home Equities T.U.UN Announces Year Ended 2022 Results

T.U.UN Announces Year Ended 2022 Results

Sprott Inc. (NYSE/TSX: SII) (“Sprott” or the “Company”) today announced its financial results for the year ended December 31, 2022.

Management commentary

“Sprott’s positioning in precious metals and energy transition materials served our shareholders well in 2022, as Assets Under Management (“AUM”) grew to $23.4 billion, up $3 billion from December 31, 2021. Our asset growth during the year was driven by $2.8 billion in net sales, largely in our physical trusts and private strategies. We also benefited from the acquisition of the Sprott Uranium Miners ETF (URNM) and strong late-year performance in precious metals,” said Whitney George, CEO of Sprott.

“We continue to build on the success of our uranium strategies by expanding our energy transition business. In July 2022, we launched an actively managed energy transition strategy to capitalize on our deep bench of talented portfolio managers and analysts and in February 2023, subsequent to year-end, we introduced four new energy-transition themed ETFs. We expect to launch additional products this year,” added Mr. George.

Financial highlights1

Key AUM highlights

  • AUM was $23.4 billion as at December 31, 2022, up $2.4 billion (11%) from September 30, 2022 and up $3 billion (15%) from December 31, 2021. Our AUM benefited on a three and twelve months ended basis from strong inflows to our physical trusts and private strategies funds. We also benefited from the onboarding of AUM on the closure of the North Shore Global Uranium Mining ETF acquisition (“URNM acquisition”), adding $1 billion to our AUM in the second quarter. Additionally, we benefited from strong market value appreciation during the quarter that partially offset cumulative losses experienced earlier in the year.

Key revenue highlights

  • Management fees were $28.4 million in the quarter, up $0.6 million (2%) from the quarter ended December 31, 2021 and $115.4 million on a full year basis, up $11.4 million (11%) from the year ended December 31, 2021. Carried interest and performance fees were $1.2 million in the quarter, down $3.1 million (72%) from the quarter ended December 31, 2021 and $3.3 million on a full year basis, down $9 million (73%) from the year ended December 31, 2021. Net fees were $26.6 million in the quarter, up $0.1 million from the quarter ended December 31, 2021 and $106.9 million on a full year basis, up $7.4 million (7%) from the year ended December 31, 2021. Our revenue performance was primarily due to strong net inflows to our exchange listed products segment (primarily our physical uranium, gold and silver trusts) and higher average AUM from the URNM acquisition. These increases were partially offset by lower average AUM in our managed equities segment and lower carried interest crystallization in our private strategies segment.
  • Commission revenues were $5 million in the quarter, down $9.1 million (64%) from the quarter ended December 31, 2021 and $30.7 million on a full year basis, down $14.6 million (32%) from the year ended December 31, 2021. Net commissions were $2.9 million in the quarter, down $4.1 million (59%) from the quarter ended December 31, 2021 and $16.2 million on a full year basis, down $7.8 million (33%) from the year ended December 31, 2021. Lower commissions were due to weaker mining equity origination activity in our brokerage segment.
  • Finance income was $1.4 million in the quarter, up $0.7 million (83%) from the quarter ended December 31, 2021 and $5 million on a full year basis, up $1.5 million (41%) from the year ended December 31, 2021. Our results were primarily driven by higher income generation in co-investment positions we hold in LPs managed in our private strategies segment.

Key expense highlights

  • Net compensation expense was $12.5 million in the quarter, up $0.1 million (1%) from the quarter ended December 31, 2021 and $56.3 million on a full year basis, up $8.4 million (18%) from the year ended December 31, 2021. The increase was primarily due to higher long-term incentive plan (“LTIP”) amortization as a result of grant date valuations required on the launch of our new 2022 LTIP program. This higher accounting valuation on our LTIP amortization was partially offset by lower annual incentive compensation (“AIP”).
  • SG&A was $4.1 million in the quarter, down $0.1 million (2%) from the quarter ended December 31, 2021 and $16 million on a full year basis, up $1.3 million (9%) from the year ended December 31, 2021. The increase on a full year basis was mainly due to higher marketing and technology costs.

1 See “non-IFRS financial measures” section on this press release and schedule 2 and 3 of “Supplemental financial information”

Earnings summary

  • Net income was $7.3 million ($0.29 per share) in the quarter, down 28% or $2.8 million ($0.12 per share) from the quarter ended December 31, 2021 and $17.6 million on a full year basis ($0.70 per share), down 47%, or $15.6 million ($0.63 per share) from the year ended December 31, 2021. Net income was negatively impacted by a combination of weaker equity origination activity in our brokerage segment, unrealized losses on co-investments and legacy digital gold investments, FX losses and non-recurring severance costs.
  • Adjusted base EBITDA was $18.1 million ($0.72 per share) in the quarter, up 2%, or $0.4 million ($0.01 per share) from the quarter ended December 31, 2021 and $71 million ($2.83 per share) on a full year basis, up 11%, or $6.9 million ($0.25 per share) from the year ended December 31, 2021. Our results benefited from strong net inflows to our physical trusts (primarily our physical uranium, gold and silver trusts) and the URNM acquisition. These increases were only partially offset by weaker mining equity origination activity in our brokerage segment and lower AUM in our managed equities segment.

Subsequent events

  • On February 23, 2023, the Sprott Board of Directors announced a quarterly dividend of $0.25 per share.
  • Consistent with the successful transition of our U.S. broker-dealer from a transaction-based business into a fee-based discretionary account management business, subsequent to year end, we plan on selling our Canadian broker-dealer operations to the current management team as we continue to focus on our core asset management businesses (however, we will migrate our charity flow-through operations into our managed equities segment). We expect the transaction to close by June 30, 2023.

    The impact of this change will be immaterial to our future earnings and cash flows but moderately positive to our consolidated operating margins as a greater proportion of our consolidated earnings will now arise from our core precious metals and energy transition materials product and service offerings. These core offerings have materially larger and more predictable revenue streams and also yield higher operating margins than our Canadian broker-dealer. In 2022, the Canadian broker-dealer contributed less than 5% and 4% to our consolidated net income and adjusted base EBITDA, respectively, and yielded operating margins of less than 39% compared to our consolidated total operating margins of 57%. The transition away from transaction-based businesses will also free up more capital to reinvest into our core precious metals and energy transition materials product and service offerings.

Supplemental financial information

Please refer to the December 31, 2022 annual financial statements of the Company and the related management discussion and analysis filed earlier this morning for further details into the Company’s financial position as at December 31, 2022 and the Company’s financial performance for the year ended December 31, 2022.

Schedule 1 – AUM continuity

3 months results
(In millions $) AUM
Sep. 30, 2022
Net inflows (1) Market
value
changes
Other (2) AUM
Dec. 31, 2022
Blended
management
fee rate (3)
Exchange listed products
– Physical trusts
– Physical Gold Trust 5,235 2 509 5,746 0.35 %
– Physical Silver Trust 3,135 133 823 4,091 0.45 %
– Physical Gold and Silver Trust 3,523 (39 ) 514 3,998 0.40 %
– Physical Uranium Trust 2,843 37 (4 ) 2,876 0.30 %
– Physical Platinum & Palladium Trust 147 (5 ) (4 ) 138 0.50 %
– Exchange Traded Funds
– Uranium ETFs 884 1 (28 ) 857 0.67 %
– Gold ETFs 286 13 50 349 0.34 %
16,053 142 1,860 18,055 0.39 %
Managed equities
– Precious metals strategies 1,504 (14 ) 231 1,721 0.92 %
– Other (4)(5) 903 8 121 1,032 1.20 %
2,407 (6 ) 352 2,753 1.02 %
Private strategies 1,896 8 (12 ) (12 ) 1,880 0.79 %
Core AUM 20,356 144 2,200 (12 ) 22,688 0.50 %
Non-core AUM (6) 688 57 745 0.51 %
Total AUM (7) 21,044 144 2,257 (12 ) 23,433 0.50 %
12 months results
(In millions $) AUM
Dec. 31, 2021
Net inflows (1) Market
value
changes
Other (2) AUM
Dec. 31, 2022
Blended
management
fee rate (3)
Exchange listed products
– Physical trusts
– Physical Gold Trust 5,008 823 (85 ) 5,746 0.35 %
– Physical Silver Trust 3,600 390 101 4,091 0.45 %
– Physical Gold and Silver Trust 4,094 (99 ) 3 3,998 0.40 %
– Physical Uranium Trust 1,769 931 176 2,876 0.30 %
– Physical Platinum & Palladium Trust 132 12 (6 ) 138 0.50 %
– Exchange Traded Funds
– Uranium ETFs 37 (222 ) 1,042 857 0.67 %
– Gold ETFs 356 52 (59 ) 349 0.34 %
14,959 2,146 (92 ) 1,042 18,055 0.39 %
Managed equities
– Precious metals strategies 2,141 (69 ) (351 ) 1,721 0.92 %
– Other (4)(5) 1,141 57 (166 ) 1,032 1.20 %
3,282 (12 ) (517 ) 2,753 1.02 %
Private strategies 1,426 700 (25 ) (221 ) 1,880 0.79 %
Core AUM 19,667 2,834 (634 ) 821 22,688 0.50 %
Non-core AUM (6) 776 (31 ) 745 0.51 %
Total AUM (7) 20,443 2,834 (665 ) 821 23,433 0.50 %
(1) See ‘Net inflows’ in the key performance indicators and non-IFRS and other financial measures section of the MD&A.
(2) Includes new AUM from fund acquisitions and lost AUM from fund divestitures and capital distributions of our private strategies LPs.
(3) Management fee rate represents the weighted average fees for all funds in the category.
(4) Includes institutional managed accounts and high net worth discretionary managed accounts in the U.S.
(5) Prior year figures have been restated to confirm with current year presentation. See the “Business overview” section of the MD&A.
(6) Previously called Other, this AUM is related to our legacy asset management business in Korea, which accounts for 3.2% of our AUM and 1% of consolidated net income and EBITDA.
(7) No performance fees are earned on exchange listed products. Performance fees are earned on all precious metals strategies and are based on returns above relevant benchmarks. Other managed equities strategies primarily earn performance fees on flow-through products. Private strategies LPs earn carried interest calculated as a pre-determined net profit over a preferred return.

Schedule 2 – Summary financial information

(In thousands $) Q4
2022
Q3
2022
Q2
2022
Q1
2022
Q4
2021
Q3
2021
Q2
2021
Q1
2021
Summary income statements
Management fees 28,405 29,158 30,620 27,172 27,783 28,612 25,062 22,452
Trailer, sub-advisor and fund expense (1,204 ) (1,278 ) (1,258 ) (853 ) (872 ) (637 ) (552 ) (599 )
Direct payouts (1,114 ) (1,121 ) (1,272 ) (1,384 ) (1,367 ) (1,892 ) (1,198 ) (890 )
Carried interest and performance fees 1,219 2,046 4,298 7,937
Carried interest and performance fee payouts – internal (567 ) (1,029 ) (2,516 ) (126 ) (4,580 )
Carried interest and performance fee payouts – external (1) (121 ) (476 ) (790 ) (595 )
Net fees 26,618 26,759 28,090 25,476 26,536 26,083 23,186 23,725
Commissions 5,027 6,101 6,458 13,077 14,153 11,273 7,377 12,463
Commission expense – internal (1,579 ) (2,385 ) (2,034 ) (3,134 ) (4,128 ) (3,089 ) (3,036 ) (5,289 )
Commission expense – external (1) (585 ) (476 ) (978 ) (3,310 ) (3,016 ) (2,382 ) (49 ) (253 )
Net Commissions 2,863 3,240 3,446 6,633 7,009 5,802 4,292 6,921
Finance income 1,439 933 1,186 1,433 788 567 932 1,248
Gain (loss) on investments (930 ) 45 (7,884 ) (1,473 ) (43 ) 310 2,502 (4,652 )
Other income 999 (227 ) 170 208 313 529 438 303
Total net revenues(2) 30,989 30,750 25,008 32,277 34,603 33,291 31,350 27,545
Compensation 17,030 18,934 19,364 21,789 20,632 18,001 15,452 22,636
Direct payouts (1,114 ) (1,121 ) (1,272 ) (1,384 ) (1,367 ) (1,892 ) (1,198 ) (890 )
Carried interest and performance fee payouts – internal (567 ) (1,029 ) (2,516 ) (126 ) (4,580 )
Commission expense – internal (1,579 ) (2,385 ) (2,034 ) (3,134 ) (4,128 ) (3,089 ) (3,036 ) (5,289 )
Severance, new hire accruals and other (1,240 ) (1,349 ) (2,113 ) (514 ) (187 ) (207 ) (293 ) (44 )
Net compensation 12,530 14,079 13,945 15,728 12,434 12,813 10,799 11,833
Severance, new hire accruals and other (3) 1,240 1,349 2,113 514 187 207 293 44
Selling, general and administrative 4,080 4,239 4,221 3,438 4,172 3,682 3,492 3,351
Interest expense 1,076 884 483 480 239 312 260 350
Depreciation and amortization 710 710 959 976 1,136 1,134 1,165 1,117
Other expenses 1,650 5,697 868 1,976 2,910 3,875 876 4,918
Total expenses 21,286 26,958 22,589 23,112 21,078 22,023 16,885 21,613
Net income(4) 7,331 3,071 757 6,473 10,171 8,718 11,075 3,221
Net income per share(5) 0.29 0.12 0.03 0.26 0.41 0.35 0.44 0.13
Adjusted base EBITDA 18,083 16,837 17,909 18,173 17,705 16,713 15,050 14,605
Adjusted base EBITDA per share 0.72 0.67 0.71 0.73 0.71 0.67 0.60 0.59
Operating margin 59 % 55 % 55 % 57 % 55 % 52 % 52 % 51 %
Summary balance sheet
Total assets(6) 383,748 375,386 376,128 380,843 365,873 375,819 361,121 356,986
Total liabilities(7) 106,477 103,972 89,264 83,584 74,654 84,231 64,081 67,015
Total AUM 23,432,661 21,044,252 21,944,675 23,679,354 20,443,088 19,016,313 18,550,106 17,073,078
Average AUM 22,323,075 21,420,015 23,388,568 21,646,082 20,229,119 19,090,702 18,343,846 17,188,205
(1)  These amounts are included in the “Trailer, sub-advisor and fund expenses” line on the consolidated statements of operations.
(2) Total revenues for the year ended December 31, 2022 were $145,182 (December 31, 2021 – $164,645; December 31, 2020 – $121,776).
(3) The majority of the 2022 amount is compensation and other transition payments to the former CEO that is currently scheduled to be paid out in 2022, 2023 and 2024.
(4) Net income for the year ended December 31, 2022 was $17,632 (December 31, 2021 – $33,185; December 31, 2020 – $26,978).
(5) Basic and diluted net income per share for the year ended December 31, 2022 was $0.70 and $0.67, respectively (December 31, 2021 – $1.33 and $1.28 respectively; December 31, 2020 – $1.10 and $1.05, respectively).
(6) Total assets as at December 31, 2022 were $383,748 (December 31, 2021 – $365,873; December 31, 2020 – $377,348).
(7) Total liabilities as at December 31, 2022 were $106,477 (December 31, 2021 – $74,654; December 31, 2020 – $86,365).

Schedule 3 – EBITDA reconciliation

3 months ended 12 months ended
(in thousands $) Dec. 31, 2022 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2021
Net income for the periods 7,331 10,171 17,632 33,185
Adjustments:
Interest expense 1,076 239 2,923 1,161
Provision for income taxes 2,372 3,354 7,447 12,005
Depreciation and amortization 710 1,136 3,355 4,552
EBITDA 11,489 14,900 31,357 50,903
Other adjustments:
(Gain) loss on investments (1) 930 43 10,242 1,883
Amortization of stock based compensation 3,635 450 14,546 1,698
Other expenses (2) 2,560 3,304 15,929 13,217
Adjusted EBITDA 18,614 18,697 72,074 67,701
Other adjustments:
Carried interest and performance fees (1,219 ) (4,298 ) (3,265 ) (12,235 )
Carried interest and performance fee payouts – internal 567 2,516 1,596 7,222
Carried interest and performance fee payouts – external 121 790 597 1,385
Adjusted base EBITDA 18,083 17,705 71,002 64,073
Operating margin (3) 59 % 55 % 57 % 53 %
(1)  This adjustment removes the income effects of certain gains or losses on short-term investments, co-investments, and digital gold strategies to ensure the reporting objectives of our EBITDA metric as described above are met.
(2)  In addition to the items outlined in Note 5 of the annual financial statements, this reconciliation line also includes $1.2 million severance, new hire accruals and other for the three months ended December 31, 2022 (three months ended December 31, 2021 – $0.2 million) and $5.2 million for the year ended December 31, 2022 (year ended December 31, 2021 – $0.7 million). This reconciliation line excludes income (loss) attributable to non-controlling interest of $0.3 million for the three months ended December 31, 2022 (three months ended December 31, 2021 – ($0.2) million) and ($0.5) million for the year ended December 31, 2022 (year ended December 31, 2021 – $0.1 million).
(3)  Calculated as adjusted base EBITDA inclusive of depreciation and amortization. This figure is then divided by revenues before gains (losses) on investments, net of direct costs as applicable.

Normal Course Issuer Bid

Sprott Inc. (“Sprott” or the “Company”) (NYSE/TSX: SII) is pleased to announce that the Toronto Stock Exchange (“TSX”) has approved the notice of its intention to make a normal course issuer bid (“NCIB”). Pursuant to the terms of the NCIB, Sprott may purchase its own common shares for cancellation through the facilities of the TSX, alternative Canadian trading systems and/or the New York Stock Exchange, in each case in accordance with the applicable requirements, and as otherwise permitted under applicable securities laws. The maximum number of common shares which may be purchased by Sprott during the NCIB will not exceed 648,908 common shares being approximately 2.5% of 25,956,325 (representing the number of issued and outstanding common shares as of February 17, 2023). The average daily trading volume (the “ADTV”) of the common shares on the TSX for the six-month period ended January 31, 2023 was 53,658. Under the rules of the TSX, Sprott is entitled to repurchase during the same trading day on the TSX up to 25% of the ADTV of the common shares, being 13,414 common shares, except where such purchases are made in accordance with the “block purchase” exemption under applicable TSX policy. Sprott will effect purchases at varying times commencing on March 3, 2023 and ending on March 2, 2024.

In addition to providing shareholders liquidity, Sprott believes that the common shares have been trading in a price range which does not adequately reflect the value of such shares in relation to Sprott’s business and its future prospects.

Under its current NCIB that commenced on March 3, 2022 and will terminate March 2, 2023, Sprott previously sought and received approval from the TSX to repurchase up to 646,743 common shares. Pursuant to its current NCIB, Sprott has purchased an aggregate of 81,538 common shares through the facilities of the TSX and NYSE. 8,200 common shares were purchased on the TSX at a weighted-average price of C$42.80 per common share, for total cash consideration of C$350,960, and 73,338 common shares were purchased on the NYSE at a weighted-average price of US$37.95 per common share, for total cash consideration of US$2,783,177. Sprott did not repurchase the maximum allowance under the current NCIB for a combination of factors.

Conference Call and Webcast

A webcast will be held today, February 24, 2023 at 10:00 am ET to discuss the Company’s financial results. To listen to the webcast, please register at https://edge.media-server.com/mmc/p/97a6c8xe

Please note, analysts who cover the company should register at https://register.vevent.com/register/BI0345f2c1992a467f835282eb895bc20a to participate in the live Q&A session.

Non-IFRS Financial Measures

This press release includes financial terms (including AUM, net revenues, net commissions, net fees, expenses, adjusted base EBITDA, operating margins and net compensation) that the Company utilizes to assess the financial performance of its business that are not measures recognized under International Financial Reporting Standards (“IFRS”). These non-IFRS measures should not be considered alternatives to performance measures determined in accordance with IFRS and may not be comparable to similar measures presented by other issuers. Non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Our key performance indicators and non-IFRS and other financial measures are discussed below. For quantitative reconciliations of non-IFRS financial measures to their most directly comparable IFRS financial measures please see schedule 2 and schedule 3 of the “Supplemental financial information” section of this press release.

Net fees

Management fees, net of trailer, sub-advisor, fund expenses and direct payouts, and carried interest and performance fees, net of carried interest and performance fee payouts (internal and external), are key revenue indicators as they represent the net revenue contribution after directly associated costs that we generate from our AUM.

Net commissions

Commissions, net of commission expenses (internal and external), arise primarily from transaction-based service offerings of our brokerage segment and purchases and sales of uranium in our exchange listed products segment.

Net compensation

Net compensation excludes commission expenses paid to employees, other direct payouts to employees, carried interest and performance fee payouts to employees, which are all presented net of their related revenues in the MD&A, and severance, new hire accruals and other which are non-recurring.

EBITDA, adjusted EBITDA, adjusted base EBITDA and operating margins

EBITDA in its most basic form is defined as earnings before interest expense, income taxes, depreciation and amortization. EBITDA (or adjustments thereto) is a measure commonly used in the investment industry by management, investors and investment analysts in understanding and comparing results by factoring out the impact of different financing methods, capital structures, amortization techniques and income tax rates between companies in the same industry. While other companies, investors or investment analysts may not utilize the same method of calculating EBITDA (or adjustments thereto), the Company believes its adjusted base EBITDA metric, in particular, results in a better comparison of the Company’s underlying operations against its peers and a better indicator of recurring results from operations as compared to other non-IFRS financial measures. Operating margins are a key indicator of a company’s profitability on a per dollar of revenue basis, and as such, is commonly used in the financial services sector by analysts, investors and management.

Forward Looking Statements
Certain statements in this press release contain forward-looking information and forward-looking statements (collectively referred to herein as the “Forward-Looking Statements”) within the meaning of applicable Canadian and U.S. securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify Forward-Looking Statements. In particular, but without limiting the forgoing, this press release contains Forward-Looking Statements pertaining to: (i) our belief that we will continue to launch new products this year; (ii) the declaration, payment and designation of dividends and confidence that our business will support the dividend level without impacting our ability to fund future growth initiatives; and (iii) the closing, including timing thereof, of the transaction in respect of our Canadian broker-dealer operations.

Although the Company believes that the Forward-Looking Statements are reasonable, they are not guarantees of future results, performance or achievements. A number of factors or assumptions have been used to develop the Forward-Looking Statements, including: (i) the impact of increasing competition in each business in which the Company operates will not be material; (ii) quality management will be available; (iii) the effects of regulation and tax laws of governmental agencies will be consistent with the current environment; (iv) the impact of COVID-19; (v) that the conditions to closing of the transaction in respect of our Canadian broker-dealer operations will be satisfied or waived on a timely basis, or at all; and (vi) those assumptions disclosed under the heading “Critical Accounting Estimates, Judgments and Changes in Accounting Policies” in the Company’s MD&A for the period ended December 31, 2022. Actual results, performance or achievements could vary materially from those expressed or implied by the Forward-Looking Statements should assumptions underlying the Forward-Looking Statements prove incorrect or should one or more risks or other factors materialize, including: (i) difficult market conditions; (ii) poor investment performance; (iii) failure to continue to retain and attract quality staff; (iv) employee errors or misconduct resulting in regulatory sanctions or reputational harm; (v) performance fee fluctuations; (vi) a business segment or another counterparty failing to pay its financial obligation; (vii) failure of the Company to meet its demand for cash or fund obligations as they come due; (viii) changes in the investment management industry; (ix) failure to implement effective information security policies, procedures and capabilities; (x) lack of investment opportunities; (xi) risks related to regulatory compliance; (xii) failure to manage risks appropriately; (xiii) failure to deal appropriately with conflicts of interest; (xiv) competitive pressures; (xv) corporate growth which may be difficult to sustain and may place significant demands on existing administrative, operational and financial resources; (xvi) failure to comply with privacy laws; (xvii) failure to successfully implement succession planning; (xviii) foreign exchange risk relating to the relative value of the U.S. dollar; (xix) litigation risk; (xx) failure to develop effective business resiliency plans; (xxi) failure to obtain or maintain sufficient insurance coverage on favorable economic terms; (xxii) historical financial information being not necessarily indicative of future performance; (xxiii) the market price of common shares of the Company may fluctuate widely and rapidly; (xxiv) risks relating to the Company’s investment products; (xxv) risks relating to the Company’s proprietary investments; (xxvi) risks relating to the Company’s lending business; (xxvii) risks relating to the Company’s brokerage business; (xxviii) failure to satisfy the conditions to closing of the transaction in respect of our Canadian broker-dealer operations on a timely basis or at all; (xxix) those risks described under the heading “Risk Factors” in the Company’s annual information form dated February 23, 2023; and (xxx) those risks described under the headings “Managing Financial Risks” and “Managing Non-Financial Risks” in the Company’s MD&A for the period ended December 31, 2022. In addition, the payment of dividends is not guaranteed and the amount and timing of any dividends payable by the Company will be at the discretion of the Board of Directors of the Company and will be established on the basis of the Company’s earnings, the satisfaction of solvency tests imposed by applicable corporate law for the declaration and payment of dividends, and other relevant factors. The Forward-Looking Statements speak only as of the date hereof, unless otherwise specifically noted, and the Company does not assume any obligation to publicly update any Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

About Sprott

Sprott is a global leader in precious metal and energy transition investments. We are specialists. Our in-depth knowledge, experience and relationships separate us from the generalists. Our investment strategies include Exchange Listed Products, Managed Equities, Private Strategies and Brokerage. Sprott has offices in Toronto, New York and London and the company’s common shares are listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbol (SII). For more information, please visit www.sprott.com.

Investor contact information:

Glen Williams
Managing Partner
Investor and Institutional Client Relations;
Head of Corporate Communications
(416) 943-4394
gwilliams@sprott.com

Source: Sprott Physical Uranium Trust