Sprott Gold & Precious Minerals Class
Investment Team
Charles Oliver
Senior Portfolio ManagerCharles Oliver
Senior Portfolio Manager
Charles Oliver joined Sprott Asset Management LP in January 2008. With over 25 years of financial industry experience, he is now Lead Portfolio Manager of the Sprott Gold & Precious Minerals Fund, Sprott All Cap Fund, and co-manages Sprott Silver Equities Class.
Prior to joining Sprott, Charles was at AGF Management Limited, where he led the team that was awarded the Canadian Investment Awards Best Precious Metals Fund in 2004, 2006, 2007, and was a finalist for the best Canadian Small Cap fund in 2007. His accolades also include: Lipper Awards’ best 5-year return in the Precious Metals category (AGF Precious Metals Fund, 2007) and best 10-year return in the Natural Resources category (AGF Canadian Resources Fund, 2007).
Charles began his investment career with Midland Doherty in 1987, and in 1999, joined AGF’s Fund Management department. He went on to become Co-Manager of the AGF Precious Metals Fund, the AGF Global Resources Fund, AGF Canadian Resources Fund and the AGF Growth Equity Fund; Manager of the AGF Canadian Small Cap Fund; and Co-Advisor on the Markland Oilsands Sector Fund. Charles also helped manage institutional funds and funds domiciled in Japan, Ireland, and the UK.
Charles combines a big picture approach with a bottom-up process, and focuses on strong management teams with sound strategy. He looks for growth at a reasonable price (GARP) and generally buys companies with the view of holding them over the long-term.
Charles obtained his Honours Bachelor of Science degree in Geology from the University of Western Ontario in 1987, and obtained his CFA designation in 1998.
Fund Details
| Fund Status | Open |
| Issue Price | $10.00 per Unit |
| Distributions | Ordinary Dividends Paid in December; Capital Gains Dividends Paid in February; Distributions are Reinvested Automatically. |
| Fund Code |
SPR302 - FE (A) |
| Inception Date | 10/17/2011 |
| Nature of Securities | Shares of a Class of a Mutual Fund Corporation |
| Type of Fund | Gold and Precious Minerals |
| Valuations | Daily |
| Redemptions | Daily |
| Minimum Initial Investment | $1,000 CAD |
| Minimum Subsequent Investment | $100 CAD |
| Minimum Investment Term | 90 days (2% penalty) |
| Management Fee | 2.5% annual - (A) 1.5% annual - (F) |
| Performance Fee | Based on underlying fund. Underlying fund's performance fee is 10% of excess over S&P/TSX Global Gold Index. |
| Eligible for Registered Plans | Yes |
| Investor Risk Tolerance | High |
| Service Fee |
FE - 1% |
Fund Objective
The Fund aims to achieve long-term capital growth. It seeks a similar return to its underlying fund, Sprott Gold and Precious Minerals Fund, by investing substantially all of its assets in securities of that fund. The underlying fund invests primarily in gold, gold certificates, precious metals and minerals, the certificates relating to such metals and minerals and/or in equity securities of companies that are directly or indirectly involved in the exploration, mining, production or distribution of gold and precious metals and minerals.The indicated rates of return for series A/class A securities of the Funds are based on the historical annual compounded total returns including changes in unit/share value and reinvestment of all distributions or dividends and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. This communication does not constitute an offer to sell or solicitation to purchase securities of the Funds.
For performance of underlying Fund, view the Sprott Gold & Precious Minerals Fund.
Sprott Corporate Class Brochure
Sprott Corporate Class Fund Fact
Q4 Market Commentary
The Sprott Gold & Precious Minerals Class Series A fell by 12.5% during the fourth quarter, slightly outperforming its benchmark, the S&P/TSX Global Gold Total Return Index, which declined by 13.0% during the quarter.
The Fed’s announcement of QE3 in September had positive implications for the gold market, and yet precious metals and precious metal stocks declined during the following quarter. This is different from past announcements of quantitative easing, which have led to rallies in the precious metals markets. It is a bit of a conundrum that has frustrated many sophisticated investors caught off guard by this aberration.
At the end of the year, the Fed announced an additional $45 billion per month of long bond purchases, which is on top of the existing $40 billion per month program. At the new rate of $85 billion per month, the Fed will effectively print $1 trillion dollars in 2013. With the monetary base currently near 2.7 trillion this represents nearly a 40% increase for this coming year. We see this as inherently inflationary and for this reason alone, we anticipate future outsized returns from precious metals stocks.
In past cycles after coming out of a weak period it has usually been the mid and smaller cap names that have outperformed. As such, during the quarter we trimmed some of our large caps positions and re-deployed into the mid and smaller cap names.
In our opinion, gold equities, which represented 63% of the portfolio at year-end, are cheap. As a result, in the fourth quarter, we saw a number of stocks held within the underlying Fund including: Orko Silver bought by First Majestic (70% announced premium), Prodigy Gold bought by Argonaut Gold (54% announced premium) and Queenston Mining bought by Osisko Mining (36% announced premium). With the juniors running tight on cash, and valuations very attractive we expect that M&A activity to remain high in 2013.
Silver equities accounted for 23% of the underlying Fund at year-end we also saw some decent M&A activity in these names during the quarter, including Mirasol Resources which sold one of their properties for $60 million (1/2 cash and half shares). Mirasol now has a very low enterprise value and lots of cash. The backdrop for silver continues to be supportive, as global investment demand remains strong and improving data from China bodes well for strong industrial demand.
The Fund’s small-cap bias worked against it this year, as the market preferred higher yielding large cap names. While this hurt our relative returns, we remain very optimistic that once gold and silver bullion establish a consistent upward trend, smaller cap producers and explorers will outperform.