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Eric Sprott’s Sprott Asset Management Initiated a Brand New Position in $TSX-BZA

Eric Sprott’s Sprott Asset Management initiated a brand new position in American Bonanza Gold Corp (TSX-BZA). According to the firm’s 13G filing on October 7th, Sprott Asset Management now has 24.91 million shares in TSX-BZA, giving a 12.7% passive stake in the stock. Before the third quarter, no hedge fund in our tracking list had ever reported a position in TSX-BZA. The stock had a mixed path before September, but it suddenly hit its multiyear stock price high on September 6th without any direct news related. Since TSX-BZA’s daily trading volume is only a few hundreds of thousand for most of the time, it’s possible that Sprott Asset Management made the purchase throughout the entire third quarter to reach its current holding. The stock is now trading at $0.48, representing a 37% year to date return.

Sprott Asset Management is under Eric Sprott, who is the Senior Portfolio Manager of the Sprott Canadian Equity Fund, Sprott Hedge Fund LP & LP II, and Sprott Bull/Bear RSP Fund. He has a portfolio value of more than $1.1 billion, eighty percent in which are invested in Basic Materials sector.

American Bonanza Gold Corp is an exploration-stage company. According to Scottrade, the company is engaged in the identification, acquisition and exploration of gold mining projects in pro-mining areas of the United States and Canada. The company had a wholly owned subsidiary, Bonanza Explorations Inc. (Bonanza Explorations) as of December 31, 2009. In January 2009, the company completed the sale of the Taurus Property to Hawthorne Gold Corp.