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9/1/18

(Some of) Eric Sprott's Greatest Misses


Unlike those who think that he's some sort of infallible machine who never gets them wrong, I understand how Eric Sprott approaches the exploreco market. He knows he's going to bet on losers along the way and has done so on umpteen occasions, he also knows that it only takes one massive winner among a bunch of positions to justify the strategy and come out on top.

This is something that the newbies in hot stocks fail to capture, so by way of an example they might want to mull over the RegFs  filed by Mr. Sprott last night on SEDAR in which he announced the lapsing of warrant positions in four of his holdings. For those just joining us, this means...
  • He bought into a placement that included warrants in the deal
  • No matter what the shares have done, the warrants on the day of expiry weren't at the base price required
  • He has let them expire worthless, waving goodbye to them forever. 

There were four of his positions filed last night, in Latin American Minerals (LAT.v), Excellon Resources (EXN.to), Golden Predator (GPY.v) and Ascot Resources (AOT.v). For what it's worth, considering the entry price of the units in each placement, though still losers he's only going to be down a bit in EXN and AOT, no big number in percentage terms. However in LAT and GPY, he swung and missed.
  • The LAT warrants were priced at $0.15. Today it's a $0.025 stock
  • The EXN warrants were priced at $1.75. Today it's a $1.13c stock
  • The GPY warrants were priced at $1.00. Today's it's a $0.355 stock
  • The AOT warrants were priced at $1.50. Today's it's a $0.87 stock

FOR IMMEDIATE RELEASE
TORONTO, August 31, 2018 - Eric Sprott announces the following common share purchase warrant (“Warrant”) expirations that resulted in a partially diluted beneficial ownership change of greater than 2% and the filing of early warning reports.  

Latin American Minerals Inc. (“LAT”)
On July 7, 2018 and July 18, 2018, a total of 25,000,000 Warrants expired unexercised representing approximately 10.2% of the outstanding common shares on a partially diluted basis. Prior to the expiry of these Warrants, Mr. Sprott beneficially owned and controlled 35,333,334 common shares and 33,333,334 Warrants representing approximately 27.2% of the outstanding common shares on a non-diluted basis and approximately 42.8% on a partially diluted basis assuming the exercise of all Warrants. As a result of the Warrant expiry, Mr. Sprott now beneficially owns and controls 35,333,334 common shares and 10,333,334 Warrants representing approximately 27.2% of the outstanding common shares on a non-diluted basis and approximately 32.6% on a partially diluted basis assuming the exercise of all Warrants. LAT is located at 502-211 Yonge Street, Toronto, ON M5B 1M4. A copy of the early warning report with respect to the foregoing will appear on LAT’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com and may also be obtained by calling Mr. Sprott at (416) 362-7172.
 
Excellon Resources Inc. (“EXN”)
On July 26, 2018, 2,913,413 Warrants expired unexercised representing approximately 2.3% of the outstanding common shares on a partially diluted basis. Prior to the expiry of these Warrants, Mr. Sprott beneficially owned and controlled 20,520,715 common shares and 3,538,413 Warrants, representing approximately 20.8% of the outstanding common shares on a non-diluted basis and approximately 23.6% on a partially diluted basis assuming the exercise of all Warrants. As a result of the Warrant expiry, Mr. Sprott now beneficially owns and controls 20,520,715 common shares and 625,000 Warrants, representing approximately 20.8% of the outstanding common shares on a non-diluted basis and approximately 21.3% on a partially diluted basis assuming the exercise of all Warrants. EXN is located at 900-20 Victoria Street, Toronto, ON M5C 2N8. A copy of the early warning report with respect to the foregoing will appear on EXN’s profile on SEDAR at www.sedar.com and may also be obtained by calling Mr. Sprott at (416) 362-7172.
 
Golden Predator Mining (“GPY”)
On July 26, 2018, 5,000,000 Warrants expired unexercised representing approximately 3.5% of the outstanding common shares on a partially diluted basis. Prior to the expiry of these Warrants, Mr. Sprott beneficially owned and controlled 8,000,000 common shares and 5,000,000 Warrants, representing approximately 6.1% of the outstanding common shares on a non-diluted basis and approximately 9.6% on a partially diluted basis assuming the exercise of all Warrants.

 As a result of the Warrant expiry, Mr. Sprott now beneficially owns and controls 8,000,000 common shares, representing approximately 6.1% of the outstanding common shares. This is Mr. Sprott’s first transaction in GPY since he last reported as a 10% or more beneficial owner. GPY is located at 510-580 Hornby Street, Vancouver, B.C. V6C 3B6. A copy of the early warning report with respect to the foregoing will appear on GPY’s profile on SEDAR at www.sedar.com and may also be obtained by calling Mr. Sprott at (416) 362-7172.
 
Ascot Resources Ltd. (“AOT”)
On August 5, 2018, 8,695,653 Warrants expired unexercised representing approximately 4.7% of the outstanding common shares on a partially diluted basis. Prior to the expiry of these Warrants, Mr. Sprott beneficially owned and controlled 18,628,006 common shares and 8,695,653 Warrants, representing approximately 12.2% of the outstanding common shares on a non-diluted basis and approximately 16.9% on a partially diluted basis assuming the exercise of all Warrants. As a result of the Warrant expiry, Mr. Sprott now beneficially owns and controls 18,628,006 common shares, representing approximately 12.2% of the outstanding common shares.
AOT is located at 1550-505 Burrard Street, Vancouver, B.C. V7X 1E5. A copy of the early warning report with respect to the foregoing will appear on AOT’s profile on SEDAR at www.sedar.com and may also be obtained by calling Mr. Sprott at (416) 362-7172.
 
Purpose
The securities noted above are held for investment purposes. Mr. Sprott has a long-term view of the investment and may acquire additional securities either on the open market or through private acquisitions or sell the securities either on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other relevant factors.
 
Eric Sprott
200 Bay Street, Suite 2600
Royal Bank Plaza, South Tower
Toronto, Ontario M5J 2J1


These are just a handful from last night, a list that makes for an easy example post in the blog on a Saturday morning. Those of you under the impression that following Eric S into a trade is some sort of mystic formula for guaranteed gains ought to check further, do more DD, see for yourself. He backs failures A LOT of the time (seriously, go look), the difference is that when he nails a winner he makes an equal capslock A LOT of money (e.g. at least $300m in Kirkland Lake). However, anyone that gives you the "Eric is long so this is a winner" spiel does not know what they're talking about.