Sprott Resource Lending Corp.

Sprott Resource Lending Corp.

February 09, 2011 07:01 ET

Sprott Resource Lending Corp. Updates Loan Portfolios, Its Future Dividend Plans and Seeks Regulatory Approval for a Normal Course Issuer Bid

TORONTO, ONTARIO--(Marketwire - Feb. 9, 2011) - Sprott Resource Lending Corp. (the "Corporation" or "Sprott Resource Lending") (TSX:SIL)(NYSE Amex:SILU) continues to work towards investing its cash position in a resource lending portfolio. 

As at December 31, 2010 Sprott Resource Lending had funded new resource loans of $5 million and, subsequent to year end, has entered into an additional $34 million of resource loans. These amounts include a US$25 million loan to African Minerals Limited, for which the Corporation acted as lead arranger for a US$418 million loan facility. Further, Sprott Resource Lending has extended preliminary commitments for $30 million in new loans which are sufficiently advanced in the documentation process for management to believe that closing is likely to occur.

During the last quarter of 2010, Sprott Resource Lending grew its cash and marketable securities position by monetizing approximately $27 million in real estate loans and a further $9 million during January 2011. As of February 8th, 2011 the Corporation's cash and marketable securities balance is approximately $104 million.

Peter Grosskopf, President and Chief Executive Officer stated, "With the recent surge in the equity markets, many resource companies are foregoing mezzanine financing and opting to source more permanent capital. Despite this, with a strong loan pipeline, we are well on our way to profitably deploying our growing cash position into the sector. We intend to recommence the payment of a regular dividend and will do so as soon as supported by lending cash flow. In addition, we feel the current market value of shares can provide good value and to that end, we are seeking regulatory approval to make a normal course issuer bid which will benefit continuing shareholders."

Sprott Resource Lending intends to re-institute the payment of a regular dividend once the aggregate size of its total resource loan portfolio is sufficient to fund the dividend; this amount is currently estimated to be approximately $100 million.

The Corporation also intends to seek regulatory approval to make a normal course issuer bid ("NCIB"), under which the Corporation may make open market purchases of its common shares over the TSX.

The Corporation's directors believe that the purchase from time to time of common shares of the Corporation may be a worthwhile investment for the Corporation that should benefit continuing shareholders. The Corporation's directors believe that normal course issuer bid purchases of shares for cancellation may, by reducing the number of outstanding shares, reduce the discount that may exist between the market price of its shares and the Corporation's net asset value per share.

About Sprott Resource Lending Corp.

Sprott Resource Lending specializes in bridge and mezzanine lending to precious and base metal mining, exploration and development companies and oil and gas companies on a global basis. Headquartered in Toronto, the Corporation seeks to generate income from lending activities as well as the upside potential of bonus arrangements with borrowers generally tied to the underlying property or shares of the borrower.

Sprott Resource Lending (www.sprottlending.com) was founded by Quest Capital Corp. and Sprott Lending Consulting Limited Partnership. Sprott Lending Consulting LP is a wholly owned subsidiary of Sprott Inc., the parent of Sprott Asset Management LP (www.sprott.com), a leading Canadian independent money manager.

For more information about Sprott Resource Lending, please visit SEDAR (www.sedar.com).


This press release may include certain statements that constitute "forward-looking statements", and "forward looking information" within the meaning of applicable securities laws ("forward-looking statements" and "forward-looking information" are collectively referred to as "forward-looking statements", unless otherwise stated). Such forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Forward-looking statements may relate to the Corporation's future outlook and anticipated events or results and may include statements regarding the Corporation's future financial position, business strategy, budgets, litigation, projected costs, financial results, taxes, plans and objectives. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements were derived utilizing numerous assumptions regarding expected growth, results of operations, performance and business prospects and opportunities that could cause our actual results to differ materially from those in the forward-looking statements. While the Corporation considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect.

Forward-looking statements should not be read as a guarantee of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward looking statements. To the extent any forward-looking statements constitute future-oriented financial information or financial outlooks, as those terms are defined under applicable Canadian securities laws, such statements are being provided to describe the current potential of the Corporation and readers are cautioned that these statements may not be appropriate for any other purpose, including investment decisions. Forward-looking statements speak only as of the date those statements are made. Except as required by applicable law, we assume no obligation to update or to publicly announce the results of any change to any forward-looking statement contained or incorporated by reference herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward looking statements. If we update any one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. You should not place undue importance on forward-looking statements and should not rely upon these statements as of any other date. All forward looking statements contained in this press release are expressly qualified in their entirety by this cautionary notice.

Contact Information

  • Sprott Resource Lending Corp.
    Peter Grosskopf
    President and CEO
    Sprott Resource Lending Corp.
    Jim Grosdanis