In response to an article in today’s Barron’s questioning Eric Sprott’s involvement with Timminco Limited (TSX:TIM $22.95), Toronto’s Globe and Mail has begun to question Sprott Asset Management’s role in Timminco’s dealings. The Barron’s article noted the involvement of a “financial whiz” who has used the Timminco stock promotion to cash in on almost US$400 million of stock in Amsterdam without Canadian disclosures. Sprott has used Canadian funds to buy an irregular position in Timminco.
The Barron’s article questions the creditability of Timminco’s claims that it can reduce capital expenditures by 97% and variable costs by over 50% versus the industry’s leaders without having conducted any material research or development. Barron’s also questioned Sprott’s enthusiasm for Timminco’s patent. The article noted that Timminco has no patent and that there are prior patents for silicon-processing like Timminco’s. The Barron’s article also challenges Timminco’s use of Q-Cells AG to support its claims noting that Q-Cells AG has invested in many schemes that did not work.
The Globe’s article was a change from its February 21, 2008 editorial position that highlighted Timminco as Sprott’s “killer stock” and Mr. Sprott as an investor who can find “a diamond covered with garbage.” The Barron’s article noted irregular insider dealings and conflicts of interests. The Globe is now unlikely to give Eric Sprott the same free hand again.
There are over 12 companies engaged in producing solar grade metallurgical silicon. These include the world’s leading silicon and polysilicon producers, Dow Corning and Elkem AS, in addition to 6 technology based companies without the legacy of commodity silicon production. Timminco is a 30 year old producer of commodity silicon with no published or otherwise known research and development expenditures or capabilities in solar grade silicon. Timminco’s patent filing has not been approved and the application omitted significant prior art in the form of existing patents and publications.
Click here to view Barron’s April 19, 2008 “Timminco Generates More Heat Than Light” article.