Other Interests

Evaluation of the carrying values of each stream, 

royalty and other interest is undertaken when 

events or changes in circumstances indicate 

that the carrying values may not be recoverable 

and at each reporting period. If any indication 

of impairment exists, the recoverable amount 

is estimated to determine the extent of any 

Stream, royalty and other interests consist of 

impairment loss. The recoverable amount is 

acquired royalty and stream metal purchase 

the higher of the fair value less costs of disposal 

agreements. These interests are recorded at cost 

and value in use. 

and capitalized as long term assets with finite 

lives. They are subsequently measured at cost 

less accumulated depletion and accumulated 

impairment losses, if any. Project evaluation 

costs that are not related to a specific agreement 

are expensed in the period incurred.

Fair value is the price that would be received 

from selling an asset in an orderly transaction 

between market participants at the measure-
ment date. Costs of disposal are incremental 

costs directly attributable to the disposal of an 

asset. Fair value less costs of disposal is usually 

Stream,  royalty  and  other  interests  related 

estimated using a discounted cash flow approach. 

to  producing  mines  are  depleted  using  the 

Estimated future cash flows are calculated using 

units-of-production method over the life of 

estimated production, sales prices, and a discount 

the property to which the agreement relates, 

rate. Estimated production is determined using 

which is estimated using available information 

current reserves and the portion of resources 

of proven and probable reserves and the portion 

expected to be classified as mineral reserves 

of resources expected to be classified as mineral 

as well as exploration potential expected to be 

reserves at the mine corresponding to the specific 

converted into resources. Estimated sales prices 

interest.

are determined by reference to an average of 

81

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

long-term metal price forecasts by analysts and 

Upon demonstration of the technical feasibility 

management’s expectations. The discount rate is 

and commercial viability of a project, any past 

estimated using an average discount rate incor-

exploration and evaluation costs related to that 

porating analyst views to value precious metal 

project are subject to an impairment test and are 

royalty companies. Value in use is determined as 

reclassified in accordance with IAS 16, Property 

the future value of present cash flows expected 

Plant and Equipment. 

to be derived from continuing use of an asset in 

its present form for those assets where value in 

use exceeds fair value less costs of disposal. If it 

is determined that the recoverable amount is less 

than the carrying value, then an impairment is 

recognized within net income (loss) immediately.

Management assesses exploration assets for 

impairment at each reporting period or when 

facts and circumstances suggest that the carrying 

value of capitalized exploration costs may not 

be recoverable.

An assessment is made at each reporting pe-

riod if there is any indication that a previous 

J  Revenue Recognition

impairment loss may no longer exist or has 

Revenue is comprised of revenue earned in the 

decreased. If any indications are present, the 

period from contracts with customers under each 

carrying amount of the stream, royalty and other 

of its royalty and stream interests. The Company 

interest is increased to the revised estimate of 

has determined that each unit of a commodity 

its recoverable amount, but so that the increased 

that is delivered to a customer under a royalty 

carrying amount does not exceed the carrying 

and stream interest is a performance obligation 

amount net of depletion that would have been 

for the delivery of a good that is separate from 

determined had no impairment loss been recog-

each other unit of the commodity to be delivered 

nized for the stream, royalty and other interest 

under the same arrangement. In accordance 

in previous periods.

I 

Exploration Assets 

with IFRS 15, the Company recognizes revenue 

to depict the transfer of the relevant commod-

ity to customers in an amount that reflects the 

consideration to which the Company expects to 

All costs incurred prior to obtaining the legal 

be entitled in exchange for those commodities. 

right to undertake exploration and evaluation 
activities on a project are expensed in the period 

incurred. Exploration and evaluation costs aris-

ing following the acquisition of an exploration 

license are capitalized on a project-by-project ba-

sis. Costs incurred include appropriate technical 

and administrative overheads. Exploration assets 

are carried at historical cost less any impairment 

losses recognized. Exploration and evaluation 

activity includes geological and geophysical 

studies, exploratory drilling and sampling and 

resource development. 

For Stream interests, revenue recognition occurs 

when the relevant commodity received from the 

stream operator is transferred by the Company 

to its third-party customers.

For royalty interests, revenue recognition occurs 

when the relevant commodity is transferred to 

the end customer by the operator of the royalty 

property. Revenue is measured at the fair value 

of the consideration received or receivable when 

management can reliably estimate the amount, 

pursuant to the terms of the royalty agreement. 

82

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

In some instances, the Company will not have 

assets and liabilities denominated in foreign 

access to sufficient information to make a rea-

currencies are translated using the closing rate 

sonable estimate of consideration to which it 

as at the reporting date.

expects to be entitled and, accordingly, revenue 

recognition is deferred until management can 

make a reasonable estimate. Differences between 

L  Financial Instruments

estimates and actual amounts are adjusted and 

The Company’s financial instruments consist 

recorded in the period that the actual amounts 

of cash and cash equivalents, trade receivables 

are known.

K  Foreign Currency Translation

and other, short and long-term investments, 

loans receivable which are included in other 

assets, trade and other payables and bank debt. 

All financial instruments are initially recorded 

The functional currency of the Company and 

at fair value and designated as follows: 

its subsidiaries is the principal currency of the 

economic environment in which they operate. 

For the Company and its subsidiaries Sandstorm 

Gold (Canada) Ltd., Bridgeport Gold Inc., In-

versiones Mineras Australes S.A., Inversiones 

Mineras Australes Holdings (BVI) Inc., Premier 

Royalty U.S.A. Inc., SA Targeted Investing Corp., 

Sandstorm Metals & Energy (Canada) Holdings 

Ltd., Sandstorm Metals & Energy (Canada) Ltd., 

Sandstorm Metals & Energy (US) Inc., Mariana 

Resources Limited, Mariana Turkey Limited and 

the Company’s Entrée Resources Ltd. associate, 

the functional currency is the U.S. dollar.

The  functional  currency  of  the  Company’s 

Hod Maden interest in associate is the Turkish 

Lira. To translate the Hod Maden interest to 
the presentation currency of the U.S. dollar, all 

assets and liabilities are translated using the 

exchange rate as of the reporting date and all 

income and expenses are translated using the 

average exchange rates during the period. All 

resulting exchange differences are recognized 

in other comprehensive income (loss).

Transactions in foreign currencies are initially 

recorded in the entity’s functional currency as 

the rate on the date of the transaction. Monetary 

Cash and cash equivalents, trade receivables and 

other, and loans receivable which are included 

in other assets are classified as financial assets at 

amortized cost and trade and other payables and 

bank debt are classified as financial liabilities at 

amortized cost. Both financial assets at amortized 

cost and financial liabilities at amortized cost are 

measured at amortized cost using the effective 

interest method. 

The Company’s financial assets which are subject 

to credit risk include cash and cash equivalents, 

trade receivables and other and loans receivable 

which are included in other assets. Application 

of the expected credit loss model at the date of 

adoption did not have a significant impact on the 
Company’s financial assets because the Company 

determined that the expected credit losses on 

its financial assets were nominal. There were 

no material impairment losses recognized on 

financial assets during the years ended December 

31, 2021 and December 31, 2020.

Investments in common shares are held for 

long-term strategic purposes and not for trading. 

The Company has made an irrevocable election 

to designate all these investments as fair value 

through other comprehensive income (“FVTO-

83

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

CI”) in order to provide a more meaningful 

In August 2020, the International Accounting 

presentation based on management’s intention, 

Standards Board issued Interest Rate Bench-

rather than reflecting changes in fair value in net 

mark Reform — Phase 2 (Amendments to IFRS 

income. Such investments are measured at fair 

9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) (“IBOR 

value at the end of each reporting period, with 

Amendments”), which is applied to potential 

any gains or losses arising on re-measurement 

changes in contractual cash flows of a financial 

recognized as a component of other comprehen-

asset or financial liability as a result of replacing 

sive income under the classification of gain (loss) 

an interest rate benchmark with an alternative 

on revaluation of investments. Cumulative gains 

benchmark rate. The Company has adopted the 

and losses are not subsequently reclassified to 

IBOR Amendments retrospectively. The new 

profit or loss.

Investments in warrants and convertible debt 

instruments are classified as fair value through 

profit or loss (“FVTPL”). These warrants and 

convertible debt instruments are measured at 

fair value at the end of each reporting period, 

with any gains or losses arising on re-measure-

ment recognized as a component of net income 

(loss) under the classification of gain (loss) on 

revaluation of investments. 

Transaction costs on initial recognition of fi-

standard did not have a material impact on the 

Company’s consolidated financial statements.

M 

Inventory

When refined gold or the applicable commodity, 

under the Stream agreement, is delivered to the 

Company, it is recorded as inventory. The amount 

recognized for inventory includes both the cash 

payment and the related depletion associated 

with the related Stream interest.

nancial instruments classified as FVTPL are 

N  Cash and Cash Equivalents

expensed as incurred. Transaction costs incurred 

on initial recognition of financial instruments 

classified as loans and receivables, FVTOCI 

and other financial liabilities are recognized 

at their fair value amount and offset against 

the related loans and receivables or capitalized 
when appropriate.

Cash  and  cash  equivalents  include  cash  on 

account, demand deposits and money market 

investments with maturities from the date of 

acquisition of three months or less, which are 

readily convertible to known amounts of cash 

and are subject to insignificant changes in value.

Financial assets are derecognized when the 

contractual rights to the cash flows from the asset 

O 

Income Taxes

expire. Financial liabilities are derecognized only 

Current income tax assets and liabilities are 

when the Company’s obligations are discharged, 

measured at the amount expected to be recovered 

cancelled  or  they  expire.  On  derecognition, 

from or paid to the taxation authorities. The 

the difference between the carrying amount 

tax rates and tax laws used are those that are 

(measured at the date of derecognition) and 

substantively enacted at the reporting date.

the consideration received (including any new 

asset obtained less any new liability obtained) 

is recognized in profit or loss.

Deferred income taxes are provided for using 

the liability method on temporary differences 

at the reporting date between the tax bases of 

84

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

assets and liabilities and their carrying amounts 

P  Share Capital and Share Purchase 

for accounting. The change in the net deferred 

income tax asset or liability is included in income 

except for deferred income tax relating to equity 

items which is recognized directly in equity, 

and relating to investments in common shares 

designated as FVTOCI which is recognized in 

other comprehensive income. The income tax 

effects of differences in the periods when revenue 

and expenses are recognized in accordance with 

Company accounting practices, and the periods 

they are recognized for income tax purposes are 

reflected as deferred income tax assets or liabil-

ities. Deferred income tax assets and liabilities 

are measured using the substantively enacted 

statutory income tax rates which are expected 

to apply to taxable income in the years in which 

the assets are realized or the liabilities settled. 

A deferred tax asset is recognized for unused 

tax losses, tax credits and deductible tempo-

rary differences to the extent that it is probable 

that future taxable profits will be available for 

utilization.

Warrants 

The proceeds from the issue of units are allocated 

between common shares and share purchase 

warrants (with an exercise price denominated 

in U.S. dollars) on a pro-rata basis based on rel-

ative fair values at the date of issuance. The fair 

value of common shares is based on the market 

closing price on the date the units are issued 

and the fair value of share purchase warrants 

is determined using the quoted market price or 

if the warrants are not traded, using the Black-
Scholes Model (“BSM”) as of the date of issuance. 

Equity instruments issued to agents as financing 

costs are measured at their fair value at the 

date the services were provided. Upon exercise, 

the original consideration is reallocated from 

share purchase warrants reserve to issued share 

capital along with the associated exercise price. 

Original consideration associated with expired 

share purchase warrants is reallocated to issued 

share capital.

Deferred income tax assets and liabilities are 

Q  Earnings Per Share

offset only if a legally enforceable right exists to 

offset current tax assets against liabilities and the 

deferred tax assets and liabilities relate to income 

taxes levied by the same taxation authority on 

the same taxable entity and are intended to be 
settled on a net basis.

Basic earnings per share is computed by dividing 

the net income available to common sharehold-

ers by the weighted average number of common 

shares issued and outstanding during the period. 

Diluted earnings per share is calculated assuming 

that outstanding share options and share pur-

The determination of current and deferred taxes 

chase warrants, with an average market price 

requires interpretations of tax legislation, esti-

that exceeds the average exercise prices of the 

mates of expected timing of reversal of deferred 

options and warrants for the year, are exercised 

tax assets and liabilities, and estimates of future 

and the proceeds are used to repurchase shares 

earnings.

of the Company at the average market price of 

the common shares for the year.

85

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

R  Share Based Payments

S  Related Party Transactions

The Company recognizes share based compen-

Parties are considered related if one party has the 

sation expense for all share purchase options 

ability, directly or indirectly, to control the other 

and restricted share rights (“RSRs”) awarded 

party or exercise significant influence over the 

to employees, officers and directors based on 

other party. Parties are also considered related if 

the fair values of the share purchase options 

they are subject to common control or significant 

and RSRs at the date of grant. The fair values of 

influence. A transaction is considered a related 

share purchase options and RSRs at the date of 

party transaction when there is a transfer of 

grant are expensed over the vesting periods of the 

resources or obligations between related parties.

share purchase options and RSRs, respectively, 

with a corresponding increase to equity. The fair 

value of share purchase options is determined 

T  Segment Reporting

using the BSM with market related inputs as 

An operating segment is a component of the 

of the date of grant. Share purchase options 

Company that engages in business activities 

with graded vesting schedules are accounted 

from which it may earn revenues and incur ex-

for as separate grants with different vesting 

penses. The Company’s operating segments are 

periods and fair values. The fair value of RSRs 

components of the Company’s business for which 

is the market value of the underlying shares at 

discrete financial information is available and 

the date of grant. At the end of each reporting 

which are reviewed regularly by the Company’s 

period, the Company re-assesses its estimates 

Chief Executive Officer to make decisions about 

of the number of awards that are expected to 

resources to be allocated to the segment and 

vest and recognizes the impact of any revisions 

assess its performance.

to this estimate in the Consolidated Statements 

of Income (Loss).

U  Leases

The BSM requires management to estimate the 

expected volatility and expected term of the 

equity instrument, the risk-free rate of return 

over  the  term,  expected  dividends,  and  the 

number of equity instruments expected to ul-

timately vest. The Company uses its competitors 

market data with respect to expected volatility 

and expected dividend yield to the extent these 

factors are indicative of the Company’s future 

expectations. The expected term is estimated 

using historical exercise data, and the number of 

equity instruments expected to vest is estimated 

using historical forfeiture data.

Upon lease commencement, the Company recog-

nizes a right-of-use asset, which is initially mea-

sured at the amount of the lease liability plus any 

direct costs incurred, which is then amortized 

over the life of the lease on a straight-line basis. 

The lease liability is initially measured at the 

present value of the lease payments payable over 

the lease term, discounted at the rate implicit 

in the lease; if the implicit lease rate cannot be 

determined, the incremental borrowing rate is 

used. Payments against the lease are then offset 

against the lease liability. The lease liability and 

right-of-use asset are subsequently re-measured 

to reflect changes to the terms of the lease. Assets 

and liabilities are recognized for all leases unless 

the lease term is twelve months or less or the 

underlying asset has a low value.

86

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

3  KEY SOURCES OF ESTIMATION 

disclosures of Reserves and Resources that are 

UNCERTAINTY AND CRITICAL 
ACCOUNTING JUDGMENTS

The preparation of the Company’s consolidated 

financial statements in conformity with IFRS 

requires management to make judgments, esti-

mates and assumptions that affect the reported 

amounts of assets, liabilities and contingent 

liabilities at the date of the consolidated financial 

statements and reported amounts of revenues 

and  expenses  during  the  reporting  period. 

Estimates and assumptions are continuously 

evaluated and are based on management’s expe-

rience and other factors, including expectations 

of future events that are believed to be reasonable 

under the circumstances. However, actual out-

comes can differ from these estimates.

Information about significant sources of es-

timation uncertainty and judgments made by 

management  in  preparing  the  consolidated 

financial statements are described below.

released by the operators of the interests in-

volve assessments of geological and geophysical 

studies and economic data and the reliance on a 

number of assumptions, including commodity 

prices and production costs. The estimates of 

Reserves and Resources may change based on 

additional knowledge gained subsequent to the 

initial assessment. Changes in the estimates of 

Reserves or Resources may impact the carrying 

value of the Company’s stream, royalty and other 

interests and depletion charges. 

The Company’s stream and royalty interests are 

depleted on a units-of-production basis, with 

estimated recoverable Reserves and Resources 

being used to determine the depletion rate for 

each of the Company’s stream and royalty inter-

ests. These calculations require determination 

of the amount of recoverable Resources to be 

converted into Reserves. Changes to depletion 

rates are accounted for prospectively.

A  Attributable Reserve and Resource 

B 

Investments

Estimates 

Stream, royalty and other interests are a sig-

nificant class of assets of the Company, with a 

carrying value of $473.7 million at December 

31, 2021 (2020 — $356.6 million). This amount 

represents the capitalized expenditures related 

to the acquisition of the stream, royalty and 

other interests net of accumulated depletion and 

any impairments. The Company estimates the 

reserves and resources relating to each interest. 

Reserves and Resources are estimates of the 

amount of minerals that can be economically 

In the normal course of operations, the Company 

invests in equity interests of other entities. In 

such circumstances, management considers 

whether the facts and circumstances pertaining 

to each such investment result in the Company 
obtaining control, joint control or significant 

influence over the investee entity. In some cases, 

the determination of whether or not the Com-

pany controls, jointly controls or significantly 

influences the investee entities requires the 

application of significant management judgment 

to consider individually and collectively such 

and legally extracted from the mining prop-

factors as:

erties at which the Company has Stream and 

royalty interests, adjusted where applicable to 

reflect the Company’s percentage entitlement to 

minerals produced from such mines. The public 

 ▶ The purpose and design of the investee entity.

 ▶ The ability to exercise power, through substantive 
rights, over the activities of the investee entity that 
significantly affect its returns.

87

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

 ▶ The size of the Company’s equity ownership and 
voting rights, including potential voting rights.

and expectations of future taxable income, are 

assessed by management at the end of each 

 ▶ The size and dispersion of other voting interests, 

reporting period and adjusted, as necessary, on 

including the existence of voting blocks.

a prospective basis. Refer to note 10 for more 

 ▶ Other investments in or relationships with the 
investee entity including, but not limited to, 
current or possible board representation, royalty 
and/or stream investments, loans and other types 
of financial support, material transactions with 
the investee entity, interchange of managerial 
personnel or consulting positions.

 ▶ Other relevant and pertinent factors.

information.

D 

Impairment of Assets 

There  is  judgment  required  to  determine 

whether any indication of impairment exists 

at the end of each reporting period for each 

stream, royalty and other interest and the Hod 

If it is determined that the Company neither has 

Maden interest and other investments in asso-

control, joint control or significant influence over 

ciates, including assessing whether there are 

an investee entity, the Company accounts for the 

observable indications that the asset’s value has 

corresponding investment in equity interest at 

declined during the period. Management uses 

fair value through other comprehensive income 

judgment when assessing whether there are 

as further described in note 2.

C 

Income Taxes

indicators of impairment, such as significant 

changes in future commodity prices, discount 

rates, operator reserve and resource estimates 

or other relevant information received from 

The interpretation of existing tax laws or regu-

the operators that indicates production from 

lations in Canada, the United States of America, 

stream and royalty interests will not likely occur 

Australia, Argentina, Ecuador, Turkey, Guernsey, 

or may be significantly reduced in the future. 

Mexico, Brazil or any of the countries in which 

If such an indication exists, the recoverable 

the mining operations are located or to which 

amount of the interest is estimated in order 

shipments of gold and other metals are made 

to determine the extent of the impairment (if 

requires the use of judgment. Differing inter-

any). The recoverable amount is the higher of 

pretation of these laws or regulations could 

the fair value less costs of disposal and value in 

result in an increase in the Company’s taxes, or 

use. The calculation of the recoverable amount 

other governmental charges, duties or impo-

requires the use of estimates and assumptions 

sitions. To the extent there are uncertain tax 

such as long-term commodity prices, discount 

provisions, the Company measures the impact 

rates, and operating performance. 

of the uncertainty using the method that best 

predicts the resolution of the uncertainty. The 

judgements and estimates made to recognize and 

measure the effect of uncertain tax treatments 

are reassessed whenever circumstances change 

or when there is new information that affects 

those judgements. In addition, the recoverability 

of deferred income tax assets, including expected 

periods of reversal of temporary differences 

The recoverable amount is determined by cal-

culating the present value of expected future 

cash flows. The discount rate is based on the 

Company’s weighted average cost of capital, 

adjusted for various risks. The expected future 

cash flows are management’s best estimates 

of expected future revenues and costs. Under 

each method, expected future revenues reflect 

the estimated future production for each mine 

88

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

at which the Company has a Stream or royalty 

The assessment of whether an acquisition meets 

based on detailed life of mine plans received from 

the definition of a business or whether assets are 

each of the mine operators. Included in these 

acquired is another area of key judgement. If 

forecasts is the production of mineral resources 

deemed to be a business combination, applying 

that do not currently qualify for inclusion in 

the acquisition method to business combinations 

proven and probable ore reserves where there 

requires each identifiable asset and liability to be 

is a high degree of confidence in its economic 

measured at its acquisition date fair value. The 

extraction. This is consistent with the methodol-

excess, if any, of the fair value of the consideration 

ogy that is used to measure value beyond proven 

over the fair value of the net identifiable assets 

and probable reserves when determining the 

acquired is recognized as goodwill. The determi-

fair value attributable to acquired stream and 

nation of the acquisition date fair values often 

royalty interests. Expected future revenues also 

requires management to make assumptions and 

reflect management’s estimated long term metal 

estimates about future events. The assumptions 

prices, which are determined based on current 

and estimates with respect to determining the 

prices, forward pricing curves and forecasts 

fair value of Stream, royalty and other interests 

of expected long-term metal prices prepared 

generally require a high degree of judgement, 

by analysts. These estimates often differ from 

and include estimates of mineral reserves and 

current price levels, but are consistent with 

resources acquired, future metal prices, discount 

how a market participant would assess future 

rates and conversion of reserves and resources. 

long-term metal prices. Estimated future cash 

Changes in any of the assumptions or estimates 

costs are established based on the terms of each 

used in determining the fair value of acquired 

Stream, royalty and other interest, as disclosed 

assets and liabilities could impact the amounts 

in note 14 to the financial statements.

assigned to assets and liabilities.

E  Accounting for Acquisition of Assets 

F  Functional Currency

and Stream, Royalty and Other Interests

The Company’s business is the acquisition of 

Streams, royalties and other interests. Each 

Stream, royalty and other interest has its own 

unique terms and judgement is required to as-

sess the appropriate accounting treatment. The 

determination of whether an acquisition should 

be accounted for as a Stream, royalty and other 

interest or a financial instrument requires the 

consideration of factors such as (i) the terms of 

the agreement; (ii) the applicability of the own 

use exemption under IFRS 9; (iii) whether there 

is a contractual commitment to repay amounts 

under the Stream; and (iv) the expected timing 

and amount of future deliveries of gold, silver 

and other commodities under the Stream with 

reference to the existing mine plan.

The functional currency for each of the Compa-

ny’s subsidiaries and associates is the currency 

of the primary economic environment in which 

the entity operates. Determination of function-

al currency may involve certain judgments to 

determine the primary economic environment 

and the Company reconsiders the functional 

currency of its entities if there is a change in 

events and conditions which determine the 

primary economic environment.

G  COVID-19 Estimation Uncertainty

In March 2020, the World Health Organization 
declared a global pandemic related to COVID-19. 
The current and future impact on global com-
merce is far-reaching. To date there has been 

89

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

significant stock market volatility, significant 
volatility in commodity and foreign exchange 
markets, restrictions on the conduct of business 
in many jurisdictions including the temporary 
suspension of mining activities and mine de-
velopment, and the global movement of people 
and some goods has become restricted. There 
is significant ongoing uncertainty surrounding 
COVID-19 and the extent and duration of the 
impacts that it may have on demand and prices 
for the commodities relating to the Company’s 
Streams and royalties, on the operations of its 
partners, on its employees and on global financial 
markets. As a result of this uncertainty, there 
is heightened potential for impairments or im-
pairment reversals. In the current environment, 
assumptions about future commodity prices, 
exchange rates, and interest rates are subject 
to greater variability than normal, which could 
in future significantly affect the valuation of the 
Company’s assets, both financial and non-fi-
nancial.

4  FINANCIAL INSTRUMENTS

A  Capital Risk Management

The Company manages its capital such that 
it endeavors to continue as a going concern 
while maximizing the return to stakeholders 
through the optimization of the debt and equity 
balance. At December 31, 2021, the capital struc-
ture of the Company consists of $592.6 million 

(2020 — $638.1 million) of equity attributable to 
common shareholders, comprising issued share 
capital (note 9), accumulated reserves, retained 
earnings and accumulated other comprehensive 
loss. The Company was not subject to any ex-
ternally imposed capital requirements with the 
exception of complying with certain covenants 
under the ESG Revolving Facility agreement 

governing  bank  debt.  The  Company  was  in 
compliance with the debt covenants described 
in note 8 as at December 31, 2021.

B  Fair Value Estimation

The fair value hierarchy establishes three levels 
to classify the inputs of valuation techniques 
used to measure fair value. As required by IFRS 
13, assets and liabilities are classified in their 
entirety based on the lowest level of input that 
is significant to the fair value measurement. 
The three levels of the fair value hierarchy are 
described below:

Level 1 | Unadjusted quoted prices in active 
markets that are accessible at the measurement 
date for identical, unrestricted assets or liabili-
ties. Investments in common shares and warrants 
held that have direct listings on an exchange are 
classified as Level 1.

Level 2 | Quoted prices in markets that are 
not active, quoted prices for similar assets or 
liabilities in active markets, or inputs that are 
observable, either directly or indirectly, for 
substantially the full term of the asset or liabil-
ity. Investments in warrants and convertible 
debt instruments held that are not listed on an 
exchange are classified as Level 2. The fair value 
of warrants, convertible debt instruments and 
related instruments are determined using a 
Black-Scholes model based on relevant assump-
tions including risk free interest rate, expected 
dividend yield, expected volatility and expected 
warrant life which are supported by observable 
current market conditions. The use of reasonably 
possible alternative assumptions would not 
significantly impact the Company’s results.

Level 3 | Inputs that are unobservable (sup-
ported by little or no market activity).

90

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

The following table sets forth the Company's financial assets and liabilities measured at fair value on a 
recurring basis by level within the fair value hierarchy as at December 31, 2021 and December 31, 2020.

As at December 31, 2021:

In $000s

LONG-TERM INVESTMENTS

Common shares held

Warrants and other

Convertible debt

As at December 31, 2020:

In $000s

SHORT-TERM INVESTMENTS

Convertible debt

LONG-TERM INVESTMENTS

Common shares held

Warrants and other

Convertible debt

Quoted prices in 
active markets 
for identical 
assets 
(Level 1)

Total

Significant 
other 
observable 
inputs 
(Level 2)

Significant 
unobservable 
inputs 
(Level 3)

21,486

$

21,486

$

-

$

1,666

904

-

-

1,666

904

24,056

$

21,486

$

2,570

$

-

-

-

-

Quoted prices in 
active markets 
for identical 
assets 
(Level 1)

Total

Significant 
other 
observable 
inputs 
(Level 2)

Significant 
unobservable 
inputs 
(Level 3)

1,852

$

-

$

1,852

$

28,416

$

28,416

$

-

$

1,143

15,525

-

-

1,143

15,525

46,936

$

28,416

$

18,520

$

-

-

-

-

-

$

$

$

$

$

The fair value of the Company's other financial instruments, which include cash and cash equivalents, 
trade and other receivables, loans receivable which are included in other current assets, and trade and 
other payables, approximate their carrying values at December 31, 2021 and December 31, 2020 due to 
their short-term nature. There were no transfers between the levels of the fair value hierarchy during 
the years ended December 31, 2021 and December 31, 2020.

91

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

C  Credit Risk

The Company’s credit risk is limited to cash 
and cash equivalents, loans receivable which 
are included in other assets, trade and other 
receivables, and the Company’s investments in 
convertible debentures. The Company’s trade 
and other receivables are subject to the credit 
risk of the counterparties who own and operate 
the mines underlying Sandstorm’s royalty port-
folio. In order to mitigate its exposure to credit 
risk, the Company closely monitors its financial 
assets and maintains its cash deposits in several 
high-quality financial institutions. The impact 
of expected credit losses on trade receivables 
and financial assets held at amortized cost is 
not material.

D  Currency Risk

Financial instruments that impact the Compa-
ny’s net income or other comprehensive income 
due to currency fluctuations include: cash and 
cash equivalents, trade and other receivables 
and  trade  and  other  payables  denominated 
in Canadian dollars. Based on the Company's 
Canadian dollar denominated monetary assets 
and monetary liabilities at December 31, 2021 
a 10% increase (decrease) of the value of the 
Canadian dollar relative to the United States 
dollar would not have a material impact on net 
income or other comprehensive income.

E  Liquidity Risk

The Company has in place a planning and budget-
ing process to help determine the funds required 
to support the Company’s normal operating 
requirements on an ongoing basis. In managing 

liquidity risk, the Company takes into account 
the amount available under the Company’s re-
volving credit facility, anticipated cash flows from 
operating activities and its holding of cash and 
cash equivalents. As at December 31, 2021, the 
Company had cash and cash equivalents of $16.2 

million (December 31, 2020 — $113.8 million). 
Sandstorm holds common shares, convertible 
debentures, and warrants and other of other 
companies with a combined fair market value as 
at December 31, 2021 of $24.1 million (December 

31, 2020 — $46.9 million). In addition, Sandstorm 
also holds common shares of Entrée Resources 
Ltd. with a fair value of $31.7 million at December 
31, 2021 which are classified as an investment 
in associate and accounted for using the equity 
method. The daily exchange traded volume of 
these shares, including the shares underlying the 
warrants, may not be sufficient for the Company 
to liquidate its position in a short period of time 
without potentially affecting the market value 
of the shares.

F  Other Price Risk

The Company is exposed to equity price risk as 
a result of holding investments in other mining 
companies. The Company does not actively trade 
these investments. The equity prices of long-term 
investments are impacted by various underlying 
factors including commodity prices and the vol-
atility in global markets as a result of COVID-19. 
Based on the Company's investments held as at 
December 31, 2021, a 10% increase (decrease) 
in the equity prices of these investments would 
increase (decrease) other comprehensive income 
by $2.1 million and would not have a material 
impact on net income.

92

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

5  STREAM, ROYALTY AND OTHER INTERESTS

A  Carrying Amount

As of and for the year ended December 31, 2021:

COST

Net 
Additions 
(Disposals)

Opening

ACCUMULATED DEPLETION

Ending

Opening

Depletion 1

Depletion 
in Ending 
Inventory

Impairment

Ending

Carrying 
Amount

$

11,091 $

- $

11,091 $

2,052 $

815 $

- $

- $

2,867 $

8,224

37,817

21,495

69,554

53,134

33,267

5,818

45,120

35,352

26,289

26,441

23,354

-

-

1

-

-

-

1

-

-

-

-

-

-

37,818

30,426

1,888

21,495

19,584

1,545

69,554

16,882

2,963

53,134

43,220

3,372

33,268

1,290

2,304

5,818

-

-

45,120

12,331

1,610

35,352

-

-

26,289

17,440

1,586

26,441

2,907

4,624

23,354

21,932

270

117,787

117,787

27,590

27,590

-

-

1,444

-

74,252

-

74,252

25,883

10,415

257,994

7,326

265,320

170,419

2,422

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

32,314

5,504

21,129

366

19,845

49,709

46,592

6,542

3,594

29,674

-

5,818

13,941

31,179

-

35,352

19,026

7,263

7,531

18,910

22,202

1,152

1,444

116,343

-

27,590

36,298

37,954

408

173,249

92,071

$ 720,978 $ 152,705 $ 873,683 $ 364,366 $

35,258 $

- $

408 $ 400,032 $ 473,651

In $000s

Aurizona 
Brazil

Black Fox 
Canada

Bracemac-
McLeod 
Canada

Chapada 
Brazil

Diavik 
Canada

Fruta del Norte 
Ecuador

Hod Maden 
Turkey

Houndé 
Burkina Faso

Hugo North 
Extension and 
Heruga 
Mongolia

Karma 
Burkina Faso

Relief Canyon 
United States

Santa Elena 
Mexico

Vale Royalties 
Brazil

Vatukoula 
Fiji

Yamana silver 
stream 
Argentina

Other2

Total 3

1 

2 

Depletion during the period in the Consolidated Statements of Income (loss) of $35.7 million is comprised of depletion expense for the 
period of $35.3 million, and $0.4 million from depletion in ending inventory as at December 31, 2020.

Includes Mt. Hamilton, Prairie Creek, Gualcamayo, Emigrant Springs, Mine Waste Solutions, Thunder Creek, Hackett River, Lobo-Marte, 
Agi Dagi & Kirazli, HM Claim, Ming, and others.

3 

Stream, Royalty and Other Interests includes non-depletable assets of $53.9 million and depletable assets of $419.8 million.

93

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

As of and for the year ended December 31, 2020:

COST

Net 
Additions 
(Disposals)

Opening

ACCUMULATED DEPLETION

Ending

Opening

Depletion

Depletion 
in Ending 
Inventory

Impairment

Ending

Carrying 
Amount

$

11,091 $

- $

11,091 $

985 $

1,067 $

- $

- $

2,052 $

9,039

37,817

21,495

69,554

-

-

-

37,817

29,412

1,014

21,495

18,099

1,485

69,554

13,968

2,914

53,111

23

53,134

33,273

2,085

33,259

5,818

8

-

33,267

5,818

34

-

1,256

-

45,101

19

45,120

8,515

3,816

35,351

26,289

1

-

35,352

-

-

26,289

13,248

3,843

349

26,416

25

26,441

-

2,820

23,354

74,252

-

-

23,354

21,610

312

74,252

15,764

10,119

254,544

3,450

257,994

167,011

2,393

87

10

-

-

-

-

-

-

-

-

-

-

-

-

-

30,426

7,391

19,584

1,911

16,882

52,672

7,862

43,220

9,914

-

-

-

-

-

-

-

-

1,290

31,977

-

5,818

12,331

32,789

-

35,352

17,440

8,849

2,907

23,534

21,932

1,422

25,883

48,369

1,015

170,419

87,575

In $000s

Aurizona 
Brazil

Black Fox 
Canada

Bracemac-
McLeod 
Canada

Chapada 
Brazil

Diavik 
Canada

Fruta del Norte 
Ecuador

Hod Maden 
Turkey

Houndé 
Burkina Faso

Hugo North 
Extension and 
Heruga 
Mongolia

Karma 
Burkina Faso

Relief Canyon 
United States

Santa Elena 
Mexico

Yamana silver 
stream 
Argentina

Other1

Total 2

$

717,452 $

3,526 $ 720,978 $ 321,919 $

33,124 $

446 $

8,877 $ 364,366 $ 356,612

1 

Includes Mt. Hamilton, Prairie Creek, Gualcamayo, Emigrant Springs, Mine Waste Solutions, Thunder Creek, Hackett River, Lobo-Marte, 
Agi Dagi & Kirazli, HM Claim, Ming, and others.

2 

Stream, Royalty and Other Interests includes non-depletable assets of $58.4 million and depletable assets of $298.2 million. 

94

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

B  Significant Acquisitions

VALE ROYALTY PACKAGE

On June 29, 2021, the Company acquired a di-
verse package of royalties on several of Vale S.A.’s 
(“Vale”) assets located in Brazil for consideration 
of $109.1 million. During the third quarter of 
2021, the Company made an additional $8.7 
million investment in the Vale Royalties on 
similar pro-rata terms. These royalties provide 
holders with life of mine net sales royalties on 
seven producing mines and several exploration 
properties covering a total area of interest of 
15,564 square kilometres (the “Vale Royalties”). 
Under the terms of the Vale Royalties, the Com-
pany is entitled to:

Copper and Gold

 Ƚ 0.03% net sales royalty on the Sossego 

copper-gold mine; and

 Ƚ 0.06% net sales royalty on copper and gold 

and a 0.03% net sales royalty on all other 

minerals from certain assets.

Iron Ore

 Ƚ 0.05% net sales royalty on iron ore sales 

from the Northern System; and

 Ƚ 0.05% net sales royalty on iron ore sales 
from a portion of the Southeastern System 

after a cumulative threshold of 1.7 billion 

tonnes of iron ore has been met.

Other

 Ƚ 0.03% of net sales proceeds in the event of 

an underlying asset sale on certain assets.

Royalty payments are made on a semi-annual 
basis on March 31 and September 30 of each year 
reflecting sales in the preceding half calendar 
year period. The payment for the first half of 2021 
was paid to the Company on October 1, 2021, re-
flecting a net sales royalty for the period January 
1, 2021 to June 30, 2021. As the majority of these 
sales occurred prior to Sandstorm’s acquisition 
of the Vale Royalties, the Company has recog-
nized these accrued amounts as a pre-acquisition 
receivable and made a corresponding reduction 
to the cost base of the royalty.

WATERTON ROYALTY PACKAGE

In May 2021, Sandstorm acquired a package of 
royalties from an affiliate of Waterton Precious 
Metals Fund II Cayman, LP (“Waterton”) for 
consideration of $7 million, with an additional $1 
million payment contingent on certain advance-
ment milestones on the Converse property. The 
package includes 21 royalties on development, 
advanced exploration and exploration stage 
projects located in Nevada and Montana.

VATUKOULA GOLD STREAM AND ROYALTY

In December 2021, the Company closed its previ-
ously announced gold purchase agreement which 
entitles it to purchase 25,920 ounces of gold 
over an approximate 5.5-year period (the “Fixed 
Delivery Period”) and thereafter 2.55%–2.90% 
of the gold produced from Vatukoula Gold Mines 
PTE Limited’s (“VGML”) underground gold mine 
located in Fiji (“Vatukoula” or the “Vatukoula 
Mine”) for ongoing per ounce cash payment equal 
to 20% of the spot price of the gold. In addition 
to this Gold Stream, Sandstorm received an 
effective 0.45% net smelter return royalty on 
certain prospecting licenses, plus a five-kilometre 
area of interest.

95

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

maturity date, at a 35% premium, or as approved 
by the TSX-V, to Bear Creek’s share price on 
closing of the transaction.

The transaction, which is expected to close by 
March 31, 2022, is subject to various closing 
conditions and the Fixed Delivery Term will 
begin on the earlier of the closing date or April 
2022.

C 

Impairment

DURING THE YEAR ENDED DECEMBER 31, 2020:

Due to adverse diamond market conditions, 
partly exacerbated by the COVID-19 pandemic, 
the Company estimated the recoverable amount 
of the Diavik royalty and, during the year ended 
December 31, 2020, recorded an impairment 
charge of $7.9 million. The recoverable amount of 
$11.3 million was determined using a discounted 
cash flow model in estimating the fair value less 
costs of disposal. This is a level 3 measurement 
due to the unobservable inputs in the model. 
Key assumptions used in the cash flow forecast 
were: a mine life of approximately three years, a 
diamond price ranging from $55–$90 per carat 
and a 4% discount rate. The recoverable amount 
of Diavik is most sensitive to changes in diamond 
prices and mine life. In isolation, a 10% decrease 
in diamond prices would result in a reduction in 
the recoverable amount of approximately $1.2 
million and a one year reduction in mine life 
would result in a reduction in the recoverable 
amount of approximately $3.5 million.

Under the terms of the agreement, during the 
first 1.5 years of the Fixed Delivery Period, Sand-
storm will receive 3,040 ounces of gold per year, 
increasing to 5,340 ounces of gold per year during 
the final four years of the Fixed Delivery Period. 
After the Fixed Delivery Period, Sandstorm will 
receive a variable proportion of gold produced 
from the Vatukoula Mine for the life of the mine.

As at December 31, 2021, the Company has re-
mitted $27 million of the $30 million purchase 
price, with the remaining amount subject to 
various milestones.

MERCEDES GOLD STREAM

In December 2021, the Company entered into a 
$60 million financing package with Bear Creek 
Mining Corporation (“Bear Creek”) to facili-
tate Bear Creek’s acquisition of the producing 
Mercedes gold-silver mine in Sonora, Mexico 
(“Mercedes” or the “Mercedes Mine”) from 
Equinox. The financing package includes a $37.5 
million Gold Stream on the Mercedes Mine and 
a $22.5 million convertible debenture, both of 
which are payable on closing. 

Under the terms of the Gold Stream, Sandstorm 
has agreed to purchase 25,200 ounces of gold over 
a 3.5 year period (the “Fixed Delivery Term”) 
and thereafter 4.4% of the gold produced from 
Mercedes Mine. During the Fixed Delivery Term, 
Sandstorm will make ongoing per ounce cash 
payment equal to 7.5% of the spot price of the 
gold. After the receipt of the fixed deliveries, the 
ongoing per ounce cash payment will increase 
to 25% of the spot price of the gold.

The $22.5 million convertible debenture bears 
an interest rate of 6% per annum and has a term 
of 3 years. Sandstorm has the right to convert the 
principal amount of the debenture into common 
shares of Bear Creek, at any time prior to the 

96

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

6  HOD MADEN AND OTHER INVESTMENTS IN ASSOCIATES

The following table summarizes the changes in the carrying amount of the Company’s 

investments in associates:

In $000s

Hod Maden interest

Entrée Resources Ltd.

A  Hod Maden Interest

As at 
December 31, 2021

As at 
December 31, 2020

$

$

63,313

21,276

84,589

$

$

96,666

16,240

112,906

The Company has a 30% net profits interest in Artmin Madencilik Sanayi ve Ticaret A.S, incorporated in 
Turkey which owns and operates the Hod Maden project. This interest is accounted for using the equity 
method and its financial results are adjusted, where appropriate, to give effect to uniform accounting 
policies. 

The following table summarizes the changes in the carrying amount of the Company’s Hod Maden interest:

In $000s

Beginning of Year

Company’s share of net loss of associate

Capital investment

Currency translation adjustments

End of Year

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020

96,666

$

116,585

(253)

672

(33,772)

63,313

$

(360)

3,579

(23,138)

96,666

$

$

Summarized financial information for the Company’s investment in this associate, on a 100% basis 
and reflecting adjustments made by the Company, including fair value adjustments made at the time 
of acquisition and adjustments for differences in accounting policies is as follows:

In $000s

Administration expenses

Other income

Total net loss

Company’s share of net loss of associate

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020

$

$

$

(994)

151

(843)

(253)

$

$

$

(1,387)

187

(1,200)

(360)

97

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

In $000s

Current Assets

Non-current Assets

Total Assets

Current Liabilities

Non-current Liabilities

Total Liabilities

Net Assets 

Company’s share of net assets of associate

Adjustments for differences in accounting policies and other

Carrying amount of investment in associate

B  Entrée Resources Ltd. 

As at 
December 31, 2021

As at 
December 31, 2020

$

$

$

$

$

$

$

$

$

$

$

181

207,032

207,213

366

-

366

206,847

62,054

1,259

63,313

$

765

318,710

319,475

518

-

518

318,957

95,687

979

96,666

The Company holds a position in Entrée Resources Ltd. (“Entrée”), a Canadian mining company with 
a carried joint venture interest in the Hugo North Extension and Heruga deposits located in Mongolia. 
As at December 31, 2021, this position represents approximately 26% of the common shares of Entrée 
on a non-diluted basis and is accounted for using the equity method. The Company records its share of 
Entrée’s profit or loss including adjustments, where appropriate, to give effect to uniform accounting 
policies. Using the quoted price of Entrée’s common shares, the fair value of Sandstorm’s interest was 
$31.7 million as at December 31, 2021.

The following table summarizes the changes in the carrying amount of the Company’s Entrée interest:

In $000s

Beginning of Year

Acquisition of investment in associate

Additions

Company’s share of net loss of associate

Currency translation adjustments

End of Year

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020 1

$

$

16,240

$

-

6,220

(690)

(494)

-

16,339

-

(99)

-

21,276

$

16,240

1 

Information is for the reconstructed period November 20, 2020 to December 31, 2020.

Summarized financial information for the Company’s investment in this associate, on a 100% basis 
and reflecting adjustments made by the Company, including fair value adjustments made at the time 
of acquisition and adjustments for differences in accounting policies is as follows:

98

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

In $000s

Administration expenses

Other (expense) income

Total net loss

Company’s share of net loss of associate

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020 1

$

$

$

(2,632)

(154)

(2,786)

(690)

1 

Information is for the reconstructed period November 20, 2020 to December 31, 2020.

In $000s

Current Assets

Non-current Assets

Total Assets

Current Liabilities

Non-current Liabilities

Total Liabilities

Net Assets

Company’s share of net assets of associate

7 

INVESTMENTS

As of and for the year ended December 31, 2021:

As at 
December 31, 2021

6,922

167,304

174,226

199

92,295

92,494

81,732

21,276

$

$

$

$

$

$

$

$

$

$

$

$

$

(123)

(333)

(456)

(99)

As at 
December 31, 2020

7,651

152,133

159,784

184

84,831

85,015

74,769

16,240

In $000s

SHORT-TERM INVESTMENTS

Jan. 1, 2021

Additions

Disposals

Fair Value 
Adjustment

Dec. 31, 2021

 ȯ Convertible debt instruments1

Total short-term investments

$

$

1,852

1,852

$

$

-

-

$

$

(1,722)

(1,722)

$

$

(130)

(130)

$

$

-

-

NON-CURRENT INVESTMENTS

 ȯ Common shares2

$

28,416

$

20,799

$

(15,882)

$

(11,847)

$

21,486

 ȯ Vale Royalties financial instrument

 ȯ Warrants and other1

 ȯ Convertible debt instruments1

Total non-current investments

Total Investments

-

1,143

15,525

45,084

46,936

$

$

-

-

-

$

$

20,799

20,799

$

$

(5,887)

(99)

(12,470)

(34,338)

(36,060)

$

$

5,887

622

(2,151)

(7,489)

(7,619)

$

$

-

1,666

904

24,056

24,056

1 

2 

Fair value adjustment recorded within net income for the year.

Fair value adjustment recorded within Other Comprehensive Income (loss) for the year.

99

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

During the year ended December 31, 2021, as part of the Company’s ongoing efforts to monetize its 
non-core assets, Sandstorm disposed of common shares of other mining companies with a fair value on 
disposition of $15.9 million. During the year, the Company acquired and disposed of certain derivative 
financial instruments relating to the market value of the Vale Royalties, classified as a level 2 fair value 
measurement, resulting in fair value gains of $5.9 million recognized within net income. Also, during 
the year, the majority of the Company’s convertible debentures were redeemed for common shares. 
The resulting mark-to-market loss on conversion of $2.3 million was recognized within net income.

As of and for the year ended December 31, 2020:

In $000s

Jan. 1, 2020

Additions

Disposals

Transfers

Fair Value 
Adjustment

Dec. 31, 2020

SHORT-TERM INVESTMENTS

 ȯ Convertible debt instruments1

Total short-term investments

$

$

10,801

10,801

$

$

-

-

$ (11,006)

$ (11,006)

$

$

556

556

$

$

1,501

1,501

$

$

1,852

1,852

NON-CURRENT INVESTMENTS

 ȯ Common shares2

$

52,325

$

11,456

$

(37,238)

$ (16,339)

$

18,212

$

28,416

 ȯ Warrants and other1

 ȯ Convertible debt instruments1

Total non-current investments

Total Investments

4,623

15,892

72,840

83,641

$

$

$

$

52

60

(5,732)

-

-

(556)

2,200

129

11,568

$ (42,970)

$ (16,895)

11,568

$

(53,976)

$

(16,339)

$

$

20,541

22,042

$

$

1,143

15,525

45,084

46,936

1 

2 

Fair value adjustment recorded within net income (loss) for the year.

Fair value adjustment recorded within Other Comprehensive Income (loss) for the year.

8  REVOLVING FACILITY AND 

DEFERRED FINANCING COSTS

In October 2021, Sandstorm amended its revolv-
ing credit agreement, allowing the Company to 
borrow up to $350 million and incorporating 
sustainability-linked performance targets to es-
tablish an Environment, Social, and Governance 
(“ESG”) linked credit facility (“ESG Revolving 
Facility”). The ESG Revolving Facility is for 
general corporate purposes, from a syndicate of 
banks including The Bank of Nova Scotia, Bank 
of Montreal, National Bank of Canada, Canadian 
Imperial Bank of Commerce, and Royal Bank 
of Canada (the “Syndicate”). The term of the 
ESG Revolving Facility is for four years and is 
extendable by mutual consent of Sandstorm 

and the Syndicate. The amounts drawn on the 
ESG Revolving Facility are subject to interest at 
LIBOR plus 1.875%–3.0% per annum, and the 
undrawn portion of the ESG Revolving Facility 
is subject to a standby fee of 0.422%–0.675% 
per annum, both of which are dependent on the 
Company’s leverage ratio.

The ESG Revolving Facility incorporates sus-
tainability-linked incentive pricing terms that 
allow Sandstorm to reduce the borrowing costs 
from the interest rates described above as the 
Company’s ESG performance targets are met. 
These targets focus on increasing the Company’s 
producing assets which report under sustain-
ability and climate related standards as well 
as maintaining and improving the Company’s 

100

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

The  Company  has  an  at-the-market  equity 
program (the “ATM Program”) whereby it is 
permitted to issue up to an aggregate of $140 
million worth of common shares from treasury 
at prevailing market prices to the public through 
the Toronto Stock Exchange, the New York Stock 
Exchange or any other marketplace on which the 
common shares are listed, quoted or otherwise 
trade. The volume and timing of distributions 
under the ATM Program is determined at the 
Company’s sole discretion, subject to applicable 
regulatory limitations. The ATM Program is 
effective until May 2022, unless terminated prior 
to such date by the Company. The Company has 
not utilized or sold any shares under the ATM 
Program.

The Company declared a dividend of CAD$0.02 
per share on December 15, 2021. The full amount 
of the dividend was recorded as a payable and 
included within trade and other payables as at 
December 31, 2021.

B  Stock Options of the Company

The Company has an incentive stock option 
plan (the “Option Plan”) whereby the Company 
may grant share options to eligible employees, 
officers, directors and consultants at an exercise 
price, expiry date, and vesting conditions to 
be determined by the Board of Directors. The 
maximum expiry date is five years from the 
grant date. All options are equity settled. The 
Option Plan permits the issuance of options 
which, together with the Company's other share 
compensation arrangements, may not exceed 
8.5% of the Company’s issued common shares 
as at the date of the grant. 

own external ESG rating and ensuring diverse 
representation at the senior management and 
board levels. 

Under the credit agreement, the Company is 
required to maintain a leverage ratio of net debt 
divided by EBITDA (as defined in the credit 
facility  agreement)  of  less  than  or  equal  to 
4.00:1.00 for each fiscal quarter. The Company 
must also maintain an interest coverage ratio of 
greater than or equal to 3.00:1.00 for each fiscal 
quarter. The ESG Revolving Facility is secured 
against the Company’s assets, including the 
Company’s stream, royalty and other interests 
and investments.

As of December 31, 2021, the Company was in 
compliance with the covenants and there was 
no balance drawn on the ESG Revolving Facility.

Deferred financing costs are amortized on a 
straight-line basis over the term of the ESG Re-
volving Facility. At December 31, 2021, deferred 
financing costs, net of accumulated amortization, 

were $2.6 million (December 31, 2020 — $1.7 
million).

9  SHARE CAPITAL AND RESERVES

A  Authorized Share Capital

The Company is authorized to issue an unlimited 
number of common shares without par value.

Under the Company’s normal course issuer bid 
(“NCIB”), the Company is able, until April 6, 
2022, to purchase up to 19.1 million common 
shares. The NCIB provides the Company with 
the option to purchase its common shares from 
time to time. 

During the year ended December 31, 2021, the 
Company, utilizing its current and previous 
NCIB, purchased and cancelled approximately 
5.5 million common shares. 

101

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

During the year ended December 31, 2021, the Company granted 2,968,000 options with a weighted 
average exercise price of CAD$7.18 and a fair value of $3.3 million or $1.11 per option. The fair value of 
the options granted was determined using a BSM using the following weighted average assumptions: 
grant date share price and exercise price of CAD$7.18, expected volatility of 30%, risk-free interest rate 
of 0.95%, dividend yield of 1.11%, and an expected life of 3 years. Expected volatility was determined 
by considering the trailing 3 year historical average share price volatility of similar companies in the 
same industry and business model.

A summary of the Company’s options and the changes for the period is as follows:

Options outstanding at December 31, 2019

Granted 

Exercised 

Options outstanding at December 31, 2020 

Granted 

Exercised 

Options outstanding at December 31, 2021

Number of options

Weighted average exercise 
price per share (CAD) 1

7,568,533

2,812,000

(1,253,430)

9,127,103

2,968,000

(855,761)

11,239,342

6.06

9.43

(4.42)

7.33

7.18

(4.96)

7.47

1 

For options exercisable in British Pounds Sterling (“GBP”), exercise price is translated to Canadian Dollars (“CAD”) using the period end 
exchange rate.

The weighted average remaining contractual life of the options as at December 31, 2021 was 3.26 years 

(year ended December 31, 2020 — 3.41 years). The weighted average share price, at the time of exercise, 
for those shares that were exercised during the year ended December 31, 2021 was CAD$7.74 per share 

(year ended December 31, 2020 — CAD$11.65).

A summary of the Company’s options as of December 31, 2021 is as follows:

Year of expiry

Number outstanding

2022

2023

2024

2025

2026

914,010

3,118,332

1,427,000

2,812,000

2,968,000

Vested

914,010

3,118,332

951,338

937,340

-

11,239,342

5,921,020

Exercise price per share 
(range) (CAD) 1

Weighted average exercise 
price per share (CAD) 1, 2

4.94–15.00

5.92

8.89

9.43

7.18

5.43

5.92

8.89

9.43

-

6.88

1 

For options exercisable in GBP, exercise price is translated to CAD using the period end exchange rate. 

2  Weighted average exercise price of options that are exercisable.

102

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

C  Restricted Share Rights

The Company has a restricted share plan (the “Restricted Share Plan”) whereby the Company may 
grant restricted share rights (“RSRs”) to eligible employees, officers, directors and consultants at an 
expiry date to be determined by the Board of Directors. Each restricted share right entitles the holder 
to receive a common share of the Company without any further consideration. The Restricted Share 
Plan permits the issuance of up to a maximum of 4,500,000 restricted share rights.

During the year ended December 31, 2021, the Company granted 343,200 RSRs with a grant date fair 
value of $1.9 million, a three year vesting term, and a weighted average grant date fair value of $5.64 per 
unit. As of December 31, 2021, the Company had 1,992,500 RSRs outstanding. 

D  Diluted Earnings Per Share

Diluted earnings per share is calculated based on the following:

In $000s 
(except for shares and per share amounts)

Net income for the year

Basic weighted average number of shares

Basic earnings per share

EFFECT OF DILUTIVE SECURITIES

 ȯ Stock options

 ȯ Warrants

 ȯ Restricted share rights

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020

27,622

$

13,817

193,974,313

187,507,754

0.14

$

0.07

$

$

1,684,992

-

2,164,175

2,732,900

4,318,675

2,348,511

Diluted weighted average number of common shares

197,823,480

196,907,840

Diluted earnings per share

$

0.14

$

0.07

The following table lists the number of potentially dilutive securities excluded from the computation of 
diluted earnings per share because the exercise prices exceeded the average market value of the common 

shares of CAD$8.76 during the year ended December 31, 2021 (December 31, 2020 — CAD$10.48).

Stock options

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020

4,241,250 

217,376 

103

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

10  INCOME TAXES

The income tax expense differs from the amount that would result from applying the federal and 
provincial income tax rate to the net income before income taxes.

These differences result from the following items:

In $000s

Income before income taxes

Canadian federal and provincial income tax rates

Income tax expense based on the above rates

INCREASE (DECREASE) DUE TO:

 ȯ Non-deductible expenses and permanent differences

 ȯ Non-taxable portion of capital gain or loss

 ȯ Withholding taxes

 ȯ Change in unrecognized temporary differences and other

Income tax expense

The deferred tax liabilities are shown below:

In $000s

DEFERRED INCOME TAX LIABILITIES:

 ȯ Non-capital losses

 ȯ Investments and other

 ȯ Stream, royalty and other interests

Total deferred income tax liabilities

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020

44,853

27%

12,110

$

$

1,627

$

348

2,178

968

24,276

27%

6,555

1,525

(433)

1,940

872

17,231

$

10,459

As at 
December 31, 2021

As at 
December 31, 2020

17,405

$

274

(35,973)

(18,294)

$

24,922

(735)

(29,664)

(5,477)

$

$

$

$

$

$

Deferred tax assets and liabilities have been offset where they relate to income taxes levied by the same 
taxation authority and the Company has the legal right and intent to offset. Non-capital losses have 
been recognized as a deferred income tax asset to the extent there will be future taxable income against 
which the Company can utilize the benefit prior to their expiration. The Company recognized deferred 

tax assets in respect of tax losses as at December 31, 2021 of $64.5 million (2020 — $92.3 million) as it 

is probable that there will be future taxable profits to recover the deferred tax assets.

104

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

The movement in net deferred income taxes is shown below:

In $000s

Balance, beginning of the year

Recognized in net income (loss) for the year

Recognized in equity

Recognized in other comprehensive income (loss) for the year

Balance, end of year

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020

$

$

(5,477)

$

(14,202)

65

1,320

(18,294)

$

4,107

(7,595)

357

(2,346)

(5,477)

The Company has deductible unused tax losses, for which a deferred tax asset has been recognized, expiring 
as follows:

In $000s

Non-capital loss carry-forwards

Location

Canada

$

Amount

64,465

Expiration

2030–2036

The aggregate amount of deductible temporary differences associated with capital losses and other 
items, for which deferred income tax assets have not been recognized as at December 31, 2021 are $15.1 

million (2020 — $13.0 million). No deferred tax asset is recognized in respect of these items because it 

is not probable that future taxable capital gains or taxable income will be available against which the 
Company can utilize the benefit.

11  ADMINISTRATION AND PROJECT EVALUATION EXPENSES

The administration expenses for the Company are as follows:

In $000s

Corporate administration

Employee benefits and salaries

Professional fees

Administration expenses before share-based compensation

Equity settled share-based compensation (a non-cash expense)

Total administration expenses

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020

$

$

$

3,198 

$ 

2,824 

983 

7,005 

$ 

3,193 

10,198 

$ 

2,128 

2,276 

924 

5,328 

3,007 

8,335 

Project evaluation expenses consists of employee benefits and salaries of $2.9 million (2020 — $2.5 

million), share-based compensation of $2.8 million (2020 — $2.6 million), and other of $2.1 million 

(2020 — $0.4 million).

105

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

12  SUPPLEMENTAL CASH FLOW INFORMATION

In $000s

CHANGE IN NON-CASH WORKING CAPITAL:

 ȯ Trade receivables and other

 ȯ Trade and other payables

Net (decrease) increase in cash

Common shares received on conversion 
of convertible debentures

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020

$

$

$

(4,213)

1,872

(2,341)

$

$

(553)

(2,169)

(2,722)

13,965

$

-

13  KEY MANAGEMENT COMPENSATION

The remuneration of directors and those persons having authority and responsibility for planning, directing 
and controlling activities of the Company are as follows:

In $000s

Salaries and benefits

Share-based payments

Total key management compensation expense

Year Ended 
December 31, 2021

Year Ended 
December 31, 2020

$

$

2,588

4,368

6,956

$

$

1,561

4,068

5,629

106

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

14  COMMITMENTS AND CONTINGENCIES

In connection with its Streams, the Company has committed to purchase the following:

Stream

Black Fox

Chapada

Entrée

Karma

Relief Canyon

Santa Elena

Vatukoula

% of Life of Mine Gold or 
Relevant Commodity 5, 6, 7, 8, 9, 10

8%

4.2%

5.62% on Hugo North Extension and 4.26% 
on Heruga

Per Ounce Cash Payment: 
lesser of amount below and 
the then prevailing market 
price of commodity 
(unless otherwise noted) 1, 2, 3, 4

$566

30% of copper spot price

$220

1.625%

20% of gold spot price

32,022 ounces over 5.5 years and 4% thereafter

20%

Varies

$468

25,920 ounces over 5.5 years and 2.9% 
thereafter

20% of gold spot price

Yamana silver stream

20%

30% of silver spot price

1 

2 

3 

Subject to an annual inflationary adjustment.

For the Relief Canyon stream, after receipt of 32,022 gold ounces (the cost of which is nil), the Company is entitled to purchase 4.0% of 
the gold and silver produced from the Relief Canyon Project for ongoing per ounce cash payments equal to 30%–65% of the spot price of 
gold or silver, with the range dependent on the concession’s existing royalty obligations.

For the Entrée Gold Stream, after approximately 8.6 million ounces of gold have been produced from the joint venture property, the price 
increases to $500 per gold ounce.

4  For the Entrée silver stream, percentage of life of mine is 5.62% on Hugo North Extension and 4.26% on Heruga which the Company can 

purchase for the lesser of the prevailing market price and $5 per ounce of silver until 40.3 million ounces of silver have been produced 
from the entire joint venture property. Thereafter, the purchase price will increase to the lesser of the prevailing market price and $10 per 
ounce of silver.

5 

For the Entrée Gold and silver stream, percentage of life of mine is 5.62% on Hugo North Extension and 4.26% on Heruga if the minerals 
produced are contained below 560 metres in depth.

6  For the Entrée Gold and silver stream, percentage of life of mine is 8.43% on Hugo North Extension and 6.39% on Heruga if the minerals 

produced are contained above 560 metres in depth.

7 

8 

For the Entrée copper stream, the Company has committed to purchase an amount equal to 0.42% of the copper produced from the Hugo 
North Extension and Heruga deposits. If the minerals produced are contained above 560 metres in depth, then the commitment increases 
to 0.62% for both the Hugo North Extension and Heruga deposits. Sandstorm will make ongoing per pound cash payments equal to the 
lesser of $0.50 and the then prevailing market price of copper, until 9.1 billion pounds of copper have been produced from the entire joint 
venture property. Thereafter, the ongoing per pound payments will increase to the lesser of $1.10 and the then prevailing market price of 
copper.

For the Chapada copper stream, the Company has committed to purchase an amount equal to 4.2% of the copper produced (up to an 
annual maximum of 3.9 million pounds of copper) until the mine has delivered 39 million pounds of copper to Sandstorm; then 3.0% of the 
copper produced until, on a cumulative basis, the mine has delivered 50 million pounds of copper to Sandstorm; then 1.5% of the copper 
produced thereafter, for the life of the mine. 

9  Under the terms of the Yamana silver stream, Sandstorm has agreed to purchase an amount of silver from Cerro Moro equal to 20% of the 

silver produced (up to an annual maximum of 1.2 million ounces of silver), until Yamana has delivered to Sandstorm 7.0 million ounces of 
silver; then 9.0% of the silver produced thereafter. 

10  Under the terms of the Vatukoula stream, after receipt of 25,920 gold ounces (the cost of which is 20% of the spot price), the Company is 
entitled to purchase 2.9% for the first 100,000 ounces of gold produced in a calendar year, and 2.55% for the volume of production above 
100,000 ounces.

107

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

As previously disclosed, Sandstorm became aware that a third party commenced legal proceedings against 
it in a Brazilian court. The proceedings involve severance owed to former employees of Colossus Miner-
ação Ltda., a Brazilian subsidiary company of Colossus Minerals Inc. (an entity with which Sandstorm 
entered into a Stream). Since these severance claims, estimated to be approximately $8 million, remain 
outstanding, the claimants are seeking to recoup their claims from Sandstorm. Sandstorm intends on 
defending itself as it believes the case is without merit.

Subject to certain milestones, the Company has $3 million remaining to remit with respect to the 
Vatukoula Gold Stream agreement. The Vatukoula Gold Stream is further discussed in note 5 (b).

Sandstorm entered into an agreement to subscribe for shares of Americas Gold in an amount up to $10.8 
million in 2022, at the option of Americas Gold. 

In December 2021, the Company announced a $60 million financing package with Bear Creek Mining to 
facilitate its acquisition of the producing Mercedes gold-silver mine in Mexico from Equinox Gold Corp. 
The financing package includes a $37.5 million Gold Stream and a $22.5 million convertible debenture. 
The transaction is expected to close by March 31, 2022 and gold deliveries to Sandstorm will commence 
immediately thereafter.

15  SEGMENTED INFORMATION

The Company’s reportable operating segments, which are components of the Company’s business where 
separate financial information is available and which are evaluated on a regular basis by the Company’s 
Chief Executive Officer, who is the Company’s chief operating decision maker, for the purpose of assessing 
performance, are summarized in the tables below:

108

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

For the year ended December 31, 2021:

In $000s

Product

Sales

Royalty 
revenue

Cost of sales 
excluding 
depletion

Depletion

Stream, 
royalty 
and other 
interests 
impairments

Gain on 
revaluation 
of Vale 
Royalties 
financial 
instrument

Income 
(loss) 
before taxes

Cash flows 
from 
operating 
activities

GOLD

$

- $

9,844 $

- $

815 $

- $

- $

9,029 $

9,444

Aurizona 
Brazil

Black Fox 
Canada

Bracemac-McLeod1 
Canada

Chapada 
Brazil

Diavik 
Canada

Fruta del Norte 
Ecuador

Houndé 
Burkina Faso

Karma 
Burkina Faso

Relief Canyon 
United States

Santa Elena 
Mexico

Vale Royalties 
Brazil

Yamana silver 
stream 
Argentina

GOLD

4,154

-

1,309

1,888

VARIOUS

-

5,487

-

1,545

COPPER

15,118

-

4,541

2,963

DIAMONDS

GOLD

GOLD

GOLD

-

-

-

4,065

GOLD

10,499

GOLD

9,786

7,647

6,367

3,803

-

-

-

-

-

-

3,372

2,304

1,610

824

1,935

-

4,711

2,568

280

IRON ORE

-

4,398

-

1,444

SILVER

25,460

-

7,603

10,415

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

957

2,845

3,942

4,995

7,614

10,577

4,275

7,097

4,063

4,465

2,193

3,802

1,306

3,241

5,788

10,499

6,938

7,357

(5,887)

8,841

198

-

-

7,442

17,857

5,402

8,658

Other2

VARIOUS

2,640

5,592

-

2,422

408

Total Segments

$

71,722 $

43,138 $

16,845 $

35,704 $

408 $ (5,887) $

67,790 $

91,035

CORPORATE:

 ȯ Administration & Project 

evaluation expenses 

 ȯ Foreign exchange loss

 ȯ Loss on revaluation of 

investments

 ȯ Finance (expense) 

income, net

 ȯ Other 

Total Corporate

Consolidated

$

$

$

- $

- $

- $

- $

- $

- $ (17,968) $ (11,492)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(645)

(1,659)

-

-

(1,654)

38

(1,011)

1,558

- $

- $

- $

- $

- $

- $ (22,937) $

(9,896)

71,722 $

43,138 $

16,845 $

35,704 $

408 $ (5,887) $

44,853 $

81,139

1 

Royalty revenue from Bracemac-McLeod consists of $2.8 million from copper and $2.7 million from zinc.

2  Where a stream and royalty interest represents less than 10% of the Company's sales, gross margin or aggregate asset book value and represents 
an interest on gold, silver or other metal, the interest has been summarized under Other. Other includes revenue from Gualcamayo, Emigrant 
Springs, Mine Waste Solutions, Thunder Creek, HM Claim, Triangle Zone, Ming and others. Includes revenue from interests located in Canada of 
$4.9 million, Argentina of $1.0 million and other of $2.3 million. Includes revenue from gold of $7.6 million and other base metals of $0.6 million. 

109

Aurizona 
Brazil

Black Fox 
Canada

Bracemac-McLeod1 
Canada

Chapada 
Brazil

Diavik 
Canada

Fruta del Norte 
Ecuador

Houndé 
Burkina Faso

Karma 
Burkina Faso

Relief Canyon 
United States

Santa Elena 
Mexico

Yamana silver 
stream 
Argentina

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

For the year ended December 31, 2020:

In $000s

Product

Sales

Royalty 
revenue

Cost of sales 
excluding 
depletion

Depletion

Stream, 
royalty 
and other 
interests 
impairments 

Income 
(loss) 
before taxes

Other

Cash flows 
from 
operating 
activities

GOLD

$

- $

8,850 $

- $

1,067 $

- $

- $

7,783 $

7,950

GOLD

3,693

-

1,194

1,014

VARIOUS

-

2,946

-

1,485

COPPER

9,904

-

3,021

2,914

-

-

-

-

-

-

1,485

2,500

1,461

3,234

3,969

6,883

2,085

7,862

392

(7,623)

3,075

DIAMONDS

GOLD

GOLD

GOLD

GOLD

GOLD

-

-

-

8,184

7,096

9,749

SILVER

19,199

2,716

3,302

8,740

-

-

-

-

-

-

-

1,256

3,816

1,619

3,843

-

2,820

2,552

312

5,660

10,119

-

-

-

-

-

-

-

-

-

-

-

-

-

2,046

1,408

4,924

6,633

2,722

6,438

4,276

7,096

6,885

7,100

3,420

13,540

5,238

7,553

Other 2

VARIOUS

835

7,811

-

2,393

1,015

Total Segments

$

58,660 $

34,365 $

14,046 $

33,124 $

8,877 $

392 $

36,586 $

73,410

CORPORATE:

 ȯ Administration & Project 

evaluation expenses 

 ȯ Foreign exchange loss

 ȯ Gain on revaluation of 

investments

 ȯ Finance (expense) 

 income, net

 ȯ Other 

Total Corporate

Consolidated

$

$

$

- $

- $

- $

- $

- $

- $ (13,868) $

(7,728)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(345)

3,830

-

-

(1,792)

94

135

(135)

(160)

- $

- $

- $

- $

- $

135 $ (12,310) $

(7,794)

58,660 $

34,365 $

14,046 $

33,124 $

8,877 $

527 $

24,276 $

65,616

1 

Royalty revenue from Bracemac-McLeod consists of $1.4 million from copper and $1.5 million from zinc.

2  Where a stream and royalty interest represents less than 10% of the Company's sales, gross margin or aggregate asset book value and represents 

an interest on gold, silver or other metal, the interest has been summarized under Other. Other includes royalty revenue from Gualcamayo, 
Emigrant Springs, Mine Waste Solutions, San Andres, Thunder Creek, Ming and others. Includes royalty revenue from royalty interests located 
in Canada of $4.0 million, the United States of $0.6 million, Argentina of $1.1 million, Honduras of $1.0 million and other of $1.9 million. Includes 
royalty revenue from gold of $8.1 million and other base metals of $0.5 million.

110

Q4 2021

Notes to the Consolidated Financial Statements 

SECTION 3

Total assets as of:

In $000s

Aurizona

Black Fox

Bracemac-McLeod

Chapada

Diavik

Fruta del Norte

Hod Maden 1

Houndé

Hugo North Extension and Heruga2

Karma

Relief Canyon

Santa Elena

Vale Royalties

Vatukoula

Yamana silver stream

Other3

Total Segments

CORPORATE:

 ȯ Cash and cash equivalents 

 ȯ Investments 

 ȯ Other assets 

Total Corporate

Consolidated

December 31, 2021

December 31, 2020

$

11,124

$

5,504

1,089

49,709

7,742

31,174

69,131

31,179

56,628

7,263

18,910

1,152

120,543

27,716

37,954

93,221

570,039

$

16,166

$

24,056

10,597

50,819

620,858

$

$

$

$

$

$

11,539

7,391

2,142

52,672

10,564

33,377

102,484

33,374

51,592

9,356

23,621

1,511

-

-

48,369

89,724

477,716

113,776

46,936

11,493

172,205

649,921

1 

2 

Includes royalty interest of $5.8 million and investment in associate of $63.3 million at December 31, 2021. Includes royalty interest of 
$5.8 million and investment in associate of $96.7 million at December 31, 2020.

Includes stream interest of $35.4 million and investment in associate of $21.3 million at December 31, 2021. Includes stream interest of 
$35.4 million and investment in associate of $16.2 million at December 31, 2020.

3  Where a stream and royalty interest represents less than 10% of the Company's sales, gross margin or aggregate asset book value and 

represents an interest on gold, silver or other metal, the interest has been summarized under Other. Includes Mt. Hamilton, Prairie Creek, 
Gualcamayo, Emigrant Springs, Mine Waste Solutions, Thunder Creek, Hackett River, Lobo-Marte, Agi Dagi & Kirazli, HM Claim, Triangle 
Zone, Ming, and others.

111

SECTION 3

Notes to the Consolidated Financial Statements 

2021 Q4

Non-current assets by geographical region as of:

In $000s

North America

 ȯ Canada

 ȯ USA

 ȯ Mexico

South & Central America

 ȯ Argentina

 ȯ Brazil

 ȯ Ecuador

 ȯ French Guiana 

 ȯ Chile

Africa

 ȯ Burkina Faso

 ȯ South Africa

Other

 ȯ Turkey

 ȯ Mongolia

 ȯ Fiji

 ȯ Australia

 ȯ Other

Consolidated

December 31, 2021 1

December 31, 2020 1

45,917

$

41,660

4,034

51,627

$

177,640

29,675

5,160

2,460

38,565

$

2,745

72,917

$

57,271

27,590

3,220

2,717

54,013

39,113

4,598

62,039

65,075

31,977

5,160

2,460

41,749

2,980

106,402

52,235

-

3,401

4,258

563,198

$

475,460

$

$

$

$

$

1 

Includes Stream, royalty and other interests (note 5) and Investment in associate (note 6).

16  SUBSEQUENT EVENT

Subsequent to year end, the Company announced that it had reached an agreement with Royalty North 
Partners Ltd. to sell its 30% interest in Hod Maden and its equity interest in Entrée. In consideration, 
Sandstorm will receive a flagship Gold Stream on Hod Maden and a portion of debt and equity in the 
resulting issuer. The transaction is subject to various closing conditions and is expected to close in the 
second half of 2022. The accounting for the transaction will be finalized on closing based on the facts 
and circumstances at that time. With this transaction, Sandstorm intends to unlock additional value in 
Hod Maden through the re-rating of the asset as a Gold Stream in its portfolio and further repositions 
Sandstorm as a pure-play precious metals royalty and streaming company.

112