Sandstorm Gold has entered a definitive agreement with Evolve Strategic Element Royalties for the sale of various non-precious metal royalties.

This deal, valued at $21m (C$28.72m) in cash plus future proceeds from the Copper Mountain Royalty, is set to complete in the second quarter (Q2) of 2024, subject to customary closing conditions.

The royalties acquired by Evolve cover Highland Valley Copper and Copper Mountain North Pit, among others.

This transaction aligns with Sandstorm’s strategy to monetise non-core assets and accelerate debt repayment.

Evolve has obtained financing commitments surpassing the cash purchase price.

Sandstorm anticipates receiving the cash purchase price upon the fulfilment of closing conditions, including the lapse of pre-emptive rights held by project operators.

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Since Q3 2023, Sandstorm has sold more than $50m in non-core royalty and equity investments, with around $40m in cash consideration.

The company continues to prioritise balance sheet deleveraging and investing in high-return initiatives such as the repurchase of undervalued shares through the Normal Course Issuer Bid (NCIB).

Despite the sale, Sandstorm’s production guidance remains unaffected, with the Retained Copper Mountain Royalty and the early-stage nature of several assets in the Royalty Package.

The company maintains its 2024 production guidance of 75,000–90,000 gold equivalent ounces (oz), with an expected increase to nearly 125,000oz within five years.

Additionally, Sandstorm’s board of directors endorsed the use of the renewed NCIB, allowing the company to buy back its common shares when they are perceived to be undervalued by the market.

This move is part of a broader strategy to enhance shareholder value in the current commodity price environment.