Frequently Asked Questions (FAQs)

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

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

Nasdaq Sprott Copper Miners™ Index (NSCOPP™) is designed to track the performance of a selection of global securities in the copper industry, including copper producers, developers, and explorers.

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 may 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 free float market capitalization of at least $50 million or $30 million 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 $30,000 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 weighting of the largest individual company, by free float market capitalization, may not exceed 24% of the value of the Index
  • The weighting of the second and third largest companies, by free float market capitalization, may not exceed 10% of the value of the Index each
  • The aggregate weight of securities with a weight greater than 5% may not exceed 49%
  • The weighting of no other individual company may exceed 4.75% the value of the Index

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 copper companies that are providing a critical mineral necessary for the clean energy transition. 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, the associated upgrades to electrical grids, and the development of clean technology.

Sprott Asset Management USA, Inc. is the investment adviser to the Sprott 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 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. It is also critical to upgrades to global power grids that will be essential to the support of new energy sources.

• 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 A Typical EV uses approximately 117 pounds of copper, which is 2.4x the copper used in an internal combustion engine⁵
• Compared to natural gas and coal, solar and wind farms require significantly more copper. 2.5 times more for solar and onshore wind, and 7 times more for offshore wind.⁵

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

• COPP’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 carbon emissions 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

COPP is the only ETF to provide exposure exclusively to the large-, mid- and small-cap copper miners that supply a mineral critical to energy transmission, as clean energy grids and technology develop in response to global energy transition goals.

With the copper supply-demand gap widening, miners may offer opportunities

The widening gap between supply and demand could translate into benefits for both copper prices and the mining companies involved. Additionally, an uptick in mergers and acquisitions (M&A) within the industry could further strengthen the position of copper miners

Copper is essential for decarbonization

The push toward net-zero emissions by 2050, driven by global mandates and goals, is set to escalate the development of copper-intensive infrastructure, such as power grids, electric vehicles (EVs) and clean energy technologies.

Copper demand is surging

Emerging clean-energy technologies require significantly more copper than traditional systems. This surge in demand coincides with an anticipated 86% increase in global electricity consumption by 2050.⁹

Copper supply faces challenges

The global copper supply faces significant hurdles, including decreasing ore quality, prolonged lead times for opening new mines and an extended period of underinvestment. These factors underscore the critical role of copper mining companies in meeting demand.

Copper price dynamics spurring new production

Rising copper prices may be the catalyst needed to motivate the development of new projects aiming to satisfy the growing appetite for copper.

Copper miners may offer opportunities

The widening gap between supply and demand could translate into benefits for both copper prices and the mining companies involved. Additionally, an uptick in mergers and acquisitions (M&A) within the industry could further strengthen the position of copper miners.

The Sprott 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 3/5/2024.

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: 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.

⁹ Source: IEA World Energy Outlook 2023 Stated Policies.