SII Sprott Inc

TORONTO, Feb. 29, 2012 /CNW/ - Sprott Inc. ("Sprott") today announced the signing of a letter of intent (the "LOI") reflecting an agreement in principle to acquire Toscana Capital Corporation and Toscana Energy Corporation (collectively, the "Toscana Companies"). Upon closing of the proposed transaction, Sprott will pay approximately $14 million in cash and common shares of Sprott in consideration for the acquisition of the Toscana Companies, with the possibility of up to an additional approximately $5.25 million in common shares of Sprott to be issued as additional consideration in three years upon the attainment of certain financial performance hurdles ("Earn-out Shares").  As at the date hereof, the Toscana Companies' managed entities have aggregate assets of approximately $161 million. The transaction is subject to, among other things, satisfactory results of due diligence investigations of the Toscana Companies and the negotiation of definitive agreements. The transaction is an arm's length transaction and is subject to the approval of all applicable regulatory authorities, including the Toronto Stock Exchange, as well as other third parties, as necessary. In addition, the transaction remains subject to approval by Sprott's board of directors. The parties will seek to close the transaction by the middle of the second quarter of 2012. The transaction is expected to provide benefits across the Sprott organization through the sharing of investment ideas, deal origination, the development of new products, and by leveraging Toscana's and Sprott's products and brands in the oil and gas sector. "In the Toscana Companies, we are acquiring a leading team of energy specialists and lenders as well as a Calgary presence," said Peter Grosskopf, Chief Executive Officer of Sprott. "We believe that each of Toscana's energy lending business, managed working interest portfolio and flow through investment vehicles have significant growth potential.  We look forward to working with the team to enhance the available investment opportunities and products for our combined clients." "We are excited to become part of the Sprott organization. Sprott is a well-known natural resources investor and with the combination of our two companies, Sprott's footprint in Calgary will only grow," said Joseph Durante, Chief Executive Officer of each of the Toscana Companies. About the Toscana Companies Toscana Capital Corporation manages Toscana Financial Income Trust ("TFIT"), an open-ended trust established in June 2006 focused on providing mezzanine debt financing to mid-sized private and public oil & gas companies. TFIT has a current loan portfolio of approximately $54 million. Toscana Energy Corporation manages Toscana Resource Corporation ("TRC"), a mutual fund corporation established in April 2010 focused on investing in medium and long-term non-operating working interests in oil & gas assets, unitized production interests and royalties. TRC currently has aggregate assets that have a value of approximately $90 million. In addition, Toscana Energy Corporation is a technical advisor to and co-manager of Maple Leaf 2011 Energy Income Fund LP ("MLEI"), a flow-through limited partnership focused on investing in non-operated, direct working interests by participating in oil & gas development projects (drilling programs). MLEI is co-managed by Toscana Energy Corporation and a third party manager.  MLEI currently has aggregate assets that have a value of approximately $17 million. About Sprott Inc. Sprott Inc. is a leading independent asset manager dedicated to achieving superior returns for its clients over the long term. The Company currently operates through four business units: Sprott Asset Management LP, Sprott Private Wealth LP, Sprott Consulting LP, and Sprott U.S. Holdings Inc.  Sprott Asset Management is the investment manager of the Sprott family of mutual funds and hedge funds and discretionary managed accounts; Sprott Private Wealth provides wealth management services to high net worth individuals; and Sprott Consulting provides management, administrative and consulting services to other companies, including Sprott Resource Corp. , Sprott Resource Lending Corp. and Sprott Power Corp. . Sprott U.S. Holdings Inc. includes Global Resource Investments Ltd, Terra Resource Investment Management Inc., and Resource Capital Investments Inc. Sprott Inc. is headquartered in Toronto, Canada, and its common shares are listed on the Toronto Stock Exchange under the symbol "SII". For more information on Sprott Inc., please visit www.sprottinc.com. Forward-Looking Statements This release contains "forward-looking statements" which reflect the current expectations of Sprott Inc.  These statements reflect management's current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements in this press release include, but are not limited to, statements with respect to the negotiation of the definitive agreements for the transaction, the terms of such definitive agreements, the closing of the transaction and the anticipated benefits from the transaction.  Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions, including with respect to the anticipated completion of the negotiation of the definitive agreements, the closing of the transaction, the timing and receipt of all applicable regulatory approvals and third party consents, the anticipated benefits from the transaction and the satisfaction of other conditions to the completion of the transaction.  Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements including, without limitation, those listed under the heading "Risk Factors" in Sprott's annual information form dated March 22, 2011 as well as that the closing of the transaction could be delayed if the necessary regulatory approvals and third party consents are not obtained on the timelines planned or the transaction may not be completed at all if these approvals are not obtained or any other conditions to closing are not satisfied. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this release. Although the forward-looking statements contained in this release are based upon what Sprott believes to be reasonable assumptions, management cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and Sprott does not assume any obligation to update or revise them to reflect new events or circumstances, except as required by law. Sprott Inc. CONTACT: Investor contact information: (416) 203-2310 or 1 (877) 403-2310or ir@sprott.com.

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