PRECIOUS METALS

Mining Journal talks with Sprott's Peter Grosskopf

Peter Grosskopf became CEO of Sprott Inc in July 2010 within a year of gold reaching its all-time high in US dollar terms. Throughout the prolonged precious metals bear market Grosskopf oversaw the development and growth of multiple product lines, bringing in some of the best and brightest talent in the sector to do so, such that today, Sprott is arguably the go-to name for precious metals investment.

In this video, Mining Journal talks with Grosskopf about its New York dual listing, junior mining investing, the all-important strategy and the firm's precious metals product range. Highlights include:

Sprott Inc

"We see ourselves as almost a royalty company-like profit earner in the sector. We pay a strong dividend and we have good margins. … The adoption curve of having gold become a mainstream portfolio holding and insurance is still in its early days so we see ourselves being a lot bigger doing what we are doing."

New York dual listing

"We have a lot of retail investors in the US and believe it or not, in this modern age, a lot of them are still prevented from buying a Canadian stock ... because their back offices and compliance departments still have impediments for foreign stocks."

Product portfolio

"We came at it from the background of being a stock-picking firm. The bullion trusts and the lending fund and the private equity style funds we've added in the business have all been a function of just getting broader within the sector. … It is a function of coming at the sector from almost every viable perspective and having funds that cater to investors that appreciate particular strategies."

Capital allocation

"We are fortunate enough to have more capital being offered to us than opportunities in a lot of the funds. … We tend to keep [competition for investment opportunities] to a minimum. Each fund has a specific profile."

Junior stock-picking

"It might look as though we're throwing darts because we're making a lot of investments but in fact that is what its required to sort out the right opportunities and to plant the seeds that we need to test out a property to see if its worth a bigger capitalisation and a bigger investment. … We have calculated strategies for making that number of bets and we're looking for very high returns and alpha compared to the risks that we're taking."

Juniors red flags

"The first thing we look at is management. Are management credible? Do they have the right people in the right positions? Are they overly promotional? Do they have a sensible plan? Are they aligned with us as investors? … We look to avoid certain groups in the business that have a bad reputation for being over-promotional."

Exit strategy

"Generally speaking we are looking for a catalyst. We have a game plan, we are looking to exit when certain valuation metrics are achieved and we have to start thinking about that exit well in advance because we are a long-term investor and don't like to be disruptive with our trading."

Shares in Sprott are trading at C$42.94, valuing the company at $1.1 billion.

 

 

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.

editions

Mining Journal Intelligence Global Leadership Report 2023: Social licence

Gain insights into social licence trends and best practices from interviews with 20+ top mining company executives and an industrywide survey.