Sprott Resource Corp. First Quarter Conference Call May 14, 2014
Speakers Steve Yuzpe Chief Executive Officer Michael Staresinic Chief Financial Officer Sprott Resource Corp. 3
Portfolio Overview Sprott Resource Corp. 4
Q1 Business Update High level of activity year-to-date has accelerated development of business High-quality pipeline of opportunities due to: SRC outreach efforts Rising profile of private equity in resource space New accounting…
Long Run Exploration (LRE) Transaction Announced sale of one third of LRE holdings through a bought deal offering for net proceeds of 64 million SRC will continue to own 23 million LRE shares 9.7 million in dividend income expected…
Royalty Investment Continued to fund 5 million energy royalty investment Attractive risk/reward profile and potential for equity-like returns SRC began to receive royalty payments in April 2014 Payments will grow over time as more…
Diversified Portfolio Investment Sectors Other 1% Cash 4% Investment Sector Fair Value1 (MM) Agriculture Oil & 16% Agriculture 61 Gas Services 15% Mining Mining 23 6% Oil & Gas E&P 219 Oil & Gas Services 58 Cash2 15 Oil &…
Long Run Exploration Management continues to successfully transition to dividend plus growth model Expanded asset base through agreement to buy certain strategic liquids-rich natural gas assets in the deep basin area of Alberta…
Independence Contract Drilling Continues to perform according to plan Construction of ninth and tenth rigs is underway All fielded rigs are working in the Permian Basin ICDs ShaleDriller series rigs are specifically designed for…
Other Portfolio Investments One Earth Farms progressing well on expansion of branded food business and exit from crop operations One Earth Oil and Gas completed winter drilling and seismic program with two horizontal wells, shown to…
Impact of IFRS Changes Adoption of investment entity presentation No longer consolidate or equity account for investments All investments carried at fair value with gains and losses through the statement of operations Sprott…
Summary of Financial Information millions (except for per share amounts) Q1 2014 Q4 2013 (Restated) Net Asset Value (NAV) 379 366 NAV per share 3.85 3.71 Sprott Resource Corp. 13
Balance Sheet in millions Value of Investment Portfolio 365 Investment portfolio increased by 16MM during Q1 360 NAV of 379MM or 3.85 per 355 share 350 No debt Expected 80MM in cash post- 345 LRE transaction 340 Continued…
Income Statement millions (except for per share amounts) Q1/2014 Q1/2013 Investment Income 17.3 (10.7) Expenses General and administrative expenses 0.9 2.4 Management fees and compensation 1.7 2.3 Earnings (loss) 13.4…
Outlook Mining sector will take time to recover from downturn 18 to 24 month window to capitalize on depressed valuations in certain resource sectors Strengthening pipeline of new deals Currently seeing attractive opportunities in…
2014 Business Objectives Accelerate business through: Increased investment activity Closer collaboration with broader Sprott Group Continue to support our existing investee companies Add energy team in Calgary Enhance stakeholder…
Summary Dedicated to being leaders in resource private equity Focused on opportunities across the capital structure to earn equity-like returns with attractive risk/reward profiles Significant capital for new investments and to…
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