SPROTT INC.

Outlook

Geopolitical conditions have worsened since our last letter. The war in Iran has re-escalated and is now a broader Middle East conflict with attacks on Saudi Arabia and many other Gulf states. Energy and other commodity prices are rising again with reserve stockpiles nearly depleted. The resultant inflationary expectations drove fixed income markets to their worst quarterly performance in decades. U.S. 10-year Treasuries declined by nearly 8% in the quarter with yields at levels not seen in two decades. This despite the best efforts of the U.S. Treasury Department and Federal Reserve to convince markets that they could control inflation and force rates back down. Federal Reserve chairman Kevin Warsh delivered a hawkish speech in August. Then in September, the Federal Reserve raised rates 25 basis points more to preserve credibility than to have an economic impact. For his part, Treasury Secretary Bessent directed an intervention in the currency markets to prevent Japan from selling U.S. Treasuries to defend its currency. Next, Bessent raised the Treasury's commitment to buy back long dated issues. And finally, he declared “I am the house” in an effort to scare short-term traders into covering their short positions. None of these moves had more than a momentary impact on halting the rise in rates. Further, describing the Department of the Treasury as some kind of casino can hardly inspire confidence. We are reminded of the famous quote from the 1975 movie Jaws, “You are going to need a bigger boat.” Perhaps that’s why Secretary Bessent recently hired sound money advocate Judy Shelton as a Counselor to the Treasury Department. Shelton’s responsibilities are said to include “advising Bessent on currency policy, with a particular focus on evaluating financial conditions in China.” While Shelton was widely ridiculed by the Senate when President Trump nominated her for a Federal Reserve position during his first term, her views about backing long-term Treasuries with some linkage to gold may not be so far fetched today. A quick study of China will reveal its continued gold purchases and the lowest 10-year interest rates of any major economy other than Switzerland.

On the surface, equity markets seemed more resilient with major U.S. indices hitting all-time highs and the S&P 500 index itself closing the third quarter just 2% off its all-time high. But once again this was driven by a handful of mega-cap technology companies benefiting from the perceived limitless growth in artificial intelligence. The mean performance of all stocks in the S&P 500 was negative 21%. In the broader Russell 3000 index, 57% of the stocks were down more than 20%. It appears to us that the generals have gotten too far ahead of their troops.

As the U.S. enters midterm elections, it seems that confidence in our leadership has deteriorated from an already low level. Nothing has been accomplished on the leading issues about the cost of living. In fact, the most recent news on inflation is heading in the wrong direction. The only tangible progress has been the renaming of some national monuments and bodies of water. The Gulf of Mexico is now the Gulf of America and Lake Ontario has become Lake America. We have heard that some Canadians prefer the name “The Strait of our Moose.” To be fair, there have also been some modest positives. We have made peace with Greenland and Maine Senator Susan Collins, who is locked in a tight Senate race, successfully lobbied the administration to lower trade tensions by reducing the 50% tariffs on some Canadian goods used by her state’s agricultural industry, including seaweed, rock salt and edible algae. Unfortunately for her constituents, these reductions will be offset by higher tariffs on shampoo, caskets, carpets and other household items.

The news flow from the White House has become exhausting. Reports of trade deals and peace negotiations now seem confined to within the White House walls with outside participants lacking knowledge of their existence. While we don't expect any of this to change in the near term, we remain confident that our products in physical commodities and the miners that produce them are well positioned to help investors diversify their portfolios.

Amid all the noise, we continue to do all we can to create value for our clients and shareholders. Our marketing team continues to generate best-in-class thought leadership materials and our client-facing teams are seeing increased activity from institutions and family offices. Our key accounts team’s efforts to forge relationships and gain shelf space for our products on increasingly larger platforms are paying off. We are beginning to see the impacts of our technology investments on productivity and we continue to explore new ways to become more efficient through thoughtful use of AI. And our efforts are being recognized. In October, Sprott was named as one of Fortune Magazine’s 100 Fastest Growing companies.

We remain confident that the investment thesis for both precious metals and critical materials continues to improve. Our financial position remains strong and our free cash-flow generation is accelerating. We continue to exercise a disciplined capital allocation framework and on November 3, 2026 our board of directors approved a 25% increase to our regular quarterly dividend. During the year and through October we have bought back more than $20 million of our shares through our normal course issuer bid. And we have ample capacity to continue buying if market conditions cause the stock to trade below what we believe to be its long-term value.

As always, we thank you, our fellow shareholders, for your continued support. We look forward to reporting to you on our progress in the quarters ahead. We remain contrarian, innovative and aligned.

Sincerely,

Whitney George

Chief Executive Officer