Sprott files registration statement for new physical silver trust

Toronto's Sprott Inc. has filed a preliminary prospectus for the launch of the Sprott Physical Silver Trust, aimed at giving investors the liquidity of an ETF combined with silver bullion exposure.

Author: Dorothy Kosich
Posted:  Thursday , 15 Jul 2010


Following up on the success of his Sprott Physical Gold Trust, which allows investors to exchange their investment for gold bullion on a monthly basis, Eric Sprott is about to launch the Sprott Physical Silver Trust.

In filings with both the SEC and SEDAR, the Sprott Physical Silver Trust seeks to raise capital via the sale of US$10 units. One analyst estimated that the trust will raise at least $287.5 million in its IPO.

The proceeds will be used to invest in physical silver bullion, which unitholders will be able to redeem all or some of the units once a month and receive physical silver. The bullion will be stored at the Royal Canadian Mint, according to the Form F-1 Registration Statement filed last week with the SEC.

Sprott aims to list the physical silver trust on the TSX and NYSE.

This new silver offering will be made a few months after the Sprott Physical Gold Trust raised US$442.5 million in its IPO through the sale of units at $10/sh. Since then it has raised an additional $279.5 million from units priced at $11.25 each.

Despite Eric Sprott's announcement Wednesday that he will hand over the Sprott Inc.'s CEO job to Peter Grosskopf on September 7th, Sprott will still serve as chief investment officer of Sprott Asset Management, which will oversee both the physical gold and physical silver trusts.