Sprott Focus Trust : 2021 Semi-Annual Report

Semi-Annual Report

June 30, 2021

Beginning September 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of Sprott Focus Trust's ("the Fund") semi-annual and annual financial reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on www.sprottfocustrust.com and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you have already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor and your shares are held with our transfer agent, Computershare, you may log into your Investor Center account at www.computershare.com/investor and go to "Communication Preferences". You may also call Computershare at 1.800.426.5523.

You may elect to receive all future reports in paper form at no cost to you. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call Computershare at 1.800.426.5523. Your election to receive reports in paper form will apply to all funds held in your account with your financial intermediary or, if you invest directly, to all closed-end funds you hold.

Table of Contents
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Manager's Discussion of Fund Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Performance and Portfolio Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
History Since Inception . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Distribution Reinvestment and Cash Purchase Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Schedule of Investments and Other Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
Board Approvals of Investment Advisory and Subadvisory Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
Notes to Performance and Other Important Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22

Managed Distribution Policy

The Board of Directors of Sprott Focus Trust, Inc. (the "Fund") has authorized a managed distribution policy ("MDP"). Under the MDP, the Fund pays quarterly distributions at an annual rate of 6% of the rolling average of the prior four quarter-end net asset values, with the fourth quarter distribution being the greater of this annualized rate or the distribution required by IRS regulations. With each distribution, the Fund will issue a notice to its stockholders and an accompanying press release that provides detailed information regarding the amount and composition of the distribution (including whether any portion of the distribution represents a return of capital) and other information required by the Fund's MDP. You should not draw any conclusions about the Fund's investment performance from the amount of distributions or from the terms of the Fund's MDP. The Fund's Board of Directors may amend or terminate the MDP at any time without prior notice to stockholders.

Performance

NAV Average Annual Total Returns

As of June 30, 2021 (%)

FUND	YTD1	1 YR	3 YR	5 YR	10 YR	15 YR	20 YR	SINCE INCEPTION2	INCEPTION DATE
Sprott Focus Trust	19.25	45.85	12.58	13.00	7.85	7.24	9.42	9.96	11/1/962
INDEX
Russell 3000 TR3	15.11	44.16	18.73	17.89	14.70	10.78	8.92	9.80

• Not Annualized, cumulative Year-to-Date.

• Royce & Associates, LLC served as investment adviser of the Fund from November 1, 1996 to March 6, 2015. After the close of business on March 6, 2015, Sprott Asset Management LP and Sprott Asset Management USA, Inc. became the investment adviser and investment sub-adviser, respectively, of the Fund.

• Russell Investment Group is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group. The Russell 3000 Total Return Index measures the performance of the largest 3,000 U.S. companies. The performance of an index does not represent exactly any particular investment, as you cannot invest directly in an index.

Important Performance and Risk Information

All performance information reflects past performance, is presented on a total return basis, net of the Fund's investment advisory fee and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the most recent month-end may be obtained at www.sprottfocustrust.com. The market price of the Fund's shares will fluctuate, so shares may be worth more or less than their original cost when sold.

The Fund is a closed-end registered investment company whose shares of common stock may trade at a discount to their net asset value. Shares of the Fund's common stock are also subject to the market risks of investing in the underlying portfolio securities held by the Fund.

The Fund's shares of common stock trade on the Nasdaq Select Market. Closed-end funds, unlike open-end funds, are not continuously offered. After the initial public offering, shares of closed-end funds are sold on the open market through a stock exchange. For additional information, contact your financial advisor or call 203.656.2430. Investment policies, management fees and other matters of interest to prospective investors may be found in the closed-end fund prospectus used in its initial public offering, as revised by subsequent stockholder reports.

2021 Semi-Annual Report to Stockholders | 1

Whitney George

MANAGER'S DISCUSSION

Sprott Focus Trust

DEAR FELLOW SHAREHOLDERS,

We are pleased to report that Sprott Focus Trust (FUND) posted strong performance in the first half of 2021. For the six months ended June 30, 2021, FUND's net asset value (NAV) advanced 19.25% and its market price increased 26.62%, reflecting the reinvestment of dividends. This compares favorably to FUND's benchmark, the

broad-based Russell 3000 Total Return Index, which gained 15.11% in the first six months. For the trailing 12 months ended June 30, 2021, FUND's NAV and market price appreciated by 45.85% and 55.33%, respectively, compared to the Russell 3000 Total Return Index's 44.16% advance. While Sprott Focus Trust still trails on some longer-term measures, we are optimistic about improvement ahead.

The underpinnings of FUND's first-half success are the long awaited return of active investing and a shift in preference to undervalued, economically sensitive companies. During 2020's COVID-induced economic shutdown, a new audience discovered stock market investing. Armed with new savings and easily accessible cheap (or commission-free) trading platforms, a new breed of retail investors discovered stocks for the first time. This new class of investors seems disinterested in passively betting on indices or ETFs and has found new non-traditional Wall Street research sources. They seem to prefer to find their gurus on social media platforms. While their initial targets were heavily shorted stocks like GameStop Corp. (yes, we did once own it and sold it near the bottom), their interest seems to have broadened out to seek other fundamental factors. As the first half of 2021 progressed, small-cap stocks with higher quality metrics and more compelling valuations were discovered by these more active and engaged investors.

We entered a corrective phase in the second quarter (which persists at this writing) due to fears that the Delta variant of COVID-19 might slow the rapid economic recovery. We expect the correction in value and small-cap strategies will be short lived. The markets are taking their cues from the U.S. Treasury bond market, and it seems that the massive risk-off rally in bond prices has run its course. Further, given the level of interest rate manipulation by the Federal Reserve ("Fed"), we would not trust the historically reliable signals delivered by bond yields. It also seems likely that more fiscal stimulus is on its way and its inflationary impacts will be far from "transitory." The reversal of relative performance between value and growth styles was the most dramatic we have seen since 2000 and we believe the powerful mean reversion in our favor is just beginning.

With its heavy emphasis on quality balance sheets and high returns on capital, FUND's portfolio was well positioned when the markets

turned their attention toward economic recovery with the arrival of COVID vaccines at the end of last year. Our overweighting in hard assets themes like Energy Services, Industrials, Materials and Real Estate was finally rewarded. Many of FUND's portfolio companies posted all-time record results in the first quarter of 2021. The early read for the second quarter is more of the same, with even brighter prospects for the balance of 2021. We are enjoying intelligent share buyback activity and dividend increases among most of our portfolio holdings. Our heavy exposure to asset management companies positions us well for the continued asset appreciation in markets (good inflation). Finally, during the 2020 COVID recession, many companies found new ways to improve their business models and are now enjoying record operating margins. The current domestic competitive landscape looks more like the 2000-2010 period than the last decade (2011-2020) which was characterized by disinflation. We have remained fully invested and our holdings, while up, are barely keeping pace with their improving fundamentals.

Portfolio Activity

The S&P 500 Total Return Index advanced 96.14% from the March 23, 2020, low last year in an almost straight-line fashion through June 30, 2021. Following a move of this magnitude over such a short time period, we've been better sellers than buyers of late, reflected in our lower-than-normal portfolio turnover of 9.11%. We exited four positions during the six months while building only one new position (and started to nibble on another). Positions in Arcosa, Inc. Cirrus Logic, Inc. and Gentex Corporation were liquidated during the period under review after very significant share price moves in each and reaching our estimates of fair value. Fresnillo plc, part of the precious metals basket, was liquidated in favor of consolidating exposure to silver with our higher conviction position in Hochschild Mining plc.

A new position in Australian drilling services company DDH1 Limited ("DDH1"). was initiated during the first half of 2021. Shares in DDH1 languished for a short time following its March 2021 IPO (initial public offering), providing the opportunity to buy a very high- quality business at an even better entry price. DDH1 Drilling started in 2006 with a single diamond core drill rig. Through consistent organic growth and two key acquisitions in 2018 and 2019, DDH1 has grown to become one of Australia's largest providers of specialized and more technically challenging and deep drilling services. The company's market share in Australia has grown from 2% (16 rigs) in 2011 to 11% (99 rigs) as of December 31, 2020, a compound average growth rate of 20%. Key elements of attraction that enable DDH1's resilience through the mining cycle include a focus on large scale low-cost miners with an ongoing need to replenish reserve depletion

2 | 2021 Semi-Annual Report to Stockholders

regardless of the stage in the cycle; a focus on producing mines and near mine development; excellent track record managing fixed and variable costs; judicious use of leverage to ensure sufficient capital to grow in the down cycle instead of servicing debt (DDH1 has a net cash balance sheet today); exploration exposure targeting higher- margin work; diversity in commodity exposure, and sufficient scale in each; specialization requiring greater skills, garnering higher day rates; a focus on increasingly deeper drilling industry trends - drilling rates per meter increase as depth increases.

During the first half of 2021, we also started to nibble on shares in leading scrap steel producer Nucor Corporation before record high steel prices during the period propelled shares beyond our targeted buy range. We remain disciplined and patient, hoping for a better entry price in the second half of 2021.

Performance Contributors and Detractors

In our last letter to shareholders (annual report dated December 31, 2020), we explained that in the closing days of 2020, Sprott Focus Trust participated in a faltering SPAC (special purpose acquisition company) transaction involving AerSale Corporation, a global leader in aviation aftermarket products and services. It was an opportunistic purchase since very attractive terms were needed to entice outside investor participation and enable the deal with Monocle Acquisition Corporation to be consummated. Since the closing of the transaction, AerSale shares advanced strongly, producing the greatest source of portfolio performance during the period under review (3.10% contribution). Shares in high-quality denim retailer The Buckle, Inc. contributed 2.67% of portfolio performance thus far this year as consumers returned to in-store shopping while online sales activity remained elevated, driving better than expected operating results. Biogen Inc. delivered strong share price performance during the period as the FDA approved its controversial Alzheimer's drug aducanumab. Shares surged 41.42% through June 30, 2021, contributing 1.82% of total portfolio performance. Shares in Helmerich & Payne, Inc., the largest U.S. oil and gas drilling services company, contributed 1.80% of total performance as drill rig utilization rates continue to rebound from the deep 2020 trough. Helmerich & Payne's transition to performance-based contracts from standard day rate-based contracts should drive increased profit margins as the energy drilling upcycle continues. Western Digital Corporation shares contributed 1.27% of portfolio performance during the period as expectations for improved end-market demand for the company's hard disk drive (HDD) and NAND memory products suggest better pricing and stronger profitability in the coming quarters and beyond.

The greatest detractors from Sprott Focus Trust's performance during the first half of 2021 were all miners in the precious metals basket.

MANAGER'S DISCUSSION

The spot price of gold declined 6.76% in the first six months of this year on the belief that the Fed will raise interest rates sooner than later to tame what is believed to be transient inflationary pressures related to the reopening of the post-COVID global economy. Against this pricing headwind, shares of precious metals producers across the globe struggled, despite strong underlying fundamentals at the current cyclically depressed spot prices. The bottom five portfolio positions in aggregate detracted 1.69% from FUND's total portfolio performance. (This compares favorably, however, to the aggregate contribution of 10.66% from the top five performers discussed earlier.) Today, precious metals mining equities offer generally clean balance sheets, strong expected free cash flow and among the most compelling valuations in 20 years, which translates into tremendous perceived risk-reward opportunities. Great investment opportunities are often preceded by significant declines. We believe this is the case today with our basket of gold and silver miners, despite the market's recent sell-off.

	Top 5 Contributions to Performance	Top 5 Detractors from Performance
	Year-to-date through 6/30/2021 (%)1	Year-to-date through 6/30/2021 (%)1
	AerSale Corporation	3.10	Hochschild Mining plc	-0.56
	The Buckle, Inc.	2.67	Seabridge Gold Inc.	-0.44
	Biogen Inc.	1.82	Pan American Silver Corp.	-0.31
	Helmerich & Payne, Inc.	1.80	Fresnillo plc	-0.20
	Western Digital Corporation	1.27	Barrick Gold Corporation	-0.18
	1 Includes dividends.		1 Net of dividends.

Figure 1

Positioning

Sprott Focus Trust at mid-year had 35 equity positions and was nearly fully invested with cash at 2.59%. As shown in Figure 2, the Fund's greatest sector exposure remains the Materials sector at 25.14%, consisting of both industrial and precious metals producers and drilling services companies. Almost as large, is the Fund's exposure to the Financials sector (20.70%), consisting primarily of asset managers and longtime holding Berkshire Hathaway Inc. We still own no banks (a differentiating feature among value managers) since their levered business model provides no margin of safety against permanent impairment, a lesson others learned during the 2008 global financial crisis. Six of the previous largest ten positions remain, with AerSale Corporation, The Buckle, Inc., Pason Systems Inc. and THOR Industries, Inc. appreciating into the top Top 10 list by mid- year. Share price appreciation resulted in the portfolio becoming slightly more concentrated today than at year-end. The Top 10 comprised 46.38% of portfolio exposure versus 45.48% at year-end.

Statistically, as shown in Figure 3, the Sprott Focus Trust remains invested across a collection of equity securities of high quality

2021 Semi-Annual Report to Stockholders | 3