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Eric Sprott To Buy $235 Million In Gold, Or Over 6 Metric Tonnes, As Part Of PHYS Follow-On Offering

Tyler Durden's picture





 

Eric Sprott's Physical Gold Trust (PHYS) has just announced it is issuing a follow-on offering of 18 million trust units, with an overallottment option of another 2.7 million, for a total, including the greenshoe, of 20.7 million new units. The proceeds, as expected, will be used to purchase physical gold bullion to satisfy unprecedented investor demand for a safe haven away from the central bank printing press madness. At a post-announcement per unit price of $11.40, this means Sprott will buy $235 million worth of gold in the open market. At today's gold price of $1,200 this translates into 195,833 troy ounces of gold to be acquired, or roughly 6 metric tonnes. Somehow, we don't think the LBMA will be too thrilled with this extraction of physical gold out of the controlled synthetic precious metal ponzi system.

Full press release:

Sprott Physical Gold Trust Announces Follow-On Offering of 18,000,000 Trust Units

 

TORONTO, ONTARIO--(Marketwire - May 25, 2010) - Sprott
Physical Gold Trust (the "Trust") (TSX:PHY.U)(NYSE:PHYS), a trust
created to invest and hold substantially all of its assets in physical
gold bullion and managed by Sprott Asset Management LP, announced today
that it plans a follow-on offering to the public (the "Offering") of
18,000,000 transferable, redeemable units of the Trust ("Units"). As
part of the Offering, the Trust expects to grant the underwriters an
over-allotment option to purchase up to 2,700,000 additional Units.

The
Trust intends to use the net proceeds of this 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 this Offering.
Under the trust agreement
governing the Trust, the net proceeds of the Offering per unit must be
not less 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.

The Units are listed on the NYSE Arca and the
Toronto Stock Exchange under the symbols "PHYS" and "PHY.U",
respectively. The Offering will be made simultaneously in the United
States and Canada through a syndicate of underwriters led by Morgan
Stanley and RBC Capital Markets in the United States and RBC Capital
Markets and Morgan Stanley in Canada.

Copies of the
U.S. prospectus related to this Offering may be obtained by contacting
Morgan Stanley & Co. Incorporated, 180 Varick Street, 2nd Floor,
New York, New York 10014 Attention: Prospectus Department (telephone
866-718-1649 (toll free) or 917-606-8474) or by e-mailing prospectus@morganstanley.com,
or RBC Capital Markets Corporation, Attention: Prospectus Department,
Three World Financial Center, 200 Vesey Street, 8th floor, New York,
New York 10281-8098 (telephone: 212-428-6670, fax: 212-428-6260).

This
news release does not constitute an offer to sell or a solicitation of
an offer to buy the Units, nor shall there be any sale of the Units in
any state or jurisdiction in which such an offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.

 


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Tue, 05/25/2010 - 17:51 | Link to Comment Turd Ferguson
Turd Ferguson's picture

This is great news!!!

Should help eliminate some of the premium to NAV, too, that was keeping some investors out.

Tue, 05/25/2010 - 18:16 | Link to Comment Captain Obviousness
Captain Obviousness's picture

Possibly, but that depends what the NAV premium is caused by.  CEF also generally carries a significant NAV premium which temporarily evaporates when they issue new shares.  But PHYS claims to get regular capital gains tax treatment, unlike the higher "collectible" rate you have to pay in other precious metal ETF's.  I think most of the NAV premium in PHYS is due to perceived tax advantages, not due to perceived safety.  The US gov will eliminate any legitimate tax advantages PHYS currently has.  Can't let transactions in gold be too cheap, you know.

Tue, 05/25/2010 - 19:21 | Link to Comment Cistercian
Cistercian's picture

 Sprott is chock full of WIN.The real comedy is that the more WIN he has, the more likely the ponzi FAIL.And an epic fail it will be.

Tue, 05/25/2010 - 23:12 | Link to Comment akak
akak's picture

"WIN"?

It may soothe the ego and stroke one's sense of superiority to casually and flippantly bandy about obscure acronyms, but we mere mortals would be interested in following the conversation as well.

Wed, 05/26/2010 - 10:44 | Link to Comment Temporalist
Temporalist's picture

I think he meant WIN as in WIN not W.I.N.

Like Sprott PWNED...

Tue, 05/25/2010 - 18:06 | Link to Comment jmf
jmf's picture

Moin from Germany,

add "The Gold Rush In China"  to the physical bullion mix......

http://timiacono.com/index.php/2010/05/25/the-gold-rush-in-china/

Must see clip!!

Tue, 05/25/2010 - 18:26 | Link to Comment ZerOhead
ZerOhead's picture

Yup... must see clip. The party is starting... feel the energy... feel the fear.

Soros of course is correct... gold will become a bubble... but it sure ain't yet!

Tue, 05/25/2010 - 18:58 | Link to Comment Rusty_Shackleford
Rusty_Shackleford's picture

Yeah, you gotta' love that line (as he was buying hand over fist).

Tue, 05/25/2010 - 23:51 | Link to Comment Slewburger
Slewburger's picture

Watched Roubini on Bill Maher's show (ashamed), he was advocating spam investment instead of gold.

Maher called it antiquated. Of course the crowd laughs when the signs light up on queue.

Maher's show is filmed in NBC studios, looks like Immelts propaganda machine is running almost as fast as Uncle Bennie's press.

No bubble for us yet, but the Chinese will be laughing when the music stops and they're already sitting in their chairs.

Wed, 05/26/2010 - 00:23 | Link to Comment drwells
drwells's picture

I remember a few years ago some mainstream financial analyst was recommending that you fill your garage with Plasma TVs rather than gold. I loved the fact that the asshole even managed to pick the one of the few things that actually manages to depreciate faster than green toilet paper.

Wed, 05/26/2010 - 10:42 | Link to Comment Temporalist
Temporalist's picture

I have been a fan of Maher's for a while.  He is an "entertainer" so I take everything he says with a grain of salt.  The guests he has are worth listening to usually...when he lets them speak.

Tue, 05/25/2010 - 19:52 | Link to Comment Rebel
Rebel's picture

Watched the clip . . . looked like a big gold shop in a mall. Can you imagine whipping out your cash in that crowded store, getting your 1 Kg (2.2 lb) bar, and walking out with it, back through the mall and out to your car. Chances of making it home alive in US?

Tue, 05/25/2010 - 20:11 | Link to Comment Mesquite
Mesquite's picture

At the 800+ peak, years ago, that was going on in Vancouver, Canada...(Lined up around the block to get in, even..)

Tue, 05/25/2010 - 17:58 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

"Somehow, we don't think the LBMA will be too thrilled with this extraction of physical gold out of the controlled synthetic precious metal ponzi system."

In all seriousness, I hope Sprott is somehow testing the physical they receive because there's a whole lot of tungsten filled Gold 400 oz bars looking for a sucker to buy.

Tue, 05/25/2010 - 18:04 | Link to Comment tomb traider
tomb traider's picture

Would anyone consider Linden Dollars to be a safe haven?

Tue, 05/25/2010 - 18:19 | Link to Comment Temporalist
Temporalist's picture

I have been thinking about that myself TT.

The problem I see is that without an internet connection you cannot collect, walk to your atm, write a check...it is imaginary until you convert it to real currency or use it in game.

I think it has value though but earning it in game is probably best not investing in it for the next year or three.

Tue, 05/25/2010 - 18:23 | Link to Comment Nolsgrad
Nolsgrad's picture

https://www.xstreetsl.com/modules.php?name=Currency&file=charts

 

Their currency holds up way better than the Euro.

Wed, 05/26/2010 - 01:37 | Link to Comment nobita
nobita's picture

it´s tied to the dollar genius.

btw i want to ask the crowd, do you guys have the same level of trust for central fund of canada as you do for sprott?

Tue, 05/25/2010 - 18:13 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I cannot imagine that buying so many millions worth of gold that he would NOT check it.

Good for Sprott! 

A lesson here: buy gold!  Before Sprott buys it all up!

Tue, 05/25/2010 - 18:16 | Link to Comment stockfish
stockfish's picture

Tungsten? As in tungsten carbide drills?: http://www.youtube.com/watch?v=HLoVF7vcBtY

Tue, 05/25/2010 - 18:21 | Link to Comment Joe Sixpack
Joe Sixpack's picture

Same element, but in metallic form rather than as a carbide (as in drills). Use the drills (with or without tungsten carbide) to make holes in the gold (in non-carbide form) to check for tungsten (in non-carbide form).

 

www.Gold-Silver.US

Tue, 05/25/2010 - 20:06 | Link to Comment BobPaulson
BobPaulson's picture

Nice one centurion.

Tue, 05/25/2010 - 18:20 | Link to Comment ZerOhead
ZerOhead's picture

Kinda brings a smile to mind when I think of the Worlds Largest House of Cards Ponzi Scheme built on only a couple of gold bars (less than 1%)... and then a guy like Sprot comes along and takes one itsy bitsy ($180MM) bar away...

Not thrilled indeed... their "doomsday" clock just moved one minute closer to midnight!

Tue, 05/25/2010 - 18:41 | Link to Comment Amish Hacker
Amish Hacker's picture

Funny how GLD claims to hold something like 1,100 metric tons of AU, but their activity buying and selling never seems to have much of an impact on the rigged gold market. Then along comes Eric Sprott looking to buy just 8 tons, and suddenly everyone starts wondering if the physical market can withstand this sort of off-take.

Get physical.

Tue, 05/25/2010 - 18:49 | Link to Comment RossInvestor
RossInvestor's picture
  1. Since Rob Kirby, a Toronto-based newsletter writer, broke the story on gold-plated T-bars, I strongly suspect Sprott, who is HQ'd in Toronto, is well aware of the issue and is likely testing every bar.
  2. Trying to offload T-bars to Sprott would be one of the stupidest acts the LBMA and/or CRIMEX could possibly do, because Sprott would immediately go public with the information.  Such a revalation would casue an immediate run on both exchanges.
Tue, 05/25/2010 - 19:05 | Link to Comment DosZap
DosZap's picture

CD,

As I see things unraveling, what makes Sprott think all he is doing, is stockpiling it, so they can get it all in ONE fell swoop?.

Out of the realm of reality, I think a MOST likely sceanario.........

Sprott, being the billionaire he is, I doubt seriously he is as UP on the REALITY of the situation, except from a financial perspective.

Uber wealthy folks, having lived large in safe places, and prospered, most likely have not REALLY looked at REALITY, if the SHTF.

He's doing it as an investment...........he's never likely had to face a LOCKED door, and denied entrance, nor access to what is rightfully HIS.

There's likely going to be a lot of wealthy people, wondering what hell just hit em'.

'

Tue, 05/25/2010 - 20:22 | Link to Comment Mesquite
Mesquite's picture

DZ--fyi..

In 1967, when one couldn't openly purchace Au in

USA, one could in Canada..(Even had some represented in their coinage..Course one never saw 'it' circulating..)

Tue, 05/25/2010 - 21:23 | Link to Comment Double down
Double down's picture

Rumour is he is building a vault in Alberta.  Read that somewhere but I do not remember where.  

Tue, 05/25/2010 - 20:08 | Link to Comment Mesquite
Mesquite's picture

Re: CD ..beware tungsten bars..

Now WHY would anyone 'junk' this post..??

Hmmm..

Tue, 05/25/2010 - 20:55 | Link to Comment Rebel
Rebel's picture

We are experiencing Junk Inflation. Anyone can sit and "print" junks as easy as FRN's. We need to go on some sort of gold standard. Each member allowed only one junk a day. Put an end to this insanity.

Tue, 05/25/2010 - 20:56 | Link to Comment Rebel
Rebel's picture

See what I mean?

Tue, 05/25/2010 - 22:02 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

YES!!!!

Cap and Trade ZH junks.

I call first dibs on ZH junks. I'll corner the market by setting up an exchange and soak them up when supply is high and people will sell them for pennies. Then when Harry Wanger and the market both come back (admittedly there is the potential for a long wait here) I'll sell them for $10 each for those so desperate to junk Harry Wanger they'll pay through the teeth. :>)

Wed, 05/26/2010 - 05:55 | Link to Comment Hephasteus
Hephasteus's picture

Dude. I'm totally not naked shorting my junk. It's just wrong on so many levels.

Tue, 05/25/2010 - 22:23 | Link to Comment Gunther
Gunther's picture

That test can be done by ultrasound. Ultrasound measures speed of sound times thickness of piece.

Austrian refiner Oegussa made such a testing device until the nineties.  In German:

http://www.foonds.com/article/5714/gefaelschte_goldbarren_sind_keine_leg...

 

Tue, 05/25/2010 - 18:01 | Link to Comment MsCreant
MsCreant's picture

Eric wants to hold it if he is sold it.

Thing is, so do I.

Meanwhile, after testing his bars, it would be cool to see more people with serious resources taking delivery.

Tue, 05/25/2010 - 18:03 | Link to Comment papaswamp
papaswamp's picture

...that's alot of bacon

Tue, 05/25/2010 - 18:04 | Link to Comment faustian bargain
faustian bargain's picture

Newb question...does Sprott make money on fees or per-sale commissions, or on spreads? Because the way it's worded, it looks like they would like to sell the stocks at one price and then buy the gold backing it up, at a lower price. They definitely don't want to do it the other way around. So are they shorting gold, or just hoping for a well-timed dip?

Tue, 05/25/2010 - 18:14 | Link to Comment dumpster
dumpster's picture

commission structure

Management Fee 2.5% annual - (A) Performance Fee 10% of excess over S&P/TSX Global Gold Index
Tue, 05/25/2010 - 22:51 | Link to Comment Barmaher
Barmaher's picture

2.5% management fee annually?  Holy Crap Batman!   Bullionvault holds more than 19 metric tons and charges 0.2% annual fees for storage/insurance within a good delivery vault.  The custodian, ViaMat, provides audits every business day.   That extra 2.3% every year would be hard to justify IMHO.

Tue, 05/25/2010 - 23:24 | Link to Comment dumpster
dumpster's picture

2.5 fee can be justified .. small potatoes for a large fund ... in my opinion .

 

Tue, 05/25/2010 - 18:28 | Link to Comment knukles
knukles's picture

Management fees.
Read the prospecti before you fondle or invest.

The premium IMO is solely a function of the custodian, segregated and unencumbered nature of the arrangement.  After all, if you want gold, this is the safest way next to real physical coin or bars under the mattress, under the bed or in the safety deposit box that can be had today.  No loans, extensions of credit, promissory notes, delivery receipts from other alternative vaults....just real countable, shiny bars, all there in one safe place which the manager can go see at any time their little heart desires.  Plus, under most circumstances, the good custody is "backed" by the Mint (See prospectus...nice touch relative to other deals out there.

Make me all warm and....opps, mixed company!  Sorry!

Tue, 05/25/2010 - 18:52 | Link to Comment chet
chet's picture

Do you know the details on where he keeps it?  Is it really safe if the SHTF?

Tue, 05/25/2010 - 19:23 | Link to Comment knukles
knukles's picture

Royal Canadian Mint. 
Define SHTF and use your imagination.
EMP.  No wire transfers.
Expropriation.  No so good.
Maggot filled ingots.  Outta Luck.
Invasion of the Body Snatchers.  WTF knows.
More Astute Political, Monetary and Fiscal Prowess displayed by world wide Power Elite. Could be Priceless.
Serve as food or smoke?  Nope, grow yer own.
Getting it on the Cheap?  NFW.  Big Premium to NAV. 
Ya' pays for a whatcha thinks a good night's sleep.

Tue, 05/25/2010 - 19:29 | Link to Comment ZerOhead
ZerOhead's picture

You look a little shady chet yet vaguely familiar... however I'm sure you're OK so I'll tell ya.

It's in the wall safe behind the fan... 36L-24R-36L

If the SHTF however...  the safe may not pass the sniff test!

Tue, 05/25/2010 - 19:49 | Link to Comment chet
chet's picture

Thanks.  I just want to, um, check in on it.  For the good of the order, and all that....

Tue, 05/25/2010 - 21:17 | Link to Comment faustian bargain
faustian bargain's picture

Sweet, you put it in a Brick....House.

Tue, 05/25/2010 - 21:41 | Link to Comment MsCreant
MsCreant's picture

Good catch!

Built mightee mightee, just letin it all hang out.

Wed, 05/26/2010 - 03:06 | Link to Comment Riley Wilde
Riley Wilde's picture

I would think Sprott makes most of his money by buying up all the new shares at NAV and then slowly unwinding his position at high premiums.  If he is not allowed to trade it himself, then you still need to ask...with the premiums at 10-25% (http://www.sprottphysicalgoldtrust.com/Net-Asset-Value/default.aspx), who captures this premium when new shares are issued at NAV? Surely an acution of new shares would be fairest to current holders.

For all its (supposed) weakneses, the creation and redemption process of GLD keeps it trading very closely to spot gold.  If you have significant holdings in GLD and are worried about its legal/ownership risks, then taking physical yourself of some gold coins or bars (which really should never be at a premium of more than 5%) seems like a far wiser idea than paying an outrageous premium for PHYS, high management charges, and uncertain tax consequences.

In fact, PHYS stores its metal at the Royal Canadian Mint. If you wanted to store your metal there too for much less cost, then try pushing Kitco to re-open their RCM Prestige Account. Alternatively there is BullionVault and GoldMoney which work out less expensive annually for the buy-and-hold investor. COMEX and GLD have their usefulpurposes for frequent trading and/or hedging of your physical. And then paying a small premium for real physical and very little to hide it somewhere yourself is probably the cheapest and wisest move of all.

Anyway, that's my two cents...

Tue, 05/25/2010 - 18:08 | Link to Comment Temporalist
Temporalist's picture

Dylan Ratigan had Peter Schiff on today to discuss gold and the Glen Beck/Weiner spat.

Unfortunately Schiff had technical difficulties and was cut off but comes back at the end.

http://www.msnbc.msn.com/id/3096434/vp/37343028#37343028

Tue, 05/25/2010 - 18:34 | Link to Comment Harbourcity
Harbourcity's picture

That woman in that report did NOT look comfortable.  Must be her first time on TV - as some points it looked like she was going to pass out or vomit.

 

Tue, 05/25/2010 - 18:41 | Link to Comment cossack55
cossack55's picture

she is always like that.  Genius level IQ though.  Wrote a great book on the 1st great depression. "The Forgotten Man."  Connected to the CFR I believe.

Tue, 05/25/2010 - 20:07 | Link to Comment qualia
qualia's picture

i'm actually into eccentric geeky chicks on tv.  we need more of them.

Wed, 05/26/2010 - 10:37 | Link to Comment Temporalist
Temporalist's picture

In the piece they intro her as from the CFR.

I have never seen so many CFR people on television as I have in the past 3 months.

Tue, 05/25/2010 - 18:40 | Link to Comment Apostate
Apostate's picture

She was actually at least mildly intelligent and friendly for a CFR member.

If only they were space aliens with mind control rays. When the USD goes to shit, even they will need to find real jobs!

Tue, 05/25/2010 - 18:53 | Link to Comment Rusty_Shackleford
Rusty_Shackleford's picture

Thanks for the link.

Tue, 05/25/2010 - 18:09 | Link to Comment tony bonn
tony bonn's picture

if he can buy at today's closing price he will have pure profit.

gold is in severe and permanent backwardation. the takedown of gold last week was another failed attempt by the sociopathic banksters, fedsters, and treasury crooks to keep their criminal enterprises going all in the name of the plutocrats.

Tue, 05/25/2010 - 18:13 | Link to Comment Harbourcity
Harbourcity's picture

Doesn't that mean that at a ratio of 10 oz in ETF to 1 oz physical that close to 2 million oz is now removed from the gold ETF market?

 

Tue, 05/25/2010 - 18:20 | Link to Comment faustian bargain
faustian bargain's picture

I think it'd be the other way around, since 1oz of physical gold equals (say) 10oz paper gold. So more like 200 million paper ounces being removed. Not like GLD cares anyway.

Tue, 05/25/2010 - 18:37 | Link to Comment Harbourcity
Harbourcity's picture

We're on the same page - I had already converted the 197,000 oz in physical to ETF of 1,970,000 .  Shouldn't the removal of that much gold from the ETF market be noticed?  I thought the basis of shorting the market was selling significant amounts of gold - shouldn't it work both ways?

 

Tue, 05/25/2010 - 18:44 | Link to Comment faustian bargain
faustian bargain's picture

I guess we'll see. There are many who think paper gold is decoupling (or has decoupled) from physical gold anyway, due to fractionalization in the ETFs. So having a physical gold stock compete with a fractional paper one will be interesting.

Tue, 05/25/2010 - 18:18 | Link to Comment dumpster
dumpster's picture

if he can buy at today's closing price he will have pure profit

 

explain that logic lol

the fund divides total gold 97%   cash and stocks 3%  into total shares , the .... the difference in the cost of gold and the price now is a function of the share price and the NAV

commission structure

Management Fee2.5% annual - (A)Performance Fee10% of excess over S&P/TSX Global Gold Index

Tue, 05/25/2010 - 18:18 | Link to Comment saulysw
saulysw's picture

I hope Sprott watches those sidestreets. This kind of taking on the big boys might end in an "accident".

Tue, 05/25/2010 - 18:24 | Link to Comment dumpster
dumpster's picture

i sure doubt it ,, the big boys will soon be taking on the big boys ,  the big boys will be riding the wave up

and are in position to profit the most in the gold ramp

 

while master bates sucks a big pile of wind

Tue, 05/25/2010 - 18:44 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ $1202

I wonder when the Haters are coming in.

Good observations about the big boys, yeah, they'll do fine.

Wed, 05/26/2010 - 03:07 | Link to Comment Johnny Bravo
Johnny Bravo's picture

Hah.  You're retarded.

The big boys are either like Soros and hold 2% gold in their portfolios, or are already short.

The only people buying gold are retail investors, who are soon to be bagholders.

Tue, 05/25/2010 - 18:24 | Link to Comment Freebird
Freebird's picture

Haven't seen you here before Saul. Nice post.

Tue, 05/25/2010 - 19:44 | Link to Comment saulysw
saulysw's picture

Thanks Freebird! I've been here more or less since the beginning, but I do a great deal more reading of comments than writing them - so I'm not surprised if I seem "new". Every now and then I put my 2 cents in, when I feel I have something worth saying. You can click on my name and see my profile, and posting history. I see you have been here 3 weeks and 4 days, for example (me : 39 weeks, 2 days). It's generally a great community here, and I sometimes skim the article just to get to the comments.

Tue, 05/25/2010 - 23:17 | Link to Comment Freebird
Freebird's picture

Thanks Saul for coming back & seeing your mail. I am extremely impressed with your profile - credentials and pedigree. By the way my donger is really huge and although somewhat shy, I have come out of the closet recently although have been zhing since the first site. Looking forward to when you feel you have something else worth saying.

Tue, 05/25/2010 - 18:28 | Link to Comment Apostate
Apostate's picture

He's too high profile. It's too late.

The powers that be are now the powers that were.

Tue, 05/25/2010 - 22:18 | Link to Comment robobbob
robobbob's picture

"He's too high profile"

 

higher profile than a Dallas motorcade in front of hundreds of witnesses and being filmed to boot?

 

Just a question of determination, and a plausible enough cover story

Wed, 05/26/2010 - 04:10 | Link to Comment weelp
weelp's picture

Dude, you're starting to get on my nerves. God damn. You have no idea what the fuck you are talking about. You just post stupid remarks and graffiti the comment section.

Wed, 05/26/2010 - 04:43 | Link to Comment Hephasteus
Hephasteus's picture

Ok this is easily fixed. Take a bunch of ticks and attach themselves to your body. All over till you're covered with them. The ticks will beging processing your bloodstream. But since they are insects they will start kicking out strange chemicals into your bloodstream that your liver doesn't have a chemical formulation to correctly neutralize. So this will cause toxic chemicals to float all through you blood stream. The main danger here is one will attack the mylin sheath on your nervous system. If you use a whole lot of ticks and really let them engourge themselves your nervous system could be completely destroyed in as little as 3 or 4 months. That way he won't get on your nerves and you can die happy because unfortunately your nervous system is responsible for controlling many vital organs.

Tue, 05/25/2010 - 18:33 | Link to Comment akak
akak's picture

Or in his unknowing ingestion of some tasty polonium-laced cuisine, as well.

Tue, 05/25/2010 - 18:23 | Link to Comment silvertrain
silvertrain's picture

That jpm gig in singapore thats set for the fall of the year is a little bit late to the party.Should have been living your life the right way guys.

Tue, 05/25/2010 - 18:26 | Link to Comment RobotTrader
RobotTrader's picture

Nice 10% wipeout in PHYS after hours....

Hopefully, that's just the premium evaporation and nothing else.

Wed, 05/26/2010 - 04:11 | Link to Comment weelp
weelp's picture

7%. Don't add 300 unwarranted basis points to make your point. 

Tue, 05/25/2010 - 18:28 | Link to Comment cocoablini
cocoablini's picture

Well that oughta make gold up tonight. How much???

Tue, 05/25/2010 - 18:28 | Link to Comment MinnesotaNice
MinnesotaNice's picture

Since they already have gold holdings valued at $436,000,000... then the total of all their gold holdings will be around 17 metric tonnes when they are done with this follow-on offering... and if they were a country that would put them more than halfway up on the list of the top 110 countries with gold reserves.  But it will be interesting to see if they can entice investors from the SPDR Gold Trust who has more that 1100 metric tonnes. 

Tue, 05/25/2010 - 18:31 | Link to Comment faustian bargain
faustian bargain's picture

1100 tonnes...lol, holy truckloads batman.

Tue, 05/25/2010 - 18:46 | Link to Comment What_Me_Worry
What_Me_Worry's picture

1100 metric tonnes!?!  That's a lot of paper!

Tue, 05/25/2010 - 19:00 | Link to Comment ZerOhead
ZerOhead's picture

Good one Mr. Neuman!

Tue, 05/25/2010 - 19:04 | Link to Comment Hephasteus
Hephasteus's picture

<cough> Bullcrap! <cough> yaright <cough>

Tue, 05/25/2010 - 19:16 | Link to Comment MinnesotaNice
MinnesotaNice's picture

Hephasteus... surely you aren't questioning whether they have the actual gold to back up the paper... my goodness what has this world come to when we have to question the integrity of our financial instruments...

Tue, 05/25/2010 - 23:56 | Link to Comment Hephasteus
Hephasteus's picture

He has not capture 1/14th of the worlds gold supply. First off the confiscated gold from 1933 is simply LOANED to the treasury. Yes that's how the laws and rules are played out. Which is exactly why the IMF never sells it's gold outright. It simply leases it and plays with currency as a derivitative of it. If he's done what he said he's done it won't be tolerated unless it's a country because making millions of enemies is not something done lightly even for the IMF. But one guy controlling all that gold is going to end badly if it's real.

China and russia are having trouble getting thier physical reserves up that much and they got tons of people out doing it.

Tue, 05/25/2010 - 20:09 | Link to Comment Implicit simplicit
Implicit simplicit's picture

When you do the math:

GLD market cap about   47134

PHYS market cap (MC) about   552

GLD has MC about 85 times PHYS

multiply 85 X 17 metric tons=1445 o get equivalent of GLD but GLD (supposedly) has

1100 tons; therefore PHYS a better value plus to be trusted more, plus only 15% longterm tax rate

Tue, 05/25/2010 - 18:32 | Link to Comment cocoablini
cocoablini's picture

That happened to CEF as well. The premium tanked- which makes sense. Morons will think that's share dilution.

Tue, 05/25/2010 - 19:51 | Link to Comment Implicit simplicit
Implicit simplicit's picture

CEF and PHYS are my only stock equity positions in PMs from recomendations here.

Tue, 05/25/2010 - 18:37 | Link to Comment The Rogue Trader
The Rogue Trader's picture

It's just great that Sprott is doing this...the whole PHYS thing....must be driving da Boyz crazy...

Tue, 05/25/2010 - 18:38 | Link to Comment AxiosAdv
AxiosAdv's picture

I was a decent sized buyer after the announcement.  This isn't your typical share dilution - they are buying assets with that money.

Tue, 05/25/2010 - 19:44 | Link to Comment Implicit simplicit
Implicit simplicit's picture

Same here. Bought more after hours for 11.40

Tue, 05/25/2010 - 18:46 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Paper covers Rock until Scissor comes along and divides up paper into millions of itty bitty pieces. 

I know that sounds deep so I'll explain. 

For now paper assets (incl currencies) "trump" hard assets like gold in terms of convertibility. You get paper from your bank. You can easily convert paper into things you need like food, fuel or shelter. 

Along comes a chill macro economic wind full of malevolence and TPTB acting through the Fed and Treasury decide that the only way out of $50 Trillion dollars of debt is through massive devaluation (as they have so many times in the past). So scissor cuts paper into itty bitty bits.

Now hard assets like gold command a gigantic premium. Access becomes impossible because they preserve private wealth. Convertibility becomes a non-issue as anybody would be willing to accept gold in exchange for anything else. Like how dollars used to be the unofficial black market currency of choice in some nations. 

Hard will beget hard. Things in short supply will get paid by other things in short supply in the coming storm.

Tue, 05/25/2010 - 18:57 | Link to Comment Rusty_Shackleford
Rusty_Shackleford's picture

Bingo.  I like the cut of your jib.

Tue, 05/25/2010 - 18:57 | Link to Comment FranSix
FranSix's picture

I would think that these gold purchases are not directly from the COMEX or the LBMA but come more or less from source(meaning straight out of the mines) after refinery in the Mint or some other refiner.

Interesting vehicle under NAFTA, because anybody living anywhere in North America can purchase units of PHYS on the NYSE in $US terms and be certain that their physical is securely stored and audited in Canada.

May as well buy at source, no?

Tue, 05/25/2010 - 23:50 | Link to Comment Freebird
Freebird's picture

Smart. Of course.

Thinking back to back, buy from the miners at 850 & sell retail, result nice.

Tue, 05/25/2010 - 19:02 | Link to Comment Paul Bogdanich
Paul Bogdanich's picture

They are going to use their regualatory authority to lock him up financially and make him illiquid.  It's a controlled market not a free market and Mr. Sprot is verging on running afoul of the US authorities and even though he's Canadian that matters. 

Tue, 05/25/2010 - 19:41 | Link to Comment dumpster
dumpster's picture

pray tell your authority for that statement .

sound like B.S. to me   and your invested in gold ,,

so the authorities will tie sprout up  lock up liquidity in the shares .and running a foul of u.s. authorities .. really? 

grab a copy of mad magazine and have a good evening

 

Tue, 05/25/2010 - 19:14 | Link to Comment Turd Ferguson
Turd Ferguson's picture

Maybe Mr Sprott is purchasing directly from the IMF. They still have 200 mts available and they certainly are in need of cash these days.

Tue, 05/25/2010 - 19:32 | Link to Comment breezer1
breezer1's picture

he asked them and they only sell to central banks.

Tue, 05/25/2010 - 19:37 | Link to Comment Sabremesh
Sabremesh's picture

He already tried that particularly route, without success. In fact, the IMF screamed like a little girl and ran away.

Tue, 05/25/2010 - 20:56 | Link to Comment DosZap
DosZap's picture

Sab, He wasn't the only Individual that tried,that tells me ONE of two things.

They supposedly hold 32k metric tons, that's (guessing) more than ALL the Soverign Nations, and then some.

One is they DO not/Will not sell to non Banksta's, or TWO, they do NOT HAVE THE METALS.

32k Metric tons is a shitload...............

Tue, 05/25/2010 - 19:35 | Link to Comment bugs_
bugs_'s picture

BE SKEPTICAL.

Tue, 05/25/2010 - 19:42 | Link to Comment dumpster
dumpster's picture

of what are we to be skeptical of , bugs saying be skeptical

Wed, 05/26/2010 - 03:13 | Link to Comment Johnny Bravo
Johnny Bravo's picture

Skeptical that this is the first time in history that retail investors aren't buying at the top of the market, like the goldbugs are.

Tue, 05/25/2010 - 19:39 | Link to Comment peterpeter
peterpeter's picture

20.7 million new units including the over-allotment.

http://www.sprottphysicalgoldtrust.com/Net-Asset-Value/default.aspx

The NAV on each unit is now $10.0445 (see the intraday idicative value for 5/25 or the NAV if after the page has been changed for today's data).  That means that the 20.7 million new units would cost Sprott (ignoring the market impact of his purchase):

20.7M x $10.0445 = $207.92M

However, with PHYS trading at $12.21, the value of those same shares (as deemed by folks who don't seem to mind paying a 24% premium for Gold...) is:

20.7M x $12.21 = $252.74M

That means his gains ignoring the impact of his transactions on the underlying price of Gold and PHYS would be approximately $44.8M.  Since his purchase will slightly push up the price of Gold and likely drop the premium on PHYS somewhat, he'll get less than that, but still a huge amount of money for not all that much work.

This is a risk free arbitrage for Sprott.  For some crazy reason, people are paying a 24% premium for his shares, which is - well - stupid.  No tax advantage (which is at best fleeting) is worth paying an additional $287/oz.

Storage (if done right) is not all that cheap, nor is taking physical delivery - but for $287/oz, you can get *much* better storage and delivery than Sprott will give you, and still have a lot left over.

The people who are buying PHYS at these premiums are just financially illiterate, and Sprott is doing the sensible thing and making a huge windfall profit off of their stupidity.

Note - long physical gold, GLD and short PHYS (and adding to my PHYS shorts until the premium drops from these ridiculous levels).

Tue, 05/25/2010 - 19:54 | Link to Comment What_Me_Worry
What_Me_Worry's picture

I think the premium on PHYS and CEF shows just how different the price of actual gold and paper gold can be.  If PHYS and CEF (maybe others) can just keep arbing their own premium over and over again to acquire more and more gold then they could finally force the hand of paper gold into a panic state.

They(CEF/PHYS) obviously benefit from such a move.  The more they take out of the market, the more they can squeeze the actual bullion market.  The large banks are willing to play ball with not taking delivery.  Eventually that will probably change once they figure out how to make enough off of it.

Tue, 05/25/2010 - 20:17 | Link to Comment qualia
qualia's picture

very interesting post.  thanks.

Tue, 05/25/2010 - 20:26 | Link to Comment Implicit simplicit
Implicit simplicit's picture

You never did the math on GLD for comparison. The market cap of GLD is 85 X that of PHYS

Tue, 05/25/2010 - 20:50 | Link to Comment peterpeter
peterpeter's picture

There is no math to be done...

http://www.spdrgoldshares.com/sites/us/value/premium_discount/

GLD always trades within a penny or two of fair value as compared against COMEX.

To the extent that there is any material skew in the reported NAV against trading price, it is caused by GLD using the closing COMEX price whereas GLD stops trading later in the day (4PM).  Net of the 0.40% annual expense fee, GLD trades at the right value and tracks COMEX to within a penny.

That's because with an ETF, authorized participants can convert blocks of 50K shares (a creation unit) of GLD into the equivalent cash position it represents as computed against the closing spot price, or they can turn that same amount of cash into a new creation unit of GLD (at which point GLD will eventually go out and buy more physical).

So, were there a risk free arbitrage in GLD, the authorized participants would fall over themselves to arb it away.

Note - the same is true of SGOL and IAU.

The knowledge that there are authorized participants willing to arb the fund makes other active participants arb it as well, keeping it very much in line with intraday price movements of gold.

http://finance.yahoo.com/q/bc?s=SGOL&t=5d&l=on&z=m&q=l&c=IAU,GLD,PHYS

Note which of these 4 securities is not trading like the other 3....  PHYS is just unhinged from the underlying assets.  That's not unusual for a closed end fund holding some obscure assets (like foreign corporate bonds), but it is for one where the underlying assets are readily available to investors in physical form and other share form for no (or in the case of physical - small) premiums over COMEX.

Sprott created a closed end fund, convinced the masses that there was something nefarious with ETFs, and is now poised to reap a small fortune by himself arbitraging the differential between the spot price and his shares.

The only trade IMO to make with regard to PHYS is to short it while going long GLD/IAU/SGOL (or if you don't trust the ETFs, buy physical instead as a hedge).

Sprott is selling the shares, and so should anyone interested in making money off of PHYS.

 

Tue, 05/25/2010 - 21:45 | Link to Comment Implicit simplicit
Implicit simplicit's picture

Thanks for responding. However, there is more to this than meets the eye. GLD trades so voracaciously with so many more shares than PHYS that I don't believe it has time to keep an NAV daily that is any better than PHYS. No one really knows for sure. I've alsio traded GLD for short term trades, but I don't trust it for a long term hold like I trust PHYS.

In addition, I like Sprott. At least I have seen and heard the man behind the stock. Its a rigged game, but  I am long trust factor on Sprott and PHYS on a relative basis, and short most everything else except nat. gas (also for the long term)

 There could be a day of reckoning for the paper gold ETFs.

Tue, 05/25/2010 - 22:16 | Link to Comment Implicit simplicit
Implicit simplicit's picture

PP, I went to the web site and dug up comparable NAV data for GLD. Not much difference, really when you consider costs, tax rate , intangibles like long term investing etc..

Net Asset Value $ per Basket
Based on NAV established between
0:30 a.m. & 12:00 p.m. NYT
25/05/2010

$ 11,723,961.98

 

Net Asset Value in Gold Ounces per Basket
Based on NAV established between
10:30 a.m. & 12:00 p.m. NYT
25/05/2010


9,784.237

Wed, 05/26/2010 - 04:14 | Link to Comment weelp
weelp's picture

Good luck with that. Might want to check the charts though before you make this fancy play.

Tue, 05/25/2010 - 21:00 | Link to Comment DosZap
DosZap's picture

peter,bingfngO..............

I looked at it back a couple of months ago, NO WAY I pay that extra premium...........I would rather go with Turk, if I was taking a chance on anyone holding for me.

Tue, 05/25/2010 - 23:22 | Link to Comment Honest_Money
Honest_Money's picture

+1

 

I'm a fan of Sprott and love gold here, but one of the best ways to lose money is to buy closed-end funds at huge premiums to NAV.  I've been buying 1oz eagles and GDX and GDXJ.

Wed, 05/26/2010 - 03:54 | Link to Comment Riley Wilde
Riley Wilde's picture

I agree, that the premiums on PHYS are outrageous (and the tax benefits uncertain) and the obvious trade is short PHYS against a reasonable long-gold hedge... but can you actually borrow PHYS for shorting?  What is the interest rate you are paying?

 

Interactive Brokers does not show it as shortable:

http://www.interactivebrokers.com/en/trading/ViewShortableStocks.php?cnt...

 

Wed, 05/26/2010 - 04:03 | Link to Comment Riley Wilde
Riley Wilde's picture

I logged in to my account and looked at the Short Stock Availability tool for PHYS@ARCA and IB is showing 25,000 shares shortable at an interest rate of 21%!

Wed, 05/26/2010 - 11:30 | Link to Comment Pegasus Muse
Pegasus Muse's picture
From Dave in Dever's Blog.    Tuesday, May 25, 2010    
Quote Of The Year And Must-Read Analysis From Reg Howe

 

You have to choose (as a voter) between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold.


George Bernard Shaw, 1928


Linked below is among the most well-written and brilliant analysis of how the Central Banks conspire to suppress the price of gold and how they are using GLD for this purpose. Reports about the fraudulent business structure of GLD have been published ad nauseum, including one by me, but this forensic accounting anlysis by Reg Howe is nothing short of remarkable and he clearly lays out the argument, supported by data taken directly from BIS (Bank for International Settlements - the global Central Bank of Central Banks) quarterly documents.  Here is one of the salient quotes, to wet your appetite and stroke your curiosity: 
In recent months, while GLD has generally sold at a slight discount to net asset value, other bullion funds with more transparent and credible custodial and auditing procedures have commanded significant premiums. E.g., Central Fund of Canada (CEF), Central Gold Trust (GTU), Sprott Physical Gold Trust (PHYS). Anecdotal evidence also continues to surface of premiums for spot delivery of physical metal or cash settlement in lieu of physical.

Gold forward rates as reported by the London Bullion Market Association (www.lbma.org.uk) have remained positive territory, but accompanied by sporadic negative lease rates at the shorter maturities. See Gold Derivatives: The Tide Turns (5/25/2009), and materials cited. At the LBMA, therefore, gold continues to avoid backwardation, but only because central banks continue to lend at historically very low lease rates.

It is a strange situation. Gold for spot delivery and bullion funds with high credibility for physical possession of metal in the amounts claimed are selling at premiums over paper of lesser reliability. But where gold is arbitraged against currencies on the basis of relative interest rates, it remains in contango. Freer private markets are increasingly disconnecting from more regulated and controlled official markets. Backwardation is arriving in gold, but ass backwards. Of course, nobody should be surprised. That is the way central banks typically operate.

Here is the link to the full report - please take the time read it thoroughly:  LINK

For the record, until GLD can prove that its Custodian AND the subcustodians possess every single bar of gold listed on GLD's website - that these bars are not just paper swap transactions with U.S. and European Central Banks, GLD shareholders are highly exposed to an Enron/Refco/Bear Stearns type of price collapse.  The instant a big holder of GLD tries to exchange its shares for a couple hundered tonnes of GLD's gold -and GLD blinks and hesitates on the delivery - the price of spot gold will shoot to the moon and the price of GLD will have an "air pocket" plummet. 

A long-time investment advisor colleague of mine remarked that he had put his clients in GLD today.  I replied, I hope you are not holding GLD when it's exposed.  He replied that he needed the relative liquidity of GLD for the size he was buying.  I replied that the second GLD is exposed, GLD will go "no bid" and the only thing liquid will be the brown substance in your boxer shorts. Not only that, your phone will start ringing off the hook from lawyers who are filing "breach of fiduciary duty" lawsuits.

For all you GLD loyalists, I have just one question:  "Do you feel lucky, punk?"     

Tue, 05/25/2010 - 19:48 | Link to Comment Instant Karma
Instant Karma's picture

Given we all see gold's merits. Question. When do we sell?

Tue, 05/25/2010 - 19:59 | Link to Comment What_Me_Worry
What_Me_Worry's picture

When you need/want a good or service that needs to be paid for with wealth.  Currently, you can exchange gold into your local currency for use to pay for that good or service.

Cash is fine to have.  As long as you don't plan on holding it for a long period of time.

GLD/SLV are fine to own.  As long as you don't plan on holding it for a long period of time.

Tue, 05/25/2010 - 20:04 | Link to Comment Illya Kuryakin
Illya Kuryakin's picture

When/if we need to. That may in practice not be possible with even these shares if the S truly hits the fan. PM in possession is the only safe way IMO.

Tue, 05/25/2010 - 20:50 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Don't sell.  Quietly give it away, perhaps any kid(s) you have.  Even better if you get / have grandchildren.

Tue, 05/25/2010 - 21:04 | Link to Comment DosZap
DosZap's picture

IK,

When things are stabilising, or for items of use, and or equal value to you/others.........

Sell for what else, in light of fiat currencies going to hades..........

Uh-Uh........PM's are # 1 Insurance, want to try and make a profit, go play the ETF's.

Tue, 05/25/2010 - 20:57 | Link to Comment Bron Suchecki
Bron Suchecki's picture

"roughly 6 metric tonnes. Somehow, we don't think the LBMA will be too thrilled with this extraction of physical gold out of the controlled synthetic precious metal ponzi system"

I'm surprised its taken Sprott this long to issue new units. As to the above comment, Zero Hedge is tending to too much hype on gold matters. Perth Mint refines 6 tonne a week, that is not an amount that is going to be a problem for the market.

Also, can we please drop references to "the LBMA". It is not an exchange or an organisation that deals directly in the market, merely a trade association. Better to say "the bullion bankers" instead.

Wed, 05/26/2010 - 04:52 | Link to Comment Hephasteus
Hephasteus's picture

So can I put you down for a label maker for christmas?

Oh and I refined 8 tons just yesterday. But I don't have any for sale because. It's aging. No I don't have any coins. I bottle my gold. Seriously.

Tue, 05/25/2010 - 22:40 | Link to Comment justbuygold
justbuygold's picture

Hmmmm.  Sprott 235 MM   right after Central Fund did $375 MM.  This all in less than 2 weeks.   It seems there is a huge appetite for gold and silver if investors are buying up $600 MM worth in such a small amount of time.  Add that to huge demand out of Russia, China , and India  +  GLD and SLV +  demand from mints around the world to satisfy the massive demand for coins.

It all adds up to higher gold prices down the road. I would think JP Morgan is starting to fold.

Tue, 05/25/2010 - 23:32 | Link to Comment dumpster
dumpster's picture

look at the ten year old chart .. lol

it points up  .. the buying a been going on for some time

and just now some are waking up .. other sleep away .

dressed in their best Keynesian diapers ,, listening to the sound of pavlov's dog  and eating gruel out of the bowl.. while the high pitch of the bell rings in their zit covered face's

Wed, 05/26/2010 - 00:54 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 quintillion (too many zeros for me to write inebriated) to dumpster...

Ignore buying gold at your peril.

.....

dumpster!!!  My brother and the girl who became his wife met at a dumpster (in NC).  One had just thrown their trash away, and one was coming to do the same.

Was that YOU who brought matrimonial bliss to a part of my family...?

Wed, 05/26/2010 - 01:01 | Link to Comment dumpster
dumpster's picture

dumpster probably was the trash thrown in the brier patch   lol

said the rabbit to the fox  ,, anywhere but that dang brier patch

Tue, 05/25/2010 - 23:39 | Link to Comment FranSix
FranSix's picture

jberni1 had this interesting comment on the return of the gold standard, how Yurpeens are heading down to Switzerland to buy gold, because there's none left in Germany.  Well, iffin you go to Canada to buy gold, isn't that the same thigm?

 

http://www.youtube.com/watch?v=p-y_1SOC2L0&playnext_from=TL&videos=uS_y-...

Wed, 05/26/2010 - 01:38 | Link to Comment Monoki
Monoki's picture

Sell gold above 1200.  The trade is too crowded, at least in the short term.  Deflation will kick the dollar up; relative valuation to other fiat currencies racing to the bottom of the barrel will only strengthen the dollar as still the perceived safe haven.

Everything traded needs to correct at some point, and the crowded gold trade is due for a big one, perhaps to a $1000.

Now, this suggestion comes from someone who favors gold.  I clearly see deflation at hand.  But at some point, inflation expectations might jump on fears of the Fed's (and ECB) inability to pull liquidity in a timely manner.  Exacerbated by the ongoing concern of deficit spending, gold, at that point, should renew a rally. 

Bottomline, I think gold is headed to $1000 from here.  It might consolidate there, perhaps slightly higher or lower.  But should the above scenario be realized, watch out, for gold might see $3000-plus in no time.  That said, again, wait for it to correct.

Ooh-rah!

Monoki

Wed, 05/26/2010 - 02:55 | Link to Comment dumpster
dumpster's picture

so you sell gold ,above 1200 lol , the real not the paper shit . pay the round trip fees 50 bucks or so each way.

 and to sell the paper is to sell paper ,,

because gold may go down to 1000 from 1200 or so.. verry smart

 

dumpster says just hold the gold , why is the trade to crowded ,, what does that mean ,, crowded by less than 1% of americans 10% world wide . very few funds ,, and then people making statements to sell ,

 

same old same old since 300 gold .. setting on 900 bucks profit ,,

gold is to savor and hold close to the vest ,,

.

 

Wed, 05/26/2010 - 03:16 | Link to Comment Johnny Bravo
Johnny Bravo's picture

I'm still waiting for the ZH predictions about gold going to 2000 by June to come true.

Wed, 05/26/2010 - 03:27 | Link to Comment Hephasteus
Hephasteus's picture

Cool story bro. Let me do my technical analysis. The human brain is basically held together by long chain fatty acids. Theres several and they melt at various temperatures. The first melting point is reached at about 112 degrees farenheit but you are in danger when your body temperature reaches 104 degrees because the human skull is not a very good heat conducter even with the fluid that protects your brain conducting the heat towards the skull. Camels have an intricate air cooling system to keep their brain from melting in the desert even when their body temps reach rediculous temps of 150 160 degrees. Elephants of the african variety route blood in vessels bigger than the human thumb through thier large ears and they simply cool the blood by flapping thier ears ensuring cool blood is reaching the brain.

So my advice is take the helmet off. Stay out of the sun and don't sell your gold. Because if you clearly see deflation then everything deflates to gold anyway and fiat will always be inflated relative to gold but will never deflate relative to gold.

Wed, 05/26/2010 - 01:49 | Link to Comment dogbreath
dogbreath's picture

Sprott did an interview maybe a year ago.  I tried to find it but this dude is the original gold bug.  So many recent interviews and what an outstanding record.

In the interview I saw he said he was a significant buyer of maples when the Can. Mint was at less than 100% capacity.  E.C. bought the excess.  He also stated in that interview that 400oz bar were easy to get in london.  The problm was with the smaller bars and the retail demand which couldn't access  the LME.  He is a seller of maples and charges a large premium over the rest of the retail market. i wouldn't be surprised if E.C. has the physical  for his fund already.  

For those of you who like E.C. check out John Embry.  John was the fund manager for the RBC precious metals fund when it returned 86% yoy.  John was too outspoken for RBC and Sprott hired him.

 

 

 

 

Wed, 05/26/2010 - 05:10 | Link to Comment Rabelais
Rabelais's picture

If Gold can do $940 the ounce in 1980, it can certainly do double that as a peak 30 years later. $1600 is a done deal - $2000 is a nice, round number.

Wed, 05/26/2010 - 10:55 | Link to Comment Temporalist
Temporalist's picture

When, not if, gold hits $1500 it will jump to $2000.  There will be a $100 day in the near future and then a $500 day and possibly more than that at some point.

Wed, 05/26/2010 - 07:29 | Link to Comment Hephasteus
Hephasteus's picture

It's day 3 of the options expiration field trip. As is becoming normal and common and almost predictable. Gold smashed over 70 dollars for options expiration starts out the 3rd of the 3 days later in at 1214 marching steadily towards 1242 high that just got smashed. Yawn.

Wed, 05/26/2010 - 09:19 | Link to Comment sweetwater88
sweetwater88's picture

I bought PHYS yesterday at $12.33, I wake up diluted 10% . Can someone explain why Sprott is a good deal?

Wed, 05/26/2010 - 10:53 | Link to Comment Temporalist
Temporalist's picture

It was risky to buy on an day of options expiration.  You will recoup your losses soon enough.  Gold is up today...it will continue on it's bullish trend of the past 10 years.

Basically you bought $1200 gold for $12 in some ways (of paper).  Hold it or buy more when it dips to average down.

Wed, 05/26/2010 - 10:44 | Link to Comment Pegasus Muse
Pegasus Muse's picture

Yes.  Listening to several Sprott interviews he came across as a straight shooter.

I wake to find I, along with every other PHYS investor, have been screwed by this dilution (Follow On Offering).

I'm selling my PHYS and buying physical gold.

This is really bad.  What a disappointment.  You can't trust anyone selling paper of any kind.  Even the Canadian Gold Trusts that many people talk so highly of.

 

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sun1's picture

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sun's picture

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