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Sandstorm Gold acquires 0.9% royalty on Lundin gold project for almost US$33M

Sandstorm Gold Ltd. acquired a 0.9% net smelter royalty on precious metals produced from over 644 square kilometers comprising the preproduction-stage Fruta del Norte gold-silver property in Ecuador from a private third party for about US$32.8 million in cash.

Lundin Gold Inc. is constructing the project. The first gold pour is expected in the fourth quarter, and commercial output is slated for the first half of 2020 for an underground operation with an initial life of 15 years.

Fruta del Norte hosts reserves that support average annual production of more than 330,000 ounces over the first 13 years of operations.

In an investor presentation accompanying the announcement, Sandstorm said it expects record after-tax net cash flow in 2019 while estimating the measure at US$68 million in 2020, increasing to US$121 million in 2023.