i did go ahead and call Sandstorm's office tuesday evening before committing more money.
I spoke with the president, Nolan Watson. It's not that I
know him. He just took the call.
I mentioned my concerns about the stock falling out of bed against a price of gold that is holdng its own.
He steered away from discussing the stock price but did run through the projects. He stated that he knows of nothing that would modify any of their previously published plans to achieve cash flow.
The company has been saying it would have 2010 cash flow from three of its four deals.
The most important of the three is Luna gold's project in Brazil.
Watson said he just talked to Luna management, meaning within the last day or two.
They have said publicly that they would be pouring gold by the end of the second quarter, and they are, at least in a very preliminary fashion.
In fact, Sandstorm has already benefited from a small gold shipment by Luna, according to Watson.
“So technically we are already cash-flow-positive It is enough to pay G and A. (general and administrative),” Nolan said.
I got the idea that the cash flow would build up gradually over the next two-three quarters.
What I liked about the conversation was that I wasn't hearing about any glitches.
I am figuring this creates a buying opportunity.
The stock is still kind of an unknown. The team is a good one, and the cash flow machine they are creating is a great model for the years ahead. Like franco nevada, they put their money in first and get paid in gold, so to speak, for the life of the mine.
The market blew hot and then cold on it. I do not think there was any bewildering or bad news that triggered a sell off.
I think the stock just got a little ahead of itself.
There has been no confirmation of cash flow yet in the form of a press release. But I gotta figure one is in the works.
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