Eric Sprott's hunger for most commodities has likely wavered after last year's market collapse, however, the legendary hedge fund manager is still placing bets on at least a few.
Sprott Resource Group Corp., of which Mr. Sprott is chairman, announced Thursday the launch of One Earth Farms Corp., "a large scale, fully-integrated corporate farming entity" as a subsidiary agricultural business.
Sprott Resources said the venture plans to begin tilling 50,000 acres of farmlands in conjunction with First Nations groups in the Prairie provinces by year-end, and will pump in $27.5-million to kick-start operations.
Sprott Resources has called on underwriters Cormark Securities to explore raising outside funding.
"Management believes that the timing for this venture is opportune," Sprott Resources said in a statement. "Global trends continue to impact food supplies, as arable land continues to decline, fresh water remains in short supply and various regions of the world are experiencing severe, recurring droughts."
Mr. Sprott, who is also the chief executive of Toronto-based money manager Sprott Inc., will chair the new entity. Larry Ruud, a director at Viterra Inc. the largest grain company in Canada, will serve at chief executive.
Sprott Inc., which made a name for itself as its mutual and hedge funds moved aggressively into surging commodities in recent years, has taken losses as demand for commodities has plummeted amid a global recession.
