Sprott Resource Holdings Press Releases

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Press Release

Sprott Resource Corp. Announces 2015 First Quarter Results

TORONTO, May 12, 2015 (GLOBE NEWSWIRE) -- Sprott Resource Corp. (TSX:SCP) ("SRC" or the "Company") today announced its financial results for the three-months ended March 31, 2015.

Summary

  • Net Asset Value ("NAV") at March 31, 2015 of $201.9 million ($2.06 per share) compared to December 31, 2014 of $227.7 million ($2.33 per share)
     
  • For the three-months ended March 31, 2015, the Company recorded a net loss of $25.9 million ($0.27 cent loss per basic and diluted share) compared to net income of $13.4 million ($0.14 cent earnings per basic and diluted share) for the three-months ended March 31, 2014. Included in the net loss for the three-months ended March 31, 2015 are unrealized losses on investments of $38.9 million offset partially by unrealized gains on investments of $14.5 million.

"During the first quarter of 2015, we continued to deal with the effects of the dramatic decline in oil, natural gas and coal prices that wreaked havoc on the energy sector. While this has negatively impacted our portfolio, leading to lower valuations of our energy-related holdings and a decline in our NAV, we remain confident in the long-term fundamentals for the energy sector," said Steve Yuzpe, President and CEO of SRC. "In recent weeks, we have begun to see signs that sentiment is changing. Oil and gas stocks have outperformed the broader market and key indicators such as inventories have begun to stabilize."

"We are pleased with the performance of the majority of our portfolio companies. One Earth Farms has completed a successful turnaround and is now one of Canada's leading natural and organic meat producers with a growing shelf of high-quality brands," added Mr. Yuzpe. "Our 2014 investment in InPlay Oil, a private light oil producer, continues to perform well as the company executes on its 'anchor and build' strategy of identifying consolidation opportunities in core areas."

"We are currently focused on helping to position our portfolio companies to capitalize on the next upswing in the commodities cycle. We are also actively seeking opportunities to improve our liquidity and reduce our discount to NAV though appropriate monetizations. Finally, we remain committed to repurchasing our shares for cancellation when they are trading at a significant discount to NAV and as regulatory windows permit," concluded Mr. Yuzpe.

SRC Net Asset Value as at March 31, 2015

The following table outlines SRC's equity attributable to shareholders and investment ownership as at March 31, 2015. Please see the Company's unaudited consolidated interim financial statements and notes thereon, and management's discussion and analysis for the three-months ended March 31, 2015 for additional information.

 

    As at SRC Ownership
(in thousands except share and per share amounts)   March 31, 2015  (undiluted)
       
Cash and cash equivalents   $ 2,024  
Other current assets   1,940  
       
Investments, at fair value      
Energy exploration, production and services      
Long Run Exploration Ltd. 15,870   11.9%
One Earth Oil & Gas Inc. 13,976   97.1%
InPlay Oil Corp. 23,976   19.9%
Independence Contract Drilling, Inc. 39,948   18.6%
Other investments 10,279 104,049 n/a
       
Mining      
Corsa Coal Corp. 30,805   19.9%
Stonegate Agricom Ltd. 2,129   20.9%
Potash Ridge Corporation 1,696   24.4%
Other investments 3,386 38,016 n/a
       
Agriculture      
One Earth Farms Corp. 31,000   49.9%
Union Agriculture Group 40,173 71,173 6.6%
       
       
Liabilities      
Less: current liabilities   3,080  
Less: non-current liabilities   12,206  
Total equity attributable to shareholders (NAV)   $ 201,916  
       
Number of common shares issued and outstanding as at March 31, 2015   97,874,503  
       
NAV per share   $ 2.06  

SRC corporate developments:

  • The Company reported an investment loss of $24.0 million for the three-months ended March 31, 2015 that was comprised of a loss on investments of $24.4 million and dividend income of $0.4 million compared to investment income of $17.3 million for the three-months ended March 31, 2014
     
  • Expenses for the three-months ended March 31, 2015 were $1.9 million, compared to $2.6 million for the three-months ended March 31, 2014
     
  • The Company's discount to NAV grew to 54.9% as at March 31, 2015 from 19.3% as at December 31, 2014
     
  • As at March 31, 2015, the Company's cash position was $2.0 million with debt of $12.2 million.

Conference Call Details

SRC will hold a conference call to discuss its first quarter 2015 results on May 12, 2015 at 11:00am ET. To participate in the call, please dial (866) 322-9569 ten minutes prior to the scheduled start of the call and provide conference ID: 42957092. A taped replay of the conference call will be available until Tuesday, May 19, 2015 by calling (855) 859-2056 or (404) 537-3406. The conference call will be webcast live at www.sprottresource.com and http://edge.media-server.com/m/p/h84fiqcq

About Sprott Resource Corp.

Sprott Resource Corp. (TSX:SCP) is a resource-focused private equity investor managed by one of Canada's leading teams of resource private equity specialists. The company currently has investments in oil and gas, mining, agriculture and agricultural nutrients. SRC takes an active involvement in the companies in which it invests. Management is dedicated to generating consistently superior returns on capital for its shareholders, while focusing on risk management and real wealth preservation. To learn more, please visit www.sprottresource.com.

Forward-Looking Information

Certain statements in this press release contain forward-looking information (collectively referred to herein as the "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 press release contains Forward-Looking Statements pertaining to: (i) expectations regarding the long-term fundamentals for the energy sector; and (ii) expectations with respect to helping SRC's energy companies emerge from the downturn in the best shape possible to capitalize on the anticipated next upswing in the commodities cycle. Although SRC believes that the Forward-Looking Statements are reasonable, they are not guarantees of future results, performance or achievements. A number of factors or assumptions have been used to develop the Forward-Looking Statements, including, energy markets and the price of oil, natural gas liquids and natural gas will be higher in the future. Actual results, performance or achievements could vary materially from those expressed or implied by the Forward-Looking Statements should assumptions underlying the Forward-Looking Statements prove incorrect or should one or more risks or other factors materialize, including: (i) general economic, market and business conditions; (ii) commodity price fluctuations and uncertainties and, in particular the price of oil and gas; (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) those risks disclosed under the heading "Financial Instruments and Risk Management" in SRC's MD&A for the three month period ended March 31, 2015; and (vii) those risks described under the heading "Risk Factors" in SRC's annual information form dated March 3, 2015. The Forward-Looking Statements speak only as of the date hereof, unless otherwise specifically noted, and SRC does not assume any obligation to publicly update any Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable Canadian securities laws.

CONTACT: Glen Williams
         Director of Communications
         T: (416) 943-4394
         E: gwilliams@sprott.com
Sprott Resource Corp.

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