Sandstorm Gold vs Premier Royalty I did a small comparison analysis for Sandstorm and Premier, now the latter finally has closed the deal with Bridgeport Ventures.
Total shares outstanding:
Sandstorm 86M + 28M, 32% future dilution
Premier 63M + 26M, 41% future dilution
Marketcap:
Sandstorm $11.60 * 86M = $998M
Premier $0.61 * 4 * 63M -/- 10% for the warrants = $138M
Cash at bank:
Sandstorm $130M
Premier $15M
Enterprise value (Mcap -/- cash)
Sandstorm $868M
Premier $123M
Cash flow projections based on both companies' presentations with gold at $1,700
Sandstorm:
2013 $50M
2014 $67M
2015 $90M, average growth 35%
Premier:
2013 $8M
2014 $9M
2015 $10M, average growth 10%
Enterprise value/CF
2013: Sandstorm 17, Premier 15
2014: Sandstorm 13, Premier 14
2015: Sandstorm 10, Premier 12
Conclusion:
I don't intend to have performed here a perfect analysis of both companies. It is just a very rough comparison exercise to determine how those two companies are valued against each other. There are much more factors to be considered, like exploration potential, management performance, jurisdictions etc. so I urge everybody to do their own research. Based on this analysis however, Premier has, notwithstanding the conversion of the debt into shares and Sandstorms recent pull back, still a lower valuation, when based on next years cash flow. The future perspectives for Sandstorm however are superior. In fact, I am a little surprised with these results, as I expected Premier to be still substantially undervalued. Bottomline, I think that with a portfolio including above average positions for both royalty players, you will most certainly perform much better then the average investor.