Net Asset Value Premiums of Certain Precious Metal Funds - Sprott Places Gold Offering at Premium

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Published : February 07th, 2012
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Category : Market Analysis

 

 

 

 

Sprott Physical Gold Trust Announces Completion of Its Follow-on Offering of Trust Units
Feb 3, 2012

TORONTO, Feb. 3, 2012 /CNW/ - Sprott Physical Gold Trust (the "Trust") (NYSE: PHYS / TSX: PHY.U), a trust created to invest and hold substantially all of its assets in physical gold bullion and managed by Sprott Asset Management LP, today announced that it has completed its follow-on offering of 20,000,000 transferable, redeemable units of the Trust (the "Units") at US$15.19 per Unit for gross proceeds of US$303,800,000 (the "Offering").

The Trust will use the net proceeds of the Offering to acquire physical gold bullion in accordance with the Trust's objective and subject to the Trust's investment and operating restrictions described in the prospectus related to the Offering. The net proceeds of the Offering per Unit are greater than 100% of the most recently calculated net asset value per Unit of the Trust prior to, or upon determination of, pricing of the Offering, as required under the trust agreement governing the Trust.


At today's prices this offering will pull about 176,000 ounces of gold off the public market.

In the reverse of what we saw with silver, the big follow on offering for the Sprott Physical Gold Trust priced out at a premium to its NAV and its market price. I think that is not possible with silver because of the huge premium that the Silver trust often carries. The Gold Trust premium is normally in the 3-4% range.

Sprott placed the entire gold offering fairly quickly, having announced it last week.





 

 

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