Sprott Resource Corp. Institutes Monthly Dividend
TORONTO, Dec. 12, 2012 /CNW/ - Sprott Resource Corp. ("SRC") (TSX: SCP) announced today that its Board of Directors has declared an initial monthly dividend of $0.038 per common share (the "Initial Dividend").
The Initial Dividend will be paid on January 15, 2013 to shareholders of record at the close of business on December 31, 2012. The full amount of the Initial Dividend is designated as an "eligible dividend" for purposes of the Income Tax Act (Canada).
Dividend Policy
SRC's Board of Directors also approved a policy (the "Dividend Policy") pursuant to which SRC intends to pay a monthly dividend at least equal to 0.833% of SRC's total equity attributable to shareholders ("SRC's Book Value") based on the most recently filed financial statements of SRC at the time the dividend is declared. The amount of future monthly dividends will accordingly fluctuate quarterly with SRC's Book Value.
The Initial Dividend is based on SRC's Book Value as at September 30, 2012, adjusted to take into consideration the increase in SRC's Book Value due to its disposition of Waseca Energy Inc., as will be the monthly dividends that are declared prior to the filing of SRC's financial statements for the year ending December 31, 2012
"We are committed to providing shareholders with an attractive total return and increased liquidity," said Kevin Bambrough. "We feel that our business has matured such that monetizations of our portfolio companies will be more predictable and the returns on such monetizations will support the Dividend Policy and grow SRC's Book Value per common share."
As disclosed in SRC's press release dated November 14, 2012, since inception in 2007, SRC has achieved an internal rate of return on investments(1) of approximately 28% and gross gains, excluding taxes and fees, of approximately $365 million, of which $280 million are gross realized gains. In addition, since inception management has repurchased approximately $72 million in common shares, with over $38 million repurchased in 2012 alone. Based on its historical returns and its return expectations, management believes that it can sustain the Dividend Policy and grow SRC's Book Value per common share over the long term.
Dividend Reinvestment Plan
SRC also intends to adopt a dividend reinvestment plan ("DRIP") early in 2013. The DRIP will allow eligible shareholders of SRC to direct their dividends to be reinvested in additional SRC common shares which may be purchased in the market at prevailing market prices or issued from treasury at a price which may include a discount of up to 5% of the market price of SRC's common shares (as such term will be defined in the DRIP).
About Sprott Resource Corp.
SRC is a Canadian-based company, the primary purpose of which is to invest and operate 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. SRC invests and operates through Sprott Resource Partnership (SRP), a partnership between SRC and Sprott Resource Consulting Limited Partnership, an affiliate of SCLP which is the managing partner of SRP. |
