Gold took a pretty good hit after the Fed meeting strengthened the dollar, but it is working its way back to the big attractor/repeller level at $1,225, explains Michael Murphy, editor of the industry leading advisory service, New World Investor.

Sandstorm Gold (SAND) announced September quarter revenues of $17.3 million with net income of $2.1 million or 1¢ a share, both in line with expectations.

Of the 14,314 attributable gold equivalent ounces sold by Sandstorm, approximately 39% were attributable to mines located in Canada, 17% from the rest of North America and 44% from South America and other countries.

At the big Equinox Gold Aurizona gold mine in Brazil, overall project construction was 80% complete on September 30. The project is on track to achieve commercial production around the end of the first quarter of 2019.

At the end of the third quarter of 2018, more than 4 million tonnes of material had been moved and 270,000 tonnes of ore stockpiled. Sandstorm has a 3% to 5% sliding scale Net Smelter Royalty on the Aurizona project. At gold prices less than or equal to $1,500 per ounce, the royalty is 3%.

They received notice that Yamana has begun commercial production at the Cerro Moro mine. Beginning April 1, Sandstorm will purchase 20% of their silver produced at $3 an ounce to a maximum amount purchased per year of 1.2 million ounces.

They expect to purchase approximately 300,000 ounces of silver every quarter, which should equal around $12 million per year in cash flow at spot prices.

The Cerro Moro stream will be the largest stream coming online in the history of Sandstorm. With over 772 square miles under their area of interest and a four year, $40 million exploration program underway, this asset will continue to reward us for many years to come.

On the conference call, management continued to forecast attributable gold equivalent ounces sold between 56,000 and 60,000 in 2018 and between 63,000 and 73,000 ounces in 2019. They still forecast attributable gold equivalent production of 140,000 ounces in 2023.

They announced an 18.3 million share buyback between now and the end of 2019, which is about 10% of the current shares outstanding. SAND is a buy under $10 for a $25 target. The primary risk is if  precious metals fall due to US dollar strength.

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