Sprott(US:SII)2024-11-07 00:23Financial Data and Key Metrics Changes - Assets under management (AUM) increased by $2.3 billion to $33.4 billion, a record high for the company, with AUM reaching $34.2 billion as of November 1 [7][11] - Net income for the quarter was $12.7 million, up 87% from $6.8 million for the same period last year, and year-to-date net income was $37.6 million, up 17% from $32.1 million [12][13] - Adjusted base EBITDA was $20.7 million in the quarter, up 16% from $17.9 million year-over-year, and $62.8 million year-to-date, up 18% from $53.1 million [13] Business Line Data and Key Metrics Changes - Managed equity strategies recorded $589 million in net sales during the quarter, primarily in physical gold and silver funds [8] - The actively managed precious metal strategies performed well, with the flagship gold equity fund gaining 21.4% in Q3 and 36.3% year-to-date, despite $54.6 million in net redemptions during the quarter [25] - AUM in the suite of Physical Commodity Trusts reached an all-time high, up 50% since the beginning of 2023 [22] Market Data and Key Metrics Changes - Precious metals prices have driven asset growth, with gold up 32% year-to-date and silver up approximately 36% [7] - Gold held by ETFs decreased to under 81 million ounces despite gold prices rising to $2,400, but has recently started to increase again [20] Company Strategy and Development Direction - The company is focused on precious metals and critical materials investments, positioning itself to benefit from macro trends in the market [6][28] - Plans to launch two new precious metals ETFs in the first quarter of 2025 [8] Management's Comments on Operating Environment and Future Outlook - Management believes that the election results will not significantly alter the long-term outlook, as growing deficits are expected to pressure interest rates and inflation [31] - The company anticipates continued demand for uranium and critical materials due to bipartisan support for nuclear energy and reshoring of supply chains [33] Other Important Information - The company expects to be debt-free by the end of the year after fully paying down its credit facility [14][28] - A 20% increase in the quarterly dividend was announced based on strong financial performance [14][28] Q&A Session Summary Question: Implications of Trump Presidency on precious metals demand - Management indicated that the election outcome does not change the long-term outlook, with expectations of continued growing deficits and inflationary pressures [31] Question: Outperformance of Physical Gold and Silver Trust - The outperformance is attributed to investor trust in the physical delivery component and tax advantages for certain U.S. investors [36] Question: Future of Lending Fund-III - The company is in a cycle of making new loans and expects growth in private strategies AUM as new funds are launched [38] Question: Carried interest visibility - The carried interest realized this quarter was a one-off from a legacy exploration LP, with future carried interest expected from private strategies funds [40]