Sandstorm Gold had been basking in the glow of U.S. exposure since its Aug. 20 listing on the New York Stock Exchange, as outlined in my first World of Mining post. Shares went on a tear, rising more than 40% in the 3 months since the successful co-listing. It helped that Jim Cramer promoted the company on his CNBC show, including a positive interview with Sandstorm CEO Nolan Watson.
But this week the stock has been getting creamed – Cramered? – after the same Jim Cramer made noises on his Mad Money “Lightning Round” about a declining gold price hitting the miners, in a brief response to a phone question about Sandstorm. Shares are down 20% in two trading sessions.
Here’s the link (make sure the volume is turned down):
Despite the stock’s drop, nothing here has changed. Sandstorm Gold is cash-rich and poised for more deals on favourable terms with smaller mining companies whose financing opportunities are limited in this market. Sandstorm’s partners get cash upfront, and Sandstorm gets a gold stream at $400 or $500 an ounce, depending on the deal, for life of mine. And Sandstorm’s management team is risk-averse and very selective when choosing what companies to do deals with.
There has been some insider selling – directors John Budreski and Andrew Swarthout both sold shares above $13.50, before the big drop, according to CanadianInsider.com. CEO Watson has also been a net seller in the past year, according to INK Research data, but he’s been adding to his stake in sister streamer Sandstorm Metals & Energy.
Disclosure: I own shares of Sandstorm Gold and Sandstorm Metals & Energy. I do not watch Jim Cramer’s TV show. This isn’t financial advice and all investors should do their own due diligence. Please read my disclaimer.