Sprott Inc. (SII)

Hi Laura

First time poster here. Just got my user ID and password set up recently. Look forward to posting now and forward to share my opinions.

Yes I agree with you. Better to just buy Sprott Inc and ride it up during the next few years as this bull market in precious metals continues to move up.

Have owned Sprott Inc over the last 5-7 years and most of my purchases were in the $2.50. Average cost today is $2.70(pre 10:1 split) or $27.50 post split. I have waited all this time because I knew sooner or later this bull market would get going. I saw a huge run up in profits after the recent NYSE listing. Profits were around $120k at peak $57 SP recently. Have given back around $50k in profits on the recent drop in price from the peak. It doesn’t bother me as this is a “buy and hold” over the next few years.

With all the money printing and stimulus seen so far and much more to come, we will easily reach and exceed the $57 SP recent highs. Precious metals miners will have more upside however the royalty companies are safer and will also enjoy the ride up. An asset management company like Sprott us a very safe bet to me too.

Francis I like your posts on this board too. I loved your analysis on Sprotts $3.2b of surplus Capital they had to work with you mentioned a few times. Can you perhaps elaborate on what the potential opportunities that would do to the Share price here if the maximize those opportunities you provided? Curious to know what our upside here is in price not just for that surplus but also if we get a $2,500 or higher gold price as many are expecting

Thx

Ron

I’m ready to dump any notion that there’s an undeclared capital surplus of $3.2b. U.S., and instead proceed with the facts on the Q3 report:

My impression about the conference call is that respondents are obliged to closely examine the minutiae on the quarterly statement, since the P/E ratio is extraordinarily high. How on earth will the stock price go up, with the P/E ratio so high? But then you compare with other royalty companies in the space, the ratio is nearly the same.

Everything seems in order, the stock price will go up as the gold price goes up.

The question to ask, really, is how is the company expected to grow? The company expects to grow net sales and net inflows(this is the first time looking at their MD&A). There are only very few instances of net sales and net inflows using a page search through the Q3 MD&A.

I’m very reluctant to continue speculating and more strongly desirous of dealing in facts. This time around. The one fact I do know is that the accumulated deficit at $GBRIF has to be in the $850m. U.S. range. Another fact that I do know is that on amalgamation, the assets and liabilities of the target become the assets and liabilities of the parent.

The one fact I don’t really know is the cost per ounce associated with extracting so many ounces(the total ounces is unclear) from the La Ronge Gold Project.

If the accumulated deficit strictly matches the capital held in Private Lending LP, then the amounts in the private lending LP being commensurate with this figure would mean that the total number of ounces delivered to precious metals trusts would have a per ounce cost below $300 U.S.

This substantially changes my assumptions that the cost associated with gold produced from $GBRIF is $1000/oz. U.S. As concerns this balance sheet, those assumptions of $1000/oz. U.S. are plainly wrong.

The capital surplus held within the Private Lending LP IS commensurate with a modified expectation of a lower cost quartile assumption, but this changes my expectations as to the amounts held in the Private Lending LP, or - capital surplus - There is a variance between the $ CAD and $ U.S. so the cost quartile of the mining prospect in $ CAD would vary significantly with a $U.S. figure over several fiscal years.

If you go back further in prior fiscal years, amounts held under Private Lending LPs fall under Alternative Investment Strategies, where the actual figure associated with providing doré to physical precious metals trusts becomes obscured.
There is a seriously huge net sales and net inflow from the $PHYS at-the-market capital raise, which, once fully subscribed, goes under Private Lending LP.

After tossing out my previous assumptions of a huge, unreported capital surplus, the amounts held under Private Lending LPs and the recent at-the-market capital raise would suffice for an amalgamation of $SRHI with the parent once $SRHI acquires control of $GBRIF and a gold off-take from Minera Très Valles is agreed upon.

The amounts in question are $900 m U.S. to go to financing development at the La Ronge Gold Project, and $1.5b. U.S. from the at-market capital raise of $PHYS goes to purchasing a gold off-take from MTV. Probably all under the guise of financing.

The completion of this whole strategy is called an Internal Capital Reorganization.

The growth in question to come will be achieved by concluding the internal capital reorganization in the very near term, and the longer term acquisitions and possible future net inflows from more IPOs or at-the-market issuances. This does not rule out providing financing to mining prospects in the future.

There ‘s a very bright future in store based on growth in the business.