TORONTO, Nov. 14, 2013 /CNW/ - (TSX: SCP) - Sprott Resource Corp. ("SRC" or the "Company") today announced financial results for the three and nine-months ended September 30, 2013.
"The current downturn in the resource sector provides tremendous opportunities to make investments at extremely compelling valuations," said Mr. Yuzpe. "We believe that we have the right team in place to take advantage of these opportunities, while continuing to support the development of our current portfolio of investments. As always, our primary focus will be pursuing accretive transactions to create value for our shareholders."
"In November, subsequent to quarter end, we completed the disposition of our gold bullion holdings for gross proceeds of approximately US$76 million," continued Mr. Yuzpe. "This transaction gives us the financial flexibility to eliminate our outstanding debt, while providing the Company with approximately $24 million to pursue new investment opportunities."
"We have a strong portfolio of investments, the largest of which is our position in Long Run Exploration Ltd. ("Long Run") which enjoyed excellent performance during the third quarter and contributed to a significant increase in our net asset value," added Mr. Yuzpe. "In addition, Long Run recently announced a $0.402 cent per share annual dividend which, through our current holdings in the company, will provide Sprott Resource Corp. with more than $14 million in annual cash flows, which is more than enough to cover our costs to run the business."
"We remain committed to enhancing shareholder value through our long-standing normal course issuer bid ("NCIB") and when appropriate will continue to buy back shares for cancellation when we believe the share price does not fully reflect the net asset value of the business," concluded Mr. Yuzpe.
SRC Equity attributable to shareholders as at September 30, 2013
The following table outlines SRC's equity attributable to shareholders as at September 30, 2013 and reflects the value at which individual items are carried on SRC's balance sheet.
|(in thousands)||September 30, 2013|
|Cash and Cash Equivalents1||$||1,499|
|Other Current Assets||1,597|
|Consolidated investment in:3|
|OEOG (defined below)||17,023|
|One Earth Farms (defined below)||36,603|
|Fair value investment in:|
|Union Agriculture Group5||33,127|
|Virginia Energy (defined below)6||2,078|
|Potash Ridge (defined below)7||3,963|
|Equity investment in:|
|Stonegate Agricom (defined below)8||17,653|
|ICD (defined below)9||48,843|
|Less: Current Liabilities||(53,666)|
|Less: Non-Current Liabilities||(5,713)|
|Total equity attributable to shareholders (NAV)||$|| 383,399 |
|(assets in thousands)||Sept. 30, 2013|
|Net assets attributable to shareholders of the Company||$||383,399|
|Number of share outstanding as at September 30, 201310||99,351,131|
|Net assets per share||$||3.86|
|1.||Cash held at SRC and does not include cash held by subsidiaries of SRC or investee companies.|
|2.||As at September 30, 2013, SRC held 59,829 ounces of gold bullion valued at $1,366.49 per ounce. Subsequent to quarter end, the Company disposed of its entire gold bullion position for gross proceeds of approximately US$76 million.|
|3.||One Earth Oil & Gas Inc. ("OEOG") and One Earth Farms Corp. ("One Earth Farms") are controlled subsidiaries of SRC and are carried at their book value.|
|4.||As at September 30, 2013, SRC owned 35.7 million shares of Long Run (common shares and non-voting preferred shares) valued at 5.50 per share.|
|5.||As at September 30, 2013, SRC owned 3.4 million common shares of Union Agriculture Group valued at $9.79 per share, which is the price that the Company has recorded as fair value.|
|6.||As at September 30, 2013, SRC owned 9.4 million common shares of Virginia Energy Resources Inc. ("Virginia Energy") valued at $0.22 per common share.|
|7.||As at September 30, 2013, SRC owned 21.2 million shares of Potash Ridge Corporation ("Potash Ridge") (common shares and non-voting preferred shares) valued at $0.18 per share. Also included in the balance is $0.3 million of warrants.|
|8.||As at September 30, 2013, SRC owned 71.0 million common shares of Stonegate Agricom Ltd. ("Stonegate Agricom"), valued at its market value of $0.24 per share.|
|9.||As at September 30, 2013, SRC owned 2.5 million common shares of Independence Contract Drilling, Inc. ICD is not publicly listed and the Company equity accounts for this investment.|
|10.||As of the date hereof, SRC has 98,847,731 common shares outstanding.|
Financial Highlights for the three-months ended September 30, 2013
SRC corporate developments:
Achievements by SRC Subsidiaries and Investees for the three-months ended September 30, 2013 and to the date hereof:
Stonegate Agricom Issues Common Shares to SRC
One Earth Farms
One Earth Oil and Gas
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 receipt of dividends by SRC from certain of its holdings; and (iii) potential use of SRC's normal course issuer bid. 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 the future outlook for the energy sector and, in particular, natural gas. 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 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); (iv) 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; (v) the ability of the Company to repurchase its securities may be limited by applicable corporate law; and (vi) those listed under the heading "Risk Factors" in SRC's annual information form dated March 28, 2013. 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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