Topic: How To Invest

Hi Pat and Co. Many thanks for being a rock in this sea of uncertainty. Can I have your opinion on Sprott Resource Corp.? Looks like they hold a lot of cash. Thanks.

Article Excerpt

Sprott Resource Corp. $2.70, symbol SCP on Toronto (Shares outstanding: 81.9 million; Market cap: $221.1 million), invests in natural resources. The company is based in Vancouver. In September 2007, General Minerals Corp. (a gold exploration company) hired Sprott Consulting, a wholly-owned subsidiary of Sprott Asset Management (symbol SII on Toronto), to make all future investments on General’s behalf. General Minerals then changed its name to Sprott Resource Corp. and began selling shares to the public at $1.50 each in September 2007. Soon after, Sprott Resource started financing joint ventures in the resource sector, investing in natural-resource companies and directly buying commodities, like gold and silver bullion. In payment for its services, Sprott Consulting gets a yearly management fee of 2% of Sprott Resource’s average month-end net asset value. In addition, Sprott Consulting gets performance fees equal to 20% of the portion of Sprott Resource’s annual pre-tax profits that fall above a high-water mark. (This means Sprott Consulting only gets performance fees…