MLY closed at $4.72 today but has a N.A.V. of $6.06. MLY.WT a real good choice to play moly here...
Sprott Molybdenum's NAV at $6.06 at Dec. 31, 2007
2008-02-28 19:19 ET - News Release
An anonymous director reports
SPROTT MOLYBDENUM PARTICIPATION CORPORATION RELEASES RESULTS FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2007
Sprott Molybdenum Participation Corp. has released its results for the three and 12 months ended Dec. 31, 2007.
The increase in net asset value from operations after taxes per share, adjusted to provide a meaningful measure(1), amounted to $1.22 for the year and a decrease of two cents for the fourth quarter. In dollar terms, the increase in net assets from operations after taxes amounted to $52.7-million for the year and a decrease of $800,000 for the fourth quarter.
In 2007, the corporation's assets performed well. Portfolio investments generated net unrealized and realized gains of $59.6-million and $19.5-million, respectively, which translated into a return on portfolio investments of 48.06 per cent. In the fourth quarter of 2007, positions in certain equity investments, including General Moly Inc. (formerly Idaho General Mines Inc.) and Moly Mines Ltd., were decreased, shifting gains from unrealized to realized. Over all, in the fourth quarter, portfolio investments generated a loss of approximately $1.7-million, decreasing the return for the year from 49.05 per cent at the end of the third quarter to 48.06 per cent at the end of the year. Securities that contributed the most to this return included Thompson Creek Metals Company Inc. (formerly Blue Pearl Mining Ltd.), Quadra Mining Ltd., General Moly (formerly Idaho General Mines) and Roca Mines Inc.
Approximately 600,000 pounds of molybdenum, in the form of molybdenum oxide, purchased in the second quarter at $28.40 (U.S.) per pound, were delivered throughout the fourth quarter. With the price of the metal at $32.70 (U.S.) as at Dec. 31, 2007, this investment generated unrealized gains of $1.1-million or 6.46 per cent in the fourth quarter and $2.9-million or 17.20 per cent for the year.
The most significant expenses of the corporation for the year ended Dec. 31, 2007, were incentive fees of $16.4-million and management fees of $3.2-million, respectively, with both fees calculated pursuant to the management services agreement dated April 3, 2007(2) (of the total, $1.7-million of incentive fees and $1.3-million of management fees were incurred in the fourth quarter). Together, incentive and management fees comprised 91.6 per cent of the corporation's total expenses for the year and 85.16 per cent of total expenses in the fourth quarter.
Other material expenses incurred in 2007 included general and administrative expenses of $628,500, transaction costs of $224,700, directors' fees of $105,200 and advisory fees of $411,300. Advisory fees were paid to third party investment advisers in the second quarter for consulting and advisory services provided to the corporation in relation to some of its more significant investments.
The net asset value of the corporation as at Dec. 31, 2007, was $262.9-million or $6.06 per common share.
Throughout most of the second half of 2007, the corporation's stock has been trading at a discount of 20 to 30 per cent of net asset value. In an attempt to remedy the situation, a normal course issuer bid was initiated in August, 2007. The purpose of the normal course issuer bid is to provide the corporation with a mechanism to decrease the spread between the net asset value per share and the market price of the shares. As at Dec. 31, 2007, the corporation had purchased and cancelled a total of 1,144,900 common shares. An additional 629,800 shares were repurchased subsequent to year-end.
As at Dec. 31, 2007, the holdings of the corporation were as shown in the table.
Name of security Per cent of net assets
Thompson Creek Metals Company Inc. 20.67
Quadra Mining Ltd. 11.98
Inca Pacific Resources Inc. 11.24
Mercator Minerals Ltd. 8.78
General Moly Inc. (formerly Idaho General Mines Inc.) 7.05
Roca Mines Inc. 6.05
Moly Mines Limited 1.94
Virgin Metals Inc. 1.79
Galway Resources Ltd. 1.27
TTM Resources Inc. 1.27
International PBX Ventures Ltd. 1.22
Mosquito Consolidated Gold Mines Limited 1.20
Golden Phoenix Minerals Inc. 1.06
Erdene Gold Inc. 0.72
Torch River Resources Ltd. 0.54
Western Troy Capital Resources Inc. 0.53
Creston Moly Corporation (formerly Georgia Ventures Inc.) 0.47
Tournigan Gold Corp. 0.25
Columbia Yukon Explorations Inc. 0.11
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Portfolio holdings as a percentage of net assets 78.14
(1) This is a non-generally accepted accounting principles measure; please refer to the financial highlights section of the management report of fund performance (MRFP) for further details. The MRFP is available at SEDAR and the company's website.
(2) A copy of the management services agreement is available for review at SEDAR and the company's website.
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