Item 5. Fees and Compensation
Asset-Based Compensation
Model Portfolios:
Sprott USA pays the Adviser a monthly advisory fee equal to 50 basis points of the amount of the aggregate
net management fee received by Sprott USA with respect to each account that utilizes a Sprott Model
Portfolio, such net management fee calculated based on the net asset value of the applicable Sprott USA
account.
Registered Investment Companies:
Sprott Gold Equity Fund pays an investment advisory fee at an annual rate of 1.00% on the first $500
million of average daily net assets, 0.75% of average daily net assets in excess of $500 million but not
exceeding $1 billion, and 0.65% of average daily net assets in excess of $1 billion to the Adviser or Sprott
USA. The Adviser and Sprott USA split the remaining portion of the management fee after applicable
costs and expenses have been deducted, applying the “profit split method” (as defined by the Organisation
for Economic Co-operation and Development). Under the profit split method, the share of residual profit
allocated to the Adviser is determined based on the relative compensation of the Canadian PMs as
compared to the relative compensation of the U.S.-based portfolio managers with respect to Sprott Gold
Equity Fund.
In addition, the Canadian PMs receive compensation indirectly for the portfolio management services they
provide to Sprott Gold Equity Fund.
Performance-Based Compensation
The Adviser does not currently receive performance-based compensation for the investment advisory
services it provides to SAM Clients.
Other Compensation
Sprott Gold Equity Fund pays an administration fee at an annual rate of 0.15% on the first $400 million of
average daily net assets, 0.13% on the next $600 million of average daily net assets, and 0.12% on the
average daily net assets in excess of $1 billion.
The Adviser receives compensation from its other business activities and operations, including with respect
to its non-U.S. clients and certain physical trusts that are not investment advisory clients. No such
compensation will offset any management fee or other compensation received from a SAM Client.
The Adviser is permitted from time to time to enter into arrangements with service providers that provide
fee discounts for services rendered to SAM Clients or the Adviser. For example, certain law firms retained
could discount their legal fees for advice in connection with certain matters. In some cases, discounts
could be based on volume and so the Adviser or certain SAM Clients could receive a greater discount than
others depending on the timing of their transactions (e.g., if a transaction occurs early in a year it is possible
that the transaction does not receive the same discount as a transaction that occurs later in the year).
Services Provided by Affiliates of the Adviser
In addition to the investment advisory services provided by the Adviser, the Adviser and certain of its
affiliates or related persons (each an “Affiliate Service Provider”) have provided, and intend in the future to
provide, operations-related consulting and other support services, including, without limitation, fund
operations, accounting, tax, finance, ESG (as defined below) and information technology services, to SAM
Clients that would otherwise be performed by third parties. Affiliate Service Providers or their affiliates have
received, and will in the future receive, compensation for such services, including, without limitation,
consultant fees, retainer fees, success fees and other fees, salary, promotes, profit sharing, incentive
equity, stock options, stock awards, co-investment rights and other non-cash compensation, benefits and
incentives, and reimbursement of expenses (including internally allocated overhead), from SAM Clients at
rates which are intended to be at or below market rates, or, if no such market rates are available, at rates
that the Adviser believes to be commercially reasonable. Determining whether a particular rate or expense
is at or below market rates is difficult and depends on a number of factors and considerations. Where the
Adviser, an Affiliate Service Provider or an affiliate thereof has determined to provide services at or below
market rates, they will do so in their sole discretion and apply rates that they determine in their sole
discretion to reflect a range of rates they believe to be commercially reasonable in the relevant market.
None of the Adviser, an Affiliate Service Provider or any affiliate thereof commits to conduct any particular
form of benchmarking in connection with determining the rates at which it provides its services. Investors
should be aware that it can be difficult to identify comparable operating companies or other service
providers that provide services of a similar scope and scale, which could impact any benchmarking
analysis. Any amounts received in connection with such support services, including any amounts received
in connection with particular transactions or investments, will not reduce or off-set any management fees.
The compensation received by the Affiliate Service Providers or the Adviser in connection with these
services creates a conflict of interest with respect to the investment advisory services provided to SAM
Clients. The Adviser is incentivized to provide investment advice that will increase a SAM Client’s
utilization of such services provided by the Adviser or Affiliate Service Providers.