KeyStone’s Stock Talk Show, Episode 244. 

It’s great to be back again this week, just ahead the announcements of our first webinars of 2024. Aaron will start us off with a quick summary on how to Invest in Artificial Intelligence or (A.I.)? Then we will hit the proverbial mailbag to answer some viewer questions, starting with me answering a question on Sandstorm Gold Ltd. (SSL:TSX) a  precious metal streaming and royalty company. The viewer asks why the share price has performed poorly over the past year as the price of gold has moved higher – I will let you know. Sticking with the gold theme, Brett answers a viewer question on Newlox Gold Ventures (LUX:CSE). The company focuses on niche reprocessing of gold within Latin America. While this Canadian Nano-cap produces revenues, Brett will let you know if it has the scale to be profitable. Finally, Brennan answers a viewr question on Well Health Technologies (WELL:TSX) which provides omni-channel healthcare services, including primary care and allied health clinic operations (gastrointestinal, mental disorders, specialized care, diagnostic services, and telehealth services). We last reviewed the company and recommended listeners avoid the stock – Brennan let’s you know if our outlook has changed.

Let’s get to the show – we welcome my cohost, Mr. Aaron Dunn and the killer B’s, Brett and Brennan.

Sandstorm Gold Ltd. (SSL:TSX)

What does SSL do?

A precious metal streaming and royalty company offering investors leverage to gold, low operational risk, strong margins and exploration upside. Its proven business model is being executed by an experienced Management team that has positioned Sandstorm for continued growth through the addition of accretive streams and royalties.

Gold pricing environment over the past year:

Sandstorm performance over the past year.

Down 18%.

So what gives. The junior explorers and miners have generally seen a very tough environment over the past 12-18 months with higher rates, financing has been harder to come by and equity capital dried up in 2023. This should, to a degree, play into the hands of a royalty or streaming financing company like Sandtorm, but it certainly has not helped the stock. The markets can get things really wrong in the near-term, so let’s take a look at what is playing out here.

Let’s look at the Recently Reported Annual Numbers: (and see if they tell us the story)

Additional 2023 Highlights:

Record attributable gold equivalent ounces1 of 97,245 ounces (FY 2022 — 82,376 ounces);

Record revenue of $179.6 million (FY 2022 — $148.7 million);

Record cash flows from operating activities, excluding changes in non-cash working capital1 of $151.1 million (FY 2022 — $109.8 million);

Net income of $42.7 million (FY 2022 — $78.5 million). 


SSL trades with a trailing PE of 47, EV/EBITDA of 13.3 and a price to adjusted cash flow of 12.6x.

These numbers may move higher over the next year given lower expectations for EBITDA and cash flow.


Our take – The company has taken on significant debt to invest for future growth and that debt is becoming more costly. Interest expense and financing amortization Jumped to $39.4 million from $17.2 million – more than doubling.  While growth should be coming from these investments, it is not here today on a per share basis given the dilution and the current debt inhibits further future growth.

Today Debt Reduction and Monetization are being highlighted by management. I quote,  “De-levering remains a top priority for Sandstorm. As of February 15, 2024, the company had $421 million drawn and outstanding on the credit facility. To further expedite debt repayment, the company is undergoing a process to monetize between $40–$100 million of non-core assets by the end of 2024. Accordingly, in the fourth quarter of 2023, Sandstorm closed its previously announced agreement to sell the El Pilar and Blackwater Royalties for total consideration of $25.0 million comprised of cash and common shares. The company anticipates that consideration from future monetization efforts will consist entirely of cash.


  • Summing this up, the market currently expects Sandstorm to sell less gold in fiscal 2024, produce less EBITDA and less cash flow.
  • Current valuations are not compelling.
  • If the price of gold does well in 2024, SSL will likely perform well, but as we saw, this was not the case in 2023.

YSOT Newlox Gold Ventures LUX:CSE

Newlox Gold Ventures symbol LUX on the Canadian Securities Exchange. The company focuses on niche reprocessing of gold within Latin America. The company does environmentally friendly reprocessing artisanal tailings, effectively they are attempting to extract additional gold while offering the reduction of waste for the miners.

The stock trades at $0.13 a share and has a market capitalization of $19 million.

2) A quick overview of the company’s current projects.

They have one operational facility based in the Costa Rican Gold Belt. The facility has tailing agreements with over 30 regional mining sites. Before the purchase of any tailings, the company conducts in-house analysis to test gold concentration. The company is still investing in the property to build out production currently ramping up to 80 tonnes per day. The company expects recovery to be 6,500 ounces per year at costs of $600 an ounce.

Next, the company has the Boston Project, the second plant based in Costa Rica. The plant has begun commissioning work. At full-scale operations the company expects the Boston Mill to process 150 tonnes per day at a material grade of +/- 15 grams per tonne and gold recovery of 90%. The expected full-scale recovery is 20,000 ounces a year

Last the company has an early-stage project in Antioquia (An-tee-ow-kee-uh), Colombia where it has completed due diligence and has agreed to purchase 100% of the project for the mineral processing rights for the region. The project has a term of 21 years and the company plans to construct a facility that can process 500 to 1000 tonnes per day a large step up from the current projects.


3) Moving to the financials for the Fiscal Q2 2024 period ending September 2023.

The company does have significant quarterly variance at this time, likely as all the operational revenue and costs are related to a single plant and location.

Revenue fell to $663 thousand compared to $1.2 million in the prior quarter and $868 thousand in the prior year. Likewise, gross profit fell to $241 thousand from $960 thousand and $656 thousand for the prior quarter and year respectively.  Net loss was $532 thousand compared to $485 thousand and $348 thousand for the prior quarter and year.

So, the last quarter has been the weakest out of the last 8 quarters, management in the MD&A or nowhere else I can find gives the reasoning why, the last quarter was weaker as the commentary in the filings only refers to the 6 months and not the quarter. The company. That being said on a call with management we would follow up on why the last quarter was notably weaker.


But moving on some viewers may have noticed that all but one of the prior 8 quarters eps were 0. This is because the company does have significant outstanding shares of 148 million compared to 146 million for the same period last year, not a significant increase but a substantial share count. But the company also had 12.7 million in share options outstanding of which 1 million have expired out of the money since and 21 million in warrants outstanding at the end of the quarter which have been extended to mature in December 2024.

Since the quarter ended the company has sold additional convertible debentures at $0.15 and 10% interest and warrants at $0.25 which could add another 10.3 million shares if fully converted and exercised. So fully, diluted which would likely occur at a price above $0.25 per share would have in the range of 192 million shares outstanding, about 30% more than the current.

The point of me going through this is to show the company is using equity financing to fund its growth which puts downward pressure on share prices. As the cash flows from operations are not substantial enough to fund growth. As well, the company at the end of the last quarter had a net debt position of $2.35 million, however, the exact value has likely changed from the last quarter due to the capital raises and likely capital expenditures.


But to summarize. The company’s current plant in Costa Rica is relatively small compared to its plans in Colombia, really a pilot plant more than anything as the country just doesn’t have the scalability. The Boston project coming online will likely add some cash flows to the calendar 2024 as it ramps and that is something you should watch is how it adds to cash flows, but the big test is the expansion in Colombia.

On the risk side, you need to worry about equity dilution as well as interest expense on top of the usual commodity risk albeit the commodity risk is lower as a processor compared to a mining operation. As well, the company has significant execution risk, if the Colombia project falls apart the growth plan is derailed. So what I would like to see is the company hit the point of internal cash flow funding growth. So the company doesn’t need to do additional dilution or debt. That inflection point de-risks the company substantially. So for now I would just wait to see how the Boston project contributes and the progress of the Colombian Project.


Well Health 



Well Health Technologies (WELL:TSX)

Price: $3.84

Market Cap: $924 Million

Company Description:

Well Health provides omni-channel healthcare services, including primary care and allied health clinic operations (gastrointestinal, mental disorders, specialized care, diagnostic services, and telehealth services). The company also operates an electronic medical records platform; billing and revenue cycle management solutions; and cybersecurity protection and patient data privacy solutions.

Slide #2

The last time we included the stock on the podcast was back in 2021 when it traded at $7.50 per share. Since then, we have seen the stock pull-back to $2.56 in late 2022, but the stock had a strong 2023 bringing it back to the $4.00 range. Clients are somewhat familiar with WELL as the company acquired CRH Medical at $5.00 per share which was a stock that we had under coverage.

The company has operations in both the U.S. & Canada with over 530,000 quarterly visits in Canada and over 505,000 in the U.S.

Slide #3

Looking at some of the most recent updates:

  • February 1, 2024 – WELL agreed to sell all of the issued and outstanding shares if its subsidiary Intrahealth Systems to HEALWELL AI for a total consideration of approximately $24.2 million. Furthermore, WELL completed the acquisition of HEALWELL’s performing clinical assets in Ontario. As a result of the transaction, WELL became a new control person of HEALWELL, holding between 22.7-32.7 million Shares (21%-27%) depending on whether WELL receives payment of the post-closing $5 million in Shares.

  • Ryan is going to love this one – on December 7, 2023 – WELL announced that it was selected by the Vancouver Canucks as Official Medical Services Provider meaning WELL is now an integrated part of the Canucks medical team providing leading-edge diagnostic imaging, sports cardiology and pain management services.


  • November 21, 2023 – WELL launched WELL AI Inbox Admin, an AI-powered system that creates efficient custom workflows to help optimize clinical operations and manage incoming fax documents. An initial pilot involving six WELL clinics has begun managing more than 16,000 faxes.


  • October 26, 2023 – WELL’s Cubersecurity Business unit, Cycura, acquired Seekintoo, a provider of Cybersecurity services and Proack, a premier provider of offensive security assessments.

Slide #4

WELL’s revenue growth has been very strong driven by acquisitions and organic growth. The most recent financial results were for Q3 2023 ended September 30th, 2023, revenue was up to $204.5 million, an increase of 40%. This was driven by 27% increase in patient services revenue in Canada due to organic growth from expanding into Alberta. While U.S. Patient Services increased 52% driven primarily by the CarePlus Acquisition acquired in 2023.

Although the company has posted strong revenue growth, the company’s accounting EPS remains negative at a loss of ($0.03) per share, while Adjusted EBITDA was up 13% to $28.2 million.

Quickly looking at the valuations the stock trades at 17.2 times trailing adjusted earnings, 11.4 times trailing CFO, and with an EV/EBITDA of approximately 11.7 times.

Slide #5

As I just quoted the P/adj. earnings multiple, the company does provide an adjusted net income figure which was $12.8 million or $0.05 per share, which represents a decline of 11% year over year.

If we look at the adjustments that are made to net income, nothing looks too peculiar which they are adjusting out, but the company’s stock-based comp is certainly an impediment to the company reaching accounting profitability.

Slide #6

Looking at the balance sheet as of September 30, 2023, WELL had $45 million in cash and debt and leases were $404 million, providing a net debt & leases position of $359 million and a net debt-to-EBITDA multiple of 3.3 times. I believe most of their debt is floating, but they have 3-year interest rate swaps which they entered into last year which are locking in about $50 million of their debt with a rate of around 4.7%.

Slide #7

And not only has the company been taking on debt to fund their expansion, they have also issued shares quite aggressively as shown in the chart in my slideshow – with the company now up to about 250 million shares outstanding. I must remind our listeners that an acquisition growth strategy funded through issuing shares can be successful, but it is a much harder path to growing cash flow per share than simply recycling excess cash flow into acquisitions.

Slide #8

Looking at the company’s Q4 2023 update, the company announced that they expect positive EPS on both an adjusted and unadjusted basis and anticipate record quarterly revenue once again.

For 2023, WELL upgraded its guidance back in November to between $755-$765 million and is guiding toward $900 million in revenue in 2024 with sustained gains in Adjusted EBITDA and cash flow.

Slide #9

  • WELL has shown great revenue growth over the past few years, with revenue of just $32.8 million in 2019, now up to over $700 million expected for FY2023 and $900 million expected in FY2024.
  • The company’s astonishing growth has been primarily driven by acquisitions funded through share issuances and debt. Overall it is good to see that the company is producing cash flow which will help the company pay down its debt (which is on the high side currently) and hopefully reduce its reliance WELL’s reliance on issuing shares.
  • Given the strong acquisition & organic growth the Valuation of 17x adjusted earnings, and around 11x P/CFO and EV/EBITDA, the business looks reasonable given its recent organic growth (30% Canada & U.S. Growth in Patient visits) – but it would be great to speak with management to get a better gauge on the trendline organic growth rate to help determine how reasonable those multiples really are.
  • All-in-all, the company still has work to further progress into accounting earnings, reduce its debt load, and reduce its cadence of issuing shares. But if the company can begin to achieve consistent accounting and adjusted profitability and use internally generated cash flow to bolster growth, there could potentially be an “inflection point” in the business. But that is yet to be determined.



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