Sprott Resource Corp. Institutes Monthly Dividend
TORONTO, Dec. 12, 2012 /CNW/ - Sprott Resource Corp. ("SRC") (TSX: SCP) announced today that its Board of Directors has declared an initial monthly dividend of $0.038 per common share (the "Initial Dividend").
The Initial Dividend will be paid on January 15, 2013 to shareholders of record at the close of business on December 31, 2012. The full amount of the Initial Dividend is designated as an "eligible dividend" for purposes of the Income Tax Act (Canada).
SRC's Board of Directors also approved a policy (the "Dividend Policy") pursuant to which SRC intends to pay a monthly dividend at least equal to 0.833% of SRC's total equity attributable to shareholders ("SRC's Book Value") based on the most recently filed financial statements of SRC at the time the dividend is declared. The amount of future monthly dividends will accordingly fluctuate quarterly with SRC's Book Value.
The Initial Dividend is based on SRC's Book Value as at September 30, 2012, adjusted to take into consideration the increase in SRC's Book Value due to its disposition of Waseca Energy Inc., as will be the monthly dividends that are declared prior to the filing of SRC's financial statements for the year ending December 31, 2012
"We are committed to providing shareholders with an attractive total return and increased liquidity," said Kevin Bambrough. "We feel that our business has matured such that monetizations of our portfolio companies will be more predictable and the returns on such monetizations will support the Dividend Policy and grow SRC's Book Value per common share."
As disclosed in SRC's press release dated November 14, 2012, since inception in 2007, SRC has achieved an internal rate of return on investments(1) of approximately 28% and gross gains, excluding taxes and fees, of approximately $365 million, of which $280 million are gross realized gains. In addition, since inception management has repurchased approximately $72 million in common shares, with over $38 million repurchased in 2012 alone. Based on its historical returns and its return expectations, management believes that it can sustain the Dividend Policy and grow SRC's Book Value per common share over the long term.