Eric Sprott increased its stake in Seabridge Gold Inc (SA) by 15.71% based on its latest 2016Q4 regulatory filing with the SEC. Sprott Inc bought 49,769 shares as the company’s stock declined 8.47% while stock markets rallied. The hedge fund run by Eric Sprott held 366,489 shares of the basic industries company at the end of 2016Q4, valued at $2.99M, up from 316,720 at the end of the previous reported quarter. Sprott Inc who had been investing in Seabridge Gold Inc for a number of months, seems to be bullish on the $571.42M market cap company. The stock rose 2.49% or $0.25 reaching $10.3 per share. About 371,950 shares traded. Seabridge Gold, Inc. (USA) (NYSE:SA) has declined 18.80% since June 2, 2016 and is downtrending. It has underperformed by 35.50% the S&P500.
Coldstream Capital Management Inc increased its stake in Visa Inc (V) by 789.76% based on its latest 2016Q4 regulatory filing with the SEC. Coldstream Capital Management Inc bought 21,829 shares as the company’s stock rose 5.74% with the market. The hedge fund held 24,593 shares of the business services company at the end of 2016Q4, valued at $1.92M, up from 2,764 at the end of the previous reported quarter. Coldstream Capital Management Inc who had been investing in Visa Inc for a number of months, seems to be bullish on the $221.96B market cap company. The stock rose 0.73% or $0.69 reaching $96.1 per share. About 5.68 million shares traded. Visa Inc (NYSE:V) has risen 20.29% since June 2, 2016 and is uptrending. It has outperformed by 3.59% the S&P500.
More notable recent Seabridge Gold, Inc. (USA) (NYSE:SA) news were published by: Globenewswire.com which released: “Seabridge Gold Confirms Sale of Castle-Blackrock Claims to Columbus Gold” on February 22, 2017, also Globenewswire.com with their article: “New Study Finds Significant Further Gains for Seabridge Gold’s KSM Project” published on October 06, 2016, Streetinsider.com published: “Seabridge Gold, Inc. (SA) Reports Unfortunate Death of Board Member Douglass …” on April 12, 2017. More interesting news about Seabridge Gold, Inc. (USA) (NYSE:SA) were released by: Seekingalpha.com and their article: “Why Seabridge Gold Won’t Be Producing Anytime Soon” published on June 07, 2016 as well as Seekingalpha.com‘s news article titled: “Seabridge Gold: Deep Kerr Falls Short” with publication date: October 18, 2016.
Sprott Inc, which manages about $3.27 billion and $1.17 billion US Long portfolio, decreased its stake in New Gold Inc Cda (NYSEMKT:NGD) by 1.58 million shares to 31,750 shares, valued at $111,000 in 2016Q4, according to the filing. It also reduced its holding in Tahoe Res Inc (NYSE:TAHO) by 446,594 shares in the quarter, leaving it with 1.05 million shares, and cut its stake in Apple Inc (NASDAQ:AAPL).
Coldstream Capital Management Inc, which manages about $1.42B and $614.55 million US Long portfolio, decreased its stake in Vanguard Index Fds (VB) by 9,008 shares to 65,121 shares, valued at $8.40 million in 2016Q4, according to the filing. It also reduced its holding in Vanguard Index Fds (VNQ) by 109,070 shares in the quarter, leaving it with 79,648 shares, and cut its stake in Ishares Tr (MUB).
Investors sentiment increased to 1.05 in 2016 Q4. Its up 0.12, from 0.93 in 2016Q3. It is positive, as 86 investors sold V shares while 540 reduced holdings. 132 funds opened positions while 525 raised stakes. 1.69 billion shares or 1.50% more from 1.66 billion shares in 2016Q3 were reported. Veritable Lp has 70,667 shares. Florida-based Raymond James Svcs Advsrs Inc has invested 0.34% in Visa Inc (NYSE:V). Psagot Investment House Limited reported 8,572 shares or 0.03% of all its holdings. Harvey Inv Co Limited Liability Company holds 0.04% in Visa Inc (NYSE:V) or 2,666 shares. Aristotle Capital Mgmt Ltd Limited Liability Company reported 2,700 shares or 0% of all its holdings. Charter Tru Com holds 0.16% or 18,744 shares. Freestone Capital Ltd Liability Corporation has invested 0% of its portfolio in Visa Inc (NYSE:V). 421,609 were reported by Waters Parkerson & Limited Liability. Lateef Invest Mngmt Lp, California-based fund reported 1.05 million shares. Ww Investors invested in 33.33M shares. Credit Agricole S A invested in 1.78M shares or 0.45% of the stock. Svcs Automobile Association, a Texas-based fund reported 3.30 million shares. 6.37M are owned by Allianz Asset Mgmt Ag. Strs Ohio holds 0.88% or 2.56M shares. Oregon Public Employees Retirement Fund, a Oregon-based fund reported 441,399 shares.
Among 23 analysts covering Visa Inc. (NYSE:V), 18 have Buy rating, 0 Sell and 5 Hold. Therefore 78% are positive. Visa Inc. had 44 analyst reports since July 21, 2015 according to SRatingsIntel. JP Morgan maintained the stock with “Overweight” rating in Friday, August 14 report. The rating was maintained by Stifel Nicolaus with “Buy” on Friday, February 3. S&P Research downgraded the shares of V in report on Tuesday, July 28 to “Hold” rating. The stock of Visa Inc (NYSE:V) has “Hold” rating given on Tuesday, September 1 by Vetr. The company was maintained on Tuesday, October 25 by UBS. The firm has “Mkt Perform” rating by FBR Capital given on Friday, July 24. The firm has “Outperform” rating given on Tuesday, November 3 by RBC Capital Markets. The stock of Visa Inc (NYSE:V) earned “Outperform” rating by RBC Capital Markets on Friday, July 24. The stock has “Buy” rating by Sterne Agee CRT on Thursday, December 17. The stock of Visa Inc (NYSE:V) has “Outperform” rating given on Thursday, October 22 by Wells Fargo.
More notable recent Visa Inc (NYSE:V) news were published by: Seekingalpha.com which released: “Visa Is The Exception To The Rule” on May 29, 2017, also Seekingalpha.com with their article: “Visa: This Payments Powerhouse Is Not Done Yet” published on May 29, 2017, Seekingalpha.com published: “Warren Buffett Stocks In Focus: Visa” on May 31, 2017. More interesting news about Visa Inc (NYSE:V) were released by: Zacks.com and their article: “Are Options Traders Betting on a Big Move in Visa Inc. (V) Stock?” published on June 02, 2017 as well as Nasdaq.com‘s news article titled: “Visa Inc. (V) Ex-Dividend Date Scheduled for May 17, 2017” with publication date: May 16, 2017.
Since February 6, 2017, it had 0 insider buys, and 2 selling transactions for $11.71 million activity. On Monday, February 6 the insider HOFFMEISTER JAMES H sold $957,390.
Toronto-based Goldmoney, a gold-based payments and savings platform that allows users to acquire, store, and spend gold that is stored in a secure vault, has announced a partnership with Isle of Man, United Kingdom-based investment company LBT Holdings. Goldmoney is also making an undisclosed private investment into the company.
“We are delighted to invest in this early stage, and potentially revolutionary, peer-to-peer lending model and provide our precious metal infrastructure to LBT clients.”
LBT Holdings is the parent company of the Lend & Borrow Trust Company (LBT), an online platform that offers auction-rate peer-to-peer lending and borrowing.
Through the partnership, eligible Goldmoney clients with Full Holdings will be able to access LBT auction rates and earn interest income from loans fully secured by precious metal collateral. Borrowers will be able to monetize their precious metal holdings in their choice of five national currencies.
Goldmoney said the investment will give it the ability to nominate a board member and provide metal dealings and storage solutions to LBT’s clients. The company also said that clients with a Goldmoney Holding, which consist of UK residents and businesses, may gain access to LBT’s auction rates and earn interest income from secured loans.
“It’s a small balance sheet investment,” said Josh Crumb, chief strategy officer and CFO at Goldmoney. “We have a meaningful enough stake, and good partners that we can scale up with later. It’s the kind of deal we want to do at this stage in our business, one that helps us grow our core ecosystem without taking on a lot of the early stage risk.”
Goldmoney’s investment into LBTH includes common shareholders Eric Sprott, and James Turk, lead director and chairman at LBT. The company says that LBT’s offerings will first be available to businesses and UK residents at roll out, and other countries will be added over time.
“Goldmoney was founded on a mission to provide clients with unparalleled access to precious metals ownership with minimized counterparty risk,” said Roy Sebag, CEO of Goldmoney. “LBT has a similar goal of providing clients with an alternative for their national currency savings. LBT currency deposits have no banking counterparty risk, a revolutionary idea and one I believe many clients seek in the prevailing artificially-low interest rate environment known as return-free risk. We are delighted to invest in this early stage, and potentially revolutionary, peer-to-peer lending model and provide our precious metal infrastructure to LBT clients.”
Now having lots of acreage doesn’t necessarily mean it’s all ripe with nuggets of gold just waiting to be picked up, but in Kerr Mines (TSX: KER) (OTC: KERMF)’s case, its damn near that rich – and WAY UNDERVALUED in share price, which we’ll explain further on.
The [property] is fully-permitted with extensive infrastructure in place, meaning Kerr Mines has a 450 ton-per-day mill already onsite and the tunnels going down to the high-grade gold ore are already there.
Now to its ore bodies.
There are 942,000 ton of Measured and Indicated gold ore with a grade of 10.3 grams per ton. That’s some high-grade gold!!! On the Inferred side, there are another 335,000 ton with a grade of 12.2 grams per ton. That’s in the soon-to-be further explored “South Zone”, which has GREAT POTENTIAL TO EXTEND THAT ORE BODY. But in the Proven and Probably category, Kerr Mines (TSX: KER) (OTC: KERMF) has 910,000 ton with an average grade of 8.8 grams per ton. So, what does that spell? MONEY, BABY…. MONEY!!. Now you can see why the great Eric Sprott got his checkbook out and bought into the project.
There are many factors that determine the value of a mine. The grade of gold is obviously first in determining an investment into a gold stock like Kerr Mines. But with such HIGH GRADES of gold, from Proven, Measured and Indicated to Inferred, the numbers are OFF THE CHARTS.
So, is Kerr Mines a takeover target? Perhaps, but not from the likes of the majors, like Barrick Gold (NYSE: ABX), Newmont (NYSE: NEM), or GoldCorp (NYSE: GG). Why? Too small… but with Kerr permitted with a mill in place and the tunnels opened up to access the three zones previous not mined and the heavy hit Kerr Mines (TSX: KER) (OTC:KERMF) discovered in the South Zone, its most likely going to be in production next year. In fact, the feasibility study needed to go into production is expected in the fourth quarter of this year. So that tells us that Kerr Mines intends to go into production.
The demand for junior precious metals mining company stocks is soaring, and as a result VanEck's GDXJ is being forced by stringent regulations into rebalancing - forced selling to reduce positions that have become too large, which is creating tremendous opportunities.
As Eric Sprott says, "There's too much interest. Isn't the the funny thing? There's so much interest that the stocks are going down! It's the most ironic situation that we've ever been in, but there will just be new vehicles created. " Keith Neumeyer & Eric Sprott join me to discuss this, the precious metals manipulation, the problems at the LBMA and much more. Thanks for tuning in.
In A Critical Update, Eric Sprott Dissects This Week’s Mauling of Silver:
What They’re Really After is Silver. The HUGE Short Position in Silver, if it Ever Got Out of Control, Every Dollar Up is $1 BILLION in Losses. They’re Trying to Get it Under Control, But They Can’t Get the Longs to Capitulate!
Northern Superior Resources announced that a numbered company controlled by gold financier Eric Sprott will make a $2 million investment in the Sudbury junior miner, and is out to raise $2.5 million more.
"Northern Superior looks forward to the involvement of Mr. Sprott and his associates with the Company,” said Northern Superior president-CEO Tom Morris in a Feb. 13 statement. “These financings could raise up to $4,500,000, allowing Northern Superior to aggressively advance exploration on the Company's key properties in Québec and Ontario. We look forward to the initiation of a series of exciting exploration programs on our two key properties over the coming months."
Northern Superior Resources has started a 30-hole, 9,000-metre drilling program on its Croteau Est gold property in north-central Quebec to examine the eastward extension of mineralization linked to the company’s Croteau Bouchard Shear Zone which has an inferred gold resource of 640,000 ounces of gold.
Morris said defining that extension “will not only lay the foundation for increasing the resource already reported, but could potentially lead to the discovery of other areas of mineralization.”
Sprott’s company is acquiring 40,000,000 units at a price $0.05 per unit with each unit comprised of one common share and one non-transferable share purchase warrant exercisable at a price of $0.075 per share for a period of two years from date of closing.
Sprott is entitled to nominate one person to Northern Superior’s board, so long as he maintains a minimum 10 per cent interest in the company.
Northern Superior has a portfolio of gold and diamond projects in Quebec and Ontario, including the Ti-pa-haa-kaa-ning gold property in northwestern Ontario, Croteau Est and Lac Surprise gold projects in central Quebec, and Ville Marie diamonds in west-central Quebec.
Eric Sprott Analyzes Trump’s Trade War With Mexico (and likely China Next):
“It’s scary to be honest…You could see Russia, China, even the EU stop buying US bonds… ”
How Will This Affect Gold and Silver? - Source
During the past three months, market sentiment has shifted on fundamentals dominating short-term trading in gold markets. Consensus views have gravitated towards further Fed tightening, rising Treasury yields and a strengthening U.S. dollar. In the body of this report, we have outlined our reasoning as to why each of these assumptions may be short-sighted.
In our view, cumulative and immutable imbalances (debt levels, valuations, dollar liquidity) will soon test recent sentiment shifts, we expect decidedly in gold’s favor. While we are not stocking canned goods, oiling muskets, or bottling water, we are suggesting that a modest portfolio allocation to gold has never been more prudent.
A consistent theme at investment conferences during 2016 has been the compression of investment returns. Especially in the pension and endowment world, very few institutions are achieving chartered rates of return. While institutions might have expected historically to achieve real rates of return of 5% on equities and 2 ½% on bonds, the realities of achieved returns during the past several years are tracking (at the high end) roughly half these historical levels.
We believe the root cause for compressed returns is far simpler than much of the sophisticated quantitative analysis we have encountered. The United States has a structural debt problem, and the Fed has employed ZIRP for eight years to forestall rationalization of this untenable debt load. As every student of economics is aware, marginal returns gravitate towards marginal costs.
The longer the U.S. economy operates in a ZIRP environment, the closer to zero will migrate the sum-profit-total of U.S. economic agents. Recognizing this, the Fed has telegraphed for years a desire to normalize rate structures. Consensus has recognized the Fed’s poor track record in achieving rate normalization but, in our view, has failed to grasp the true impediment to higher rates.
It is not popular to suggest U.S. debt levels cannot sustain higher rates, but we believe these are the root facts. During the past decade, global productivity has collapsed to its lowest level in the modern financial era. Optimists shrug off these statistics as outdated and unreflective of vast productivity enhancements enabled by the internet, I-Phones and social media. We cite this example (which we will develop further in our February report) as a metaphor for a broader condition in global asset markets.
Most investors sense that there are looming risks in financial markets and troubling impediments to healthy global growth. Yet, the relentless performance of the S&P 500 Index has reinforced the inclination to ignore these nagging concerns. In the institutional arena, excessive bearishness or even adoption of defensive and hedged strategies can handicap performance and introduce career risk. To us, an allocation to gold is a powerful tool to help insulate portfolios from potential dislocations in a complicated financial world. In essence, a gold allocation can provide a bit of cheap insurance to any ongoing investment program.
We continue to marvel at gold’s lack of sponsorship in the institutional arena. During the past hundred years, even a modest portfolio commitment to gold has been proven to push total portfolio returns further to the right along return frontiers for any reasonable asset mix, generating equal returns with less risk and standard deviation, or superior returns with equivalent risk and standard deviation, versus identical portfolios without a gold investment component (World Gold Council).
During the past 16 years, gold’s non-correlated and market-leading returns have provided invaluable portfolio alpha in an increasingly challenging investment environment. During the next several years, mounting monetary, economic and financial imbalances, which appear to be approaching important tipping points, suggest gold is a portfolio-diversifying asset worthy of serious consideration.
We view corrections in gold markets during the fourth quarter of 2016 as fairly standard retests of early 2016 breakouts from established downtrends. To us, underlying fundamentals suggest significantly higher gold prices during the next several years.
Gold’s Prospects in 2017 and Beyond
Over the long run, we believe the gold investment thesis rests squarely on monetary, economic and financial imbalances which continue to be resolved to the measurable benefit of investors choosing to denominate a portion of their wealth in assets which can neither default nor be debased. Over the short run (one-to-two years), gold’s performance can be impacted by consensus views on a wide array of market variables.
We would highlight five such variables as motivating the lion’s share of trading patterns in gold markets: Fed policy, the U.S. dollar, 10-year Treasury yields, U.S. economic performance and U.S. equity risk premiums. It is unusual for any single event to impart significant impact on all five of these variables simultaneously. The Trump election has certainly proven to be such an event!
Trump’s victory has unleashed one of the strongest expressions of business and financial optimism in history, starkly affecting variables central to gold’s short-term trading patterns. While optimism is never a bad thing, we suspect financial markets are reflecting classic emotional blow-off.
Investors, admittedly parched for a more normalized economic world unfettered by QE and ZIRP, have, in our view, temporarily lost sight of immutable realities such as debt, valuation, debasement and mathematics.
Should our suspicions bear out that reigning euphoria proves short-lived, recent market dislocations will provide excellent entry points for a wide array of investment assets. Given our confidence in underlying fundamentals relevant to precious-metals, we view the Q4 back-up in gold markets as a rare opportunity to achieve a significantly discounted entry point in gold’s unfolding advance.
Despite being in a multi-year bull market for oil, herd mentality has taken over as fears around a potential Border Adjustment Tax by the Trump administration have led to the pummelling of Canadian oil stocks with many falling by 15 per cent+ this month. We do not believe the U.S. president will push through a BAT that includes oil, as it would increase the average household’s gasoline expense by $300-$400/year and would be highly politically unpopular and counterproductive to his re-industrializing of the American economy. As such, we view the risk-reward as extremely favourable for aggressive capital deployment. We are “all in” and believe we own stocks that have the potential to appreciate by over 60 per cent over the next 18 months. This month reminds us of January 2016 when people were panicking, stocks were imploding, and our will was tested from being fully invested. How did it turn out? The Sprott Energy Fund rallied by over 140 per cent from the lows seen in that month. Now is not the time for panic; it is the time for disciplined investment and a
We believe a very large U.S. seller has been responsible for the stock falling by 16 per cent this month and is the poster child for what has happened to Canadian oil stocks due to worries around the Border Adjustment Tax. The stock now trades at 4.9X 2018 EV/CF on our commodity assumptions versus formerly trading at 8.0X. We see over 65 per cent upside in the stock over the next 18 months. SPE is a very low-risk way to play our multi-year bullish view on oil.
Birchcliff Energy is at the beginning of a multi-year internally-funded ramp in production as it grows its core Montney production and explores a new liquids-rich zone. The company has never been in a better position to create long-term shareholder value given a much improved balance sheet, strengthened inventory, and exploration upside. The stock trades at 5.3X 2018 EV/CF at $3/mcf gas and we have an 18-month $13.30 target which equals over 60 per cent upside.
Trican Well Services is benefitting from the beginning of the inflection in pressure-pumping pricing. Prices are up 20 per cent from the bottom and we believe could go up another 30 per cent to 40 per cent by year-end. They also monetized a portion of their interest in a U.S. pressure pumper called Keane which the street is mispricing. Giving a mark-to-market valuation on Keane, which we believe is worth $2.10/share, TCW is trading at 4.3X 2018 EV/EBITDA when a mid-cycle valuation is 7.5X. This would imply upside of over 50 per cent.it of patience. The Sprott Energy Fund is the #1 Energy Fund in the country on a one- and three-year basis as of December 30, 2016.
Kirkland Lake Gold (KLG.TO) has agreed to join forces with Newmarket Gold (NMI.TO) in an all-stock deal worth about $1 billion.
Retail and institutional investors are likely to take a shine to both the deal and the new gold company, according to Andrew McCreath, BNN Markets Commentator and founder of Forge First Asset Management.
“This is a deal that is trying to make a stock more interesting to more shareholders … and also to lower the cost of production of the combined entity with a higher production base,” he said on Thursday.
Kirkland Lake Gold shares will be exchanged at a ratio of 2.1053 Newmarket shares per Kirkland share, the companies announced in a press release. Once the deal closes, Newmarket shareholders will receive 0.475 shares of the combined company for each share held. Kirkland’s shareholders will emerge with 57% ownership of the merged company. The transaction is expected to close in the fourth quarter of this year, pending approvals.
Newmarket Gold has been on an aggressive expansion spree with the help of Eric Sprott – the noted gold bug. Sprott holds more than nine per cent of Newmarket’s shares and is also the chairman of Kirkland Lake Gold. “Clearly, Eric Sprott is driving the bus on making this transaction work,” said McCreath.
Newmarket CEO Douglas Forster has been trying to build the company into a mid-tier gold producer for the past year. Shares of Newmarket are up more than 250 per cent over the past year – that surge will likely dissuade another company from trying to make a competing bid for the company, according to McCreath, who thinks the popularity of the stock will likely make the deal appealing for traders. “I think this will be a nice little feast day for the merger arb funds out there that like these kind of deals.”
The higher production and lower cost profile will also make the deal appealing to a broader share of gold investors, added McCreath, whose Forge First doesn’t hold shares in either of the merging companies.
The new company will have total gold production of about 500,000 ounces per year from Kirkland’s flagship Macassa Mine in Northern Ontario as well as the Holt, Holloway and Taylor gold mines – all in northeastern Ontario. Newmarket currently operates three gold mines in Australia.
“Macassa is not exactly an easy mine,” McCreath pointed out. “There’s probably not a lot of upside unless gold goes way the heck up from here.”
Gold bug Eric Sprott’s increased stake in Newmarket Gold Inc. has renewed interest in the junior producer, which operates three mines in Australia. Investors are now looking for the Vancouver-based miner to fulfill its promise to boost production while controlling expenses and not overpaying for acquisitions, as the price of gold sits stubbornly at about $1,200 (U.S.) an ounce.
Shares of Newmarket, which merged with Crocodile Gold Corp. in July, have risen by about 13 per cent since the company said on Monday that Mr. Sprott bought 10 million shares to boost his ownership stake to 8.7 per cent. He purchased the stock from Luxor Capital Partners LP, which is still Newmarket’s largest shareholder, now with a 28.7-per-cent stake.
All 10 analysts who cover Newmarket have a “buy” recommendation. The analyst consensus price target over the next year is $3.03 (Canadian), which is about 23 per cent above its current price of $2.46. The stock is up about 82 per cent so far this year.
“As far as junior producers go right now, this is our favourite in the gold space,” said Raymond James analyst Chris Thompson, who has a $3.30 target on the stock, calling the valuation “cheap” compared with its peers in the junior mining space.
Mr. Thompson said the increased investment from legendary investor Mr. Sprott “provides a vote of confidence” in the company’s management and future valuation.
Newmarket’s board includes well-known executives such as mining financier Lukas Lundin and Randall Oliphant, the executive chairman of New Gold Inc. and chairman of the World Gold Council.
“We consider this ‘new kid on the block’ to be underowned by traditional institutional resource fund managers, and to have above-average potential to qualify for addition to several precious metal indices over the next 12 months,” Beacon Securities analyst Michael Curran said in a note. His target is $3.25.
Last month, Newmarket reported an increase in reserves and resources at its flagship Fosterville mine, which could extend its production life.
BMO Nesbitt Burns analyst Brian Quast increased his target on Newmarket to $3 from $2.75 as a result.
The company has no debt and is benefiting from the weak Australian dollar, when compared with the U.S. currency. Gold is priced in U.S. dollars, which means the company receives more Australian dollars per ounce of gold sold. Operating costs are also paid in Australian dollars, which helps to increase margins.
Risks for the stock include a strengthening Australian dollar, the high cost of production in Australia, as well as the potential of overpaying for acquisitions, which has been an issue for gold producers in recent years after the price of gold plummeted from its record above $1,900 (U.S.) in 2011.
“It’s always a little risky and generally M&A activity is not looked upon favourably unless it’s an absolute slam dunk, and there are few of those around at the moment,” Mr. Thompson said.
Newmarket chief executive officer Douglas Forster said the company is on the hunt for acquisitions in Australia and North America, to help reach its goal of becoming a mid-tier gold miner producing 400,000 to 500,000 ounces a year, up from expected production of 205,000 to 220,000 ounces in 2016.
“We do see opportunity, that’s the good news, but we’re cautious,” said Mr. Forster, noting that management and insiders together own about 8 per cent of the company.
He wouldn’t comment on whether there has been any interest in a takeover of Newmarket, but said a hostile bid would be difficult to pull off, given that nearly half of the shares are owned by management, Mr. Sprott and Luxor.
“We’ll do whatever makes sense and that maximizes shareholder value,” Mr. Forster said. “Hopefully, that means we are growing by acquisition and organically. If it means someone else is [interested in acquiring us and achieving] our goals, then obviously we would have to consider it. It doesn’t mean we would support it.”
Peter Imhof, vice-president and portfolio manager at AGF Investments Inc., said the stock is a bit too small for him to own in the AGF Canadian Growth Equity Class fund. He also cited concerns in the market about Luxor looking to unload more of its shares, although Mr. Sprott’s investment is a positive sign.
“You always have to pay attention when he’s taking a big position in the company,” said Mr. Imhof, who used to work with Mr. Sprott at Sprott Asset Management.
Luxor has also granted Mr. Sprott a right of first refusal to buy another 16.2 million shares by the end of the year.
Renowned money manager Eric Sprott is still very bullish on physical gold and silver. Why? Sprott proclaims, “The U.S. is broke. We know they’re broke. . . . About a thousand professors have signed up and told Congress you’ve got to deal with this issue, and it is immediately ignored, but it is by far the biggest issue. It’s not just government. It’s corporate pension plans, and state pension plans and all these unfunded obligations where everyone thinks they are going to receive something only to find out that they are not going to receive something. . . . The math is pretty simple. The U.S. is broke, and I don’t want to single out the U.S. Lots of countries are broke. I am sure Japan is broke, and I am sure there are European countries that are broke. We can’t keep extending and pretending and suggesting everything is great. Unfortunately, someone is going to pay the price, and I am not sure when the price is going to be paid. The analogy I use is we all knew ten years ago that Detroit was broke. . . . It was so mathematically certain that you knew what was going to happen. The same thing will happen to the United States.”
How has the economy stayed afloat even though the U.S. isbroke? Sprott, who manages nearly $7.5 billion in total assets, contends, “I take it back to NASDAQ 2000 when we had our crash, and there really should have been a normal secular bear market. Along comes the government and their ‘cash for clunkers’ and ‘home buyer tax credit’ and HARPS and TALF and too-big-to fail and printing and ZIRP. This was an elongated process of trying to hold it together. All of this was supposed to have a huge impact on the economy, and yet, we have had negligible growth. In the meantime, all the debts have soared. You have student loan debt, and now students can’t afford to buy a home, so they are all living with their families. You have so many people on food stamps, and you have people taking advantage of the disability fund . . . in the latest statement, it goes broke in a year. . . . This is symptomatic of the problems.”
On The Fed’s constant indecision on whether or not to raise interest rates, Sprott says, “You’re getting a rope-a-dope. One minute you think one thing, and the next minute you think the other. I am having a tough time thinking rates are going to go up (in December). One of the things that all central banks are doing is losing credibility, that people really believe that they know what they are doing. We saw what has happened in Japan the last 25 years, and we see what’s happening in Europe which is what’s happening in the United States. Economic growth, if there is growth, is so anemic . . . and I believe it’s getting worse as this year progresses.”
On his physical gold and silver investments, Sprott says, “I don’t lose any sleep over the price of gold going down in the sense that I believe what I believe. I believe it’s been manipulated. It’s very much about currency and economics of the Keynesian scheme that we’re going to spend money, print money and it’s all going to work. It’s not working. I don’t want to wait and find out the day it falls apart because when it falls apart someday, then it will be too late. I want to be positioned beforehand. I can remember shorting stocks before March of 2000. It was a bit of a rough ride for three months, but my gosh, when it rolled over . . . you have to be a little bit early on things. I believe the last four years have been orderly and created to be difficult. I think gold would have gone up, but they could not stand for it to go up because they were printing money. If you are printing money and gold goes up, everybody figures it out. . . . I’ve been around for a while, and I have the patience to hang in there. I have been a buyer of gold stocks, and so I am hopeful this will end up being a very, very rewarding trade.”
Sprott predicts, “There has to be a collapse. It will be way bigger than 2008. We had a debt problem in ‘07 and ‘08 and the debt has exploded.”