Sprott Inc. Q4 FY2024 earnings call

• Sprott achieved its seventh consecutive year of double-digit AUM growth in 2024, with AUM increasing by $2.8 billion to $31.5 billion by year-end 2024, and further rising to $33.5 billion YTD 2025.
• Launched two new ETFs: Sprott Silver Miners & Physical Silver ETF (SLVR) with ~70% silver exposure and Sprott Active Gold and Silver Miners ETF (GBUG), the world's first actively managed gold and silver miners ETF.
• Financial results: Net income in Q4 2024 was $11.7 million, up 21% y-o-y; adjusted base EBITDA $22.4 million, up 19% y-o-y. Full-year net income was $49.3 million, up 18% y-o-y; adjusted base EBITDA $85.2 million, up 18% y-o-y.
• Corporate actions: Paid down line of credit to achieve a debt-free balance sheet, increased quarterly dividend by 20% in November 2024, and conducted modest share repurchases at year-end.

In 2024, Sprott's AUM finished the year at $31.5 billion, up 10% from $28.7 billion in 2023. Despite a 6% Q4 decrease from the previous quarter, it was up 10% from 2023 end. Year-to-date 2025, AUM increased by $2 billion to $33.5 billion. The precious metals product category was the primary growth engine, with AUM in this segment at an all-time high. For the fourth quarter, net flows were $126 million despite softer metal prices, and full-year net flows were $957 million including the Sprott Physical Copper Trust IPO. Managed equity strategies had $182 million net redemptions in Q4 2024 and $349 million full-year. Combined lending and streaming strategies AUM was $2.3 billion as of December 31, 2024.

• AUM momentum carried into 2025 with assets increasing by $2 billion YTD to $33.5 billion.
• Expect further volatility in 2025 due to evolving trade alliances and supply chain fragility, but confident in critical materials thesis driven by global electrification.
• SLVR ETF receiving good traction, and GBUG ETF, the first actively managed gold and silver miners ETF, positioned to target investors migrating to ETFs.

• Market volatility: Uncertainties in uranium, copper, and gold markets due to geopolitical tensions, Fed rate cuts, and changing demand. For example, spot uranium prices declined in 2024, copper faced weakening Chinese demand.
• Tariffs and trade risks: Potential tariffs on precious metals and critical materials affecting supply and demand dynamics.
• ETF segment volatility: Changes in the ETF segment are more volatile due to the smaller cap nature of many holdings in these ETFs.

Q: What are your expectations for the uranium market and spot prices over the next couple of quarters?

A: Uncertainty in the uranium market due to utility concerns, potential changes to the Inflation Reduction Act, tariffs, and geopolitical issues like President Trump's relation with Putin; spot price may remain choppy for the next quarter or two.

Q: Does the mention of friendly jurisdictions imply a demand for an ETF focusing on material producers in particular geographies?

A: Tariffs are designed to incentivize reshoring or restarting of lost industries, and friendly geographies could be relevant, but tariffs are unpredictable and uncertainly is hampering the market.

Q: How is the comp ratio trending for 2025?

A: Likely to be in the mid- to high-40%s range through 2025.

Q: Do you have a way to gauge geographically where and by what type of investor the demand for physical gold ETFs is coming from?

A: ETF data transparency is limited, but gold ETFs are seeing renewed interest due to market uncertainties, with US institutions rethinking risks and considering gold as a portfolio ballast.

Q: Could you feel comfortable putting location swaps on to raise capital in the uranium trust?

A: We are contingency planning and would consider location swaps to optimize the value of our uranium stockpile held in the US, as it has potential strategic value.

Q: Can the level of EBITDA margin expansion be repeated in 2025 or 2026?

A: There is ample operating leverage in the model to see the number continue to rise at least for the remainder of 2025.

Q: How are flows looking Q1 2025 to date?

A: The Physical Gold Trust is seeing the most traction due to gold's role as a portfolio diversifier; silver is positioning itself, while uranium is on the sideline due to different market dynamics.