Sprott(US:SII)2021-11-06 20:30Financial Data and Key Metrics Changes - Assets Under Management (AUM) reached $19 billion, an increase of $466 million or 3% from June 30, and up $1.6 billion or 9% from December 31 of the previous year [10][11] - Adjusted base EBITDA for the quarter was $16.7 million, up $4.7 million or 39% from the prior period, and year-to-date adjusted base EBITDA was $46.4 million, up $17 million or 58% from the prior period [11][12] - Subsequent to the quarter-end, AUM surpassed the $20 billion milestone for the first time, marking a significant achievement for the company [7][10] Business Line Data and Key Metrics Changes - The Sprott Physical Uranium Trust (SPUT) launched in July and has grown to over $1.6 billion in AUM, with $459 million attributed to net flows in the quarter [6][14] - The streaming and royalty strategy raised $400 million in Q3, contributing to overall business growth [7][28] - Managed equities business experienced modest positive cash flows despite challenges in gold equities, which have been struggling due to low precious metal prices [25][30] Market Data and Key Metrics Changes - The uranium market is described as opaque and OTC, with SPUT enhancing liquidity and price transparency [19][21] - The North Shore Global Uranium ETF (URNM) is set to be acquired, which has seen significant inflows and strong performance, ranking number 2 out of 2,504 non-levered ETFs [22][23] Company Strategy and Development Direction - The company is focusing on expanding its uranium business and launching new products, indicating a strategic shift towards alternative assets [30][31] - The acquisition of URNM is seen as a complement to the existing uranium offerings, aiming to capture a broader investor base interested in both physical and equity uranium investments [22][23] Management's Comments on Operating Environment and Future Outlook - Management noted that gold and silver prices have recovered since the quarter-end, suggesting a positive outlook for precious metals as investors seek inflation protection [30] - The company believes it is in the early stages of a new bull market, which supports the recent acquisition of URNM [19][30] Other Important Information - The company has seen strong inflows into its physical silver trust and lending segment, contributing to overall AUM growth [10][11] - The brokerage segment is performing well, with efforts to convert assets under administration to fee-earning AUM [29] Q&A Session Summary Question: On compensation and G&A expense run rate - Management indicated that SG&A is scalable and estimated a quarterly run rate around $4 million, driven by regulatory and insurance costs [34][35] Question: Fundraising mix in private strategies - The mix remains largely unchanged, primarily involving large endowments and pensions from the U.S., with growing global interest [36][37] Question: URNM transaction details - Specific metrics on the URNM transaction were not disclosed, but management indicated that valuation metrics are similar to prior transactions [39][40] Question: Management fees for URNM - The ETF currently has a unitary fee of 85 basis points, with no plans for changes at this time [41][42] Question: Lending segment AUM increase - The significant AUM increase was attributed to catch-up payments on management fees from large institutional commitments [49][50] Question: Future targets in uranium and clean metals - The company is exploring opportunities in decarbonization minerals but did not disclose specific targets [55][56]