Q2 2026 Sprott Inc Earnings Call

August 5, 2026

Speaker #2: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to SPROTT INC.'s 2026 Q2 results conference call. At this time, all participants are in a listen-only mode.

Speaker #2: Following the presentation, we will conduct a Q&A session. Instructions will be provided at that time for you to queue up for questions. As a reminder, this conference is being recorded today, August 5, 2026.

Speaker #2: On behalf of the speakers that follow, listeners are cautioned that today's presentation and the responses to questions may contain forward-looking information and forward-looking statements within the meaning of the applicable Canadian and U.S. laws.

Speaker #2: securities laws. Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are implied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements.

Operator: Certain material factors or assumptions are applied in making forward-looking statements. Actual results may differ materially from those expressed or implied in such statements. For additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements, please consult the MD&A for the quarter and Sprott's other filings with the Canadian and US securities regulators. I will now turn the conference over to Mr. Whitney George. Please go ahead, Mr. George.

Speaker #2: For additional information about factors that may cause, actual results to differ materially from expectations, and about material factors or assumptions applied in making forward-looking statements, please consult the MD&A for the quarter and SPROTT's other filings with the Canadian and U.S.

Speaker #2: Securities regulators. I will now turn the conference over to Mr. Whitney George. Please go ahead, Mr. George.

Speaker #3: Thank you, operator, and good morning, everyone. Thanks for joining us today. On the call with me today are our CFO and co-COO, Kevin Hibbert, and John Ciampaglia, CEO of Sprott Asset Management.

Whitney George: Thank you, operator. Good morning, everyone, and thanks for joining us today. On the call with me today is our CFO and Co-COO, Kevin Hibbert, and John Ciampaglia, CEO of Sprott Asset Management. Our 2026 Q2 results were released this morning and are available on our website, where you can also find the financial statements and MD&A. I'll start on slide four with some Q2 highlights, or maybe you might call them lowlights. The Q2 was a challenging quarter for precious metals, with significant volatility across commodity, currency, and interest rate markets. Spot gold declined 14.1% as investors adjusted rapidly to changing geopolitical and monetary policy expectations. Silver fell more, dropping 22%. Rising oil prices strengthened the dollar during the quarter, which tightened global liquidity and created a challenging environment for gold.

Speaker #3: Our 2026 Q2 results were released this morning, and are available on our website, where you can also find the financial statements and MD&A. I'll start on slide 4.

Speaker #3: With some Q2 highlights, or maybe you might call them lowlights, the Q2 was a challenging quarter for precious metals with significant volatility across commodity currency and interest rate markets.

Speaker #3: Spot gold declined 14.1% as investors adjusted rapidly to changing geopolitical and monetary policy expectations. Silver fell more, dropping 22%. Rising oil prices strengthened the dollar during the quarter, which tightened global liquidity and created a challenging environment for gold.

Speaker #3: While the metals Q2 correction was severe, we believe it was driven primarily by cyclical factors rather than any deterioration in its long-term fundamentals. Many of the forces that have supported gold over the past several years remain firmly in place, rising government debt burdens, persistent fiscal deficits, ongoing monetary debasement, and a growing demand for reserve assets outside the traditional sovereign debt system.

Whitney George: While the metal's Q2 correction was severe, we believe it was driven primarily by cyclical factors rather than any deterioration in its long-term fundamentals. Many of the forces that have supported gold over the past several years remain firmly in place, rising government debt burdens, persistent fiscal deficits, ongoing monetary debasement, and a growing demand for reserve assets outside the traditional sovereign debt system. Our AUM decreased CAD 9.5 billion in the Q2 to CAD 55.6 billion. We reported CAD 400 million, or CAD 0.4 billion in net redemptions, primarily from our precious metals physical trust. Our critical materials ETFs were a bright spot, delivering net sales despite a tough environment. Our most recent ETF launches have continued to scale nicely, hitting AUM and liquidity targets more quickly than our previous launches and expanding our audience in both the broker-dealer and institutional channels.

Speaker #3: Our AUM decreased 9.5 billion in the Q2 to 55.6 billion, and we reported 400 million or 0.4 billion in net redemptions, primarily from our precious metals physical trusts.

Speaker #3: Our critical materials ETFs were a bright spot, delivering net sales despite a tough environment. Our most recent ETF launches have continued to scale nicely, hitting AUM and liquidity targets more quickly than our previous launches, and expanding our audience in both the broker-dealer and institutional channels.

Speaker #3: With that, I'll pass it over to Kevin for a review of our financial results.

Whitney George: With that, I'll pass it over to Kevin for a review of our financial results.

Speaker #4: Thank you, Whitney. And good morning, everyone. I'll start on slide 5, which provides a summary of our historical AUM. AUM finished the quarter at 55.6 billion dollars, down 15% from 65.1 billion dollars as at March 31, 2026, and down 7% from 59.6 billion dollars as at December 31, 2025.

Kevin Hibbert: Thank you, Whitney, and good morning, everyone. I'll start on slide five, which provides a summary of our historical AUM. AUM finished the quarter at CAD 55.6 billion, down 15% from CAD 65.1 billion as at 31 March 2026, and down 7% from CAD 59.6 billion as at 31 December 2025. On a three and six-month ended basis, our AUM was negatively impacted, to Whitney's point, by market value depreciation and net outflows from our precious metals products, partially offset by net inflows to our critical materials products. Average AUM was CAD 63.9 billion for the quarter, up CAD 26.3 billion, or 70%, from CAD 37.6 billion this time last year, and CAD 66.6 billion on a year-to-date basis, up CAD 31.2 billion or 88% from CAD 35.4 billion this time last year.

Speaker #4: On a three- and six-month ended basis, our AUM was negatively impacted, to Whitney's point, by market value depreciation and net outflows from our precious metals products, partially offset by net inflows to our critical materials products.

Speaker #4: Conversely, average AUM was 63.9 billion dollars for the quarter, up 26.3 billion dollars or 70% from 37.6 billion dollars this time last year, and 66.6 billion dollars on a year-to-date basis, up 31.2 billion dollars or 88% from 35.4 billion dollars this time last year.

Speaker #4: Our average AUM was positively impacted by a combination of net inflows and market value appreciation across a majority of our fund products, since the Q2 of last year, which more than offset the impact of the June pullback in precious metals valuations.

Kevin Hibbert: Our average AUM was positively impacted by a combination of net inflows and market value appreciation across the majority of our fund products since the Q2 of last year, which more than offset the impact of the June pullback in precious metals valuation. Slide six provides a brief look at our three and six-month earnings. Net income this quarter was CAD 34.3 million, up CAD 20.8 million from CAD 13.5 million over the same three-month period last year. On a year-to-date basis, net income was CAD 63.5 million, up CAD 38 million from CAD 25.5 million this time last year. Our three and six-month ended results were primarily due to higher average AUM in our exchange-listed products and managed equity segments, with our six-month ended results, in particular, also benefiting from carried interest crystallization in our private strategy segment in the Q1 of the year.

Speaker #4: Slide 6 provides a brief look at our 3 and 6 month earnings. Net income this quarter was 34.3 million dollars, up 20.8 million dollars from 13.5 million dollars over the same 3-month period last year.

Speaker #4: On a year-to-date basis, net income was 63.5 million dollars, up 38 million dollars from 25.5 million dollars this time last year. Our 3 and 6 month ended results were primarily due to higher average AUM in our exchange-listed products and managed equity segments.

Speaker #4: With our 6-month ended results in particular, also benefiting from carried interest crystallization, in our private strategy segment in the first quarter of the year.

Speaker #4: Adjusted EBITDA which excludes quarterly volatility from items like stock-based compensation, and intermittent carried interest and performance fee crystallizations, was 50.8 million dollars for the quarter, up 25.3 million dollars from 25.5 million dollars over the same 3-month period last year.

Kevin Hibbert: Adjusted EBITDA, which excludes quarterly volatility from items like stock-based compensation and intermittent carried interest and performance fee crystallizations, was CAD 50.8 million for the quarter, up CAD 25.3 million from CAD 25.5 million over the same three-month period last year, and it was CAD 108.7 million on a year-to-date basis, up CAD 61.3 million from CAD 47.4 million this time last year. Adjusted EBITDA doubled in the quarter and on a six-month ended basis due to an increase in average AUM attributable to the combination of net inflows and market value appreciation across the majority of our fund products since the Q2 of last year, as I just mentioned, which more than offset the impact of that June pullback in precious metals valuations. Finally, slide seven provides a few treasury and balance sheet management highlights. As you can see, our cash and liquidity profile remains strong and we continue to repurchase shares opportunistically.

Speaker #4: And it was 108.7 million dollars on a year-to-date basis, up 61.3 million dollars from 47.4 million dollars this time last year. Adjusted EBITDA doubled in the quarter and on a 6-month ended basis due to an increase in average AUM attributable to the combination of net inflows and market value appreciation across a majority of our fund products, since the Q2 of last year as I just mentioned, which more than offset the impact of that June pullback in precious metals valuations.

Kevin Hibbert: Adjusted EBITDA doubled in the quarter and on a six-month ended basis due to an increase in average AUM attributable to the combination of net inflows and market value appreciation across the majority of our fund products since the Q2 of last year, as I just mentioned, which more than offset the impact of that June pullback in precious metals valuations. Finally, slide seven provides a few treasury and balance sheet management highlights. As you can see, our cash and liquidity profile remains strong and we continue to repurchase shares opportunistically.

Speaker #4: Finally, slide 7 provides a few Treasury and balance sheet management highlights. And as you can see, our cash and liquidity profile remained strong, and we continue to repurchase shares opportunistically.

Speaker #4: For more information on our revenues, expenses, net income, adjusted EBITDA, and balance sheet metrics, you can refer to the supplemental information section of this presentation, as well as our quarterly MD&A and financial statements filed earlier this morning.

Kevin Hibbert: For more information on our revenues, expenses, net income, adjusted EBITDA, and balance sheet metrics, you can refer to the supplemental information section of this presentation, as well as our quarterly MD&A and financial statements filed earlier this morning. With that said, I'll pass things over to John.

Speaker #4: With that said, I'll pass things over to John.

Speaker #1: Thanks, Kevin. And good morning, everybody. As Whitney mentioned in his opening comments, we experienced a sharp correction in precious metals in Q2. This resulted in an $8.2 billion, or 16%, decline in our AUM in the physical trusts.

John Ciampaglia: Thanks, Kevin, and good morning, everybody. As Whitney mentioned in his opening comments, we experienced a sharp correction in precious metals in Q2. This resulted in a CAD 8.2 billion or 16% decline in our AUM in the physical trusts. Precious metals prices have since stabilized, and despite the correction, our AUM is still up over 40% over the past year. Critical materials fared better in the quarter. The uranium price remains resilient, supported by a structural supply deficit. The copper price is near an all-time high due to tightness in the physical market and speculation the US could impose tariffs on a broader range of copper forms in the new year. Turning to slide nine. After eight consecutive quarters of inflows, we experienced outflows in Q2. Profit-taking in precious metals drove the redemption activity.

Speaker #1: Precious metals prices have since stabilized and, despite the correction, our AUM is still up over 40% over the past year. Critical materials fared better in the quarter.

Speaker #1: The uranium price remains resilient, supported by a structural supply deficit while the copper price is near an all-time high due to tightness in the physical market and speculation the US could impose tariffs on a broader range of copper forms in the new year.

Speaker #1: Turning to slide 9, after 8 consecutive quarters of inflows, we experienced outflows in the Q2. Profit-taking in precious metals drove the redemption activity; our uranium trust bucked the trend with positive sales reported in the quarter.

John Ciampaglia: Our uranium trust bucked the trend with positive sales reported in the quarter. A quick look at slide 10. Our ETF product suite fared better in the quarter with an AUM decline of 10%. AUM was helped by positive gains in copper stocks in the quarter. Moving over to slide 11. Despite the challenging market conditions, net flows were positive in the quarter, reflecting broadening interest in uranium, critical materials, and rare earths. Over the past couple of years, we have seen interest evolve from specialists to generalist investors who are looking to capitalize on several trends, including electrification, growing electricity requirements from AI data centers, energy securities, and defense technologies. Investors are increasingly recognizing the role critical commodities like copper, uranium, and rare earths play. Finally, on slide 12.

Speaker #1: And a quick look at slide 10, our ETF product suite fared better in the quarter with an AUM decline of 10%. AUM was helped by positive gains in copper stocks in the quarter.

Speaker #1: Moving over to slide 11, despite the challenging market conditions, net flows were positive in the quarter, reflecting broadening interest in uranium, critical materials, and rare earths.

Speaker #1: Over the past couple of years, we have seen interest evolve from specialist to generalist investors, but we're looking to capitalize on several trends, including electrification, growing electricity requirements from AI data centers, energy securities, and defense technologies.

Speaker #1: Investors are increasingly recognizing the role critical commodities like copper, uranium, and rare earths play. And then finally, on slide 12, over the past 4 years, our team has been focused on growing our product suite organically, to capitalize on the secular trends mentioned earlier.

John Ciampaglia: Over the past four years, our team has been focused on growing our product suite organically to capitalize on the secular trends mentioned earlier. As we grow our product suite and investor base, we are experiencing the benefits of scale. On this graph, we have plotted the number of days it took each of our ETFs to reach CAD 50 million in assets. As you can see, the timelines continue to decline, helping us to reach profitability faster and meet product approval thresholds with distributors. Our latest ETF, the Sprott Rare Earths Ex-China ETF, symbol REXC, took just 32 trading days to reach the CAD 50 million mark. I will now pass it over to Whitney to update you on our managed equity segment.

Speaker #1: As we grow our product suite and investor base, we are experiencing the benefits of scale. On this graph, we have plotted the number of days it took each of our ETFs to reach $50 million in assets.

Speaker #1: As you can see, the timelines continue to decline helping us to reach profitability faster and meet product approval thresholds with distributors. Our latest ETF has brought rare earths ETF ex-China, symbol REXC, took just 32 trading days to reach this 50 million dollar mark.

Speaker #1: I will now pass it over to Whitney to update you on our managed equity segment.

Speaker #2: Thank you, John. I'm on slide 13. Our managed equities AUM contracted by approximately 0.7 billion during the quarter, as lower precious metal prices weighed on mining equities.

Whitney George: Thank you, John. I'm on slide 13. Our managed equities AUM contracted by approximately CAD 0.7 billion during the quarter as lower precious metal prices weighed on mining equities. On slide 14, you can see we reported modest net redemptions during the quarter. However, we did see positive flows in our Sprott USA business as we completed the final phases of converting legacy brokerage client accounts to AUM. I'll turn now to slide 15 on our private strategies. Private strategies AUM was CAD 2 billion as of 30 June 2026. We remain committed to growing our private strategies segment and are evaluating new strategies and extensions of existing offerings. Fundraising for our fourth private lending fund is underway, and we expect to close that fund sometime in 2027. Slide 16 is a reasonably new slide.

Speaker #2: On slide 14, you can see we reported modest net redemptions during the quarter; however, we did see positive flows in our Sprott USA business as we completed the final phases of converting legacy brokerage client accounts to AUM.

Speaker #2: I'll turn now to slide 15. On our private strategies, private strategies AUM was 2 billion, as of June 30, 2026. We remain committed to growing our private strategies segment.

Speaker #2: On our evaluating new strategies and extensions of existing offerings, fundraising for our fourth private lending fund is underway, and we expect to close that fund sometime in 2027.

Speaker #2: Slide 16 is a reasonably new slide. Before I get to my closing remarks, I'd like to just point out that the reason I love this business so much is that we can deliver operating leverage without financial leverage.

Whitney George: Before I get to my closing remarks, I'd like to just point out that the reason I love this business so much is that we can deliver operating leverage without financial leverage. Our adjusted EBITDA margins have steadily increased from 53% to 71%, creating significant leverage. As a result, we are now debt-free and generating significant free cash flow. This is the power of our business model, the ability to deliver on the promises we made half a decade ago. I'll move to slide 17 for a quick recap. Despite the pullback in precious metal prices, as of 30 June, our average AUM was up 70% from the same period last year, demonstrating the resilience of our business model. The structural elements of the precious metals bull market are intact despite recent volatility.

Speaker #2: Our adjusted EBITDA margins have steadily increased from 53% to 71%, creating significant leverage as a result. We are now debt-free, and generating significant free cash flow.

Speaker #2: This is the power of our business model, the ability to deliver on the promises we made half a decade ago. I'll move to slide 17 for a quick recap.

Speaker #2: Despite the pullback in precious metal prices, as of June 30, our average AUM was up 70% from the same period last year, demonstrating the resilience of our business model.

Speaker #2: Current geopolitical and trade disruptions have put short-term pressures on prices, but the structural elements of the precious metals bull market are intact. Despite recent volatility, critical materials are top of mind for investors and governments globally, with security of supply being the primary driver of interest and investment in this space.

Whitney George: Critical materials are top of mind for investors and governments globally, with security of supply being the primary driver of interest and investment in this space. We continue to invest in our business to support our growing client base, adding new talent in sales and marketing. We've also expanded our technology capabilities to address new productivity opportunities. Finally, we've created a team to monitor and better understand the rapidly evolving landscape of digital offerings. That concludes our remarks for today's call. I'll now turn it back to the operator for some Q&A. Thank you.

Speaker #2: We continue to invest in our business to support our growing client base, adding new talent in sales and marketing. We've also expanded our technology capabilities to address new productivity opportunities.

Speaker #2: And finally, we've created a team to monitor and better understand the rapidly evolving landscape of digital offerings. That concludes our remarks for today's call, and I'll now turn it back to the operator for some Q&A.

Speaker #2: Thank you.

Speaker #3: Thank you. Ladies and gentlemen, we will now conduct the question-and-answer session. If you do wish to ask a question, please press star 1 on your telephone keypad.

Operator: Thank you. Ladies and gentlemen, we will now conduct the question and answer session. If you do wish to ask a question, please press star one on your telephone keypad. If you're on speakerphone, please lift your handset before doing so. If you wish to withdraw your question, you may press star two. Once again, if you wish to ask a question, please press star one now. We will take a moment to gather questions. Your first question comes from the line of Matthew Lee at Canaccord Genuity. Your line is now open.

Speaker #3: If you are on speakerphone, please lift your handset before doing so. If you wish to withdraw your question, you may press star 2. Once again, if you wish to ask a question, please press star 1 now.

Speaker #3: We will take a moment to gather questions. Your first question comes from the line of Matthew Lee, at CGF. Your line is now open.

Speaker #4: Hey, morning, guys. Nice quarter overall, despite tougher environment. I wanted to touch on how you guys think about growth for the ETF business if we don't see another step-up of material prices.

Matthew Lee: Hey, morning, guys. Nice quarter overall despite a tougher environment. I wanted to touch on how you guys think about growth for the ETF business if we don't see another step up on material prices. Maybe ask another way. If underlying resource prices remain flat for the next year or so, what level of AUM growth should we be expecting?

Speaker #4: Maybe ask another way. If underlying resource prices remain flat for the next year or so, what level of AUM growth should we be expecting?

Speaker #2: John, do you want to take that one?

Whitney George: John, you want to take that one?

Speaker #1: Go ahead, John. Yeah, sure. Good morning, Matt. Yeah, I mean, that's a tricky question to answer. Obviously, this is part of a really large secular trend.

John Ciampaglia: John. Yeah, sure. Good morning, Matt. Yeah, that's a tricky question to answer. Obviously, this is part of a really large secular trend. This is part of a geopolitical tussle that's going on right now amongst superpowers. These critical materials are obviously very important for a lot of technologies, defense technologies in particular. We think this is part of a much larger re-rating and long-term secular trend. We think this trend is obviously going to take years and years to play out, the reason is obviously we need to build massive amounts of capacity in both mining and refining of these metals in the West to de-risk the reliance that we currently have on China, particularly for rare earths. That was really the key reason why we launched the Rare Earths Ex-China ETF to really play this thematic.

Speaker #1: This is part of a geopolitical tussle that's going on right now among superpowers. These critical materials are obviously very important for a lot of technologies, defense technologies, in particular.

Speaker #1: And we think this is part of a much larger re-rating and long-term secular trend. We think this trend is obviously going to take years and years to play out, and the reason is obviously we need to build massive amounts of capacity in both mining and refining of these metals in the West to de-risk the reliance that we currently have on China particularly for rare earths.

Speaker #1: And that is really the key reason why we launched the rare earths ex-China ETF, to really play this thematic. So we think commodity prices have more room to grow, the reason being we need higher incentive pricing.

John Ciampaglia: We think commodity prices have more room to grow, the reason being we need higher incentive pricing to reshore and incentivize more build-out of capacity in the West. I think the other point is we're still very early in the cycle in terms of allocation, meaning most generalist investors are just starting to learn the words critical materials, rare earths, and recognize how important they are in the supply chain. Rare earths is a really good example. It's a relatively small industry relative to some of the bigger segments like steel and iron ore and copper. If you shut off rare earths, you literally cripple trillions of dollars of the economy.

Speaker #1: To reshore and incentivize more buildout of capacity in the West. I think the other point is, we're still very early in the cycle in terms of allocation, meaning most generalist investors are just starting to learn the words "critical materials," "rare earths," and recognize how important they are in the supply chain.

Speaker #1: Rare earths is a really good example. It's a relatively small industry relative to some of the bigger segments like steel and iron ore. And copper, but if you shut off rare earths, you literally cripple trillions of dollars of the economy.

Speaker #1: And so investors are finally starting to realize the importance of some of these supply chains and this is why we spent so much of our time at SPROT educating investors about these different markets, how they operate.

John Ciampaglia: Investors are finally starting to realize the importance of some of these supply chains. This is why we spend so much of our time at Sprott educating investors about these different markets, how they operate. They're all very unique. They're all on different kind of timelines and cycles. We think this is still very early in terms of investor awareness and, more importantly, allocation. It doesn't take a lot of money moving from large capital pools and generalist buckets from things that they're, I would say, largely exposed to or overexposed to, say, technology companies, to critical materials and obviously precious metals-oriented investments to really keep money coming into our sector. Despite the air pocket we hit, we still think we're in a very early part of the cycle.

Speaker #1: They're all very unique. They're all on different kinds of timelines and cycles. So, we think this is still very early in terms of investor awareness and, more importantly, allocation.

Speaker #1: And it doesn't take a lot of money moving from large capital pools and generalist buckets—from things that they're, I would say, largely exposed to or overexposed to, say, technology companies—to critical materials, and obviously precious metals-oriented investments, to really keep money coming into our sector.

Speaker #1: So despite the air pocket we hit, we still think we're in very early part of the cycle. Okay, that's robust answer. And then maybe on the profitability side for the exchange listed products business, net fees were down almost 20%, but margins actually remained at all-time highs.

Matthew Lee: Okay. That's a robust answer. Maybe on the profitability side for the exchange-listed products business, net fees were down almost 20%, but margins actually are at all-time highs. I'm just trying to think about, is that primarily due to better cost structure than prior years, or is there maybe a cost-cutting element to it as well?

Speaker #1: And just trying to think about it, is that primarily due to better cost structure than prior years, or is there maybe a cost-timing element to it as well?

Speaker #2: Yeah, I mean, the beauty of ETFs is about scale. As you build scale in these products, given they have unitary fees, unitary fees for the 40x funds that we have and the funds we have in Europe, are a fixed fee.

John Ciampaglia: Yeah. The beauty of ETFs is about scale. As you build scale in these products, given they have unitary fees, unitary fees for the 40 Act funds that we have and the funds we have in Europe are a fixed fee. The investor has complete predictability and consistency with respect to how much they pay. As you grow those funds, the variable costs obviously are variable costs, but the fixed costs obviously come down as a percentage of AUM. That helps to flow down to our bottom line. Scaling ETFs is really important in terms of fixed fees, but they also, on the variable fees, have a benefit because with most service providers, you tend to pay them less as a percentage of the fund as the AUM goes up. There is a scale effect there as well.

Speaker #2: So the investor has complete predictability and consistency with respect to how much they pay. So as you grow those funds, the variable costs obviously are variable costs, but the fixed costs obviously come down as a percentage of AUM.

Speaker #2: And that helps to slow down to our bottom line. So scaling ETFs is really important in terms of fixed fees, but they also on the variable fees have a benefit because with most service providers, you tend to pay them less as a percentage of the fund as the AUM goes up.

Speaker #2: So there is a scale effect there as well. And as we showed you on that chart, we just arbitrarily picked $50 million. That is not a break-even on a fund.

John Ciampaglia: As we showed you on that chart, we just arbitrarily picked CAD 50 million. That is not a break-even on a fund. Every fund is slightly different, but for many of our 40 Act funds, we think our break-even is closer to CAD 25 million per fund. Costs in Europe are different. They're higher. For many of the funds we've been focused on in North America, we can get down to break-even around CAD 25 million. That's very good. It gives us confidence to launch new funds and get them to at least break-even. That's obviously helping the overall product suite in terms of profitability.

Speaker #2: Every fund is slightly different, but for many of our 40x funds, we think our break-even is closer to $25 million per fund. Costs in Europe are different.

Speaker #2: They're higher. But for many of the funds we've been focused on in North America, we can get down to break-even around $25 million. So that's really good.

Speaker #2: It helps give us confidence to launch new funds and get them to at least break even, and that's obviously helping the overall product suite in terms of profitability.

Speaker #1: Understood. All right, I'll pass the line. Thanks for the cover.

Matthew Lee: Understood. All right, I'll pass the line. Thanks for the comment.

Speaker #3: Thank you. Your next question Securities. Your line is now open.

Operator: Thank you. Your next question comes from the line of Graham Ryding at TD Securities. Your line is now open.

Speaker #2: John, maybe I'll just stick with you on that theme of critical materials. Energy security and rising demand for electricity are some themes that you flagged in your comments.

Graham Ryding: John, maybe I'll just stick with you in that theme of critical materials. Energy security and rising demand for electricity are some themes that you flagged in your comments. What commodity specifically would you call out that would be best positioned to benefit from that theme?

Speaker #2: What commodity specifically would you call out that would be best positioned to benefit from that theme?

Speaker #1: Yeah, sure. Good to talk to you, Graham. I mean, obviously, there are a lot of commodities that play a critical role in these thematics. Obviously, copper is really the linchpin in terms of anything to do with moving electrons.

John Ciampaglia: Yeah, sure. Good to talk to you, Graham. Obviously, there's a lot of commodities that play critical roles in these thematics. Obviously, copper is really the linchpin in terms of anything to do with moving electrons. Copper is really your go-to metal, and I think it's reflected in the current pricing. Copper is flirting with an all-time high in an environment where we've obviously had a pretty severe correction in some other metals and commodities. That's really, I think, reflecting the recognition of the strategic importance of copper, but also the scarcity of copper. Just yesterday, Codelco, which is the largest copper miner in the world, announced that they're having seismic issues at one of their key copper mines. We obviously are benefiting from demand drivers around electrification, AI, electric vehicles, all these kinds of things. On the supply side, it's been very challenging.

Speaker #1: Copper is really your go-to metal. And I think it's reflected in the current pricing. I mean, copper is flirting with an all-time high in an environment where we've obviously had a pretty severe correction in some other metals and commodities.

Speaker #1: And that's really, I think, reflecting the recognition of the strategic importance of copper, but also the scarcity of copper. I mean, just yesterday, Codelco, which is the largest copper miner in the world, announced that they're having seismic issues at one of their key copper mines.

Speaker #1: So we obviously are benefiting from demand drivers around electrification, AI, electric vehicles, all these kinds of things. But on the supply side, it's been very challenging.

Speaker #1: We've had a number of disruptions at some of the biggest copper mines in the world. Bringing new copper mines to market is underway, but these are very long-lead projects.

John Ciampaglia: We've had a number of disruptions at some of the biggest copper mines in the world. Bringing new copper mines to market is underway, these are very long lead projects, often involving investment decisions of spending CAD 10 or CAD 15 billion to build these projects. They're in very challenging environments, usually at high altitude, and with scarcity of water, I'm referring to the Andes. The second one obviously is uranium. As the world kind of pivots back to nuclear energy, given its incredible energy density and base load characteristics, you really need to underpin your grid with base load power, that's what nuclear energy and obviously some thermal supply sources provide.

Speaker #1: Often involving investment decisions of spending $10 or $15 billion to build these projects. They are in very challenging environments, usually at high altitude.

Speaker #1: And with scarcity of water, I'm referring to the Andes. And then the second one, obviously, is uranium. As the world kind of pivots back to nuclear energy, given its incredible energy density and base load characteristics, you really need to underpin your grid with base load power.

Speaker #1: And that's what nuclear energy and obviously some thermal supply sources provide. The world has built an enormous amount of solar capacity over the last 10 years, but we're at saturation points in terms of how much more capacity grids can add, given the variability and capacity factors, which are only about 25%.

John Ciampaglia: The world's built an enormous amount of solar capacity over the last 10 years, we're at saturation points in terms of how much more capacity grids can add given the variability and capacity factors, which are only about 25%. We're very bullish, obviously, on copper for energy transmission, electricity transmission, and uranium for electricity production. Obviously there are a whole bunch of other supporting metals, those are the two big ones that we're most excited about.

Speaker #1: So we're very bullish, obviously, on copper for energy transmission, electricity transmission, and uranium for electricity production. And obviously, there are a whole bunch of other supporting metals, but those are the two big ones that we're most excited about.

Speaker #2: Okay, great. And then, Whitney, just looking at precious metals from a macro perspective, what are you watching for most closely that you think is going to have the biggest impact on the direction of precious metals prices over perhaps the near term or into '27?

Graham Ryding: Okay, great. Whitney, just looking at precious metals from a macro perspective, what are you watching for most closely that you think is going to have the biggest impact on the direction of precious metals prices over perhaps the near term or into 2027?

Speaker #4: Well, I mean, I think we had a sharp correction and it looked like gold based around 4,000 in a fairly healthy way. Central bank resume buying back in May.

Whitney George: Well, I think we had a sharp correction, it looked like gold based around 4,000 in a fairly healthy way. Central Bank resumed buying back in May at sort of their accelerated pace. That kind of underpins the market. Today we're obviously seeing gold up CAD 150 as we speak. I think what gets the generalist involved again is some hint of QE. I'm not certain the plumbing of the intervention that the US and Japan did on the yen last week, I suspect there's a little bit of QE behind that. Once the market sniffs that out, I think we're off and going to exceed the highs in fairly short order.

Speaker #4: It's sort of their accelerated pace. So that kind of underpins the market. Today, we're obviously seeing gold up 150 bucks as we speak. I think what gets the generalist involved again is some hint of QE.

Speaker #4: And I'm not certain the plumbing of the intervention that the US and Japan did on the yen last week, but I suspect there's a little bit of QE behind that.

Speaker #4: And once the market sniffs that out, I think we're off and going to exceed the highs in fairly short order.

Speaker #2: Okay, great. And then one more, if I could. Any particular reason why you're gold and silver trust had higher outflows on a relative basis when you look at your other exchange-listed precious metals funds?

Graham Ryding: Okay, great. One more, if I could. Any particular reason why your gold and silver trust had higher outflows on a relative basis when you look at your other exchange-listed precious metal funds?

Speaker #4: So we bought that trust back in 2018, I believe, as part of our initial focus on precious metals. It's a very old trust. It's got long, long-term shareholders.

Whitney George: We bought that trust back in 2018, I believe, as part of our initial focus on precious metals. It's a very old trust. It's got long-term shareholders. It is both gold and silver, we found most investors would prefer to buy one or the other individually. It's always kind of had a legacy issue of being less attractive to institutions or others who want to focus on one particular metal. As a consequence, it is typically traded at a wider discount than the other trust, which makes it vulnerable for redemption activity.

Speaker #4: It is both gold and silver, and we found most investors would prefer to buy one or the other individually. So, it has always kind of had a legacy issue of being less attractive to institutions or others who want to focus on one particular metal.

Speaker #4: And as a consequence, it has typically traded at a wider discount than the other trust, which makes it vulnerable to redemption activity.

Speaker #2: Okay, makes sense. That's it for me. Thank you.

Graham Ryding: Okay. Makes sense. That's it for me. Thank you.

Speaker #3: Thank you. Your next question comes from the line of Mike Kozak from Cantor Fitzgerald. Your line is now open.

Operator: Thank you. Your next question comes to the line of Mike Kozak from Cantor Fitzgerald. Your line is now open.

Speaker #5: Yeah, good morning, Whitney, Kevin, John, and team. Pretty solid quarter overall. Given the size of the drawdown in precious metals, looks like the bottom is now in, but we will see.

Mike Kozak: Good morning, Whitney, Kevin, John, and team. Pretty solid quarter overall, given the size of the drawdown in precious metals. Looks like the bottom is now in, we will see. I just had one question. The NCIB, it was nice to see it active in the quarter on the share price pullback. My question is, do you guys have a set framework for how active that buyback program will be? What I mean is that buyback, is it primarily a function of your valuation versus peers, some internal valuation metric, free cash flow generation, or some combination thereof? Just some guidance on how you're thinking about the buyback going forward would be helpful. Thank you.

Speaker #5: I just had one question. The NCIB, it was nice to see it active in the quarter on the share price pullback. My question is, do you guys have a set framework for how active that buyback program will be?

Speaker #5: And what I mean is, is that buyback, is it primarily a function of your valuation versus peers, some internal valuation metric, free cash flow generation, or some combination thereof?

Speaker #5: Just some guidance on how you're thinking about the buyback going forward would be helpful. Thank you.

Speaker #4: Sure. We have sort of a program in place for our blackout periods to execute on the buyback. At any level, we need to buy a little bit back to satisfy the TSX, so they'll allow us to renew it each year.

Whitney George: Sure. We have sort of a program in place for our blackout period to execute on the buyback. At any level, we need to buy a little bit back to satisfy the TSX, so they'll allow us to renew it each year. In this quarter, obviously, we saw the stock come down. There are set levels. They're kind of based on our own financials, not on any peers and the level of cash. We tend to be dollar cost averagers, so the lower the stock price goes, the more aggressive we'll become.

Speaker #4: In this quarter, obviously, we saw the stock come down. There's set levels. They're kind of based on our own financials, not on any peers.

Speaker #4: And the level of cash and we tend to be dollar cost averagers. And so the lower the stock price goes, the more aggressive we'll become.

Speaker #5: Okay, maybe one follow-up. Were you or are you active so far in Q3? On the buyback? Okay, thank you. I'll leave it there. Thanks.

Mike Kozak: Okay, maybe one follow-up. Were you or are you active so far in Q3 on the buyback?

Whitney George: Yes.

Mike Kozak: Okay. Thank you. I'll leave it there. Thanks.

Speaker #3: Thank you. Your next question comes from the line of Katie Chen from BMO Capital Markets. Your line is now open.

Operator: Thank you. Your next question comes from the line of Katie Chen from BMO Capital Markets. Your line is now open.

Speaker #6: Thanks. Just want to circle back on the recent launch of REXC. To what factor do you attribute your ability to raise record level of capital in just a few months after launch?

Katie Chen: Thanks. Just want to circle back on the recent launch of REXC. To what factor do you attribute your ability to raise a record level of capital in just a few months after launch? Sure. Hi, it's John. I think it's really two things. One is market related. When investors are opening up The Wall Street Journal or Barron's each week and reading more and more stories about how important rare earths are, it's definitely getting the attention of investors. Obviously, governments are intervening in terms of these markets and making all kinds of investments through equity investments, offtakes, loans, et cetera. Governments are trying to essentially crowd in private capital. There's a very interesting dynamic. Specifically to the product, it's the only pure play rare earth ETF that we are aware of in the world.

[Analyst] (BMO Capital Markets): Thanks. Just want to circle back on the recent launch of REXC. To what factor do you attribute your ability to raise a record level of capital in just a few months after launch? Sure. Hi, it's John. I think it's really two things. One is market related. When investors are opening up The Wall Street Journal or Barron's each week and reading more and more stories about how important rare earths are, it's definitely getting the attention of investors. Obviously, governments are intervening in terms of these markets and making all kinds of investments through equity investments, offtakes, loans, et cetera. Governments are trying to essentially crowd in private capital. There's a very interesting dynamic. Specifically to the product, it's the only pure play rare earth ETF that we are aware of in the world.

Speaker #1: Sure. Hi, it's John. I think it's really two things. One is market-related. When investors are opening up The Wall Street Journal or Barron's each week and reading more and more stories about how important rare earths are, it's definitely getting the attention of investors.

Speaker #1: Obviously, governments are intervening in terms of these markets and making all kinds of investments through equity investments, offtakes, loans, etc. So governments are trying to essentially crowd in private capital.

Speaker #1: So there's a very interesting dynamic but specifically to the product, it's the only peer play rare earth ETFs that we are aware of in the world.

Speaker #1: And that was an opportunity we saw to design a product and bring it to market on a timely basis. We also don't have any Chinese exposure, Chinese equities in the fund, which was a deliberate decision to really capitalize on this reshoring effort underway.

John Ciampaglia: That was an opportunity we saw to design a product and bring it to market on a timely basis. We also don't have any Chinese exposure, Chinese equities in the fund, which was a deliberate decision to really capitalize on this reshoring effort underway. I think the uniqueness of the product and the timing of its launch were really two factors that have allowed us to get investor interest right out of the gate. Okay. This is helpful. I'll pass along.

Speaker #1: So I think the uniqueness of the product and the timing of its launch were really two factors that have allowed us to get investor interest right out of the gate.

Speaker #6: Thanks. This is helpful. I'll pass the line.

Speaker #3: Thank you. As a reminder, if you do wish to ask a question, please press star one on your telephone keypad. And at this time, we have no further questions.

Operator: Thank you. As a reminder, if you do wish to ask a question, please press star one on your telephone keypad.

Kevin Hibbert: No further questions.

Operator: At this time, we have no further questions. I'll turn it back to management for closing remarks.

Speaker #3: I'll turn it back to management for closing remarks.

Speaker #4: Thank you, operator. And thank you, everyone, for participating in this call. We appreciate your interest in SPROT and look forward to speaking to you again after our third quarter results.

Whitney George: Thank you, operator. Thank you everyone for participating in this call. We appreciate your interest in Sprott and look forward to speaking to you again after our Q3 results. Until then, we remain contrarian, innovative, and aligned. Thank you.

Speaker #4: Until then, we remain contrarian, innovative, and aligned. Thank you.

Speaker #3: Thank you. This does conclude today's conference call. We thank you for attending, and you may now disconnect your lines.

Operator: Thank you. This does conclude today's conference call. We thank you for attending, and you may now disconnect your lines. Please wait. The conference will begin shortly.

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