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Mania. Manipulation. Meltdown.

Eric Sprott, FCA Chief Executive Officer Chief Investment Officer Senior Portfolio Manager Sprott Asset Management LP

November 2011

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Disclaimer

Sprott Asset Management LP is the investment manager to the Sprott Funds, (collectively, the “Funds”). Important information about these Funds, including their investment objectives and strategies, purchase options, and applicable management fees, performance fees (if any), and expenses, is contained in their prospectus or offering memorandum. Please read these documents carefully before investing. Commissions, trailing commissions, management fees, performance fees, other charges and expenses all may be associated with investing in the Funds. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. This communication does not constitute an offer to sell or solicitation to purchase securities of the Funds. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Funds may be lawfully sold in their jurisdiction.

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Disclaimer Forward-Looking Statements This presentation contains forward-looking statements which reflect the current expectations of management regarding future growth, results of operations, performance and business prospects and opportunities. Wherever possible, words such as “may”, “would”, “could”, “will”, “anticipate”, “believe”, “plan”, “expect”, “intend”, “estimate”, and similar expressions have been used to identify these forward-looking statements. These statements reflect management’s current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions. 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. 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 document. These factors should be considered carefully and undue reliance should not be placed on these forward-looking statements. Although the forward-looking statements contained in this document are based upon what management currently believes to be reasonable assumptions, there is no assurance 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 presentation and Sprott does not assume any obligation to update or revise.

Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any investment funds managed by Sprott Asset Management LP. Any reference to a particular company is for illustrative purposes only and should not to be considered as investment advice or a recommendation to buy or sell nor should it be considered as an indication of how the portfolio of any investment fund managed by Sprott Asset Management LP is or will be invested. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Funds may be lawfully sold in their jurisdiction.

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SubPrime ALT-A HELOC CDS CDO MBS STUDENT AUTO CORPORATE REAL ESTATE CONSTRUCTION STOCKS PREFERREDS ETC, ETC, ETC …

Leverage in the Banking System

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QE1, QE2, TARP, TALF, Term Auction Facility, UK bank bailouts, Term Security Lending Facility, American Recovery & Reinvestment Act, European Financial Stability Facility, Chinese bank loans, Home buyer tax credits,

Ireland bank bail-outs, Money Market Investor Funding Facility, Unemployment benefit extensions, FDIC bank takeovers, Fannie Mae & Freddie Mac, EU & IMF bail-out of Portugal, Canadian government mortgage purchases

through CMHC, Student loan guarantees …

Transfer of Risk…from Private Sector to Public Sector

Government Bailouts

*** Recent EU Bailout

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The Underperformance of European Banks

Source: Yahoo Finance

Blue: Deutsche Bank Red: BNP Paribas Green: Credit Agricole Orange: Societe Generale

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Bank CDS Rates

Source: Bloomberg

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Sovereign CDS

Source: Bloomberg

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US Examples Select October 2011 Bank Failures

Source: FDIC

140 banks failed

in 2009 157 banks failed

in 2010 So far 73 banks

have failed in 2011...

Bank of Commonwealth, Norfolk, Virginia

- $985.1 million in total assets - Cost to the FDIC: $268.3 million - Implied Write-Down: 27%

First National Bank of Florida

- $296.8 million in total assets - Cost to the FDIC: $46.9 million - Implied Write-Down: 16%

First Southern National Bank, Statesboro, Georgia

- $164.6 million in total assets - Cost to the FDIC: $39.6 million - Implied Write-Down: 24%

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Precious Metals Review

A Decade of Change

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Source: CPM Group, Sprott Asset Management LP

Physical Supply: Gold

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Gold’s Changing Fundamentals 2000 2010 Annualized Change

in Demand Annual Mine Production ~ 2,620 metric tonnes according to GFMS Central Banks; Sellers of 400 tonnes (Washington Agreement, Sept. 1999) US & Canadian Mint Coin Sales: 290,100 oz* Limited Exchange-traded investment options China consumes 207.5 tonnes (WGC)

Indian gold imports: 535 tonnes (Reuters)

Annual Mine Production ~ 2,689 metric tonnes according to GFMS Central Banks; Net Buyers of 400 tonnes**

US & Canadian Mint Coin Sales: 2,355,500 oz* Physical gold ETFs hold 2300 tonnes of gold (Bloomberg)

China consumes 700 tonnes (WGC)

Indian gold imports: 918 tonnes (Economic Times)

(79)

800

64

400

500

383

~2000 tonnes

* Source: http://www.usmint.gov/ and Royal Canadian Mint ** Sprott estimate

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China’s September Gold Imports Jump Sixfold

Chinese gold imports from Hong Kong, a proxy for the country’s overall overseas buying, leapt to a record high in September, when monthly purchases of 57 tonnes matched almost half that for the whole of 2010. Monthly gold imports for most of 2010 and this year run at about 10 tonnes, but buying jumped in July, August and September. In the three-month period, China imported from Hong Kong about 140 tonnes, more than the roughly 120 tonnes for the whole 2010.

Source: Financial Times

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Source: World Gold Council

Physical Demand Increasing Rapidly

(Bars and coins, excluding jewelry demand)

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Silver: Investment of the Next Decade

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Source: CPM Group, Sprott Asset Management LP

Physical Supply: Silver

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Silver’s Changing Fundamentals

2005 2010 Annualized Change in Demand

Annual Mine Production ~ 630 million oz according to US Geological Survey Canadian Mint Silver Coin Sales: 1,062,000 oz (RCM)

US Mint Coin Sales: 8,405,000 oz* Limited Exchange-traded investment options China net exporters of 2.7 million oz (GFMS)

US Sales 100 million oz (Silver Institute)

Annual Mine Production ~ 720 million ounces according to GFMS

Canadian Mint Silver Coin Sales: 17,900,000 oz (RCM)

US Mint Coin Sales: 34,662,500 oz* Physical silver ETF holdings: 510 mm oz (Bloomberg)

China net importers 112 million oz (Commodity Online)

No US Sales

(90)

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100

200

100

380 mm oz. * Source: http://www.usmint.gov/ and Royal Canadian Mint

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The Price Ratio Argument

Historical Silver-to-Gold Ratio: 16:1 Geological In Situ Silver-to-Gold Ratio: 17.5:1 Current Silver-to-Gold Ratio: 50:1 Implied silver price if silver reverted back to 16:1 ratio at $1,600 gold: $100/oz

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Investable Ratio Analysis Key Takeaways

Comparison of Key Gold-to-Silver Ratios (Ratios in Dollar Terms)

Gold bars and coins in existence (1) ~2.2Bn ounces

Silver bars and coins in existence (1) ~1.2Bn ounces

Value of gold bars and coins in existence to silver bars and coins in existence (1) 88:1

Investments in the SPDR Gold Trust to iShares Silver Trust (2) 6:1

2011 YTD U.S. Mint gold coin sales to silver coin sales (3) 1:1

PHYS to PSLV IPO’s 0.75:1

Gold Money 1:1

Royal Canadian Mint 1.5:1

The value of all gold bars and coins in existence is ~$3.5Tn at current prices

The value of all silver bars and coins in existence is ~$40Bn at current prices

Supply / Inventory of investable gold is significantly higher than the supply of investable silver…

…but investors are choosing to put disproportionately more money to work in silver than in gold…

…and the disparity is even greater in physical coin sales

(1) Gold and silver data according to the CPM Group 2010 Gold Yearbook and CPM Group 2009 Silver Yearbook, respectively.

(2) Ratio is of net dollar purchases of the GLD to the dollar purchases of

the SLV since inception of SLV in April, 2006. (3) 2011 YTD US Mint Coin Sales sourced from http://www.usmint.gov/

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The Great Wealth Redistribution

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HUI Gold Index Outperformance

Source: Bloomberg

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HUI vs. European Financials

Source: Bloomberg

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Gold: The Ultimate Currency

Source: Bloomberg

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Concluding Remarks

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Contact Information

Sprott Asset Management LP Royal Bank Plaza, South Tower 200 Bay Street Suite 2700 Toronto, ON M5J 2J1 T: +1 416 943 6707 Toll Free: +1 866 299 9906 F: +1 416 362 4928

Email: info@sprott.com Web: www.sprott.com