Sprott Resource Corp Ord SCPZF

Corsa Position

[pmac2015]

Interesting to think about how they participated in the recent equity offering by Corsa Coal. Now that the Corsa shares represent 75% of the market value of SCP and cash represents up to 50% of the market value of SCP depending on how much of the ICD position is remaining. If they want the fund to have more exposure to Corsa it would be cheaper and more advantageous to use the cash to buy back shares of SCP. So it was objectively a bad investment decision on that basis but perhaps maintaining 20% ownership of Corsa somehow strengthens the position by ensuring representation on the board.