NYBob
5 years ago
Sprott Inc. Announces Share Consolidation and Application to List on New York Stock Exchange
TORONTO, May 26, 2020 (GLOBE NEWSWIRE) --
Sprott Inc. (“Sprott” or the “Company”) (TSX: SII) announced today that it has filed a Registration Statement on Form 40-F (the “Registration Statement”) with the United States Securities and Exchange Commission (“SEC”) and submitted a listing application (the “Listing Application”) with the New York Stock Exchange (“NYSE”).
The Registration Statement and Listing Application will allow Sprott to pursue a dual listing of its common shares on the NYSE to complement its current listing on the Toronto Stock Exchange (“TSX”).
https://www.sprott.com/investor-relations/press-releases/sprott-inc-announces-share-consolidation-and-application-to-list-on-new-york-stock-exchange/
In connection with the proposed listing on the NYSE, and as previously authorized by its shareholders, the Company, following a determination by its Board of Directors, has filed articles of amendment implementing a consolidation of its outstanding common shares on the basis of one (1) post-consolidation common share for every ten (10) pre-consolidation common shares. The Company’s common shares are expected to commence trading on the TSX on a post-consolidation basis beginning at the open of markets on or about May 28, 2020. The Company currently anticipates that, subject to the receipt of all required approvals, its common shares will commence trading on the NYSE prior to the end of the second quarter under the symbol "SII". The consolidation has reduced the number of issued and outstanding common shares from 253,556,869 to 25,355,686.
Peter Grosskopf, CEO of Sprott, stated, “Our planned listing on the NYSE represents an important milestone for Sprott as we believe it will create greater exposure for the Company and attract an expanded and diverse group of institutional and retail investors in the United States. As the large majority of our clients reside in the United States, the listing will allow us to more fully explore synergies between our client base and shareholders.”
The Registration Statement has not yet become effective. Any listing of Sprott’s common shares on the NYSE will be subject to the SEC declaring the Registration Statement effective and to Sprott attaining the approval of the NYSE. The Company cannot provide any assurance that it will be successful in achieving a listing of its common shares on the NYSE.
Registered shareholders of the Company have been mailed a letter of transmittal by the Company’s transfer agent, TSX Trust Company. The letter of transmittal is used by registered shareholders to exchange their pre-consolidation share certificates for post-consolidation certificates. Until surrendered, each share certificate representing pre-consolidation common shares will represent the number of whole post consolidation common shares to which the holder is entitled as a result of the consolidation.
For further details on the consolidation and listing on the NYSE, please refer to the management information circular dated March 18, 2020 available under the Company’s profile on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
About Sprott
Sprott is an alternative asset manager and a global leader in precious metal investments. Through its subsidiaries in Canada, the US and Asia, Sprott is dedicated to providing investors with specialized investment strategies that include Exchange Listed Products, Lending, Managed Equities and Brokerage. Sprott’s common shares are listed on the Toronto Stock Exchange under the symbol
(TSX: SII). For more information, please visit www.sprott.com.
Forward Looking Statements
This press release contains statements that constitute “forward-looking information” (collectively, “forward-looking statements”) within the meaning of applicable securities laws. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “estimates”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.
The forward-looking statements herein are made as of the date of this press release only, and the Company does not assume any obligation to update or revise them to reflect new information, estimates or opinions, future events or results or otherwise, except as required by applicable law. Forward-looking statements in this press release include statements about the approval of the NYSE for the trading of the post-consolidation common shares, the timing of the expected commencement of trading of the post-consolidation common shares on the TSX and the NYSE and the satisfaction of any conditions relating thereto.
Although the Company believes the forward-looking statements in this press release are reasonable, it can give no assurance that the expectations and assumptions in such statements will prove to be correct. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results, and that actual results may differ materially from those in forward-looking statements as a result of various factors, including, but not limited to, the following: announcement or implementation of the consolidation may adversely affect the market price of the common shares; the NYSE may not approve the listing of the consolidated common shares or the commencement of trading of the consolidated common shares on either or both of the TSX and the NYSE may be delayed; the liquidity and market price of the common shares and the Company’s ability to raise capital may be adversely affected if the Company is unable to maintain its listing on the NYSE; the impact of any escalation in the severity of the COVID-19 pandemic on the implementation of the consolidation or the NYSE listing; and the other risks described under the headings "Managing Risk: Financial" and "Managing Risk: Non-Financial" in the Company’s MD&A for the period ended December 31, 2019. As a result, readers should not place undue reliance on the forward-looking statements contained in this press release.
Investor contact information:
Glen Williams
Managing Director, Investor Relations & Corporate Communications
(416) 943-4394
gwilliams@sprott.com
https://www.sprott.com/our-firm/
NYBob
5 years ago
RE:Hemke on the cartel naked short covering
Hemke on the cartel naked short covering
The market data provided by the U.S. CFTC is deliberately sparse and opaque. However, when these Banks are grouped together with other firms that actually seek to provide legitimate hedging and trading facilities, the CFTC categorizes them as "Commercials". And on the Commitment of Traders report surveyed on Tuesday March 10, these combined "Commercials" in COMEX gold were NET short 328,304 contracts.
Each contract is alleged to represent 100 ounces of gold...so...doing the math...as of March 10, these "Commercials" were NET short 32,830,400 ounces of COMEX gold. That means:
• Every $1 rally from the COMEX close of $1660 on March 10 was a NET paper loss of nearly $33,000,000
• Every $10 rally from the COMEX close of March 10 was a NET paper loss of $330,000,000
• And a rally from $1660 to $1690 would add another cool $1,000,000,000 to an already-hefty pile of paper losses.
So, when The Bullion Banks got the inside, secret word of rushed-forward FOMC schedule, they KNEW they had to act fast. If COMEX gold remained near $1640 and then blasted $100 higher on the FOMC news, the "Commercials" would have added another $3.3B in paper losses heading into the end of the first quarter.
Instead, by taking immediate action, The Banks not only reset price $150 lower BEFORE the FOMC news rally could begin, they also were able to cover an untold number of their short positions by taking the buy side of the Spec liquidation selling they had engendered by using all of the same dirty tricks (spoofing, etc.) for which they are currently under federal investigation.
So, look, I could be wrong. Maybe ten years of monitoring and tracking the every move of these criminal Banks has left me jaded and cynical. That's possible. But it's more than possible that, instead, what gold investors witnessed last week was blatant overt price manipulation that was taken by Bank trading desks after they had received inside word of a change in the FOMC calendar.
In the end, for long-term gold investors, what you've just read hardly matters.
Though The Banks may have bought themselves some time and lessened some of their potential losses, it's undeniable that significantly higher gold prices are coming over the horizon in 2020, as the global central banks rush to devalue their currencies by funding the TRILLIONS in government spending that will be needed to overcome the economic devastation of the coronavirus.
To that end, this latest criminal price manipulation effort by The Banks is actually a gift for gold (and silver) investors. Once rational thought returns to the global markets, the economic reality of these ongoing Central Bank actions will sink in. When it does, the demand for gold and silver in all their forms will likely skyrocket.
Hemke, thank you,
the NWO banksters gangsters mafia should
have been taken to court justice and
prison for a long time ago!
What I can say about NWO Satan's banksters evils;
Be sober, be vigilant;
because your adversary the devils walks about
much worse than roaring lions and alligators,
seeking whom they may devour.
Resist NWO banksters mafia evils, steadfast in faith.
Therefore submit to God,
Resist the devils and they will flee from you.
888C.com
God Bless
Amen
goldenpolarbear
5 years ago
Hi NYBob, BTW, “... Kerr Mines Closes Oversubscribed Private Placement; Increases and Extends Convertible Note Financing With Sprott Resource Lending
"... TORONTO, Feb. 28, 2020 (GLOBE NEWSWIRE) -- Kerr Mines Inc. (TSX: KER, OTC: KERMF) (“Kerr” or the “Company”), announces the closing of its non-brokered private placement raising gross proceeds of $3.21 million (the “Offering”). The Offering, previously announced on February 11, 2020 and targeting proceeds of $2.5 million, was oversubscribed due to investor demand. Furthermore, Sprott Private Resource Lending LP has agreed to increase its current US$1.5 million senior secured convertible note by US$500,000 (Cdn$670,000) (“the “Note”).
Giulio T. Bonifacio, Chief Executive Officer stated: “The total proceeds from this financing inclusive of funding from Sprott Lending further endorses the Company’s short term objectives by allowing the Company to commence a targeted drilling program for purposes of resource expansion while also testing the exploration upside with defined follow up targets within the 50 square kilometre land position at Copperstone. Additionally the Company will further advance detailed engineering and project optimization for purposes of the re-start of commercial production at the Company’s high grade Copperstone gold project.”
Private Placement
The Company completed the Offering consisting of 22,913,486 units of the Company (the “Units”) at a price of CDN$0.14 per Unit for total gross proceeds of CDN$3.21 million. Each Unit consists of one common share of the Company (a “Common Share”) and one Common Share purchase warrant (a “Warrant”).
Each Warrant entitles the holder to purchase one Common Share at a price of CDN$0.21 per Common Share until February 28, 2022 provided that if, at any time the Common Shares trade on a stock exchange at a volume weighted average trading price of CDN$0.30, or greater, per Common Share for a period of 20 consecutive trading days, the Company may accelerate the expiry date of the Warrants by giving notice to the holders thereof and in such case the Warrants will expire on the 30th day after the date on which such notice is given by the Company. All securities issued pursuant to the Offering shall be subject to a hold period of four months from the date of closing. In connection with the Offering the Company paid finders fees totalling $63,410 to certain eligible persons. Senior Officers and directors subscribed for 8,107,430 Units under the Offering.
The Offering has been conditionally approved by the Toronto Stock Exchange (“TSX”) but remains subject to final approval from the TSX. The securities issued pursuant to the Offering are subject to a four month hold period in accordance with applicable securities laws.
The issuance and sale of 8,107,430 Units under the Offering to certain Senior Officers and directors of the Company constituted related party transactions within the meaning of Multilateral Instrument 61-101- Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1) (a) of MI 61-101, as the fair market value of the participation in the Offering by each insider will not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101. The Company did not file a material change report in respect of the related party transaction at least 21 days before the closing of the Offering, which the Company deems reasonable in the circumstances so as to be able to avail itself of the proceeds of the Offering in an expeditious manner.
Sprott Convertible Note
The Note, including the US$500,000 increase, forms part of the Sprott project financing facility for US$25 million. The advance of the balance of the project financing facility remains subject to achieving defined project milestones. The Note bears interest at a rate of 9% per annum payable semi-annually. The maturity date of the Convertible Note will be extended to May 31, 2021. The Note is convertible into Common Shares at any time prior to maturity at a conversion price of CDN$0.16 per share. The Company can redeem the Note at any time by paying the outstanding principal amount in cash, or with the agreement of the holder, in Common Shares of the Company, together with interest payable to maturity.
In connection with the Note and extension, the Company will issue Sprott an additional 650,000 common share purchase warrants (the “Sprott Warrants’). Each Sprott Warrant will entitle the holder to purchase one Common Share at a price of CDN$0.15 with an expiry date of November 28, 2023. The previously issued 1,000,000 common share purchase warrants will also be extended to an expiry date of November 28, 2023. The expiry of all common share purchase Warrants issued to Sprott can be accelerated at the Company’s election if the trading price of the common shares is higher than 2.5 times the exercise price for 30 consecutive trading days
The increase in the principal amount of the Note and extension of its terms, the issuance of the Sprott Warrants and the extension of the previously issued warrants remains subject to the approval of the TSX.
Annual General and Special Meeting of Shareholders
On February 6th, 2020 the Company held its Annual General and Special Meeting of Shareholders (the “Meeting”). The shareholders voted in favour of all resolutions presented in its management information circular at the Meeting. A total of 88,836,884 common shares were voted at the Meeting, representing 30.91% of the votes attached to all outstanding common shares and the voting results were as follows:
Item 1: Appointment of Auditors
Kreston GTA LLP were appointed as the auditors of the Company and the directors were authorized to fix their remuneration by a show of hands.
Item 2: Election of Directors
On a vote by ballot, each of the seven nominees set forth in the Company’s 2020 Management Information Circular were elected as a director of the Company. The results of the ballot were as follows:
Nominee Votes For % For Votes Withheld % Withheld
Fahad Al Tamimi 80,436,689 99.74% 207,555 0.26%
Claudio Ciavarella 80,436,907 99.74% 207,337 0.26%
Giulio T. Bonifacio 80,412,853 99.71% 231,391 0.29%
Martin Kostuik 80,426,573 99.73% 217,362 0.27%
Ayman Arekat 80,488,390 99.81% 155,854 0.19%
Peter Damouni 80,447,573 99.76% 196.671 0.24%
James McVicar 80,447,585 99.79% 166,659 0.21%
Item 3: Approval of Name Change
The resolution to approve an amendment to the Articles of the Company to effect a change of name was carried by a show of hands.
About Kerr Mines Inc.
Kerr Mines is an Emerging American Gold Producer advancing the re-start of production at its 100% owned, fully permitted past-producing Copperstone Mine project located in mining-friendly Arizona. The Copperstone project demonstrates significant upside exploration potential within a 50 Square Kilometre (12,260 acre) land package that includes past production of over 500,000 ounces of gold by way of an open pit operation. The Company’s current focus is on maximizing Copperstone’s potential by defining and expanding current resources and further optimizing mine’s economics for purposes of the re-start of production.
For further information please visit the Kerr Mines website (www.kerrmines.com)
For further information contact:
Giulio T. Bonifacio
Chief Executive Officer
gtbonifacio@kerrmines.com
604-318-6760
Cautionary Note Regarding Forward Looking Statements
This news release contains forward-looking statements, including current expectations on future exploration plans and completion of the proposed Offering. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Such statements are based on current expectations, are subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such statements. These uncertainties and risks include, but are not limited to, the strength of the Canadian economy; the price of gold; operational, funding, and liquidity risks; reliance on third parties, the degree to which mineral resource and reserve estimates are reflective of actual mineral resources and reserves; and the degree to which factors which would make a mineral deposit commercially viable are present; the risks and hazards associated with underground operations. Risks and uncertainties about Kerr Mines’ business are more fully discussed in the Company's disclosure materials, including its annual information form and MD&A, filed with the securities regulatory authorities in Canada and available at www.sedar.com and readers are urged to read these materials. Kerr Mines assumes no obligation to update any forward-looking statement or to update the reasons why actual results could differ from such statements unless required by law.
While management believes that the results of its project optimization efforts and proposed changes to the project design are likely to improve the overall economics of the Copperstone Project previously disclosed in the Copperstone PFS, there can be no certainty that the actual effects will be as stated. The Company has not completed a new economic study in accordance with applicable law to evaluate the effect of the proposed changes and, as such, readers should not place undue reliance on these statements as the actual results may be significantly less favourable than expected.
Neither TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release and no stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
I am MAD that I did NOT BUY more KERR MINES shares this week!
I cannot wait to visit the KERR booth at PDAC
https://www.globenewswire.com/news-release/2020/02/28/1992997/0/en/Kerr-Mines-Closes-Oversubscribed-Private-Placement-Increases-and-Extends-Convertible-Note-Financing-With-Sprott-Resource-Lending.html
https://web.tmxmoney.com/article.php?newsid=6039538146736295&qm_symbol=KER
Kerr Mines Inc.
Booth Number: 2618A
Website: www.kerrmines.com
https://www.pdac.ca/convention/exhibits/investors-exchange/exhibitors?startsWith=k
NYBob
5 years ago
GCM News $15 Mil. Eric Sprott Investment
T.GCM |
TORONTO, Oct. 30, 2019 (GLOBE NEWSWIRE) --
Gran Colombia Gold Corp. (TSX: GCM; OTCQX: TPRFF) is pleased to announce
that Eric Sprott has agreed to purchase 3,260,870 Units of the Company
in a non-brokered private placement (the “Private Placement”) at a
price of C$4.60 per Unit, representing a 4% discount to the five-day
volume weighted average price of $4.79 for the period ended October 29,
2019, for a total investment of $15 million.
The proceeds of the Private Placement will be used for general working
capital and corporate purposes.
Closing of the Private Placement is subject to the receipt of
regulatory approvals, including the Toronto Stock Exchange, and is
expected to close two business days following receipt of such approval.
Each Unit consists of one common share and one common share purchase
warrant exercisable into a full common share at $5.40 per share for a
period of four years from the date of issuance.
Serafino Iacono, Executive Chairman of Gran Colombia, stated, “On behalf
of the Board and Management of Gran Colombia, I am pleased to welcome
Mr. Eric Sprott as a major investor in our Company.
Our success in the turnaround of Gran Colombia has led to an increase
in gold production, earnings and free cash flow and has strengthened
the Company’s financial position.
In September, we were recognized in the inaugural TSX30 based on the
increase in our share price over the last three years.
We see the investment by Mr. Sprott, a well-known gold investor, as
solid endorsement of the potential for further appreciation i programs
at our high-grade Segovia Operations with approximately 70,000 meters
of drilling over the next 1n Gran Colombia’s shares.
We are about to ramp up our near-mine and regional exploration 8 months
and we are unlocking value in our Marmato Project through a spin out
to a separate-listed vehicle, in which we will maintain a control
position, to fund a major underground mine expansion.
We look forward to the relationship with Mr. Sprott as we continue to
execute our strategy.”
About Gran Colombia Gold Corp.
Gran Colombia is a Canadian-based mid-tier gold producer with its
primary focus in Colombia where it is currently the largest underground
gold and silver producer with several mines in operation at its Segovia
and Marmato Operations.
Gran Colombia is continuing to focus on exploration, expansion and
modernization activities at its high-grade Segovia Operations and,
through a spin out transaction with Bluenose Gold Corp. announced on
October 7, 2019, Gran Colombia is progressing toward a major expansion
and modernization of its underground mining operations at
the Marmato Project.
Additional information on Gran Colombia can be found on its website at
http://www.grancolombiagold.com
and by reviewing its profile on SEDAR at www.sedar.com.
Cautionary Statement on Forward-Looking Information:
This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to anticipated business plans or strategies. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Gran Colombia to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements are described under the caption "Risk Factors" in the Company's Annual Information Form dated as of March 27, 2019 which is available for view on SEDAR at www.sedar.com. Forward-looking statements contained herein are made as of the date of this press release and Gran Colombia disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
For Further Information, Contact:
Mike Davies
Chief Financial Officer
(416) 360-4653
investorrelations@grancolombiagold.com
In GOD We Trust -
https://www.kitco.com/images/live/silver.gif?0.8344882022363285
http://www.kitconet.com/images/live/au0001wb.gif
Gold & Silver is the only REAL Legal Tender -
by The Founding Fathers for your -
Rights, Liberty and Freedom -
http://www.biblebelievers.org.au/monie.htm
God Bless America
Ps.
opinion appreciated
TIA
NYBob
5 years ago
Gold futures looking good and great for KL & BTR also -
Sprott Money News Weekly Wrap-up - 9.27.19
SEPTEMBER 27, 2019 -
https://www.buzzsprout.com/201225/1777198-sprott-money-news-weekly-wrap-up-9-27-19
SHOW NOTES
It’s the end of another quarter, and as we check in on the latest
gold and silver news, what do we find?
The usual shenanigans.
Eric Sprott is “very concerned” about a connection between
the repo market issues and the surging GLD inventory…and
he thinks the smart money may be moving.
In this edition of the Weekly Wrap-Up you’ll also hear:
• Why there may be a physical shortage of silver
• What’s holding things back for the shares
• Plus: Eric answers your listener-submitted questions
“I found it kind of hilarious when we had that big down day that they
apparently said the reason was because Trump was not going to be
impeached.
So they’re slamming gold.
Well, of course, now it looks like they’re working harder on
impeachment.
But the funny thing is, it doesn’t go back up again.
You know why?
Because it’s options expiry.
And I thought the most hilarious thing I’ve read in a long time is
that some people have decided that bitcoin prices tend to go down
before the contracts expire on the CME
. Isn’t that funny?…Welcome to our world, buddy!”
Toronto Stock Exchange Introduces the TSX30
Canada NewsWire
TORONTO, Sept. 26, 2019
Canada's premier equities marketplace launches new program to showcase
top performing companies, TSX to host market open ceremony
September 27
TORONTO, Sept. 26, 2019 /CNW/ -
Toronto Stock Exchange (TSX) today announced the inaugural TSX30, a
flagship program recognizing the 30 top-performing TSX stocks over a
three-year period based on dividend-adjusted share price appreciation.
For more information on the TSX30, visit:
http://www.tsx.com/tsx30
# 4 included:
Kirkland Lake Gold Ltd.
TSX:KL in TSX30 -
For Market Openings: Media may pick up a feed from the TOC (television
operations centre) for all market open ceremonies.
[t][/t]The feed is named TSX Transmit 1 (SD-SDI).
The client moves into position for the market open ceremony at
approximately 9:27 a.m. ET and the markets will open with the sound of
a siren (the traditional market open on Toronto Stock Exchange)
at 9:30 a.m. ET.
View original content: http://www.newswire.ca/en/releases/archive/September2019/26/c2842.html
Gold futures looking good and great for KL & BTR also -
Bonterra Resources Inc (TSXV:BTR) (BONXF) RE: Great results....
look what Kirkland did for itself, 2200% stock price appreciation
in 4 years.
whats in store for Bonterra? think about that....
http://schrts.co/YnpIdmAm
by Belek
Bonterra must have some good potential >
Belek thank you for good info BONXF -
weekly chart -
http://schrts.co/bGFvicdB
with Kirkland Lake Gold more involved it
will add more knowledge to BONXF exploration and
gold production -
Let's get it back UP and much higher for its
very undervalued and oversold -
it should be a 10 bagger and better from here
and that's why KL taking more positions )
Gold producer Kirkland Lake Gold increases stake in Bonterra Resources
Kirkland Lake, which is also backed by mining impresario Eric Sprott, increased its holdings in Bonterra to around 11.3% or 8.5 million shares
Kirkland Lake Gold - Gold producer Kirkland Lake Gold increases stake in Bonterra Resources
Bonterra recently closed a C$32 million financing to fund ongoing exploration at the company’s Quebec assets
Mining giant Kirkland Lake Gold Ltd (TSE:KL) (NYSE:KL) has boosted its stake in Canadian gold explorer Bonterra Resources Inc (CVE:BTR), which recently closed a C$32 million financing to fund ongoing exploration at its Quebec assets.
Kirkland Lake, which has a market capitalization of over C$12 billion, acquired a further 2 million units of Bonterra at C$2.50 each for a total cash payment of C$5 million. Each unit consists of one share and one-half of one warrant entitling the gold producer to acquire an additional share at C$3.10 until August 20, 2021.
The gold producer, which is also backed by mining impresario Eric Sprott, increased its holdings in Bonterra to around 11.3% or 8.5 million shares from 10.2% or 6.5 million shares.Sprott owns around 5.2 million shares of Bonterra, or just over 8% of the company.
READ: Bonterra Resources raises C$32 million to bolster Quebec projects
Kirkland Lake Gold has a long-term view of the investment, it said in a statement.
Bonterra has been advancing its gold projects in Quebec, which include the Gladiator, Barry and Moroy deposits as well as significant regional targets. It also has 100% ownership of the Urban-Barry Mill, the only permitted gold mill in the region.
Recent drilling at the Gladiator and Barry projects in Quebec intersected high-grade gold.
Drilling at Gladiator revealed intercepts of 18.5 grams per ton gold (g/t) over 3 metres in one hole, while another hit 13 g/t gold over 3 metres. At Barry, one drill hole intersected 11.6 g/t gold over 2.9 metres, extending the zone more than 50 metres to the west.
Contact Angela at angela@proactiveinvestors.com
Follow her on Twitter @AHarmantas
https://ca.proactiveinvestors.com/companies/news/901328/gold-producer-kirkland-lake-gold-increases-stake-in-bonterra-resources-901328.html
Gold and Silver is God's money and is the Answer.
Be Bold NOT Passive.
https://www.youtube.com/watch?time_continue=158&v=mpM-rUhbWm8
GOLD is Father GOD'S Money!
by Robert Kiyosaki says -
God made gold and silver.
Man made paper to replace gold and silver as money.
Throughout the history of mankind
ALL paper currencies have failed.
It's an inevitable consequence of paper
lacking intrinsic value of gold and silver... simple.
Propaganda to the contrary is an attempt to deceive people
out of their money, their value, the fruits of their labor,
their life savings, their future as independent people
living comfortably as a result of hard work and
planning for retirement their entire adult lives.
All of this is at risk for anyone trusting in paper
or electronic currency, which are only substitutes
for the real money, God's money, gold and silver.
https://www.youtube.com/watch?v=J6YJziTrHII
In GOD We Trust -
https://www.kitco.com/images/live/silver.gif?0.8344882022363285
http://www.kitconet.com/images/live/au0001wb.gif
Gold & Silver is the only REAL Legal Tender -
by The Founding Fathers for your -
Rights, Liberty and Freedom -
http://www.biblebelievers.org.au/monie.htm
God Bless America
Ps.
opinion appreciated
TIA
NYBob
5 years ago
Craig Hemke at Sprott Money: From here, where?
Submitted by cpowell on 08:38PM ET Tuesday, August 27, 2019. Section: Daily Dispatches
4:38p ET Tuesday, August 27, 2019
Dear Friend of GATA and Gold:
The TF Metals Report's Craig Hemke, writing at Sprott Money, today
outlines the central bank actions that are likely to keep elevating
gold and silver prices.
He adds that prices will get more boosting as investors note what's
happening and pile into a sector that has virtually no public
participation.
Hemke's analysis is headlined "From Here, Where?" and it's posted at
Sprott Money here:
https://www.sprottmoney.com/Blog/from-here-where-craig-hemke-27-082019.html
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATa.org
Gold futures looking good and great for KL & BTR also -
Bonterra Resources Inc (TSXV:BTR) (BONXF) RE: Great results....
look what Kirkland did for itself, 2200% stock price appreciation
in 4 years.
whats in store for Bonterra? think about that....
http://schrts.co/YnpIdmAm
by Belek
Bonterra must have some good potential >
Belek thank you for good info BONXF -
weekly chart -
http://schrts.co/bGFvicdB
with Kirkland Lake Gold more involved it
will add more knowledge to BONXF exploration and
gold production -
Let's get it back UP and much higher for its
very undervalued and oversold -
it should be a 10 bagger and better from here
and that's why KL taking more positions )
Gold producer Kirkland Lake Gold increases stake in Bonterra Resources
Kirkland Lake, which is also backed by mining impresario Eric Sprott, increased its holdings in Bonterra to around 11.3% or 8.5 million shares
Kirkland Lake Gold - Gold producer Kirkland Lake Gold increases stake in Bonterra Resources
Bonterra recently closed a C$32 million financing to fund ongoing exploration at the company’s Quebec assets
Mining giant Kirkland Lake Gold Ltd (TSE:KL) (NYSE:KL) has boosted its stake in Canadian gold explorer Bonterra Resources Inc (CVE:BTR), which recently closed a C$32 million financing to fund ongoing exploration at its Quebec assets.
Kirkland Lake, which has a market capitalization of over C$12 billion, acquired a further 2 million units of Bonterra at C$2.50 each for a total cash payment of C$5 million. Each unit consists of one share and one-half of one warrant entitling the gold producer to acquire an additional share at C$3.10 until August 20, 2021.
The gold producer, which is also backed by mining impresario Eric Sprott, increased its holdings in Bonterra to around 11.3% or 8.5 million shares from 10.2% or 6.5 million shares.Sprott owns around 5.2 million shares of Bonterra, or just over 8% of the company.
READ: Bonterra Resources raises C$32 million to bolster Quebec projects
Kirkland Lake Gold has a long-term view of the investment, it said in a statement.
Bonterra has been advancing its gold projects in Quebec, which include the Gladiator, Barry and Moroy deposits as well as significant regional targets. It also has 100% ownership of the Urban-Barry Mill, the only permitted gold mill in the region.
Recent drilling at the Gladiator and Barry projects in Quebec intersected high-grade gold.
Drilling at Gladiator revealed intercepts of 18.5 grams per ton gold (g/t) over 3 metres in one hole, while another hit 13 g/t gold over 3 metres. At Barry, one drill hole intersected 11.6 g/t gold over 2.9 metres, extending the zone more than 50 metres to the west.
Contact Angela at angela@proactiveinvestors.com
Follow her on Twitter @AHarmantas
https://ca.proactiveinvestors.com/companies/news/901328/gold-producer-kirkland-lake-gold-increases-stake-in-bonterra-resources-901328.html
Gold and Silver is God's money and is the Answer.
Be Bold NOT Passive.
https://www.youtube.com/watch?time_continue=158&v=mpM-rUhbWm8
GOLD is Father GOD'S Money!
by Robert Kiyosaki says -
God made gold and silver.
Man made paper to replace gold and silver as money.
Throughout the history of mankind
ALL paper currencies have failed.
It's an inevitable consequence of paper
lacking intrinsic value of gold and silver... simple.
Propaganda to the contrary is an attempt to deceive people
out of their money, their value, the fruits of their labor,
their life savings, their future as independent people
living comfortably as a result of hard work and
planning for retirement their entire adult lives.
All of this is at risk for anyone trusting in paper
or electronic currency, which are only substitutes
for the real money, God's money, gold and silver.
https://www.youtube.com/watch?v=J6YJziTrHII
In GOD We Trust -
http://www.kitconet.com/images/live/au0001wb.gif
Gold & Silver is the only REAL Legal Tender -
by The Founding Fathers for your -
Rights, Liberty and Freedom -
http://www.biblebelievers.org.au/monie.htm
God Bless America
Ps.
opinion appreciated
TIA
NYBob
6 years ago
Turkey was the last country to ask for gold, and withdrew 220 tonnes of
gold from the US Federal Reserve on 19 April 2018.
The country's 220 tonnes of gold are valued at $25.3 billion.
Turkey has followed countries such as
Germany,
the Netherlands,
Austria,
Belgium,
Russia and
China which have already started to repatriate their gold stocks.
There is a real lack of confidence in the U.S. Treasury which
currently holds 261,000,000 ounces of gold mainly at Fort Knox,
according to GOLD TELEGRAPH.
Furthermore, the official gold reserves have never been thoroughly
independently verified.
Why Romania Wanting Its Gold Back May Mean More Than You Think
Mar 06, 2019
Guest(s): Jeffrey Christian Managing Partner, CPM Group
https://www.kitco.com/news/video/show/PDAC-2019/2309/2019-03-06/Why-Romania-Wanting-Its-Gold-Back-May-Mean-More-Than-You-Think#_48_INSTANCE_puYLh9Vd66QY_=https%3A%2F%2Fwww.kitco.com%2Fnews%2Fvideo%2Flatest%3Fshow%3DPDAC-2019
The repatriation of gold from central banks has less to do with gold
and more to do with the rise of nationalism, said Jeffrey Christian,
managing partner of CPM Group.
“The more important thing has nothing to do with gold and it has
everything to do with the rise of nationalism,” Christian told Kitco
News on the sidelines of the PDAC 2019.
“What you’re really seeing is a rising nationalist trend, not only in
Europe, but also in other countries.”
Italy’s gold reserves belong to central bank – BoI’s Visco
Posted on March 6, 2019 by News
Reuters/Stefano Bernabei/3-4-2019
“Bank of Italy’s Governor Ignazio Visco said on Monday the country’s
reserves of gold belonged to the central bank and could not be used to
fund government spending.”
Note: Here we are again witnessing an argument among principal players
over the sovereign nature of a barbarous relic
that has no relevance in
the modern monetary system [sigh. . . to NWO fiat$fed counter paper fits]
Modern Monetary Theory is smoke and mirrors nonsense
Posted on March 6, 2019 by Opinion
MarketWatch/Kenneth Rogoff/3-5-3019
“Just as the Federal Reserve seems to have beaten back blistering
tweets from President Donald Trump, the next battle for central-bank
independence is already unfolding.
And this one could potentially destabilize the entire global
financial system.
A number of leading U.S. progressives, who may well be in power after
the 2020 elections, advocate using the Fed’s balance sheet as a cash
cow to fund expansive new social programs, especially in view of
current low inflation and interest rates.”
The Fed is moving to take even more control of debt markets and interest rates
Posted on March 6, 2019 by Opinion
Mises Institute/Thorsten Polleit/3-4-2019
“In the second scenario, in the light of an actual or expected rise in
inflation, people lose their confidence in the value of the currency.
They try to rid themselves of their money balances, withdraw bank
deposits and divest their bond holdings. To prevent this from raising
market interest rates, the central bank has purchase more debt and
issue more money.
This causes confidence in the value of money to decline further.
The debt market sell-off continues, and more money is issued,
so that eventually price inflation accelerates.”
https://mises.org/wire/fed-seizing-even-more-marketplace
xxxx xxxx
God Bless America
NYBob
6 years ago
Ronan Manly: Romania joins gold repatriation exodus
Submitted by cpowell on 02:25AM ET Wednesday, March 6, 2019.
Section: Daily Dispatches
9:26p ET Tuesday, March 5, 2019
Dear Friend of GATA and Gold:
Bullion Star gold researcher Ronan Manly today examines the effort
in Romania's parliament to repatriate the country's gold reserves
from the Bank of England and concludes that it opens a new front
between democracy and the arrogance and unaccountability
of the central bank.
If legislators enact the bill, Manly writes,
"Romania looks set to join the ranks of Hungary, Austria, Germany,
and the Netherlands in bringing gold bars back into domestic storage.
Which European nation will be next after Romania?
Poland is a likely candidate, with 102.9 tonnes of gold
stored at the Bank of England."
Manly's analysis is headlined "The Domino Effect:
Romania Joins Gold Repatriation Exodus" and it's posted
at Bullion Star here:
https://www.bullionstar.com/blogs/ronan-manly/the-domino-effect-romania-joins-gold-repatriation-exodus/
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
Ronan Manly: Bank of England tears up its gold custody contract with Venezuela
Submitted by cpowell on 02:17AM ET Thursday, January 31, 2019.
Section: Daily Dispatches
9:18p ET Wednesday, January 30, 2019
Dear Friend of GATA and Gold:
Confiscation of Venezuela's gold by the Bank of England, Bullion Star
gold researcher Ronan Manly writes today, seems to have been plotted
by the United Kingdom and the United States last April when
Venezuela's central bank paid Citibank $172 million to recover
gold bars kept at the Bank of England that had been given
as collateral for a loan.
In any case, Manly writes, the Bank of England's reputation as a safe
and impartial custodian of international gold reserves has been
destroyed.
Of course Venezuela's removal of so much gold from the Bank of England
might have greatly endangered the gold price management operation of
the major central banks, which is centered on the Bank of England.
Manly's analysis is headlined
"Bank of England Tears Up Its Gold Custody Contract with Venezuela's
Central Bank" and it's posted at Bullion Star here:
https://www.bullionstar.com/blogs/ronan-manly/bank-of-england-tears-up-i...
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
* * * *
In Maduro's Venezuela, even counting gold bars is a challenge
Submitted by cpowell on 01:33AM ET Thursday, January 31, 2019.
Section: Daily Dispatches
By Laura Millan Lombrana
Bloomberg News
Wednesday, January 30, 2019
Venezuela is home to rich gold deposits and holds billions of dollars
of foreign reserves in gold bars in the central bank's vaults.
The question is: How much is there?
The answer has taken on added significance as beleaguered President
Nicolas Maduro faces increasing pressure to resign.
Last week countries including the U.S. and U.K. recognized
the leader of the National Assembly, Juan Guaido,
as the Venezuela's legitimate leader, amid mass protests.
On Monday, the Trump administration issued new sanctions that
effectively block crude exports to the U.S.,
where Venezuela gets the bulk of its cash.
While crude is by far Venezuela's largest export, refined oil and
then gold both make up significant sources of revenue,
according to data compiled by the Observatory of Economic
Complexity of the Massachusetts Institute of Technology.
But both the nation's gold reserves and mining production
have dropped in recent years as Maduro's regime used
the yellow metal to generate hard currency in
international transactions -
- and even to exchange it for food and medicine. ...
... For the remainder of the report:
https://www.bloomberg.com/news/articles/2019-01-30/in-maduro-s-venezuela...
* * *
Don't deal in Venezuelan gold, White House says in anti-Maduro push
Submitted by cpowell on 01:04AM ET Thursday, January 31, 2019.
Section: Daily Dispatches
By Shaylim Castro and Jeff Mason
Reuters
Tuesday, January 29, 2019
CARACAS, Venezuela -- The White House warned traders on Wednesday
not to deal in Venezuelan gold or oil following its imposition of
stiff sanctions
aimed at forcing socialist President Nicolas Maduro from power.
National security adviser John Bolton tweeted that traders should
not deal in gold, oil, or other commodities "being stolen"
from the Venezuelan people, as opponents of Maduro's government
worried that a Russian-operated plane had shipped gold
out of Caracas this afternoon.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146447004
God Bless America
goldenpolarbear
7 years ago
“...Kerr Mines confirms new mineralized 'Footwall' zone at Copperstone Project
TORONTO, Oct. 24, 2017 /CNW/ - Kerr Mines Inc. ("Kerr" or the "Company") (TSX: KER, OTC: KERMF, FRA: 7AZ1) is pleased to announce the discovery of a new mineralized zone at the Copperstone Project. The newly realized Footwall Zone has been established as a mineralized zone by combining the drilling results of the 2017 Phase one surface exploration program with historical drilling results.
The new Footwall Zone is currently 500 feet along strike by 800 feet along dip and parallel to the Copperstone Zone.
The Copperstone Zone has a strike length greater than 4,500 feet.
Select intervals include:
CSR-143 is 30 feet at 11.7 g/tonne
DCU-8 is 15 feet at 22.1 g/tonne
KER-15-02 is 6 feet at 13.9 g/tonne
KER-17S-04 is 12 feet at 7.3 g/tonne
Provides a pathway to increase gold resources at the Copperstone Project.
Footwall Zone open for expansion along strike and dip.
Establishing the Footwall Zone is a fundamental step forward towards achieving our long term strategic growth vision. The Footwall Zone represents a significant opportunity expand our resource growth profile," said Claudio Ciavarella, CEO Kerr Mines.
Over 60 drill holes were compiled, and mineralized intervals were grouped and composited to form grade shells in this new Footwall Zone. The grade shells of historic origin were identified and combined with new grade shells formed by the phase one drill program to establish a zone of continuity.
The Footwall Zone provides a focused area within which to continue exploration drilling efforts with the goal of adding to the Copperstone Project gold resources. In addition, the discovery of this Footwall Zone allows a more focused allocation of exploration drilling outside of the Footwall Zone with the goal of expanding it along strike and dip.
The geology, including lithology, alteration and inclination, is the same as the Copperstone Zone. The mineralized areas include intersections of quartz latite porphyry in the detachment fault brecciated sediments with chlorite and hematite alteration.
The Footwall Zone is a parallel system to the west side of the Copperstone Zone, which historically produced over 500,000 ounces of gold and has a current mineral resource of 313,000 ounces at 10.35 gram per tonne (0.302 ounce per ton) (measured + indicated), estimated in 2010*.
The technical information in this news release has been prepared in accordance with the Canadian regulatory requirements set out in NI 43-101 and reviewed and approved by Michael R. Smith, Registered Geologist., a "Qualified Person" as defined by NI 43-101 for this project.
About Kerr Mines Inc.
Kerr Mines is a North American gold development and exploration company currently advancing the 100% owned, fully permitted past-producing Copperstone Mine project. Copperstone is a high-grade gold project located along a detachment fault mineral belt in mining-friendly Arizona. The project demonstrates significant upside exploration potential within a 4,775 hectare (11,800 acres) land package that includes a production history of over 500,000 ounces of gold. The Company's current focus is on maximizing Copperstone's potential by defining and expanding current resources and strengthening the mine's economics leading to a production decision.
Quality Assurance and Quality Control Statement
Procedures have been implemented to assure Quality Assurance Quality Control (QAQC) of drill hole assaying being done at American Assay Laboratories (American), which is ISO Accredited. All portions of drill holes are being assayed and samples are securely stored for shipment to American, with chain of custody documentation through delivery. Mineralized commercial reference standards and coarse blank standards are inserted every 20th sample in sequence and results are graphed to assure acceptable results, resulting in high confidence of the drill hole assay results. When laboratory assays are received, the QAQC results are immediately evaluated and graphed to analyze dependability of the drill hole assays. As the Copperstone Project advances, additional QAQC measures will be implemented including 1) selected duplicate assaying being done at a second accredited assay laboratory, 2) duplicate assaying of selected intervals of core (quarter splits) and reverse circulation drilling samples, and 3) metallic screen assays of selected remaining laboratory rejects. All results will be analyzed for consistency.
*Mineral Resource Tabulation – Model capped at 5.0 oz Au/t with a 0.15 oz Au/t cutoff grade, 1,038,000 tons (measured + indicated) - NI 43-101 Technical Feasibility Report, Copperstone Project, February 11, 2010. Limited mining of this resource occurred in the period between Q4 2012 and Q3 2013 and updated tons will be tabulated when a new resource is estimated in early 2018.
Cautionary Note Regarding Forward Looking Statements
This news release contains forward-looking statements, including current expectations on the timing of the commencement of production and the rate of production, if commenced. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Such statements are based on current expectations, are subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such statements. These uncertainties and risks include, but are not limited to, the strength of the Canadian economy; the price of gold; operational, funding, and liquidity risks; the degree to which mineral resource estimates are reflective of actual mineral resources; and the degree to which factors which would make a mineral deposit commercially viable are present; the risks and hazards associated with underground operations. Risks and uncertainties about Kerr Mines' business are more fully discussed in the Company's disclosure materials, including its annual information form and MD&A, filed with the securities regulatory authorities in Canada and available at www.sedar.com and readers are urged to read these materials. Kerr Mines assumes no obligation to update any forward-looking statement or to update the reasons why actual results could differ from such statements unless required by law.
Neither TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release and no stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
SOURCE Kerr Mines Inc.
For further information: Claudio Ciavarella, Chief Executive Officer, cciavarella@kerrmines.com, 416-855-9305
Related Links
www.kerrmines.com
...”
http://www.newswire.ca/news-releases/kerr-mines-confirms-new-mineralized-footwall-zone-at-copperstone-project-652707483.html
FYI, Kerr Mines AGM is in Toronto at the Sheraton @ 10:00 am BTW, Eric Sprott rarely makes gold mine investment errors imho http://www.finanzen.net/nachricht/aktien/irw-news-kerr-mines-inc-kerr-mines-bestaetigt-neue-mineralisierte-zone-footwall-im-projekt-copperstone-5768708 “... IRW-News: Kerr Mines Inc: Kerr Mines bestätigt neue mineralisierte Zone Footwall im Projekt Copperstone...”
Tommy
11 years ago
Rick Rule: Are Some Mining Stocks Heading Up?
http://sprottgroup.com/thoughts/articles/rick-rule-are-some-mining-stocks-heading-up/
Friday, November 22, 2013
Henry Bonner
“I have not seen capital markets in the junior industry this gloomy for a decade,” Rick Rule told clients of Sprott Global Resource Investments Ltd. on a conference call Monday, November 18.
“Twice before, I have been in a market this gloomy,” Rick continues, “in 1991 and 2000. Within a year and a half of both periods, the market went much higher. In 1991, the benefits to me were spectacular. And the recovery off the 2000 low was even better by a large margin.
“Now, after three years of pain, I suggest it is in your interest to hang around for the gain,” he says.
What Goes Around Comes Around…
“In a conversation with Eric Sprott about four or five weeks ago, I was lamenting my own behavior at the peak in 2010. I observed at the time that it was hard to buy – which probably meant it was time to sell. I even communicated this to clients at the time. And we did sell some at the time – but not our entire position. Why did I hold on when I believed the market would go lower?
“What I learned from Eric was that you never sell everything at the top. This is a consequence of our own confidence and simple hubris. We believe ourselves to be better investors and analysts than the rest. We believe our management teams are smarter than others, and that our properties are of higher quality. We believe our companies have better balance sheets. What happens is that we ride our stocks over the top and then, with some of them, back down to the bottom.”
Were we wrong to think that we owned better stocks than most investors?
“The truth is that the market does not care whether you do or not. And that is true on the way down -- and on the way up.
“In the context of very rapid and very violent market moves – particularly on the way down – having the best is very little consolation when your position has declined by 50%.”
So why stay in the sector when the market ignores our expertise at analyzing stocks?
“Once in a decade, natural resource markets fall by at least 50%,” says Rick. “The best investors lose half their money even though they have the best positions. At the bottom the best investors sell the worst of their stocks and redeploy the money among the remaining companies. When markets recover, those portfolios can be up dramatically, compensating them more than handsomely for their courage in the bear market days.”
“Closet Bull Market” May Be Under Way…
Has the market bottomed yet? Rick says the better stocks may have already turned around.
“In my last market update, I said the market would begin to ‘bifurcate’ – meaning the top 10 to 20 percent of issuers would start moving higher, while the rest of the issuers continued to trend lower. This ‘bifurcation’ may already be three or four months old at this point.
“These types of moves may leave behind investors looking for a broad-based recovery in the resource sector, because the overall market will continue to decline, dragged down by the majority of stocks.”
This type of phenomenon is nothing new, says Rick. “As with prior bear market bottoms, buyers are exhausted, which is the reason for lower and lower prices – but sellers are exhausted too. As an example, one stock that we follow closely was recently up 50% on only $300,000 of buying.
“So at this point, we should see some of the better companies begin to receive higher bids, because sellers are scarcer than before. It can take a small amount of buying to change a market cap substantially.”
Beware, nonetheless, that there could be more rounds of selling, even in the better companies, specifically because of tax-loss selling in December, Rick warns.
Why Can’t We Call a Broad Market Bottom?
“A lot of companies simply do not have the balance sheets to survive in the absence of a change in underlying market conditions. While the best companies get better, the worst companies – which are much more numerous – are going to keep going lower.”
Do not expect a quick recovery of the broad market before these deadbeat stocks disappear, he says: “This cleansing period could last another 18 to 24 months. This will be a ‘closet’ bull market because only the best will be moving up or going sideways.
“Despite overall deteriorating market conditions, companies that offer real value from the best management teams exploring in areas with the highest chance of success should start to receive higher bids.”
‘Cleansing’ of bad companies will likely accompany similar developments among professionals and investors in natural resources, Rick expects: “We haven’t seen professional capitulation yet among mining industry experts. We would expect many CEOs and administrative staff to leave the sector as mergers and acquisitions reduce the number of professionals needed within the space.
“We also still expect to see capitulation among issuers, where they come to us for capital offering terms similar to those we obtained in 1991 and 2000, when new capital was as scarce as today. Instead, issuers expect the terms they got at a market peak in 2010, when companies could easily find financing.”
This “gloomy” market may already be moving up for the best names. If you believe Rick, this is a move that the broad market could fail to recognize because of deadweight from companies still ‘on the way out.’ While specific stocks recover, the broad junior space could continue to clean slate with more professional capitulation and fewer junior companies able to maintain their operations – let alone their salaries.
Rick Rule founded Global Resource Investments in 1994. Global provides brokerage and investment banking services to high net worth individuals, institutional investors, and corporate entities worldwide. In 2011, Global was acquired by Sprott, Inc., a public company based in Toronto, Canada, which has in excess of $7.3 billion in assets under administration in the resource and commodity sectors.
1http://www.marketwatch.com/investing/stock/sii
Tommy
11 years ago
Sprott USA Chairman Rick Rule, the Carlsbad, California based natural resource financier with nearly four decades of experience, joined us for a conversation earlier today on the current mining bear market, which is approaching its third anniversary. As expected, Mr. Rule was upbeat, and sounds to be making the most of the opportunities being presented to him.
“Junior capital markets may be closed but Sprott is not. We are aggressively trying to allocate capital in this market.”
Mr. Rule’s only complaint is that issuers (read: small, pre-revenue, hope and dream mining companies) still think they are entitled to financing terms of the 2003-2010 bull market. Mr. Rule said that during that period, half of Canadian listed junior mining companies were spending more than 50% of their capital on general and administrative expenses.
“The exploration industry was stupidly overcapitalized from 2003-2010. Every truly great party causes a truly monumental hangover. We’re in that phase now.”
Mr. Rule is not at all depressed about the current mining bear market, however. He thinks that the top 10-15% of junior companies have already bottomed, and notes that discoveries, such as RMC, FCU or AOI, are continuing to reward investors with five and ten-baggers.
Rule predicted it will take another 18-24 months for resource equities to fully rebound. The largest mining companies are already starting to show compelling valuations, Rule says, which will ultimately attract global capital flows.
We were able to ask Mr. Rule about a few stocks that he’s mentioned in the past, including Fission Uranium, which he feels is being held back by a weak uranium spot price. “Unless I’m wrong and the exploration becomes less predictable, I’ll own the name until it has a different symbol.”
Charts provided by the CEO Technician. Click to expand.
Fission Uranium (TSXV:FCU). Click to enlarge.
Rule believes Robert Friedland’s Ivanhoe Mines is in a “very special situation” for having the world’s best exploration and development entrepreneur running the company, while also having “two generational discoveries” contained in the one vehicle. “My own experience has been that superb projects finance themselves, including in difficult countries,” offered Mr. Rule on the locations of Ivanhoe’s deposits, DRC and South Africa.
Charts provided by the CEO Technician. Click to expand.
Ivanhoe Mines (TSX:IVN). Click to enlarge.
Bob Quartermain’s Pretivm Resources, which has been under tremendous pressure recently, received a show of support from the Sprott USA Chairman. Rule expects results from Pretivm’s bulk sample to be better than expected, adding that he may repurchase shares in Pretivm, but does not own the company currently. “If the results are as I anticipate them, and if the reaction to the results are stilted by some academic discussion… I’ll be an extraordinarily large buyer.” Of Pretivm’s CEO, Rule expressed strong support. “I have known Bob Quartermain for over two decades. To suggest that he is either dishonest or incompetent is of monumental stupidity.”
Click to enlarge
Pretivm Resources (TSX:PVG). Click to enlarge.
Mr. Rule says Sprott Inc. has significantly expanded its footprint in Calgary since the acquisition of former competitor, the Toscana Merchant Group, in 2012. “We’re no longer suitcase bankers or investors coming in from California or Toronto”, he claims. Rule says he sees a lot of value in the sub 5000 barrel a day space in Canada. “We would love to play an increasing role helping those companies with equity, off balance sheet finance, with drilling joint ventures, with bridge and mezzanine finance, and acquisition debt finance.”
Sprott Inc (TSX:SII). Click to enlarge.
Sprott Inc (TSX:SII). Click to enlarge.
To conclude our conversation, Mr. Rule simply reminded us that bull markets follow bear markets. “Having lived through the pain, you may as well hang around for the gain.”
We appreciate Mr. Rule for joining the program, and we advise all readers to sign up for updates from the Sprott Organization.
Please note that nothing contained in this article or the associated audio file are to be considered investment or professional advice of any kind. All facts are to be verified by the reader. Always do your own due diligence. Thank you.
Previously on CEO.CA: Sprott USA Chairman Rick Rule: This is turning into a long rant, but you asked for it
Tommy
11 years ago
$SII.TO - Sprott Inc. Announces 2013 Third Quarter Results
http://www.sprottinc.com/investors/press-releases/press-release/?prId=122624
... "TORONTO, Nov. 14, 2013 /CNW/ - Sprott Inc. (TSX: SII) ("Sprott" or the "Company") today announced its financial results for the three and nine months ended September 30, 2013.
Q3 2013 Overview
Assets Under Management ("AUM") were $7.3 billion as at September 30, 2013, compared to $10.3 billion as at September 30, 2012 and $7.1 billion as at June 30, 2013
Assets Under Administration ("AUA") were $2.6 billion as at September 30, 2013, compared to $4.0 billion as at September 30, 2012 and $2.6 billion as at June 30, 2013
Management Fees were $19.5 million, a decrease of 30.9% compared with the three months ended September 30, 2012
EBITDA was $5.9 million ($0.03 per share), compared with $10.5 million ($0.06 per share) for the three months ended September 30, 2012, a decrease of 44.0%
Net income was $13.5 million ($0.06 per share) for the three months ended September 30, 2013, compared with net income of $11.0 million ($0.07 per share) for the three months ended September 30, 2012
Completed acquisition of Sprott Resource Lending Corp.
Launched a new offshore global mining fund with Zijin Mining Group Company Limited
Reported positive net sales for the third quarter
Subsequent Events
Named Steve Yuzpe Chief Executive Officer of Sprott Resource Corp.
"Throughout 2013 we have taken steps to improve our investment management processes," said Peter Grosskopf, Chief Executive Officer of Sprott. "Going forward, our portfolios will be more actively managed, more concentrated, and focused on limiting downside risk while maintaining strong upside potential. We will continue to diversify our Canadian platform through the addition of new products and investment capabilities. We will also look for opportunities to more efficiently leverage our platform by increasing our managed asset base through new products and acquisitions."
"During the third quarter, we completed the acquisition of Sprott Resource Lending Corp. in a transaction that further strengthens our balance sheet and gives us the ability to re-launch our resource lending strategy in a structure that will be more attractive to institutional investors," said Steven Rostowsky, Chief Financial Officer of Sprott. "We currently have close to $350 million in available capital that will be deployed for various growth initiatives including seeding and launching new funds such as our new offshore fund with Zijin; the pending Sprott Resource Lending LP; and other products under review."" ...
Tommy
11 years ago
Glum Resource Market Creates Value Plays: Adam Footer
http://sprottgroup.com/thoughts/articles/glum-resource-market-creates-value-plays-adam-footer/
Having lived through the pain, you might as well stick around for the gain.
-- Rick Rule
The last two years have been tough for the natural resource sector – though as of November 5, gold was up nearly $100 from its late June low of around $1,220 per ounce1. Today (Friday, November 8) gold saw a steep fall back down to around $1,285, which has been tied to a report of stronger job growth in the U.S.2.
Adam Footer, an Investment Executive at Sprott Global Resource Investments Ltd., says the two-year fall has left the junior market under-followed, and describes two types of companies that could make good investments now.
“Most people are either depressed about the sector or have stopped watching out of lack of interest,” he explained. “If you want to invest in the sector, you have to act within the context of the current market. You cannot ‘throw darts’ and you cannot buy low-quality companies, because in a disinterested market, these boats will not float.
“A common mistake that I see is focusing too much on tomorrow’s metals prices – which we do not know. Predictions are often wrong and will only bias your analysis when it comes to stock selection. Instead, adapt to today’s market and plan to invest without immediately higher precious metals prices.
“An area to look at could be potential takeover targets that control high quality assets. You may be early, but you can be fairly confident that you will get in cheaply relative to a few years ago.
“For people invested in the sector, continue to know what you own; some companies can ‘control their own destiny’ because they have cash on hand and are performing work that will generate news. Positive drill results or a new discovery can still make a stock stand out regardless of the trend in commodity prices.
“In this type of environment, we look for stocks that the market has to care about – i.e. companies that can put out positive news, giving the stock near-term upside potential. No matter how bad the market becomes, there will be serious money in the sector. Because of this, there are still companies that the market has to care about, even when it does not pay attention to most of the companies out there.
So what can you do today?
“Ask yourself if the companies that you own can go higher if the market stays still, or gets worse in the next year. In a lot of cases the answer will be no.
“Then you have some decisions to make – selling positions to raise cash, reallocating within the sector, scaling out of some positions, or even reallocating your portfolio to increase your yield or income allocation. Hoping for your stocks to go back up costs you money and kills your morale -- ask anyone who sat through the NASDAQ decline in the early 2000’s. Set yourself up for success in this market, not the market of three years ago.
“If you have cash to invest, there are some nice opportunities out there. But don’t rush, and don’t commit everything at one time.
“You can start by looking at what stocks bucked the trend this year. Remember that we are in a bear market: any junior that performed well this year is an outlier and may be doing something exceptionally well. Is there potential for this to continue for the next year?
“In most cases these outperforming stocks were driven higher by exceptional exploration results that discovered or grew an asset. When an asset grows it usually increases in value, regardless of the market conditions, and share prices can increase accordingly.
“Another opportunity lies in companies that are trading sideways at a depressed price, but own an asset that is known to be of high quality. These stocks often fall to the wayside because they are no longer publishing attention-grabbing news releases. Their high-quality asset, however, is the same regardless of whether we are in a bear market or a bull market.
“Remember that grade is king. If you can buy high-quality, high-grade assets at bear-market prices, then you will feel good about it when the market eventually turns bullish.
“So there are two strategies that can help you narrow your focus. You can buy the high quality that the market has forgotten, or you can buy the small segment of companies that are putting out news that the market still cares about. These are two ways to try to reduce risk in an otherwise very risky sector.
“Finally, remember to temper your expectations, because if you expect prices to rally immediately after making a stock purchase you stand to be disappointed. Buy because you believe you will be rewarded when this market turns around regardless of how long it takes.
“Using this approach, you own the best-in-class assets, which stand to lead the way when the market shifts to early-stage bullishness. You can then consider re-allocating to more risky or speculative positions. But now is not a time to take on a lot of risk through blind speculation.
“Bear markets are hard to sit through, but we believe we can make it work for us in the long run. It is a matter of finding the right course of action and sticking to it.”
P.S.: For 10 questions Rick Rule asks before investing in any natural resource play, click here.
Tommy
11 years ago
How to Be Your Own Central Bank
‘Fedspeak’ was first used to describe the long, often vague statements by Alan Greenspan on changes in Federal Reserve policy. In fact, Greenspan claims opaque answers to straight forward questions were part of the job as he did not want to make markets overreact. In his words, “What tends to happen is your syntax collapses… All of a sudden, you are mumbling. It often works. I created a new language which we now call Fedspeak. Unless you are expert at it, you can’t tell that I didn’t say anything.”1 Recently, in a departure from ‘Fedspeak’, Central bankers around the world have made their intentions known about how they plan to manage their foreign exchange reserves, giving investors a rare glimpse into how to manage their own portfolios.
Daniel Mminele, Deputy Governor of the South African Reserve Bank, recently gave his view on the impact of the Federal Reserve tapering of its bond purchases. He believes that asset purchases by the Fed have significantly elevated prices for US Treasuries. With more than 60% of South African foreign exchange reserves held in US dollars, he has a lot to lose. To lessen the impact of tapering, the South African Reserve Bank will be diversifying into new asset classes and new currencies outside of the US dollar.2 In simpler terms, tapering will lower the value of their reserves and they are beginning to move out of US dollar assets now.
Further clarity came from the European Central Bank’s Mario Draghi when asked by Tekoa da Silva recently his thoughts on gold as a reserve asset he responded, “I never thought it wise to sell it [gold], because for central banks this is a reserve of safety… it gives you a value-protection against fluctuations against the dollar. So that’s why central banks which have started a program for selling gold a few years ago, substantially I think stopped… most of the experiences of central banks that have leased or sold the stock of gold about ten years ago, were not considered to be terribly successful from a purely money viewpoint.”3 That is a surprisingly clear endorsement of gold as an asset for central banks – no ‘Fedspeak’ here – and a clear endorsement for banks to hold some gold.
In contrast to the recent directness from The Reserve Bank of South Africa and the candid comments from Mr. Draghi, we move to the ‘Nospeak’ policy on gold from China. The last time China reported gold holdings was in April 2009 with 1,054 metric tons. However as we have opined previously “you have to watch what they do, not what they say”.4 China is on pace to consume a record amount of gold this year, which may be partly due to the central bank diversifying its foreign-exchange reserves. The continued legislative wrangling and a possible debt default next year have only deepened concerns about the outlook for the US dollar and Treasuries. But you won’t hear that from the Peoples Bank of China. While officials have vehemently denied adding to their gold holdings, trade statistics tell a different story. As of September 2013 China has imported a total of 826 tonnes so far this year, double that of the first nine months of 2012, well on the way to being the largest consumer of gold in 2013. It is hard for us to believe that none of this gold has found its way to the Peoples Bank of China. In fact, Andrew Cosgrove and Kenneth Hoffman of Bloomberg industries estimate that Chinese central bank holdings are likely closer to 2,710 metric tonnes – a significant increase over their disclosed amount. But no clarifying statements are expected from the Chinese any time soon.
If we were to cobble together the advice from Mr. Mminele, Mr. Draghi and the ‘Nospeak’ implications from the Chinese, we can create a ‘how-to-manage’ your own portfolio manual just as central banks do:
Begin to diversify your holdings outside of the US dollar because Federal Reserve tapering at some point in the future will have deleterious effects on dollar holdings.
Own some gold as a reserve of safety and value-protection against fluctuations in the US dollar.
Accumulate your store of gold slowly over time.
Never disclose how much gold you own and NEVER sell it.
If you are ever asked direct questions about your ownership or intentions on purchasing gold, speak but don’t say a thing.
This is sage investment advice from the world’s top bankers, which unfortunately, they will never share with you.
1 Fedspeak’s new nuances.
http://articles.chicagotribune.com/2007-05-18/business/0705171115_1_greenspan-and-bernanke-ben-bernanke-monetary-policy
2 Reserve Bank to diversify currency exposure.
http://www.bdlive.co.za/economy/2013/11/05/reserve-bank-to-diversify-currency-exposure
3 ECB Head Mario Draghi on Gold and Banking.
http://www.silverdoctors.com/ecb-head-mario-draghi-on-gold-admits-central-bankers-are-powerful-they-are-also-not-elected/
4 China’s Gold Reserves: Watch What They Do, Not What They Say. http://sprottgroup.com/thoughts/articles/chinas-gold-reserves-watch-what-they-do-not-what-they-say/
Tommy
11 years ago
5 Lessons I Learned From Lukas Lundin
http://seekingalpha.com/article/1693152-5-lessons-i-learned-from-lukas-lundin?source=email_macro_view&ifp=0
A natural-resource insider asking who Lukas Lundin is would be like a Brit asking who the current queen of England is. You just know.
Fact is, there is no stronger figure in the resource sector than Lukas, who heads the Lundin Group of Companies founded in 1971 by the late Adolf Lundin, Lukas's father and a veritable legend in the sector.
Their website states, "With a mandate to maximize shareholder value, the Lundins have produced consistent, long-term results and have earned unprecedented loyalty among their shareholders." This is no exaggeration-and I believe it's one of the reasons why for three decades the Lundins have reigned supreme in the resource market.
In 2011, for example, they sold Red Back Mining for C$7.1 billion to Kinross Gold (KGC), and in 2012, Lundin company Africa Oil (AOIFF.PK) made a world-class oil discovery in Kenya, handing shareholders a ten-bagger (meaning a profit of 1,000% or more).
All in all, the Lundin Group, consisting of 15 companies, has raised over $3 billion in financing to advance its projects. Lundin companies operate in more than 30 different countries, and joint venture partners have included some of the largest companies in the world, such as Gulf Oil, Barrick Gold (ABX), BHP Billiton (BHP), and Freeport McMoRan (FCX).
I feel privileged to have been able to spend a lot of time with Lukas Lundin over the years, not just in my role as Casey's chief energy investment strategist and as a full-time investor, but also because I happen to live next door to him.
Being a great admirer of successful entrepreneurs, I've recently pondered what it is that separates Lukas from the thousands of wannabe resource titans. Here are the five valuable lessons I learned, lessons that I think any businessman should take to heart.
Lesson #1: Walk the walk.
Lukas's attitude toward investments is the first major difference between him and many others in the resource community. He thinks and acts like a winner. He's the first person to write a large check to go into his own deals, and that, in my mind, is the greatest sign of leadership and confidence you can expect from a company's management.
In all of the Lundin companies, the Lundin family has the most money invested and the most money at risk-their interests are perfectly aligned with the shareholders'. Unlike most of the resource explorers on the TSX-V exchange, the Lundins don't make money unless their shareholders make money.
This was highlighted again last Saturday, when Lukas invited me over for breakfast. Naturally, our conversation tends to drift to the natural resource sector, and before I knew it, we'd spent over three hours talking about the business. But one line that really stood out for me was when he said, "How can I ask investors to invest and buy Lundin stocks unless I am willing to invest the most?" I can tell you from personal experience that not too many people in the resource sector think like that.
Lesson #2: Find the best people and keep them.
Lukas also has an uncanny ability to attract the best in the business to work in his companies. A great example is Keith Hill, Lukas's right-hand man in the oil sector. Under Lukas's guidance, Keith put together what is today Africa Oil (the company whose shareholders saw over 1,000% gains in the last 18 months).
Thanks in part to Africa's partner Tullow Oil (TUWLF.PK), the company's assets continue to get bigger and better. Lukas is smart enough to understand that he can't do it all alone; at the core of every great company are the people who make things happen. At the Lundin office, if you don't make things happen, you won't be around for long-and that's a good thing for investors.
Lesson #3: Think big.
One of Lukas's core beliefs is that life is short, so you might as well focus on the most economic world-class projects. If it doesn't have world-class potential, Lukas isn't interested, which is a fundamental difference between him and 99.9% of the resource sector.
Lukas is able to differentiate what has world-class potential and what doesn't, without spending years and millions of the shareholders' money. I believe this comes down to the fact that Lukas is the largest shareholder in his companies; because his own wealth is at risk, he treats the treasury with the utmost respect and doesn't waste money on mediocre projects. Of course, not every single project pans out, but unless it has world-class potential, the Lundin fingerprint won't be on it.
Lesson #4: Don't be afraid; be a contrarian.
You cannot succeed without being a contrarian in the resource sector. This is what I like most about Lukas: he isn't scared to tell his friends that they're wrong.
Lukas and one of his close friends-another resource titan-have had some heated debates of late. His friend thinks the metals market is at risk due to a global economic slowdown, a result of the end of global growth. Lukas, on the other hand, is bullish and thinks this is exactly the market to be aggressive when everyone is weak, to go after the best projects in the world. Both are highly respected within the industry, yet they have polar opposite views. Why so different? Well, one of them has recently had major successes, while the other was close but didn't monetize the opportunities, and his shares have suffered as a result.
Lukas has a strong balance sheet across the board and is able to act on these opportunities because of his past successes and monetization of large assets. Luck? As they say, you have to be good to be lucky, and Lukas is good. In the 2008 resource meltdown, he suffered like most; however, he positioned his companies to not just benefit from the rebound, he monetized opportunities.
Lukas learned early on about the benefits of being a contrarian from his legendary father, Adolf. The Lundins would go after top-quality deposits in areas most others didn't dare to tread or didn't have the know-how to operate in. By moving decisively, the Lundins were able to get in early and cheaply. You will never see a Lundin chase an area play-in fact, it's quite the opposite. They cause area plays, such as they did in the East African Rift in Kenya in the past couple of years.
I was involved in the early stages of Africa Oil and was a large investor alongside the Casey Energy subscribers in what at the time was a relatively unknown oil district. There were no majors, no wells being drilled, and the Lundins were able to buy the 10BB block for $10 million, which today is worth billions of dollars. (To give you an idea what I mean by "world-class deposit," the 10BB block alone is now being compared to the potential of the entire North Sea.) The Lundins were right again.
Lesson #5: Push through obstacles.
As riveting as the Africa Oil story is, it wasn't easy getting there. In late 2008, the financial crisis was in full swing, and most resource investors fell victim to the collapse. Lundin asset Africa Oil was in the midst of restructuring itself when the crisis hit. It had been looking to acquire a company called Turkana, which owned the now-famed 10BB block in Kenya.
Doug Casey, myself, and Casey Research subscribers were heavily invested in Turkana because we believed in 10BB's potential. The discussions for Africa Oil buying out Turkana had started just before the 2008 collapse, and as the due diligence progressed, so did the crisis.
By early 2009, most resource investors were very discouraged by the significant losses they'd taken. It was the worst time possible for Africa Oil to raise the C$30 million it needed to advance its assets, including taking over Turkana's properties.
As a large shareholder of Turkana, I attended the meetings with Lukas and Keith during this period and wondered how in the world they would pull this off.
At some point in the meeting, Lukas cleared his throat, stood up, and declared in a firm voice, "I'll take ten million dollars as the lead order." He knew these projects had incredible potential, and he simply refused to let the current market conditions distract him from the big picture.
At that point, Rick Rule, a longtime friend of Lukas's and a famous resource investor in his own right, stated he would take C$10 million, and the rest of the people in the room took the rest. But it was only because of Lukas's leadership that that specific financing was completed. Africa Oil's market capitalization at that time was around C$100 million-today it's roughly C$2 billion, a 2,000% increase in less than five years. That's why Lukas is a billionaire.
I think these five lessons are perfect for understanding the elements required to get a "Big Score" in the resource sector. It all starts with a founder who is financially committed to the long-term success of the company and who is its largest investor. He attracts brilliant people who will commit not just their services but also their own money to the long-term success of the company. They focus on world-class deposits, while being the first in gives them a low entry price, and they push through obstacles with determination. It may sound simple, but it's incredibly difficult to execute and find in the real world.
So when one does come across a company that is replicating the "Lundin formula," one must pay attention. It's taken me four years to find a company with the ten-bagger potential that Africa Oil had in its early days.
The president of this company, like Lukas Lundin in the early days of Africa Oil, has also invested C$10 million of his own money in the company's first private placement.
He's a very successful individual who turned his prior company into a multi-billion-dollar enterprise.
He's been able to attract key people who were responsible for the early success of the legendary Bakken formation; and as with Lukas's teams, they have invested their own money in the company.
The company has spent the last five years looking for the next Bakken, and management believe they are sitting on a world-class deposit. They were able to get over 2 million acres of land, which has known pools of oil, in an area where nobody was looking for it.
The company has the right formula-now the drilling will determine if it is the next Big Score, that one huge discovery that can make a fortune for management and shareholders alike.
There are risks to investing in any resource company, but mitigating risk is a key factor for success in the resource sector. This company has done that, and the Casey Energy team is convinced that it is sitting on the "next Bakken." Just like Africa Oil, it will take time for the company to develop the asset and attract the supermajors, but we think this will happen sooner than later … simply put, oil exploration doesn't get any better than this.
We expect the definitive drill results from the first well on or around September 16, less than a week from now. Once the drill results get released, we'll immediately alert our Casey Energy Report subscribers, plus send them a detailed research report on the "next Bakken" and the company I've been talking about.
Tommy
11 years ago
Sprott Inc. announces 2013 second quarter results
http://www.sprottinc.com/investors/press-releases/press-release/?prId=122619
TORONTO, Aug. 8, 2013 /CNW/ - Sprott Inc. (TSX: SII) ("Sprott" or the "Company") today announced its financial results for the three and six months ended June 30, 2013.
Q2 2013 Overview
Assets Under Management ("AUM") were $7.1 billion as at June 30, 2013, compared to $8.5 billion as at June 30, 2012 and $9.1 billion as at March 31, 2013
Assets Under Administration ("AUA") were $2.6 billion as at June 30, 2013, compared to $3.8 billion as at June 30, 2012 and $3.3 billion as at March 31, 2013
Management Fees were $21.5 million, a decrease of 23.6% compared with the three months ended June 30, 2012
EBITDA was $8.1 million ($0.05 per share), compared with $10.4 million ($0.06 per share) for the three months ended June 30, 2012, a decrease of 22.0%
Net loss was $6.7 million (negative $0.04 per share) for the three months ended June 30, 2013, compared with net income of $0.7 million ($0.00 per share) for the three months ended June 30, 2012
Subsequent Events
On July 23, 2013, Sprott completed the acquisition of all of the outstanding shares of Sprott Resource Lending Corp.
As previously announced, effective July 31, 2013 Renewable Energy Developers Inc. ("ReD"), formerly Sprott Power Corp. terminated the Management Services Agreement between Sprott Consulting Limited Partnership and ReD.
"In July, we completed the acquisition of Sprott Resource Lending Corp. in a transaction that further strengthens our balance sheet and provides us with the ability to reposition our business to thrive in a changing asset management landscape," said Mr. Grosskopf. "We now have more than $350 million in available capital that we will actively deploy to seed new products and pursue synergistic acquisition opportunities. We also intend to re-launch our successful resource lending strategy and expand our private equity business through new limited partnerships that we will be developing this fall."
"We are focused on positioning the business for better performance, developing new products and increasing client diversity," continued Mr. Grosskopf. "At the same time, we are committed to managing expenses through prudent cost cutting measures."
For the three months ended For the six months ended
June 30, June 30,
($ in millions) 2013 2012 2013 2012
AUM, beginning of period 9,110 9,683 9,931 9,137
Net sales (redemptions) (144) (158) (418) 387
Market value depreciation of portfolios (1,819) (1,040) (2,366) (1,039)
AUM, end of period 7,147 8,485 7,147 8,485
Assets Under Management
At June 30, 2013, AUM decreased by 15.8% to $7.1 billion from $8.5 billion at June 30, 2012. Net redemptions for the three months ended June 30, 2013 were nearly $0.2 billion. Average AUM for the three months ended June 30, 2013 was $8.0 billion compared with $9.0 billion for the three months ended June 30, 2012, a decrease of 10.8%.
Income Statement
Total revenues for the three months ended June 30, 2013, decreased by 39.6% to $16.6 million from $27.4 million for the three months ended June 30, 2012. For the six months ended June 30, 2013, total revenues decreased by 38.6% to $44.1 million from $71.8 million in the first six months of 2012.
For the three months ended June 30, 2013, management fees decreased by 23.6% to $21.5 million from $28.1 million in the three months ended June 30, 2012. For the first six months of 2013, management fees decreased by 22.4% to $47.4 million from $61.1 million in the first half of 2012. The decrease in management fees is primarily attributable to both the lower average AUM for the three and six months ended June 30, 2013 as well as an increase in lower fee products such as the physical bullion trusts and fixed-income funds.
Losses from proprietary investments, which include investments in products that Sprott manages, certain other resource-related stocks and warrants, and bullion, totaled $9.5 million, compared with $4 million in the three months ended June 30, 2012. For the six months ended June 30, 2013, losses from proprietary investments totaled $12.5 million, compared with gains of $0.3 million during the first six months of 2012.
Commission revenue for the three months ended June 30, 2013, decreased by $0.5 million to $1.6 million from $2.1 million during the three months ended June 30, 2012. For the six months ended June 30, 2013, commission revenue decreased by $4.2 million to $3.6 million from $7.8 million during the prior year period.
Total expenses for the three months ended June 30, 2013 were $26.7 million, an increase of $0.5 million or 1.7% compared with $26.2 million for the three months ended June 30, 2012. Total expenses for the first six months of 2013 were $50.4 million, an increase of 2.0% from $49.4 million in the six months ended June 30, 2012.
EBITDA for the three months ended June 30, 2013 was $8.1 million, representing a decrease of $2.3 million or 22.0% compared with the three months ended June 30, 2012. For the six months ended June 30, 2013, EBITDA decreased by 30.3% to $18.5 million from $26.6 million in the first half of 2012.
Net loss for the three months ended June 30, 2013 was $6.7 million (negative $0.04 per share) compared to net income of $0.7 million ($0.00 per share) for the three months ended June 30, 2012. Net loss for the first six months of 2013 was $4.6 million (negative $0.03 per share), compared to net income of $17.7 million ($0.10 per share) for the six months ended June 30, 2012.
Dividends
On May 7, 2013, a dividend of $0.03 per common share was declared for the quarter ended March 31, 2013. On August 7, 2013, a dividend of $0.03 per common share was declared for the quarter ended June 30, 2013.
Conference Call and Webcast
A conference call and webcast will be held today, Thursday, August 8, 2013 at 10:00am ET to discuss the Company's financial results. To participate in the call, please dial 416-764-8688 or 1-888-390-0546 ten minutes prior to the scheduled start of the call. A taped replay of the conference call will be available until Thursday, August 15, 2013 by calling 416-764-8677or 1-888-390-0541, reference number 29871520. The conference call will be webcast live at www.sprottinc.com and www.newswire.ca
*Non-IFRS Financial Measures
This press release includes financial terms (including AUM, AUA, EBITDA and net sales) that the Company utilizes to assess the financial performance of its business that are not measures recognized under International Financial Reporting Standards ("IFRS"). These non-IFRS measures should not be considered alternatives to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers. For additional information regarding the Company's use of non-IFRS measures, including the calculation of these measures, please refer to the "Non-IFRS Financial Measures" section of the Company's Management's Discussion and Analysis and its financial statements available on the Company's website at www.sprottinc.com and on SEDAR at www.sedar.com.
Tommy
11 years ago
Sprott Resource Lending Corp. shareholders approve arrangement with Sprott Inc.
http://www.sprottlending.com/investors/press-releases/press-release/?prId=122537
TORONTO, July 18, 2013 /CNW/ - Sprott Resource Lending Corp. (the "Company" or "Sprott Resource Lending") (TSX:SIL) (NYSE MKT:SILU) is pleased to announce that its shareholders have approved the previously announced plan of arrangement involving the Company and Sprott Inc. ("Sprott") (TSX:SII) under the Canada Business Corporations Act pursuant to which Sprott will acquire all of the outstanding common shares in the capital of the Company (the "Arrangement"). Under the terms of the Arrangement, each Sprott Resource Lending shareholder (other than Sprott) will receive 0.5 of a Sprott common share and C$0.15 in cash for each Sprott Resource Lending common share held.
Over 98.8% of Sprott Resource Lending common shares voted at today's annual and special meeting of shareholders (the "Meeting") voted in favour of the special resolution approving the Arrangement. In addition, 98.4% of Sprott Resource Lending common shares held by minority shareholders of the Company voted in favour of the special resolution approving the Arrangement. Approximately 74.6% of the issued and outstanding Sprott Resource Lending common shares were represented at the Meeting. Details of the voting results will be filed under the Company's profile on SEDAR at www.sedar.com.
Sprott Resource Lending will apply for a final order from the Ontario Superior Court of Justice approving the Arrangement at a hearing, scheduled for 12:15 p.m. (Toronto time) on July 19, 2013, and, assuming receipt of court approval and all other conditions to the Arrangement being satisfied or waived, Sprott Resource Lending expects that the Arrangement will close on or about July 24, 2013.
Sprott Resource Lending also announces that the following nine nominees listed in the Company's Amended and Restated Management Information Circular dated June 26, 2013 were elected as directors at the Meeting to serve until the earlier of (a) the time immediately prior to the effective time of the Arrangement and (b) the next annual general meeting of shareholders of the Company or until successors are elected or appointed in accordance with applicable laws and the Company's by-laws:
Nominees Votes For
Murray Sinclair 84,341,463 94.17%
Peter Grosskopf 87,936,231 98.19%
David Black 87,890,600 98.14%
Brian Bayley 87,438,860 97.63%
Donald Copeland 87,862,647 98.10%
Paul Dimitriadis 84,496,765 94.35%
Murray John 84,361,238 94.19%
Dale Peniuk 84,692,825 94.56%
Stewart Robertson 87,901,068 98.15%
About Sprott Resource Lending Corp.
Sprott Resource Lending (www.sprottlending.com) specializes in lending to resource companies on a global basis. Headquartered in Toronto, the Company seeks to generate income from lending activities as well as the upside potential of bonus arrangements with borrowers generally tied to the underlying property or shares of the borrower. Pursuant to a management services agreement and a partnership agreement, Sprott Lending Consulting Limited Partnership ("SLCLP") provides Sprott Resource Lending with day to day business management as well as other management and administrative services. SLCLP is a wholly owned subsidiary of Sprott Inc. (www.sprottinc.com), the parent of Sprott Asset Management LP (www.sprott.com). For more information about Sprott Resource Lending, please visit SEDAR (www.sedar.com).
Caution Regarding Forward-Looking Statements and Information
This document includes certain statements that constitute "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws (collectively, "forward-looking statements"). These statements include statements regarding Sprott Resource Lending's intent, or the beliefs or current expectations of Sprott Resource Lending's officers and directors. Such statements are typically identified by words such as "believe", "anticipate", "estimate", "project", "intend", "expect", "may", "will", "plan", "should", "would", "contemplate", "possible", "attempts", "seeks" and similar expressions. Forward-looking statements may relate to Sprott Resource Lending's future outlook and anticipated events or results.
By their very nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions and other forward-looking statements will not prove to be accurate. Do not unduly rely on forward-looking statements, as a number of important factors, many of which are beyond Sprott Resource Lending's control, could cause actual results to differ materially from the estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to: (a) the inability of Sprott Resource Lending to obtain approval of the transaction by the court and the other regulatory approvals; and (b) the occurrence of any other event, change or other circumstance that could give rise to the termination of the Arrangement Agreement (as defined in the information circular), or the delay of consummation of the transaction or failure to complete the arrangement for any other reason.
Forward-looking statements speak only as of the date those statements are made. Except as required by applicable law, Sprott Resource Lending does not assume any obligation to update, or to publicly announce the results of any change to, any forward-looking statement contained herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements.
SOURCE: Sprott Resource Lending Corp.
Tommy
11 years ago
Friday, July 12, 2013
Henry Bonner
The Hidden Edge of Junior Mining Companies
Rick Rule, Chairman of Sprott Global Resource Investments Ltd., has invested in natural resource projects for nearly four decades. I asked him what I needed to know about investing in junior exploration projects.
“That’s a very large subject,” Rick began, “but the first thing you should know is that the minerals exploration business is frequently mistaken for an asset-based business, but it’s really a knowledge-based business.”
What’s does this mean? The problem with investing in natural resource projects, says Rick, is that there’s a very low chance of success for any individual property. “When I was in university, some forty years ago, the experts claimed that roughly one in three thousand mineralized anomalies (exploration targets) would become a mine,” Rick explained. “With those odds of success, any particular property has a pretty slim chance of being worth something. The way people are successful in this business is by identifying the opportunities with the best characteristics – and having the ability to quickly figure out what’s in the ground.”
“Analysts and investors who participate in the sector would be well-advised to recognize that the entities whose shares we buy are similar to the small research entities in the research and development space in the technology industries,” Rick concludes.
Most analysts and investors don’t recognize this fact, and their mistake often results in poor investment performance in the sector. “The argument that these are asset-based businesses is responsible for most of the capital lost in public junior minerals equity markets. The equation offered up by junior capital markets is that investors take a one in three thousand chance in order to receive a ten to one return. That isn’t much better than the odds of success buying lottery tickets. But understanding the industry can, and does, improve the odds substantially.”
“The junior exploration industry today can be seen partly in the context of a broader economic trend today - outsourcing.” He continues: “The major mining companies today are increasingly financially driven, and the variability of returns from exploration, as well as the valuation and reporting challenges that accompany exploration efforts discourage major mining companies from being exploration focused. Their competitive advantages lie in scale, financial stability, engineering and construction capabilities, and production technologies, and less to the entrepreneurial acumen required for exploration success.”
Major mining companies prefer to avoid the exploration side, Rick says, because companies generally must pursue multiple fruitless endeavors before, if ever, attaining success – and this period of failures is punished by shareholders. This has led to increasing collaboration between juniors and majors, and the majors focus on the acquisition of successful juniors as a focus growth strategy.
What allows juniors to pursue exploration, which the majors avoid? Rick believes that the reason lies with a hidden advantage enjoyed by the juniors.
“They have an effective sub-zero cost of capital,” Rick says. “On the whole, the exploration industry loses between $2 billion to $10 billion per year, subtracting annual expenditures against income from corporate and property acquisitions, production income, or portfolio transactions.”
“Exploration on the whole is a capital destroying business,” Rick continues. “It costs more than you get out of it – and yet, it raises billions of dollars of fresh equity every year. Its cost of capital is thus arguably sub-zero – a fact that majors cannot ignore.”
But can this be sustained? How long can an industry which destroys billions in capital yearly survive?
“In order to play down the low odds of exploration success, juniors have begun to emphasize ‘market success’ instead – the value of their paper instead of that of their projects. One manifestation of this attitude is the juniors’ habit of recycling exploration targets that have failed in the past but can be counted on to yield decent confirmation holes. Another is their tendency to acquire hyper-marginal deposits and promote the ‘in situ’ value of the resources, without regard to the capital costs of developing these resources, the operating costs, or the net present value of operating cash flows that might occur in three decades time.”
So don’t let promoters swindle you into lousy stock positions, Rick advises. “The industry has been quite successful, during ‘bull market’ cycles, at causing allegedly sophisticated investors to focus on exciting but meaningless criterion. Successful investing and speculating in the sector is truly about discriminating amongst choices. If your broker convinces you to buy the entire sector indiscriminately, they will have lived up to their moniker: you will become ‘broker’ and ‘broker.’”
Rick Rule founded Global Resource Investments in 1994. Global provides brokerage and investment banking services to high net worth individuals, institutional investors, and corporate entities worldwide. In 2011, Global was acquired by Sprott, Inc., a public company based in Toronto, Canada, which has in excess of $9 billion in assets under administration in the resource and commodity sectors.
Tommy
11 years ago
Sprott Money Managers Share the Secret for Surviving the 'Bernanke Put'
http://www.theenergyreport.com/pub/na/15429
Kevin Bambrough Paul Dimitriadis The "Bernanke Put," or promises of quantitative easing, has become the standard government response to economic uncertainty. But while the powers that be insist everything's fine, Sprott Resource Corp. Founder Kevin Bambrough and COO Paul Dimitriadis see financial deterioration around the globe. Only one thing is for certain: Taking the contrarian view provides the best opportunities to buy low and sell high. In this interview with The Energy Report, they explain why they expect energy assets to perform better in the long haul, cluing us in on a few names they are considering for big returns.
Companies Mentioned: Arch Coal Inc. : Long Run Exploration Ltd. : Potash Ridge Corp. : Stonegate Agricom Ltd. : Virginia Energy Resources Inc.
The Energy Report: How would you characterize the current economic background? Are things really looking better in your view?
Kevin Bambrough: Markets typically peak when fear is low and complacency is high, and bottom when fear is rampant and people are extremely worried. The U.S. markets in general have performed quite well this year, but the U.S. bond markets have started to see a lot of hiccups. The European debt market still remains on very shaky ground. The Chinese debt market is now showing major problems in the banking system and the Japanese are still trying to find a solution to their debt woes with increased monetization, and have started an aggressive currency devaluation exercise. Debt levels for governments and individuals around the world are still at unsustainably high levels relative to GDP or individual incomes.
Bankers and governments continually lie to the public and pretend that things are better than they are. If they told the truth, no one would own a bond or keep money idle in cash. These days, the government guarantees and what people have referred to as a "Bernanke put" are the only reason rates are low and the bond market doesn't crash. The Federal Reserve must talk tough from time to time and pretend it's going to curtail its quantitative easing. The fact is it can't.
Curtailing quantitative easing would force interest rates back up significantly, increase the government debt burden and raise the deficit. At the same time, it would crush the housing market and over-levered consumers already struggling to pay off their mortgages. The increased debt burden would bankrupt governments, individuals and the entire financial system.
TER: So realistically we're stuck with low interest rates for the foreseeable future?
Paul Dimitriadis: There's no way that rates, in my view, are going to rise anytime soon. The Federal Reserve knows it can't allow them to rise materially. Americans may have an egocentric view that everything is fine because the S&P 500 is at a new high. Globally, the situation is not that great. The emerging markets have performed terribly this year and we're starting to see unrest in a number of places around the world as social situations deteriorate rapidly, mainly in Brazil, Turkey, Egypt and such. All is certainly not well and I don't expect the situation to get better anytime soon.
TER: When will everybody realize this is all a big charade?
KB: I often try to predict the catalyst that breaks the bond bubble. Government bonds are primarily held by mega funds, and sovereign banks. The banks around the world do it because they can lever up and play the carry-trade game. Most governments do it to keep their currencies low and support their export economies.
If interest rates rose, banks would be bankrupt, so they have no interest in seeding their demise. Governments try to pretend that deficits are going to eventually be brought under control, and continually make statements that there is no inflation, so they can prevent their currencies and bond markets from collapsing. Whenever economies slow as a result of higher interest rates, consumer confidence drops and interest rate-sensitive sectors like housing slow. Central bankers, or shall we say central planners, will become more aggressive with quantitative easing and bring the rates down to try to kick-start the economy again. That's the delicate game they have to continue playing.
I expect this will continue for many years until the systemic U.S. trade deficit stops being funded by foreigners. It could be a few months from now or a few years, but eventually foreigners will come to understand the stupidity of buying U.S. government bonds to try to help their economies. I believe this is the Achilles heel of the system, and the U.S. dollar reserve-based global financial system's days are numbered. The U.S. dollar will lose its reserve currency status when the Chinese, Japanese, Koreans and other major purchasers of U.S. bonds decide it's not in their best interest to continue doing so. For the longest time, China and other countries have viewed purchasing U.S. bonds as an effective way to keep their currencies relatively stable. But at some point they're going to give up on the foolishness of supporting the U.S. trade deficit and focus more on their domestic economy, rather than on competitive devaluation to support exports. The fact is, they collectively have been giving the U.S. over $500 billion worth of goods and services per year for over a decade. They will recoup little from these "loans" in the future. When they try to cash in their bond holdings, they will find there is no buyer other than the Federal Reserve, which will deliver them freshly printed currency that will only be accepted in the U.S.A. because no foreigner will want to accumulate more. When the trillions sent overseas come home to the U.S., inflation will explode and trade restrictions will rise.
TER: So how do we convert this into an investment strategy from a contrarian viewpoint?
KB: It is difficult to try to determine the best asset class to own. You also have to pick a time horizon and focus on what the world is going to look like 10–20 years from now and evaluate the asset classes that could give the best rate of return. Ultimately, we always come back to what we believe—that food, energy and other base and precious metals will do better in the long run. The key to investing in cyclical resource sectors is buying when they're depressed. Now we've got a situation where they're extremely depressed in many sectors.
TER: What are you doing at Sprott to deal with the current market environment for energy-related investments? Has your approach changed since your last interview?
KB: Precious metal equity values have come down substantially this year and we're starting to see some very good value and opportunities in that sector. As for base metals, we still think there's more potential downside.
We're quite optimistic on developments in the natural gas market. Last year's injection season marked the smallest inventory increase in the modern history of the natural gas market. The withdrawal season was also the third largest on record, and that was with relatively average winter weather. At around $4 per thousand cubic feet ($4/Mcf), demand is going to continue to grow faster than supply and that price will eventually be pushed higher. That will create value for companies like Long Run Exploration Ltd. (LRE:TSX), which we own, and which has significant natural gas exposure as well as stable profitability from its oil production.
PD: Purely gas-focused drilling activity is almost down to zero. We need to see higher prices to generate drilling demand from producers, which I think we will begin to see this year.
KB: Another sector that's been quite depressed is coal, mostly as a result of low natural gas prices. A lot of mines have had to close or go through a restructuring. It looks like we're getting closer to a historic bottom in coal equity valuations and so we're looking around for opportunities to get some long-term exposure to that sector.
PD: As an example, Arch Coal Inc. (ACI:NYSE) is down from $28 to below $4 in the past two years. It was up over $70 around five years ago before the financial crisis.
KB: During a boom in any sector, a lot of the big companies are tempted to take on debt and continue acquisitions. Arch Coal still has a significant amount of debt. There are other coal companies that will certainly survive. We may not be incentivized to bring a new coal mine into production today, but there's great incentive for us to buy coal mines that have long life reserves and wait.
TER: You mentioned Long Run, which we talked about during your last interview. Where do you think that one's going?
PD: The company merged last fall (Guide Exploration Ltd. and WestFire Energy Ltd. combined to form Long Run) and recently completed its first couple of quarters as a new entity. Production is going well and cash flow is meeting expectations. It's focusing on oil production exclusively this year due to the oil and gas pricing environment. There's a lot of room to pay a dividend later this year or next perhaps, which both we and the market would welcome seeing. Long Run's gas reserves are significant, so there is huge optionality on the gas side. Overall, it's a solid story and it's discounted to its peers, probably because it's a new name and there's currently a lack of fund flows into the general Canadian energy market.
Looking at the various metrics relative to its peer group, you can safely conclude that it's trading at a 30–40% discount. If the sector gets revalued because money starts flying back into it, things can go higher from there. The optionality in the gas market could take the stock even higher.
TER: Sprott Resource Corp. completed that nice deal on its Waseca Energy Inc. holdings last year when it sold out to Twin Butte Energy after four years.
KB: We were very pleased with the performance of that company. Again, we stuck with our strategy of investing in a sector while it was depressed. We bought into heavy oil when it was no bid in Canada, formed the company and ultimately were able to monetize it when margins were significant and the company had grown from zero production into a +4,000 barrels per day company. That delivered another big win for our shareholders with a nearly $70 million profit.
PD: Along that same vein, we've invested in a drilling company based out of Houston, Texas called Independence Contract Drilling just over a year ago. It drills shale formations and, again, we invested in the sector when it was generally out of favor, and built the company up from book value to probably having above 12 rigs in production by the end of next year. I expect that at that time we will be able to capitalize on its strong cash flow and look for some sort of monetization, whether it's an IPO or sale of the business.
TER: Another area we haven't talked about yet is uranium. I know you're into Virginia Energy Resources Inc. (VUI:TSX.V; VEGYF:OTCQX). What's the update on that name?
KB: The uranium market is similar to coal. Natural gas has weakened valuations and demand in all energy sectors. Fukushima also really upset the short-term demand and created a very negative sentiment in the nuclear space. But demand for physical uranium for nuclear power production is going to grow over the next decade or two and mine supply will fall short with $40 per pound ($40/lb) uranium. When we look at overall planned, permitted nuclear facility growth and as well as extensions of the existing facilities, we see robust demand and we see very little supply coming on the market.
PD: We will see large supply shortfalls emerging in the next few years. The market's going to have to catch up on funding mines, because funding has been scarce over the last few years. We believe a uranium price north of $75/lb is going to be required to balance supply. Although the Commonwealth of Virginia has not yet passed legislation that would provide a framework for permitting uranium mining projects, we are hopeful it will in the near future. At that point the company would be greatly positively revalued.
KB: Regardless of the uranium market, Virginia Energy Resources is one of the largest undeveloped uranium projects in the United States, and major producers will likely try to take out Virginia Energy Resources when the permitting framework is in place.
TER: Where you see opportunities in the fertilizer/potash markets?
PD: Potash prices have softened a bit lately. We've invested in one potash company that produces SOP potash, called Potash Ridge Corp. (PRK:TSX; POTRF:OTCQX). It is developing a project in Utah, we think has very favorable economics based on the preliminary economic assessment. A prefeasibility study is expected in the next couple of months, which should give greater clarity on that project. The project's key benefits are the byproducts in the deposit, which lower the production cost dramatically. It should be one of the lowest-cost producers of SOP potash, which is a growing market globally. We're optimistic that someone is going to have an interest in an offtake agreement and perhaps assist with the financing in the next 12–18 months.
The phosphate market has been more stable than the potash side. In the U.S., there is some risk for domestic producers due to potential shortfalls in their mines over the coming year. The phosphate market could be in very good shape over the next five years as those companies seek to replace their production. We're quite optimistic about one of our investments in a company called Stonegate Agricom Ltd. (ST:TSX, SNRCF:OTCPK), which is developing its potash project in Idaho. That should come into production in late 2014 or 2015.
TER: Do you have any final thoughts you'd like to leave with us?
PD: The resource sector, generally, is probably the most out-of-favor it has been in a long, long time. If you're ever going to put money to work in this sector, right around now would probably be an opportune time to do so.
KB: This is the kind of market that really allows those who are willing to step up and invest to make a lot of money.
TER: Thank you gentlemen, for your updates and insights today.
Kevin Bambrough founded Sprott Resource Corp. in September 2007. He is a seasoned financial executive with more than a decade of investment industry experience and is a recognized leader in the commodity investing space. Since 2009, he also has served as president of Sprott Inc., one of Canada's leading asset managers, which has more than $8 billion in assets under management. Between 2003 and 2009, he held a number of positions with Sprott Asset Management, including market strategist, a role in which he devoted a significant portion of his time to examining global economic activity, geopolitics and commodity markets in order to identify new trends and investment opportunities for Sprott Asset Management's team of portfolio managers.
Paul Dimitriadis is Chief Operating Officer for Sprott Consulting and Sprott Resource Corp., where he evaluates and structures transactions, coordinates and conducts due diligence and is involved in the oversight of subsidiaries and managed companies. He serves on the board of directors of two of Sprott Resource Corp.'s subsidiaries, Stonegate Agricom Ltd. and Long Run Exploration Ltd. Prior to joining the Sprott group of companies, he practiced law at Blake, Cassels & Graydon LLP. Dimitriadis holds a Bachelor of Laws degree from the University of British Columbia and a Bachelor of Arts degree from Concordia University.
Tommy
11 years ago
Gold and Silver: Questions and Answers with Rick Rule
Sprott Global Chairman and Founder Rick Rule recently spoke on a conference call to clients. He answered questions from clients on the current market environment for gold and silver.
What’s going to happen with gold and silver?
They’re going to be extremely volatile. But these are the sort of times where gold and silver have done very well over time. Remember, as my friend John Mauldin puts it, “We want to own things central bankers can’t print.” They can’t print gold and silver.
Right now, we’re seeing a classic move from one set of hands to another. For the last 10 years, the pricing of gold and silver has been determined by the futures markets -- not the physical markets. Futures markets are highly leveraged and momentum-driven. Currently, long leveraged carry trades by institutions are unwinding. The buyers are unleveraged individuals purchasing record amounts of physical gold and silver around the world. A number of central banks in developing countries are also adding to their gold bullion reserves.
The Reserve Bank of India is doing everything it can to constrain purchases by individuals of physical gold and silver. Government in India has historically done everything it can to impede access to legal gold and silver. The citizens themselves happily go into real markets that smuggle gold. I believe the government’s efforts will fail.
What's your outlook on gold and silver if the Federal Reserve succeeds in putting an end to QE without triggering runaway inflation?
I don’t know, but lower. I have substantial suspicions about the ability of the Federal Reserve to exit QE, however. What they are doing is liquefying the banks and issuing more debt than they can sell. Right now, new aggregate on-balance liabilities on the Federal level is $1.5 trillion per year. They finance that by selling $750 billion of debt, and by printing up $750 billion of debt which they use to buy existing bonds. The off-balance-sheet liabilities of the Treasury exceed $60 trillion and grow by about $4 trillion a year.
The idea that we are going to get through this without either defaulting on our obligations or inflating them away defies any rational analysis of the problem.
From my point of view you’re safer with gold in your portfolio. Experts who follow the market closely, including Eric Sprott, but also Morgan Stanley and the big bullion banks, say that the ‘anti-gold’ – what you consider in place of gold – is the U.S. 10-year Treasury. Mainstream institutional investors say that gold is ‘risk-on’ and the 10-year Treasury is ‘risk-off,’ but I think that the world has it exactly confused. The U.S. Treasury -- the ‘anti-gold’ -- pays a 1.75% interest rate, which is well below the rate of inflation and assumes that there is no credit risk with regards to U.S. obligations. If nothing else, the lower interest rate lowers the cost – in terms of avoided cost – of owning gold.
Are you concerned that the government will put in place price controls or confiscate gold at some point in the future?
I think that the risk of that is relatively low given the transportability of wealthy today. They would have to put currency controls in place first, in which case we would all have greater concerns than the price of gold or gold equities. You can buy certificated instruments that hold gold outside the U.S., which may help protect you depending on how the law was enacted.
Will investors continue to look to the U.S. as a safe-haven for investments? Where should I invest if the U.S. is no longer safe?
The US dollar is the worst currency in the world – except all the others. The US dollar is the most liquid currency on the planet. As bad as we are in the US, we started off from a very good place. Compared to the Euro or to the Yen, we’re in pretty good shape.
But the ultimate outlook for the dollar remains bleak. The Western World is going to have a very difficult time with the debt burden that we have taken on to sustain our standard of living over the last 30 years, and that is going to have dire consequences for the dollar.
What types of investments make sense? I think you have to have some cash, despite the fact that your purchasing power will decline every year. You need to have bullion to hedge your cash. I think those of you who can afford to speculate will get some extraordinary bargains in the next 6 months, and I suspect that the very volatility that I see in the next 6 months will give investors a once in 20-year opportunity to buy high quality natural resource and infrastructure stocks at once in 20-year style prices.
Are any gold or silver miners stockpiling their production until precious metals prices go up? Why don’t more gold and silver miners do this?
Sadly, most gold and silver mining managers don’t believe in their product. They do not necessarily believe that gold and silver are money. Eric Sprott tried to convince many mining companies to hold their working capital in precious metals without success.
In my opinion, the 20-year bear market in mining from 1982 to 2002 did not attract the best and brightest management teams. That’s not to say that there aren’t bright minds. But when gold goes from $250 per ounce to $1,250 per ounce and per-share cash flow goes down, the bulk of the businesses may be management-challenged.
What should I be buying now? Bullion or mining shares?
If you think that the metals prices are going up, own the metal – not the miners. Own the miners because you think that there is something intrinsic to them that will take them higher. So, to begin with, own cash and the metals. Buy the miners if you can withstand -- financially and psychologically -- the risks and the volatility of the sector. Take particular attention, if you’re an accredited investor, to the private placements and the full warrants that should someday be coming to us.
Rick Rule founded Global Resource Investments in 1994. Global provides brokerage and investment banking services to high net worth individuals, institutional investors, and corporate entities worldwide. In 2011, Global was acquired by Sprott, Inc., a public company based in Toronto, Canada, which has in excess of $9 billion in assets under administration in the resource and commodity sectors.
NYBob
11 years ago
Sprott Resource Lending Corp. announces details for postponed annual and special meeting of shareholders
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Sprott Resource Lending Corp (TSX:SIL)
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1 Month : From Jun 2013 to Jul 2013
TORONTO, June 26, 2013 /CNW/ - Sprott Resource Lending Corp. (the "Company" or "Sprott Resource Lending") (TSX:SIL) (NYSE MKT:SILU) announced today that its annual and special meeting of shareholders (the "Meeting"), originally scheduled for June 25, 2013, has been rescheduled to 10:00 a.m. (Toronto time) on Thursday, July 18, 2013 at the TSX Gallery, TMX Broadcast Centre, The Exchange Tower, 130 King Street West, Toronto, Ontario for the same purposes as set out in the notice of annual and special meeting of shareholders and management information circular of the Company dated May 24, 2013, including the proposed plan of arrangement between Sprott Inc. ("Sprott") and the Company (the "Arrangement").
The Company has been granted an order by the Ontario Superior Court of Justice, which is the court supervising the Arrangement, and has received approval of the Toronto Stock Exchange, to extend the time for holding the Meeting.
The Company is also pleased to announce that the United States Securities and Exchange Commission ("SEC") has indicated that it has no further comments in respect of its review of the Company's May 31, 2013 Schedule 13E-3 going private transaction statement filing, as amended ("Schedule 13E-3"). In response to the comments received from the SEC and in order to augment its previous disclosure, the Company has prepared an amended and restated management information circular, a copy of which will be mailed to all securityholders of the Company as soon as practicable. The amended and restated management information circular, as well as the Schedule 13E-3, will also be available for download from the Company's website at www.sprottlending.com as well as under its profile on SEDAR at www.sedar.com and EDGAR at www.sec.gov.
"We apologize for the delay and any inconvenience this unexpected postponement of our annual and special meeting may have caused to our shareholders. We would like to thank our shareholders for their continuing patience and support", said Murray Sinclair, Chairman of Sprott Resource Lending's Board of Directors. To date, approximately 72.68% of the votes have been received, of which 98.91% of such votes are in favour of approving the Arrangement.
Shareholders who have already submitted a form of proxy or voting instruction form and do not wish to change their vote need not take any further action and shareholders continue to have the right to revoke or change their proxies prior to the commencement of the Meeting.
The record date for the Meeting has not changed and remains the close of business (5:00 p.m. (Toronto time)) on May 23, 2013.
It is currently expected that the closing of the Arrangement will take place on or about July 24, 2013.
About Sprott Resource Lending Corp.
Sprott Resource Lending (www.sprottlending.com) specializes in lending to resource companies on a global basis. Headquartered in Toronto, the Company seeks to generate income from lending activities as well as the upside potential of bonus arrangements with borrowers generally tied to the underlying property or shares of the borrower. Pursuant to a management services agreement and a partnership agreement, Sprott Lending Consulting Limited Partnership ("SLCLP") provides Sprott Resource Lending day to day business management as well as other management and administrative services. SLCLP is a wholly owned subsidiary of Sprott Inc. (www.sprottinc.com), the parent of Sprott Asset Management LP (www.sprott.com). For more information about Sprott Resource Lending, please visit SEDAR (www.sedar.com).
http://ih.advfn.com/p.php?pid=nmona&article=58170097
Tommy
11 years ago
Rick Rule: The precious metals could sell off again
Tekoa Da Silva | July 3, 2013
http://www.mining.com/web/rick-rule-the-precious-metals-could-sell-off-again/?utm_source=digest-en-au-130703&utm_medium=email&utm_campaign=digest
During a time of intense fear and volatility in the precious metals and mining space, Sprott Asset Management’s Rick Rule was kind enough to share insight on where he sees the markets moving next, and how investors can make money during these periods. Rick views this period as a reflection of the four times during his career that he’s seen absolute capitulation, which is setting the stage for a “spectacular recovery”.
Here are the notes from his conversation with Bull Market Thinking’s Tekoa Da Silva.
Tekoa Da Silva: Rick, what are you seeing and hearing right now from an asset management standpoint?”
Rick Rule: Well, this is interesting. You will recall in a couple of prior interviews that you and I did, I said that bear markets ended in capitulation selling but I hadn’t seen that yet. We are now in capitulation. This is the fourth time in my career that I’ve seen capitulation selling and it gets ugly and spasmodic, but this is the beginning of the end. Certainly I believe the precious metals themselves as bullion are oversold, but they could sell off again. That’s not uncommon, a double bottom.
I think if we do get a [stronger] rebound in the precious metals prices, that it will not in the near term pull over to the equities. I think we’re going to get washout selling this summer—absolute capitulation selling. Then you’re going to have a sideways tail in the equities as both the buyers and sellers are exhausted.
The market will certainly bifurcate. The better names will do better but they will only do marginally better. It won’t feel good. But we are setting up the type of recovery that we saw in 2002, 1994, and 1986. This is the way markets work. It’s bear markets like this that cause bull markets and the inverse reaction is a function of the strength of the action.
The depth and severity of this down market cycle, the fact that maybe 700 juniors will go away over the next 12 months, sets the stage for a truly spectacular recovery. Bear markets cause bull markets, and bull markets cause bear markets.
TD: When we talk about that inverse reaction you’re expecting to the upside, do you expect to see doubles, triples, and quadruples in select names across the entire space?
RR: Absolutely. I mean without fail. I can’t tell you when it’s going to happen but I will tell you that what we’re going through right now is exactly what we needed.
From a pricing point of view, the resource market has been undervalued for a year. My nervousness about coming back into it with both feet was simply that we needed a downside blowout. We needed capitulation. We’re in capitulation now.
Two weeks ago, I was on the East Coast in the United States visiting very large institutional investors and the level of indecision I saw was absolutely classic of the period right before capitulation. Then last week, [capitulation] was right on schedule. Truly ugly. But this is the kind of cleansing that the market needs.
TD: Rick what about gold here. Were you closely watching it during the mid-70s when there was that similar type of shake-out?
RR: I sure was and by the way, that shake-out was much more aggressive than this one. That was a 50% decline over nine months and as ugly as it was on the bullion, it was uglier yet on the equities. I would suspect that the equities markets in the 1975 to 1976 cyclical decline, was more like a 65% decline over nine months. It was truly brutal.
That set the stage for an unbelievable recovery and that’s worth discussing because past is often prologue. In the decade as a whole, the gold price went from $35 an ounce to $850 an ounce.
In the period from 1970 to 1975, gold advanced six-fold from $35 an ounce to $200 an ounce, and suddenly over nine months it gave up $100, from $200 to $100.
Investors who didn’t have either the cash or the courage (or better yet both) to survive a 50% cyclical decline in the secular bull market, those who got shaken out at the bottom missed the move in gold from $100 to $850, an eight-fold move over six short years and the move in the equities was even greater. That’s a really instructive lesson.
TD: Rick, how much of this is about courage as compared to people getting hit with forced liquidation and/or redemptions and simply not being able to hold on?
RR: Well, I think it’s both. The truth is that many people don’t have the courage of their convictions which is why those people often go into mutual funds. But the truth is, it’s your decision as to whether you redeem. It’s your decision as to whether you add more capital in bad markets as opposed to adding more capital in good markets.
So the truth is it’s both. What I have found in my own life is that one of the functions of courage is cash. When I have more cash, I have more courage, and I’ve disciplined myself in my life, in periods like 2009 and 2010, to do a little more selling than other people, and I’ve always scaled back into markets.
Even as we speak, I’m conflicted. I realize that what you do with capitulation bottoms is buy. But rather than buying a broad basis, what I’m trying to do is save lots of cash to participate in private placements which will give me both shares and warrants. I want a leveraged participation to the upside and getting a warrant in a private placement is getting the opportunity (but not the obligation) to double up on your position at a fixed price over a fixed period of time.
You get to participate in success, be it market success or corporate success retroactively, and you get to do that for free. So it’s interesting that even in this time of capitulation, where cheap stocks are getting ridiculously cheap, I am keeping lots of powder dry because I believe that I will be able to provide capital when nobody else will be willing to provide capital to an industry and get warrants.
TD: Rick, are there certain types of projects in the metals space that might go the way of the Dodo Bird whether it be the big bulk tonnage, low grade deposits or otherwise?
RR: It’s OK to buy those large low grade deposits if you get them very cheaply. You can make an absolute fortune doing that like we did with Silver Standard, like we did with Lumina, like we did with Allied Nevada, if you have an eight or ten-year time horizon.
There is near-term money to be made two different ways. One is in the 18 to 24-month timeframe with regards to the undervalued prefeasibility or feasibility stage development projects.
The other is in the context of companies which have made discoveries and nobody cares. You’re in a market right now where you don’t have to buy these stocks in anticipation of the market’s reaction to news.
You can wait until the good news comes out, study the news, and then make your decision. We’re back in a period like 2000 where good news comes out and stocks go down.
This is the best of all possible circumstances if somebody has a two-year time horizon or a three-year time horizon, and it’s actually a spectacular set of circumstances if you have a seven to ten-year time horizon. This is a lethal set of circumstances if you have a three-month time horizon.
TD: Rick, most people in the industry are saying, “Oh, this is terrible. We’re getting killed.” But a few are saying, “We’re just getting up every day and we’re going to work.” How does this time impact the leading developers of the space, the Ross Beaty’s, the Bob Quartermain’s? What do you see those guys doing during these periods?
RR: All these guys are working hard. Ross Beaty is looking for opportunity, Lucas Lundin is looking for opportunity, and Bob Quartermain is completely ignoring the market. He’s proceeding with his bulk sample, dealing with the first nations, lining up his financing. He just got a long term investment the other day, Liberty Mutual Insurance Group, who have built a couple of billion dollar oil and gas businesses on the private equity side.
This is the time when the A-players go to war.
TD: When you look back on your career Rick, in terms of returns coming out of these periods over a longer timeframe; what sort of “light at the end of the tunnel” should people stay focused on during these times?
RR: Well, in the 1998 to 2000 timeframe, those first two partnerships I did, the capital that we allocated at market bottoms, over five to seven years, those partnerships generated sort of 20 to 1 returns. It doesn’t mean I will be able to do it again, I manage more money now than I managed then.
But certainly small, focused investors who are willing to allocate capital now and have a two, three, five-year timeframe can expect spectacular returns if they do the work. I was talking with Eric this morning on the phone and what he sort of reinforced to me was that he built Sprott from a $10 million manager to a $10 billion manager by the aggressive deployment of capital at times like these. Eric has always said don’t be afraid to be right. So that’s where we are.
TD: Rick Rule, Chairman of Sprott US Holdings, part of the $10 billion Sprott Group of Companies. Thank you so much for sharing your comments.
RR: Always a pleasure. Thank you for the opportunity.
—-
Rick Rule has dedicated his entire adult life to many aspects of natural resource securities investing. In addition to the knowledge and experience gained in a long, successful and focused career, he has a worldwide network of contacts in the natural resource and finance worlds. As Chairman of Sprott US Holdings, Mr. Rule leads a highly skilled team of earth science and finance professionals who enjoy a worldwide reputation for resource investment management.
Mr. Rule is a frequent speaker at industry conferences, and is interviewed for numerous radio, television, print and online media outlets concerning natural resource investment and industry topics. He is frequently quoted and referred by prominent natural resource oriented newsletter and advisories. Mr. Rule and his team have long experience in many resource sectors including agriculture, alternative energy, forestry, oil and gas, mining and water.
Sprott US Holdings is active in securities brokerage, segregated account money management and investment partnership management involving both equity and debt instruments, across the entire spectrum of the natural resource industry.
Tommy
12 years ago
Rick Rule’s Reasons to Buy Gold and Select Gold Stocks
http://news.goldseek.com/GoldSeek/1369939809.php
By Jeff Clark, Senior Precious Metals Analyst
Interviewed by Jeff Clark, Casey Research
Jeff Clark: First, Rick, what's your basic explanation as to why gold crashed a few weeks ago?
Rick Rule: I think there are two parts to the answer, maybe three. First, the gold market was technically weak. The second thing is that there were a lot of institutional players long gold on leverage, using capital that was borrowed rather than their own, so when the price crashed they had to unwind very rapidly.
The fact that there was a very large futures player who attempted to come out of the market all at once during a period in time when the market was extremely illiquid is, of course, also very suspect. I know that most Internet articles are focused on the one large 400-tonne sale at a very odd point in time, and I would certainly agree with the suspicion that if I were a holder of that size and I was looking to sell or had to sell, I probably wouldn't have chosen to do it all at once or in a very illiquid time in the market.
I think that one of the things you have to look at in the gold market is that we are changing the nature of ownership, from institutional momentum holders who are leveraged, which is a long way of saying "weak hands," to physical individual buyers on a global basis, which is a different way of saying "strong hands." So one of the things that happened in the gold smackdown is that gold did what many things do in bear markets: it went from weak hands to strong hands.
Jeff: I saw a BNN video where you said the capitulation process isn't over. What makes you say that?
Rick: I don't know if I have an opinion regarding the capitulation process in gold and silver, but I certainly think that the lows are yet to come for the junior mining equities. My experience in 35 years in junior equity markets is that bull markets end in an upside blowout, and bear markets end in a downside puke. I think we were partway through that a couple weeks ago, but I think it got interrupted. I haven't seen the sort of cataclysmic capitulation selling that usually marks a bear market bottom. It doesn't mean that just because it has always happened that way that it will happen this way again, but I haven't seen the capitulation selling. What I have seen, for example, is mutual funds being forced to sell to meet redemptions – but I haven't seen the no-bid market that usually marks the cataclysmic bear market bottom.
Jeff: And the point is that you expect that.
Rick: I do.
Jeff: That was a record selloff a few weeks back.
Rick: It didn't have the duration that one would have expected. These things are usually two or three week long sell-fests. I forget what month it was in the year 2000, but there was an absolutely comical selloff. People who were on margin didn't find it funny at all, but because I was cashed up and I was extremely experienced, it was just an absurd theater that I took advantage of. There were a bunch of people who didn't know much about these stocks that bought them in 1996, and that same group of morons that knew nothing about what they owned or why they owned them and so puked them out in 2000. Your job as a speculator is to be on the other side of both of those trades.
Jeff: This implies that gold returning to the $1,900 level and going higher could be a couple of years away.
Rick: I have no opinion on that. It's important to note that most of the juniors are nonviable at any gold price. When people ask me what would happen to the price of Amalgamated Moose Pasture if gold went to $2,000, I'm forced to say to them, "Well, it really shouldn't matter. Amalgamated Moose Pasture doesn't have any gold. They are looking for gold, and if the price of something that you don't have any of goes up, it shouldn't make any intrinsic difference."
The truth is, we need to unwind the excesses of the last decade in the junior market. We've done a pretty good job of that, but we need to finish it.
Don't get me wrong, I'm a gold bug. But if you think gold is going higher, buy gold. If you are going to buy gold stocks, buy them because there is some internal reason to own that company and why it is becoming more valuable. Never confuse the two.
Jeff: Good point. What do you make of the record insider buying in the junior market?
Rick: I think there are two things to consider there. The first is that the high-quality gold juniors are very cheap. We believe, statistically, that the high-quality gold juniors are the cheapest they've ever been since 1992. So you are seeing very sophisticated buying of the gold juniors to match the selling from other places.
The other thing you're seeing with insider buying are financings where they issue God knows how many millions of shares at a nickel to raise $300-400K, which are basically going to pay insiders' salaries. These people are basically putting the money from one pocket into another pocket, and issuing themselves 10 or 11 million shares in the process. There are hopefully 500 or 600 companies headed to extinction.
Both of those things are happening. One of them is bullish, and the other is just the way these junior markets work.
Jeff: A lot of analysts, especially the CNBC types, claim the gold bull market is over, that we've entered a bear market and it's time to get out.
Rick: I disagree with that on many levels. The narrative associated with gold and the narrative associated with the resource story hasn't changed. How many of your readers – in fact, how many listeners to CNBC or CNN – believe that the Western world's financial crisis is over? How many believe that any of the G20 nations can balance their budget? How many believe that central bank liquidity is a substitute for solvency, owing more than you can pay back? How many people would deny that physical gold demand has been strong?
The point is that the narrative that drove the gold market in 2006 and 2010 is very much intact. Nothing, in fact, has changed. The only thing that has changed is the perception and the price, both of which are lower, which is better. So yes, I am absolutely a gold bug, particularly when you compare it with the alternative, the US 10- or 30-year Treasury, which Jim Grant famously describes as "return-free risk." Does return-free risk sound attractive to you? It doesn't to me.
Jeff: Right.
Rick: I also need to say that my 30-year track record and Eric Sprott's 30-year track record are a function of being extremely aggressive buyers in very bad markets. The $10 billion business that is now Sprott, Inc., is really a consequence of aggressive investing during bear markets. In periods like the 1990 bear market and the year 2000 bear market, it is precisely markets like these, when we have taken pain but have also taken aggressive action. And the rebound coming back out of markets like these can be very violent. You don't have the ability to reap the rewards of those upturns if you are not an aggressive investor in downturns like these.
Jeff: I've heard you say that you've made the biggest part of your wealth during big selloffs. This has been one for the record books, so are you viewing this as being another one of those opportunities?
Rick: Absolutely, Jeff. Let's face it, I'm 60 years old. This is probably my last major market cycle. I'm going to make the most of it. I can tell you that I'm having the most fun I've had in my career for 13 years. I have spent all my life honing my skills, building up the capital, building up the client base – this is tailor-made for me. I realize this period is unpleasant for some people, but the market doesn't care if it's unpleasant. The market doesn't care if it's inconvenient. You take what the market gives you – and this market is giving me a gigantic sale on assets I want to own.
Jeff: It's very exciting from that perspective. It begs the question, though: how do investors know when to reenter the market? How do we know when to buy?
Rick: You know, Jeff, I'm always early. Your friend Doug Casey will tell you that about me. I have a very logical mind. I believe if A is true, B is true, and C is true, then X will be the result. And when I reach that conclusion, I often confuse imminent with inevitable. So I don't know the answer to that.
What I do know is that my own net worth seems to go up fivefold coming out of a bear market and going into a bull market. Suppose it took 18 months longer than I had hoped; does that really matter, given the magnitude of the outcome? When there is a sale at a store for goods that you want, do you really worry too much about the fact that there might be another sale two weeks from now? I don't think you do. When goods that you want to own are attractively priced, you buy them.
Jeff: What about the investor who has already built a full position in a high-quality company; how does someone take advantage of what you're essentially calling a lifetime buying opportunity?
Rick: I think a key part of the answer has to do with "high-quality company." Most investors, particularly in the junior sector, are very bad at stock selection, and they don't have a good sense of what constitutes a high-quality company. If, in fact, I am to answer the question precisely as you asked it – what does a person do if they already have a full position in a high-quality company – then the answer is easy: relax. But if the question goes to somebody who has a laundry list of 20 companies and doesn't really remember why he or she bought the companies and is not aware of the fundamentals of the company and hasn't bothered to benchmark those companies against other companies that exhibit similar characteristics, that's a very different question.
In bull markets and in bear markets, one must continue to high-grade one's portfolio. One must make oneself at least once a year sell at least 20% of the portfolio. If you have 20 names in the portfolio, you have to make yourself sell four or five of them, and increase your positions in your best names. And you don't just do that in bull markets, you do it in bear markets, too.
Jeff: It's critical to be selective with stock picking.
Rick: It is absolutely critical. You've heard me say this before: if you merged every junior exploration company in the world into one company, that company would lose somewhere between $2 billion and $5 billion a year. So how do you price the industry… do you price it at five times losses? Ten times losses? The question, of course, is apocryphal.
What you need to remember is that all of the performance that gives the sector its occasional luster is concentrated in the top 10% of companies. People who are going to participate in the sector need to either spend the time or spend the money to have their portfolio selectively high-graded on a consistent basis. It's all about stock selection. If you want the extra leverage inherent in equities, do securities analysis and pay attention to those equities.
Jeff: Someone wrote to me recently saying, "I thought I was going to get rich in gold stocks, and here they are plummeting." What is your response to the investor who makes that kind of comment?
Rick: That's easy. Natural resource businesses and precious metals businesses are capital intensive and extraordinarily cyclical. Somebody in the sector must always remember, you are either a contrarian or you will be a victim. It's funny; people only want to be contrarians when it's popular. The fact that the narrative hasn't changed, the fact that the facts haven’t changed, the fact that nothing has changed except the TSX.V being off by 60%, means that the same goods that appeared attractive to people at twice current prices must be more attractive now.
The gentleman or the lady who wrote to you is probably somebody who only believed in the narrative when it was being reinforced by the market. That's not being a contrarian, that's being a victim. If you came into a market when it was popular in 2010 and then you exit the market when it's unpopular in 2013, that's a classic example of buying high and selling low, a silly thing to do.
Remember the take-home phrase: you are either a contrarian or you are a victim. To buy low, you have to buy in markets that don't have competition. To sell high, you have to be a seller in markets where other people are greedy. It's that simple.
Jeff: Are there any specific catalysts you're looking for to turn the gold market around, as well as gold stocks?
Rick: There are three catalysts in every market. First, markets work, and the cure for low prices is simple: low prices. Bear market pricing causes bull market pricing. And the overvaluations of bull markets cause bear markets.
With regard to gold itself, I think the real catalyst will be the fact that on a global basis, people are mistaking liquidity – counterfeiting, if you will – with solvency. The truth is that the Western world has lived beyond its means for some substantial period of time, and they are attempting to engineer a default by depreciating the purchasing power of the denominator – the currency – so I think that's the ultimate catalyst for gold.
With regard to the stocks, which are a very different set of circumstances, I would suggest that one catalyst may be an increase in the gold price, but a much more important catalyst is the fact that high-quality gold companies, in our opinion, are selling at the best price they have sold at for 20 years. They are simply too cheap. It won't be immediate, but it will cause some of the higher-quality names to be taken over, because it's cheaper to buy gold than it is to go find gold.
And the third thing that's really going to surprise people in the juniors is that we are slowly coming into a discovery cycle. There is nothing that adds hope and liquidity like a discovery. People talk about what a pathetic market we had last year, but if you happened to own Reservoir Minerals before its discovery, the stock went from $0.26 to $3.50. Africa Oil went from $0.80 to $10. This is a market that will reward performance, but it's a market that has been starved for performance, too.
Jeff: Okay, last question. I'm a planner, so I want to write down in my calendar what year I'm going to be sitting on a beach sipping a mai tai with you after we've sold our junior stocks for 10 or maybe even 100 times our original investment. What year should I write in my calendar?
Rick: I suspect it will be in the epicenter of a bull market five years from now. It might be sooner, frankly, but I've found that these cycles take four or five years, and we're sort of two and half years into the cycle.
First, though, we need a cataclysmic selloff to mark the bottom. Then we'll go sideways for a while. I certainly think that people who are involved in the gold stocks that don't have a two- or three-year time horizon are delusional.
Jeff: Okay, it's in my calendar. Thanks for the insights, Rick.
Rick: It's an enormous pleasure for us, Jeff. We have done this for 30 years in the Sprott organization, and this is our third big decline. And as I said, the fact that we manage $10 billion is due to bear markets, and your speculative readers need to remember that.
Jeff: Good point. Where can readers go if they want to learn more about Sprott?
Rick: We would love for people to come visit us at Sprott Global. We encourage them to sign up for our daily Sprott commentary by hitting the subscribe button at Sprott's Thoughts on the website.
Jeff: Very good. Thanks again, Rick.
Rick: Always a pleasure, Jeff.
As Rick pointed out, knowing the timing of a cycle is only one part of profiting: a successful investor also needs to differentiate winning companies from failures. He, Doug Casey, John Mauldin, and others discussed these issues and much more in the recent Downtown Millionaires webinar. If you want to be positioned for maximum profits in the junior metals sector, you need to see this video today.
Tommy
12 years ago
$SII.TO - Sprott Announces Joint Venture with CITIC Private Equity
http://www.sprottinc.com/investors/press-releases/press-release/?prId=122610
TORONTO, May 30, 2013 /CNW/ - Sprott Inc. (TSX: SII) ("Sprott" or the "Company") today announced that it has entered into a joint venture agreement (the "JV Agreement") with CITICPE HONGKONG MGT. CO. LIMITED. (or "CITICPE HK") to set up an offshore global resource fund ("the Fund").
"We are very pleased to be launching this fund with CITICPE HK, one of China's leading alternative asset managers and we look forward to working together to establish an industry-leading global resource fund," said Peter Grosskopf, Chief Executive Officer of Sprott. "We regard this partnership to be a long-term synergistic relationship that will leverage Sprott's unique resource investment platform and CITICPE HK's investment expertise and in-depth knowledge in Asian markets."
"Establishing a global resource fund with Sprott is a natural extension of our alternative asset management platform," said Frank Wu, Chief Executive Officer of CITICPE HK. "Our two firms offer complementary skill sets and share a view that the current market environment offers compelling opportunities to invest in the resource sector."
The Fund will focus primarily on investment opportunities in equities and debt instruments of global resource companies and will be co-managed by affiliates of Sprott and CITICPE HK.
The management team of CITICPE HK was the founder of the first American Dollar denominated fund in mainland China. CITICPE HK is managed by fund management professionals from CITIC Group. CITIC Group is one of China's largest financial institutions and a Fortune Global 500 company.
The launch of the Fund is conditional on Sprott receiving the necessary regulatory approvals in Canada and CITICPE HK receiving the relevant regulatory approvals in the People's Republic of China.
Forward-Looking Statements
This release contains "forward-looking statements" which reflect the current expectations of the Company. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements including, without limitation, those listed under the heading "Risk Factors" in the Company's annual information form dated March 26, 2013. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this release. Although the forward-looking statements contained in this release are based upon what the Company believes to be reasonable assumptions, the Company cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and the Company does not assume any obligation to update or revise them to reflect new events or circumstances.
About Sprott Inc.
Sprott Inc. is a leading alternative asset manager dedicated to achieving superior returns for its clients over the long term. The Company currently operates through four business units: Sprott Asset Management LP, Sprott Private Wealth LP, Sprott Consulting LP, and Sprott U.S. Holdings Inc. Sprott Asset Management is the investment manager of the Sprott family of mutual funds and hedge funds and discretionary managed accounts; Sprott Private Wealth provides wealth management services to high net worth individuals; and Sprott Consulting provides management, administrative and consulting services to other companies. Sprott U.S. Holdings Inc. includes Sprott Global Resource Investments Ltd, Sprott Asset Management USA Inc., and Resource Capital Investments Corporation. Sprott Inc. is headquartered in Toronto, Canada, and is listed on the Toronto Stock Exchange under the symbol "SII". For more information on Sprott Inc., please visit www.sprottinc.com.
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