Sprott Inc. · TSX:SII

Sprott — Investor Presentation (March 2023)

32 slides from Sprott's investor presentation, Mar 31, 2023

  1. Slide 1: Sprott Gold Equity Fund (SGDLX)

    Sprott Gold Equity Fund (SGDLX) March 31, 2023 V5 5.25.2023

  2. Slide 2: Global Leader in Precious Metals and Energy Transition Investments

    Global Leader in Precious Metals and Energy Transition Investments US$25.4B in AUM1 Sprott (SII) is publicly listed on the NYSE and TSX Exchange Listed Products Managed Equities Private Strategies $19.2B AUM2 $3.0B AUM2 $2.5B AUM2 • Physical Bullion Trusts • Flagship U.S. Gold Equity Mutual • Bespok

  3. 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

  4. Slide 4: Investment Team

    Investment Team Victor Huwang, Director, U.S. Operations Victor Huwang joined Sprott Asset Management USA, Inc. in January 2020. Previously, he was Head of Gold Funds Operations at Tocqueville Asset Management L.P. Mr. Huwang has extensive fund administration experience in financial reporting, inves

  5. 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 53 Management USA, I

  6. Slide 6: Investment Process

    Investment Process Sprott Gold Equity Fund | 6

  7. Slide 7: Investment Process: Comprehensive and repeatable 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

  8. Slide 8: Investment Process: The Ms - Management

    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

  9. Slide 9: Investment Process: The Ms - Mines & Minerals

    Investment Process: “The 3 Ms” Mines & Minerals • Sprott has one of the industry’s deepest teams of technical specialists (geologists and mining engineers) who assist the investment and research teams to analyze the potential of a company’s assets • The process begins with a technical review of a co

  10. Slide 10: Investment Process: The Ms - Money

    Investment Process: “The 3 Ms” Money • Mining is capital intensive and the deployment of capital is often spread over a relatively long period of time. Assessing the time-line of capital needs and availability is an important determinant in gold mining valuations. • From the Sprott investment team’s

  11. Slide 11: Fund Positioning & Performance

    Fund Positioning & Performance Sprott Gold Equity Fund | 11

  12. Slide 12: Portfolio Construction

    Portfolio Construction The portfolio is built to balance potential risk and return • 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: Country Weight

  13. Slide 13: Allocation & Portfolio Statistics

    Allocation & Portfolio Statistics Asset Allocation (% of Net Assets)† 3.23% 13.55% Portfolio Statistics SGDLX Equities Weighted Average Market Cap ($ billions) 3.9 Physical Gold Weighted Median Market Cap ($ billions) 1.7 Private Fund/Other Number of Holdings 56 Turnover Ratio (%) 19.45% 83.21% Indu

  14. Slide 14: Historical Performance of Sprott Gold Equity Fund

    Historical Performance1 of Sprott Gold Equity Fund Month-End Performance: Average Annual Total Returns (%) AS OF 3/31/2023 Q1 2023* YTD* 1 YR 3 YR 5 YR 10 YR 15 YR 20 YR S.I.2 SGDLX – Investor Class A 10.86 10.86 -13.97 13.30 6.28 -1.24 0.15 6.38 8.68 SGDIX – Inst. Class I 10.95 10.95 -13.72 13.63 –

  15. Slide 15: Fund Opportunity

    Fund Opportunity Sprott Gold Equity Fund | 15

  16. Slide 16: 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

  17. Slide 17: Sprott's 2023 Outlook on Gold and Gold Equities

    Sprott’s 2023 Outlook on Gold and Gold Equities Gold Bullion • Gold was an effective safe haven asset in 2022, posting a -0.28% return, compared to a decline of 18.11% for the S&P 500 Index. Markets also recognized the importance of the gold trade to establish currency authority. • We believe near-t

  18. Slide 18: Gold Leads the Pack Over the Long Term

    Gold Leads the Pack Over the Long Term Gold vs. Stocks, Bonds and USD Returns for Period from 12/31/1999-3/31/2023 Compound Annual 700 Returns Bull Market 8.62% 600 Post GFC Precious Metals Bull Market 500 Index (Base = 100) 6.52% 400 300 4.07% 200 Click to100edit Master title style 0.03% 0 Gold S&P

  19. Slide 19: Gold is an Alternative Currency

    Gold is an Alternative Currency • Spot gold’s average performance, measured in the world’s four leading fiat currencies, has been positive in 20 of the past 23 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 Perfo

  20. Slide 20: 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 is likely to provide valuable pro

  21. Slide 21: 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 35-year low vs. gold. The ratio of miners to gold would need to increase

  22. Slide 22: 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. 80% 60% 40% 20% Premium/Discount to NAV 0% -20.2% -20% -40% -60% Click-80% to edit Master title style -70.3% -100% Senior Miner

  23. Slide 23: 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 Gold Miners (GDM) S&P 500 Comments EV/EBITDA 9.29x 12.45x GDM ~two thirds as expensive Dividend Yield 2.27% 1.68% GDM ~

  24. Slide 24: Gold Miners Out-Yielding Stocks

    Gold Miners Out-Yielding Stocks • Gold miners’ dividend yield is currently 0.59% greater than the S&P 500 after historically under yielding the S&P 500 Index 3.5% NYSE Arca Gold Miners S&P 500 3.0% 2.5% 2.27% 2.0% Yield 1.68% 1.5% 1.0% 0.5% Click to edit Master title style 0.0% Source: Bloomberg as

  25. Slide 25: 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 not enough quality deposits to sustain future production without go

  26. Slide 26: 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

  27. Slide 27: Cost per Ounce to Buy vs. Build

    Cost per Ounce to Buy vs. “Build” • There can be a 50%+ discount for buying ounces through M&A compared to discovering new ounces • Buying reserves eliminates the time and uncertainty associated with exploration • May lead to higher valuations of well positioned mid-cap companies Average Cost per Di

  28. Slide 28: Gold Equities: A New M&A Cycle May be Underway

    Gold Equities: A New M&A Cycle May be Underway • 2023 highlights thus far include Newmont Mining’s May bid to buy Australian gold and copper miner Newcrest for $17.5 billion in what would be the largest ever gold mining deal Gold Miners M&A Activity (2000-2023) $40 $38 $38 $35 $35 $30 $25 $25 Billio

  29. Slide 29: Gold Provides Low Correlation

    Gold Provides Low Correlation • Gold has provided a low correlation to other asset classes and may have diversification benefits in broader portfolios Correlation versus Gold (Past 20 Years) 1.00 1.00 0.90 0.80 0.70 0.60 0.50 0.38 0.40 0.30 0.21 0.20 0.14 0.10 0.11 0.10 0.10 0.00 Gold U.S. Equities

  30. Slide 30: Client Service Team

    Client Service Team Financial Advisors and Individual Investors Please contact the Sprott Team at 888.622.1813 for more information, or answers to your questions. You can also email us at [email protected] Ed Coyne Senior Managing Partner, Global Sales T 646.599.0859 | [email protected] John H. K

  31. Slide 31: Regional and National Sales Coverage

    Regional and National Sales Coverage Sprott Gold Equity Fund | 31

  32. Slide 32: 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

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