Several folks have asked me if I had any reaction to Sprott Resource Lending (SILU)’s last quarterly report — which was pretty tepid.

So in response: Yes, it looks to me like they’re still “steady as she goes.”

I initially bought in to SILU and profiled it for the Irregulars with far too much short-term enthusiasm — I expected them to be able to ramp up the size of their portfolio much more quickly, and to then much more quickly ramp up their dividend and provide a nice leveraged return. Fate intervened, and the crash of junior mining stocks along with some prudence at SILU and competition in their marketplace have meant that SILU’s growth has been much slower than I expected. Throw in a persistent pile of bad real estate that’s still on their books from their previous life (they were briefly the equivalent of a mortgage REIT before they returned to their mining and natural resources roots under Sprott’s tutelage), and it’s been a slog.

Not an unprofitable slog, mind you, but a slog compared to what I expected — when I first bought shares I was forecasting that their dividend would be up to 15-20 cents a share by now (that’s per year), and though they have raised it once it’s still at six cents, for a yield of a bit over 4%. And I also thought that they would move up to trade at a small, reasonable premium to book value — but that hasn’t happened either, they’re trading now at a pretty substantial discount to book value. Book value just got back to $1.60 (it fluctuates some, largely due to the equity and warrants they hold as “kickers” for the loans they’ve made to miners), so at the current $1.40 share price that’s a price/book valuation of 0.86.

So what’s the deal?

Well, as I said, it’s been a bit slow. The company is designed to make both gold loans and more standard loans to natural resources companies — gold loans are similar to the streaming deals done by our fave Sandstorm Gold (SAND), whereby SILU effectively lends money and is paid back in gold, with a kicker if gold prices rise. More standard resource loans are loans they make to miners or other resource companies to help them get a mine built, and they come with a solid coupon (8-10%ish these days) as ...