Sprott Inc. Q3 FY2024 earnings call

• AUM reached a record high of $33.4 billion at the end of the third quarter, with an additional $800 million increase to $34.2 billion by November 1.
• Net sales in the quarter were $617 million, the strongest in two years, driven by gold and silver trusts.
• There was a market disconnect between gold price and ETF holdings, which reversed in the last quarter with ETF gold holdings growing to 84 million ounces.
• AUM in Physical Commodity Trusts climbed to an all-time high at the end of October, up 50% since the start of 2023.
• Two new precious metals ETFs are expected to launch in the first quarter of 2025.

Assets under management increased by $2.3 billion to $33.4 billion in the third quarter, a record high, with AUM reaching $34.2 billion as of November 1. Precious metals' price growth was the main driver of asset growth. Net sales during the quarter were $589 million, largely in physical gold and silver funds. The Precious Metals Physical Trust contributed significantly. Exchange listed products saw net inflows. Equity ETFs had muted sales of $56 million, but Uranium equity performance improved post-correction. Actively managed equity products had net redemptions in the quarter, while physical gold saw record investor demand. Private strategies had combined lending and streaming strategies AUM of $2.4 billion as of September 30, 2024.

• The quarterly dividend was raised by 20%.
• Expect to be debt-free by the end of November as the credit facility balance will be fully paid down.
• AUM has continued to grow post-quarter end to $34.2 billion.

• Volatility in financial markets due to the election results.
• Uncertainty in trade relations with China potentially affecting gold buying by the Chinese Central Bank.
• Carried interest from a legacy exploration LP was a one-off, and future carried interest from private strategies is uncertain.

Q: Implications of Trump Presidency on precious metals and critical minerals demand?

A: Continued growing deficits may pressure interest rates and inflation, with fundamentals still in place; uranium to benefit from reshoring and nuclear push.

Q: Why did Physical Gold and Silver Trusts outperform competitors?

A: Trust in physical delivery, safe custodian (Royal Canadian Mint), physical redemption option, and tax advantages.

Q: Visibility on carried interest crystallizations?

A: Carry from legacy exploration LP was a one-off; future carry from private strategies, and Lending Fund-II maturity is uncertain.