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Sprott Raises Capital To Buy Another 6 Tons ($250 Million Worth) Of Gold
The wholesale demand for physical gold continues without reprieve, as the Sprott Physical Gold Trust (PHYS) has just announced it will sell another 22 million units. Use of proceeds: "The Trust will use the net proceeds of this offering to acquire London Good Delivery physical gold bullion in accordance with its objective and subject to the investment and operating restrictions described in the Preliminary Base Prep Prospectus." Somehow we are confident that Sprott, when determining the pent up demand for this trust, is fully aware that gold is not very edible, if at all.
Full notice:
h/t Mike
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Anyone who wines about the destruction of the premium doesn't understand that in time it will be even higher.
Also, does anyone else notice that PHYS has its biggest moves on days when there is European uncertainty? Euro fetish for Canucks?
like someone is going to sell it to him....good luck with that...the IMF blew him off this summer. and where else is he going to find this kind of tonnage? smoke is billowing from the windows of the Comex now. word is they haven't delivered on the June/May contracts yet ...
we're getting to the point if you don't have it, you ain't gettin' any.
Remember back in the early 80s when the Hunt brothers cornered the gold market? The Comex issued an order that all orders now can be "Liquidation only", crashing the gold mkt.
Uhh...that was the silver market...
Thanks for the correction.
The Hunt brothers didn't try to "corner the market" either. They simply made the mistake of requesting delivery when there wasn't enough silver available to deliver. Interesting how they became pariahs for trying to call the bluff of a corrupt institution/system. Deja vu all over again? Woe to anyone who demands physical delivery of a large amount of contracts.
That is not entirely right.
The brothers did not have enough money to purchase all (or even most) of the silver they had contracts for. Instead they purchased a lot of futures contracts on margin and then held on cornering them, without intending to actually take delivery.
The courts ruled that because of this they were "manipulating" the markets. Personally, I don't buy that, but it was the legal logic.
What Soros,Paulson,etc are doing with GLD and SLV is brilliant.
GLD and SLV WILL HAVE ENOUGH MONEY to fully purchase the futures contracts they own. When GLD and SLV call those in, the banks will be busted.
According to the court's legal precedent, this will not be cornering the market.
GLD and SLV will bust the banks, and be able to take legal possession of them in place of the banks failure to deliver.
That is what Soros, Paulson want. To own the banks and the FED.
Freakin brilliant.
That said, individual investers in GLD and SLV will get screwed, that is why I buy PHYS and coins.....
Sprott is pretty smart and has probably already locked in the tonnage (at a higher price). This is short term dilutive to the PHYS trust until the specifics of purchase are known. Bottom line is there is no other trust that will let you take delivery, and the price will only keep going up. I buy units on any weakness. Gaps down at 11.1 need to fill, so I'll look to add in that area when the unit offer announcement is made. Also, he's buying from the London Market..same diff...
Sorry to be impertinent but Has anybody seen Johnny Bravo? I am concerned that he has joined Amelia Earheart, the Lindbergh baby, Jimmy Hoffa, & Elvis & is sleeping with the fishes. Maybe he is in the bottom of a lake with golden boots.
Iindefinite vacation with his S/P winnings...
He already knows you can't eat gold, now he is confirming that you can't wipe yr butt with it.
Will be back when research completes, or so I've been told.
He promised that he'd disappear when some parameters were met... And they were met.
Something about predicting some futures and some gold pricing.
He's dead meat.
"Short term dilutive" a good phrase, just inappropriate - like 6 months inappropriate, bringing into question just what it is that the management of the trust are really trying to do, because it is surely not bringing benefit to early investors.
where did Thailand get the 10-12 tons they just bought. Kentucky?
Can we assume they're not taking delivery when it's from the IMF?
> Anyone who wines about the destruction of the premium doesn't understand that in time it will be even higher.
That was the logic of every speculator buying pets.com shares in 99... or tulips in Amsterdam.
While the price of Gold may continue to rise, buying it at a premium over what every other gold ETF or for that matter what a bullion dealer will sell you coins for is - well - good for Sprott and bad for the buyers.
Buying because you expect an already rich premium to rise further is just stupid. This is Sprott's 3rd issuance, and if the premium stays or grows, there will surely be more as it is a risk free arbitrage netting him millions.
Sprott buys gold as the spot, and somehow lumpen-investors have been convinced that they should in turn buy shares at a material premium to the spot price he just paid. A small premium might make sense for the convertability of the shares and if you value cost of protecting bullion, but the current premium is over $60/oz, which is well above the cost to take delivery and securely store gold by quite a lot....
1. Sprott is the only entity in the gold space offering an ETF that will make good on delivery should there ever be a run on bullion. Considering the smoke coming out of the window of the COMEX, any failure to deliver to the numerous ETFs taking in LBMA bars may eventually be out of luck.
2. Sprott is also set up to buy straight out of the mines. Write this down. Gold comes out of mines, not necessarily the COMEX.
3. A 'premium' to gold investments like coins or bars would be in the area of 60% in a major bull market for gold, not a few sheckles.
Exactly...
"Write this down. Gold comes out of mines"
Riiiiight.....next you'll be telling me that food doesn't come from grocery stores.
LOL.
Pretty funny.
The thing is, gold is not manufactured solely for the purposes of the COMEX. Unlike a grocery store, you can't grow it on the farm year after year in plentiful abundance.
It takes years and hundreds of millions in development capital to set up a mine with a grade of maybe 1g/t. And you might need to process 30,000 to 60,000 tonnes per day of rock to get decent production rates.
A year's worth of production from the mines trades in four days' time on the precious metals exchanges. So whatever is being traded on precious metals exchanges the rest of the year, it sure isn't bullion.
Whereas, the production of fiat currency takes a few trees and some ink. And here's the neat part, they can put as many zeros on it as they want! What a deal. How else could you take a $300 tree and turn it into a gazillion "dollars". Now, gold on the other hand...
By all means if you can, buy physical bullion and take possession. That being said PHYS offers many advantages to Europeans/Americans (holds gold offshore), 401k/IRA/RRSP holders (can be easily purchased in certain retirement plans).
Oh, you mean the 401ks/IRA that the labor dept. just completed their hearings on yesterday so the treas. can seize and convert 401/IRA to UST annuities. I am really unhappy with this scene.
I have agonized on this. I think I would pull my money out and pay the penalty before I would let the Gov. tell me what to buy...
You might want to get busy then. If you start taking out some each year, you can keep the tax impact down when compared with taking it all in one tax year.
It has been a while since this was brought up, do you have a link or anymore information on this matter?
No. I can find no info. Will try the WSJ this AM.
Absolutely agree...
Have you looked at the premium buyers on Ebay are paying? It's about the same...
Yes, the coins had been trading something like 45% premium. Better to get a quote from a coin and bullion dealer first. But I think a premium on anything before bullion reaches its 40-year inflation adjusted average of $1673/oz. U.S. doesn't mean much.
The best move for most folks trying to accumulate gold and silver right now is to just buy U.S. Mint American Eagles. Both versions are bullion: .999 fineness. American Buffalo 1oz coins are .9999, or 24 karat. One doesn't have to purchase numismatic or semi-numismatic coins unless one wants to. The premiums on these are much higher. Not saying they don't have a place for many investors, but new Eagles work just fine thank you.
American Silver Eagles (ASE's) are 1oz ea, while the Gold version is available in 1oz, 1/2oz, 1/4oz, and 1/10oz sizes. The premium (dealer mark up over the spot price) goes up as the size goes down, but the smaller sizes mean most anyone can get in on gold and build a little PM stash via monthly purchases. I never buy Silver Eagles on ebay, only b/c everything I've ever seen carries too high a mark up. At these rising prices, you need to save where you can.
I've used a number of dealers but have found www.bulliondirect.com to be best for my needs. They always have Eagles in stock, have the lowest mark up I've found anywhere, and don't keep you waiting for delivery. Another nice benny: aside from taking delivery, one can leave it in their vault- - with no storage fees. Nice to be able to keep some there, that eliminates shipping charges if I want to sell some...
Very reliable operation, great prices. No, I don't work for em!
Silver Eagles are $23.06 each tonight. See if you can beat that, and if so, please let me know where so I can use 'em too.
I'm not sure I'll see the answer later, but I was hoping you or someone else could answer this. Forgive me if it sounds naive.
Is there any reason I wouldn't want to buy, say, a 2008 or 2009 Silver Eagle, if they're cheaper than the 2010?? Thanks in advance.
Blano, especially with Silver Eagles, there is no reason whatsoever not to go with the less expensive item. Good luck.
I found a place much closer to where I live where I can get the '08/'09's a buck cheaper and was wondering why I wouldn't want to do that.
Thank you very much!!
Buy locally only if there is no sales tax!
Silver Eagles are generic enough that the year does not matter. The newer issues get a premium for some collector reason but it's not warranted.
See mintage quantities here: http://silvereagleguide.com/mintages/
It should be pointed out that all U. S. bullion coins contain a full ounce of silver. Gold coins contain the full measure of gold as shown. The coins actually weigh more than this because they are not pure.
I may have this mixed up, but I thought the premium was because of a claim that this particular ETF was somehow subject to the stock capital gains rate rather than collectilbles, as the latter is used for GLD. Am I thinking of some other fund?TIA
peterpeter, your comment is spot on. As you said, it is cheaper to buy the gold and have it delivered into hand than pay the silly high premium for an ETF.
Why is this so hard to understand? Oh yeah, glod is something magical.
As one such "lumpen" investor since the initial offering I should like to educate your somewhat smug and sorry attitude just a little. Premium or no premium, this instrument has some distinguishing features which may surprise.
First it is supposed to be a closed end fund. If you look up "closed" in the dictionary, (where you may also identify that "whines" is spelled with an "h") you may infer that we might not have expected two yes two further visits to the table within the first 6 months. Further, this is a trust vehicle which apparently does not need or seek permission to do anything at all even "ultra vires" actions by the trustees. Third, if you see negative price correlation with its peers and with the underlying metal in the weeks before a publicly DENIED further visit to the honeypot, it is reasonable to suppose there may have been someone trading the information rather sooner than the rest of the market.
The rich premium to which you refer reached an apparent maximum of around 24%, but now languishes at below 6%. The not inconsiderable difference has gone to fund the underwriting profits from the sale of their previous grubbings. This has nothing to do with tulip bubbles, this has to do with exchange acceptance of maverick offerings where there is no intention to comply with the offer documents, rather to line the pockets of the underwriters, and expand the political objectives of GATA board members. Once in this "honeytrap" the individual investor who may or may not wish to wait a year for a further opportunity to get out has little choice but the bad one: book significant losses, or hold and hope. Last time I stayed and hoped, based on the assurances given to me by Sprott themselves, but having seen the price pick itself up a little once more, I have been devastated to see that last night they DID IT AGAIN!
The conclusions are obvious, but not entirely as you suggest. The fact is that the product is rubbish in that it has produced losses for my portfolio, has not delivered a sou to its early investors relative to gold itself, and is run as a political weapon in the well publicised interests of the Sprott management two of whom are prominent GATA members.
Next time you want to post in here, wait until you are old enough to do the CAPTCHA yourself rather than getting your parents to help just so you can sound off about "lumpen" idiots.
I'm not impressed with PHYS so far. I've been an owner of it for several months, and it seems to underperform other gold-based investments.
Rather than castng some generic and unverifiable aspersion at PHYS, why don't you tell us which "other gold-based investments" you're comparing it to?
Or are you just here to deflect share from PHYS?
I'm not "talking my book" if that is what you are trying to say.
If you want a comparison, I own a lot more of CEF, and it has performed better for much of the year. I'm still holding my PHYS for now, but I'll need to see better performance soon.
You don't need to look far - any of its peer group ETN's or heaven forfend - even gold itself!
PHYS is a political cause, not an investment - it is a rich man's toy.
I have been buying when the premium to NAV drops and selling when it is high. You simply bought high, I would think. You may be interested in the Trust's summary of the range of how it has traded in relation to NAV:
http://www.sprottphysicalgoldtrust.com/Net-Asset-Value/default.aspx
(scroll down page for full info)
Thanks, great link!
I just checked my purchase history and you are right. My timing for PHYS was poor, while my timing for CEF purchases was much better. That has a lot to do with my poor impression of PHYS.
well said. that man.
Once again - you talk as though nothing could be more normal than that a closed end fund should revisit the table every time there is a bit of premium to reallocate to the underwriters...
Also, the management company's own history as you link it shows how rapid has been the gouging. Apart from a few days after the initial offering, the premium is at a low in percentage terms, because it has been eaten by the parasitic shits who the rich boy uses to gouge his investors - check the price action relative to peersa and metal BEFORE this announcement, and if you don't see insider action you need to see your optician.
Then turn it in for paper and ink.
Be patient. They are accumulating assets which is short term dilutive (think secondary stock offering in..oh, I don't know-like microsoft in 1988).
Appreciate all the useful information flowing. ZH.
You are wise beyond your years...
When is their silver trust available???
...you read my mind....since my boat is loaded with the silver miners, I wish them the very best in raising this $$$ for gold, but then lets get going on silver....I ain't getting any younger.
I read somewhere it has been delayed until November at least, courtesy your friendly neighborhood porn-addicts at the SEC.
Maybe Sprott can send some Playboys to the SEC to grease the wheels, ahem, so to speak...
I think they are saying it's a few months more. In the meantime, the Central Fund of Canada (CEF) people have Silver Bullion Trust, SVRZF on the pink sheets here or SBT_U on the TSE, w about $70 million of physical silver, and which I own. You have to be careful w limit orders on either exchange or you will get taken advantage of.
SWEET! Drain the LMBA, Sprott! Suck it dry. Maybe we will see another BIS "gold swap" soon to alleviate the pressure on physical gold in London.
It seems that a recent "request" for physical delivery at the LBMA was accompanied by armored cars & guards. Unfortunately for the "leveraged" exchange they were unable to deliver until the B.I.S. shipped 384 TONNES from Basel to London. The pathetic cover story was that it was a "swap" to Portugal. Sure & it was now.
Many of our posters here totally misunderstand Au & Ag. They think that the metals "go up"...
Au contraire: The metals are unchanging and immutable, like Mt. Everest. It is the "paper munneys" of the criminal central bankers which go down on purchasing power non-stop.
Richard Russell (& central banksters) acquire metal on a continuous basis, as do we. The paper price is totally irrelevant. Never looked or asked the price since it was $50 in paper munny...
Sprott 4EVER!
Why are all these fucks buying up gold and raising the price for me.
It's been discovered to be edible
I can attest to gold's potability via Zelta vodka (zelta being the Latvian word for gold). Goes down just fine. Plus the vodka adds its own premium.
Vodka, bitchez!
.
Are you late to the party? Ooops.
Party is barely started. Relax and sell everything you can to trade cash trash for the inedible barbarous relic.
Inedible, credible GOLD!
as someone who as only bought gold/silver, when you sell to a dealer, do they have to report the proceeds to the IRS? I ask as a matter of curiosity as I have no plans to sell.
I believe dealers currently have to report when they buy over $25K.
However, hidden in the new health care reform bill is language that will make it $600.00.
Confiscation is inpractical, so they will impose inane taxes and reporting regulations.
They will try confiscation. It's the only way to to make the man with 2 first names shut up.
No way.... Not the confiscation, the shutting up.
The days of the totalitarian socialists are numbered. I bought a very nice AR 15 because Obama and his Hawvad Marxists worried me. Now I see I can trade it for an oz of gold. The czars will be packing their bags in a couple years with the Lame Duck in Chief.
I did the same a few months back. I am alternating buying silver/gold and ammo. I figure if I am wrong in the end at least I will have a cool weapon.
You were afraid of what? I'm confused (no news there). What was passed as law at the prompting of White House policy regarding guns that I missed?
Yes, you do, so keep track of your BASIS. If you don't provide a basis, then the IRS assumes that 100% of your proceeds are taxable, instead of just your profit.
Yeah, but I inherited all my 2010 gold Buffaloes from my grandfather.
I dont know if gold enjoys a step up in basis at death?
Anybody?
My bad. It was supposed to be a bit of a funny.
2010 mintage from long dead grandfather.... get it?
You do raise an interesting question, but not being an accountant I can't contribute to the conversation. My grandfather was a pauper -- runs in the family.
Rocky's old man was a pauper,
Who taught him to save which is proper.
But inheriting those
Fresh struck Buffaloes?
I think Rocky's telling a whopper.
Very good...
Your fish is moving.
Leave that fish alone. Bad Rocky. Eat your cat food and stop playing with the fish.
Yes, a stepped up basis.
Dude,
Can you change your icon? It does nothing but take aware from your message...
meant take away from your message.
methink's you were distracted.
Go FUCK YOURSELF!
Offended now?
+100
I expect it falls in the category of inherited real estate, which you aren't taxed for unless the estate is big enough to get the death tax.
Guess their Roubini subscription lapsed.
Nice!
at least they're getting a premium on the new shares. seems the first time they didn't get a premium and it screwed with price of existing shares.
for those who do not believe that gold is edible:
http://www.fancyflours.com/edible-gold-leaf-sprinkles.html
(knocking holes in the deflationists arguments, one fact at a time)
Careful on the way out however. The nuggets burn like jalapenos.
OK then...I am not going to miss the trade, but ridiculous.
The romans had coins made of precious metals and it didn't help them much.
Shouldn't this capital to productive/innovative work?
Innovations in medicine and healthcare could help solve the forthcoming medicaid meltdown.
Yeah, those coins in the final days (made of iron) were such a burden that shipping them cost more than the intrinsic value of the coins. If you want to call them coins.
http://en.wikipedia.org/wiki/Roman_currency
The coins of PMs from the U. S. Mint are not called "bullion" for nothing; they do not circulate as coinage. Their purpose is for a store of value. Even the Treasury knows that.
Our pre-1965 coins were 90% silver. Same shit, different century.
Also like our Roman cousins, their early coins had designs (like ours until 1909 Lincoln,1945 FDR dime, Washington quarter, JFK,etc) and changed to various rulers as the empire degenerated into dust. Love those repeats.
Yes....edjucashun is your friend.
Yup. I think our buddy D-Jerk has some gaps in his curriculum.
Dear Mr. Sprott,
Thanks for being a decent man and also thank you very much for taking another 6 tons of physical gold out of the hands of those who would use it to prop up their bullshit for another day. We believe in you and the few like you!
God Bless you and your Family Sir.
Love,
Your appreciative fans at Zero Hedge
i will 'second' that.
Me too! Me too! ...or would that be "two"?
Literally!
Who'd junk you for that bro?
Btw, I've always loved your icon, never change.
That would be cowards and other assorted folks. They are probably half illiterate and junk the comments that they can actually read with some clarity.
pladizow has been asked to change his avatar many times, and he refuses. IMO, Tyler should simply ban him, there is no need to deliberately be offensive.
Two fingers holding an acorn? What's wrong with that?
Here's hoping Sprott takes immediate delivery from LBMA. Smart man.
Mr. Sprott is a saint. I only hope he will be able to feed his hungry family after this gesture.
Not edible? Notice this sandwich not topped wth FRN...
£111 cheese sandwich is topped with gold dust September 13, 2010 5:15 PMA celebrity chef has created the worlds most expensive cheese sandwich by blending humble cheddar with white truffles… and then topping it with gold dust.
Ewwww. I can just see Lloyd on his knees, bent over a nice warm, steamy little loaf poking through it with a sharp pencil, picking out the teenie-weenie tiny little flakes after he'd showed it to everyone spinning on a string, glittering golden patches of illuminatiation over all the lawgiver spectators in Timmy's office, proclaiming the magic of Disco Dropping.
Another Fun Afternoon at the New Versailles.
Now that is just plain creepy -- lol.
Michelle is having that chef flown in to the White House for the next big party. But our overlords still feel our pain. mmmm mmmm mmmm
Michelle Obama: White House Life Is "Hell, I Can't Stand It." - http://chicagoist.com/2010/09/16/michelle_obama_white_house_life.php
http://www.bittenandbound.com/wp-content/uploads/2008/07/obama_new_yorke...
At this moment PHYS is trading after hours for the exact secondary price of $11.37, and premium to NAV is 4.9%, almost the lowest ever. Very different from the conditions at the first secondary, when premium was +20% IIRC.
There was a big selloff of PHYS between 3-4 p.m. today. It feels as if even PHYS is manipulated.
Basia, that isn't just perception, PHYS has been shorted consistently since its inception.
The cartel no likee Mr. Sprott. Not being a reptilian, he just doesn't fit in.
Congressmen Henry Waxman and Anthony Weiner have called hearings and are going to find a way to "fix" this gold problem. You know, the problem (with serious national security implications) where people buy physical coins and keep them somewhere safe. I'm just guessing here, but I don't think most goldbugs are going to like their plan.
I'm sure this has been brought before so pardon my missing this the first time, but while googling PHYS I cam across the article below. An opinions on this authors points?
http://seekingalpha.com/article/206320-seriously-the-spdr-gold-trust-isn-t-a-scam-but-phys-might-be
Sure friend: use it at the bottom of the birdcage.
Look deeply into GLD's prospectus, then compare that dreck to what you'll find with PHYS.
Then, see above again.
I hope Mr. Sprott has a good way to test each Gold Bar..
They are the 400 oz. standard type.
I would not trust Ben Bernanke and the Fed with a Dime.
The central banks are not to be trusted.
People who don't personally take physical delivery are retarded.
History shows us exactly what will happen to accounts like this.
Anyone not holding physical in their own two grubby paws will lose everything.
Not true. Once one's home is ready to collapse under the weight of their on-prem PMs, 2 very good alternatives exist:
1. James Turk's www.Goldmoney.com
2. Eric Sprott's PHYS
You are 100% right about any vehicle that isn't fully allocated: stay away. However, both of these options are and these two gentlemen are about as honest and well respected as they come.
Goldmoney's ultra-stringent auditing regimen should be the norm everywhere. Unlike with COMEX and the LBMA, there is no doubt the metal you think you own really exists.
This may well be true. But in these deceitful days of duplicity, I barely trust MYSELF to take good care of my metals, and I'm highly motivated.
Sprott probably is honest. Doesn't matter. The Government is not honest. Sprott stores the Gold at the Royal Canadian Mint. They can seize it whenever they like.
Take possession of your core Gold investment. It is the only way. For paper plays stick to miners and explorers.
Can anyone tell me what exactly I should expect to receive by way of documentation, certification etc on taking delivery? The worry would be that when eventually trying to realise bars it might turn out to be very difficult or very expensive or even....RISKY!
>>>Sprott probably is honest.<<<
Sure, if you call conrnering the market and jamming the float 'honest'...the real question you have to ask is "does Mr. Sprott get his $$$$ out first or do I"...
The answer is patently clear. I've been beside him and his company for so many years on so many positions I can't even count now. Your primary goal is to make sure you exit before he does. That's all you have to do. lol
Gold in your possesion is the exit. So I agree that you should exit PHYS before this paper world is set ablaze I do not believe you should exit gold! That's like ditching your lifeboat and trying to swim away with the anchor
Remember 100 to 1, that is how many paper contracts there are for physical.....
In essence sprott is buying up 600 tons of paper or 192k comex contracts. He doesn't have to do this much more to squeeze em. That's the leverage taking physical has! 100 to 1!
I'll know the top is in for gold when Nuveen comes out with a closed-end fund. Til then, it's still a bull market.
what is LMBA?
Lousy Manipulation of Best Assets
The mixed conflicting market signals return. It reminds me of periods in 2007/2008 during the market uncertainty and dislocation in addition to market intervention or rumours of market intervention (like the QE chatter now).
http://stockmarket618.wordpress.com
Buy that top!
I found lots of interesting information here. I love zerohedge.
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