Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Sandstorm Gold Ltd (NYSEMKT:SAND)

Q3 2012 Earnings Call

October 26, 2012 11:30 AM ET

Executives

Denver Harris – Manager, IR

Nolan Watson – President and CEO

Erfan Kazemi – CFO

David Awram – EVP

Analysts

Heiko Ihle – Euro Pacific Capital

Eric Winmill – Casimir Capital

Dan Davis

Brian McKay

Robert Carlson – Janney Montgomery Scott

Graham Javed

Matt Williams – Perpetual Investments

Operator

Good morning. My name is Michelle and I will be your conference operator today. At this time, I would like to welcome everyone to Sandstorm Gold’s Third Quarter Conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. (Operator Instructions)

I would now like to turn the call over to Mr. Denver Harris. Please go ahead sir.

Denver Harris

Good morning everyone, and thank you for participating in today’s third quarter conference call. With me as usual, I have Sandstorm’s President and CEO, Nolan Watson; CFO, Erfan Kazemi; and Executive Vice President, David Awram.

Before we get started, I would like to bring to your attention that some of the commentary on today’s call may contain forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Lastly, please note that any discussion of financial figures is in US dollars.

I will pass it over to Nolan for third quarter summary.

Nolan Watson

Thank you, Denver, and thank you ladies and gentlemen for joining today’s call. The third quarter was a memorable one for Sandstorm not just because we had record revenue, but because we accomplished a number of other objectives as well and I’ll walk through a few of those here.

In August, the company shares began trading on the NYSE market and a group of the Sandstorm employees had the opportunity to ring the opening bell at the New York Stock Exchange. And shortly after that, our market cap hit the $1 billion mark for the first time and we also during the quarter made our debut on U.S. network television and I personally had the opportunity to appear on Fox and CNBC. And during the quarter we also launched and completed a $100 million equity financing as we’ve always promised to shareholders that we would not launch or raise money through an equity financing unless we had deal to do in the pipeline that was specifically identified. In the spirit of that, immediately closing or immediately after that financing we’re able to announce the $10 million contribution to Luna for that amendment for the Phase 1 expansion of Luna Gold to Aurizona mine.

And we are also able to complete to run out the $60 million Colossus stream where we purchased 1.5% to the gold and 35% to the platinum for the life of the mine, and I’m going to let Dave talk to the Serra Pelada mine a little bit later in this call. And all of that happened just in the last quarter. And when I look at things and think that 3.5 years ago, we were a $4 million market cap shell company and I see what this team has been able to do over the last 3.5 years, I get pretty excited as to what I think this team can do over the next 10 years.

Now having said all that, there are three things that I just want to speak to in a little bit more detail before I hand it over to Erfan to talk about the accounting figures and the results for the quarter. And those three things are the Luna amendment (inaudible) to our thinking as to why we did that. The second thing that I want to speak in a bit more detail is about the undrawn revolving credit facility and then I want to speak a little bit to our pipeline, our deal pipeline specifically.

So the first of those three things, the Luna amendments. We’ve had a number of questions and comments from investors, a number of whom are pretty excited about the Luna amendments announcement but some investors had questions as to why did we do the Luna amendments if we were not obligated to pay $10 million. And I’d just like to walk everyone through that thinking. Luna, as most of you’re aware has a significant amount of exploration upside, the deposit looks more and more fantastic every time, they do more work on it and find more ounces and do more drilling.

The resource continues to get larger and larger, and a lot of people are excited about how large the asset can get and how much we can produce in the future. One of the concerns that some investors that expressed was what if Luna who has other assets in the nearby jurisdiction were to find another gold mine and start displacing ounces in the mill with their gold is not on our land. So one of the things that we actually did in the amendment is to ensure that gold can only be processed through Luna’s mill, if that gold was mined from the area of interest that Sandstorm has an interest in.

So that should calm the concerns of our various investors. Having said all that, I don’t think it was a take or significant give on Luna’s perspective because it’s unlikely that it would make economic terms to do so anyway, Luna has got a lot of fantastic exploration upside ground but in virtually all reasonable scenarios, they would have to go build a separate mine, anyway to take advantage of that. So I think it was a good win for Sandstorm. I think its amendment was a good win for Luna.

And even taking that one step further, we’re calling this the Phase 1 expansion for a reason. We believe that there should be a Phase 2 expansion and so does Luna and they’re working on the analysis and technical work to see what that would look like and how much that would cost and what size the mine would be. And one question that a lot of investors have had is, how is Luna going to afford to pay for a significant expansion beyond Phase 1, and us making this amendment, giving Luna a little bit of money, potentially loaning them a little bit of money and helping ensure that the Phase 1 expansion is completed will allow Luna to get their production ramped up.

It will allow Luna to get more cash flow and it should calm anyone’s concerns as to whether or not that they will have all of the capital required to do what would become a Phase 2 expansion. So we think that this is – again it’s a great thing for Luna, it’s a great thing for Sandstorm. It shows that Sandstorm is willing to be a partner that it’s willing to do smart deals and amendments and be a good flexible partner when a win-win situation can be created.

So that’s enough of that. And I’ll move on to quick discussion here of our undrawn revolving facility. Currently we have a $50 million undrawn facility with Scotia Bank. We have an issued conversations with the banks to increase the size of that facility. Those conversations are ongoing. We just want to ensure that because our deal pipeline is strong, that we have all of the various tools in our toolkit to ensure that we can afford various deals as and when we do them and so we are actively and proactively working on increasing the size of that revolving facility.

And then the third thing I wanted to speak about briefly is the deal pipeline. The equity markets appeared to have opened a little bit here and it’s become very apparent to us and many other companies that they have not opened nearly as much as everyone thinks they have and most companies in the mining industry are still struggling in a material way to raise the capital required to build their assets.

And as a result of that, our deal pipeline is very, very strong and we’ve got a number of things not only at an early stage, we’ve also got a number of acquisitions at more advanced stages that we are currently doing due diligence on, and we are working through the negotiation of those things. And although I can’t guarantee that any of those will get done because in many cases we haven’t completed all of our due diligence and we haven’t finalized all of the detailed negotiation.

There is enough things in the pipeline that I am confident that here in the New Year probably Q1 or Q2 we should have more deals to announce. And so that’s the update. I’m pretty excited about what the future looks like. We finally have a significant amount of capital, a significant amount of cash flow, a significant amount of debt facility that we can draw to take advantage of all these opportunities in our pipeline and I think the future looks pretty bright for Sandstorm.

And so with that, I will hand it over to Erfan and he can talk about the quarterly results.

Erfan Kazemi

Thanks Nolan. This quarter we posted record revenues with gold sales of 9,066 ounces, which is a slight decrease from last quarter and is primarily attributable to an 84% decrease in gold deliveries from the Ming Mine. As anticipated Rambler commissioned the copper cost and trigger at Ming during the third quarter and switched production from the 1806 gold zone to the 1807 copper zone.

The 75% increase in gold deliveries relating to the Aurizona Mine as well as strong production from our other partners, almost all that made up for the production decline at Ming. Breaking down our portion of gold sales by mine, Aurizona had a record quarter whereby Sandstorm sold 3,888 ounces. From the Black Fox Mine we are just over 2,671 ounces, a 33% increase over Q2 2012, reflecting the continued ramp of operation.

As we discussed during our last conference call, gold production from the Ming Mine was expected to decrease this quarter. Ming ended up delivering 410 ounces of gold compared to 2,574 in the second quarter. We sold 1,585 ounces from Santa Elena and 512 ounces from Bachelor Lake. We expect Bachelor Lake to ramp up more significantly during 2013. Based on the quarterly production, we revised our 2012 guidance to 31,000 ounces to 34,000 ounces of gold, increasing to approximately 60,000 ounces of gold equivalent by 2015.

Moving onto other metrics. Gold was sold at an average of $16,066 per ounce with an average cash cost of $408 resulting operating margins of $1,258. As everyone knows cash costs and capital expenditures are continuing to rise in the mining sector and our results clearly demonstrate the strength of our business model where we have fixed costs ongoing that are fixed forever.

In our most recent stream with Colossus Minerals, our cash costs are fixed at $400 per ounce of gold and $200 per ounce of platinum. Our cash position at quarter end was approximately $104 million. We had $10.6 million in operating cash flow and although that’s slightly lower than Q2 2012, it is a 24% increase over the comparable period in 2011 and a $147 million from the financing activities, largely related to the bond deal financing that Nolan discussed earlier.

These inflows were offset by $77 million in investing activities largely attributable to our gold stream acquisition. Overall with over a $100 million cash on hand combined with an undrawn $50 million revolving line of credit and over $3 million in cash flow coming in on a monthly basis, Sandstorm is well capitalized to execute on a growth strategy which is continued to acquire gold stream.

That’s all I have. Dave, over to you.

David Awram

Okay, great. Thanks Erfan. So I’m going to do a little bit of a quick asset update, instead going through each one of the project individually. Although everything has performed well, performed on target particularly in Luna, we’ve seen a continued increase – ongoing consistent increase on a monthly basis of the production there. There is not much new news kind of coming out those assets, instead what I’ll like to talk about is Colossus Minerals and Serra Pelada acquisition and then a little bit about Black Fox and some of the most recent (inaudible).

So for Serra Pelada, the deal we completed very recently. This is a historical producer but not like many other historical producers. It was really mined in the 1970s and 80s by garimpeiros or artisanal type miners that produced over 2 million ounces of gold from what is really identified as a relatively small pit. And there is anecdotal evidence that there would substantially more ounces coming out of that just the 2 million.

The projects was owned by this kind of cooperative of garimpeiros called COOMIGASP and that’s where Colossus did the JV with and are now the active operators of the asset. The COOMIGASP is still involved. It’s a interesting deposit. It’s really unique geologically. There is not really many comparative type deposits around the world, which can make you think it’s a little risky but it’s I think really offset on the fact that the resource has or the grade at least has been spectacularly high in many areas of the deposits. It is hosted in what could be termed as challenging rock conditions, but certainly not in conditions that I haven’t seen mine before.

And it does not have a current resource at this point but that’s really because a nature of the difficulties in drilling it, and really the type of rock that it’s hosted in. Now normally that would make me quite concerned but I did was able to spend a lot of time on the site and a lot of time with the geologist and really spending more time ever going over every single assay and every single drillers that they have to try and determine whether or not this was actually the mine.

The result of that I was quite pleased with what I saw and not only did I see something that I think will become mine and we’ll be able to develop a resource of eventually, I see something that on a per tonne basis is going to be a very profitable type of operation going forward and has a lot of upside associated with it. So and then metallurgically we were quite though we did the unique type of deposit, we’re quite pleased with the work that Colossus has put into it.

The actual ultimate flow sheet for the metallurgy and the extraction is quite simple in the end and it should prove to be quite effective. We are obviously very eagerly anticipating some of the news coming out of there as they continue doing their underground drilling. And then later on this year or into the early next year, going in and actually getting a little mini bulk sample in the main Aurizona this deposit. So I hope that we can expect big things on this project. We are going to be receiving not just the gold, but the platinum from it and then also the palladium which is going into Sandstorm Metals and Energy. We certainly see this as a big growth story for the company going forward and we see the potential for some very strong upside in the asset.

The other thing I’d like to update on is really just Brigus Gold that some of the most recent drilling on the Black Fox deposit. It’s been a long time since they’ve really put any holes into the Black Fox deposit itself, but as of this summer they completed their underground exploration drift and they have started putting some holes into it. I had a chance to go down there in this summer time and had depth [ph] on the faces, we saw some great looking kind of results and then just yesterday, Brigus put out a news release describing some of the intersections from that first ground of underground drilling, with some really great bonanza grades.

What we are seeing in this project is increasing grades as you go down in depth. This is something that we’re hoping we would see and we’re starting to see that emerge. So as we see the project going forward and more drilling coming out, I think we can be hopeful that they will increase their reserves and resources and potentially even increase their grade going forward. So that’s pretty much it in terms of the onset update, I’d like to give right now.

With that I can turn it back to the operator. If there is, any other further questions on specific assets I would be more than happy to answer them?

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Heiko Ihle. Your line is open.

Heiko Ihle – Euro Pacific Capital

Thank you very much and congratulations guys.

Nolan Watson

Thank you.

Erfan Kazemi

Thank you.

Heiko Ihle – Euro Pacific Capital

When you made the Serra Pelada stream acquisition from Colossus, you guys gave the palladium stream back to Sandstorm Metals and Energy. Is there something that we should expect you guys to do again in the future and to sort of building on that, I mean given there was only $15 million anyway, why didn’t you just keep it on your books, so I guess nothing else is really been announced so far? I guess what I’m saying is were you closer to an acquisition then than you are now?

Nolan Watson

In terms of keeping it on our books, so I’ll address the issue of why we put the palladium in Sandstorm Metals and Energy. The deal was originally approached to us at Sandstorm, do you want to buy a platinum and palladium stream? And we said well, it’s kind of precious metal, kind of industrial commodity, doesn’t really fits Sandstorm Metals and Energy, it doesn’t really fully fit in Sandstorm Gold and after a number of meetings with our management team internally, we said if we go back and say we wanted to be a gold, platinum and palladium stream and gold clearly fitting into the Sandstorm Gold box. Palladium in my mind clearly fitting in the Sandstorm Metals and Energy box because despite the fact that the price of palladium is high and some people referred to that as a precious metal. There is nothing precious about palladium it’s fully an industrial commodity.

And then platinum would be what I would consider a hybrid of the two. It has elements that are industrial in nature but it also has elements of being a precious metal. In fact when I got married, when I was much younger I wanted a platinum wedding ring but couldn’t afford it, so I end up having a gold wedding ring. So at the end of the day where we settled out was let’s put the gold and the platinum in Sandstorm Gold, let’s put the palladium in Sandstorm Metals and Energy and both of the shareholders had a win-win on both sides.

Heiko Ihle – Euro Pacific Capital

Got you. So what I was saying earlier about sort of planning the acquisition that didn’t come through, there was none of that sort that went on?

Nolan Watson

There is always acquisitions, I mean our pipeline right now has probably 40 things in it and there is always acquisitions that we’re working on that will fall through and other ones will fall up on the table and what we try to do is get our deals in continuing to turn about 40 things, 30 to 40 things depending on how full the pipeline is, and you hope that the best deal will pop out and that’s kind of how we manage the corporate development side.

So we’re always having things fall through but we’re always having the good opportunities come in the door and on the whole net end up with two or three deals a year.

David Awram

Davie Awram here. Just to give you some background, here at Sandstorm between really the two companies we have six senior corporate development people that are kind of basically almost in the investment bankers types which are looking through and doing serious analysis on at least 300 deals per year. So it really is a matter of yes, certainly there are going to be deals that we’d like to do that don’t end up happening but for the most part it’s deals that we were going through and due diligence or for whatever reasons the project doesn’t fall, this comes through.

So yes, I mean our business is really going through and looking at as many projects as possible and just trying to focus in on those quality ones and we’re going to get in those completed.

Heiko Ihle – Euro Pacific Capital

Well thanks for taking my questions.

Nolan Watson

Yes, no problem. Thank you.

Operator

Your next question comes from Eric Winmill. Your line is open.

Eric Winmill – Casimir Capital

Good morning guys, thanks for taking my call. Just had a couple of quick questions here. Firstly, I guess on the new acquisitions front, I wonder if you can comment on any jurisdictions that you’re looking at it particular or areas where you really don’t want to go.

Nolan Watson

Well yes in terms of the areas that we are looking at, the one – I mean it’s still North America, South America and safe jurisdictions. We have looked at some other assets in Brazil. We’ve looked in Canada and the U.S. These are kind of some more Australia. These are place where we’ve taken a look at some projects. Even in Europe, in some of those jurisdictions and a few in West Africa. Places that we aren’t going to go are Russia, China, we’re not overly enthusiastic about places like Argentina either and then Venezuela and Bolivia are very, very unlikely as well.

So we are really trying to mitigate risk but yes, we are looking at places – some places in West Africa we find suitable jurisdictions. One of those jurisdictions is not South Africa. We would now look at those projects but there are some projects, I mean as we get a little bit larger, we feel we can take a little more of a portfolio approach and as long as we can get better value for some jurisdictions maybe consider a little bit riskier. We’ll take a look and see if there is a potential deal to be done there.

Eric Winmill – Casimir Capital

Okay, thanks. That’s helpful. And also I know it’s not a big part of the portfolio but just wondered if there was any updates on Summit and what’s happening there, looks like maybe a merger or something is on?

Nolan Watson

Yes, Summit is working on a few different alternatives, so they need some more capital into their company. And what we’ve done is just told them don’t worry about delivering us gold, why you need that capital, go find that capital by a merger or other means and it looks they are getting traction on that front.

And once that’s complete, we are going to slightly amend the agreement to delay some of the amounts that they owe us but the mine is still operating right now, it’s still continuing to produce and in fact they’re ramping up production as it goes. So despite the fact that they don’t – they got a little bit behind (inaudible) in terms of capital. The mine is starting to look better and better from a technical perspective.

David Awram

Yes and from a reserve and resources perspective, I mean it still looks solid, I mean they’re still reporting a reasonable grade and they’re producing a very good concentrate. It’s just a matter of kind of – one of these small mines it’s tougher for being an undercapitalized going into a fair number of years here. So hopefully they can kind of get back on their feet now that they have, they’ve ramped up and got close to a commercial production level on a consistent basis. They can move the project forward as we original saw moving.

Eric Winmill – Casimir Capital

Okay, great. I appreciate it and it looks like a good quarter overall. Thank you.

Nolan Watson

Thank you.

Operator

Your next question comes from Dan Davis [ph]. Your line is open.

Dan Davis

Good morning, it looks like looking over your news this Brigus Mine that they’ve repurchased some of your interests, could you go through that transaction?

Nolan Watson

Yes, they have not repurchased some of our interests yet. We’ve done a deal with them where we get 12% of their production and they have the right until the end of this year to buyback up to 6% of that by paying us a 30% premium to what we paid them. And they have publicly announced their intention to buyback 4% of the 12% which would take us to 8%. They have notified us that they are going to do that but they have not yet done that.

Dan Davis

Then after the end of the year though that option no longer exists on the remaining portion?

Nolan Watson

Correct.

Dan Davis

Okay, thank you.

Operator

Your next question comes from Edward Gordon [ph]. Your line is open. Mr. Gordon, your line is open. Your next question comes from Brian McKay [ph]. Your line is open.

Brian McKay

Good morning. I wonder if you could comment on the ramp up at Bachelor Lake. It seems to me that there have been some delays in the ramp up and I wonder what your expectations are over the next six to 12 months as they move towards an annualized run rate of 60,000 ounces of gold? Thank you.

David Awram

Well in terms of the ramp up that we saw it going forward is, they are actually not that far behind on it. We had an opportunity to see that project a couple of times this year. They got their bulk samples that was done in early – well in the late kind of spring time and into the early summer. That was actually very successful bulk sample that they completed.

For 2013 we are guiding 30,000 ounces which is really I think very close to what we’ve been saying all along for the project. They did get their commercial license and their permits to be able to mine at the appropriate rate that they were looking for. So they are going through that process, I mean I think maybe from their guidance that they’ve been giving to the market, they are maybe a little bit slow but I think they’re pretty right on track what we’ve been trying to tell everybody to expect of the Bachelor Lake mine.

Brian McKay

Thank you.

Operator

Your next question comes from Robert Carlson [ph]. Your line is open.

Robert Carlson – Janney Montgomery Scott [ph]

Just a question, more of a industry than as it relates specifically to Sandstorm. But with Basel III coming on I think January 1st, what’s the doing to the ability to deals prior to January 1st, I mean are people holding back or its putting premium on existing properties and people taking away same attitude but I don’t think it’s going to push the price of gold higher, therefore the ability, I mean we’re paying up (inaudible)?

Nolan Watson

You’re afraid Basel III is coming and increasing the capital requirement to the banking industry?

Robert Carlson – Janney Montgomery Scott

Exactly.

Nolan Watson

Yes, we are seeing and a portion of this is related to Basel III but a portion of this is just banks still being fairly undercapitalized with all of the macroeconomic environment things that are going on around the world. We’re seeing quite a bit of reduced competition from traditional banking players.

Now our competition is also always included the equity capital markets and the equity capital markets have been our main competitor. So when we get or lose a deal, that’s usually in conjunction with there because of the equity capital markets. So our business at Sandstorm isn’t as impacted by the debt markets as one may thing. Having said that, a lot of banks are shying away and pulling back, I won’t name some of them by name but some banks that we had been working with in the past, some sort of joint project financings, they have told us point blank they are going to take a couple of year high this year from doing more mining type loans and then they plan on potentially getting back into the game if they feel that their bank’s balance sheet and the risk environment is right for them but they just don’t feel it is today.

There is one bank, one of the main mining lending banks in the industry, most people publicly aren’t aware or never heard of them, they were group called WestLB and they are a private German bank with significant presence in Canada and the United States and South America. And even back, when I was at Silver Wheaton, they were a major player in our debt syndicates and they had lent money to a lot of companies in the mining industry.

They’ve actually very quietly and without many people knowing because they are not a public bank. They’ve just gone insolvent a few months ago here in 2012 and have shutdown their entire business and are liquidating their banking licenses and taking all of the mining loans that they’ve made and putting them in debt and debt funds. And so we are seeing quite a bit less competition from the banks, because they are worried about their capital, they’re worried about the risk environment. So I think that’s a good development for Sandstorm.

Robert Carlson – Janney Montgomery Scott

But it is not, I guess I think that you’ve currently goals like a Tier-III asset per bank in January 1, if I am correct, that’s going to go to a Tier-I. Isn’t that going to make the price of gold go up, hence the price of properties will go up?

Nolan Watson

It will if banks make the decision to hold increased amounts of gold and they haven’t necessarily explicitly made those decisions yet. I think it will be a decision that’s made on a bank by bank basis. That’s of course it’s not going to decrease the demand for gold, it will either keep it the same or increase it. So it’s a good development but it’s too early to say that that’s going to cause the price of gold to spike. I think the price of gold is going to be go up but I think for a number of other reasons as well.

Robert Carlson – Janney Montgomery Scott

Thank you.

Operator

Your next question comes from Graham Javed [ph]. Your line is open.

Graham Javed

Good morning gentlemen, this is Graham Javed from Wood Hall, Jamaica [ph]. Congrats again.

Nolan Watson

Hi Graham.

Graham Javed

(Inaudible) I am curious right, if you guys would be doing maybe like a NHRD [ph] or a few certainly mining companies that maybe some of you are directors in, for example (inaudible)?

Nolan Watson

It’s a very good question. We are always looking to do new deals with lots of companies. Our corporate development team is looking at all companies irrespective of whether any of us are Directors of them. Most of Sandstorm employees are not Directors of very many companies at all. We want to limit at Sandstorm employees involvement so that they can spend the most of their time on Sandstorm and not get distracted by being involved with other companies.

I am on a Board of two companies right now and as it currently stands I do not anticipate as doing a streaming deal with either of those two companies, but if one of our corporate development guys wants to do that, to clear conflict and stand down on either side and allow that process to run its course by I think it’s a pretty unlikely outcome.

Graham Javed

Okay, thanks. I mean I don’t public, I was just wondering what the thought process is, you know. Thanks.

Nolan Watson

Okay, thank you.

Operator

Your next question comes from Matt Williams. Your line is open.

Matt Williams – Perpetual Investments

Thanks for taking my question guys. In regards to Luna, is your expectation that Luna will release an updated resource statement before year end? And then as a tag along to that one, when do you guys expect to see a Phase 2 scoping study out of Luna? And then secondly, in terms of Rambler, looking out 12 to 18 months, how likely do you guys think it is that Rambler looks to build a separate gold mill to bring forward gold production from the 1806 zone?

Nolan Watson

Sure, so first start with the Luna question on the Aurizona. In terms of a new resource coming out on the project, I’m not sure if they have anything planned like that. The bulk of the drilling that they’ve done through 2012 is focused on really outside that main Piaba pit. They have gone out and released results on Boa Esperança and Ferradura, Conceição areas. They are doing a little bit of additional planning.

I am not sure if any kind of significant resource expansion is planned other than really discussing some of those areas. The big focus for them at Aurizona is to really go through and take a look at this Phase 2 Scoping Study Expansion. The greater problem that they are really focusing on which is really John Blake and Peter Mah over there at Luna is to understand and really what would significantly larger than 125,000 ounce per year mill look like, what are the implications from the power side, the water issues, tailings storage facilities.

So there is a lot of questions to answer there and I think that will be the more significant type of technical report that you see over call it the next six months, six to eight months come out on that project.

On to Rambler and really that project, I mean that’s kind of an ongoing question of debate for both of them that they’re thinking of, I mean the key Rambler right now is just to make sure that they can get after that operation element, the daily tonnage that they want to just on the copper zone. If they can manage that, and also get back into the 1806 zone, certainly I think that’s something that they’ll look into, I know they’ve done more intuitive and more kind of initial studies as to how the new grinding facility and crushing facility would look like, but it is something that I am sure that they’re looking at actively and we’ll announce anything like that if it made any progress on that.

Is it a possibility? Absolutely, certainly it is a possibility and it should be something that they are considering because both zones are going to be strongly economic for them.

Matt Williams – Perpetual Investments

Thanks guys. Keep up the great work.

Nolan Watson

Yes, thank you.

Operator

I have no further questions in queue. I turn the call back over to the presenters for closing remarks.

Nolan Watson

Well thank you very much everyone for calling into the conference call. And as always, feel free to call either Denver or myself, Dave or Erfan directly if you have any further follow-up questions and hope everyone have a great day. Thank you.

Operator

This concludes today’s conference call. You may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Sandstorm Gold's CEO Discusses Q3 2012 Results - Earnings Call Transcript
This Transcript
All Transcripts