TORONTO, Aug. 15 /CNW/ - (TSX: SCP) - Sprott Resource Corp. ("SRC")
announced today its financial results for the quarter ended June 30, 2008. The
consolidated financial statements and the related management's discussion and
analysis ("MD&A") can be found on SEDAR at www.sedar.com.
For the second quarter, net earnings were $6.96 million or $0.13 basic
earnings per share ($0.11 fully diluted earnings per share). Net earnings
include $4.99 million in equity earnings of PBS Coals Corporation ("PBS") and
$3.17 million in gains on the sale of investments. Working capital ended the
second quarter at $58.12 million, an increase of $24.98 million from the end
of the previous quarter. The increase in working capital was a result of a
warrant incentive program that commenced during the second quarter and was
completed subsequent to the end of the second quarter. The total proceeds
resulting from the warrant incentive program will be fully reflected in the
third quarter's financial statements.
The second quarter included an additional investment of US$23,960,000 in
PBS. This investment increased SRC's holdings of PBS shares to 44,194,538.
Subsequent to the end of the quarter, SRC sold into escrow 17,050,000 PBS
shares for gross proceeds of approximately $102,300,000. These proceeds have
been placed into escrow and will be released from escrow following the
satisfaction of certain conditions, which are expected to be fulfilled by the
end of August 2008.
Also of note in the second quarter was the acquisition, through a newly
formed Ontario corporation ("Ontario Co"), of the outstanding shares of
Mantaro (BVI) Ltd., the company that indirectly holds the mineral rights
relating to the Mantaro Phosphate Project. Subsequent to the end of the second
quarter, SRC announced that it would be amalgamating Ontario Co with Stonegate
Minerals Ltd. ("Stonegate"), a private Ontario company. Stonegate will be
providing initial working capital for the project. The key principals of
Stonegate, Ian McDonald and Kerry Knoll, will lead the management of the
"The successful completion of the warrant incentive program and the sale
of a portion of our PBS shares leaves us in a very strong financial position,"
said Kevin Bambrough, CEO of Sprott Resource Corp. "With a strong capital
base, we intend to take advantage of the existing market conditions to
continue to acquire properties and investments at attractive valuations."
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 Asset
Management 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 or future market conditions, may constitute forward-looking
statements under applicable securities laws and necessarily involve risk,
including without limitation, risks associated with mineral exploration
projects, risks associated with commodity prices and risks associated with the
release conditions to the escrowed funds on the sale of PBS shares not being
satisfied. 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 event 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
For further information:
For further information: Kevin Bambrough, President and CEO, Tel: (416)
977-7333, Fax: (416) 977-9555