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Sprott says silver will keep outshining gold
By Euan Rocha and Pav Jordan
Tuesday, March 8, 2011
TORONTO -- Silver is likely to keep outperforming gold thanks to strong dollar flows, though both are still good investments compared with copper and other base metals, according to Eric Sprott, the hedge-fund manager and Canadian investment guru.
"I watch where the money goes and the money's going into silver. There's as much money going into silver as into gold in dollar terms," said Sprott in an interview with Reuters.
Sprott, who heads Toronto-based hedge-fund Sprott Asset Management, said it is important to note that silver available to buy is relatively scarce in terms of value, and that bodes well for further gains.
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Prophecy Resource Spins Off Platinum/Palladium Venture:
World-Class PGM Deposit in Yukon
Company Press Release, January 18, 2011
VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy.
PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding.
Following the transaction:
-- Prophecy will own approximately 90 percent of PCNC.
-- PCNC will consolidate its share capital on a 10 old for one new basis.
-- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp.
-- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings.
Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000.
For the complete announcement, please visit:
"There is 75 times more dollars worth of gold to buy than silver, but the money's going in one to one," says Sprott, while speaking on the sidelines of an investor event held in conjunction with the annual PDAC mining convention in Toronto.
Silver stocks in COMEX warehouses are near their lowest since April 2006, when the metal traded at $5 an ounce. Demand for silver coins has also picked up, especially in the United States, where it was at record levels early this year.
"My biggest thing is silver. I think silver is going to go up a lot here. Gold's right in there, but not as good as silver," said Sprott, following a presentation to hundreds of investors in a resplendent ballroom at Toronto's Royal York Hotel.
Gold and silver -- traditionally viewed as a safe store of value in turbulent times -- have soared on inflation concerns, political turmoil in the Middle East and North Africa, an uneven U.S. economic recovery, and the European sovereign debt crisis.
Gold touched an all-time high of $1,444.40 on Monday, while silver hit a 31-year high of $36.70 an ounce, after rating agency Moody's downgraded Greece's debt and violence flared anew in Libya.
"I have a little website that sells gold and silver maple leafs, and we sell about four times more silver than gold in dollars," said Sprott, who had earlier in the day addressed a room full of miners, investors, and others at the PDAC convention.
The PDAC event is the world's largest gathering of people tied to the mining industry, and this year's event is expected to attract more than 22,000. The mood among delegates is exuberant, thanks to record or near-record prices that both precious and base metals are commanding.
While bullish on precious metals, Sprott is wary of base metals -- copper, nickel, and zinc -- as their fortunes are too closely tied to the fate of the broader economy.
"I agree with the prices of precious metals. I'm not as much of a bull on base metals," Sprott said. "I still worry about the financial system. It's massively overlevered and will still come undone."
Sprott's views on base metals mirror those of another of Canada's most influential money managers, Donald Coxe, who expresses similar doubts about the strength of the economy due to surging food and fuel prices.
"I'm not as economically optimistic as the average guy, so I don't go to base metals," said Sprott, a gold bug, who has built a reputation for bucking market trends.
"We have oil and food prices rising like crazy. ... It's almost hyperinflationary," said Sprott, who advises investors to put money in "real things" where demand is virtually inelastic.
"I'm very optimistic about gold and silver," said Sprott. "And real things like potash, uranium, oil, stuff that is absolutely essential."
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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: