Sprott Inc. · TSX:SII
Sprott — Investor Presentation (March 2024)
29 slides from Sprott's investor presentation, Mar 31, 2024
Slide 1: Sprott Gold Equity Fund (SGDLX)
Sprott Gold Equity Fund (SGDLX) March 31, 2024 V5 5.15.2024
Slide 2: Global Leader in Precious Metals and Critical Materials Investments
Global Leader in Precious Metals and Critical Materials Investments US$28.7B in AUM1 Sprott (SII) is publicly listed on the NYSE and TSX Exchange Listed Products Managed Equities Private Strategies $23.2 Billion AUM $2.9 Billion AUM $2.6 Billion AUM • Physical Bullion Trusts • Flagship U.S. Gold Equ
Slide 3: Investment Team
Investment Team John Hathaway, CFA, Senior Portfolio Manager John Hathaway joined Sprott Asset Management USA, Inc. in January 2020. Mr. Hathaway is a Portfolio Manager of Sprott Hathaway Special Situations Strategy and Co-Portfolio Manager of the Sprott Gold Equity Fund. Previously, Mr. Hathaway jo
Slide 4: Investment Team
Investment Team Justin Tolman, Managing Partner, Sprott Inc. & Senior Portfolio Manager and Economic Geologist, Sprott Asset Management USA, Inc. Justin Tolman joined Sprott in 2018 as an economic geologist. He is a Senior Portfolio Manager on Sprott Hathaway Special Situations Strategy, a Senior Po
Slide 5: Sprott Gold Team
Sprott Gold Team INVESTMENT TEAM INVESTMENT TEAM EXECUTIVE TEAM Tenure Tenure Tenure Team (Years) Team (Years) Team (Years) John Hathaway, CFA Matthew Haynes, CFA Managing Partner, Sprott Inc.; Senior Portfolio Manager, Sprott Asset Whitney George Portfolio Manager, Sprott Asset 54 Management USA, I
Slide 6: Investment Process
Investment Process Sprott Gold Equity Fund | 6
Slide 7: Investment Process
Investment Process • Focus on projects with experienced and well-organized management • Prior relationships with key managers • Evaluate compensation packages to ensure alignment of interests between management and shareholders 1. Management • Technical analysis of issuer’s assets • Desktop due dili
Slide 8: Investment Process: The 3 Ms
Investment Process: “The 3 Ms” Management • When evaluating a potential investment, Sprott places a high value on its relationship with the management team • The team conducts more than 200 management meetings per year • Among the criteria considered in the team’s management assessment are: o Famili
Slide 9: Fund Positioning & Performance
Fund Positioning & Performance Sprott Gold Equity Fund | 9
Slide 10: Portfolio Construction
Portfolio Construction The portfolio is built to balance potential risk and return • We believe significant opportunities exist in smaller, earlier-stage mining companies • >50% of the asset base, on a look-through basis, is located in North America Equities: Stage of Development (%)*† Equities: Cou
Slide 11: Allocation & Portfolio Statistics
Allocation & Portfolio Statistics Asset Allocation (% of Net Assets)† 3.64% 16.36% Portfolio Statistics SGDLX Equities Weighted Average Market Cap ($ billions) 4.9 Physical Gold Weighted Median Market Cap ($ billions) 1.6 Private Fund/Other Number of Holdings 51 Turnover Ratio (%) -9.24% 79.99% Indu
Slide 12: Historical Performance of Sprott Gold Equity Fund
Historical Performance1 of Sprott Gold Equity Fund Month-End Performance: Average Annual Total Returns (%) AS OF 3/31/2024 Q1 2024* YTD* 1 YR 3 YR 5 YR 10 YR 15 YR 20 YR S.I.2 SGDLX – Investor Class A 7.26 7.26 -1.40 -0.73 7.10 1.87 1.92 3.52 8.27 SGDIX – Inst. Class I 7.31 7.31 -1.13 -0.45 – – – –
Slide 13: Fund Opportunity
Fund Opportunity Sprott Gold Equity Fund | 13
Slide 14: Sprott Gold Equities Fund (SGDLX)
Sprott Gold Equities Fund (SGDLX) Objective Sprott Gold Equity Fund’s* investment objective is long-term capital appreciation. The Fund seeks to achieve its investment objective by investing at least 80% of its net assets, plus borrowings for investment purposes, in gold and other precious metals an
Slide 15: Sprott's 2024 Outlook on Gold and Gold Mining Equities
Sprott’s 2024 Outlook on Gold and Gold Mining Equities Gold Bullion • Gold price: Reached a high of $2,230 per ounce in Q1 2024 and is up 8.09% YTD after rising 13.1% in 2023. Gold rally is underway despite low Western interest (ETF assets down 33% from 2020 peak). • Unprecedented central bank buyin
Slide 16: Gold Leading the Pack Over the Long Term
Gold Leading the Pack Over the Long Term Gold vs. Stocks, Bonds and USD Returns for Period from 12/31/1999-3/31/2024 Compound Annual Returns 800 8.80% 700 Bull Market Post GFC 600 Precious Metals 7.39% Bull Market Index (Base = 100) 500 400 300 3.97% 200 100 0.11% Click to edit Master title style 0
Slide 17: Gold is an Alternative Currency
Gold is an Alternative Currency Spot gold’s average performance, measured in the world’s five leading fiat currencies, has been positive in 21 of the past 24 years/periods (far right column) Gold in Gold in Gold in Gold in Gold in Gold's Average Year Canadian Dollar U.S. Dollar Euro Yuan Yen Perform
Slide 18: Fundamentals Support a Long-Term Uptrend in Gold
We Believe Fundamentals Support a Long-Term Uptrend in Gold • Central bank balance sheets, government deficits and fiat M2 growth are all experiencing simultaneous growth • Other financial markets are increasingly correlated and tied to this growth • The gold sector may likely provide valuable portf
Slide 19: Gold Miners Offering Deep Value versus Gold Bullion
Gold Miners Offering Deep Value versus Gold Bullion • There has historically been a strong correlation between the price of gold and gold mining stocks, although they are not always in sync • Gold mining equities are now near a 36-year low vs. gold, at a ratio of 0.06. The ratio of miners to gold wo
Slide 20: Junior Miners Cheap Relative to Senior Miners
Junior Miners Cheap Relative to Senior Miners North American junior mining stocks are trading at a significant discount to their underlying NAVs vs. senior mining stocks. The Valuation Gap between the Seniors and Juniors 80% 60% Premium/Discount to NAV 40% 20% 0% -48.67% -20% -40% -60% Click to edit
Slide 21: Gold Miners Present Attractive Relative Value and Fundamentals
Gold Miners Present Attractive Relative Value and Fundamentals Gold mining equities are trading multiples lower than the S&P 500 and with greater profitability and lower leverage Metric Gold Miners (GDM) S&P 500 Comments EV/EBITDA 10.83x 13.98x GDM Lower Dividend Yield 1.89% 1.36% GDM Higher Net Deb
Slide 22: Gold Miners Out-Yielding Stocks
Gold Miners Out-Yielding Stocks Gold miners’ dividend yield is currently 0.8% greater than the S&P 500 after historically under yielding the S&P 500 Index 3.5% 3.0% 2.5% 2.2% 2.0% Yield 1.5% 1.4% 1.0% 0.5% Click to edit Master title style 0.0% NYSE Arca Gold Miners S&P 500 Source: Bloomberg as of 3/
Slide 23: Gold Supply Factors: Discovery & Production
Gold Supply Factors: Discovery & Production • Despite record spending on exploration, new gold discoveries are less frequent • As gold production trends higher and discoveries dwindle, ore quality has become more marginal; there are likely not enough quality deposits to sustain future production wit
Slide 24: Gold Supply Continues to Decline
Gold Supply Continues to Decline Declining gold supply can drive gold prices higher and support M&A • Mine lives in the gold sector are at the • Major gold discoveries have declined lowest levels in more than ~30 years significantly Average Mine Life versus Change in Supply Gold Production 1985-2021
Slide 25: Cost per Ounce to Buy vs. Build
Cost per Ounce to Buy vs. “Build” • “Make or Buy” favors publicly traded assets trading at up to 50% discounts vs. “start new mine built from scratch” • Quality assets tend to trade at significant discount to replacement cost • Smart acquisitions can unlock value for both the acquired and acquiring
Slide 26: Gold Equities: M&A Repositioning to Fill the Power Vacuum
Gold Equities: M&A Repositioning to Fill the Power Vacuum 2023 highlights include Newmont Mining’s acquisition of Australian gold and copper miner Newcrest for ~US$17 billion, the largest ever gold mining deal. B2Gold Corp. acquired Sabina Gold & Silver Corp for ~US$900 million for their Back River
Slide 27: Gold Has Provided Low Correlation
Gold Has Provided Low Correlation Gold has provided a low correlation to other asset classes and may have diversification benefits in broader portfolios Asset Class Correlation to Gold Bullion 20 Years ended 3/31/2024 1.00 1.00 0.90 0.80 0.70 0.60 0.50 0.38 0.40 0.30 0.20 0.20 0.14 0.10 0.11 0.08 0.
Slide 28: Sprott Client Services Team
Sprott Client Services Team Sprott Gold Equity Fund | 28
Slide 29: Important Disclosure
Important Disclosure This content is intended solely for the use of Sprott Asset Management USA, Inc. for use with investors and interested parties. Investments, commentary and statements are unique and may not be reflective of investments and commentary in other strategies managed by Sprott Asset M