Well, it won’t surprise you at all to hear that I like Sprott Resource Lending (SILU), since I wrote glowingly about them in my “idea of the month” article just a couple weeks ago — but now that my trading restriction has expired, I’ve used some of the money that I freed up by selling Activision Blizzard (ATVI) to open a small SILU position.
No news from the company since I last wrote — they have updated their investor presentation, but basically just to add the data that they had already released in press release form and that I included in my notes earlier ($30 million in loans in the pipeline, $39 million closed). They’re still planning to be substantially done clearing their real estate loans off the books sometime next quarter (ie, by the end of June), and to start paying their initial dividend (likely to be around 4%) and roughly that same time. I still think we’ll see an effective yield on today’s price of 10%+ in a couple years, though that depends on a lot of factors, including management execution and commodity prices.
And yes, I still believe the upside from their sister company Sprott Resource (SCP in Canada, SCPZF on the pink sheets) will be sharper, given the possible catalysts from their public and may-soon-IPO holdings like One Earth Farms and Union Agriculture Group, but I expect Sprott Resource Lending to be a strong yielder and compounder going forward, and likely much more stable — I’m happy to own both.