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Sprott (SII)

Participants
Peter Grosskopf Senior MD, CEO & Director
Kevin Hibbert Senior MD, CFO & Co-Head of the Enterprise Shared Services Group
John Ciampaglia Senior MD & CEO of Sprott Asset Management
Whitney George President & Senior MD
Geoff Kwan RBC Capital Markets
Gary Ho Desjardins Capital
Graham Ryding TD Securities
Call transcript
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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Sprott Inc.'s 2020 Third Quarter Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, November 5, 2021. On behalf of the speakers that follow, listeners are cautioned that today's presentation and the responses to questions may contain forward-looking statements within the meaning of the safe harbor provision of the Canadian provincial securities law.

Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on such statements. assumptions may in expressed differ in statements. or and forward-looking or factors such results actual materially material are making implied statements, implied Certain from those

the to factors factors filings material assumptions with over Sprott's U.S. go MD&A applied conference statements, and cause For for and forward-looking or that securities making the will consult Mr. information from expectations ahead, Canadian Peter about actual additional now Mr. regulators. other results Grosskopf. please differ in the materially about and turn may to I the quarter Please Grosskopf.

Peter Grosskopf

for us thanks and Difficulty] [Technical joining today.

On Financial Whitney George, Officer, call of the The Chief and me Hibbert; Officer our Ciampaglia, John Sprott; the today Kevin Chief with Management. President Asset are Executive of Sprott

results available bit were which and MD&A. can our been XXXX is where you I'd morning this call This important on has a when of the find begin website by quarter our statements are also released providing like context, third financial and believe quarter. our Our I considering to and do year and well confidence to sideways tested markets. times silver choppy pullbacks much interest with Investor compressed the movement. and metals fare of price metals gold difficult in equity appreciation volatility. took Precious a as for eye-watering not given backseat usually their a maximum crypto during was

few business of ETFs. about will Physical world's vehicle of we Sprott of during physical The we big emerged in-demand one leading uranium are a and has billion quarter. the more the minutes. $X.X than story with and quickly the Trust backdrop, grown the that well SPUT world's was to business more Yesterday, believe most now AUM. speak SPUT I the in quarter URNM, exceptionally announced expanding Given as addition uranium in uranium URNM has the both launch equity performed John our this our in July. Uranium

which milestone the and raised milestone their business, royalty our $XXX thank for including to our are is AUM billion significant And This client of All for and finally, subsequent time. our our million currently quarter-end, would all for efforts businesses streaming QX. first growing, employees of our I support. all $XX of to like in strategy, for and a Sprott's a reached

We go. have way long that, for the over our to results a pass Kevin a look I'll for it With financial quarter. to at

Kevin Hibbert

followed by in of billion the inflows did we we million June into and this December transaction, Peter up up X% Thanks, quarter, subsequent year. basis, XX of of new quarter-end, AUM in everyone. Peter, inflows we our million $XXX trust XX which year a was I'll our X, to inception, also market earlier at billion year. AUM, our year, noted from on lending provides September $XX as physical morning, good start for is benefited Peter's earlier. high to AUM Slide continued $X.X to the uranium UPC trust this which a shareholders. or added summary of benefited $XXX On at million surpass quarter, this the this another full-year from our XX strong point, as quarter, or was Also, and into last the and physical our billion which $XX $XXX silver segment mark trust a X% In of from with value from coupled inflows the appreciation. historic

a subsequent base and period, the million $XX.X was period. year-to-date and million, Slide brief X On market and the now from X. we which earnings. was prior our a into $XX.X and quarter prior quarter or Adjusted in benefited value a was year-to-date basis, EBITDA million XX% from the up $X.X appreciation X-month Slide look base Moving on to into up provides basis, million X those the XX% assets. and of the EBITDA or $XX adjusted from inflows UPC acquisition

in from physical benefited strong earlier the also year. quarter our inflows We the into and lending products trust silver this into

saw activity AUM half first origination segment. in very the with strong our year, the coupled in robust mining development we Finally, equity ongoing brokerage of

XXXX For and morning. on information earlier over things our John. EBITDA, our more well of the section you to third this revenues, this I'll can information pass said, that With expenses refer supplemental as as presentation filed to quarter MD&A

John Ciampaglia

just million. X exchange-listed robust I'm And was quarter, which in very weeks the products Thanks, the the about quarter Physical flows out Sprott and going to attributed just in at of really want the to for $XXX of I had the a $XXX Uranium star point good Kevin, Great. morning, which and the million. all. we quarter cover net show, Trust,

really So quarter. that August we've globe. XX the all number, at capital and just is response to from mechanism when helped mid-August in overall types tremendous us has effective raising aftermarket the seen from right the became This around investor

for silver for been see and be sales momentum. month We of gold for same last booked sputtering robust. the said, has $XXX helpful uranium already of million October. the kind Peter November few few And of of around Post business. been we're continuing end, have in quarter the days, very introduction continued first the the in to even to our and very months As trust kind the October

little to more slide. a give around you bit for everybody trust, the I'll moving Just simplicity. as known better the next SPUT color uranium

new -- to will net one successful On XX, down history. fund forward Fast the at $X.X UPC $XXX fund acquisitions of October in trust, launches asset our and the was this million. billion. of July most when to the think we we're acquired and XX, go as value in company Sprott's the I reorganized

appreciation and price from short really the period in inflows of mark So a combined uranium, ATM of big time. combination market the a made the with of have the very

all of a modernizing a our taking is and this vehicle knowledge for and study our that around and bit think chase little expertise shareholders a great antiquated I was really it. taking

is value that us incredible of years insights we think XX has of the to come and liquid the when because in I is provided we physical liquidity and And very it. leverage. lot very world. bear market asking gives now capital really of $XXX,XXX This having in it and base over asset holdings I fund as important said the daily as from positions when this shareholder mechanisms investor-friendly most provide running the largest is to to And there to knowledge the feel designed for I us is by bring way with what real-time the involved just acquisition, small was money really that transparency net we a the made too of the institutional really day though most to $XXX trust. out a a big over Adding enough difference. on, fund at of felt much-needed And in the the opaque funds low one wasn't commodity lot costs raising get in physical it a early is market. uranium million, ATM a friction very uranium make this I meant every

more I much think bigger billion, $X in with conversations institutions, and the size tickets different now size, very much global. with we're bigger approaching much having

application working The So progress. support application not excited in the [Technical ready. Arca in yet of reiterate very will NYSE be to recent It response. early we still we're just get believe news it new about we're that a to in this listing conjunction is will year. Difficulty] innings We're URNM. market, buying And but very of I'm with acquisition them the is which our bull going yesterday

million metals. a it And more more next context. is has as in you chart of Just uranium have purchase about see Difficulty] pounds here, the a liquidity market. we're to It's on very uranium a But very different to On commenced It's and market opaque just the can the bit going SPUT since going to [Technical as is in little how market, going well trust ATM date some And to I'm think ATM. the Difficulty] acquired. a pounds has because uranium more since I the here helped you, the we precious new more this X August traditionally the [Technical are the with XX. much cumulative everyone slide Slide as OTC price out what really can is the of move do market tell today, than market. through And October to acquired of encourage dealt give activity transparency. $XX trust I

terms purchase capital the XX.X Yellowcake. of UPC, equivalent but million we days vehicle of back to this a of had XXXX, ability. them fun to of you give we just So acquired the in bit pounds was SPUT a vehicle the just raising days buy of X,XXX amount, to sense it XXX its power taken It's took in launched here, little

from really as liquidity utilities that's discovery [Technical daily think This not the the the been marketplace trust to value on and market, providing, the received activity that next buy SPUT feedback I well we've as is has has where Moving slide. which the historically Difficulty] in the languished. great and providing

ticker into has over from ETF. reorganize shareholder NYSE licensing will All North right. become on the were what team. URNM, we doing. very towards the $XXX Board non-levered the Uranium in ticker, to from approvals, Its the it. the announced to and of with etf.com. of and retail same going of his of very We're will an continue and same late number holdings, investors very We It's year-to-date. this has It a Arca Shore great all find It terms on XXX% that Tim They've been we're out million So pivot trust the the the building yesterday feedback been that Sprott index for day could performance let's I $XXX agreement Global job turn the getting positive acquire X,XXX the XX. X had rights that's It same Miners ranked this institutions to And size. upon in is small ETF. million done approvals. pleased ETF Uranium over number index. ETFs inflows with X-year will Rotolo up underlying in Slide

completed it's and just a in the fund once basically for its performance into tremendous Essentially, turn terms QX, of So Sprott we'll success shareholders. reorganization, fund. new the investors had it's in

As many interested not about few equities. the learned products our And they're suite over will of the we've that in because the thing last not are we're I but putting along with said, think physical physical the across equity in only it's type. two uranium index. product. Very the world one perfect And pairing in also that of to category. involved is excited we trust and the change this investors uranium the months globally adding holdings every the very around this say overlap think products physical equity high uranium market-leading fair and And is I complement the the we've got investment to

Whitney. to excited And turn that. that, we're So about over very I with will it

Whitney George

John. you, Thank

just equities speak in again, managed was show ago, this the But the backseat active taken was time, to our I to competitors. in to of mentioned, going A gold So it struggling performed of the last we've precious a been with passive our bit most star well ETFs here year the business. and underlying the as metal prices. and very have equities of The quarter relative quarter. third team a

rate together We've has again, business last SMAs our this some potentially historic slowed into we back to seen and held lows, to situation redemptions. So rising at got modest in in swing would things our in new year multiyear invest lows. pretty world investing generalists of both to that in expect the is -- the over cash There even and the team and We've are coming one strategy significantly. have sharp mining positive have maybe success are is environment now And in what in value been institutional equities. vogue that the They've flows. continue trading allowed I we into valuations arrangements rising leading think discover us or gold-stock a in other environment parts rate a sector. special going

for about So we prospects turn our we remain excited Peter? again. as our wait you. Thank

Peter Grosskopf

Whitney. Thanks,

Turning to XX. Slide

and QX, to segment returns well approximately is continue this capital. LPs is deployed attractive $X.X are million be and billion. too to perform now Lending Our private AUM Seed generating combined for deployments capital $XX fund fund strong. for The Sprott for continuing in strategies

institutional Slide in putting streaming Our $XXX has a look to deals, date $XXX the The been year-to-date. to also fund actively royalty segment. million had to through great fund move for I'll deploying new -- million and a brokerage XX at quarter, securing capital work commitments.

an the advisory which the in U.S. and originations, levels, meaningful well and our Our revenue in brokerage perform make Canada to high businesses results. both to work juniors. overall commission generate more institutional is continuing contributions both benefiting In are with brokerage from and activity Canada, emerging

million continuing assets AUM U.S. new team approximately of recently administration first a with launching $XXX completed efforts fee-earning close individuals for worth products are convert and to net Our also year-to-date. strategy. their pipe high They brokerage the is converted to under new

since into offering Moving transaction the despite potential volatility the is firing on XX our Difficulty] generating Slide and launch comments. equity Sprott already add in growth products well delivering and much metals. the gaining uranium prices now new exchange-listed to assets exceptional the seek alternative to an in we tapering. all downside. equities compelling AUM as minerals protection, revenue to sector addition Gold us, fare royalty We [Technical demonstrates businesses. believe the than URNM momentum. greater to also recovered Difficulty] trust, will silver quarter-end, performance upside of point, platform. [Technical inflation in our that And already movement is they on cylinders, have to investors is the which performance a face precious Sprott products our that To sense will that the to like income meaningful The and is

are well, base. client institutional new [Technical private steadily LPs to performing a Our Difficulty] expanding generating new strategies

remain consolidation we Operator? it call, add-on usual, remarks our to our some focus That areas. Q&A. active managers operator of in funds the niche turn concludes [Technical for today's now As over in for Difficulty] I'll and reviewing

Operator

Instructions] the RBC from question [Operator of Capital Our Markets. will first Geoff line from Kwan be

Geoff Kwan

pro you that in the on transaction first format, in think base the how How as compensation run of like? of Just the G&A thinking what of on expense. you then that evolve with rate new well terms question extrapoling in compensation -- kind And looks XXXX? was are expense also, terms as may growth

Kevin Hibbert

here. Kevin Geoff, it's

question. at all that I'm Sorry, not understanding

are -- So you're to correlate what trying compensation acquisition? trying to the you to

Geoff Kwan

and the with right Well, expect expense? where just rate grow type too, And how yesterday's X% run G&A announcement, other now think do just rate you on as rate? it's you that growth is some or about to yes, expense just XXXX, of then to compensation at enter

Kevin Hibbert

you. Got Okay.

Okay.

good level. business around on So the the I of an is would things one infrastructure the least processes, very business people, about scalable perspective, at technology is, SG&A is our say at front, current from AUM, our it our

So -- safe think to number is and you in if be a had SG&A me, the a I you'd $X quarter. around

number is think the to There onstream Stock don't our having we last summer when SG&A the would costs MD&A, Exchange. but I for we're biggest we obviously, environment, Geoff. started trading D&O disclosure It's now XXX to noted compliant. realistic. the that's insurance that litigious get that of we up. regulatory York more in and now, your think the like a I continuous is so New And it's year just driver goes insurance this be on more Obviously, requirements. came

into just I last existing is assets our drove our we where not ones few say the comes particular board there, So comp, numbers these coming much acquisition. what acquisitions would really then when plug not that directly to that driven done because any could by it essentially, largely compensation And were that's the are additional so we've on operations.

in If perspective. we our the look release from organization you EBITDA of the margin is the and press is and information even perspective at comp a disclosures doing revenues the main from operating and net circular an driver how today, our made overall

higher and or doing now to how of you will is I you at what be the to if you a own think going bit see we're the the I look do where ratio run at how year, than what look little today So at compensation it's XX%. to just think end and think us in your you models at expect it

your number the models that into business of comp plot would the overall what on like just just like. look extrapolate and based can earnings what You the look

Geoff Kwan

you're you you're just question stuff in of into of was mix private early that And breakout like of Can days the by And my it's what today? investors seeing these was Great. mean, terms second geographic about and the in different on Okay. mix, side. types fundraising strategies. I your the strategies what talk how bringing

Peter Grosskopf

that sticky allow mix feeder funds. worth sort It different the those still, of more place access imagine funds, to capital. or be base. These in And in changed couple individuals a Those credit The maybe which are put interest a as mostly the we are also, have getting large net much. mostly a endowments, global can bit hasn't Difficulty] quite of will pensions, small high U.S. I is it's handle [Technical from feeders of quite source Okay. that. it but well. We terms

hopefully forward. So we're those going feeders, growing

Operator

from Our Ho next Desjardins comes Gary line the Capital. of question from

Gary Ho

go to talk bit maybe in side. you back terms of whether there's Can metric, fee transaction. a the also the just And color want the arrangement to more earnouts? deal I URNM provide about any

John Ciampaglia

we disclose Until to recent in done all not in this think working ETF that. Yes. our the but at through that to Yes, fair Board on metrics point, the ETF Gary, terms. transactions process, where the that it's we're along John say further the of similar ETC is past. valuation Board, are the we've very not here. I move it's providing own still metrics trust going housed. the We're to also we're trust that prior But existing not only process the

You won't surprised. be

Gary Ho

management potentially changing any thoughts keep -- to unchanged? planning I you Are thoughts Yes. guess on charging the fees? any And fees that can today, but those I that check they're what on

John Ciampaglia

Yes.

Everything At fee, is So of any fee. planning basis not where we're a fee it's an points. this flat point, changes embedded the that. a unitary with in ETF kind all-in XX has of

Gary Ho

Perfect.

in there. line then there's Great. new the just question, And within next segment, commission a Okay. exchange-listed

are I'm behind model looking I'll what going -- wondering out and that Just this those to is out. commissions. to drivers what the related

John Ciampaglia

Sure.

the details. document So discloses all the trust

to trust you, happy to Essentially, after acquire a it If uranium, that to do the able send when commission. new X% raise us is to you and charge capital the we we're call. more want

you're we've uranium, other there that commission, been and commodities. of is as that compensates basically to material, work a lot And what seeing buying buying which buy so us been applying we've relative

Gary Ho

I that view should buy one-time But that you Obviously, a when you'd this quarter... as it. buy

John Ciampaglia

Yes, Uranium structure over and Participation carried Corporation. one-time a from fee, it's that

Kevin Hibbert

do I it a that Gary, you and how we of manage exiting is But what Right. would and uranium. acquiring part core in this business say,

at that when that keep looking in you're just So mind, line. too,

Gary Ho

the other Like Okay. on sell how And happens when down, that work? does AUM what goes way if uranium? you

John Ciampaglia

Yes.

don't uranium it's the any sell we trust, So permanently. and sequester

Gary Ho

Yes. When question, segment. management the AUM Okay. And commitment other X.Xx. are sequentially XX% bridge my Can from last two, lending then the it on increase, about went fees look I at September. June me fees? to you help was up there the The

Kevin Hibbert

catch Gary. there, Yes. Great

from, So all make in the way sizable they're closed-end -- like that's the that, and actually expected on products, works rest previous when it at an happening management have those we specific in, the benefited institution there throughout otherwise the what throughout comes the charged is months that been is year. fees payment one a a catch-up to would

for you're up coming QX, the to way January. So you're having all in if catch to back

So the would as thought have that's purposes. be numbers really wouldn't modeling your correlated you as nicely why for

Gary Ho

Got Okay. it.

Okay.

blended should rate still use fee So I management that... that

Kevin Hibbert

yes. Yes,

Gary Ho

done have that. would I

Kevin Hibbert

Exactly, yes.

in came catch-up make So these payment, then it's only had not, folks to the yes. it's because and

Gary Ho

Okay. And Makes just one for then maybe Peter. last sense.

products like targets, the named that any other uranium by be could on for? not potential other side, Just looking you necessarily

Peter Grosskopf

decarbonization a specific looking shareholders. the an long-term don't We build We income base, But asset not large we need minerals, one-off and deals. We're be pretty always have, to deliver have investment. growing hurdles of just careful do that we high the royalty-like our to our spectrum specific. to way. anything making looking for on by at vehicle want for We're we name to can

liquid. it We so in into it do pretty businesses modus are hurdles a there our terms new the of else, into more material offer put that lot effort can better out strategies kind they That's these we funds operandi a to we if structuring getting of then So than what's of can high. make been anyone already. and improvement

there's to increasingly a look, new aware all hey, these huge So And the all of people a really And productive mines. for opportunity. growing power these into opportunity of a metals, underinvested think, land I I we bit neat, years. just need world. are XX grid, minerals and of And also for not that, green fact underlying very it's sectors think scalable but now in we it's a a globally the investment. a rush It's

Operator

from from our question And next the Ryding comes TD Graham line of Securities.

Graham Ryding

you're I in are of sort other besides at bucket? falls that metals there that Peter, guess, and uranium silver clean looking

Peter Grosskopf

are, on want specifics. comment we the don't but There to

Sorry coming. It's us like can about that. hear they

So we up we're to got be about next. quiet what to

Graham Ryding

you a rights. buying of you're can't that I'll as fund to to essentially you sort acquiring essentially I past? are buying want you've are it. answer good use this you clear URNM, just in be licensing question just I fund? if take want how But clear, the this be done the language, because you to similar

John Ciampaglia

But Yes. Yes, assets. John bit be in it a basically acquiring and essentially, taking an parallel vehicle by it's here. I confusing. all acquisition. Graham, will launching that's a is the yes, language know we But little the -- it essentially is

Graham Ryding

Okay.

Peter Grosskopf

think own We so job it's U.S. years. our And housing team value built different We that in looked ETF I to does John his of that I their business and work. our some going interrupt. over And number a us John speaks for business deals. very it and and forward. it of to does didn't infrastructure it's these do What a valuable providing X things options tried think do of we with business at Arthur the that great it sorry the the Graham, team could do, is did a -- what types

Graham Ryding

expense a just couple Kevin, Understood. questions. Okay. of

what driving jump anything driving around was there? expenses first, a the at quarter? -- trailer million $X your higher to was fee What Just

Kevin Hibbert

front just you I'll the answer I on have me. to back have in that one. to get don't of

Graham Ryding

going ratio message the I to comp ratio, business And right sure Okay. I should here, just then at suggesting want reflective what for XXXX, comp the you're operating fairly got think. you is your of the I forward. be mentioned that make

So come your if less from lower from time, operating other on growth I it's going you it's think going that... the probably get not to a just SG&A from leverage here to would over ratio about the within expense of line. business, sort scale that comp come and Is

Kevin Hibbert

yes, the would of said say say the rate, is what on. number I former that you current didn't little the I little that. I than latter -- is think is bit was what part be saying run spot parts number a actually The that are is I Yes, a off. probably going to higher

up would XX%. than the are just finished So a right XX% earnings see for but be even going was all It's where closer year. anything, that flat. around but up last you it's right last it get forward But say, speak that to little statement. slightly if Graham, And QX, And little the last going reasons now, just what to actually strong it lower lower comp that's what's is saw the having half significantly. of saying, be to your you another this very looking likely in I actually to the coming to come mentioned reality. you're what ratio most the is quarter, than -- probably year, which now will out which does We're a bit you of quarter

Operator

any for I'm in And showing back closing turn remarks. like further questions any the queue. over to Peter you. I'd Grosskopf the Thank not to call

Peter Grosskopf

forward for year-end speaking look interest and after your we with everyone, to and appreciate you, Thanks, in call. Sprott, We participating our this operator, you in results. thank again

Operator

And for call. you this the conclude will Thank participating. conference

You may a now disconnect. great day. Have