It was an honour to have Nolan Watson, president, CEO, and chairman of Sandstorm, talking to us in class via Skype. Through a combination of his short introduction of Sandstorm in class, and a formal interview Mr. Watson conducted with The Street, I have noticed a few points of parallel between the various business concepts we discussed in class, and Sandstorm’s operating principles.

In an effort to explain the advantage of investing in gold streaming over an exchange-traded fund (ETF), which essentially describes a tradable security that tracks numerous assets, Mr. Watson mentioned that the money value of an ETF shrinks overtime. This is possibly due to management costs and inflation. On the other hand, the stock price of Sandstorm fluctuates along the price of gold, this minimizes the effect of inflation and have proved to be a more sustainable investment for investor.

As far as the industry goes, gold streaming has little risks, as Sandstorm is not exposed to the actual operational cost associated with exploiting the mine. Mr. Watson also explains that instead of viewing the investment of private equities (PE) as direct competitor, he rather partners with them to co-finance great projects.

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