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Goldageddon 2013 continues to drag the gold equities through a barren desert, where now-forgotten gains have been scorched like unprotected skin.
In one corner of this parched landscape, a foul wind has whipped up the sand, forcing newcomers to the shares of Sandstorm Gold (NYSEMKT: SAND ) to shield their eyes from a painful blast. In the span of just four months, Sandstorm's stock has been sandblasted to the tune of a 40% decline from its 52-week high to touch as low as $9.14 per share Wednesday morning.
But the last thing you want to do when crossing a desert is to stop in your tracks and give in to the punishing elements. If I were caught out in a sandstorm with you, I would do everything in my power to keep you moving forward. And that's precisely what I want to do for Sandstorm investors today, by highlighting the continued strides the company has made in recent months to foster a strong long-term outlook for earnings growth. The company released 2012 earnings and announced a new gold stream transaction within the past week, and I fear investors may have averted their eyes in the midst of these howling winds.
Sandstorm achieved profit growth of 76% during 2012, enjoying a rich cash operating margin of $1,313 for each of the 33,514 gold ounces sold during the year. The fourth quarter came in a little on the light end, with gold sales of 7,243 ounces pitching in only 21.6% of the full-year total, but investors familiar with silver streamer Silver Wheaton (NYSE: SLW ) will recall that timing of shipments and other logistical considerations will commonly yield substantial variability in production from quarter to quarter.
Like the company's recent announcement of a stream-related financing arrangement with Entrée Gold -- which gives Sandstorm some exciting exposure to the likelihood of future expansion at the Oyu Tolgoi mine in Mongolia -- Sandstorm's light production quarter could hardly have come at a less opportune moment. In the midst of an industrywide sell-off of this magnitude, the downside exposure from any unwelcome news is of course magnified. Worse yet, the market is approaching Rio Tinto's (NYSE: RIO ) Oyu Tolgoi project with considerable caution just now, after Mongolia's president sought greater government involvement in the project.
The combined result of these recent downside catalysts -- in conjunction with the ongoing horror of this gold equity collapse that I've termed goldageddon -- is one more standout opportunity for long-term gains that truly savvy investors will be pouring into just as capitulating desert-crossers fall to their knees. To keep Sandstorm's recent collapse in its proper context, meanwhile, I encourage Fools to consider the following six-month chart. Sandstorm has still outperformed venerable gold royalty leader Royal Gold (NASDAQ: RGLD ) , and easily outperformed the gold mining equities as reflected in the gut-wrenching decline of the Market Vectors Gold Miners ETF (NYSEMKT: GDX ) . With Sandstorm's gold production expected to double over the next four years -- reaching 70,000 ounces by 2016 -- the stock's return to single-digit territory must be greeted by investors as a lush garden spring in the middle of a sand-swept desert.
To track my own ongoing coverage of Sandstorm Gold and its metal-streaming, royalty-collecting ilk, please bookmark my article list or follow me on Twitter. My Foolish colleague Dan Caplinger, meanwhile, has prepared a detailed report outlining the compelling investment thesis for Silver Wheaton, and I encourage Fools to access that special report by clicking here.