TORONTO, March 3 /CNW/ - (TSX:SCP) - Sprott Resource Corp. ("SRC") today announced its financial results for the year ended December 31, 2008. The consolidated financial statements and related management's discussion and analysis can be found on SEDAR (www.sedar.com).Highlights for 2008: - Net earnings for 2008 of $134.2 million or $1.94 per basic share compared to net earnings of $2 million or $0.09 per basic share for 2007 - Ended 2008 with cash, cash equivalents and short-term investments (Government of Canada Treasury Bills) of $203.5 million - Ended 2008 with holdings of 40,475 ounces of gold and 1,783,013 ounces of silver bullion, valued at $68 million as at December 31, 2008 - Ended 2008 with portfolio investments of $28.6 million - Ended 2008 with net assets of $284.8 million or $3.48 per share (undiluted) based on shares outstanding as at December 31, 2008"We are very proud that in this hostile financial environment our management team produced such spectacular results," said Eric Sprott, Chairman of SRC. "Our strategy focuses on managing risk by adjusting our invested capital to reflect market conditions. Last year demonstrated our ability to execute on this strategy, as we benefited from the rise in the resource market and then preserved capital after the market and economy deteriorated," said Kevin Bambrough, President and CEO of SRC. "The undeniable strength and quality of our balance sheet leaves us well positioned to take advantage of investment opportunities that will undoubtedly arise at the bottom of this cycle." Financial Review For 2008 net earnings were $134.2 million or $1.94 per basic share compared to net earnings of $2 million or $0.09 per basic share for 2007. The increase in net earnings was primarily a result of gains realized from the sale of securities, in particular the sale of SRC's shares in PBS Coals Limited. General and administrative expenses increased for 2008 to $43.3 million compared to $2 million for 2007. The increase is due to $39.6 million in management fees and incentive fees paid or accrued to Sprott Consulting Limited Partnership ("SCLP") pursuant to the management services agreement between SRC and SCLP. At the end of 2008, SRC had portfolio investments of $28.6 million, consisting of $12.5 million of publicly traded securities and $16.1 million of securities in private companies. As at December 31, 2008, SRC had 81,807,229 outstanding common shares. This takes into consideration 8,000,000 common shares purchased and cancelled pursuant to a normal course issuer bid completed by SRC in 2008 at an average cost of $2.46 per common share and the issuance of 39,179,279 common shares in 2008 through the exercise of share purchase warrants (36,933,970), stock options (474,000) and the issuance of shares to complete the acquisition of the Mantaro Phosphate Project (1,771,309). 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 Asset Management 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 Certain statements contained herein may constitute "forward-looking statements" under applicable securities laws. Some of the forward-looking statements may be identified by words such as "expects", "anticipates", "should", "believes", "plans", and similar expressions. These statements are based on current estimates, factors and assumptions, including expectations regarding the SRC's future strategy and business and the execution of its existing plans. These statements involve known and unknown risk. No assurance can be given that any events anticipated by the forward-looking statements will occur. Actual results and future events could differ materially from those expressed in, or implied by, the forward-looking statements. As a result, readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are made as at the date of this news release. SRC does not undertake any obligation to publicly update or revise any of these forward-looking statements, except as required by applicable securities laws.
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