Sprott Inc. Q1 FY2025 earnings call

Market Backdrop

• Stagflation environment, gold as hedge; S&P 500 had volatile April, 10-year treasury yields fluctuated.

Product Launches

• Launched Sprott Silver Miners & Physical Silver ETF and Sprott Active Gold & Silver Miners ETF, with early success.

Physical Trusts

• Strong inflows to physical trusts, especially gold trust, with significant net flows in 2025.

ETF Performance

• Gold mining ETF ranked 3rd in performance; uranium mining stocks rebounding after short selling pressure.

Assets under management increased by $3.5 billion in Q1 to $35.1 billion, driven by gold price surge and inflows to precious metal strategies, with net sales of $407 million. Managed equity strategies performed well, with the flagship gold equity fund up 26.4%. The company launched new ETFs like Sprott Silver Miners & Physical Silver ETF and Sprott Active Gold & Silver Miners ETF. Physical trusts saw strong growth: Sprott Physical Gold Trust crossed $12 billion, Physical Silver Trust and Physical Gold and Silver Trust each eclipsed $6 billion, and Uranium Trust approached $5 billion.

AUM Growth

• Expect AUM to continue growing, with EBITDA margins expected to slightly improve due to operating leverage.

Sector Outlook

• Positive outlook for precious metals, with uranium and copper showing signs of improvement.

Market Volatility

• Volatile market conditions due to trade war uncertainties and potential recession.

Short Selling

• Uranium sector faced short selling pressure, though signs of improvement are emerging.

Q: Etienne Ricard with BMO Capital Markets asked about changes in institutional interest in precious metals given market volatility.

A: John Ciampaglia said institutional investors are more active in hedging, with trading volumes in trusts reflecting institutional interest.

Q: Matthew Lee with CGF asked about white space for ETF expansion and breakeven AUM for new ETFs.

A: John Ciampaglia said breakeven depends on fees, and focus is on scaling existing ETFs. Whitney George added active management in mining sector offers alpha opportunities.

Q: Graham Ryding with TD Securities asked about low redemptions in exchange-listed trusts.

A: Whitney George said it's due to longer-term investors and arbitrage activity.

Q: Mike Kozak with Cantor Fitzgerald asked about inflows acceleration in Q2 and investor interest split between precious metals and uranium.

A: John Ciampaglia said inflows are lumpy but some funds are growing, and investor interest is shifting with new uranium investors reevaluating.