Sprott Inc. · TSX:SII
Sprott — Investor Presentation (March 2024)
49 slides from Sprott's investor presentation, Mar 21, 2024
Slide 1: Uranium and Copper: The Elements of Energy
Uranium and Copper: The Elements of Energy Webcast: March 21, 2024 V4.03.2024
Slide 2: Featured Speakers
Featured Speakers John Ciampaglia, CFA, FCSI Chief Executive Officer, Sprott Asset Management & Senior Managing Partner, Sprott Inc. John Ciampaglia has almost 30 years of investment industry experience and since 2017 serves as Chief Executive Officer of Sprott Asset Management and as Senior Managin
Slide 3: Webcast Outline
Webcast Outline The Energy Transition and Critical Materials • Ed Coyne Uranium and the Reinvigoration of Nuclear Power • John Ciampaglia Copper: Wired for the Future • Jake White Uranium and Copper: How to Invest • Ed Coyne Sprott Webcast – Uranium and Copper: The Elements of Energy | 3
Slide 4: 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 $23.2B AUM $2.9B AUM $2.6B AUM • Physical Bullion Trusts • Flagship U.S. Gold Equity Mutual • Bespoke
Slide 5: Electricity Demand Estimated to Increase by 86% by 2050
Electricity Demand Estimated to Increase by 86% by 2050 60,000 53,985 World Electricity Demand (Terawatt-hour – TWh) 50,000 86% 40,000 Rising middle classes in 29,033 the East and developing 30,000 technologies in the West are driving demand for electricity. 20,000 10,000 0 2010 2021 2022 2030E 2040
Slide 6: Global Investment in the Energy Transition
Global Investment in the Energy Transition 2023 energy transition investment, $1.8 trillion, now far exceeds global investment in fossil fuels, according to clean energy research group BloombergNEF. $ billion 2,000 1,769 1,800 1,600 1,511 Clean shipping 1,400 Clean industry 1,190 1,200 Electrified h
Slide 7: Uranium and the Reinvigoration of Nuclear Power
Uranium and the Reinvigoration of Nuclear Power John Ciampaglia Sprott Webcast – Uranium and Copper: The Elements of Energy | 7
Slide 8: Uranium: Growing Focus on Nuclear as a Clean Energy Solution
Uranium: Growing Focus on Nuclear as a Clean Energy Solution Nuclear energy has the highest capacity factor1 versus both traditional and alternative energy sources, providing the most reliable baseload power source. Nuclear has the least CO2 equivalent emissions versus other energy forms and the low
Slide 9: COP28: Nuclear Takes Center Stage
COP28: Nuclear Takes Center Stage Decarbonization, Energy Security, Baseload Energy Sprott Webcast – Uranium and Copper: The Elements of Energy | 9
Slide 10: Nuclear Energy Policy & Sentiment Has Shifted
Nuclear Energy Policy & Sentiment Has Shifted Sources: The New York Times: 03/01/2024; E&E News: 3/4/2024; Financial Times: 3/10/2024; Reuters: 3/1/2024; Financial Post: 3/5/2024; Utility Dive: 3/12/2024; Bloomberg: 2/16/2024; Power Engineering International: 3/11/2024. Sprott Webcast – Uranium and
Slide 11: Global Policy Initiatives Support Nuclear Energy
Global Policy Initiatives Support Nuclear Energy • Global governments are recognizing nuclear power’s vital role as a carbon-free energy source United States European Union (EU) • US. Department of Energy has requested $4.3B to • UK new energy security policy has domestic nuclear assist in transitio
Slide 12: AI and Data Center Growth Will Likely Drive Power Demand
AI and Data Center Growth Will Likely Drive Power Demand (1) Boston Consulting Group, the Impact of Electricity; https://www.linkedin.com/posts/bcg-on- energy_the-impact-of-genai-in-electricity-activity-7112787574032674816-uDEX Sprott Webcast – Uranium and Copper: The Elements of Energy | 12
Slide 13: Utility Contracting Cycle Accelerating
Utility Contracting Cycle Accelerating • 2023 provided the long-awaited inflection point for the uranium contracting cycle whereby we have finally achieved replacement rate levels. We believe the era of uranium inventory destocking and utility complacency is over. Utility Long-term Uranium Contracti
Slide 14: Geopolitical Tensions with Russia Heightens Supply Concerns
Geopolitical Tensions with Russia Heightens Supply Concerns • Almost half of the total uranium production in 2022 came from Kazakhstan which is shipped through Russia. Russia supplies 25% of enriched uranium to the U.S. China India Niger 3% 1% 4% Russia 5% Uzbekistan 7% Kazakhstan 44% Australia 8% N
Slide 15: Where Will the Supply Come From?
Where Will the Supply Come From? 1.5+ Billion lbs of Uncovered Utility Requirements to 2040 Sprott Webcast – Uranium and Copper: The Elements of Energy | 15
Slide 16: Scramble to Reopen/Build Uranium Mines
Scramble to Reopen/Build Uranium Mines • Higher prices are allowing miners to restart and develop projects • Many uranium juniors have not yet sold their production forward and may be well positioned to benefit from further price increases – whether through developing projects themselves or M&A Proj
Slide 17: Uranium Bull Market Continues
Uranium Bull Market Continues Sprott Webcast – Uranium and Copper: The Elements of Energy | 17
Slide 18: Spot Uranium Price History
Spot Uranium Price History (in Real and Nominal Dollar Terms) In prior cycles, uranium peaked at $US170/lb and $US200/lb in today’s dollar terms Sprott Webcast – Uranium and Copper: The Elements of Energy | 18
Slide 19: Summary
Summary • Nuclear energy addresses energy transition, energy security, challenges with renewables (intermittency & land use issues) • Uranium production remains in a structural supply deficit, despite a tripling of prices • No meaningful supply response expected until 2028/30 • Utility contracting c
Slide 20: Copper: Wired for the Future
Copper: Wired for the Future Jacob White Sprott Webcast – Uranium and Copper: The Elements of Energy | 20
Slide 21: Copper: A Central Role in the Energy Transition
Copper: A Central Role in the Energy Transition • The copper market is large and mature; at • The previous commodity supercycle, led by the $183 billion in 2022,1 it is the third largest metals industrialization of China, is giving way to a new cycle market by U.S. dollar value behind iron ore and g
Slide 22: EVs and Renewables Require More Copper
EVs and Renewables Require More Copper • EVs require 2.4x more copper than a Copper Intensities conventional internal combustion engine (ICE) car. Lb/Vehicle 0 20 40 60 80 100 120 140 • Solar requires 2.5x more than fossil Conventional Car fuel counterparts per megawatt (MW). • Onshore wind requires
Slide 23: Strong Growth in Battery-Based Electric Vehicles Is Underway
Strong Growth in Battery-Based Electric Vehicles Is Underway Across the globe, approximately 14 million electric cars were sold in 2023, more than four times the sales three years ago. Sales are estimated to reach 16.7 million in 2024. Million China Europe North America South Korea Japan Rest of Wor
Slide 24: Solar and Wind Installed Capacities Are Rising
Solar and Wind Installed Capacities Are Rising Solar and wind global installed capacities have taken off in recent years and are expected to continue to grow. Solar Cumulative Capacity Per Gigawatt (GW) Wind Cumulative Capacity (GW) 5000 2500 4500 4000 2000 3500 3000 1500 2500 2000 1000 1500 1000 50
Slide 25: Electric Grids Require Considerable Investment
Electric Grids Require Considerable Investment • Copper’s high conductivity, tensile strength and Annual Grid Investments for Net-Zero1 resistance to corrosion make it useful in electricity $1,000 distribution and transmission. $900 • To reach net-zero emissions by 2050, the electricity grid may nee
Slide 26: Visualizing Copper Demand Growth
Visualizing Copper Demand Growth The cumulative demand for copper to 2050 is greater than the total produced copper over the course of human history. Source: ENERGYminute. https://energyminute.ca/infographics/the-volume-of-2050-net-zero-copper-demand/ https://www.sciencedirect.com/science/article/pi
Slide 27: Copper's Supply Struggling with Disruptions
Copper’s Supply Struggling with Disruptions • South America is the global leader in copper Copper Mine Production 20221 mining, with 38% of copper mine production.1 • Copper supply disruptions have been Others, 13% frequent. Chile, 27% Poland, 2% • Ore grades are declining. Today, they are Kazakhsta
Slide 28: Copper: A Central Role in Electricity Transmission and EVs
Copper: A Central Role in Electricity Transmission and EVs Demand for copper may be likely to outstrip supply as clean energy transition takes hold.1 Copper Supply and Demand Imbalance Likely to Grow 70 Grid Transport Wind Batteries Solar Others 60 Millions of Metric Tons Copper Supply 50 40 30 20 1
Slide 29: Copper Historic Price Growth
Copper Historic Price Growth Given the demand-supply dynamics for physical copper, we believe the price may be set up for a new super cycle. $12,000 $10,368 $10,000 $8,969 Copper Price/Metric Tons $US $8,000 $6,000 $4,000 $2,000 $- Source: Bloomberg as of 03/15/2024. The copper spot price is measure
Slide 30: Copper Inventories Are at Historic Lows
Copper Inventories Are at Historic Lows Exchange inventories cover around three days of global demand. Limited inventories raise the risk of a sudden price increase if buyers make large drawdowns to secure supplies. 1,200,000 1,000,000 800,000 Metric Tons 600,000 400,000 200,000 - Source: Bloomberg.
Slide 31: Copper Equities Outperform Spot During Bull Markets
Copper Equities Outperform Spot During Bull Markets Given the demand-supply dynamics for physical copper, investors may want to consider copper miners as a way to gain exposure to the sector. 140% 120% 109% 100% 80% 60% 40% 26% 20% 0% -20% -40% -60% -80% Copper Spot Copper Miners Source: Bloomberg.
Slide 32: Copper Miners' Healthy Profitability
Copper Miners’ Healthy Profitability • Copper miner’s all-in sustaining cost (AISC) of $2.41 per pound is well below the current copper spot price. • Implies a 41% AISC margin at the $4.07 copper spot price as of 03/15/2024. • Increases in the copper spot price may increase earnings, improve investo
Slide 33: Investing in Copper Miners
Investing in Copper Miners Only four of the top 10 copper-producing companies are majority copper miners and publicly listed. 2022 Attributable 2022 Revenue % – Top 10 Copper Producing Companies Production – (tonnes) Ownership Copper Corporación Nacional del Cobre de Chile 1,552,739 State-Owned 91%
Slide 34: Why Invest in Copper Miners Now
Why Invest in Copper Miners Now 1. Copper Is Essential for Decarbonization The push toward net-zero emissions by 2050, driven by global mandates and goals, may likely be set to escalate the development of copper-intensive infrastructure, such as power grids, electric vehicles (EVs) and clean energy
Slide 35: Uranium and Copper: How to Invest
Uranium and Copper: How to Invest Ed Coyne Sprott Webcast – Uranium and Copper: The Elements of Energy | 35
Slide 36: How Do Uranium and Copper Fit into an Investment Portfolio?
How Do Uranium and Copper Fit into an Investment Portfolio? • Energy now represents more than 10% of the S&P 500’s estimated net income, up from 6.5% in 2022; its weighting in the Index was 4.10% as of June 30, 2023 • Sprott recommends that uranium and copper can be considered for the energy allocat
Slide 37: Sprott Energy Transition Funds
Sprott Energy Transition Funds Sprott Physical Uranium Trust Sprott Energy Sprott Uranium Sprott Junior Sprott Copper Sprott Junior Sprott Lithium Sprott Nickel Transition Miners ETF Uranium Miners ETF Copper Miners ETF Miners ETF Materials ETF Miners ETF Miners ETF All prospectuses are available fo
Slide 38: Sprott Energy Transition Materials ETF (SETM) Performance History
Sprott Energy Transition Materials ETF (SETM) Sprott Energy Transition Materials ETF (SETM) Performance History Performance: Average Annual Total Returns* (%) QUARTER END AS OF 12/31/2023 1 MO 3 MO S.I.1 Sprott Energy Transition Materials ETF (Net Asset Value) 8.01 0.08 -11.60 Sprott Energy Transiti
Slide 39: Sprott Uranium Miners ETF (URNM) Performance History
Sprott Uranium Miners ETF (URNM) Sprott Uranium Miners ETF (URNM) Performance History Performance: Average Annual Total Returns* (%) QUARTER END AS OF 12/31/2023 1 MO 3 MO YTD 1 YR 3 YR S.I.1 Sprott Uranium Miners ETF (Net Asset Value) 2.54 4.99 56.88 56.88 35.75 43.47 Sprott Uranium Miners ETF (Mar
Slide 40: Sprott Junior Uranium Miners ETF (URNJ) Performance History
Sprott Junior Uranium Miners ETF (URNJ) Sprott Junior Uranium Miners ETF (URNJ) Performance History Performance: Average Annual Total Returns* (%) QUARTER END AS OF 12/31/2023 1 MO 3 MO S.I.1 Sprott Junior Uranium Miners ETF (Net Asset Value) -0.28 2.32 20.05 Sprott Junior Uranium Miners ETF (Market
Slide 41: Sprott Copper Miners ETF (COPP) Performance History
Sprott Copper Miners ETF (COPP) Sprott Copper Miners ETF (COPP) Performance History Performance: Average Annual Total Returns* (%) QUARTER END – DATA NOT YET AVAILABLE 1 MO S.I.1 Sprott Copper Miners ETF (Net Asset Value) – – Sprott Copper Miners ETF (Market Price)2 – – Nasdaq Sprott Copper Miners™
Slide 42: Sprott Junior Copper Miners ETF (COPJ) Performance History
Sprott Junior Copper Miners ETF (COPJ) Sprott Junior Copper Miners ETF (COPJ) Performance History Performance: Average Annual Total Returns* (%) QUARTER END AS OF 12/31/2023 1 MO 3 MO S.I.1 Sprott Junior Copper Miners ETF (Net Asset Value) 10.41 6.37 -7.18 Sprott Junior Copper Miners ETF (Market Pri
Slide 43: Sprott Client Services Team
Sprott Client Services Team Sprott Webcast – Uranium and Copper: The Elements of Energy | 43
Slide 44: Sprott Webcast – Uranium and Copper: The Elements of Energy | 44
Sprott Webcast – Uranium and Copper: The Elements of Energy | 44
Slide 45: Distributor Contact Details
Distributor Contact Details ALPS Distributors, Inc. 1290 Broadway, Suite 1000 Denver, CO 80203 Sprott Webcast – Uranium and Copper: The Elements of Energy | 45
Slide 46: Risk Disclosures and Other Important Information
Risk Disclosures and Other Important Information Sprott Uranium Miners ETF (NYSE Arca: URNM) This material must be preceded or accompanied by a prospectus. An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Sprott Uranium Miner
Slide 47: Risk Disclosures and Other Important Information
Risk Disclosures and Other Important Information Sprott Junior Uranium Miners ETF (Nasdaq: URNJ) This material must be preceded or accompanied by a prospectus. An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Sprott Junior Ur
Slide 48: Risk Disclosures and Other Important Information
Risk Disclosures and Other Important Information Sprott Copper Miners ETF (Nasdaq: COPP) This material must be preceded or accompanied by a prospectus. An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Sprott Copper Miners ETF
Slide 49: Risk Disclosures and Other Important Information
Risk Disclosures and Other Important Information Sprott Junior Copper Miners ETF (Nasdaq: COPJ) This material must be preceded or accompanied by a prospectus. An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Sprott Junior Cop