Royal Canadian Mint launches silver bullion-backed ETRs
Following up on the resounding success of its Gold Reserves' Exchange Traded Receipts program, the Royal Canadian Mint is launching a similar product for its silver reserves.
Posted: Tuesday , 30 Oct 2012
RENO (MINEWEB) -
The Royal Canadian Mint announced Monday it will make an initial public offering of C$100 million in silver exchange-traded receipts.
The Mint will offer exchange-traded receipts, priced at $20 each, which can be redeemed for silver or cash.
"The goal is to offer investors an exchanged-traded investment vehicle that tracks the price of silver and makes investing directly in physical silver available to institutional and retail investors," said the Mint.
Each exchange traded receipts represent "an equal undivided direct legal and beneficial interest in silver bullion to be held in custody by the Mint. The silver bullion will be legally and beneficially owned by the ETF Holders and not by the Mint."
The Mint's current IPO is being led by TD Securities and National Bank Financials, the same dealers that helmed the Mint's gold reserves program.
Proceedings from the C$100 million offering will be used to purchase silver bullion. The silver ETRs will trade on the TSX and will be redeemable once a month for either cash or silver bullion.
Unlike other silver investment products, the purchaser of an ETR owns the actual silver rather than a unit or share in an entity that owns the silver. ETRs holders can redeem their ETRs for physical silver, such as 99.9% pure bars or 99.99% Maple Leaf coins, or for cash based on the future silver price or market price of the ETRs.
ETRs will be listed in both Canadian and U.S. dollars and may be traded in either currency.
"We believe that this new program will build on our reputation as a world-class custodian of precious metals with the drive to bring silver ownership to the market in creative and innovative ways," said Ian E. Bennett, CEO of the Royal Canadian Mint. "After the success of our Canadian Gold Reserves Program we are pleased to offer investors the same convenience, efficiency and security to invest in and own physical silver."
The Royal Canadian Mint's gold Exchange Traded Receipt IPO raised an astounding C$600 million in only three weeks when it was launched in November 2011.
The launch of the silver product was complicated by the fact it requires considerably more room to store silver bullion equivalent than is required to store the gold bullion equivalent for the gold ETR program.
The silver ETRs have not been and will not be offered or sold in the United States and will not be registered under the U.S. Securities Act of 1933. However, U.S. customers are, by far, the largest buyers of Royal Canadian Mint gold although the U.S. Mint is the top gold bullion supplier globally.
iPad Version: Picture - Silver bars are displayed at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna: REUTERS/Lisi Niesner