Sprott Resource Holdings Press Releases

Press Release

Sprott Resource Corp. Announces First Quarter Results

TORONTO, May 12 /CNW/ - (TSX: SCP) - Sprott Resource Corp. ("SRC" or the "Company") today announced its financial results for the three months ended March 31, 2010.

Q1 2010 Operational and Business Highlights:          -  Orion Oil & Gas Corporation ("Orion") was listed on the TSX and           currently trades under the symbol OIP. SRC has invested           approximately $107 million in Orion to date and owns 79% of Orion's           issued and outstanding shares. As of today, Orion has a market           capitalization of approximately $347 million.          -  Waseca Energy Ltd. ("Waseca") completed a $20 million rights           offering to existing shareholders. SRC purchased 28 million common           shares of Waseca for $17 million and increased its undiluted           ownership to 81.3%.          -  Stonegate Agricom Ltd. ("Stonegate Agricom") filed an updated           NI 43-101 report for its Mantaro Phosphate Deposit demonstrating           significant potential for the project.          -  Investment portfolio increased by 21% to $41.0 million as at           March 31, 2010 from $33.8 million as at December 31, 2009.        Subsequent to the end of Q1 2010:          -  Stonegate Agricom successfully completed a $51.75 million initial           public offering at $1.00 per unit (one common share and a half           warrant), including the exercise of the underwriters' over-allotment           option ("IPO"), and began trading on the TSX under the symbol ST.           SRC has invested approximately $23 million in Stonegate Agricom to           date and owns approximately 57% of Stonegate Agricom's issued and           outstanding shares. As of today, Stonegate Agricom has a market           capitalization of approximately $120 million.          -  One Earth Farms Corp. ("One Earth Farms") began seeding operations           in the Lethbridge Alberta area. In 2010, One Earth Farms expects to           farm approximately 61,000 acres of cropland, 2,000 acres of hayland           and support 1,900 head of cattle on 15,000 acre of pasture lands.

"We are very happy with the progress of our investee companies so far this year," said Kevin Bambrough, President and CEO of Sprott Resource Corp. "Orion listed on the TSX in January, and subsequent to the end of the first quarter, Stonegate Agricom successfully completed a $51.75 million IPO. We were pleased to participate in the Stonegate Agricom IPO. Both transactions have been very accretive to our shareholders."

"Looking ahead, we will continue to look for promising investment opportunities in the resource space, while providing our subsidiaries with the support necessary to continue their growth and accelerate their value creation activities," added Mr. Bambrough.

Financial Highlights:        Consolidated Income Statements      -------------------------------------------------------------------------                                              Three Months      Three Months                                                  Ended             Ended                                             March. 31, 2010   March. 31, 2009      -------------------------------------------------------------------------      Net earnings (loss) ($000's)                   ($5,746)          ($1,171)      Earnings (loss) per share - basic               ($0.06)           ($0.01)      Earnings (loss) per share - diluted             ($0.06)           ($0.01)      -------------------------------------------------------------------------        Consolidated Balance Sheets      -------------------------------------------------------------------------                                                            As at                                                March 31, 2010       December 31,                                                      $000's              2009                                                                        $000's      -------------------------------------------------------------------------      Cash and cash equivalents                      $81,069          $107,085      Cash held in trust                               2,120                 -      Gold & silver bullion (at cost)                $75,392           $75,392      Portfolio investments                          $40,992           $33,750      Total Assets                                  $427,856          $408,602        Current liabilities                            $27,606           $21,930      Total Liabilities  (including       non-controlling interest)                      98,739            74,040      Shareholders' equity                          $329,117          $334,562      -------------------------------------------------------------------------

Financial Review

Working Capital

As at March 31, 2010, the Company had current assets of $187.5 million, consisting primarily of cash and cash equivalents ($81.1 million), and gold bullion ($75.4 million). Current liabilities of $27.6 million consist of accounts payable and accrued liabilities ($27.3 million) and capital tax payable ($288 thousand).

For the quarter ended March 31, 2010, working capital (defined as current assets minus current liabilities) has decreased to $159.9 million from $176.0 million as at Dec. 31, 2009. The decrease in working capital compared to the year-ended December 31, 2009, is attributed to the net purchase of private securities, the purchase of long-term assets and operating losses at the Company and its subsidiaries.

Oil and Gas Revenue (net of royalties)

For the three-months ended March 31, 2010, oil and gas revenue net of royalties increased to $15.1 million from $296 thousand in the first quarter of 2009. The increase was attributable to the acquisition of Orion and Waseca's increased production from drilling. As at March 31, 2010, Orion's exit rate of production was approximately 4,000 barrels of oil equivalent per day and Waseca's rate of production was 443 barrels of oil per day.

Farming Revenue and Production Costs

During the first quarter of 2010, One Earth Farms sold 3.2 thousand tonnes of barley and wheat that were harvested in the fourth quarter of 2009, for proceeds of $379 thousand.

Other Income and Expenses

Other income and expenses includes general and administrative expenses, management fees, incentive fees, oil and gas operating and production expenses, farm production expenses, gains on the disposition of investments and other miscellaneous income and expenses. In the first quarter of 2010, $21.5 million in other income and expenses, compared to $1.6 million in the first quarter of 2009, was primarily the result of growth in general and administrative expenses and oil and gas operating and production costs.

As at March 31, 2010, the Company had 96,211,427 common shares issued and outstanding.

About Sprott Resource Corp.

SRC is a Canadian based company, the primary purpose of which is to invest, directly and indirectly, in natural resources. 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 Limited Partnership ("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.

Forward Looking Statements

This news release includes certain forward-looking statements with regard to the future performance of SRC's business, operations, management's objectives, strategies, beliefs and intentions, including the amount of acreage that management expects One Earth Farms to farm in 2010. These forward-looking statements represent management's best judgment based on current facts and assumptions that management considers reasonable including the current state of negotiations between One Earth Farms and First Nations in respect of additional farmland to be farmed in 2010. All forward-looking information is inherently uncertain and subject to a variety of assumptions, risks, uncertainties and other factors that may cause SRC's actual results, performance or achievements to be materially different from those expressed or implied from such information, including, but not limited to, One Earth Farms being unable to lease the stated amount of land in 2010 or seed the expected farmland for the year. SRC has attempted to identify important factors that could cause its actual results, performance and achievements to differ materially from those contained in forward-looking statements. However, there can be other factors that cause results, performance and achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. Accordingly, readers should not place undue reliance on forward-looking statements and the information contained therein. SRC does not intend, and does not assume any obligation, to update these forward-looking statements except as required by law.

Barrels of Oil Equivalent

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 with the Canadian Securities Regulators' National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.

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