TORONTO, May 13, 2013 /CNW/ - (TSX: SCP) - Sprott Resource Corp. ("SRC" or the "Company") today announced financial results for the three-months ended March 31, 2013.
"We are pleased with the continued progress of our investee companies and see strong potential for a rebound in the energy sector. We believe the outlook for natural gas is excellent and are well positioned to benefit from its recovery through our investments in businesses like Long Run Exploration Ltd. ("Long Run"), which has significant oil, natural gas liquids and natural gas assets in Alberta," said Kevin Bambrough, Chief Executive Officer of SRC. "During the quarter, we also increased our energy exposure through a joint venture agreement between One Earth Oil & Gas Inc. ("OEOG") and Gift Energy Limited ("Gift Energy"), an entity established by the Gift Lake Metis Settlement ("Gift Lake"), to explore and develop Gift Lake lands for heavy oil."
"Our current portfolio consists of investments at various stages of maturity," said Paul Dimitriadis, Chief Operating Officer of SRC. "Going forward, one of our priorities will be to add a company with current or near-term positive cash flow to our asset mix. This will help support our dividend policy and our commitment to building value for our shareholders."
"Independence Contract Drilling, Inc. ("ICD") continues to execute on its three-year strategic plan with five rigs fully contracted and one additional rig under construction." said Arthur Einav, SRC's General Counsel and Managing Director. "It is anticipated that ICD will complete the manufacture of two or three additional rigs in 2013 and have one more rig in progress at the end of the year."
"During the first quarter, One Earth Farms Corp. ("One Earth Farms") continued its transition into a value-added food business with the acquisition of Beretta Farms Inc. ("Beretta Farms"), an established seller of antibiotic free natural and organic branded meat products in Ontario and British Columbia," said Steve Yuzpe, Chief Financial Officer of SRC. "This transaction gives One Earth Farms a retail presence in two large markets and is an important milestone in the company's vertical integration process."
SRC Equity attributable to shareholders as at March 31, 2013 and to the date hereof
The following table outlines SRC's equity attributable to shareholders as at March 31, 2013 and reflects the value at which individual items are carried on SRC's balance sheet.
|(in thousands)||March 31, 2013|
|Cash and Cash Equivalents1||$||2,307|
|Other current assets||1,995|
|Loan receivable from associate||6,800|
|Consolidated investment in:3|
|One Earth Farms||39,231|
|Fair value investment in:|
|Union Agriculture Group5||39,550|
|Virginia Energy (defined below)6||2,833|
|Potash Ridge (defined below)7||12,519|
|Equity investment in:|
|Stonegate Agricom Ltd.8||15,292|
|Less: Current Liabilities||(41,898)|
|Less: Non-Current Liabilities||(8,850)|
|Total equity attributable to shareholders (NAV)||$|| 419,612 |
Financial Highlights for the three-months ended March 31, 2013
Achievements by SRC Subsidiaries and Investees for the three-months ended March 31, 2013 and to the date hereof:
SRC Declares April Dividend
SRC implements dividend reinvestment plan
Stonegate Agricom to Issue Common Shares to SRC
One Earth Farms
About Sprott Resource Corp.
SRC is a Canadian-based company, the primary purpose of which is to invest and operate in natural resources through its subsidiaries. Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. SRC is well positioned to draw upon the considerable experience and expertise of both its Board of Directors and Sprott Consulting LP ("SCLP"), of which Sprott Inc. is the sole limited partner. Pursuant to a management services agreement between SCLP and SRC, SCLP provides day-to-day business management for SRC as well as other management and administrative services. SRC invests and operates through Sprott Resource Partnership ("SRP"), a partnership between SRC and Sprott Resource Consulting Limited Partnership, an affiliate of SCLP which is the managing partner of SRP.
Forward Looking Statements
This news release contains certain forward-looking information and statements (collectively referred to herein as "Forward-Looking Statements") within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify Forward-Looking Statements. In particular, but without limiting the forgoing, this news release contains Forward-Looking Statements pertaining to: (i) SRC's future strategies, outlook, investment opportunities and anticipated events or results; (ii) the creation of value for SRC shareholders in the future; (iii) SRC's Dividend Policy, future dividend payments and DRIP (including any applicable discounts in the purchase price); (iv) potential for a rebound in the energy sector; (v) the future outlook for natural gas and the Company's position to benefit from its recovery through the Company's investments; (vi) the addition of a company with current or near-term positive cash flow to the Company's asset mix and the expected benefits therefrom; (vii) ICD's execution of its three-year strategic plan and its anticipated manufacturing of additional rigs; (viii) One Earth Farms' strategy of vertical integration and branded food products and the expectation that it will allow OEF to meet the needs of retailers and consumers, while generating increased margins from an integrated supply chain; and (ix) the future drilling operations on a fourth commitment with respect to the Gift Lake area. Forward-Looking Statements are based on a number of expectations or assumptions which have been used to develop such information and statements but which may prove to be incorrect, including, but not limited to: (i) the benefits of investments; (ii) future outlook for the energy sector and, in particular, natural gas; (iii) expectations with respect to ICD's three-year strategic plan; (iv) expected sales and margins of Beretta Farms; (v) oil and gas reserves; (vi) expected oil and gas production results and rates from future drilling by OEOG and Long Run;. Although SRC believes the expectations and assumptions reflected in such Forward-Looking Statements are reasonable, undue reliance should not be placed on Forward-Looking Statements because SRC can give no assurance that such expectations and assumptions will prove to be correct. The Forward-Looking Statements included in this new release are not guarantees of future performance and should not be unduly relied upon. Such information and statements, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors, which may cause actual results or events to differ materially from those anticipated in such Forward-Looking Statements, including, without limitation: (i) general economic, market and business conditions; (ii) market volatility that would affect the ability to enter or exit investments; (iii) risks associated with the farming industry in general (e.g., weather risks, operational risks in production; the uncertainty of estimates and projections related to crop and cattle); (iv) risks associated with the food product and retail business (e.g., food safety risks and fluctuations in the price of inputs and sales volumes); (v) risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to reserves, production, costs and expenses, and health, safety and environmental risks); (vi) commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures; (vii) risks associated with rig construction projects (e.g., delays, cost overruns, start-up complications, operational problems) (viii) changes in environmental and other regulations; and (ix) those listed under the heading "Risk Factors" in SRC's annual information form dated March 28, 2013. In addition, the payment of dividends is not guaranteed and the amount and timing of any dividends payable by SRC will be at the discretion of the Board of Directors and will be established on the basis of SRC's earnings, the satisfaction of solvency tests imposed by applicable corporate law for the declaration and payment of dividends, and other relevant factors. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the Forward-Looking Statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the Forward-Looking Statements contained in this news release. The Forward-Looking Statements contained in this news release speak only as of the date of this news release, and SRC does not assume any obligation to publicly update or revise any of the included Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.
Information Regarding Disclosure on Oil and Gas Information
Where amounts are expressed in a barrel of oil equivalent ("boe"), or barrel of oil equivalent per day ("boe/d"), natural gas volumes have been converted to barrels of oil equivalent on the basis that 6 thousand cubic feet ("mcf") is equal to one barrel of oil. Use of the term boe may be misleading, particularly if used in isolation. This boe conversion ratio is based on an energy equivalence methodology, and does not represent a value equivalency. Indeed, the energy and value relationships may differ widely with market conditions. The conversion conforms to the Canadian Securities Regulators' National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.
SOURCE: Sprott Resource Corp.
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