TORONTO, Aug. 15 /CNW/ - (TSX: SCP) - Sprott Resource Corp. ("SRC") announced today its financial results for the quarter ended June 30, 2008. The consolidated financial statements and the related management's discussion and analysis ("MD&A") can be found on SEDAR at www.sedar.com. For the second quarter, net earnings were $6.96 million or $0.13 basic earnings per share ($0.11 fully diluted earnings per share). Net earnings include $4.99 million in equity earnings of PBS Coals Corporation ("PBS") and $3.17 million in gains on the sale of investments. Working capital ended the second quarter at $58.12 million, an increase of $24.98 million from the end of the previous quarter. The increase in working capital was a result of a warrant incentive program that commenced during the second quarter and was completed subsequent to the end of the second quarter. The total proceeds resulting from the warrant incentive program will be fully reflected in the third quarter's financial statements. The second quarter included an additional investment of US$23,960,000 in PBS. This investment increased SRC's holdings of PBS shares to 44,194,538. Subsequent to the end of the quarter, SRC sold into escrow 17,050,000 PBS shares for gross proceeds of approximately $102,300,000. These proceeds have been placed into escrow and will be released from escrow following the satisfaction of certain conditions, which are expected to be fulfilled by the end of August 2008. Also of note in the second quarter was the acquisition, through a newly formed Ontario corporation ("Ontario Co"), of the outstanding shares of Mantaro (BVI) Ltd., the company that indirectly holds the mineral rights relating to the Mantaro Phosphate Project. Subsequent to the end of the second quarter, SRC announced that it would be amalgamating Ontario Co with Stonegate Minerals Ltd. ("Stonegate"), a private Ontario company. Stonegate will be providing initial working capital for the project. The key principals of Stonegate, Ian McDonald and Kerry Knoll, will lead the management of the project. "The successful completion of the warrant incentive program and the sale of a portion of our PBS shares leaves us in a very strong financial position," said Kevin Bambrough, CEO of Sprott Resource Corp. "With a strong capital base, we intend to take advantage of the existing market conditions to continue to acquire properties and investments at attractive valuations." 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 regarding SRC, including management's assessment of future plans or future market conditions, may constitute forward-looking statements under applicable securities laws and necessarily involve risk, including without limitation, risks associated with mineral exploration projects, risks associated with commodity prices and risks associated with the release conditions to the escrowed funds on the sale of PBS shares not being satisfied. SRC's actual results or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. No assurance can be given that any event anticipated by the forward-looking statements will occur. These forward-looking statements, which are based on management's current expectations, 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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