(Call Starts Abruptly)…Officer of Sprott Inc. Please go ahead Mr. Grosskopf.

Good morning everyone and thanks for joining us today. Sorry for the delay, obviously the operator was having a little bit of issue with static on her line. With me is Steve Rostowsky, our CFO. Our Q3 results were released this morning and are available on our website, where you can also find the financial statements and MD&A. Our investment performance improved during the third quarter, the majority of our funds reporting positive returns as precious metal prices rallied through July and August before falling back again in September. However, our results have fallen well short of our standards over the past two plus years and we’ve taken a number of steps to improve our performance and position the business for a turnaround. Under the direction of our Co-CIO’s, John Wilson and Scott Colbourne, we’ve moved to a team-based approach to portfolio management and introduce enhanced risk management protocols, while maintaining strong upside potential in our funds. While it’s still early this approach has been somewhat validated by the success of our enhanced equity funds. Effectively, this is a private client style strategy in a fund format. Since launching these funds in 2012, they’ve raised more than 350 million and were the single biggest factor in our return to positive net sales this quarter. While we are still experiencing redemptions from our hedge funds and offshore strategies, we are building some sales momentum in our domestic mutual funds and we expect this trend to continue through year-end. In July, we completed the acquisition of Sprott Resource Lending Corp and a transaction that further strengthens our balance sheet and gives us the ability to re-launch our resource lending strategy in a structure that will be more attractive to institutional investors. We now have more than 350 million in available capital that we will use to seed and launch new funds structured to raise significant assets with the potential to earn meaningful performance fees. During this quarter, we took the first step in this process with the launch of an offshore mining fund and partnership with Zijin Mining Group. To our knowledge this is the first offshore fund to receive approval from the Chinese National Development and Reform Commission allowing mainland Chinese investors to invest in an offshore looking fund. We expect to launch a new institutional resource lending fund in early 2014. Finally, in October, subsequent to year-end, we named Steve Yuzpe as CEO of Sprott Resource Corp, when Kevin Bambrough left the Company to pursue other opportunities. We have a strong team in place at SRC and expect there to be a seamless transition under Steve’s leadership. We think the current resource markets offer outstanding opportunities for private equity investments and out of favor commodities and we expect this business to be a key growth area for Sprott in years ahead. I’ll now turn it over to Steve Rostowsky to walk you through our results for the quarter in more detail.

Thanks Peter. I’ll start with a look at our assets under management. Our AUM was 7.1 billion as at the end of September 2013, down from 10.3 billion at the end of Q3 2012, but up from 7.1 billion at the end of Q2 this year. Market value appreciation accounted for 350 million of the increase, offset by the transfer of about 190 million of AUM through our balance sheet following the completion of the Sprott Resource Lending transaction. Net sales for the quarter were 24 million, compared with 450 million in Q3 last year. However, we are very encouraged by our return to positive net sales after several quarters of redemptions. As Peter noted, we feel that we have begun to build some sales momentum particularly in the funds managed by John Wilson and his team. Slide 6, the next slide shows our AUM on a monthly basis. As you can see, our AUM increased during the quarter largely due to the performance of precious metals and their related equity, as well as inflows into some of our funds. Nearly all of our funds performed very well in July and August as precious metals rallied out of the summer, but several funds gave back much of those gains as precious metals sold off again in September. Turning now to AUM changes by product type, our asset mix is largely unchanged from the end of Q2. Our Physical Bullion business which is by now the largest contributor to our total AUM, increased by just under 200 million during the period as gold and silver staged the recovery as I mentioned in the earlier part of the quarter falling back again in September. At the end of Q3 these products represented 3.9 billion AUM, up from 3.7 billion at the end…

Thanks Steve. On Slide 11, we provide a snapshot of our current invested capital position. We have a strong balance sheet of close to 350 million in available capital, including 35 million in undrawn line of credit. Approximately 200 million of this was sourced from the acquisition of Sprott Resource Lending and in particular its loan book and cash balance. We now have a disciplined capital allocation framework in place and we will be very judicious in the deployment of balance sheet capital either to seed new funds or finance acquisitions and in all respects we are going to be focused on the preservation of that capital. Deployment of and return on invested capital will be an important component of our overall results in the future. On the next slide, since going public in 2008 we’ve successfully diversified our asset base launching and building scale in a range of new products. We have a platform that is capable of managing significantly more assets than our current 7.3 billion, without incurring additional investments or expenses. We have a strong brand and strong brand awareness both in Canada and internationally. We have strong distribution capabilities and a great platform and we need to fully leverage them in order to earn acceptable returns for our shareholders. Turning to Slide 13, in Canada we will continue to diversify in order to offer our clients more investment options. We’re particularly interested in monthly income products, hard asset products or infrastructure products. In addition to new product development, we’ll also look at acquisitions and new sub-advisory opportunities. Going forward, we’ll manage our firm capital more actively than we have in the past. The current market offers excellent investment opportunities, but the reality is many resource companies will not survive this downturn and we need to be…

and:

(Operator Instructions) Our first question comes from the line of Geoff Kwan with RBC Capital Markets. Your line is open.

I just have one question; it's around how you were talking about potentially consolidating global precious metals managers. And I am just wanting to understand I guess a little bit more around what you are trying to accomplish, is it a little bit of taking advantage of potentially attractive valuations of acquiring these types of managers. Is it something that you're looking to acquire more retail versus institutional, and given that typically cross-border doesn't offer a lot of synergies? RBC Capital Markets: I just have one question; it's around how you were talking about potentially consolidating global precious metals managers. And I am just wanting to understand I guess a little bit more around what you are trying to accomplish, is it a little bit of taking advantage of potentially attractive valuations of acquiring these types of managers. Is it something that you're looking to acquire more retail versus institutional, and given that typically cross-border doesn't offer a lot of synergies?

I mean first of all there is very few of them left, and secondly there are fractions of their former selves in terms of value and AUM. But what we would look for is if we were looking at something international, we'd look for a light mindedness for a firm that had a serious franchise, either retail or institutional. But our real strength has been retail, so institutional is probably a better fit and hopefully a team that has a particular skill set that can add a synergy to us. I do think that because it's all the management of a similar asset group, there are going to be synergies. So other than the fact that we do manage across the balance sheet now, you don't need 15 PMs managing precious metal funds.

And maybe similarly along those lines is by looking at other geographies would it be fair to assume that a higher level of due diligence is required regarding regulatory and other aspects? RBC Capital Markets: And maybe similarly along those lines is by looking at other geographies would it be fair to assume that a higher level of due diligence is required regarding regulatory and other aspects?

Absolutely, I mean our efforts in China have been underway now for almost two years, takes a long time to understand the market, that's why we're at our size we’re not comfortable going on our own. But these managers would have existing and in almost all cases still profitable platforms, so it's a little bit easier just doing the due diligence work on what they already have in place.

And then final question, again along the lines of the potential for acquisitions, I don't know exactly when the market turns around, but would it -- have you been looking at certain potential targets for a while. Because if it takes time as you are talking about China, the resource market might have recovered by then and the valuations may not be attractive, or does that even matter to you. Is it more about fit then may be? RBC Capital Markets: And then final question, again along the lines of the potential for acquisitions, I don't know exactly when the market turns around, but would it -- have you been looking at certain potential targets for a while. Because if it takes time as you are talking about China, the resource market might have recovered by then and the valuations may not be attractive, or does that even matter to you. Is it more about fit then may be?

It's more about strength but the answer is, it is small community, we’ve known and chatted with each other for years now, so it's not something that just suddenly comes around. It's more that when all of us are so undervalued and depressed and priced deals get a little easier to do.

(Operator Instructions) Our next question in queue comes from the line of Graham Ryding with TD Securities. Your line is open.

Hi gentleman, maybe get start with the success you are having around John Wilson's funds. Can you breakdown what distribution channels, if there are any in particular that you are having the success? And what is it about the funds that is really resonating, is it a track-record or the mandate or a combination? TD Securities: Hi gentleman, maybe get start with the success you are having around John Wilson's funds. Can you breakdown what distribution channels, if there are any in particular that you are having the success? And what is it about the funds that is really resonating, is it a track-record or the mandate or a combination?

Well, it's been mostly through our retail channels in Canada so as represented through our wholesalers and through the big networks in Canada that those sales have been generated. I think the success of his strategy lies in the fact that it is a wealth preservation strategy in a fund format. And still when he's saying that he's presenting to clients, clients are still mostly just fearful of a big pull back in equity markets and his strategy does have protection mechanisms in place. And I think in terms of success it's mostly due to the fact as he gets to know the clients over a period of time, if you set out what your objectives are, even though John's objectives are not easily put against benchmarks in the Canadian fund universe, he’s gone out and he’s sold them what he's going to do and how he's going to protect their money and what his objectives are and what the risk parameters that they should look out would be and he stuck to that, and he has delivered, so it's just a comforting process that overtime builds client support.

And then maybe if I could just look at your, it sounds like your comment was you have got capacity for much more in AUM. And that sort of suits what I see -- when I look at your compensation expenses and if I axe out the bonus pools and if I axe out the one-time items, it looks like it dropped maybe 3% year-over-year versus your asset levels which are down 30%, so is sort of the expectation here that your margins maybe under pressure over the near-term while sort of retool and grow your asset base? TD Securities: And then maybe if I could just look at your, it sounds like your comment was you have got capacity for much more in AUM. And that sort of suits what I see -- when I look at your compensation expenses and if I axe out the bonus pools and if I axe out the one-time items, it looks like it dropped maybe 3% year-over-year versus your asset levels which are down 30%, so is sort of the expectation here that your margins maybe under pressure over the near-term while sort of retool and grow your asset base?

Well, our margins have been under tremendous pressure and it’s been fully reflected in our results. I would say that the 3% figure you’re quoting is probably an understatement of how much we’ve caught. There have been some one-time expenses in those numbers this year, due to the various acquisitions and transitions that have taken place. So, we’ve eaten a lot of one-times, our expenses are probably down 10%-15% on top of comp which is down considerably more than that. But you’re right, there is a limit to what you can do and we have a much more drastic plan where we could shrink fund sizes dramatically and then the number of fund offerings and cut expenses dramatically that would be like cutting things off far too quickly. Our board and our management team is committed to turning these areas around and once you may cut it’s going forever, so we see much better opportunity to hang in there and engineer a turnaround from here.

And Graham for some additional color, at the end of September last year we had 197 employees across all our businesses, we now have 181 at the end of the past September, so there has been a reasonable shrinkage, just as Peter said there is some noise in the numbers that hide some of that, but there has been a reasonable reduction in number of employees but we’re very-very close to again as Peter said the baseline that you need to continue to manage and run all the businesses that whole part of the Sprott group.

And maybe I could just throw one more question in, on the private equity side of your business it sounds like you’re interested in maybe launching an LP format for that area as well, if I understand correctly why wouldn’t you just grow Sprott Resource Corp as opposed to lunching an LP structure, is it because the institutional audience prefers that format? TD Securities: And maybe I could just throw one more question in, on the private equity side of your business it sounds like you’re interested in maybe launching an LP format for that area as well, if I understand correctly why wouldn’t you just grow Sprott Resource Corp as opposed to lunching an LP structure, is it because the institutional audience prefers that format?

Yes, let me be clear about that, our plans right now are to launch an institutional LP private equity style for lending but for Sprott Resource Corp that team is focused on growing that business for the time being. There is no plans to launch a separate private equity LP at this stage. There is the chance that that business maybe have institutional participation in it, but it’s probably not going to take the form of a separate LP for some time and it’s exactly for that reason it’s because that company has some pretty exceptional opportunity flowing front of it right now.

Okay, so the LP is the lending side that’s the focus right now? TD Securities: Okay, so the LP is the lending side that’s the focus right now?

That’s right.

(Operator Instructions) Our next question comes from the line of Adam Dukes with [Retell Capital Mind] (ph). Your line is open.

Just couple of things regarding the capital allocation at the SII level, in the past you’ve talked about share buybacks and now you’ve confirmed that the dividend let’s say for the -- you are just barely earning it, I am curious what the thought process was because if you believe in the upside like some left due it might be a good time to suspend dividend and put that $0.12 into buybacks maybe you can talk about that? Retell Capital Mind: Just couple of things regarding the capital allocation at the SII level, in the past you’ve talked about share buybacks and now you’ve confirmed that the dividend let’s say for the -- you are just barely earning it, I am curious what the thought process was because if you believe in the upside like some left due it might be a good time to suspend dividend and put that $0.12 into buybacks maybe you can talk about that?

Yes, I mean the ability to move capital from dividend to buyback is certainly considered on an ongoing basis and will be considered on an ongoing basis. Right now, the dynamic that we see is that most of the shareholders in our Company are long-term shareholders. They all seem to value the dividend and the market seems to value the dividend. We will be looking at how cheap the shares are given the trends in our business and considering buybacks in the future. So I’ll just leave at that.

And then on Slide 14, the one title focused on performance, you have -- if you attribute that you’re looking to improve in investing management process the one of those enhanced risk management right, but we believe that is more concentrated portfolio, usually risk management means diversification or hedging, concentration means obviously the opposite so can you reconcile those with -- how can you do both of those? Retell Capital Mind: And then on Slide 14, the one title focused on performance, you have -- if you attribute that you’re looking to improve in investing management process the one of those enhanced risk management right, but we believe that is more concentrated portfolio, usually risk management means diversification or hedging, concentration means obviously the opposite so can you reconcile those with -- how can you do both of those?

I sure can, we’re a very unique case. Our Company had holdings in probably over 400 equities three year ago. We were overly diversified and the risk in being overly diversified in your portfolios is that you lose tracking your positions, you don’t have an edge and the information on your positions, and you seize to manage the positions effectively. So I think in our case, we had room for quite a bit more concentration and actually an improvement in risk management just because the Company research, the technical research we could afford to do on a narrower list of holdings would give us better information to manage that holding.

Okay. Retell Capital Mind: Okay.

That process has been well underway for two plus years and we’re actually just continuing it now.

And then you’ve mentioned Asia and some of the opportunities there, I am just curious is that a coincidence that you’re focusing there, is that just where some leads are coming, you haven’t really focused much on the Europe or the Mideast where some of these sovereign wealth funds seemed to be active in the area, can you talk about that? Retell Capital Mind: And then you’ve mentioned Asia and some of the opportunities there, I am just curious is that a coincidence that you’re focusing there, is that just where some leads are coming, you haven’t really focused much on the Europe or the Mideast where some of these sovereign wealth funds seemed to be active in the area, can you talk about that?

Well, we’ve had inquires and have had a busy time in all of those areas and it will be increasingly busy going forward. But Asia is just the first one where we’ve had a couple of tangible relationships that have been built and at least the one deal that has been signed and it takes a long time. And Asia is also and China in particular has become the world's largest consumer of gold and importer of gold, and there's just a huge investment universe there that could start to participate in precious metal equities that has not been a factor in this market at all. So if they ever were to get to the level of equity participation then they are level of physical gold participation, it will completely change the dynamics of the resource equity markets and we just thought we absolutely had to be at the front-end of that.

And lastly, you've been focusing a lot on public equity, private equity, private debt, Eric Sprott has owned sprottmoney.com and then goldmoney seems to attracting some bit of business. Is there a move to, for you to move into these sort of classical, banking or storage areas, or are you content to focus on classic public equities and private equity and debt? Retell Capital Mind: And lastly, you've been focusing a lot on public equity, private equity, private debt, Eric Sprott has owned sprottmoney.com and then goldmoney seems to attracting some bit of business. Is there a move to, for you to move into these sort of classical, banking or storage areas, or are you content to focus on classic public equities and private equity and debt?

We're a very entrepreneurial company, some may say too entrepreneurial, but I think if one of those opportunities presented itself in a way where we could see a format that would work for our platform so where our platform actually had an ability to manage it or to in some way distribute it, or oversee it, then we would be happy to look at it, but we don’t have any plans in that area at this time.

(Operator Instructions) We have no further questions, oh sorry we do have a question from the line of Daniel Pearlstein with M Partners. Your line is open.

I had a quick question about the composition of net sales. Can you elaborate on distribution between lower margin bullion, new hedge funds style and mutual funds or others? M Partners: I had a quick question about the composition of net sales. Can you elaborate on distribution between lower margin bullion, new hedge funds style and mutual funds or others?

Sure, so our net sales broke down to net positive 24.5 million, and 34 million of that was net mutual fund sales, so substantial inflows of, net inflows of over 100 million into our enhanced franchise offset by some outflows from our other funds. And the hedge fund in aggregate or the alternative asset strategy, net outflows were 63 million, that excludes offshore, offshore we had 110 million or 113 in Canadian dollars from Zijin and 10 million out from our other offshore funds and then the bullion funds in aggregate 50 million of net redemptions.

And another lastly quick question about compensation and benefits, I saw was about 17 million, are there any -- I know you mentioned it briefly already, could you breakout any or clarify any one-time items? M Partners: And another lastly quick question about compensation and benefits, I saw was about 17 million, are there any -- I know you mentioned it briefly already, could you breakout any or clarify any one-time items?

Yes, there were 7.2 million of identifiable one-time items relating to the Power MSA and some termination benefits. So the run rate could be 10 million or less, there were a couple of other much smaller one-time items in there.

Our next question comes from the line of Jim [Willing] (ph) with Aldebaran Asset Management. Your line is open.

And it seems to me that a lot of, or the function of the redemption of the assets under management is a function of the low gold and silver prices, and what I'm wondering is, I've heard Eric Sprott say on a number of occasions that paper gold market, the sorting of that is outweighing the physical demand and I'm curious why Sprott Inc. isn't using the available capital to purchase more physical gold and place the paper gold market under further pressure? Aldebaran Asset Management: And it seems to me that a lot of, or the function of the redemption of the assets under management is a function of the low gold and silver prices, and what I'm wondering is, I've heard Eric Sprott say on a number of occasions that paper gold market, the sorting of that is outweighing the physical demand and I'm curious why Sprott Inc. isn't using the available capital to purchase more physical gold and place the paper gold market under further pressure?

Well, that's an easy answer. Our bullion products are all set up to do that and the challenge for us of course is, there has been massive outflows from all bullion products in the last 6 to 12 months. Ours kind of considerably less than most, we’ve had experienced almost no redemptions on a percentage basis because we have very sticky client base, but in the environment of outflows it's very difficult for us to raise new money for those trusts, and the second we get the opportunity and we see there's a good price point and there's demand for our bullion products we will be re-initiating the growth of those products, so, and those products are designed to take physical off the market. And that's the right way for us to do that. On that strategy our capital as a manager is magnified, I mean we're making management fee returns and in some cases performance fee returns from those positions and that's the best way for our shareholders to benefit from that. So our balance sheet will not be used to take principal positions in risky asset classes or I should say volatile asset classes. We are looking to invest as a manager in fund products.

As we have no further questions in queue, I turn the call back over to Mr. Grosskopf for any closing comments.

Okay, well thanks everyone for participating this morning, for our investors, and our clients we appreciate your patience. We do think better days are ahead and we’re working very hard to ensure that we participate in those. And to everyone also on the line, thanks for your interest, have a good day and talk to you next quarter.

Ladies and gentlemen, thank you for your participation in today's teleconference. You may now disconnect.