Lessons from the Masters: Where is market mover Sprott spreading its cash on the ASX in 2022?

Sprott Asset Management, founded by famous mining investor Eric Sprott, is one of the most influential junior mining investment firms in the world
It holds over $400 million worth of Top 20 and disclosed shareholdings in 28 ASX listed companies
Sprott Inc. was founded on the back of precious metals, but in recent years uranium has become its biggest bet on the Aussie bourse

When we last checked in on Sprott, the fund management firm founded by famed Canadian precious metals bull and investment guru Eric Sprott, back in 2019, the company had a serious bent towards all things yellow metal.

An early backer of Fosterville Gold Mine owner Kirkland Lake Gold, now sadly no longer on the ASX after a multi-billion dollar merger with fellow Canucks Agnico Eagle, Sprott was indelibly linked to the shiny stuff for decades.

Back in the news after another Sprott company, Sprott Streaming and Royalty, stirred a charge in ASX junior Theta Gold Mines (ASX:TGM) shares with a US$70m ($110m) gold streaming term sheet to fund the development of its mines in South Africa, Sprott Asset Management still boasts a truckload of shares in gold stocks across the globe, including on the ASX, but mainly in its homeland of Canada.

Yet current IRESS data shows it is another yellow commodity that glows brighter in the Australian portfolio of the legendary mining investment firm these days.

Of the 28 primarily Sydney listed companies in which Sprott is a top 20 shareholder on the ASX, 10 are now uranium explorers.

Eric Sprott speaking in Perth in 2019. Pic: Stockhead

All up Sprott Asset Management holds disclosed stakes worth almost $402 million on the ASX, according to most recently available IRESS info, not including companies with a primary listing overseas like New York-listed SSR Mining (ASX:SSR).

Read it and weep (at your comparatively pitiful expense account).

Disclosed Sprott Asset Management share holdings

Source: IRESS

CODE	COMPANY	COMMODITY	SHARES (30/09/22)	%	VALUE
SPROTT ASSET MANAGEMENT
PDN	Paladin Energy	Uranium	78625308	2.64%	$ 66,045,558.72
LOT	Lotus Resources	Uranium	57589866	4.34%	$ 12,669,770.52
SVM	Sovereign Metals	Mineral Sands	54173214	11.50%	$ 19,502,357.04
PEN	Peninsula Energy	Uranium	48976400	4.90%	$ 7,836,224.00
WAF	West African Resources	Gold	44671594	4.38%	$ 46,458,457.76
TCG	Turaco Gold	Gold	42992923	10.05%	$ 1,848,695.68
CTM	Centaurus Metals	Nickel	40262738	9.43%	$ 40,262,738.00
AEE	Aura Energy	Uranium	24916380	4.80%	$ 6,976,586.40
PRU	Perseus Mining	Gold	22081800	1.62%	$ 39,526,422.00
BKY	Berkeley Energia	Uranium	20446640	4.59%	$ 5,520,592.80
BOE	Boss Energy	Uranium	16923535	4.80%	$ 44,001,191.00
DYL	Deep Yellow	Uranium	12167045	1.66%	$ 10,007,394.51
BGL	Bellevue Gold	Gold	11413732	1.09%	$ 8,446,161.68
DDH	DDH1 Drilling	Mining Services	10000000	2.48%	$ 8,200,000.00
STN	Saturn Metals	Gold	8881234	6.84%	$ 2,309,120.84
WGX	Westgold Resources	Gold	6921505	1.46%	$ 5,398,773.90
BMN	Bannerman Energy	Uranium	7061072	4.72%	$ 14,687,029.76
NST	Northern Star Resources	Gold	3645315	0.31%	$ 30,985,177.50
COD	Coda Minerals	Copper	4553231	3.65%	$ 1,320,436.99
ALV	Alvo Minerals	Copper	5625000	7.72%	$ 1,012,500.00
EVN	Evolution Mining	Gold	6000000	0.33%	$ 11,880,000.00
NIS	NickelSearch	Nickel	2885014	2.77%	$ 375,051.82
ORR	Orecorp	Gold	1380000	0.35%	$ 455,400.00
SPD	Southern Palladium	PGMs	760000	0.85%	$ 760,000.00
AGE	Alligator Energy	Uranium	161970119	4.90%	$ 8,260,476.07
EL8	Elevate Uranium	Uranium	13510718	4.90%	$ 6,755,359.00
TMR	Tempus Resources	Gold	4262844	1.80%	$ 238,719.26
SLS	Solstice Minerals	Gold	138764	0.10%	$ 19,426.26
TOTAL					$ 401,759,621.51

ERIC SPROTT
E2M	E2 Metals	Gold	17142860	8.61%	$ 2,571,429.00
KZR	Kalamazoo Resources	Gold	10000000	6.72%	$ 1,900,000.00
TOTAL					$ 4,471,429.00

Yellowcake eater

Billionaire Eric Sprott, who stepped down as Sprott Inc. chairman in 2017, famously told investors to “buy gold” ahead of the Global Financial Crisis.

The safe haven metal rose to a then record in excess of US$1900/oz within four years.

But it shouldn’t be a surprise that Sprott is backing ASX-listed uranium plays so hard.

It is responsible for the formation of the Sprott Physical Uranium Trust, or SPUT, which last year emerged as a key player in the global market for the nuclear fuel.

The hoovering up of uranium from lightly traded spot markets was like pouring kerosene on a fire sparked by a growing supply shortage for the commodity, which has been down in the dumps since the Fukushima nuclear incident in Japan in 2011.

Virtually uninvestable for a decade, with prices going so low even the majors weren’t making money and had to cut off production, a number of companies have announced plans to restart closed mines.

Two of them, Langer-Heinrich owner Paladin Energy (ASX:PDN) and Honeymoon mine operator Boss Energy (ASX:BOE), come in first and third in terms of value when it comes to Sprott’s holdings on the ASX.

In our 2019 list, Sprott had just 16 investments of note on the ASX, most of them small cap goldies.

Today it’s a more diverse set. The volume of uranium stocks on the list (10) against Sprott’s conventional play in bullion (11) shows just how strong its conviction in the nuclear sector is and how both its interests and the world’s investment focus has shifted.

Sprinkle in there some mining services, copper, and platinum group elements and Sprott is becoming a much broader church than it was before the pandemic.

All up around $180 million is invested in uranium explorers, with around $140 million in gold.

A number of juniors are on Sprott’s radar, including Saturn Metals (ASX:STN), Tempus Resources (ASX:TMR), Orecorp (ASX:ORR) and Turaco Gold (ASX:TCG).

But it is some well-known names where most of that value has been created. Sprott holds over $30 million in Northern Star Resources (ASX:NST) stock, having backed both NST and Saracen Mineral Holdings before the $10 billion producer’s merger in 2021.

ASX 200 stocks Evolution Mining (ASX:EVN) and Bellevue Gold (ASX:BGL) are there, along with Westgold Resources (ASX:WGX).

But the two biggest holdings in the precious metals world are West African gold legends West African Resources (ASX:WAF) and Perseus Mining (ASX:PRU), up 161% and 441% respectively over the past five years.

Intriguingly, Sprott’s largest holding by percentage is Sovereign Metals (ASX:SVM), the mineral sands play which has discovered the world’s largest ever bounty of natural rutile and one of its largest accumulations of natural graphite at the Kasiya project in Malawi.

Personal endorsements

Sprott himself continues to be a gold bull, having invested heavily in North America including a big punt on the frontier gold field of Newfoundland via a US$200 million investment in New Found Gold.

He has a couple of Aussie gold stocks only recently added to his personal portfolio.

The first is E2 Metals (ASX:E2M), where he cornerstoned an $8.5 million capital raising in March this year.

E2 is chasing an emerging greenfields gold and silver discovery at Conserrat in Argentina, located next door to the 8.9Moz gold and 137Moz silver mine at Cerro Vanguardia owned by South African gold monster AngloGold Ashanti.

Also in Sprott’s wheelhouse is a 6.72% stake worth $1.9 million in Victorian and Pilbara gold explorer Kalamazoo Resources (ASX:KZR).

Kalamazoo has plenty of familiarities for Sprott, who was a notable backer of both Kirkland Lake, the company that revitalised the Vic goldfields, and Novo Resources, which sparked the Pilbara gold rush in 2017.

At Stockhead, we tell it like it is. While Theta Gold Mines and Sovereign Metals are Stockhead advertisers, they did not sponsor this article.