Having a large fund invest millions of dollars into a junior resource company is par for the course … but how often do you hear about a junior resource company investing $1,500,000 of its own cash INTO one of the world’s largest funds? Well, it happened this week when UC Resources announced it had recently acquired for investment purposes $1,500,000 of the Sprott Physical Silver Trust* (NYSE Arca:PSLV) representing a portion of its available free cash. Yes, UC Resources is an AGORACOM client and you can assume we are horribly conflicted, right before you also concede that you haven’t heard of such a thing in …. ever?
The board of directors approved this investment for the following reasons:
- Enhance return on present cash, since presently holding cash vehicles provides negative returns when inflation adjusted;
- Investing in the industry the company is involved in and seeks to grow in from both a production and exploration perspective;
- Good liquidity;
- Enhance shareholder value from further increases in the price of silver;
- Our way of responding to the call to action of Eric Sprott for precious metal companies to retain some production as savings.
- It was felt the best course of action for UC was to invest in a true physical silver vehicle and the Sprott silver trust was selected.
- The UC Resources Investment and Its Implications
- Other Companies Responding To Sprott’s Call To Action
- Why Many More Silver Companies Still Need To Do More
- $100 Silver
CONCLUSION: Many, many thanks to Eric Sprott for carving out time in his incredibly schedule to speak with us. This is a very worthwhile listen for junior resource investors everywhere.
