Sandstorm Gold is a gold royalty company that we have liked for quite some time. We have been hesitant to take a position recently because of the stock’s impressive run up. However, now that the stock price has pulled back to the low $6 range we are jumping in. Sandstorm Gold is our newest kinetic rocket.
I read recently that gold royalty companies perform well later in gold bull markets compared to the miners. When gold rises in a bull market, so does the price of other commodities that are required to mine gold – such as oil. The differentiator for a royalty company vs a miner is that their costs are fixed and not variable – since their per ounce price is set when negotiating the royalty. So, when commodity prices increase, royalty company margins are protected.
We are excited to have Sandstorm as a new addition to our kinetic rocket portfolio.