TORONTO, Sept. 8 /CNW/ - (TSX: SII) - Sprott Inc. ("Sprott" or the "Company") is pleased to announce that Sprott Resource Lending Corp. (formerly Quest Capital Corp.) (TSX:QC) ("Sprott Resource Lending") has completed a private placement of $25 million (the "Private Placement"). Sprott Private Wealth LP ("SPW"), a subsidiary of the Company, acted as sole agent to SRLC on the Private Placement. Sprott Inc. ("SII") invested $14.4 million in the Private Placement and now owns 8,977,654 common shares of SRLC (or 5.8% of the outstanding shares). The balance of the Private Placement was purchased by SPW clients and employees of Sprott and its affiliates.
Sprott Resource Lending is managed by Sprott Lending Consulting LP ("SLCLP"), a subsidiary of Sprott Consulting LP ("Sprott Consulting"), a subsidiary of SII. Peter Grosskopf, CEO of SII will serve as President and CEO of Sprott Resource Lending. Jim Grosdanis has joined SLCLP and will continue as CFO of Sprott Resource Lending. Sprott Resource Lending joins Sprott Resource Corp. (TSX:SCP) and Sprott Power Corp. as businesses managed by SCLP and its subsidiaries. SCLP managed businesses have net assets in excess of $625 million.
"We would like to thank Sprott Resource Lending shareholders for placing confidence in us to manage their business," said Peter Grosskopf, CEO of Sprott and President and CEO of Sprott Resource Lending. "We believe that Sprott Resource Lending, like each of Sprott Consulting's other managed businesses, is unique and well-positioned to become a dominant player in its sector."
SRLC has cash of approximately $100 million to commit to resource lending ("Resource Lending Assets") and has an aggressive plan to monetize its net real estate loans of approximately $160 million to generate additional Resource Lending Assets. SLCLP is entitled to an annual profit interest of up to 2% of average Resource Lending Assets for the year plus an annual incentive fee equal to 20% of pre-tax profits generated on Resource Lending Assets above a hurdle rate equal to the average annual yield on the Government of Canada 30-year bond multiplied by average Resource Lending Assets for the year.
This release contains "forward-looking statements" which reflect the current expectations of the Company. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements including, without limitation, those listed under the heading "Risk Factors" in the Company's annual information form dated March 30, 2010. 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 release. Although the forward-looking statements contained in this release are based upon what the Company believes to be reasonable assumptions, the Company cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and the Company does not assume any obligation to update or revise them to reflect new events or circumstances.
About Sprott Inc.
Sprott Inc. is a leading independent asset manager dedicated to achieving superior returns for its clients over the long term. The company currently operates through three distinct business units: Sprott Asset Management LP, Sprott Private Wealth LP and Sprott Consulting LP. Sprott Asset Management LP is the investment manager of the Sprott family of mutual funds and hedge funds and discretionary managed accounts; Sprott Private Wealth LP provides wealth management services to high net worth individuals; and Sprott Consulting LP provides management, administrative and consulting services to other companies, including Sprott Resource Corp. (TSX: SCP). Sprott Inc. is headquartered in Toronto, Canada, and is listed on the Toronto Stock Exchange under the symbol "SII". For more information on Sprott Inc., please visit www.sprottinc.com.
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