Silver will be a currency too, Sprott tells NY Hard Assets Conference


Silver-Backer Sprott Still Believes -- Deeply

By Carolyn Cui
The Wall Street Journal
Monday, May 9, 2011

After silver suffered its worst one-week drubbing in three decades, one of the biggest silver bulls gave a pep talk to hundreds of followers on Monday.

"Silver will be a currency just like gold. It's logical to expect silver prices to go much higher," said Eric Sprott, chief executive officer of Sprott Asset Management LP, which oversees a $1-billion silver fund that was $327 million larger at the beginning of last week.

As for the recent plunge, Mr. Sprott pointed at speculative short-sellers as the prime culprit, eliciting applause from the crowd of nervous believers. Silver skidded 27% last week, but poor man's gold leaped 5.2% today, underscoring its rodeo-like allure.

Mr. Sprott, a big advocate for precious metals, trotted out familiar themes to back up his points: the Federal Reserve's loose monetary policies, relentless bank failures, and the fragile housing market.

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Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit,
Extending the Mineralization of the Southwest Vein on the Property

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.

"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit:

Instead of U.S. dollars and other currencies, which are "questionable currencies backed with nothing," people should buy precious metals, he said in a speech at the Hard Assets Investment Conference at the New York Marriott.

Silver kicked off its nasty week by falling $6 an ounce in 13 minutes last Sunday night, when both U.K. and Chinese markets were closed for national holidays. "But I was awake, throwing my guts up," he said.

It's been quite a week for silver -- and for Mr. Sprott's fund. Its value stood at $1.3 billion on April 20, slid to $922 million on May 6, and climbed back above $1 billion today as silver rebounded.

"If this was not the script for somebody wanting silver down, I don't know what is," he said, stressing his short-seller meme and alluding to the big moves on light volume at the start of the week. Trading activities in silver's futures market and exchange-traded funds have well exceeded the amount of silver in the physical market, he added.

Mr. Sprott also addressed one of the most contentious questions between bulls and bears in the silver market: How much above-ground silver is there? Many bulls think all the silver being produced has been consumed and disappeared. Therefore, silver is facing a shortage.

However, mainstream commodities analysts think that some of the silver used in photographic films or batteries has been recycled and come back into the market as "secondary supply." In other words, there's more silver than bulls argue. Globally, total bullion stocks should at least be 1.5 billion ounces, including silver held by exchange-traded funds and private holdings in the form of coins and bars, according to GFMS Ltd. a London-based metals consultancy.

"Why shouldn't silver appreciate more than gold if there's less silver around?," asked someone in the audience.

"Do you want to come up to the stage?" Mr. Sprott quipped. "If gold goes to $3,200, silver should be at $200."

With gold at $1500 and silver at $37, that would mean a bit more than a double for gold and more than a quintuple for silver.

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Company Press Release
via CNW Group, Toronto
Monday, May 9, 2011

Sprott Asset Management Expands its Industry-Leading Family
of Precious Metals Funds with First Silver Bullion Mutual Fund in Canada

TORONTO -- Sprott Asset Management LP is pleased to announce that it has expanded its industry-leading family of precious metals funds with the addition of the Sprott Silver Bullion Fund.

Sprott now offers five precious metals funds including Sprott Gold & Precious Minerals Fund, Sprott Gold Bullion Fund, and Sprott Silver Bullion Fund, as well as the exchange-traded Sprott Physical Gold Trust and Sprott Physical Silver Trust.

"We have been very early and active investors in precious metals and we strongly believe that all investors should have an allocation to precious metals in their portfolios. With our newest fund, investors will have greater choice as to how they choose to gain exposure to this asset class." says James Fox, president of Sprott Asset Management.

The Sprott Silver Bullion Fund is an innovative offering, being the first mutual fund in Canada to invest primarily in unencumbered, fully allocated silver bullion. The fund's objective is to seek to provide a secure and liquid investment for investors seeking exposure to silver bullion without the inconvenience associated with direct investment.

Sprott Asset Management LP (, a wholly owned subsidiary of Sprott Inc. (, is a fund company dedicated to achieving superior returns for its investors over time. Sprott Asset Management LP manages assets primarily for institutions, endowments, and high-net-worth individuals and is the investment manager of the Sprott Funds. Commissions, trailing commissions, management fees, and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual Funds are not guaranteed, their values change frequently and past performance may not be repeated. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors should consult their financial adviser to determine if these funds may be sold in their jurisdiction.

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Wall Street Journal Publishes Lewis Lehrman's Call for the Gold Standard

In its April 26 edition The Wall Street Journal published an important essay by the Lehrman Institute's chairman, Lewis E. Lehrman, explaining why a gold-convertible dollar is critical to eliminating the shocking federal deficit.

"Experience and the operations of the Federal Reserve System compel me to predict that U.S. Rep. Paul Ryan's heroic efforts to balance the budget by 2015 without raising taxes will not end in success -- even with a Republican majority in both Houses and a Republican president in 2012. ...

"What persistent debtor could resist permanent credit financing? For a government, an individual, or an enterprise, 'a deficit without tears' leads to the corrupt euphoria of limitless spending. For example, with new credit the Fed will have bought $600 billion of U.S. Treasuries between November 2010 and June 2011, a rate of purchase that approximates the annualized budget deficit. Commodity, equity, and emerging-market inflation are only a few of the volatile consequences of this Fed credit policy."

To read more, and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit: