Contrarian.
Innovative.
Aligned.
2024 Annual Report
A global leader
in precious
metals and
critical material
investments
Five Year Financial Record
In millions $, except
shareholder return
2020
2021
2022
2023
2024
Net income
27.0
33.2
17.6
41.8
49.3
Adjusted base EBITDA
44.2
64.1
71.0
71.9
85.2
Dividends
23.2
25.7
25.9
25.9
27.1
5-yr cumulative return (per $100)
128.29
202.97
164.39
168.82
233.65
S&P composite index (per $100)
105.61
132.17
124.57
139.30
169.46
NYSE composite index (per $100)
105.36
126.11
122.49
136.21
172.10
Table of Contents
2
Letter From
Our CEO
9
Business
Overview
10
Purpose &
Values
11
Board of
Directors
12
Leadership
Team
14
Corporate
Sustainability
Highlights
16
Management’s
Discussion &
Analysis
36
Financial
Statements
& Notes
76
Corporate
Information
1
2024 Annual Report
SPROTT
Letter From Our CEO
Dear fellow shareholders,
2024 Review
Sprott’s Assets Under Management (“AUM”) ended the
year at $31.5 billion, down 6% from $33.4 billion as at
September 30, 2024, but was up 10% from $28.7 billion as
at December 31, 2023. Although fourth quarter AUM was
negatively impacted by market value depreciation across
most of our funds and the termination of certain sub-
advised fund contracts, 2024 was nevertheless our seventh
consecutive year of double-digit AUM growth. Subsequent
to year-end, as at February 21, 2025, AUM had increased to
$33.5 billion, up $2 billion, or 6% from December 31, 2024.
Net income for the quarter was $11.7 million ($0.46 per
share), up 21% from $9.7 million ($0.38 per share) for the
quarter ended December 31, 2023. On a full-year basis, net
income was $49.3 million ($1.94 per share), up 18% from
$41.8 million ($1.66 per share) for the year ended December
31, 2023. Our earnings in the quarter and on a full-year
basis benefited from higher average AUM on strong market
value appreciation in our precious metals physical trusts
and inflows to the majority of our exchange listed products.
We also benefited from carried interest and performance
fee crystallization in certain funds in our managed equities
and private strategies segments.
Adjusted base EBITDA was $22.4 million ($0.88 per share)
in the quarter, up 19% from $18.8 million ($0.75 per share)
for the quarter ended December 31, 2023 and $85.2 million
($3.35 per share) on a full-year basis, up 18% from $71.9
million ($2.85 per share) for the year ended December
31, 2023.
During the quarter, we recorded $74 million in net outflows
due primarily to the termination of a sub-advisory
relationship that more than offset new flows into our
exchange listed products. On a full-year basis, net sales
were $698 million, driven primarily by strong sales in our
physical trusts and uranium and critical materials ETFs,
offset somewhat by net redemptions in our managed
equities and private strategies segments. As previously
noted, during the fourth quarter we increased our quarterly
dividend by 20%. We also paid off our line of credit,
resulting in a debt free balance sheet and re-purchased a
small number of shares via our normal course issuer bid.
Precious Metals
After posting impressive gains through the first nine months
of 2024, gold declined by 0.4% during the fourth quarter,
while silver prices fell by 7.3%. However, despite the late-
year correction, both metals still recorded impressive full-
year gains. Gold rose by 27.2% in 2024, the most in 14
years, outperforming most asset classes and ending the
year at $2,624 per ounce. Silver gained 21.5% and closed
the year at $28.90 per ounce.
Shortly after the U.S. election, a new dynamic emerged in
the gold market that has made its way into the headlines as
prices are making all-time highs on a near daily basis.
Concerns over potential tariffs on precious metals have
caused premium prices in U.S. markets relative to others,
especially London. Although there have never been tariffs
on gold, except during the Nixon administration when the
rate was set at zero percent, the ongoing arbitrage is
putting enormous pressure on physical markets. Long-term
gold bulls have always pointed to the large disconnect
between the paper markets and physical supply and we are
now witnessing the potential consequences of a rebalance.
Record amounts of physical gold are being shipped from
London to New York. Lead times for delivery are becoming
extended and lease rates have risen significantly. There are
additional logistical delays due to the fact
that Comex vaults will only take delivery of
100-ounce gold bars, while the London
Bullion Market Association (“LBMA”)
vaults hold 400-ounce bars. While this
is all short-term activity, it does
demonstrate the fragility of the old
system and the need for it to adapt to
gold’s larger role as a global reserve asset.
2024 Annual Report
SPROTT
2
Longer term, another fundamental shift appears to be
underway. The new U.S. Secretary of Treasury, Scott
Bessant, has openly expressed his fondness for gold, which
he has disclosed as his largest personal asset. He will need
a new set of tools to navigate the challenge of refinancing
$500 billion of Treasury Debt each week in a higher interest
rate environment. There has been a great deal of focus on
the national debt but little discussion of the other side of
the U.S. balance sheet, i.e., assets. Perhaps a sovereign
wealth fund is not such a far-fetched idea coming from a
hedge fund manager turned Secretary of Treasury, working
for a real estate developer turned President, surrounded by
billionaire businessmen. The opportunity to discover
national assets and promote them may prove irresistible,
including the U.S. Treasury’s gold holdings (287 million
ounces) currently valued at $42 per ounce. Next, they might
consider federally-owned buildings, mineral rights and
national parks. There is much to be discovered and
monetized by the United States' transactional leadership.
We surmise that this may be a way to maintain control over
long-term rates: supporting a strong U.S. dollar against all
currencies except gold.
Critical Materials
For many critical materials, 2024 was a challenging year as
investors struggled to gauge the impact of the Fed’s interest
rate path, geopolitical tensions and slowing demand from
China, the world’s second largest economy. Spot uranium
prices declined 10.7% during the fourth quarter and closed
the year down 19.7%. After reaching record highs during
the second quarter, copper bore the brunt of weakening
Chinese demand, losing 10.7% during the quarter and
finishing the year up 2.2%. We expect further volatility in
2025 as evolving trade alliances force many countries to
focus on security of supply and incentivizing domestic
production to guard against increasingly fragile global
supply chains. Despite the near-term turbulence, we re-
main confident in our critical materials thesis. We believe
demand will be driven by growing global electrification and
the fundamental role critical materials play in providing
economic security. Western electricity consumption is out-
pacing power production capacity and aging grids must be
upgraded to accommodate power intensive technologies
like artificial intelligence (AI). Massive amounts of critical
materials will be required to achieve these goals.
Product Development
In 2024, we expanded our exchange listed product offerings
with the launch of several critical materials ETFs and our
new Physical Copper Trust. In the first quarter of 2025, we
launched two innovative new precious metals ETFs: The
Sprott Silver Miners and Physical Silver ETF (“SLVR”), and
the Sprott Active Gold & Silver Miners ETF (“GBUG”), the
world’s first actively-managed mining equities ETF.
“The recent turmoil in metals
markets has highlighted the
importance of physical ownership,
an area where Sprott offers best-
in-class solutions to individual
and institutional investors. ”
2024 Annual Report
SPROTT
3
Outlook
Looking ahead, we expect 2025 to be characterized by
heightened volatility across most asset classes. We agree
with J.P. Morgan’s Chief Strategist Michael Cembalest who
recently wrote, “Policies and statements from Trump
nominees (both cabinet level and those not requiring
Senate confirmation) indicate that they aim to ‘break’
something,
whether
it’s
globalization,
the
Federal
bureaucracy, the IRS, the FBI, Medicare, U.S. vaccine policy,
lax U.S. border policies, its ‘Deep State’ opponents or
something else. Whatever the goals, I take them at their
word: they are going to break something, I just don’t know
what.”
Long ago Warren Buffett remarked that “debt doesn’t
matter until the day it does, then it’s all that matters.” The
question is, are we there yet? With annual deficits running
at roughly $2 trillion with no end in sight, on top of $36
trillion of uncapped debt, is the Treasury market telling us
something? In the fourth quarter alone, the U.S. Department
of the Treasury reported a deficit of $710.9 billion, up $200
billion from the comparable period in 2023. The combination
of rising interest expense, persistent spending and declining
tax receipts in the fourth quarter took the deficit to levels
only surpassed in the worst quarter of the COVID-19 crisis.
It seems to us that we might be there.
Sprott is well positioned for this uncertain future. Global
central banks are clearly focused on reducing their reliance
on U.S. Treasuries and have turned to gold instead. We
expect this trend to accelerate and broaden with investor
participation increasing. The recent turmoil in metals
markets has highlighted the importance of physical
ownership, an area where Sprott offers best-in-class
solutions to individual and institutional investors. The
realignment of global trade and a focus on energy security
will create demand for critical materials produced in
“friendly” jurisdictions. We continue to develop new
exchange-listed and actively-managed critical materials
strategies to capitalize on this powerful long-term trend.
We have invested in our sales and marketing capabilities to
deliver our clients the highest levels of client service, while
building on our position as thought leaders in our core
themes. We have a highly-motivated team committed to
creating value for our clients and shareholders in the
months and years ahead.
Thank you for your support. We look forward to reporting
to you on our progress in the quarters ahead.
Sincerely,
Whitney George
Chief Executive Officer
2024 Annual Report
SPROTT
4
Financial
Highlights
“Sprott’s disciplined approach to building
a highly focused, yet strategically
diversified investment product mix has
allowed us to drive shareholder value by
outperforming key benchmark indices
over the last 5 years.
”
Ron Dewhurst, Chairman
0
50
100
150
200
250
300
Jan 01,
2020
Dec 31,
2020
Dec 31,
2021
Dec 31,
2022
Dec 31,
2023
Dec 31,
2024
■ Sprott Inc
– Dividend Adjusted
■ S&P/TSX
Composite Index
+134%
+69%
■ NYSE
Composite Index
+72%
5-yr Historical Annual Shareholder Return
5
2024 Annual Report
SPROTT
Profitable AUM growth
through a combination of
acquisitions, organic growth
and market value appreciation
2024
2023
2022
2021
2020
2019
2018
2017
2016
Opening AUM
Net Flows
Market Value
Acquisitions
13%
58%
Adjusted base
EBITDA margin (%)
0.4
0.2
0.1
0.6
(1.2)
0.8
0.7
3.8
(1.5)
(0.7)
4.2
2.1
1.1
0.7
1.5
3.2
1.7
2.6
3.9
0.6
2.6
1
5.1*
5.8
7.8*
9.3
17.4*
20.4*
23.4*
28.7
31.5
*Acquisitions include Central Gold Trust (2016); CFCL (2018); Tocqueville (2020); UPC (2021) and; URNM (2022).
2016 and 2017 figures exclude non-diversified fund products sold in 2017.
In billions $ (unless otherwise indicated)
SPROTT
2024 Annual Report
6
Our investment solutions cover a
focused spectrum of precious metals
and critical materials in physical form,
equities and private strategies
74%
Precious
metals,
$23.2B
1%
Other precious
metals, $0.2B
1%
Other critical materials, $0.3B
1%
Copper, $0.5B
49%
Gold,
$15.6B
22%
Uranium,
$6.8B
24%
Silver, $7.4B
24%
Critical
materials,
$7.6B
2%
Other, $0.7B*
$31.5B
AUM as at Dec. 31, 2024
†
*Other primarily includes non-precious metals and critical materials equity related strategies.
†Each product exposure includes exposures pertaining to metals, materials, equities, lending
and streaming products.
7
2024 Annual Report
SPROTT
Consistent adjusted base
EBITDA growth...
2024
2023
2022
2021
2020
2019
5-yr
CAGR:
24%
29.0
44.2
64.1
71.0
71.9
85.2
In millions of $
SPROTT
2024 Annual Report
8
Business
Overview
Exchange Listed
Products
The Company’s closed-end
physical trusts and exchange
traded funds (“ETFs”).
Managed
Equities
The Company’s alternative
investment strategies
managed in-house and on a
sub-advised basis.
Private
Strategies
The Company’s lending and
streaming activities which
occur through limited
partnership vehicles
(“private strategies
LPs”).
Our
Businesses
For a detailed account of the underlying principal subsidiaries within our reportable operating segments,
refer to the Company’s Annual Information Form and note 2 of the annual financial statements.
9
2024 Annual Report
SPROTT
Purpose & Values
We aspire to be the leading global asset manager
focused on precious metals and critical materials.
Our Purpose:
As contrarian investors with a long-term investment horizon, we remain both
patient and persistent.
We will continue to innovate to bring our clients the best possible investment
products. We remain aligned with our partners (shareholders, clients,
employees, and the communities wherein we operate) as significant
shareholders of Sprott and meaningful co-investors in Sprott products.
We are committed to the support and advancement of our people. We give
back to communities we operate in both with our time and resources. At
Sprott, we have a strong plan, but the flexibility to adjust where necessary.
We share our success with our partners.
Our Values:
• We believe in partnership with our employees, clients, and our shareholders.
• We are prepared to be contrarian.
• We are innovative.
• We are aligned.
• We are patiently persistent.
SPROTT
2024 Annual Report
10
Board of Directors
Ron Dewhurst
Chairman
Independent Director
Graham Birch
Chair, Audit and Risk
Management Committee
Independent Director
Dinaz Dadyburjor
Independent Director
Barbara Connolly Keady
Chair, Governance, Sustainability
and Nominating Committee
Independent Director
Judith W. O’Connell
Chair, Compensation Committee,
Independent Director
Catherine Raw
Independent Director
Whitney George
Chief Executive Officer
Non-independent Director
2024 Annual Report
SPROTT
11
Leadership Team
From left to right: John Ciampaglia, CEO, Sprott Asset Management, Arthur Einav, General Counsel, Sprott Inc., Ed Coyne,
Head of Global Sales, Sprott Inc., Whitney George, CEO, Sprott Inc., Heather MacLeod, Chief Marketing Officer, Sprott Inc.,
Kevin Hibbert, CFO, Sprott Inc., Greg Caione, Head of Private Strategies, Sprott Inc.
2024 Annual Report
SPROTT
12
Leadership Team Continued
Samay Bhachech,
Managing Partner
Varinder Bhathal,
Managing Partner
Vishal Chhabra,
Managing Partner
Caroline Donally,
Managing Partner
Dan Elder,
Managing Partner
Jim Grosdanis,
Managing Partner
Michael Harrison,
Managing Partner
John Hathaway,
Managing Partner
Shree Kargutkar,
Managing Partner
Sarah-Jane Martin,
Managing Partner
Jason Mayer,
Managing Partner
Ryan McIntyre,
Managing Partner
Lara Misner,
Managing Partner
Narinder Nagra,
Managing Partner
Maria Smirnova,
Managing Partner
J’aime Spork,
Managing Partner
Andrew Stronach,
Managing Partner
Justin Tolman,
Managing Partner
Tom Ulrich,
Managing Partner
Robert Villaflor,
Managing Partner
Momina Walli,
Managing Partner
Glen Williams,
Managing Partner
2024 Annual Report
SPROTT
13
Corporate Sustainability Highlights
Our approach and commitment to corporate sustainability is in support of executing a
sustainable strategy that delivers long-term value for our stakeholders. Our commitment to
operating responsibly touches our policies and practices in the areas of investment management,
people and culture, business practices and ethics, philanthropy, governance, and the
environment.
Investment Management
• As a signatory to the Principles for Responsible Invest
ment (“PRI”) since 2019, Sprott has committed to, where
consistent with the fiduciary responsibilities of our sub
sidiaries, incorporating responsible investment factors
into our investment decision making and active owner
ship practices. In 2024 we completed our annual assess
ment under the PRI, continuing our incorporation of Re
sponsible Investment factors into our investment
management activities.
• Sprott continues to grow our suite of investment funds
that provide investors with exposure to a range of critical
materials necessary for the global clean energy transi
tion. Now representing 24% of our total AUM, our
critical materials strategies include funds focused on ur
anium, copper, lithium, nickel, cobalt and other materials
essential to the generation, transmission and storage of
clean energy.
• This year we launched the Sprott Physical Copper Trust
(“COP”), the world’s first physical copper investment
fund. Investor interest in copper is growing globally
given its critical role as a key component in electrifica
tion, clean energy technologies, electric vehicles and
artificial intelligence. With the launch of COP, Sprott now
offers four different copper investment strategies.
Business Practices & Ethics
• Our Risk Management and Compliance programs seek
to maintain high ethical standards along with imple
menting policies and procedures that support the
achievement of our business strategy and corporate
purpose.
• We maintain robust ethics and compliance policies
which include a Code of Business Conduct and Ethics,
Whistleblower Policy, and various other corporate gov
ernance and operational policies which all employees are
required to adhere to.
• Our mandatory training programs are ongoing and in
clude cybersecurity training, anti-money laundering
training, equal employment opportunity and anti-ha
rassment training.
Governance
• Our compensation practices align our employees with
the long-term strategic goals and interests of our clients
and shareholders.
• The majority of Sprott’s Board of Directors remains in
dependent (6 of 7 / 86% are independent).
• The Company provides continuing education opportun
ities for all directors, so that directors may maintain or
enhance their skills and abilities as directors, as well as to
ensure that their knowledge and understanding of the
Corporation’s business remains current.
• We operate a continuous information technology and
cybersecurity program to protect critical company assets/
data and ensure operational continuity. As part of this,
we successfully completed our annual National Institute
of Standards audit for 2024.
2024 Annual Report
SPROTT
14
People & Culture
• Employees are our most valuable asset and key to deliv
ering value for our clients and shareholders. We are
deeply committed to empowering our employees to
reach their full potential by cultivating an inclusive work
place culture of innovation and excellence, where be
longing, diversity of thought and well-being are sup
ported.
• We recruit, retain and support exceptional talent from a
wide range of differentiated experiences and back
grounds.
• We apply a multi-faceted approach to support our em
ployees’ professional growth and development. In addi
tion to offering external education subsidies, licensing
and designation support, time off for studying, mentor
ship and networking opportunities, we also provide our
employees with access to hundreds of on-demand soft
and hard skill courses through our internal training pro
gram, Sprott Academy.
• We prioritize our employee’s physical and mental health
by providing a comprehensive and competitive benefits
package. In addition, we strive to reduce the stigma of
seeking mental health support through our annual
month-long mental health campaign every May.
• We actively seek our employees’ feedback through our
initiative “Sprott Listens”, with a view to continuously
monitoring and improving the employee experience and
engagement, leading to better business processes and
outcomes. Our 2024 employee survey results were well
above Canadian and US benchmarks for the 5 KPIs that
gauge the employee experience.
Philanthropy
• Through various corporate philanthropic initiatives we
actively partner with organizations focused on educa
tion, health & wellness, sustainability in the mining sec
tor, and humanitarian relief.
• Our employee-led giving programs connect Sprott with
worthy organizations where our team members are
personally engaged and committed.
• Our employees participate in a number of charitable
events throughout the year including fundraising galas,
giving campaigns, food and toy drives, volunteer board
seats and fundraising committee positions.
• We also partner with various university student groups
that support the development of tomorrow’s leaders in
STEM and finance.
The Environment
• We completed our annual assessment of greenhouse
gas emissions (GHG) associated with our offices in Can
ada and the United States and achieved carbon neutrality
under the Carbonzero program after we sourced carbon
offsets in the equivalent amount of our 2023 Scope 1
and Scope 2 GHGs.
• Our Toronto headquarters location has received both
LEED v4.1 Platinum Level Certification and Platinum level
BOMA BEST certification recognizing excellence in
energy sustainability and environmental management.
2024 Annual Report
SPROTT
15
Management’s Discussion & Analysis
Years ended December 31, 2024 and 2023
SPROTT
2024 Annual Report
16
Forward looking statements
Certain statements in this Management's Discussion & Analysis ("MD&A"), and in particular the "Outlook" section, 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 MD&A contains Forward-Looking Statements pertaining to: (i) our positioning will benefit from
a highly constructive operating environment for precious metals, critical materials and their related equities; and (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.
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 public health outbreaks; and (v) those assumptions disclosed herein under the heading "Critical Accounting Estimates and significant
judgments". 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 private strategies business; (xxvii) those risks described under the heading "Risk Factors" in the Company’s annual information form dated February 25, 2025; and
(xxviii) those risks described under the headings "Managing Financial Risk" and "Managing Non-Financial Risk" in this MD&A. 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.
Management's discussion and analysis
This MD&A of financial condition and results of operations, dated February 25, 2025, presents an analysis of the consolidated
financial condition of the Company and its subsidiaries as at December 31, 2024, compared with December 31, 2023, and the
consolidated results of operations for the three and twelve months ended December 31, 2024, compared with the three and
twelve months ended December 31, 2023. The board of directors of the Company approved this MD&A on February 25, 2025.
All note references in this MD&A are to the notes to the Company's December 31, 2024 audited annual consolidated financial
statements ("annual financial statements"), unless otherwise noted. The Company was incorporated under the Business
Corporations Act (Ontario) on February 13, 2008.
Presentation of financial information
The annual financial statements, including the required comparative information, have been prepared in accordance with
International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB").
Financial results, including related historical comparatives contained in this MD&A, unless otherwise specified herein, are based
on the annual financial statements. While the Company's primary transactional currency and presentation currency is the U.S.
dollar, IFRS requires that the Company measure its foreign exchange gains and losses through its consolidated statements of
operations and comprehensive income using the Canadian dollar as its functional currency. Accordingly, all dollar references in
this MD&A are in U.S. dollars, however the translation gains and losses were measured using the Canadian dollar as the
functional currency. The use of the term "prior period" refers to the three and twelve months ended December 31, 2023.
17
Key performance indicators and non-IFRS and other financial measures
The Company measures the success of its business using a number of key performance indicators that are not measurements in accordance with IFRS and should not be considered as an alternative to
net income (loss) or any other measure of performance under IFRS. 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 page 21 of this MD&A.
Assets under management
Assets under management ("AUM") refers to the total net assets managed by the Company through its various investment
product offerings and managed accounts.
Net inflows
Net inflows result in changes to AUM, and as such, have a direct impact on the revenues and earnings of the Company.
They are described individually below:
At-the-market ("ATM") transactions and ETF unit creations
ATM transactions of our physical trusts and new 'creations' of ETF units are the primary manner in which inflows arise
in our exchange listed products segment.
Net sales
Fund sales (net of redemptions) are the primary manner in which inflows arise in our managed equities segment.
Net capital calls
Capital calls, net of capital distributions ("net capital calls") are the primary manner in which inflows arise in our
private strategies segment.
Other net inflows
Other net inflows include: (1) fund acquisitions; (2) new AUM from fund launches; and (3) lost AUM from fund closures. It
is possible for committed capital in our private strategies to earn a commitment fee despite being uncalled, in which case, it
will also be included in this category as AUM.
Net revenues
Net revenues are calculated as total net revenues (including net fees and net commissions described below) before: (1) gains
(losses) on investments; (2) revenues from non-reportable segments; and (3) carried interest and performance fees, net of
carried interest and performance fee payouts (internal and external).
Net fees
Management fees, net of fund expenses, 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 from purchases and sales of critical materials in our
exchange listed products segment and transaction-based service offerings by our broker-dealer.
Net compensation & net compensation ratio
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 this MD&A, and severance, new
hire accruals and other which are non-recurring. Net compensation ratio is calculated as net compensation divided by net
revenues (see above for net revenue calculation).
Total shareholder return
Total shareholder return is the financial gain (loss) that results from a change in the Company's share price, plus any dividends
paid over the period.
Liquid co-investments
Liquid co-investments are the Company's co-investments that can be monetized in less than 90 days.
18
EBITDA, adjusted base EBITDA and adjusted base EBITDA margin
EBITDA in its most basic form is defined as earnings before interest expense, income taxes, depreciation and amortization.
Adjusted base EBITDA further adjusts for items noted in the below reconciliation table. Adjusted base EBITDA margin is
calculated as adjusted base EBITDA from reportable segments divided by net revenues.
EBITDA, adjusted base EBITDA and adjusted base EBITDA margin are measures 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 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. Adjusted base EBITDA margins are a key indicator of the 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.
Neither EBITDA, adjusted base EBITDA, or adjusted base EBITDA margin have a standardized meaning under IFRS.
Consequently, they should not be considered in isolation, nor should they be used in substitute for measures of performance
prepared in accordance with IFRS.
The following table outlines how our EBITDA, adjusted base EBITDA and adjusted base EBITDA margin measures are
determined:
3 months ended
12 months ended
(In thousands $)
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2024
Dec. 31, 2023
Net income for the period
11,680
9,664
49,294
41,799
Net income margin (1)
27 %
24 %
28 %
28 %
Adjustments:
Interest expense
613
844
3,091
4,060
Provision for income taxes
4,813
1,159
19,712
8,492
Depreciation and amortization
600
658
2,221
2,843
EBITDA
17,706
12,325
74,318
57,194
Adjustments:
(Gain) loss on investments (2)
3,889
(2,808)
10
(1,375)
Stock-based compensation (3)
4,988
4,681
18,817
17,128
Foreign exchange (gain) loss (4)
(2,706)
1,295
(1,388)
3,212
Severance, new hire accruals and other (4)
166
179
224
5,625
Revaluation of contingent consideration (4)
—
2,254
(580)
—
Costs relating to exit of non-core business (4)
—
155
—
5,142
Non-recurring regulatory, professional fees and other (4)
—
959
—
3,982
Shares received on recognition of contingent asset (4)
—
—
—
(18,588)
Carried interest and performance fees
(2,511)
(503)
(7,319)
(891)
Carried interest and performance fee payouts - internal
830
222
1,081
458
Carried interest and performance fee payouts - external
—
—
—
—
Adjusted base EBITDA
22,362
18,759
85,163
71,887
Adjusted base EBITDA margin (5)
59 %
56 %
58 %
57 %
(1) Calculated as IFRS net income divided by IFRS total revenue.
(2) This adjustment removes the income effects of certain gains or losses on short-term investments, co-investments, and private holdings to ensure the reporting objectives of our EBITDA metric as described above are
met.
(3) In prior years, the mark-to-market expense of DSU issuances were included with "other (income) and expenses". In the current period, these costs are included as part of "stock-based compensation". Prior year
figures have been reclassified to conform with current presentation.
(4) Foreign exchange (gain) and loss; severance, new hire accruals and other; revaluation of contingent consideration; costs relating to exit of non-core business; non-recurring regulatory, professional fees and other;
and shares received on recognition of contingent asset were previously included with "other (income) and expenses" and are now shown separately in the reconciliation of adjusted base EBITDA above. Prior year
figures have been reclassified to conform with current presentation.
(5) Prior year figures have been revised to remove the adjustment of depreciation and amortization.
19
Business development and outlook
On June 6, 2024, we launched the Sprott Physical Copper Trust ("COP"), the world's first physical copper investment fund. COP
closed its initial public offering for gross proceeds of $110 million. After the launch, on July 8, 2024 COP established an ATM
equity program to issue up to an additional $500 million of trust units. COP was created to provide investors with an alternative
to rolling copper futures and a complement to investing in copper mining equities. COP is a closed-end trust trading in U.S.
dollars and Canadian dollars on the Toronto Stock Exchange under the symbols "COP.U" and "COP.UN", respectively.
On March 6, 2024, we expanded our critical materials offerings with the launch of the Sprott Copper Miners ETF. We also
added to our growing European product suite by introducing the Sprott Junior Uranium Miners UCITS ETF.
Sprott is well positioned for this uncertain future. Global central banks are clearly focused on reducing their reliance on U.S.
Treasuries and have turned to gold instead. We expect this trend to accelerate and broaden with investor participation
increasing. The recent turmoil in metals markets has highlighted the importance of physical ownership, an area where Sprott
offers best-in-class solutions to individual and institutional investors. The realignment of global trade and a focus on energy
security will create demand for critical materials produced in“friendly” jurisdictions. We continue to develop new exchange-
listed and actively-managed critical materials strategies to capitalize on this powerful long-term trend. We have invested in our
sales and marketing capabilities to deliver our clients the highest levels of client service, while building on our position as
thought leaders in our core themes. We have a highly-motivated team committed to creating value for our clients and
shareholders in the months and years ahead.
Subsequent to year-end, as at February 21, 2025, AUM was $33.5 billion, up 6% from $31.5 billion at December 31, 2024.
20
Results of operations
Summary financial information
(In thousands $)
Q4
2024
Q3
2024
Q2
2024
Q1
2024
Q4
2023
Q3
2023
Q2
2023
Q1
2023
Summary income statement
Management fees (1)
41,161
38,693
38,065
36,372
34,244
32,867
32,940
31,170
Fund expenses (2),(3)
(2,708)
(2,385)
(2,657)
(2,234)
(2,200)
(1,740)
(1,871)
(1,795)
Direct payouts
(1,561)
(1,483)
(1,408)
(1,461)
(1,283)
(1,472)
(1,342)
(1,187)
Carried interest and performance fees
2,511
4,110
698
—
503
—
388
—
Carried interest and performance fee payouts - internal
(830)
—
(251)
—
(222)
—
(236)
—
Carried interest and performance fee payouts - external (3)
—
—
—
—
—
—
—
—
Net fees
38,573
38,935
34,447
32,677
31,042
29,655
29,879
28,188
Commissions
819
498
3,332
1,047
1,331
539
1,647
4,784
Commission expense - internal
(146)
(147)
(380)
(217)
(161)
(88)
(494)
(1,727)
Commission expense - external (3)
(290)
(103)
(1,443)
(312)
(441)
(92)
(27)
(642)
Net commissions
383
248
1,509
518
729
359
1,126
2,415
Finance income (2)
1,441
1,574
4,084
1,810
1,391
1,795
1,650
1,655
Gain (loss) on investments
(3,889)
937
1,133
1,809
2,808
(1,441)
(1,950)
1,958
Co-investment income (2)
296
418
416
274
170
462
1,327
93
Total net revenues (2),(4)
36,804
42,112
41,589
37,088
36,140
30,830
32,032
34,309
Compensation (2)
19,672
18,547
19,225
17,955
17,096
16,939
21,468
19,556
Direct payouts
(1,561)
(1,483)
(1,408)
(1,461)
(1,283)
(1,472)
(1,342)
(1,187)
Carried interest and performance fee payouts - internal
(830)
—
(251)
—
(222)
—
(236)
—
Commission expense - internal
(146)
(147)
(380)
(217)
(161)
(88)
(494)
(1,727)
Severance, new hire accruals and other
(166)
(58)
—
—
(179)
(122)
(4,067)
(1,257)
Net compensation
16,969
16,859
17,186
16,277
15,251
15,257
15,329
15,385
Net compensation ratio
44 %
46 %
44 %
47 %
47 %
50 %
48 %
52 %
Severance, new hire accruals and other
166
58
—
—
179
122
4,067
1,257
Selling, general and administrative ("SG&A") (2)
4,949
4,612
5,040
4,173
3,963
3,817
4,752
4,026
SG&A recoveries from funds (1)
(280)
(275)
(260)
(231)
(241)
(249)
(282)
(264)
Interest expense
613
933
715
830
844
882
1,087
1,247
Depreciation and amortization
600
502
568
551
658
731
748
706
Foreign exchange (gain) loss (2)
(2,706)
1,028
122
168
1,295
37
1,440
440
Other (income) and expenses (2)
—
—
(580)
—
3,368
4,809
(18,890)
1,249
Total expenses
20,311
23,717
22,791
21,768
25,317
25,406
8,251
24,046
Net income (5)
11,680
12,697
13,360
11,557
9,664
6,773
17,724
7,638
Net income per share (6)
0.46
0.50
0.53
0.45
0.38
0.27
0.70
0.30
Adjusted base EBITDA
22,362
20,675
22,375
19,751
18,759
17,854
17,953
17,321
Adjusted base EBITDA per share
0.88
0.81
0.88
0.78
0.75
0.71
0.71
0.68
Summary balance sheet
Total assets (7)
388,798
412,477
406,265
389,784
378,835
375,948
381,519
386,765
Total liabilities (8)
65,150
82,198
90,442
82,365
73,130
79,705
83,711
108,106
Total AUM
31,535,062 33,439,221 31,053,136 29,369,191 28,737,742 25,398,159 25,141,561 25,377,189
Average AUM
33,401,157 31,788,412 31,378,343 29,035,667 27,014,109 25,518,250 25,679,214 23,892,335
(1) Previously, management fees within the above summary financial information table included SG&A recoveries from funds consistent with IFRS 15. For management reporting purposes, these recoveries are now shown next to
their associated expense as management believes this will enable readers to transparently identify the net economics of these recoveries. However, consistent with IFRS 15, SG&A recoveries from funds are still shown within the
"Management fees" line on the consolidated statement of operations. Prior year figures have been reclassified to conform with current presentation.
(2) Current and prior period figures on the consolidated statements of operations include the following adjustments: (1) trading costs incurred in managed accounts are now included within "Fund expenses" (previously included
within "SG&A"); (2) interest income earned on cash deposits are now included within "Finance income" (previously included within "Other income"); (3) co-investment income and income attributable to non-controlling interest
are now included as part of "Co-investment income" (previously included within "Other income"); (4) expenses attributable to non-controlling interest is now included within "Co-investment income" (previously included within
"Other expenses"); (5) the mark-to-market expense of DSU issuances are now included within "Compensation" (previously included within "Other expenses"); (6) foreign exchange (gain) loss is now shown separately (previously
included within "Other expenses"); and (7) shares received on a previously unrecorded contingent asset in Q2 2023 are now included within "Other (income) and expenses" (previously included within "Other income").
Management believes the above changes enable readers to better identify the nature of these revenues and expenses. Prior year figures have been reclassified to conform with current presentation.
(3) These amounts are included in the "Fund expenses" line on the consolidated statements of operations.
(4) Total revenues for the year ended December 31, 2024 were $178,655 (December 31, 2023- $151,367; December 31, 2022- $145,182).
(5) Net income for the year ended December 31, 2024 was $49,294 (December 31, 2023 - $41,799; December 31, 2022- $17,632).
(6) Basic and diluted net income per share for the year ended December 31, 2024 was $1.94 and $1.91, respectively (December 31, 2023 - $1.66 and $1.60, respectively; December 31, 2022 - $0.70 and $0.67, respectively).
(7) Total assets as at December 31, 2024 were $388,798 (December 31, 2023 - $378,835; December 31, 2022- $383,748).
(8) Total liabilities as at December 31, 2024 were $65,150 (December 31, 2023 - $73,130; December 31, 2022 - $106,477).
21
AUM summary
AUM ended the year at $31.5 billion as at December 31, 2024, down 6% from $33.4 billion as at September 30, 2024 but was
up 10% from $28.7 billion as at December 31, 2023. Although fourth quarter AUM was negatively impacted by market value
depreciation across most of our funds and the termination of certain subadvised fund contracts, 2024 was nevertheless our
seventh consecutive year of double-digit AUM growth as we benefited from strong market value appreciation in our precious
metals physical trusts and net inflows to our exchange listed products. Subsequent to year-end, as at February 21, 2025, AUM
was $33.5 billion, up 6% from $31.5 billion at December 31, 2024.
3 months results
(In millions $)
AUM
Sep. 30, 2024
Net
inflows (1)
Market
value changes
Other
net inflows (1)
AUM
Dec. 31, 2024
Net management
fee rate (2)
Exchange listed products
- Precious metals physical trusts and ETFs
- Physical Gold Trust
8,617
35
(44)
—
8,608
0.35%
- Physical Silver Trust
5,566
83
(422)
—
5,227
0.45%
- Physical Gold and Silver Trust
5,225
(69)
(143)
—
5,013
0.40%
- Precious Metals ETFs
404
(10)
(40)
—
354
0.33%
- Physical Platinum & Palladium Trust
151
33
(16)
—
168
0.50%
19,963
72
(665)
—
19,370
0.39%
- Critical materials physical trusts and ETFs
- Physical Uranium Trust
5,408
45
(591)
—
4,862
0.31%
- Critical Materials ETFs
2,307
27
(314)
—
2,020
0.52%
- Physical Copper Trust
103
(1)
(12)
—
90
0.32%
7,818
71
(917)
—
6,972
0.37%
Total exchange listed products
27,781
143
(1,582)
—
26,342
0.39%
Managed equities (3),(4)
3,276
(55)
(221)
(127)
2,873
0.90%
Private strategies (4)
2,382
(35)
(27)
—
2,320
0.83%
Total AUM (5)
33,439
53
(1,830)
(127)
31,535
0.47%
12 months results
(In millions $)
AUM
Dec. 31, 2023
Net
inflows (1)
Market
value changes
Other
net inflows (1)
AUM
Dec. 31, 2024
Net management
fee rate (2)
Exchange listed products
- Precious metals physical trusts and ETFs
- Physical Gold Trust
6,532
351
1,725
—
8,608
0.35%
- Physical Silver Trust
4,070
339
818
—
5,227
0.45%
- Physical Gold and Silver Trust
4,230
(230)
1,013
—
5,013
0.40%
- Precious Metals ETFs
339
(24)
39
—
354
0.33%
- Physical Platinum & Palladium Trust
116
75
(23)
—
168
0.50%
15,287
511
3,572
—
19,370
0.39%
- Critical materials physical trusts and ETFs
- Physical Uranium Trust
5,773
311
(1,222)
—
4,862
0.31%
- Critical Materials ETFs
2,143
321
(444)
—
2,020
0.52%
- Physical Copper Trust
—
1
(21)
110
90
0.32%
7,916
633
(1,687)
110
6,972
0.37%
Total exchange listed products
23,203
1,144
1,885
110
26,342
0.39%
Managed equities (3),(4)
2,874
(222)
348
(127)
2,873
0.90%
Private strategies (4)
2,661
(207)
(134)
—
2,320
0.83%
Total AUM (5)
28,738
715
2,099
(17)
31,535
0.47%
(1) See "Net inflows" and "Other net inflows" in the key performance indicators and non-IFRS and other financial measures section of this MD&A.
(2) Net management fee rate represents the weighted average fees for all funds in the category, net of fund expenses.
(3) Managed equities is made up of primarily precious metal strategies (53%), high net worth managed accounts (38%) and U.S. value strategies (9%).
(4) Prior period figures have been reclassified to conform with current presentation.
(5) No performance fees are earned on exchange listed products. Certain managed equities products earn either performance fees based on returns above relevant benchmarks or earn carried interest calculated as a
predetermined net profit over a preferred return. Private strategies LPs primarily earn carried interest calculated as a predetermined net profit over a preferred return.
22
Key revenue lines
Management, carried interest and performance fees
Management fees were $41.4 million for the quarter, up
20% from $34.5 million for the quarter ended December 31,
2023 and $155.3 million on a full-year basis, up 17% from
$132.3 million for the year ended December 31, 2023.
Carried interest and performance fees were $2.5 million for
the quarter, up from $0.5 million for the quarter ended
December 31, 2023 and $7.3 million on a full-year basis, up
from $0.9 million for the year ended December 31, 2023.
Net fees were $38.6 million for the quarter, up 24% from
$31 million for the quarter ended December 31, 2023 and
$144.6 million on a full-year basis, up 22% from $118.8
million for the year ended December 31, 2023. Our revenue
performance in the quarter and on a full-year basis was
primarily due to higher average AUM on strong market value
appreciation in our precious metals physical trusts and
inflows to the majority of our exchange listed products. We
also benefited from carried interest and performance fee
crystallization in certain funds in our managed equities and
private strategies segments.
Commission revenues
Commission revenues were $0.8 million for the quarter,
down 38% from $1.3 million for the quarter ended
December 31, 2023 and $5.7 million on a full-year basis,
down 31% from $8.3 million for the year ended December
31, 2023. Net commissions were $0.4 million for the
quarter, down 47% from $0.7 million for the quarter ended
December 31, 2023 and $2.7 million on a full-year basis,
down 43% from $4.6 million for the year ended December
31, 2023. Commission revenue was lower in the quarter due
to modest ATM activity in our critical materials physical
trusts. On a full-year basis, the decline in commission
revenue was due to the sale of our former Canadian broker-
dealer in the second quarter of last year.
Finance income
Finance income was $1.4 million for the quarter, up 4% from
the quarter ended December 31, 2023 and $8.9 million on a
full-year basis, up 37% from $6.5 million for the year ended
December 31, 2023. The increase in the quarter was due to
higher income generation in co-investment positions we hold
in our LPs managed in our private strategies segment. The
increase on a full-year basis was due to higher income
earned on streaming syndication activity in the second
quarter.
Key expense lines
Compensation
Net compensation expense was $17 million for the quarter,
up 11% from $15.3 million for the quarter ended December
31, 2023 and $67.3 million on a full-year basis, up 10%
from $61.2 million for the year ended December 31, 2023.
The increase in the quarter and on a full-year basis was
primarily due to increased Annual Incentive Program ("AIP")
accruals on higher net fee generation. Our net compensation
ratio was 44% in the quarter (December 31, 2023 - 47%)
and 45% on a full-year basis (December 31, 2023 - 49%).
SG&A
SG&A expense was $4.9 million for the quarter, up 25%
from $4 million for the quarter ended December 31, 2023
and $18.8 million on a full-year basis, up 13% from $16.6
million for the year ended December 31, 2023. The increase
in the quarter and on a full-year basis was due to higher
professional services, marketing and technology costs.
Earnings
Net income for the quarter was $11.7 million ($0.46 per
share), up 21% from $9.7 million ($0.38 per share) for the
quarter ended December 31, 2023 and was $49.3 million
($1.94 per share) on a full-year basis, up 18% from $41.8
million ($1.66 per share) for the year ended December 31,
2023. Our earnings in the quarter and on a full-year basis
benefited from higher average AUM on strong market value
appreciation in our precious metals physical trusts and
inflows to the majority of our exchange listed products. We
also benefited from carried interest and performance fee
crystallization in certain funds in our managed equities and
private strategies segments.
Adjusted base EBITDA was $22.4 million ($0.88 per share)
for the quarter, up 19% from $18.8 million ($0.75 per share)
for the quarter ended December 31, 2023 and $85.2 million
($3.35 per share) on a full-year basis, up 18% from $71.9
million ($2.85 per share) for the year ended December 31,
2023. Adjusted base EBITDA in the quarter and on a full-year
basis benefited from higher average AUM on strong market
value appreciation in our precious metals physical trusts and
inflows to the majority our exchange listed products.
23
Additional revenues and expenses
Investment losses were $3.9 million for the quarter, down
from investment gains of $2.8 million for the quarter
ended December 31, 2023 and investment losses were
nominal on a full-year basis, down from investment gains
of $1.4 million for the year ended December 31, 2023.
Investment losses in the quarter and on a full-year basis
were mainly from market value depreciation of our co-
investments.
Depreciation of property and equipment was $0.6 million
for the quarter, down 9% from $0.7 million for the quarter
ended December 31, 2023 and $2.2 million on a full-year
basis, down 22% from $2.8 million for the year ended
December 31, 2023. Depreciation of property and
equipment was lower in the quarter due to savings on the
renewal of an existing lease. On a full-year basis, the
decrease was due to cancelled lease agreements on the
sale of our legacy non-core asset management business
domiciled in Korea in the third quarter of last year.
Other (income) and expenses were $nil for the quarter
compared to other expenses of $3.4 million for the quarter
ended December 31, 2023. Other income was $0.6 million
on a full-year basis, down 94% from $9.5 million for the
year ended December 31, 2023. The decrease on a full-
year basis was due to the recognition of income on the
recording of a non-recurring contingent asset in the
second quarter of last year.
Balance sheet
Total assets were $388.8 million, up 3% from $378.8 million
as at December 31, 2023. The increase was primarily from
cash generation on increased earnings, partially offset by FX
translation losses in the period. Total liabilities were $65.2
million, down 11% from $73.1 million as at December 31,
2023. The decrease was primarily from the full repayment of
our loan facility. Total shareholder's equity was $323.6
million, up 6% from $305.7 million as at December 31,
2023.
24
Reportable operating segments
Exchange listed products
3 months ended
12 months ended
(In thousands $)
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2024
Dec. 31, 2023
Summary income statement
Management fees
29,115
22,744
107,928
81,417
Fund expenses
(2,095)
(1,580)
(7,914)
(5,058)
Net fees
27,020
21,164
100,014
76,359
Commissions
499
947
4,041
2,390
Commission expense - internal
(37)
(66)
(323)
(171)
Commission expense - external
(250)
(441)
(1,944)
(1,186)
Net commissions
212
440
1,774
1,033
Gain (loss) on investments
(2,616)
317
76
(359)
Co-investment income
—
—
29
1,014
Finance income (1)
111
65
424
251
Total net revenues
24,727
21,986
102,317
78,298
Net compensation
4,614
3,518
17,466
13,422
Severance, new hire accruals and other
—
56
—
89
SG&A
1,800
1,565
6,736
5,831
Interest expense
290
476
1,348
2,376
Depreciation and amortization
35
46
133
161
Foreign exchange (gain) loss (1)
(1,832)
447
(1,693)
344
Other (income) and expenses (1)
—
2,285
(580)
(17,920)
Total expenses
4,907
8,393
23,410
4,303
Income before income taxes
19,820
13,593
78,907
73,995
Adjusted base EBITDA
21,788
17,401
81,033
62,303
Adjusted base EBITDA margin (2)
80 %
80 %
79 %
80 %
Total AUM
26,341,775
23,202,564
26,341,775
23,202,564
Average AUM
27,831,718
21,675,252
25,861,175
19,689,463
(1) See footnote 2 of the summary financial information table on page 21 of the MD&A.
(2) Prior year figures have been revised to remove the adjustment of depreciation and amortization.
3 and 12 months ended
Income before income taxes was $19.8 million for the quarter, up 46% from $13.6 million for the quarter ended December 31,
2023 and was $78.9 million on a full-year basis, up 7% from $74 million for the year ended December 31, 2023. Our earnings
in the quarter and on a full-year basis benefited from higher management fees resulting from higher average AUM on strong
market valuations of our precious metals physical trusts and inflows to the majority of our exchange listed products.
Adjusted base EBITDA was $21.8 million for the quarter, up 25% from $17.4 million for the quarter ended December 31, 2023
and was $81 million on a full-year basis, up 30% from $62.3 million for the year ended December 31, 2023. Adjusted base
EBITDA in the quarter and on a full-year basis benefited from higher management fees resulting from higher average AUM on
strong market valuations of our precious metals physical trusts and inflows to the majority of our exchange listed products.
25
Managed equities
3 months ended
12 months ended
(In thousands $)
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2024
Dec. 31, 2023
Summary income statement
Management fees (1)
7,496
6,365
28,011
27,092
Fund expenses (2)
(454)
(520)
(1,759)
(2,035)
Direct payouts
(1,124)
(824)
(4,116)
(3,520)
Carried interest and performance fees
2,310
253
7,118
641
Carried interest and performance fee payouts - internal
(752)
(108)
(1,003)
(344)
Net fees
7,476
5,166
28,251
21,834
Gain (loss) on investments
(606)
2,359
2,529
907
Co-investment income
52
—
145
281
Finance income (2)
133
60
355
223
Total net revenues
7,055
7,585
31,280
23,245
Net compensation
3,396
3,139
13,647
12,976
Severance, new hire accruals and other
100
95
158
607
SG&A (2)
1,290
1,102
4,888
4,396
SG&A recoveries from funds (1)
(280)
(241)
(1,046)
(1,036)
Interest expense
143
333
982
1,470
Depreciation and amortization
96
139
378
483
Foreign exchange (gain) loss (2)
(1,421)
122
(1,375)
77
Other (income) and expenses (2)
—
—
—
314
Total expenses
3,324
4,689
17,632
19,287
Income before income taxes
3,731
2,896
13,648
3,958
Adjusted base EBITDA
2,136
1,601
7,363
7,756
Adjusted base EBITDA margin (3)
35 %
32 %
33 %
35 %
Total AUM
2,872,973
2,874,049
2,872,973
2,874,049
Average AUM
3,208,676
2,709,385
3,024,080
2,799,403
(1) See footnote 1 of the summary financial information table on page 21 of the MD&A.
(2) See footnote 2 of the summary financial information table on page 21 of the MD&A.
(3) Prior year figures have been revised to remove the adjustment of depreciation and amortization.
3 and 12 months ended
Income before income taxes was $3.7 million for the quarter, up 29% from $2.9 million for the quarter ended December 31,
2023 and was $13.6 million on a full-year basis, up from $4 million for the year ended December 31, 2023. Our earnings in the
quarter and on a full-year basis benefited from carried interest and performance fee crystallization in certain funds and higher
management fees on higher average AUM.
Adjusted base EBITDA was $2.1 million for the quarter, up 33% from $1.6 million for the quarter ended December 31, 2023
and was $7.4 million on a full-year basis, down 5% from $7.8 million for the year ended December 31, 2023. Adjusted base
EBITDA in the quarter benefited from higher management fees on higher average AUM. On a full-year basis, our results were
negatively impacted by higher SG&A from increased professional services costs.
26
Private strategies
3 months ended
12 months ended
(In thousands $)
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2024
Dec. 31, 2023
Summary income statement
Management fees
4,794
5,304
19,579
21,290
Fund expenses
(159)
(35)
(311)
(172)
Direct payouts
(437)
(459)
(1,797)
(1,764)
Carried interest and performance fees
201
250
201
250
Carried interest and performance fee payouts - internal
(78)
(114)
(78)
(114)
Net fees
4,321
4,946
17,594
19,490
Finance income (1)
1,084
1,137
7,685
4,501
Gain (loss) on investments
303
212
359
2,142
Total net revenues
5,708
6,295
25,638
26,133
Net compensation
2,329
2,500
10,682
9,917
Severance, new hire accruals and other
—
—
—
54
SG&A
589
356
2,144
1,576
Interest expense
2
2
8
6
Depreciation and amortization
18
7
39
25
Foreign exchange (gain) loss (1)
(2,769)
1,138
(3,466)
1,213
Other (income) and expenses (1)
—
523
—
763
Total expenses
169
4,526
9,407
13,554
Income before income taxes
5,539
1,769
16,231
12,579
Adjusted base EBITDA
2,364
3,090
12,331
12,361
Adjusted base EBITDA margin (2)
45 %
52 %
49 %
52 %
Total AUM
2,320,314
2,661,129
2,320,314
2,661,129
Average AUM
2,360,763
2,629,472
2,515,967
2,410,451
(1) See footnote 2 of the summary financial information table on page 21 of the MD&A.
(2) Prior year figures have been revised to remove the adjustment of depreciation and amortization.
3 and 12 months ended
Income before income taxes was $5.5 million for the quarter, up from $1.8 million for the quarter ended December 31, 2023
and was $16.2 million on a full-year basis, up 29% from $12.6 million for the year ended December 31, 2023. Our earnings in
the quarter and on a full-year basis benefited from foreign exchange gains and income earned on the streaming syndication
activity in the second quarter.
Adjusted base EBITDA was $2.4 million for the quarter, down 23% from $3.1 million for the quarter ended December 31, 2023
and was $12.3 million on a full-year basis, down slightly from $12.4 million for the year ended December 31, 2023. Adjusted
base EBITDA in the quarter and on a full-year basis was impacted by lower management fees due to a combination of net
capital distributions and lower commitment fee earning assets, partially offset by higher finance income earned on streaming
syndication activity in the second quarter.
27
Corporate
This segment is a cost center that provides capital, balance sheet management and shared services to the Company's subsidiaries.
3 months ended
12 months ended
(In thousands $)
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2024
Dec. 31, 2023
Summary income statement
Gain (loss) on investments
(233)
(296)
(469)
(321)
Finance income (1)
27
39
85
123
Total revenues
(206)
(257)
(384)
(198)
Net compensation (1)
6,259
5,681
23,848
20,950
Severance, new hire accruals and other
66
23
66
4,746
SG&A
1,012
659
3,942
2,486
Interest expense
178
33
753
127
Depreciation and amortization
448
462
1,658
1,759
Foreign exchange (gain) loss (1)
3,138
(287)
4,811
1,631
Other (income) and expenses (1)
—
631
—
2,077
Total expenses
11,101
7,202
35,078
33,776
Income (loss) before income taxes
(11,307)
(7,459)
(35,462)
(33,974)
Adjusted base EBITDA
(3,554)
(2,954)
(14,098)
(11,047)
(1) See footnote 2 of the summary financial information table on page 21 of the MD&A.
3 and 12 months ended
•
Net compensation was higher primarily due to increased AIP accruals on higher net fee generation.
•
Severance and other expenses were nominal in the quarter and on a full-year basis.
•
SG&A was higher primarily due to increased technology and professional services costs.
28
Dividends
The following dividends were declared by the Company during the last three years:
Record date
Payment date
Cash dividend
per share
Total dividend
amount (in
thousands $)
November 18, 2024 - Regular dividend Q3 2024
December 3, 2024
$0.30
7,749
August 19, 2024 - Regular dividend Q2 2024
September 3, 2024
$0.25
6,466
May 21, 2024 - Regular dividend Q1 2024
June 5, 2024
$0.25
6,466
March 4, 2024 - Regular dividend Q4 2023
March 19, 2024
$0.25
6,466
Dividends declared in 2024 (1)
27,147
November 13, 2023 - Regular dividend Q3 2023
November 28, 2023
$0.25
6,458
August 21, 2023 - Regular dividend Q2 2023
September 5, 2023
$0.25
6,467
May 15, 2023 - Regular dividend Q1 2023
May 30, 2023
$0.25
6,482
March 6, 2023 - Regular dividend Q4 2022
March 21, 2023
$0.25
6,489
Dividends declared in 2023
25,896
November 14, 2022 - Regular dividend Q3 2022
November 29, 2022
$0.25
6,480
August 12, 2022 - Regular dividend Q2 2022
August 29, 2022
$0.25
6,484
May 16, 2022 - Regular dividend Q1 2022
May 31, 2022
$0.25
6,500
March 7, 2022 - Regular dividend Q4 2021
March 22, 2022
$0.25
6,467
Dividends declared in 2022
25,931
(1) Subsequent to year end, on February 25, 2025, a regular dividend of $0.30 per common share was declared for the quarter ended December 31, 2024. This dividend is payable on March 25, 2025
to shareholders of record at the close of business on March 10, 2025.
Capital stock
Total capital stock issued and outstanding was 25.8 million (December 31, 2023 - 25.9 million). The decrease in the period was
due to the repurchase and cancellation of 48,182 shares through the normal course issuer bid. As at December 31, 2024, no
unvested shares were held in the EPSP Trust (December 31, 2023 - 0.5 million).
Earnings per share for the current and prior period have been calculated using the weighted average number of shares
outstanding during the respective periods. Basic earnings per share was $0.46 for the quarter and $1.94 on a full-year basis
compared to $0.38 and $1.66 in the prior periods, respectively. Diluted earnings per share was $0.45 for the quarter and $1.91
on a full-year basis compared to $0.37 and $1.60 for the prior periods, respectively. Diluted earnings per share reflects the
dilutive effect of in-the-money stock options, unvested shares held in the EPSP Trust and outstanding restricted stock units.
A total of 12,500 stock options are outstanding pursuant to our stock option plan with 1.4 years remaining on their contractual
life, all of which are exercisable.
29
Liquidity and capital resources
As at December 31, 2024, the Company had $46.8 million (December 31, 2023 - $20.7 million) of cash and cash equivalents.
In addition, the Company had $72.8 million of co-investments (December 31, 2023 - $93.5 million) of which $23.8 million
(December 31, 2023 - $39.5 million) can be monetized in less than 90 days (liquid co-investments).
As at December 31, 2024, the Company had $nil (December 31, 2023 - $24.2 million) outstanding on its credit facility, which
matures on August 8, 2028. As at December 31, 2024, the Company was in compliance with all covenants, terms and
conditions under the credit facility.
The Company has access to a credit facility of $75 million with a major Canadian schedule I chartered bank. Amounts under the
facility may be borrowed in U.S. dollars through SOFR or base rate loans. Amounts may also be borrowed in Canadian dollars
through prime rate loans or CORRA loans.
Key terms under the current credit facility are noted below:
Structure
•
5-year, $75 million revolver with "bullet maturity" August 8, 2028
Interest rate
•
SOFR + 2.33%
Covenant terms
•
Minimum AUM: CAD$15.4 billion;
•
Debt to EBITDA less than or equal to 2.5:1; and
•
EBITDA to interest expense more than or equal to 2.5:1
Commitments
The Company has commitments to make co-investments in private strategies LPs or commitments to make co-investments in
fund strategies in the Company's other segments. As at December 31, 2024, the Company had $5.2 million in co-investment
commitments in private strategies LPs due within one year (December 31, 2023 - $4 million) and $1.5 million due after 12
months (December 31, 2023 - $1.9 million).
The following are the remaining contractual maturities of financial liabilities as at December 31, 2024 (in thousands $):
Contractual obligations
Carrying
Amount
Less
than
1 year
1-3
years
4-5
years
More
than
5 years
Operating accounts payable
6,418
6,418
—
—
—
Compensation payable
11,829
11,829
—
—
—
Lease obligation
10,211
1,097
2,306
1,915
4,893
Total contractual obligations
28,458
19,344
2,306
1,915
4,893
30
Critical accounting estimates and significant judgments
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are described below. The
Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing
circumstances and assumptions about future developments may change due to market changes or circumstances arising beyond
the control of the Company. Such changes are reflected in the assumptions and estimates as they occur. The Company’s
material accounting policy information are described in Note 2 of the December 31, 2024 audited annual financial statements.
Certain of these accounting policies require management to make key assumptions concerning the future and consider other
sources of estimation uncertainty at the reporting date. These accounting estimates are considered critical because they require
subjective and/or complex judgments that may have a material impact on the value of our assets, liabilities, revenues and
expenses.
Critical accounting estimates
Impairment of goodwill and intangible assets
All indefinite life intangible assets and goodwill are assessed for impairment annually. This annual test for impairment augments
the quarterly impairment indicator assessments. Values associated with goodwill and intangibles involve estimates and
assumptions, including those with respect to future cash inflows and outflows, discount rates, AUM and asset lives. These
estimates require significant judgment regarding market growth rates, fund flow assumptions, expected margins and costs,
which could affect the Company's future results if estimates of future performance and fair value change.
Fair value of financial instruments
When the fair value of financial assets and financial liabilities recorded in the consolidated balance sheets cannot be derived
from active markets, they are determined using valuation techniques and models. Model inputs are taken from observable
markets where possible, but where this is not feasible, unobservable inputs may be used. These unobservable inputs include,
but are not limited to, projected cash flows, discount rates, comparable recent transactions and volatility of underlying securities
in warrant valuations. The use of unobservable inputs can involve significant judgment and materially affect the reported fair
value of financial instruments.
Significant judgments
Investments in other entities
IFRS 10 Consolidated Financial Statements ("IFRS 10") and IAS 28 Investments in Associates and Joint Ventures ("IAS 28")
provide for the use of judgment in determining whether an investee should be included within the consolidated financial
statements of the Company and on what basis (subsidiary, joint venture, financial instrument or associate). Significant judgment
is applied in evaluating facts and circumstances relevant to the Company and investee, including: (1) the extent of the
Company's direct and indirect interest in the investee; (2) the level of compensation to be received from the investee for
management and other services provided to it; (3) "kick out rights" available to other investors in the investee; and (4) other
indicators of the extent of power that the Company has over the investee.
31
Managing financial risks
Market risk
The Company separates market risk into three categories: price risk, interest rate risk and foreign currency risk.
Price risk
Price risk arises from the possibility that changes in the price of the Company's on and off-balance sheet assets and liabilities
will result in changes in carrying value or recoverable amounts. The Company's revenues are also exposed to price risk since
management fees, carried interest and performance fees are correlated with AUM, which fluctuates with changes in the market
values of the assets in the funds and managed accounts managed by the Company.
Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will adversely affect the value of, or cash flows from,
financial assets and liabilities. The Company’s earnings, particularly through its private strategies segment, are exposed to
volatility as a result of sudden changes in interest rates. Management takes into account a number of factors and is committed
to several processes to ensure that this risk is appropriately managed.
Foreign currency risk
The Company enters into transactions that are denominated primarily in U.S. and Canadian dollars. Foreign currency risk arises
from foreign exchange rate movements that could negatively impact the liquidity of the company as determined at the
transactional currency level.
Credit risk
Credit risk is the risk that a borrower will not honor its commitments and a loss to the Company may result. Credit risk generally
arises in the Company's investments portfolio.
Investments
The Company incurs credit risk when entering into, settling and financing transactions with counterparties. Management takes
into account a number of factors and is committed to several processes to ensure that this risk is appropriately managed.
Other
The majority of receivables relate to management fees, carried interest and performance fees receivable from the funds and
managed accounts managed by the Company. These receivables are short-term in nature and any credit risk associated with
them is managed by dealing with counterparties that the Company believes to be creditworthy and by actively monitoring credit
exposure and the financial health of the counterparties.
Liquidity risk
Liquidity risk is the risk that the Company cannot meet a demand for cash or fund its obligations as they come due. The
Company's exposure to liquidity risk is minimal as it maintains sufficient levels of liquid assets to meet its obligations as they
come due. The Company has $46.8 million (December 31, 2023 - $20.7 million) of cash and cash equivalents. In addition, the
Company has $72.8 million of co-investments (December 31, 2023 - $93.5 million), of which $23.8 million (December 31, 2023
- $39.5 million) can be monetized in less than 90 days (liquid co-investments). The Company also has access to a credit facility
of $75 million with a major Canadian schedule I chartered bank.
32
The Company's exposure to liquidity risk as it relates to our co-investments in private strategies LPs arises from fluctuations in
cash flows from making capital calls and receiving capital distributions. The Company manages its co-investment liquidity risk
through the ongoing monitoring of scheduled capital calls and distributions ("match funding") and through its broader treasury
risk management program and enterprise capital budgeting.
Financial liabilities, including accounts payable and accrued liabilities and compensation payable, are short-term in nature and
are generally due within a year.
The Company's management team is responsible for reviewing resources to ensure funds are readily available to meet its
financial obligations as they come due and ensuring adequate funds exist to support business strategies and operations growth.
The Company manages liquidity risk by monitoring cash balances on a daily basis and through its broader treasury risk
management program. To meet any liquidity shortfalls, actions taken by the Company could include but are not limited to:
drawing on the line of credit; slowing its co-investment activities; liquidating investments; and adjusting or otherwise
temporarily suspending AIPs.
Concentration risk
A significant portion of the Company's AUM and its investments are focused on the natural resource sector, and in particular,
precious metals and critical materials related investments and transactions. In addition, from time-to-time, certain investments
may be concentrated to a material degree in a single position or group of positions. Management takes into account a number
of factors and is committed to several processes to ensure that this risk is appropriately managed.
Disclosure controls and procedures ("DC&P") and internal control over financial
reporting ("ICFR")
Management is responsible for the design and operational effectiveness of DC&P and ICFR in order to provide reasonable
assurance regarding the disclosure of material information relating to the Company. This includes information required to be
disclosed in the Company's annual filings, interim filings and other reports filed under securities legislation, as well as
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.
Our chief executive officer and chief financial officer, after evaluating the effectiveness of our DC&P and ICFR (as defined in the
applicable U.S. and Canadian securities laws), concluded that the Company's DC&P and ICFR were properly designed and were
operating effectively as at December 31, 2024. In addition, there were no material changes to ICFR during the quarter.
Managing non-financial risks
Confidentiality of information
Confidentiality is essential to the success of the Company's business, and it strives to consistently maintain the highest
standards of trust, integrity and professionalism. Account information is kept under strict control in compliance with all
applicable laws, and physical, procedural, and electronic safeguards are maintained in order to protect this information from
access by unauthorized parties. The Company keeps the affairs of its clients confidential and does not disclose the identities of
clients (absent expressed client consent to do so). If a prospective client requests a reference, the Company will not provide the
name of an existing client before receiving permission from that client to do so.
Conflicts of interest
The Company established a number of policies with respect to employee personal trading. Employees may not trade any of the
securities held or being considered for investment by any of the Company's funds without prior approval. In addition, employees
must receive prior approval before they are permitted to buy or sell securities. Speculative trading is strongly discouraged. All
employees must comply with the Company's Code of Ethics. The code establishes strict rules for professional conduct including
the management of conflicts of interest.
33
Independent review committee
National Instrument 81-107 - Independent Review Committee for Investment Funds (“NI 81-107”) requires all publicly offered
investment funds in Canada to establish an independent review committee ("IRC") to whom all conflicts of interest matters
must be referred for review and approval. The Company established an IRC for its Canadian public funds. As required by NI
81-107, the Company established written policies and procedures for dealing with conflict of interest matters and maintains
records in respect of these matters and provides assistance to the IRC in carrying out its functions. The IRC is comprised of three
independent members, and is subject to requirements to conduct regular assessments and provide reports to the Company and
to the holders of interests in public funds in respect of its functions.
Insurance
The Company maintains appropriate insurance coverage for general business and liability risks as well as insurance coverage
required by regulation. Insurance coverage is reviewed periodically to ensure continued adequacy.
Internal controls and procedures
Several of the Company's subsidiaries operate in regulated environments and are subject to business conduct rules and other
rules and regulations. The Company has internal control policies related to business conduct. They include controls required to
ensure compliance with the rules and regulations of relevant regulatory bodies including the OSC, the Canadian Investment
Regulatory Organization, FINRA and the U.S. Securities and Exchange Commission ("SEC").
Enterprise risk management
The starting point to any enterprise risk management program (“ERM”) is the articulation of a risk appetite, which is the
amount and types of risk we are willing to accept in our pursuit of business objectives. A company’s risk appetite is the bedrock
upon which an ERM framework is established.
Our risk appetite is primarily based on specific regulatory and legal environment considerations, general corporate sustainability
responsibilities, the need for sound capital adequacy and treasury management processes, the preservation of its positive
reputation among current and future stakeholders, the natural expectation of its shareholders that it takes appropriate and
reasonable levels of risk in its various business segments to maximize shareholder returns and its overall desire to be good
corporate citizens as part of its organizational culture and core values. The aforementioned considerations formed the basis for
our risk appetite statements noted below:
•
Regardless of loss probability, we will only accept inherent or residual risks that we have a proven, demonstrable ability
to understand, diligently manage on an ongoing basis and thoroughly consider and balance relative to the outcomes;
and
•
Our risk appetite is low around any actions or inactions that could materially jeopardize the Company’s reputation,
purpose and values or commitment to its stakeholders. Furthermore, at no point would we ever accept existential
inherent or residual risks, regardless of loss probability or profit upside.
The ERM process involves a comprehensive drill down through the organization to its constituent parts to identify all salient risks
and evaluate them through the lens of our risk appetite. The following is a summary of the ERM steps used to filter
organizational risks through our risk appetite:
•
Identify all major processes within each business segment (and enterprise shared services function supporting them);
•
Identify materially relevant inherent risks (both quantitative and qualitative), that may arise in each major process area;
•
Rate each inherent risk (in the absence of internal controls) based on the degree of event probability and impact to the
organization;
34
•
Determine our risk tolerance for each inherent risk previously identified and rated;
•
Identify internal controls in place (or needed) to mitigate the inherent risks down to the appropriate “residual
level” (i.e. determine the post-controls risk rating and compare it to our predetermined risk tolerance level). We stratify
our internal controls universe using the “three lines of defense” approach recommended by the Institute of Internal
Auditors prior to evaluating the effectiveness of internal controls;
•
Compare all residual risk ratings to their corresponding risk tolerance level to ensure the risk is being appropriately
managed (i.e. there are a sufficient number of, and appropriate types of, internal controls in place to manage the risk
in light of our risk tolerance), and if not, take further action; and
•
Test, document and report on the effectiveness of the ERM program in managing risks within the boundaries of our risk
appetite.
Additional information relating to the Company, including the Company's Annual Information Form is available on EDGAR at www.sec.gov and SEDAR+ at www.sedarplus.com.
35
Financial Statements & Notes
SPROTT
2024 Annual Report
36
Management's responsibility for financial reporting
The accompanying consolidated financial statements, which consolidate the financial results of Sprott Inc. (the "Company"),
were prepared by management, who are responsible for the integrity and fairness of all information presented in the
consolidated financial statements and management's discussion and analysis ("MD&A") for the years ended December 31,
2024 and 2023. The consolidated financial statements were prepared by management in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board. Financial information presented in the
MD&A is consistent with that in the consolidated financial statements.
In management's opinion, the consolidated financial statements have been properly prepared within reasonable limits of
materiality and within the framework of the material accounting policy information summarized in Note 2 of the consolidated
financial statements. Management maintains a system of internal controls to meet its responsibilities for the integrity of the
consolidated financial statements.
The board of directors of the Company appoints the Company's audit and risk management committee annually. Among other
things, the mandate of the audit & risk management committee includes the review of the consolidated financial statements of
the Company on a quarterly basis and the recommendation to the board of directors for approval. The audit & risk management
committee has access to management and the auditors to review their activities and to discuss the external audit program,
internal controls, accounting policies and financial reporting matters.
KPMG LLP performed an independent audit of the consolidated financial statements, as outlined in the auditor's report
contained herein. KPMG LLP had, and has, full and unrestricted access to management of the Company, the audit & risk
management committee and the board of directors to discuss their audit and related findings and have the right to request a
meeting in the absence of management at any time.
Whitney George
Kevin Hibbert, FCPA, FCA
Chief Executive Officer
Chief Financial Officer and Senior Managing Partner
February 25, 2025
37
Management's responsibility for financial controls
The management of Sprott Inc. (the “Company”) is responsible for establishing and maintaining adequate internal control over
financial reporting, and has designed such internal control over financial reporting to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
International Financial Reporting Standards as issued by the International Accounting Standards Board.
Management has used the Internal Control – Integrated Framework (2013) to evaluate the effectiveness of internal control over
financial reporting, which is a recognized and suitable framework developed by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO).
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management has evaluated the design and operation of the Company's internal control over financial reporting as of December
31, 2024, and has concluded that such internal control over financial reporting is effective. There are no material weaknesses
that have been identified by management in this regard.
KPMG LLP, the independent auditors appointed by the shareholders of the Company, who have audited the consolidated
financial statements, have also audited internal control over financial reporting and have issued their report below.
Whitney George
Kevin Hibbert, FCPA, FCA
Chief Executive Officer
Chief Financial Officer and Senior Managing Partner
February 25, 2025
38
KPMG LLP
Bay Adelaide Centre
333 Bay Street, Suite 4600
Toronto, ON M5H 2S5
Canada
Tel 416-777-8500
Fax 416-777-8818
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Sprott Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Sprott Inc. and its subsidiaries
(the Company) as of December 31, 2024 and 2023, the related consolidated statements of
operations and comprehensive income, changes in shareholders’ equity, and cash flows for the
years then ended, and the related notes (collectively, the consolidated financial statements). In our
opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2024 and 2023, and its financial performance and its
cash flows for the years then ended, in conformity with International Financial Reporting Standards
as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting
as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and
our report dated February 25, 2025 expressed an unqualified opinion on the effectiveness of the
Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these consolidated financial statements based on our
audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
© 2025 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
39
We conducted our audits in accordance with the standards of the PCAOB. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. Our audits
included performing procedures to assess the risks of material misstatement of the consolidated
financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the consolidated financial statements. We believe that our audits provide
a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the
consolidated financial statements that was communicated or required to be communicated to the
audit and risk management committee and that: (1) relates to accounts or disclosures that are
material to the consolidated financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of a critical audit matter does not alter in any
way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit
matter or on the accounts or disclosures to which they relate.
Valuation of indefinite life fund management contracts
As discussed in note 2 to the consolidated financial statements, an annual test for impairment
augments the quarterly impairment indicator assessment of impairment for indefinite life intangibles.
The recoverable amounts associated with intangibles involve estimates and assumptions, including
those with respect to future cash inflows and outflows, discount rates and asset lives, and are
determined using the value-in-use method. These estimates require significant judgment regarding
market growth rates, discount rates, fund flow assumptions, expected margins and costs which
could affect the Company’s future results. As discussed in note 9 to the consolidated financial
statements, the Company’s indefinite life fund management contracts totaled $168,254 thousand as
of December 31, 2024.
We identified the assessment of the recoverable amounts of the indefinite-life fund management
contracts as a critical audit matter. A higher degree of auditor judgment was required to evaluate the
significant assumptions, which were determined to be maket growth rates, fund flow assumptions
and discount rates, used in determining the recoverable amounts. The sensitivity of reasonably
possible changes to those assumptions could have had a significant impact on the determination of
the recoverable amounts of the indefinite-life fund management contracts.
40
The following are the primary procedures we performed to address this critical audit matter. We
evaluated the design and tested the operating effectiveness of certain internal controls related to
the Company’s impairment testing process, including controls over the development of the
significant assumptions. We evaluated the Company’s ability to forecast fund flows by comparing
historical forecasts to actual results. We evaluated the forecasted fund flows and market growth
rates by considering external market and industry outlook data.
We involved valuation professionals with specialized skills and knowledge, who assisted in:
–
assessing the discount rates used by management by comparing against discount rate ranges
that were developed using publicly available market data and independently developed
assumptions; and
–
assessing the recoverable amounts determined by management using the forecasted fund
flows, market growth rates and discount rates by comparing the implied assets under
management (“AUM”) multiple against publicly available AUM multiples for comparable
companies.
Chartered Professional Accountants, Licensed Public Accountants
We have served as the Company’s auditor since 2016.
Toronto, Canada
February 25, 2025
41
KPMG LLP
Bay Adelaide Centre
333 Bay Street, Suite 4600
Toronto, ON M5H 2S5
Canada
Tel 416-777-8500
Fax 416-777-8818
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors Sprott Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Sprott Inc. and its subsidiaries’ (the Company) internal control over financial
reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission. In our opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2024, based on criteria established in Internal
Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of
December 31, 2024 and 2023, the related consolidated statements of operations and
comprehensive income, shareholders’ equity, and cash flows for the years then ended, and the
related notes (collectively, the consolidated financial statements), and our report dated February 25,
2025 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting,
included in the accompanying Management’s Responsibility for Internal Controls. Our responsibility
is to express an opinion on the Company’s internal control over financial reporting based on our
audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
© 2025 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
42
We conducted our audit in accordance with the standards of the PCAOB. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material respects. Our audit of internal control
over financial reporting included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. Our audit also included
performing such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles. A company’s
internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Canada
February 25, 2025
43
Consolidated balance sheets
As at
Dec. 31
Dec. 31
(In thousands of U.S. dollars)
2024
2023
Assets
Current
Cash and cash equivalents
46,834
20,658
Fees receivable
15,393
7,481
Short-term investments (1)
(Notes 3 & 12)
225
754
Other assets
(Note 5)
14,657
13,496
Income taxes recoverable
2,079
1,189
Total current assets
79,188
43,578
Co-investments
(Notes 4 & 12)
72,848
93,528
Other assets (1)
(Notes 5 & 12)
27,279
25,769
Property and equipment, net
(Note 8)
19,185
10,856
Intangible assets
(Note 9)
168,254
182,902
Goodwill
(Note 9)
19,149
19,149
Deferred income taxes
(Note 11)
2,895
3,053
309,610
335,257
Total assets
388,798
378,835
Liabilities and shareholders' equity
Current
Accounts payable and accrued liabilities
7,605
12,647
Compensation payable
11,829
7,822
Income taxes payable
10,844
980
Total current liabilities
30,278
21,449
Other accrued liabilities
22,958
16,637
Loan facility
(Note 17)
—
24,237
Deferred income taxes
(Note 11)
11,914
10,807
Total liabilities
65,150
73,130
Shareholders' equity
Capital stock
(Note 10)
450,127
434,764
Contributed surplus
(Note 10)
36,267
35,281
Deficit
(67,255)
(89,402)
Accumulated other comprehensive loss
(95,491)
(74,938)
Total shareholders' equity
323,648
305,705
Total liabilities and shareholders' equity
388,798
378,835
Commitments and provisions
(Note 18)
(1) Prior period figures have been reclassified to conform with current presentation
The accompanying notes form part of the consolidated financial statements
"Ron Dewhurst"
"Graham Birch"
Director
Director
44
Consolidated statements of operations and comprehensive income
For the years ended
Dec. 31
Dec. 31
(In thousands of U.S. dollars, except for per share amounts)
2024
2023
Revenues
Management fees
155,337
132,257
Carried interest and performance fees
7,319
891
Commissions
5,696
8,301
Finance income (1)
8,909
6,491
Gain (loss) on investments
(Notes 3, 4 and 5)
(10)
1,375
Co-investment income (1)
(Note 6)
1,404
2,052
Total revenues
178,655
151,367
Expenses
Compensation (1)
(Note 10)
75,399
75,059
Fund expenses (1)
12,132
8,808
Selling, general and administrative (1)
18,774
16,558
Interest expense
3,091
4,060
Depreciation of property and equipment
2,221
2,843
Foreign exchange (gain) loss (1)
(1,388)
3,212
Other (income) and expenses (1)
(Note 7)
(580)
(9,464)
Total expenses
109,649
101,076
Income before income taxes for the year
69,006
50,291
Provision for income taxes
(Note 11)
19,712
8,492
Net income for the year
49,294
41,799
Net income per share:
Basic
(Note 10)
1.94
1.66
Diluted
(Note 10)
1.91
1.60
Net income for the year
49,294
41,799
Other comprehensive income (loss)
Items that may be reclassified subsequently to profit or loss
Foreign currency translation gain (loss) (taxes of $Nil)
(20,553)
4,677
Total other comprehensive income (loss)
(20,553)
4,677
Comprehensive income (loss)
28,741
46,476
(1) Prior period figures have been reclassified to conform with current presentation
The accompanying notes form part of the consolidated financial statements
45
Consolidated statements of changes in shareholders' equity
(In thousands of U.S. dollars, other than number of shares)
Number of
shares
outstanding
Capital
stock
Contributed
surplus
Deficit
Accumulated
other
comprehensive
income (loss)
Total
equity
At Dec. 31, 2023
25,410,151
434,764
35,281
(89,402)
(74,938)
305,705
Shares acquired for equity incentive plan
(Note 10)
(26,321)
(963)
—
—
—
(963)
Shares issued and released on equity incentive plans
(Note 10)
479,211
18,348
(16,628)
—
—
1,720
Shares acquired and canceled under normal course issuer bid
(Note 10)
(48,182)
(2,022)
—
—
—
(2,022)
Foreign currency translation gain (loss)
—
—
—
—
(20,553)
(20,553)
Stock-based compensation
(Note 10)
—
—
17,614
—
—
17,614
Dividends declared
(Note 14)
—
—
—
(27,147)
—
(27,147)
Net income
—
—
—
49,294
—
49,294
Balance, Dec. 31, 2024
25,814,859
450,127
36,267
(67,255)
(95,491)
323,648
At Dec. 31, 2022
25,325,894
428,475
33,716 (105,305)
(79,615)
277,271
Shares acquired for equity incentive plan
(Note 10)
(154,131)
(5,252)
—
—
—
(5,252)
Shares issued and released on equity incentive plans
(Note 10)
363,352
15,649
(18,846)
—
—
(3,197)
Shares acquired and canceled under normal course issuer bid
(Note 10)
(126,353)
(4,157)
—
—
—
(4,157)
Foreign currency translation gain (loss)
—
—
—
—
4,677
4,677
Stock-based compensation
(Note 10)
—
—
20,411
—
—
20,411
Dividends declared
1,389
49
—
(25,896)
—
(25,847)
Net income
—
—
—
41,799
—
41,799
Balance, Dec. 31, 2023
25,410,151
434,764
35,281
(89,402)
(74,938)
305,705
The accompanying notes form part of the consolidated financial statements
46
Consolidated statements of cash flows
For the years ended
Dec. 31
Dec. 31
(In thousands of U.S. dollars)
2024
2023
Operating activities
Net income for the year
49,294
41,799
Add (deduct) non-cash items:
(Gain) loss on investments
10
(1,375)
Stock-based compensation
17,614
20,411
Depreciation of property and equipment
2,221
2,843
Deferred income tax expense
1,971
1,002
Current income tax expense
17,741
7,490
Other items
(2,576)
(6,961)
Shares received on recognition of a previously unrecorded contingent asset
—
(18,588)
Income taxes paid
(8,374)
(8,133)
Changes in:
Fees receivable
(7,912)
884
Other assets
(5,060)
(5,144)
Accounts payable, accrued liabilities and compensation payable
4,223
(4,367)
Cash provided by (used in) operating activities
69,152
29,861
Investing activities
Purchase of investments
(13,405)
(25,474)
Sale of investments
43,694
27,033
Purchase of property and equipment
(1,868)
(1,535)
Proceeds received on exit of non-core businesses
—
4,583
Management contract consideration
(3,906)
—
Cash provided by (used in) investing activities
24,515
4,607
Financing activities
Acquisition of common shares for equity incentive plan
(963)
(5,252)
Acquisition of common shares under normal course issuer bid
(2,022)
(4,157)
Repayment of lease liabilities
(1,342)
(2,224)
Contributions from non-controlling interest
(1,462)
4,216
Advances from loan facility
6,440
—
Repayments of loan facility
(30,677)
(30,200)
Dividends paid
(27,147)
(25,847)
Cash provided by (used in) financing activities
(57,173)
(63,464)
Effect of foreign exchange on cash balances
(10,318)
(2,024)
Net increase (decrease) in cash and cash equivalents during the year
26,176
(31,020)
Cash and cash equivalents, beginning of the year
20,658
51,678
Cash and cash equivalents, end of the year
46,834
20,658
Cash and cash equivalents:
Cash
43,214
20,658
Short-term deposits
3,620
—
46,834
20,658
The accompanying notes form part of the consolidated financial statements
47
1 Corporate information
Sprott Inc. (the "Company") was incorporated under the Business Corporations Act (Ontario) on February 13, 2008. Its
registered office is at Royal Bank Plaza, South Tower, 200 Bay Street, Suite 2600, Toronto, Ontario M5J 2J1.
2 Summary of material accounting policy information
Statement of compliance
These annual audited consolidated financial statements for the years ended December 31, 2024 and 2023 ("financial
statements") have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by
the International Accounting Standards Board ("IASB").
They have been authorized for issue by a resolution of the board of directors of the Company on February 25, 2025 and
include all subsequent events up to that date.
Basis of presentation
These financial statements have been prepared on a going concern basis and on a historical cost basis, except for
certain financial instruments classified as fair value through profit or loss ("FVTPL") and which are measured at fair
value to the extent required or permitted under IFRS and as set out in the relevant accounting policies. The financial
statements are presented in U.S. dollars and all values are rounded to the nearest thousand ($000), except when
indicated otherwise.
Principles of consolidation
These financial statements of the Company are prepared on a consolidated basis so as to include the accounts of all
limited partnerships and corporations the Company is deemed to control under IFRS. Controlled limited partnerships and
corporations ("subsidiaries") are consolidated from the date the Company obtains control. All intercompany balances
with subsidiaries are eliminated upon consolidation. Subsidiary financial statements are prepared for the same reporting
period as the Company and are based on accounting policies consistent with that of the Company.
The Company consolidates interest in its funds or subsidiaries if the Company has control over the entity. Control exists
if the Company has power over the entity, exposure or rights to variable returns from its involvement with the entity and
the ability to use its power over the entity to affect the amount of returns the Company receives. In many, but not all
instances, control will exist when the Company owns more than one half of the voting rights of a corporation, or is the
sole limited and general partner of a limited partnership.
The Company records third-party interest in the funds which do not qualify to be equity due to redeemable or limited life
features, as non-controlling interest liabilities. Such interests are initially recognized at fair value, with any changes
recorded in the co-investment income line of the consolidated statements of operations and comprehensive income.
The Company currently controls the following principal subsidiaries:
•
Sprott Asset Management LP ("SAM");
•
Sprott U.S. Holdings Inc. ("SUSHI"), parent of: (1) SGRIL Holdings Inc. ("SGRIL Holdings"); (2) Sprott Global
Resource Investments Ltd. ("SGRIL"); (3) Sprott Asset Management USA Inc. ("SAM US"); and (4) Resource
Capital Investment Corporation ("RCIC"). Collectively, the interests of SUSHI are referred to as "US entities"
in these financial statements;
•
Sprott Resource Streaming and Royalty Corporation and Sprott Private Resource Streaming and Royalty
(Management) Corp. ("SRSR");
•
Sprott Resource Lending Corp. ("SRLC"); and
•
Sprott Inc. 2011 Employee Profit Sharing Plan Trust (the "Trust").
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
48
Cash and cash equivalents
Cash and cash equivalents consist of cash on deposit with banks and with carrying brokers, which are not subject to
restrictions, and short-term interest bearing notes and treasury bills with a term to maturity of less than three months
from the date of purchase.
Investments
Investments include equity kickers received as consideration during private strategies, managed equities and broker-
dealer activities as well as investments in private companies and are measured at FVTPL.
Co-investments
Co-investments are investments the Company makes alongside clients of the various fund strategies it manages to
demonstrate the commitment and confidence the Company has in investment strategies that they promote and operate.
Included in co-investments are the Company's investment in the fund products previously managed by its non-core asset
management business domiciled in Korea.
Financial instruments
Classification and measurement of financial assets
Financial assets are measured on initial recognition at fair value, and are classified and subsequently measured at
FVTPL, amortized cost or fair value through other comprehensive income ("FVOCI").
Financial assets are measured at amortized cost if the contractual terms of the instrument give rise to cash flows that
are solely payments of principal and interest on the principal amount outstanding and it is held within a business model
whose objective is to hold assets to collect contractual cash flows.
All financial assets that are not measured at amortized cost or FVOCI are measured at FVTPL. This includes all derivative
financial assets the Company may hold.
Valuation of investments
Investments include public equities, share purchase warrants, mutual funds, private holdings and alternative investment
strategies, while co-investments are investments held in the funds managed or previously managed by the Company.
Public equities, share purchase warrants and fixed income securities are measured at fair value and are accounted for on
a trade-date basis. Mutual fund and alternative investment strategy investments which are included within Co-
investments are valued using the net asset value per unit of the fund, which represents the underlying net assets at fair
values determined using closing market prices. These investments are generally made in the process of launching a new
fund and are redeemed (if open-end) or sold (if closed-end) as third party investors subscribe. The balance represents
the Company's maximum exposure to loss associated with the investments. Private holdings include private company
investments which are classified as FVTPL and carried at fair value based on the value of the Company's interests from
financial information provided by management of the private companies, which may include operating results,
subsequent rounds of financing and other appropriate information. Any change in fair value is recognized in gain (loss)
on investments on the consolidated statements of operations and comprehensive income.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
49
Fair value hierarchy
All financial instruments recognized at fair value in the consolidated balance sheets are classified into three fair value
hierarchy levels as follows:
•
Level 1: valuation based on quoted prices (unadjusted) observed in active markets for identical assets or
liabilities;
•
Level 2: valuation techniques based on inputs that are quoted prices of similar instruments in active markets;
quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted
prices used in a valuation model that are observable for that instrument; and inputs that are derived from or
corroborated by observable market data by correlation or other means; and
•
Level 3: valuation techniques with significant unobservable market inputs.
The Company will transfer financial instruments into or out of levels in the fair value hierarchy on the reporting date to
the extent the instrument no longer satisfies the criteria for inclusion in the category in question. Level 3 valuations are
prepared by the Company and reviewed and approved by management at each reporting date. Valuation results,
including the appropriateness of model inputs, are compared to actual market transactions to the extent readily
available. Valuations of level 3 assets are also discussed with the Audit and Risk Management Committee as deemed
necessary by the Company.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount reported on the consolidated balance sheets if,
and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to
settle on a net basis, or to realize the assets and settle the liabilities simultaneously.
Impairment of financial assets
Expected credit losses are a probability-weighted estimate of future credit losses. Credit losses are measured as the
present value of the difference between the cash flows due to the Company in accordance with the contract and the
cash flows the Company expects to receive.
Recognition of income and related expenses
The Company receives variable consideration in the form of management fees, which are allocated to distinct time
periods in which the management services are being provided. Management fees are recognized when they are no
longer susceptible to market factors and no longer subject to a significant reversal in revenue.
The Company may also earn variable consideration in the form of carried interest and performance fees. These fees are
recognized when they are no longer susceptible to market factors or subject to significant reversal in revenue, which is
determined subject to agreements with the underlying funds. Carried interest and performance fee payments made in
advance of the recognition of revenue are capitalized as part of Other assets and expensed once the revenue criteria
above is met. The carried interest and performance fee prepaid asset is tested for impairment at each reporting date.
Commission income is recognized when the related services are rendered and no longer subject to a significant reversal
in revenue.
Finance income, which includes income distributions from private strategies LP units the Company holds and interest
income from cash on hand and brokerage client accounts, is recognized on an accrual basis using the effective interest
method. Under the effective interest method, the interest rate realized is not necessarily the same as the stated rate in
the loan or debenture documents. The effective interest rate is the rate required to discount the future value of all loan
or debenture cash flows to their present value and is adjusted for the receipt of cash and non-cash items in connection
with the loan.
Costs related to obtaining a contract with clients ("placement fees") are amortized on a systematic basis related to the
transfer of services to those clients.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
50
Costs incurred on behalf of investment products that are not recoverable are included in Fund expenses on the
statement of operations. Prior year figures were reclassified to include trading costs previously included within SG&A to
better reflect the nature of these expenses. Costs incurred on behalf of investment products that are recoverable are
included in Fund recoveries within Other assets.
Property and equipment
Property and equipment are recorded at cost and are amortized on either a straight-line or a declining balance basis
over the expected useful life which ranges from 1 to 5 years or in the case of leasehold improvements over the term of
the lease. Artwork is not amortized since it does not have a determinable useful life. The residual values, useful life and
methods of amortization for property and equipment are reviewed at each reporting date and adjusted prospectively, if
necessary. Any loss resulting from the impairment of property and equipment is expensed in the period the impairment
is identified.
Intangible assets
Intangible assets other than goodwill are recognized when they are separable or arise from contractual or other legal
rights, and have fair values that can be reliably measured.
Intangible assets that are purchased are measured at the acquisition date and include the fair value of considerations
transferred, and include an estimate for contingent consideration where applicable.
Intangible assets with indefinite useful lives are not amortized, but are assessed for impairment indicators at each
reporting date, or more frequently if changes in circumstances indicate that the carrying value is greater than its
recoverable amount. In addition to impairment indicator assessments, indefinite life intangibles must be tested annually
for impairment. The indefinite life of an intangible asset is reviewed annually to determine whether the indefinite life
continues to be supportable. If no longer supportable, changes in useful life from indefinite to finite are made
prospectively.
Any loss resulting from the impairment of intangible assets is expensed in the period the impairment is identified. Any
gain resulting from an impairment reversal of intangible assets is recognized in the period the impairment reversal is
identified but cannot exceed the carrying amount that would have been determined (net of amortization and
impairment) had no impairment loss been recognized for the intangible asset in prior periods.
Business combinations and goodwill
The purchase price of an acquisition accounted for under the acquisition method is allocated based on the fair values of
the net identifiable assets acquired. The excess of the purchase price over the fair values of such identifiable net assets is
recorded as goodwill.
Goodwill, which is measured at cost less any accumulated impairment losses, is not amortized, but rather, is assessed
for impairment indicators at each reporting date, or more frequently if changes in circumstances indicate that the
carrying value may be impaired. In addition to quarterly impairment indicator assessments, goodwill must be tested
annually for impairment. For the purpose of impairment testing, goodwill is allocated to each of the Company's cash
generating units ("CGUs") that are expected to benefit from the acquisition. The recoverable amount of a CGU is
compared to its carrying value plus any goodwill allocated to the CGU. If the recoverable amount of a CGU is less than
its carrying value plus allocated goodwill, an impairment charge is recognized, first against the carrying value of the
goodwill, with any remaining difference being applied against the carrying value of assets contained in the impacted
CGUs. Impairment losses on goodwill are recorded in the consolidated statements of operations and comprehensive
income and cannot be subsequently reversed.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
51
Income taxes
Income tax is comprised of current and deferred tax.
Income tax is recognized in the consolidated statements of operations and comprehensive income except to the extent
that it relates to items recognized directly in other comprehensive income or elsewhere in equity, in which case, the
related taxes are also recognized in other comprehensive income (loss) or elsewhere in equity.
Deferred taxes are recognized using the liability method for temporary differences that exist between the carrying
amounts of assets and liabilities in the consolidated balance sheets and the amounts attributed to such assets and
liabilities for tax purposes. Deferred tax assets and liabilities are determined based on the enacted or substantively
enacted tax rates that are expected to apply when the differences related to the assets or liabilities reported for tax
purposes are expected to reverse in the future. Deferred tax assets are recognized only when it is probable that sufficient
taxable profits will be available or taxable temporary differences reversing in future periods against which deductible
temporary differences may be utilized.
Deferred tax liabilities are not recognized on the following temporary differences:
• Temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss;
• Taxable temporary differences related to investments in subsidiaries, associates or joint ventures or joint
operations to the extent they are controlled by the Company and they will not reverse in the foreseeable
future; and
• Taxable temporary differences arising on the initial recognition of goodwill.
The Company records a provision for uncertain tax positions if it is probable that the Company will have to make a
payment to tax authorities upon their examination of a tax position. This provision is measured at the Company's best
estimate of the amount expected to be paid. Provisions are reversed to income in the period in which management
assesses they are no longer required or determined by statute.
The measurement of tax assets and liabilities requires an assessment of the potential tax consequences of items that can
only be resolved through agreement with the tax authorities. While the ultimate outcome of such tax audits and
discussions cannot be determined with certainty, management estimates the level of provisions required for both current
and deferred taxes.
Share-based payments
The Company uses the fair value method to account for equity settled share-based payments with employees and
directors. Compensation expense is determined using the Black-Scholes option valuation model for stock options.
Compensation expense for the share incentive program is determined based on the fair value of the benefit conferred on
the employee. Compensation expense for deferred stock units ("DSU") is determined based on the value of the
Company's common shares at the time of grant. Compensation expense related to the Company's employee incentive
plan is determined based on the value of the Company's common shares as of the grant date.
Compensation expense is recognized over the vesting period with a corresponding increase to contributed surplus other
than for the Company's DSUs where the corresponding increase is to liabilities. Compensation expense from DSU's are
included within Compensation on the statement of operations (previously included within Other expenses) to better
reflect the nature of these costs. Prior year figures have been reclassified. Stock options and common shares vest in
installments which may require a graded vesting methodology to account for these share-based awards. On the exercise
of stock options for shares, the contributed surplus previously recorded with respect to the exercised options and the
consideration paid is credited to capital stock. On the vesting of common shares, the contributed surplus previously
recorded is credited to capital stock. On the exercise of DSUs, the liability previously recorded is credited to cash.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
52
Earnings per share
Basic earnings per share are computed by dividing net income by the weighted average number of common shares
outstanding during the period.
Diluted earnings per share is computed by dividing net income by the weighted average number of common shares
outstanding during the period, after applying the treasury stock method to determine the dilutive impact, if any, of stock
options and unvested shares purchased for the Trust. The treasury stock method determines the number of incremental
common shares by assuming that the number of dilutive securities the Company has granted to employees have been
issued.
Lease commitments
The Company recognizes a right-of-use asset and a lease liability as at the lease commencement date. The right-of-use
asset is initially measured at cost and subsequently at cost less any accumulated depreciation and impairment. The lease
liability is initially measured at the present value of future lease payments over the anticipated lease term, discounted
using the Company's incremental borrowing rate. The right-of-use asset is presented in the property and equipment line
of the consolidated balance sheets and the short and long-term portions of the lease liability are presented in the
accounts payable and accrued liabilities line and other accrued liabilities line, respectively, of the consolidated balance
sheets. The Company used the practical expedient when applying IFRS 16, Leases for short-term leases under 12 months
and low-value assets such as IT equipment, with lease payments being expensed as they are incurred.
Foreign currency translation
Accounts in the financial statements of the Company's subsidiaries are measured using their functional currency, being
the currency of the primary economic environment in which the entity operates. The Canadian dollar is the functional
currency of the Company. The effects of foreign currency conversion are included in the Foreign exchange (gain) loss line
on the statement of operations. Prior year figures have been reclassified from Other (income) expenses. The Canadian
dollar is also the functional currency of all its subsidiaries, with the exception of U.S. entities, which uses the U.S. dollar
as their functional currency. Accordingly, the assets and liabilities of U.S. entities are translated into Canadian dollars
using the rate in effect on the date of the consolidated balance sheets. Revenue and expenses are translated at the
average rate over the reporting period. Foreign currency translation gains and losses arising from the Company's
translation of its net investment in U.S. entities companies, including goodwill and the identified intangible assets, are
included in accumulated other comprehensive income or loss as a separate component within shareholders' equity until
there has been a realized reduction in the value of the underlying investment. The Company's presentation currency is
the U.S. dollar, and as such, all assets and liabilities are translated using the exchange rate as at the reporting date,
while equity transactions are translated at the historical exchange rate at the date of the transaction. The statement of
operations has been translated at the average exchange rate of the reporting period. Exchange differences arising on
translation are presented in the accumulated other comprehensive loss line in shareholders' equity on the balance sheet.
Significant accounting judgments and estimates
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year are described below. The Company based its assumptions and estimates on parameters available when
these financial statements were prepared. Existing circumstances and assumptions about future developments may
change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected
in the assumptions and estimates as they occur.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
53
Fair value of financial instruments
When the fair value of financial assets and financial liabilities recorded in the consolidated balance sheets cannot be
derived from active markets, they are determined using valuation techniques and models. Model inputs are taken from
observable markets where possible, but where this is not feasible, unobservable inputs may be used. These
unobservable inputs include, but are not limited to, projected cash flows, discount rates, comparable recent transactions
and volatility of underlying securities in warrant valuations. The use of unobservable inputs can involve significant
judgment and materially affect the reported fair value of financial instruments.
Investments in other entities
IFRS 10 Consolidated Financial Statements ("IFRS 10") and IAS 28 Investments in Associates and Joint Ventures ("IAS
28") provide for the use of judgment in determining whether an investee should be included within the consolidated
financial statements of the Company and on what basis (subsidiary, joint venture or associate). Significant judgment is
applied in evaluating facts and circumstances relevant to the Company and investee, including: (1) the extent of the
Company's direct and indirect interests in the investee; (2) the level of compensation to be received from the investee for
management and other services provided to it; (3) "kick out rights" available to other investors in the investee; and (4)
other indicators of the extent of power that the Company has over the investee.
Impairment of goodwill and intangible assets
All indefinite life intangible assets and goodwill are assessed for impairment, however, finite life intangibles are only
tested for impairment to the extent indications of impairment exist at time of a quarterly assessment. In the case of
goodwill and indefinite life intangibles, an annual test for impairment augments the quarterly impairment indicator
assessments. The recoverable amounts associated with goodwill and intangibles involve estimates and assumptions,
including those with respect to future cash inflows and outflows, discount rates and asset lives, and are determined
using the value-in-use method. These estimates require significant judgment regarding market growth rates, discount
rates, fund flow assumptions, expected margins and costs which could affect the Company's future results if estimates
of future performance and fair value change.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
54
3 Short-term investments
Primarily consist of equity investments in public and private entities the Company receives as consideration during
private strategies, managed equities and broker-dealer activities (in thousands $):
Classification and
measurement criteria
Dec. 31, 2024
Dec. 31, 2023
Public equities and share purchase warrants
FVTPL
225
754
Total short-term investments (1)
225
754
(1) Private holdings are included in other assets (see Note 5). Prior period figures have been reclassified to conform with current presentation.
Gains and losses on financial assets and liabilities classified at FVTPL are included in the gain (loss) on investments line
in the consolidated statements of operations and comprehensive income.
4 Co-investments
Consists of the following (in thousands $):
Classification and
measurement criteria
Dec. 31, 2024
Dec. 31, 2023
Co-investments in funds (1)
FVTPL
72,848
93,528
Total co-investments
72,848
93,528
(1) Includes investments in funds managed and previously managed by the Company.
Gains and losses on co-investments are included in the gain (loss) on investments line in the consolidated statements of
operations and comprehensive income.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
55
5 Other assets and non-controlling interest
Other assets
Consist of the following (in thousands $):
Dec. 31, 2024
Dec. 31, 2023
Assets attributable to non-controlling interest
13,934
15,439
Fund recoveries and investment receivables
10,071
6,658
Advance on unrealized carried interest
7,750
4,517
Private holdings (1)
4,371
4,890
Prepaid expenses
4,158
4,017
Other (2)
1,652
3,744
Total other assets
41,936
39,265
(1) Private holdings are financial instruments classified at FVTPL. Gains and losses are included in the gain (loss) on investments line in the consolidated statements of
operations and comprehensive income. Prior period figures have been reclassified to conform with current presentation. See footnote 1 on Note 3.
(2) Includes miscellaneous third-party receivables.
Non-controlling interest assets and liabilities
Non-controlling interest consists of third-party interest in the Company's co-investments that are consolidated. The
following table provides a summary of amounts attributable to this non-controlling interest (in thousands $):
Dec. 31, 2024
Dec. 31, 2023
Assets
13,934
15,439
Liabilities - current (1)
(90)
(133)
Liabilities - long-term (1)
(13,844)
(15,306)
(1) Current and long-term liabilities attributable to non-controlling interest are included in accounts payable and accrued liabilities and other accrued liabilities,
respectively.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
56
6 Co-investment income
For the years ended
Dec. 31, 2024 Dec. 31, 2023
Co-investment income
1,404
2,052
Income attributable to non-controlling interest
(380)
(934)
Expense attributable to non-controlling interest
380
934
Total co-investment income
1,404
2,052
7 Other (income) and expenses
For the years ended
Dec. 31, 2024 Dec. 31, 2023
Shares received on recognition of contingent asset
—
(18,588)
Revaluation of contingent consideration
(580)
—
Costs related to exit of non-core business
—
5,142
Non-recurring regulatory, professional fees and other
—
3,982
Total other (income) and expenses
(580)
(9,464)
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
57
8 Property and equipment
Consist of the following (in thousands $):
Artwork
Furniture
and fixtures
Computer
hardware
and software
Leasehold
improvements
Right of use
assets
Total
Cost
At Dec. 31, 2022
7,089
2,823
3,002
5,654
12,359
30,927
Additions
—
154
224
1,157
1,574
3,109
Disposals
—
(591)
(189)
(413)
(2,684)
(3,877)
Net exchange differences
170
404
59
123
86
842
At Dec. 31, 2023
7,259
2,790
3,096
6,521
11,335
31,001
Additions
—
412
272
1,184
10,101
11,969
Net exchange differences
(582)
(301)
(319)
(533)
(1,295)
(3,030)
At Dec. 31, 2024
6,677
2,901
3,049
7,172
20,141
39,940
Accumulated depreciation
At Dec. 31, 2022
—
(2,513)
(2,822)
(4,814)
(8,282)
(18,431)
Depreciation charge for the year
—
(141)
(68)
(521)
(2,113)
(2,843)
Disposals
—
399
181
201
994
1,775
Net exchange differences
—
(251)
(116)
(134)
(145)
(646)
At Dec. 31, 2023
—
(2,506)
(2,825)
(5,268)
(9,546)
(20,145)
Depreciation charge for the year
—
(112)
(177)
(275)
(1,657)
(2,221)
Net exchange differences
—
270
291
408
642
1,611
At Dec. 31, 2024
—
(2,348)
(2,711)
(5,135)
(10,561)
(20,755)
Net book value at:
Dec. 31, 2023
7,259
284
271
1,253
1,789
10,856
Dec. 31, 2024
6,677
553
338
2,037
9,580
19,185
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
58
9 Goodwill and intangible assets
Consist of the following (in thousands $):
Goodwill
Fund
management
contracts
(indefinite life)
Total
Cost
At Dec. 31, 2022
132,251
178,613
310,864
Net exchange differences
—
4,289
4,289
At Dec. 31, 2023
132,251
182,902
315,153
Net exchange differences
—
(14,648)
(14,648)
At Dec. 31, 2024
132,251
168,254
300,505
Accumulated amortization/impairment
At Dec. 31, 2022
(113,102)
—
(113,102)
Amortization charge for the year
—
—
—
At Dec. 31, 2023
(113,102)
—
(113,102)
Amortization charge for the year
—
—
—
At Dec. 31, 2024
(113,102)
—
(113,102)
Net book value at:
At Dec. 31, 2023
19,149
182,902
202,051
At Dec. 31, 2024
19,149
168,254
187,403
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
59
Goodwill
The Company has identified 5 cash generating units ("CGU") as follows:
•
Exchange listed products
•
Managed equities
•
Private strategies
•
Brokerage
•
Corporate
As at December 31, 2024, the Company had allocated $19.1 million (December 31, 2023 - $19.1 million) of goodwill
between the exchange listed products CGU ($17.9 million) and the managed equities CGU ($1.2 million). Goodwill was
allocated on a relative value approach basis.
Indefinite life fund management contracts
As at December 31, 2024, the Company had indefinite life intangibles related to fund management contracts of $168.3
million (December 31, 2023 - $182.9 million). These contracts are held within the exchange listed products and
managed equities CGUs.
Impairment assessment of goodwill and indefinite life fund management contracts
In the normal course, goodwill and indefinite life fund management contracts are tested for impairment once per
annum, which for the Company is during the fourth quarter of each year or earlier if there are indicators of impairment.
As part of the Company’s annual impairment testing process, the recoverable amounts associated with goodwill and
indefinite life fund management contracts are calculated based on a five year value-in-use model with a terminal
multiple. The value-in-use model estimates future earnings based on: (1) market growth rates, including external pricing
estimates for commodities (gold, silver and uranium) and/or analyst price forecasts for the underlying equity indices; and
(2) fund flow assumptions based on historical experience. These inputs are used to estimate future cash flows which are
discounted at 9.50% and compared to the CGUs and the intangible assets carrying value. During the annual impairment
testing process, there was no impairment in either the exchange listed products or the managed equities CGUs.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
60
10 Shareholders' equity
Capital stock and contributed surplus
The authorized and issued share capital of the Company consists of an unlimited number of common shares, without
par value.
Number
of shares
Stated value
(in thousands $)
At Dec. 31, 2022
25,325,894
428,475
Shares acquired for equity incentive plan
(154,131)
(5,252)
Shares issued and released on equity incentive plans
363,352
15,649
Shares acquired and canceled under normal course issuer bid
(126,353)
(4,157)
Shares issued under dividend reinvestment program
1,389
49
At Dec. 31, 2023
25,410,151
434,764
Shares acquired for equity incentive plan
(26,321)
(963)
Shares issued and released on equity incentive plans
479,211
18,348
Shares acquired and canceled under normal course issuer bid
(48,182)
(2,022)
At Dec. 31, 2024
25,814,859
450,127
Contributed surplus consists of stock option expense, earn-out shares expense, equity incentive plans' expense, and
additional purchase consideration.
Stated value
(in thousands $)
At Dec. 31, 2022
33,716
Released on equity incentive plans
(18,846)
Stock-based compensation
20,411
At Dec. 31, 2023
35,281
Released on equity incentive plans
(16,628)
Stock-based compensation
17,614
At Dec. 31, 2024
36,267
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
61
Stock option plan
The Company has an option plan (the "Plan") intended to provide incentives to directors, officers and employees of the
Company and its wholly owned subsidiaries. The aggregate number of shares issuable upon the exercise of all options
granted under the Plan and under all other stock-based compensation arrangements including the Trust and Equity
Incentive Plan ("EIP") cannot exceed 10% of the issued and outstanding shares of the Company as at the date of grant.
The options may be granted at a price that is not less than the market price of the Company's common shares at the
time of grant. The options typically vest annually over a three-year period and may be exercised during a period not to
exceed 10 years from the date of grant.
There were no stock options issued or exercised during the year ended December 31, 2024 (year ended December 31,
2023 - Nil).
For valuing share option grants, the fair value method of accounting is used. The fair value of option grants is
determined using the Black-Scholes option-pricing model, which takes into account the exercise price of the option, the
current share price, the risk-free interest rate, the expected volatility of the share price over the life of the option and
other relevant factors. Compensation cost is recognized over the vesting period, assuming an estimated forfeiture rate,
with an offset to contributed surplus. When exercised, amounts originally recorded against contributed surplus as well
as any consideration paid by the option holder is credited to capital stock.
As at December 31, 2024, there are 12,500 options outstanding (December 31, 2023 - 12,500) with a weighted
average exercise price of CAD$27.30 and 1.4 years remaining on their contractual life.
Equity incentive plan
For employees in Canada, the Trust has been established and the Company will fund the Trust with cash, which will be
used by the trustee to purchase: (1) on the open market, common shares of the Company that will be held in the Trust
until the awards vest and are distributed to eligible members; and (2) from treasury, common shares of the Company
that will be held in the Trust until the awards vest and are distributed to eligible employees. For employees in the U.S.
under the EIP plan, the Company will allot common shares of the Company as either: (1) restricted stock; (2)
unrestricted stock; or (3) restricted stock units ("RSUs"), the resulting common shares of which will be issued from
treasury.
There were no RSUs granted during the year ended December 31, 2024 (year ended December 31, 2023 - 63,128).
Number of
common shares
Unvested common shares held by the Trust, Dec. 31, 2022
630,431
Acquired
154,131
Released
(331,672)
Unvested common shares held by the Trust, Dec. 31, 2023
452,890
Acquired
26,321
Released
(479,211)
Unvested common shares held by the Trust, Dec. 31, 2024
—
Included in the compensation line of the consolidated statements of operations and comprehensive income is
$17.6 million of stock-based compensation for the year ended December 31, 2024 (year ended December 31, 2023 -
$20.4 million).
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
62
Basic and diluted earnings per share
The following table presents the calculation of basic and diluted earnings per common share:
For the years ended
Dec. 31, 2024
Dec. 31, 2023
Numerator (in thousands $):
Net income - basic and diluted
49,294
41,799
Denominator (number of shares in thousands):
Weighted average number of common shares
25,858
25,892
Weighted average number of unvested shares in the Trust
(432)
(662)
Weighted average number of common shares - basic
25,426
25,230
Weighted average number of dilutive stock options
13
13
Weighted average number of unvested shares under EIP
437
827
Weighted average number of common shares - diluted
25,876
26,070
Net income per common share
Basic
1.94
1.66
Diluted
1.91
1.60
Capital management
The Company's objectives when managing capital are:
•
to meet regulatory requirements and other contractual obligations;
•
to safeguard the Company's ability to continue as a going concern so that it can continue to provide returns
to shareholders;
•
to provide financial flexibility to fund possible acquisitions;
•
to provide adequate seed capital for the Company's new product offerings; and
•
to provide an adequate return to shareholders through growth in assets under management, growth in
management fees, carried interest and performance fees and return on the Company's invested capital that
will result in dividend payments to shareholders.
The Company's capital is comprised of equity, including capital stock, contributed surplus, retained earnings (deficit)
and accumulated other comprehensive income (loss). SAM is a registrant of the Ontario Securities Commission ("OSC")
and the U.S. Securities and Exchange Commission ("SEC") and SGRIL is a member of the Financial Industry Regulatory
Authority ("FINRA"). As a result, all of these entities are required to maintain a minimum level of regulatory capital. To
ensure compliance, management monitors regulatory and working capital on a regular basis. SAM US and RCIC are
also registered with the SEC. As at December 31, 2024 and 2023, all entities were in compliance with their respective
capital requirements.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
63
11 Income taxes
Taxes calculated on the Company's earnings differs from the theoretical amount that would arise using the weighted
average tax rate applicable to earnings of the Company as follows (in thousands $):
For the years ended
Dec. 31, 2024
Dec. 31, 2023
Income before income taxes
69,006
50,291
Tax calculated at domestic tax rates applicable to profits in the respective countries
18,466
13,408
Tax effects of:
Non-deductible stock-based compensation
676
71
Non-taxable capital (gains) and losses
(279)
(3,377)
Adjustments in respect to previous years
578
(716)
Temporary differences not currently utilized and (not benefited previously)
(68)
(981)
Rate differences and other
339
87
Tax provision
19,712
8,492
The weighted average statutory tax rate was 26.8% (December 31, 2023 - 26.7%). The Company has $nil (December 31, 2023 - $1.8 million) of
capital losses from prior years that are not benefitted.
The major components of income tax expense are as follows (in thousands $):
For the years ended
Dec. 31, 2024
Dec. 31, 2023
Current income tax expense
Based on taxable income of the current period
17,134
8,060
Adjustments in respect to previous years
607
(570)
Total current income tax expense
17,741
7,490
Deferred income tax expense (recovery)
Origination and reversal of temporary differences
2,000
1,148
Adjustments in respect to previous years
(29)
(146)
Total deferred income tax expense (recovery)
1,971
1,002
Income tax expense reported in the consolidated statements of operations
19,712
8,492
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
64
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets are
recognized for tax loss carry-forwards to the extent that the realization of the related tax benefit through future taxable
profits is probable. The ability to realize the tax benefits of these losses is dependent upon a number of factors,
including the future profitability of operations in the jurisdictions in which the tax losses arose. The movement in
significant components of the Company's deferred income tax assets and liabilities is as follows (in thousands $):
For the year ended December 31, 2024
Dec. 31, 2023
Recognized in
income
Exchange rate
differences
Dec. 31, 2024
Deferred income tax assets
Stock-based compensation
7,018
691
(597)
7,112
Non-capital and capital losses
4,179
(517)
(311)
3,351
Lease liabilities and other
591
2,243
(124)
2,710
Total deferred income tax assets
11,788
2,417
(1,032)
13,173
Deferred income tax liabilities
Fund management contracts
16,839
1,597
(1,427)
17,009
Unrealized gains (losses)
958
(504)
(54)
400
Advance on unrealized carried interest
1,196
1,001
(143)
2,054
Fixed assets and other
549
2,294
(114)
2,729
Total deferred income tax liabilities
19,542
4,388
(1,738)
22,192
Net deferred income tax assets (liabilities) (1)
(7,754)
(1,971)
706
(9,019)
For the year ended December 31, 2023
Dec. 31, 2022
Recognized in
income
Exchange rate
differences
Dec. 31, 2023
Deferred income tax assets
Stock-based compensation
5,768
1,090
160
7,018
Non-capital and capital losses
1,324
2,742
113
4,179
Lease liabilities and other
614
(27)
4
591
Total deferred income tax assets
7,706
3,805
277
11,788
Deferred income tax liabilities
Fund management contracts
14,796
1,445
598
16,839
Unrealized gains (losses)
(2,249)
3,197
10
958
Advance on unrealized carried interest
1,180
(12)
28
1,196
Fixed assets and other
523
177
(151)
549
Total deferred income tax liabilities
14,250
4,807
485
19,542
Net deferred income tax assets (liabilities) (1)
(6,544)
(1,002)
(208)
(7,754)
(1) Deferred tax assets of $2.9 million (December 31, 2023 - $3.1 million) and deferred tax liabilities of $11.9 million (December 31, 2023- $10.8 million) are presented on the balance
sheet net by legal jurisdiction.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
65
12 Fair value measurements
The following tables present the Company's recurring fair value measurements within the fair value hierarchy. The
Company did not have non-recurring fair value measurements as at December 31, 2024 and December 31, 2023 (in
thousands $).
Short-term investments
Dec. 31, 2024
Level 1
Level 2
Level 3
Total
Public equities and share purchase warrants
172
47
6
225
Total recurring fair value measurements
172
47
6
225
Dec. 31, 2023
Level 1
Level 2
Level 3
Total
Public equities and share purchase warrants
708
44
2
754
Total recurring fair value measurements
708
44
2
754
Co-investments
Dec. 31, 2024
Level 1
Level 2
Level 3
Total
Co-investments (1)
5,511
67,337
—
72,848
Total recurring fair value measurements
5,511
67,337
—
72,848
Dec. 31, 2023
Level 1
Level 2
Level 3
Total
Co-investments (1)
15,357
78,171
—
93,528
Total recurring fair value measurements
15,357
78,171
—
93,528
(1) Co-investments also include investments made in funds which the Company consolidates that directly hold publicly traded equities or precious
metals.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
66
Other assets
Dec. 31, 2024
Level 1
Level 2
Level 3
Total
Private holdings
—
—
4,371
4,371
Assets attributable to non-controlling interest
—
13,934
—
13,934
Total recurring fair value measurements
—
13,934
4,371
18,305
Dec. 31, 2023
Level 1
Level 2
Level 3
Total
Private holdings
—
—
4,890
4,890
Assets attributable to non-controlling interest
1,706
13,733
—
15,439
Total recurring fair value measurements
1,706
13,733
4,890
20,329
The following tables provides a summary of changes in the fair value of Level 3 financial assets (in thousands $):
Short-term investments
Changes in the fair value of Level 3 measurements - Dec. 31, 2024
Dec. 31,
2023
Purchases and
reclassifications
Sales
Net unrealized
gains (losses)
included in net
income
Dec. 31,
2024
Share purchase warrants
2
23
—
(19)
6
Total
2
23
—
(19)
6
Changes in the fair value of Level 3 measurements - Dec. 31, 2023
Dec. 31,
2022
Purchases and
reclassifications
Sales
Net unrealized
gains (losses)
included in net
income
Dec. 31,
2023
Share purchase warrants
47
48
(37)
(56)
2
Total
47
48
(37)
(56)
2
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
67
Other assets
Changes in the fair value of Level 3 measurements - Dec. 31, 2024
Dec. 31,
2023
Purchases and
reclassifications
Sales
Net unrealized
gains (losses)
included in net
income
Dec. 31,
2024
Private holdings
4,890
—
—
(519)
4,371
Total
4,890
—
—
(519)
4,371
Changes in the fair value of Level 3 measurements - Dec. 31, 2023
Dec. 31,
2022
Purchases and
reclassifications
Sales
Net unrealized
gains (losses)
included in net
income
Dec. 31,
2023
Private holdings
5,263
—
—
(373)
4,890
Total
5,263
—
—
(373)
4,890
During the year ended December 31, 2024, the Company transferred public equities of $nil (December 31, 2023 -
$0.1 million) from Level 2 to Level 1 within the fair value hierarchy.
The following table presents the valuation techniques used by the Company in measuring fair values:
Type
Valuation technique
Public equities, precious metals
and share purchase warrants
Fair values are determined using publicly available prices or pricing models which incorporate all
available market-observable inputs.
Co-investments
Fair values are based on the last available net asset value.
Fixed income securities
Fair values are based on independent market data providers or third-party broker quotes.
Private holdings
Fair values based on variety of valuation techniques, including discounted cash flows,
comparable recent transactions and other techniques used by market participants.
The Company’s Level 3 securities consist of private holdings and share purchase warrants. The significant unobservable
inputs used in these valuation techniques can vary considerably over time, and include gray market financing prices,
volatility and discount rates. A significant change in any of these inputs in isolation would result in a material impact in
fair value measurement. The potential impact of a 5% change in the significant unobservable inputs on profit or loss
would be approximately $0.2 million (December 31, 2023 - $0.2 million).
Financial instruments not carried at fair value
The carrying amounts of fees receivable, other assets, accounts payable and accrued liabilities, compensation payable
and loan facility represent a reasonable approximation of fair value.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
68
13 Related party transactions
The remuneration of directors and other key management personnel of the Company for employment services rendered
are as follows (in thousands $):
For the years ended
Dec. 31, 2024
Dec. 31, 2023
Fixed salaries and benefits
4,385
4,655
Variable incentive-based compensation
9,249
6,139
Share-based compensation
9,915
9,915
23,549
20,709
The DSU plan for independent directors of the Company vests annually over a three-year period and may only be settled
in cash upon retirement. DSUs issued in lieu of directors' fees and dividends vest immediately. There were 10,991 DSUs
issued during the year (December 31, 2023 - 15,782).
14 Dividends
The following dividends were declared by the Company during the year ended December 31, 2024:
Record date
Payment date
Cash dividend
per share
Total dividend amount
(in thousands $)
November 18, 2024 - Regular dividend Q3 2024
December 3, 2024
$0.30
7,749
August 19, 2024 - Regular dividend Q2 2024
September 3, 2024
$0.25
6,466
May 21, 2024 - Regular dividend Q1 2024
June 5, 2024
$0.25
6,466
March 4, 2024 - Regular dividend Q4 2023
March 19, 2024
$0.25
6,466
Dividends declared in 2024 (1)
27,147
(1) Subsequent to year end, on February 25, 2025, a regular dividend of $0.30 per common share was declared for the quarter ended December 31, 2024. This dividend is payable on March
25, 2025 to shareholders of record at the close of business on March 10, 2025.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
69
15 Risk management activities
The Company's exposure to market, credit, liquidity and concentration are described below:
Market risk
Market risk refers to the risk that a change in the level of one or more of market prices, interest rates, foreign exchange
rates, indices, volatilities, correlations or other market factors, such as liquidity, will result in a change in the fair value of
an asset. The Company's financial instruments are classified as FVTPL. Therefore, certain changes in fair value or
permanent impairment, if any, affect reported earnings as they occur. The maximum risk resulting from financial
instruments is determined by the fair value of the financial instruments. The Company manages market risk through
regular monitoring of its investments and co-investments. The Company separates market risk into three categories:
price risk, interest rate risk and foreign currency risk.
Price risk
Price risk arises from the possibility that changes in the price of the Company's investments and co-investments will
result in changes in carrying value. If the market values of investments and co-investments classified as FVTPL increased
or decreased by 5%, with all other variables held constant, this would have resulted in an increase or decrease in net
income before tax of approximately $3.9 million for the year (December 31, 2023 - $5 million). For more details about
the Company's investments and co-investments, refer to Note 3, Note 4 and Note 5.
The Company's revenues are also exposed to price risk since management fees, carried interest and performance fees
are all correlated with assets under management, which fluctuates with changes in the market values of the assets in
the funds and managed accounts managed by SAM, SRLC, SRSR, SAM US and RCIC.
Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will adversely affect the value of, or cash flows
from, financial assets and liabilities. The Company’s earnings, particularly through its co-investment in private strategies
LPs and outstanding balance on the Company's line of credit, are exposed to volatility as a result of sudden changes in
interest rates.
As at December 31, 2024, the Company had $3.6 million in short-term government notes (December 31, 2023 - $Nil).
Foreign currency risk
Foreign currency risk arises from foreign exchange rate movements that could negatively impact either the carrying value
of financial assets and liabilities or the related cash flows when translating those balances into the Company's
functional currency, Canadian dollars. The Company's primary foreign currency is the U.S. dollar. The Company may
employ certain hedging strategies to mitigate foreign currency risk.
The US entities assets are all denominated in U.S. dollars with their translation impact being reported as part of other
comprehensive income in the financial statements. Excluding the impact of the US entities, as at December 31, 2024,
approximately $63.7 million (December 31, 2023 - $73.2 million) of total Canadian assets were invested in short-term
investments and co-investments priced in U.S. dollars. A total of $24.5 million (December 31, 2023 - $9.7 million) of
cash, $13.2 million (December 31, 2023 -$6.8 million) of accounts receivable and $10.3 million (December 31, 2023 -
$8.2 million) of other assets were denominated in USD. As at December 31, 2024, if the exchange rate between the
U.S. dollar and the Canadian dollar increased or decreased by 5%, with all other variables held constant, the increase or
decrease in net income attributable to the translation of the above mentioned assets would have been approximately
$5.6 million for the year (December 31, 2023 - $4.9 million).
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
70
Credit risk
Credit risk is the risk that a borrower will not honor its commitments and a loss to the Company may result.
Loans receivable
The Company incurs credit risk indirectly through co-investments made in the private strategies LPs managed by SRLC
and SRSR. During the loan origination process, management takes into account a number of factors and is committed
to several processes to ensure that this risk is appropriately mitigated. These include:
• emphasis on first priority and/or secured financings;
• the investigation of the creditworthiness of borrowers;
• the employment of qualified and experienced loan professionals;
• a review of the sufficiency of the borrower’s business plans including plans that will enhance the value of the
underlying security;
• frequent and documented status updates provided on business plans;
• engagement of qualified independent advisors (e.g. lawyers, engineers and geologists) to protect the
Company's interests; and
• legal reviews that are performed to ensure that all due diligence requirements are met prior to funding.
The Company may syndicate loans in certain circumstances if it wishes to reduce its exposure to a borrower or comply
with loan exposure maximums. The Company reviews its policies regarding its lending limits on an ongoing basis.
Investments
The Company incurs credit risk when entering into, settling and financing various proprietary transactions. As at
December 31, 2024 and 2023, the Company's most significant proprietary investments counterparty was Royal Bank of
Canada ("RBC") which acts as a custodian for most of the Company's proprietary investments. RBC is registered as an
investment dealer subject to regulation by the Canadian Investment Regulatory Organization; and as a result, it is
required to maintain minimum levels of regulatory capital at all times.
Other
The majority of accounts receivable relate to management, carried interest and performance fees receivable from the
funds and managed accounts managed by the Company. Credit risk is managed in this regard by dealing with
counterparties that the Company believes to be creditworthy and by actively monitoring credit exposure and the
financial health of the counterparties.
The US entities incur credit risk when entering into, settling and financing various proprietary transactions. As at
December 31, 2024 and 2023, the US entities' most significant counterparty was RBC Capital Markets, LLC ("RBCCM"),
the carrying broker of SGRIL and custodian of the net assets of the funds managed by RCIC and SAM US. RBCCM is
registered as a broker-dealer and registered investment advisor subject to regulation by FINRA and the SEC; as a result,
it is required to maintain minimal levels of regulatory capital at all times.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
71
Liquidity risk
Liquidity risk is the risk that the Company cannot meet a demand for cash or fund its obligations as they come due.
The Company's exposure to liquidity risk is minimal as it maintains sufficient levels of liquid assets to meet its
obligations as they come due. Additionally, the Company has access to a $75 million committed line of credit with a
major Canadian Schedule I bank. As at December 31, 2024, the Company had $46.8 million or 12% (December 31,
2023 - $20.7 million or 5%) of its total assets in cash and cash equivalents. In addition, approximately $24 million or
31% (December 31, 2023 - $39.7 million or 40%) of co-investments and short-term investments held by the Company
are readily marketable and are recorded at their fair value.
The Company's exposure to liquidity risk as it relates to its' co-investments in private strategies LPs arises from
fluctuations in cash flows from making capital calls and receiving capital distributions. The Company manages its co-
investment liquidity risk through the ongoing monitoring of scheduled capital calls and distributions ("match funding")
and through its broader treasury risk management program and enterprise capital budgeting. As at December 31, 2024,
the Company had $6.7 million in co-investment commitments from the private strategies segment (December 31, 2023 -
$5.9 million). Financial liabilities, including accounts payable and accrued liabilities and compensation payable, are
short-term in nature and are generally due within a year.
The following are the remaining contractual maturities of financial liabilities as at December 31, 2024 (in thousands $):
Contractual obligations
Carrying
Amount
Less
than
1 year
1-3
years
4-5
years
More
than
5 years
Operating accounts payable
6,418
6,418
—
—
—
Compensation payable
11,829
11,829
—
—
—
Lease obligation
10,211
1,097
2,306
1,915
4,893
Total contractual obligations
28,458
19,344
2,306
1,915
4,893
The Company's management team is responsible for reviewing resources to ensure funds are readily available to meet
its financial obligations as they come due, as well as ensuring adequate funds exist to support business strategies and
operations growth. The Company manages liquidity risk by monitoring cash balances on a daily basis. To meet any
liquidity shortfalls, actions taken by the Company could include: drawing on the line of credit; liquidating investments
and co-investments and/or issuing common shares.
Concentration risk
The majority of the Company's AUM, as well as its investments and co-investments are focused on the natural resource
sector, and in particular, precious metals and critical materials.
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
72
16 Segmented information
For management purposes, the Company is organized into business units based on its products, services and
geographical locations and has four reportable segments as follows:
• Exchange listed products (reportable), which provides management services to the Company's closed-end
physical trusts and exchange traded funds ("ETFs"), both of which are actively traded on public securities
exchanges;
• Managed equities (reportable), which provides management services to the Company's alternative
investment strategies managed in-house and on a sub-advisory basis;
• Private strategies (reportable), which provides lending and streaming activities through limited partnership
vehicles;
• Corporate (reportable), which provides capital, balance sheet management and enterprise shared services to
the Company's subsidiaries; and
• All other segments (non-reportable), which do not meet the definition of reportable segments per IFRS 8.
Management monitors the operating results of its business units separately for the purpose of making decisions about
resource allocation and performance assessment. Segment performance is evaluated based on earnings before interest
expense, income taxes, amortization and impairment of intangible assets and goodwill, gains and losses on investments
(as if such gains and losses had not occurred), stock-based compensation, severance, new hire accruals and other,
foreign exchange (gain) loss, costs relating to the exit of non-core businesses, revaluation of contingent considerations,
non-recurring regulatory, professional fees and other, shares received on recognition of contingent consideration, carried
interest and performance fees and carried interest and performance fee payouts (adjusted base EBITDA).
Adjusted base EBITDA is not a measurement in accordance with IFRS and should not be considered as an alternative to
net income or any other measure of performance under IFRS.
Transfer pricing between operating segments is performed on an arm's length basis in a manner similar to transactions
with third parties.
The following tables present the operations of the Company's segments (in thousands $):
For the year ended December 31, 2024
Exchange
listed
products
Managed
equities
Private
strategies
Corporate
Consolidation,
elimination
and all other
segments (1)
Consolidated
Total revenue
112,498
39,204
27,824
(384)
(487)
178,655
Total expenses
33,591
25,556
11,593
35,078
3,831
109,649
Income (loss) before income taxes
78,907
13,648
16,231
(35,462)
(4,318)
69,006
Adjusted base EBITDA
81,033
7,363
12,331
(14,098)
(1,466)
85,163
(1) Total revenue includes revenues from non-reportable segments of $2,018, net of investment losses of $2,505
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
73
For the year ended December 31, 2023 (1)
Exchange
listed
products
Managed
equities
Private
strategies
Corporate
Consolidation,
elimination
and all other
segments (2)
Consolidated
Total revenue
84,713
30,180
28,183
(198)
8,489
151,367
Total expenses
10,718
26,222
15,604
33,776
14,756
101,076
Income (loss) before income taxes
73,995
3,958
12,579
(33,974)
(6,267)
50,291
Adjusted base EBITDA
62,303
7,756
12,361
(11,047)
514
71,887
(1) Prior period figures have been updated to conform with current presentation
(2) Total revenue includes revenues from non-reportable segments of $9,483, net of investment losses of $994
For geographic reporting purposes, transactions are primarily recorded in the location that corresponds with the
underlying subsidiary's country of domicile that generates the revenue. The following table presents the revenue of the
Company by geographic location (in thousands $):
For the years ended
Dec. 31, 2024
Dec. 31, 2023
Canada
155,240
137,287
United States
23,415
14,080
178,655
151,367
17 Loan facility
As at December 31, 2024, the Company had $nil (December 31, 2023 - $24.2 million) outstanding on its credit facility,
which matures on August 8, 2028. As at December 31, 2024, the Company was in compliance with all covenants, terms
and conditions under the credit facility.
The Company has access to a credit facility of $75 million with a major Canadian schedule I chartered bank. Amounts
under the facility may be borrowed in U.S. dollars through SOFR or base rate loans. Amounts may also be borrowed in
Canadian dollars through prime rate loans or CORRA loans.
Key terms under the current credit facility are noted below:
Structure
•
5-year, $75 million revolver with "bullet maturity" August 8, 2028
Interest rate
•
SOFR + 2.33%
Covenant terms
•
Minimum AUM: CAD$15.4 billion;
•
Debt to EBITDA less than or equal to 2.5:1; and
•
EBITDA to interest expense more than or equal to 2.5:1
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
74
18 Commitments and provisions
The Company has commitments to make co-investments in private strategies LPs or commitments to make co-
investments in fund strategies in the Company's other segments. As at December 31, 2024, the Company had $5.2
million in co-investment commitments in private strategies LPs due within one year (December 31, 2023 - $4 million)
and $1.5 million due after 12 months (December 31, 2023 - $1.9 million).
SPROTT INC.
Notes to the consolidated financial statements
For the years ended December 31, 2024 and 2023
75
Corporate Information
Head Office
Sprott Inc.
Royal Bank Plaza, South Tower
200 Bay Street, Suite 2600
Toronto, Ontario M5J 2J1, Canada
T: 416.943.8099
1.855.943.8099
Directors & Officers
Ronald Dewhurst, Chairman
Graham Birch, Director
Dinaz Dadyburjor, Director
Barbara Connolly Keady, Director
Catherine Raw, Director
Judith W. O’Connell, Director
Whitney George, Chief Executive Officer and Director
Kevin Hibbert, FCPA, FCA, Chief Financial Officer
Arthur Einav, Corporate Secretary
US Transfer Agent and Registrar
Continental Stock Transfer & Trust Company
1 State Street 30th Floor
New York, NY 10004-1561
212.509.4000
continentalstock.com
Canadian Transfer Agent and Registrar
TMX Equity Transfer Services
200 University Avenue, Suite 300
Toronto, Ontario M5H 4H1
Toll Free: 1.866.393.4891
www.tmxequitytransferservices.com
Legal Counsel
Stikeman Elliot LLP
5300 Commerce Court West
199 Bay Street
Toronto, Ontario M5L 1B9
Auditors
KPMG LLP
Bay Adelaide Centre
333 Bay Street, Suite 4600
Toronto, Ontario M5H 2S5
Investor Relations
Shareholder requests may be directed to
Investor Relations by e-mail at ir@sprott.com
or via telephone at 416.943.8099
or toll free at 1.855.943.8099
Stock Information
Sprott Inc. common shares are traded on the New York
Stock Exchange and Toronto Stock Exchange under the
symbol “SII”
Annual General Meeting
Wednesday, May 7, 2025 at 12pm
2024 Annual Report
SPROTT
76
Sprott Inc.
Royal Bank Plaza, South Tower
200 Bay Street, Suite 2600
Toronto, Ontario M5J 2J1, Canada
Toll Free: 888.622.1813
www.sprott.com
Our logo, “Sprott” and our tagline “Contrarian. Innovative. Aligned” are all registered trademarks of Sprott Inc.