/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
TORONTO, Aug. 30 /CNW/ - (TSX:SCP) - Sprott Resource Corp. ("SRC") is pleased to announce that it intends to commence a normal course issuer bid (the "Bid") to repurchase up to 7.0 million of its common shares (the "Shares"), representing approximately 9.38% of the unrestricted public float of SRC and approximately 7.27% of the total number of issued and outstanding Shares. As at August 25, 2010, there were 96,251,427 Shares of SRC outstanding. Purchases will be made for cancellation through the facilities of the Toronto Stock Exchange (the "TSX") at the prevailing market price of the Shares.
SRC has received approval from the TSX to commence the Bid on September 1, 2010. The Bid will end on the earlier of (i) August 31, 2011, (ii) when the number of common shares sought under the Bid have been obtained, and (iii) when notice is given by SRC to the TSX terminating the Bid if SRC determines that it is appropriate to do so. Pursuant to TSX policies, daily purchases made by SRC may not exceed 29,337 Shares, being 25% of the six-month average daily trading volume of 117,350 Shares on the TSX, subject to certain prescribed TSX exceptions including the "block purchase exemption".
SRC believes that its Shares have been trading in a price range that does not adequately reflect the value of the Shares in relation to SRC's assets and future prospects. As a result, SRC believes that, at appropriate times, repurchases through the Bid can enhance shareholder value and represents an attractive investment and an appropriate use of SRC's financial resources.
To the knowledge of SRC, no director or senior officer, no person acting jointly or in concert with SRC and no person holding 10% or more of any Shares of SRC currently intends to sell Shares during the course of the Bid. However, sales by such persons through the facilities of the TSX may occur if the personal circumstances of any such person changes or any such person makes a decision unrelated to the Bid. The benefits to any such person whose Shares are purchased would be the same as the benefits available to all other holders whose Shares are purchased under the Bid. SRC has purchased 2,961,400 Shares pursuant to a normal course issuer bid during the preceding 12 months at an average cost of $3.85 per Share.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of the securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful.
About Sprott Resource Corp.
SRC is a Canadian based company, the primary purpose of which is to invest, directly and indirectly, in natural resources. Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. SRC is well positioned to draw upon the considerable experience and expertise of both its Board of Directors and Sprott Consulting Limited Partnership ("SCLP"), of which Sprott Inc. is the sole limited partner. Pursuant to a management services agreement between SCLP and SRC, SCLP provides day-to-day business management for SRC as well as other management and administrative services.
Forward Looking Statements
Certain statements regarding SRC, including management's assessment of future plans, may constitute forward-looking statements under applicable securities laws and necessarily involve risk. SRC's actual results or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. No assurance can be given that any events anticipated by the forward-looking statements will occur. These forward-looking statements, which are based on management's current expectations, are made as at the date of this news release. SRC does not undertake any obligation to publicly update or revise any of these forward-looking statements, except as required by applicable securities laws.
SOURCE Sprott Resource Corp.
For further information: For further information: Steve Yuzpe, Chief Financial Officer, Tel: (416) 977-7333, Fax: (416) 977-9555