Sprott Inc. amends and restates business acquisition report

    TORONTO, July 29 /CNW/ - Sprott Inc. (TSX: SII) ("Sprott") today filed an
amended and restated business acquisition report. Effective May 15, 2008,
Sprott acquired all of the outstanding shares of Sprott Asset Management Inc.
("SAM") pursuant to the terms of a share exchange agreement among SAM, the
shareholders of SAM and Sprott. The effect of the acquisition of SAM on the
assets and operations of Sprott are set out in detail in the pro forma
financial statements included in the prospectus of Sprott dated May 8, 2008
(the "Prospectus") and in the section of the Prospectus entitled "Selected
Adjusted Financial Information".
    Sprott's business acquisition report was amended and restated due to
adjustments to retained earnings of SAM that relate to accruals for employer
health taxes ("EHT") associated with SAM's bonus expenses in 2006 and 2007.
Such EHT were originally recorded at the time the bonuses were paid rather
than when the bonus expense was accrued. In the second quarter of 2008, a
determination was made that the accrual and related expense should be recorded
in the period the bonus is accrued.
    The adjustment resulted in the following changes to amounts originally
reported in SAM's unaudited interim consolidated financial statements for the
three months ended March 31, 2008 which were disclosed in Sprott's business
acquisition report dated June 27, 2008 as amended on July 18, 2008: a) a
decrease of $2.3 million to compensation and benefits expense for the three
months ended March 31, 2008 and March 31, 2007; b) a related increase in
provision for income taxes of $0.8 million for the three months ended
March 31, 2008 and March 31, 2007; c) an increase of $2.3 million in
compensation payable and a decrease of $0.8 million in income taxes payable as
at December 31, 2007 and December 31, 2006 and a related decrease to retained
earnings as at December 31, 2006 and December 31, 2007 in the amount of $1.5
    Furthermore, for the three months ended March 31, 2008, the decrease in
EHT resulted in an incremental increase of $0.575 million (25% of
$2.3 million) to SAM's discretionary bonus pool and a related decrease of
$0.193 million to the provision for income taxes, with the same changes
reflected on SAM's balance sheet for compensation payable and income taxes
payable, respectively.
    The above adjustment did not result in a restatement of SAM's 2005, 2006
and 2007 annual consolidated financial statements because the amount of the
adjustment is not material to the annual financial statements. The amount was
only material for the first quarter of 2007 and first quarter of 2008, which
were both amended, as described above.

    About Sprott Inc.

    Sprott Inc., through its wholly-owned subsidiary Sprott Asset Management
Inc., is an independent asset management company with approximately
$6.8 billion of assets under management mainly among its 21 investment funds,
discretionary managed accounts and management of certain public companies.
Sprott Asset Management Inc. has a history of offering investment management
services to high net worth individuals and institutions for more than
26 years. For more information about Sprott Inc., please visit

For further information:

For further information: Investor contact information: (416) 203-2310,
1-877-403-2310 or ir@sprott.com

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