Frequently Asked Questions (FAQs)

The Sprott Junior Copper Miners ETF is listed on Nasdaq^® under the symbol “COPJ.” Investors can purchase COPJ in a brokerage account or by contacting their financial advisor.

The Sprott Junior Copper Miners ETF (COPJ) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Nasdaq Sprott Junior Copper Miners™ Index.

The Nasdaq Sprott Junior Copper Miners™ Index is designed to track the performance of a selection of global securities in the copper industry. The Fund will, under normal circumstances, invest at least 80% of its total assets in securities of this Index.

The energy transition is a significant global structural change intended to decrease our dependence on fossil fuels in favor of low-carbon and renewable energy. While we believe fossil fuels will likely continue to play a role in our future, substantial global investment and government mandates in favor of low-carbon and renewable energy are driving opportunities in the energy transition industry.

Eligibility Requirements

• Be a security listed on an approved exchange
• The security’s issuers must be classified by Sprott as a copper producer, developer or explorer
• Have a market capitalization of at least $40 million or $25 million for existing constituents
• Have a market capitalization no higher than $2.5 billion or $3.5 billion for existing constituents
• The security must have been publicly traded at least three months prior to the reconstitution reference date
• A security must have a three-month average daily traded value of at least $50,000 or $25,000 for existing constituents

Constituent Weighting Process

• The index is a modified free-float market capitalization-weighted index
• Constituents’ initial weights are determined by dividing each constituent’s free-float market value by the aggregate free-float market value of all constituents
• Initial weights are adjusted to meet the following constraints:
  • The weight of each of the constituent may not exceed 4.75%
  • No constituent weight may be less than 0.30%

Index Rebalancing

• The index is rebalanced semi-annually in June and December, effective at the market open on the first trading day following the third Friday

Investors that seek pure-play¹ access to small copper companies that have the potential for significant revenue and asset growth. Junior copper miners that are upstream in the supply chain may be well positioned to benefit from increased investment in the low-carbon and renewable energy sector.

Sprott Asset Management USA, Inc. is the investment adviser to the Sprott Junior Copper Miners ETF. ALPS Advisors, Inc. is the sub-adviser, and ALPS Fund Services, Inc. serves as the administrator. ALPS Distributors, Inc. is the Distributor for the Sprott Junior Copper Miners ETF and is a registered broker-dealer and FINRA Member. Additionally, State Street Bank and Trust Company serves as the custodian and transfer agent.

Essential to energy transmission, copper is a critical mineral across clean energy generation sources and in electric vehicles

• Copper provides durability, malleability, reliability and superior electrical conductivity, and can be found in the vast majority of transformers, electrical wiring cores and conductors
• Copper is a key component in the energy grid, as well as in wind, solar, hydro and thermal renewable energy structures
• An essential component of electric vehicles (EVs), used in the electric motors, batteries, inverters and wiring, and in charging stations

To meet net-zero carbon emissions targets, demand for copper is expected to increase for decades

• To meet net-zero carbon emissions targets, energy transition-related demand for this critical mineral may increase nearly 4 times by 2040, relative to 2022²
• Governments are mandating the sale of EVs as soon as 2035,³ and many major auto manufacturers have plans to go fully electric as soon as 2030.⁴ Typical EV uses approximately 183 pounds of copper, which is nearly 4x the copper used in an internal combustion engine⁵
• Compared to gas-fired power plants, solar and wind farms require significantly more copper – 300% and 200%, respectively⁶

The Sprott Junior Copper Miners ETF is the only* ETF to provide pure-play exposure exclusively to small copper mining equities essential to the clean energy transition

• COPJ’s holdings are pure-play companies with business operations that are focused on the copper mining sector
• Companies that are upstream in the supply chain may be well-positioned to benefit from the increased investment in copper necessary for the clean energy transition

Clean energy is energy that has zero carbon emissions and comes from renewable and nuclear energy sources. Currently, nations around the world have committed to the Paris Agreement, which is a legally binding international treaty on climate change. It was adopted by 196 Parties at COP 21 in Paris in December 2015. Its goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels. To meet this goal, emissions need to be reduced by 45% by 2030 to reach net-zero by 2050.⁷

Critical minerals are natural materials that are essential to the generation, transmission and storage of clean energy. Sprott focuses on copper as the critical mineral depended upon for all clean energy transmission.

Currently, investors have limited choice

COPJ is the only ETF to provide exposure exclusively to the junior Copper miners that supply this critical mineral essential to the transition to cleaner energy.

Investing in individual companies that mine copper poses challenges

Many mining companies are domiciled in foreign countries, have small market capitalizations, are volatile and may have limited liquidity, making individual equity investing more challenging for some investors. The Sprott Junior Copper Miners ETF offers investors a convenient vehicle to access junior miners that supply this critical mineral along with company diversification.

Existing commodity funds have limited exposure to junior copper miners

Existing ETFs focused on the copper sector provide exposure to larger companies. Investors that seek exposure to smaller copper miners, and their potential for significant revenue and asset growth, may find COPJ to be an attractive alternative to existing ETFs.

Energy transition/Clean energy theme

Major nations have set aggressive decarbonization targets and goals to reduce emissions. Their proposals have begun encouraging investment in electric vehicles and infrastructure, wind and solar energy, and nuclear energy to assist in this effort. We believe that miners of critical minerals should benefit from this clean energy transition as they provide essential materials that are key to reaching decarbonization goals.

Energy security and sovereignty

This issue became a top headline story in 2021 as the cost of energy spiked, which highlighted the vulnerability of relying on other nations to supply energy. Rising geopolitical risks in Europe, given the Russia-Ukraine war, help highlight the energy security that renewable energy can provide.

Commodity investing

After many years out of favor, investors are returning to commodities to take advantage of supply shortages due to prolonged under-investment. The fundamentals for copper are very constructive with steady growth in demand coupled with a structural supply deficit that can only be addressed with a higher incentive price.⁸ Those invested in commodities and related equities should consider focusing on the potential future makeup of such markets, where we believe the energy transition sector will take a far greater market share.

Alternative exposure/Diversification

Many mining companies are domiciled in foreign countries, have small market capitalizations, are volatile and may have limited liquidity, potentially limiting their inclusion in major equity indices. Exposure to the pure-play companies in COPJ’s strategy may add exposure to investor portfolios that may otherwise be lacking in traditional equity strategies.

The Sprott Junior Copper Miners ETF expects to declare and distribute all its net investment income, if any, to shareholders as dividends at least annually and on a pro-rata basis. The Fund may distribute such income dividends and capital gains more frequently, if necessary, to reduce or eliminate federal excise or income taxes on the Fund.

Please reach out to your Sprott representative at 888.622.1813 or energytransition@sprott.com for additional questions.

^* Based on Morningstar’s universe of Natural Resources Sector Equity ETFs as of 6/30/2023.

¹ The term “pure-play” relates directly to the exposure that the Fund has to the total universe of investable, publicly listed securities in the investment strategy.

² Source: “Critical Minerals Market Review”, International Energy Agency (IEA), July 2023. Data shown for Net Zero Emissions Scenario.

³ Source: Reuters, December 8, 2021.

⁴ Source: “Which brands are going fully electric and by when?” CarExpert, August 14, 2021.

⁵ Source: “ThinkCopper,” Copper Development Association (copper.org) and Navigant Research. Global Copper Outlook 2022-2040, BloombergNEF. Included for illustrative purposes only.

⁶ Source: “The Raw Materials Challenge,” McKinsey & Co., January 10, 2022.

⁷ United Nations Framework Convention on Climate Change (UNFCC).

⁸ Incentive price is the price at which new mining production is reasonably profitable.