Sandstorm Gold (NYSEMKT:SAND) is a small-cap gold company with a pretty unique business model: the company gives capital to miners who are looking to build a mine and in return, Sandstorm receives a gold stream that gives the company the right to buy gold at a fixed price per ounce, for the life of the mine.
This business model has a number of key benefits:
- Gold mining tends to be a very capital intensive business because of the many ongoing capital requirements of operating a mine. For example, exploration to replace lost reserves is just one part of operating a mine, costing millions of dollars each year.
However, Sandstorm only has to make one original upfront payment...
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