Sprott provides information on goodwill impairment
TORONTO, Feb. 27, 2014 /CNW/ - Sprott Inc. (TSX:SII) today announced that for the fourth quarter and year ended December 31, 2013, it will record a non-cash charge of approximately $90 million related to the impairment of goodwill associated with the 2011 acquisition of Sprott Global Resource Investments, Ltd. (formerly Global Resource Investments, Ltd.), Sprott Asset Management USA Inc. (formerly Terra Resource Investment Management, Inc.) and Resource Capital Investment Corporation (collectively, the "Global Companies"). This was determined following the results of the annual impairment test required under International Financial Reporting Standards. The final amount of the charge will be determined following completion of the audit of Sprott's 2013 annual consolidated financial statements and will be reported in conjunction with the Company's year-end reporting.
The impact on consolidated net income is estimated to be approximately ($0.37) per share. This is a non-cash charge and will not affect the Company's ongoing operations. The charge was determined in relation to the revenues of the acquired assets, which were reduced primarily due to the protracted decline in the junior resource sector between 2011 and the end of 2013. Management expects that a recovery in the natural resources sector will drive improving revenues for the Global Companies.
Sprott is scheduled to release its audited annual consolidated 2013 financial statements on or about March 27, 2014.
About Sprott Inc.
Sprott Inc. is a leading independent asset manager dedicated to achieving superior returns for its clients over the long term. The Company currently operates through five business units: Sprott Asset Management LP, Sprott Private Wealth LP, Sprott Consulting LP, Sprott Resource Lending Corp. and Sprott U.S. Holdings Inc. Sprott Asset Management is the investment manager of the Sprott family of mutual funds and hedge funds and discretionary managed accounts; Sprott Private Wealth provides wealth management services to high net worth individuals; and Sprott Consulting provides management, administrative and consulting services to other companies. Sprott Resource Lending provides lending services to mining and energy sectors. Sprott U.S. Holdings Inc. includes Sprott Global Resource Investments Ltd, Sprott Asset Management USA Inc., and Resource Capital Investments Corporation. Sprott Inc. is headquartered in Toronto, Canada, and is listed on the Toronto Stock Exchange under the symbol "SII". For more information on Sprott Inc., please visit www.sprottinc.com.
Forward-Looking Information and Statements
This news release contains certain forward-looking information and statements (collectively referred to herein as "Forward-Looking Statements") within the meaning of applicable 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 news release contains Forward-Looking Statements pertaining to: (i) an anticipated non-cash charge related to the impairment of goodwill associated with the 2011 acquisition of the Global Companies (the "Charge"); (ii) determination and reporting of the final amount of the Charge; (iii) the estimated impact on consolidated net income and effect on Sprott Inc.'s ("SII") ongoing operations; and (iv) recovery of the natural resources sector and related improvement of revenues for the Global Companies. Forward-Looking Statements are based on a number of expectations or assumptions which have been used to develop such information and statements but which may prove to be incorrect, including, but not limited to: (i) the natural resource markets and price of natural resources; (ii) the future outlook for the natural resources sector; and (iii) the future revenues to be generated by the Global Companies. SII will publish the final Charge in its audited December 31, 2013 financial statements. The final Charge could vary significantly from the range provided in this news release. Although SII believes the expectations and assumptions reflected in such Forward-Looking Statements are reasonable, undue reliance should not be placed on Forward-Looking Statements because SII can give no assurance that such expectations and assumptions will prove to be correct. The Forward-Looking Statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statements, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors, which may cause actual results or events to differ materially from those anticipated in such Forward-Looking Statements, including, without limitation: (i) general economic, market and business conditions; (ii) those risks listed under the heading "Managing Risk" in SII's Management's Discussion & Analysis for the nine months ended September 30, 2013; (iii) those risks listed under the heading "Risk Factors" in SII's annual information form dated March 26, 2013; and (iv) other risks, which are beyond the control of SII or its subsidiaries. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the Forward-Looking Statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the Forward-Looking Statements contained in this news release. The Forward-Looking Statements contained in this news release speak only as of the date of this news release, and SII does not assume any obligation to publicly update or revise any of the included Forward-Looking Statements, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.
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