GBUG: A High-Octane Way to Ride Precious Metals Momentum

The surge in gold and silver bullion prices in 2025 has redefined the investment landscape for precious metals. Gold prices, up 44.65% year-to-date (YTD) and 14.42% in Q3 alone, closed the third quarter at $3,825.30 per ounce, while silver surged 57.03% YTD, nearing its historic $50.00 level. This momentum, driven by geopolitical tensions, central bank demand, and ETF inflows, has created a fertile ground for mining equities. Amid this backdrop, the Sprott Active Gold & Silver Miners ETF (GBUG) stands out as a high-octane vehicle for investors seeking leveraged exposure to the sector's growth potential.

Strategic Positioning: Active Management in a Bull Market

GBUG's active management approach is its defining strength. Unlike passive ETFs, which track broad indices, GBUG's portfolio is curated to capitalize on undervalued miners and sector-specific opportunities. As of December 2025, the fund holds 36 companies, with top positions including G Mining Ventures Corp. (4.70%), OceanaGold Corp. (4.44%), and DPM Metals Inc. (4.26%). The portfolio is weighted heavily toward gold equities (83.56%), with a balanced allocation to silver and other precious metals as reported. This structure allows GBUG to benefit from both the investment demand for gold and the industrial demand for silver, which is increasingly tied to green energy and technological innovation.

The fund's active strategy is particularly compelling in a market where mining equities trade at significant discounts to bullion prices. For example, major gold miners like Agnico Eagle Mines outperformed peers in Q3 2025, with lower all-in sustaining costs (AISCs) and record production levels. Sprott's management team, leveraging over four decades of expertise, has positioned GBUG to exploit such inefficiencies. The fund's 0.89% expense ratio, while higher than passive alternatives, is justified by its focus on long-term capital appreciation and contrarian value investing.

Silver's Next-Generation Metal Potential

While gold dominates GBUG's portfolio, silver's role as a "next-generation metal" is gaining traction. The Silver Institute notes that industrial demand for silver in 2025 is projected to decline slightly by 2% to 665 million ounces, but this is offset by surging demand in photovoltaics (PV), electric vehicles (EVs), and artificial intelligence (AI). For instance, the average EV contains 25 grams of silver, and advancements in solid-state batteries could push this requirement to over a kilogram per vehicle. Similarly, AI infrastructure and grid modernization are creating a stable consumption floor for the metal.

GBUG's exposure to silver miners, though smaller than its gold holdings, aligns with this structural shift. The ETF's inclusion of companies like DPM Metals Inc. and Equinox Gold Corp. reflects its focus on miners with diversified portfolios that span both precious and industrial metals. This dual exposure positions GBUG to benefit from silver's dual role as both a safe-haven asset and a critical input for the energy transition.

Equity Dispersion and Undervaluation

The dispersion of mining equities in Q3 2025 further underscores GBUG's strategic advantages. While gold prices hit record highs, the sector's equity performance varied widely. Mid-tier miners, for example, saw average implied unit earnings reach $1,959 per ounce-a record-due to improved operational efficiency and higher gold prices. Active management allows GBUG to selectively overweight these high-performing names while avoiding overextended or structurally challenged peers.

Moreover, the structural deficit in the silver market-now at 820 million ounces since 2021-creates a compelling case for mining equities. With silver mine production expected to remain flat at 813 million ounces in 2025, the gap between supply and demand is likely to persist, driving further price appreciation. GBUG's active approach enables it to capitalize on this imbalance by focusing on miners with low production costs and strong balance sheets.

Conclusion: A High-Conviction Play on Precious Metals

GBUG offers a unique combination of active management, undervaluation, and exposure to both gold and silver's growth drivers. In a market where bullion prices are surging and industrial demand for silver is evolving, the ETF's strategic positioning provides a high-conviction way to ride the momentum. For investors seeking to leverage the dual forces of geopolitical uncertainty and technological innovation, GBUG represents a compelling, high-octane option.