Nolan Watson - President and Chief Executive Officer Erfan Kazemi - Chief Financial Officer David Awram - Senior Vice President

Good morning. My name is Matt, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Sandstorm Gold Conference Call. All lines have been placed on mute to prevent any background noise. Please be aware that some of the commentary 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. After the speakers remarks' there will be a question-and-answer session. [Operator Instructions]. Thank you. Mr. Watson, you may begin.

Thank you, operator. Good morning everyone and thank you for calling into this third quarter call. This morning as usual Erfan, Our CFO is going to walk us through the Q3 results and Dave Awram will provide a brief update on a few assets. After that, I will turn it over to the operator for a question and answer period. And in addition, if anyone has any questions that don't necessarily need to be part of the live Q&A, feel free to ask it through the webportal and we'll be sure you get back to everyone with the direct response after this call. But before we do all that, I would like to provide a few material updates including a discussion about our plans for share buybacks between now and the end of 2019. At this time, we'll be walking through our prepared PowerPoint presentation on the webportal, so if you are able to please turn your attention there now. The first material update, I would like to draw everyone’s attention to is that during the quarter we received official notice from Yamana that they have achieved commercial production at Cerro Moro. And in accordance with our stream agreement what that means is that beginning January 1st 2019, i.e. just over a month from now, Sandstorm will be entitled to purchase 20% of their silver produced to a maximum amount purchased per year of 1.2 million ounces. It's important to note that under the contract, the delivery mechanism is that we received the silver ounces in the quarter following the quarter in which they were produced. Therefore we will be receiving the silver from Q1 in the second quarter of 2019. Based on current guidance we expect to be purchasing approximately 300,000 ounces of silver every quarter, which should work out to around $12 million per year in cash flow at spot prices. As such, on January 1st, the Cerro Moro stream will be the largest stream coming online in the history of Sandstorm. It's also a good example of our commitment to finding streams and royalties on high quality, low cost assets with significant expiration upside. With over two thousand square kilometres under our area of interest and a significant exploration program underway, we anticipate that this asset will continue to reward Sandstorm shareholders for many years to come. It’s also important to note that at approximately the same time, we expect to begin receiving royalty checks from Equinox based on production from Aurizona project. Equinox has recently announced that they are 80% complete construction and plan producing gold beginning in Q1, 2019 i.e. next quarter. And that they already have two hundred and seventy thousand tons of ore stockpiled. You can see in this picture that the mill is nearing completion and that it’s a fairly impressive mill. Sandstorm currently holds a sliding scale royalty that is a 3% NSR at today's gold prices. And if gold goes above $1,500 per ounce it will increase to a 4% NSR. If gold increases to $2000 an ounce, which I do believe will happen in the not too distant future, the NSR increases to 5%. Therefore at today's prices, we expect to receive $5 million per year from this project. So we'll become a material contributor to our cash flow going forward. If gold were to increase to $2000 per ounce, our cash flow would correspondingly increase to $14 million per year because of that ratcheting effect on the NSR. So we see lots of potential upside on this NSR. In addition, this is another asset with significant amount of exploration upside, which Dave will be talking about in a few minutes. As investors can see, we have a couple of exciting catalysts that are happening next quarter, and we anticipate that not only should we recognize a record production in 2018, but we also anticipate record production in 2019. And despite that, due to the low gold price and general lack of investors in the gold industry, our share price is trading at a 52-week low and materially below what we believe the fundamental value is. Therefore, I would like to take a few minutes to talk about our plans for share buybacks. In 2017, so last year, we had a Normal Course Issuer Bid or NCIB under which we were repurchasing our own shares. In total, we invested $17.7 million U.S. repurchasing 4.1 million of our shares. So far in 2018, we have invested $11 million repurchasing a further 2.5 million shares and under our current NCIB we have the ability to repurchase another 6.7 million shares by April 2019. As many of our investors know, we have been torn between the issues of when to declare a dividend weighing that against the potential share repurchases. Because of the current significantly depressed share price environment, and the low price of gold, we have decided to use our 2019 free cash flow entirely for share buybacks and we will make a decision about potential dividend timing towards the end of 2019, once the new board approved share buyback program has been completed. With respect to the details of this new buyback plan, overall our board has approved subject to TSX approval, the repurchase of 10% of our current outstanding share base, which would result in the repurchase of 18.3 million shares. This repurchase program will begin immediately and will continue through the end of next year. And it's our intention to repurchase the entire 18.3 million shares, rather it is full board approval to actually repurchase 18.3 million shares over the next year, and it is our intent and our board's expectation that it will be completed in the full. Administratively, our plan is to complete this repurchase under two separate normal course issuer bids. The first being the current NCIB, which is in place now and still has 6.7 million shares available for repurchase under it. Once we have completed the repurchase of the first 6.7 million shares, which we expect to be done in the first half of 2019 we will then apply to the TSX for a new NCIB to repurchase the remaining 11.6 million shares. We believe that this entire program will cost in the range of US$70 million to US$85 million and can be fully funded from cash on hand, combined with 2019 cash flow from operations, and we don't plan on taking any debt for the share repurchases. Furthermore, although we are currently debt free, we are working on an upsized lower cost revolving debt facility so that if we find royalties with significant exploration upside on assets that are currently producing or will be producing within a year, or so we can also complete those acquisitions and continue to grow the company while we shrink our share float. If we can successfully do that over the short term, we think our share price could have tremendous torque to the upside, once the gold market begins to turn around. So that’s the business update. And with that, I’ll turn things over to Erfan to discuss the third quarter results. Erfan?

Thank you, Nolan. And good day to all of you that have joined us on the conference line and webcast. We appreciate your continued interest in Sandstorm. I’m going to take a few minutes to walk through some of the third quarter financial numbers, and I’ll draw some comparisons to the third quarter of 2017 as well as the first three quarters in 2018 to give you a sense for how our royalty portfolio has been performing. Well, after three quarters, I would say that Sandstorm portfolio of royalties is performing as we expected. There was always some variability in the quarterly production that comes from our various royalty assets, but we’re diversified enough that when some operations are below average quarters, there are generally a few mines that outperform to make up for it. We expect there to be ups and downs, with the mining operations related to our royalty portfolio. But as Nolan discussed already, we’re fortunate that we have a number of royalties on projects that are in development and we’re excited that Cerro Moro, Aurizona and some other assets will start to contribute royalty production and cash flow during 2019, furthering that diversification effect that I was talking about. I would like to direct you back to the conference call presentation on Slide 9. You can see in the column shaded in white that our business generated about $17.3 million in revenue from more than $14,300 attributable gold equivalent ounces sold during the period. We sold those ounces at an average realized gold price of close to $1200 per ounce, which is starting to get down to the gold price levels that we haven’t seen since back in the first quarter of 2016. Other than the decrease in average realized gold price and the slight impact that had in our revenue you'll notice if you compare the 2018 and 2019 results that the Q3 numbers are quite similar to the third quarter of 2017. I’ll point out there’s a slight increase in cash flow from operations when you make changes for changes in working capital increased to $11.4 million that was partly related to a reduction in administrative cost due to cost reduction strategies. The decline in net income compared to Q3, 2017 and mostly due to items that were recognized during 2017 but did not recur in 2018. The Bachelor Lake gold stream amendment being the primary item as it resulted in a $3.4 million gain on the income statement in Q3 of last year. Speaking of Bachelor, it was great to see the transactions Bonterra come to a close in September. I’ve talked about this on the last quarterly conference call, so I won’t get into too many details. But Bonterra recently close the $21.8 million private placement and they have big plans for the Gladiator, Moroy, Bachelor and Barry projects. Sandstorm has a royalty interest on each of these assets or we’ll watching closely to see how thing progress. Okay. Going to slide 10, which provides the revenue and attributable gold equivalent ounces number for the last four quarters. Firstly, our royalty production figures have been quite consistent in the 2018 quarters which harkens back to the point about the diversification benefits that I already mentioned. Second. We’re certainly on track to meet our expectations for this year. We anticipated some modest growth compared to 2017 and that’s what played out. As a reminder, Sandstorm's royalty portfolio generated approximately 54,600 ounces in 2017 year, and for 2018 we've narrowed our guidance to 56,000 to 60,000 gold equivalent ounces sold for 2018. The growth start to pick up next year and we’re forecasting 63,000 to 73,000 gold equivalent ounces in 2019 and then our attributable production ramps up considerably with the addition of Hot Maden and some other projects by 2022, 2023. Our forecast for 2023 is 140,000 attributable gold equivalent ounces at this point. Moving on to slide 11, we’ve shown our top 10 contributors during the period. When comparing mine by mine breakdown for the same period in 2017 there were increases, from the Karma gold mine in Burkina Faso due to timing of sales and shipment, as well as the additions from the Hounde mine in Burkina, which was not part of our royalty portfolio last year. Notable decreases came from Santa Elena due to the timing of shipment sales and from Black Fox related to reduction in gold production at the mine. McEwen Mining has recently indicated that it expect to meet his full year production guidance of Black Box. As far as how all this breakdown by jurisdiction we provided a pie chart on slide 12 to illustrate that. About 56% of the sale on royalty revenues came from North America with 39% of that being Canada. And then there was an even split between South America and other countries for the balance, each contributing 22% to the total. One interesting point from accounting perspective you'll see on our balance sheet the Hot Maden interest fluctuates each quarter based on the Turkish Lira to dollar exchange rate. Some quarters the accounting number may go up, some quarters they may go down. This is simply a result of the Hot Maden subsidiary have a Turkish lira functional currency while Sandstorm presentations currency of the U.S. dollars. The fluctuation doesn’t represent a change in economic the mine. That is all I have for the quarterly review. But before I turn the call over to Dave, I like to speak briefly about Sandstorm's taxes. Over the last few years some other companies have come under scrutiny for the offshore tax structure. And as a result Sandstorm fielded several questions from investors about the way that we set up our stream and royalty investments. Our response have been that the majority of the company steams and royalties have been entered into directly by Canadian based entities and subsidiaries and therefore subject to Canadian tax. We did have Barbados entities in the early days, but as you already know, all those profits have been attributed to Canada and the profits of those streams continue to be subjects to Canadian tax. So why am I talking about this? The Canada Revenue Agency, the CRA is currently finalizing an audit of Sandstorm Gold Ltd., as a parent company’s 2010 to June 2015 tax return and has issued a proposal letter dated October 2018. Based on the letter received, we don't anticipate any adverse location for a Company's financial statements as a result for the audit and the CRA proposed adjustments. Okay. That’s it from me. Dave, the floor is yours.

Great. Thanks Erfan. So, before I lean into few key updates on assets, just a quick word on our corporate development, I’m very proud of the team intense work for digging up some great opportunities over the last quarter. Nolan and I given the Corp., debt team, change in mandate, what look for and the team has spread a quick trap line and found some quality projects. Although Nolan spend a lot of time talking about the share buyback, we still working hard to acquire cash flow from deals that are both large and small, but certainly hope that we crystallize some of these opportunities for the end of the year or early next year on to the asset update. We’ll start with Black Box on slide 14. Its now in the capable hands to mine and they began to reveal data from some of the aggressive work they have completed both development and exploration. If you spent time at their residence in September 6 or view the media that they produce. On the west they can see how the project is front and center for them in the overall strategy of growth at McEwan. Rob McEwen has even gone so far as to state how black box of Red Lake in the early stages is Gold Corp. Thus far in 2018, McEwen has spent over $79 of expiration at the Black Box complex with goal of spending $19 million over the entire year. That paid off and an updated resource room discovery of new higher grade football zone and a more active scenario or development towards both areas of mineralization that began September. Management is recently discussed the concept of being able to access to mine these new areas in as early as 18 months. In addition Froome and also Tamarack, a new view of the geology has generated a number of high-quality target Black Box property and these the targets had been chased down represent further outside. However the deep central zone continues to be the best high-grade target within the complex as you can see these drill results. As McEwen gets deeper and follows deposit down-dip, to some of the best grades to date are appearing. It's great to see this project finally get the capital it deserves. As it develops, we’ll be sure to keep you all posted. Now on to slide 15, in Cerro Moro. Cerro Moro is another project that is busy demonstrating its exploration potential. Nolan already spoken about how it has reached commercial production thresholds to trigger a stream 2019, but I think the more exciting aspect is exploration potential that is been emerging over the last couple years. As we have said before Cerro Moro is partway through to a stated four-year 40 million exploration project. Focus has been on inferred into M&I on the Veronica vein, Escondida Far West, Martina and mini extension. Today, Yamana has exceeded internal expectations on conversion and expect to increase resources at year-end. Further exploration drilling for new targets identified through geochemistry and geophysics is also occurring in Q4. When we purchased this stream in 2015, these were scenarios that we expect to come to fruition. Cerro Moro is an excellent exploration target and has a huge land package from where we expect further discoveries to be made. So on slide 16 in Aurizona, of course big part of our growth next year and production next year is reopening Aurizona mine by Equinox Goal as well as BD's [ph] new mid gold mid-tier vehicle, which is slated for Q1 of next year. However I’m personally excited to finally see the West extension of Piaba structure, Tatajuba, to be finally drill. Ever since the start of Sandstorm on our first transaction on Aurizona, I've been waiting to see drill results from this prospective ground. However the transition of the permitting has largely prevented this. Finally though the management of Equinox has succeeded in getting drills on to the site may have not disappointed. On the slide you can see some of the highlights to the right showing 13.7 grams over 35 meters and 2.71 grams over 56 meters, and just like in the Piaba area you’re seeing consistent mineralization section from section to section over more than 500 meters of strengthen length. This represents material very near the mill and extension of Piaba that maybe the same or greater grade going forward. More drilling is to come, and truly this led to the excitement around this project as we enter its production. Now we don't have a slide on it, but today Endeavour Mining released a heavily anticipated resource on the Kari Pump discovery on the Hounde. Remember that Endeavor did no exploration on this project from the acquisition 2014 and 2017, but since then they have been on an aggressive drill program on the asset focusing much of the effort on this large gold and soil anomaly at Kari and Kari Pump. 70,000 meters join has been completed May 2018 along Kari Pump, and now they hae new resource of almost 1 million ounces mostly as indicated. We’re still trying to get a handle on the location of the ounces relative to the boundary of royalty, but we’re confident that the majority of these new resource lies within the boundary. Almost more importantly much of the drilling at Kari West and Kari Central and much of the gold and soil anomaly are also on the royalty ground. So we do expect significant amounts of both of these resources anticipated in 2019 to occur on the royalty ground. It’s not about increase in the royalty that we've owned for less than year. And with that, we’ll pass it over to Matt, the operator, we can began the Q&A session.

Great. Thank you. [Operator Instructions] Our first questions from John Tumazos a Private Investor. Please go ahead.

Thank you. Should we interpret from the larger buy back that you’re not going to be buying as many new assets in 2019 or 2020?

So, one of the things that we decided to do a number of months ago and I mentioned this in a couple of presentations that I’ve given in the past is our board just made the decision that 90% of the capital we allocated is going to be either share buybacks and/or buying streams and royalties on assets that are either already producing or will be within, say 12 to 24 months. And so about six months ago we started working hard to reengineer our pipeline of potential deals for things that are currently cash flowing. When we started that process we were not that optimistic because we know its very hard to find things that are – the assets that are producing or currently under construction and to buy royalties on those. We've actually been pleasantly surprised in the last couple of months and we do have a number of deals, let’s say five deals that are at various stages of due diligence right now that meet that criteria, because of that we are working on upsizing a revolving debt facility which we hope over the next month or two we should have details out on. And if we do want to make these acquisitions then we’ll do that on that that debt facility. So, it’s too early to tell definitively and answer that question. I think based on the pipeline that we see in front of us that acquisitions next year probably will exceed what they have in the last 12 months.

If we were in a group of royalty streaming companies and two political parties aggressive and conservative if you will, Royal Gold hasn't done a significant deal in two and a half years. They appear to be conservative or just repaying debt. Your other larger peers have been more aggressive. Franco and oil and gas, Wheaton and Cobalt PGMs as well as other traditional assets, Osisko, PAAZ [ph], lots of things, do you think you’re more aggressive, more conservative or somewhere in the middle?

I'd say we do a purposeful job of being in the middle. We try to be thoughtfully aggressive. How about that?

Absolutely, Kirkland gets to the number four shaft going to the south or southeast of the existing one and they’re actually going to dismantle the number three shaft and just use it for ventilation and egress. Do you guess that one quarter, one and half, three quarter, can you guess how much of the new throughput will be from the HM claims?

It’s Dave here. It's a little bit difficult to say at this point. We're looking to try and get some guidance from Kirkland Lake themselves on this, but that has been a significant amount of drilling and development that has gone into that HM claim, particularly on that series levels where it has gotten the work on. So it is -- it's difficult to say, but I certainly do expect that we’re going to be getting over a million dollars per year from that royalty. It’s a little bit difficult at this point how long that will last for. But that’s not bad considering we paid I think less than $300,000 entirely for that, for that whole process.

All praises. I just – I’m hoping for one half of the output as opposed to the taste.

We'll see. I mean, clearly, it’s been a big focus for them at Macassa, but we'll see. If we can get some guidance. Well we’ll share that with our investors.

Thank you.

[Operator Instructions] If there are no further questions I’d like to turn the floor back to management for closing comments. All right. Well thanks everyone for going into today’s call. We have seen a number of questions coming through the portal and we’ll get back to people directly on those. And we hope everyone has a good day. Thank you.

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.