The Gold Symposium Keynote Presentation

1. Mania. Manipulation. Meltdown.
Eric Sprott, FCA
Chief Executive Officer
Chief Investment Officer
Senior Portfolio Manager
Sprott Asset Management LP
November 2011 0

2. Disclaimer
Sprott Asset Management LP is the investment manager to the Sprott Funds, (collectively, the
“Funds”). Important information about these Funds, including their investment objectives and
strategies, purchase options, and applicable management fees, performance fees (if any), and
expenses, is contained in their prospectus or offering memorandum. Please read these documents
carefully before investing. Commissions, trailing commissions, management fees, performance
fees, other charges and expenses all may be associated with investing in the Funds. Investment
funds are not guaranteed, their values change frequently and past performance may not be
repeated. This communication does not constitute an offer to sell or solicitation to purchase
securities of the Funds.
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 who are
not resident in Canada should contact their financial advisor to determine whether securities of the
Funds may be lawfully sold in their jurisdiction.
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3. Disclaimer
Forward-Looking Statements
This presentation contains forward-looking statements which reflect the current expectations of management regarding future
growth, results of operations, performance and business prospects and opportunities. Wherever possible, words such as “may”,
“would”, “could”, “will”, “anticipate”, “believe”, “plan”, “expect”, “intend”, “estimate”, and similar expressions have been used to
identify these forward-looking statements. These statements reflect management’s current beliefs with respect to future events
and are based on information currently available to management. Forward-looking statements involve significant known and
unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be
materially different from any future results, performance or achievements that may be expressed or implied by such forward-
looking statements. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the
forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those
expressed or implied by the forward-looking statements contained in this document. These factors should be considered
carefully and undue reliance should not be placed on these forward-looking statements. Although the forward-looking
statements contained in this document are based upon what management currently believes to be reasonable assumptions,
there is no assurance that actual results, performance or achievements will be consistent with these forward-looking statements.
These forward-looking statements are made as of the date of this presentation and Sprott does not assume any obligation to
update or revise.
Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of
trading intent of any investment funds managed by Sprott Asset Management LP. Any reference to a particular company is for
illustrative purposes only and should not to be considered as investment advice or a recommendation to buy or sell nor should it
be considered as an indication of how the portfolio of any investment fund managed by Sprott Asset Management LP is or will
be invested.
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 who are not resident in Canada should contact their financial advisor to determine whether
securities of the Funds may be lawfully sold in their jurisdiction.
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4. Leverage in the Banking System
SubPrime
ALT-A
HELOC
CDS
CDO
MBS
STUDENT
AUTO
CORPORATE
REAL ESTATE
CONSTRUCTION
STOCKS
PREFERREDS
ETC, ETC, ETC …
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5. Government Bailouts
Transfer of Risk…from Private Sector to Public Sector
QE1, QE2, TARP, TALF, Term Auction
Facility, UK bank bailouts, Term Security Lending
Facility, American Recovery & Reinvestment Act, European
Financial Stability Facility, Chinese bank loans, Home buyer tax credits,
Ireland bank bail-outs, Money Market Investor Funding Facility, Unemployment benefit extensions,
FDIC bank takeovers, Fannie Mae & Freddie Mac, EU & IMF bail-out of Portugal, Canadian government mortgage purchases
through CMHC, Student loan guarantees …
*** Recent EU Bailout
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6. The Underperformance of European Banks
Blue: Deutsche Bank
Red: BNP Paribas
Green: Credit Agricole
Orange: Societe Generale
Source: Yahoo Finance
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7. Bank CDS Rates
Source: Bloomberg
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8. Sovereign CDS
Source: Bloomberg
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9. US Examples
Select October 2011 Bank Failures
Bank of Commonwealth,
Norfolk, Virginia
- $985.1 million in total assets  140 banks failed
- Cost to the FDIC: $268.3 million
- Implied Write-Down: 27%
in 2009
First National Bank of Florida
- $296.8 million in total assets
 157 banks failed
- Cost to the FDIC: $46.9 million in 2010
- Implied Write-Down: 16%
First Southern National Bank,  So far 73 banks
Statesboro, Georgia have failed in
- $164.6 million in total assets
- Cost to the FDIC: $39.6 million
2011...
- Implied Write-Down: 24%
Source: FDIC
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10. Precious Metals Review
A Decade of Change
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11. Physical Supply: Gold
Source: CPM Group, Sprott Asset Management LP
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12. Gold’s Changing Fundamentals
Annualized Change
2000 2010
in Demand
Annual Mine Production ~ 2,620 Annual Mine Production ~ 2,689 (79)
metric tonnes according to GFMS metric tonnes according to GFMS
Central Banks; Sellers of 400 Central Banks; Net Buyers of 400 800
tonnes tonnes**
(Washington Agreement, Sept. 1999)
US & Canadian Mint Coin Sales: US & Canadian Mint Coin Sales: 64
290,100 oz* 2,355,500 oz*
Limited Exchange-traded Physical gold ETFs hold 2300 400
investment options tonnes of gold (Bloomberg)
China consumes 207.5 tonnes (WGC) China consumes 700 tonnes (WGC) 500
Indian gold imports: 535 tonnes Indian gold imports: 918 tonnes 383
(Reuters) (Economic Times)
~2000 tonnes
* Source: http://www.usmint.gov/ and Royal Canadian Mint
** Sprott estimate
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13. China’s September Gold Imports Jump Sixfold
Chinese gold imports from Hong Kong, a proxy for the country’s overall
overseas buying, leapt to a record high in September, when monthly
purchases of 57 tonnes matched almost half that for the whole of 2010.
Monthly gold imports for most of 2010 and this year run at about 10
tonnes, but buying jumped in July, August and September. In the three-
month period, China imported from Hong Kong about 140 tonnes, more
than the roughly 120 tonnes for the whole 2010.
Source: Financial Times
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14. Physical Demand Increasing Rapidly
(Bars and coins, excluding jewelry demand)
Source: World Gold Council
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15. Silver: Investment of the
Next Decade
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16. Physical Supply: Silver
Source: CPM Group, Sprott Asset Management LP
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17. Silver’s Changing Fundamentals
Annualized
2005 2010
Change in Demand
Annual Mine Production ~ 630 Annual Mine Production ~ 720 million (90)
million oz according to US ounces according to GFMS
Geological Survey
Canadian Mint Silver Coin Sales: Canadian Mint Silver Coin Sales: 42
1,062,000 oz (RCM) 17,900,000 oz (RCM)
US Mint Coin Sales: 8,405,000 oz* US Mint Coin Sales: 34,662,500 oz* 26
Limited Exchange-traded Physical silver ETF holdings: 510 mm oz 100
investment options (Bloomberg)
China net exporters of 2.7 million China net importers 112 million oz 200
oz (GFMS) (Commodity Online)
US Sales 100 million oz No US Sales 100
(Silver Institute)
380 mm oz.
* Source: http://www.usmint.gov/ and Royal Canadian Mint
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18. The Price Ratio Argument
Historical Silver-to-Gold Ratio: 16:1
Geological In Situ Silver-to-Gold Ratio: 17.5:1
Current Silver-to-Gold Ratio: 50:1
Implied silver price if silver reverted
back to 16:1 ratio at $1,600 gold: $100/oz
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19. Investable Ratio Analysis
Comparison of Key Gold-to-Silver Ratios Key Takeaways
(Ratios in Dollar Terms)
Gold bars and coins in existence (1) ~2.2Bn ounces  The value of all gold bars and coins in
existence is ~$3.5Tn at current prices
Silver bars and coins in existence (1) ~1.2Bn ounces  The value of all silver bars and coins in
existence is ~$40Bn at current prices
Value of gold bars and coins in existence
to silver bars and coins in existence (1)
88:1  Supply / Inventory of investable gold is
significantly higher than the supply of
investable silver…
Investments in the SPDR Gold Trust to
6:1
iShares Silver Trust (2)  …but investors are choosing to put
disproportionately more money to work
2011 YTD U.S. Mint gold coin sales to in silver than in gold…
1:1
silver coin sales (3)
 …and the disparity is even greater in
physical coin sales
PHYS to PSLV IPO’s 0.75:1
(1) Gold and silver data according to the CPM Group 2010 Gold Yearbook
and CPM Group 2009 Silver Yearbook, respectively.
Gold Money 1:1
(2) Ratio is of net dollar purchases of the GLD to the dollar purchases of
the SLV since inception of SLV in April, 2006.
Royal Canadian Mint 1.5:1 (3) 2011 YTD US Mint Coin Sales sourced from http://www.usmint.gov/
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20. The Great Wealth Redistribution
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21. HUI Gold Index Outperformance
Source: Bloomberg
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22. HUI vs. European Financials
Source: Bloomberg
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23. Gold: The Ultimate Currency
Source: Bloomberg
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24. Concluding Remarks
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25. Contact Information
Sprott Asset Management LP
Royal Bank Plaza, South Tower
200 Bay Street
Suite 2700
Toronto, ON M5J 2J1
T: +1 416 943 6707
Toll Free: +1 866 299 9906
F: +1 416 362 4928
Email: info@sprott.com
Web: www.sprott.com
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