The future of Sandstorm Metals A few days ago I expressed the opinion that a royalty company such as Sandstorm Metals could not go bankrupt.
I continue with that opinion and here is another one.
In theory, on paper, SND cannot go wrong. With a diversified portfolio, there can be an odd calamity but on balance the show goes on BUT
In reality I am beginning to think that the company may go out of business and refund money to shareholders. Why so? I am beginning to think that small royalties in coal, oil, iron ore, etc may not work. The only companies is the Sandstorm space that look for money are in dire straights and the failure rate of these may be enough to wipe out the gains on the good ones. Sandstorm could still continue and survive but why bother. If you are just paying a quarter to get back a quarter or even 30 cents the return on investment is not sufficient to manage the whole operation.
My opinion now is that Sandstorm Metals will just give up this sideshow (for Sandstorm Gold). The other option would be to do bigger deals; $50m, $100m etc with bigger safer companies. But again why bother? You can get better multiples and more cachet doing deals in gold, silver or precious metals.
Betcha
Mat