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Sprott profit dips slightly, fee revenue rises

Sprott Inc. , a Toronto-based investment company that focuses on gold, mining and other resource funds, reports its net profits in the second quarter fell slightly but the company expanded the assets it manages and generated higher fee revenues.

Sprott said Thursday its net profits rose 3.6 per cent to $7.5-million or four cents a share in the three months ended June 30.

That compared with $7.8-million or five cents a share for the same period a year ago.

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Assets under management rose to $9.3-billion from $5.5-billion last year. Meanwhile, the company said management fees rose nearly 54 per cent to $37.2-million.

"The continued growth of our business has been driven by the introduction of new products and the expansion of our successful line of bullion funds, which together have raised more than $600 million, year-to-date," said Peter Grosskopf, CEO of Sprott.

"While the correction in the price of precious metals and related equities impacted the performance of some of our funds during the second quarter, both gold and silver have recovered recently, with gold prices continuing to reach record highs," he added.

"We believe the positioning of our funds remains strong, as markets begin to feel the pressure from weak economic conditions, continuing government debt and financial sector issues, as well as the long-term loss of currency purchasing power."

On Wednesday, gold prices shot above $1,800 (U.S.) an ounce for the first time as investors pulled their money out of stocks and snapped up precious metals contracts.

December gold contracts backed off their highs, and ended the day at $1,784.30 an ounce, up $41.30, after reaching a record $1,801 an ounce earlier in the day on the New York Mercantile Exchange.

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