Metals & Mining: Year in Review, Future in Focus

Host Ed Coyne speaks to Sprott CEO Whitney George and Portfolio Manager Justin Tolman about the firm's strong performance in 2025, highlighting significant gains across gold, silver, copper and related strategies, driven by resource nationalization and supply disruptions. Looking ahead to 2026, they anticipate continued opportunities, increased investor interest and ongoing M&A activity as the mining and metals space gains broader recognition.

Video Transcript

Edward Coyne: Hello. My name is Ed Coyne, Senior Managing Partner at Sprott Asset Management. I asked our CEO, Whitney George, and one of our Senior Portfolio Managers, Justin Tolman, an economic geologist, to join us today to discuss Sprott, 2025 and the year ahead. Whitney, let's start with you. Could you tell us a bit about Sprott and the year we've just experienced?

Whitney George: Sprott is an alternatives asset manager with a singular focus on metals and the miners who mine them. We've been building the firm to its current configuration since 2017, aiming to become the leader in all things metals and mining globally. We offer a broad range of products, including trusts that invest in physical materials such as gold, silver and copper, as well as ETFs that provide exposure to the miners.

It has been an amazing year. I don't recall ever seeing more than one material going up at any single time, and they all seem to be going up. Gold is up over 60%, and silver is up 114% as of today. Copper is even catching up, gaining 33%. We have many ETFs that are up between 40% and 150% year-to-date. It's been a long time in the making, but it's all coming together very nicely. I think a lot of it has to do with what I'd call resource nationalization.

In terms of tariffs, you need more material to meet the same level of demand if you're inefficient in terms of storage or transportation. That's already compounded by very tight mine supplies resulting from two decades of underinvestment, and now we're seeing additional supply disruptions. Finally, later in the year, the debasement trade emerged. People worldwide are now concerned about the senior sovereign debt of developed countries and the potential inflation that may result from declining currencies relative to hard assets.

Edward Coyne: As we close out 2025, it feels like there's a lot to look forward to in 2026. What are some of the things you're paying attention to or maybe cautious about? What does 2026 look like for Sprott and for us as a firm?

Whitney George: Clearly, you have to be mindful of corrections. That's a normal part of the markets, and we've had a tremendous run. But I do think corrections represent opportunities for investors if they come. None of the fundamentals has changed, and this is a very new trade. People have largely overlooked the mining industry for decades. They've been focused on many other things.

Fundamental results are expected to be very strong due to robust metal prices and contained costs. It's just the beginning in terms of the audience or investors discovering this space. There’s still a long way to go. This is the wake-up call of the year, for sure. However, I expect that we'll have many more clients next year than we do currently.

Edward Coyne: Wonderful. I do like to hear that. Justin, as one of our senior portfolio managers, we look at both the physical market, as Whitney said, but also the miners. Could you tell us a bit about how investors should approach both of them? How should they be viewing the physical market, and how should they be thinking about investing in equities or mining stocks themselves?

Justin Tolman: I think about the physical market and gold and precious metals specifically as your defense. They provide a great hedge against inflation. They will preserve your purchasing power over time. They'll help mitigate currency risk and market volatility. Increasingly, we're seeing bigger institutions recognize this. This year, both J.P. Morgan and Morgan Stanley suggested that gold should replace bonds as part of a diversified risk portfolio, to the tune of 10 to 20%.

I think of equities as your offense. If the metal is your defense, the equities will give you torque and leverage to all the themes that Whitney was talking about. They will also provide you with income through dividends and exposure to growth as the companies increase their production. That means that the equities do add greater risk, but if managed well, they can provide higher returns.

Edward Coyne: Speaking of equities and the greater returns, at Sprott, we have a full suite of passive strategies. We also have some factor-based strategies that are interesting. Then we have the active suite, which is really starting to grow. Talk about the importance of being an active manager in a space like mining equities.

Justin Tolman: On the managed equity side, we have a bias towards quality: quality assets, quality management and preferably both. We believe that, over time, this approach gives us the best potential to generate alpha in our investments. When you examine our strategy composition, you'll see this reflected, especially compared to passive strategies, which are primarily designed to provide beta to the underlying index.

In the current strong markets, there are a few additional levers that active managers can use to try to generate outperformance. The first is being early on new discoveries and turnaround stories. That's something we really try to lean into. We spend a significant amount of our time and energy engaging directly with issuers, understanding their operations, visiting sites and investing in those opportunities before they meet the criteria for passive strategies.

Another approach is to assess your current position in the cycle and adjust your portfolio accordingly, identifying which miners are poised to generate outsized returns and which have levers to fill excess capacity and capitalize on current margins.

Edward Coyne: As we go into that, and as we go into 2026, clearly, '25 was a banner year. From a performance standpoint, for investors considering the space again in 2026, what should we be thinking about then? As someone who may feel like they've missed this move, is it just getting started? What are you thinking about in 2026? What would you say to an investor that's moving into the equity space today?

Justin Tolman: Let's start with the senior producers. I would note that they've all had strong returns here, and the margins they're generating now are expected to lead to banner Q4 earnings results, which will continue into 2026. I believe those earnings will be substantial enough to prompt the rest of the market to take notice of our often-neglected mining and metals sector. But then they'll take those strengthened balance sheets and start looking towards measured growth, which could come from their organic pipelines. However, increasingly, it will come from mergers and acquisitions (M&A) as companies look to expand their production.

That leads us to the mid-tier and junior companies. The best of them anticipate improved valuations heading into 2026 as generalists and value investors become more comfortable with the space, start to look down market and recognize the available opportunities. That will only accelerate the M&A theme, which has already begun and is likely to be exacerbated by a real scarcity of construction-ready opportunities in our business.

Edward Coyne: It's fair to say more to come as we go into the new year, potentially.

Justin Tolman: I'm very excited about looking into 2026.

Edward Coyne: Wonderful. Whitney, for those who are watching this video today, if someone wants to learn more about Sprott, what can they do? Where can they go?

Whitney George: They can start by going to our website. We're committed to being a go-to resource, bringing a wealth of expertise, white papers and commentary to the mining space. We're active on social media, and, of course, we have a team of great client service professionals who you are welcome to call or arrange an in-person visit.

Edward Coyne: Wonderful. Thank you. For those who want to visit us, please visit sprott.com to learn more about who we are, what we do, and how we can help you and your clients invest. Thank you for watching.