06:25 AM EDT, 04/09/2024 (MT Newswires) -- National Bank of Canada overnight Monday noted that Sandstorm Gold Ltd. ( SAND ) announced first-quarter preliminary sales of around 20,300 attributable gold equivalent ounces, exceeding the bank's estimate of 19,615 GEOs. The company also reported realized preliminary revenue of US$42.8 million, up from National Bank's estimate of US$40.5 million.

Preliminary cost of sales excluding depletion was US$5.7 million, compared with the bank's estimate of US$5.0 million, providing a cash operating margin of around US$1,781 per ounce.

National Bank said it will formally incorporate pre-released revenues and costs as part of its first-quarter gold preview in the coming days. Preliminary revenue and COGS would provide a lift of US$1.6 million to the bank's current first-quarter EBITDA estimate of US$1.5 million, an increase of 5.1%.

Production is on track to reach 2024 guidance of 75,000 to 90,000 GEOs, with production at 24.6% of midpoint and 27.1% of the low end of guidance. The bank estimates production of 78,782 GEOs for 2024.

The bank left Sandstorm with an Outperform rating and a price target of C$8.50, citing the company's improved asset diversification and growth outlook. National said SSL continues to trade at a discounted 1.09x NAV compared to intermediate royalty and streaming peers (TFPM and OR) at 1.42x. It also said while the company continues to digest recent acquisitions, management remains focused on deleveraging efforts, which can occur quickly in the current commodity price environment. The more diversified and expanded portfolio will ultimately warrant a re-rating towards that of larger-cap peers (FNV, WPM, RGLD) at 2.02x NAV, the bank added.