sprottSilverDoctors.com Exclusive
By Eric Dubin

Numerous questions have been raised about Sprott’s recent sales of Sprott Physical Silver Trust (PSLV).  SilverDoctors.com has never had any reason to doubt the integrity of Eric Sprott.  We’d like to put the speculation to rest.
On Tuesday, April 16th Eric Sprott held a conference call with institutional investors.  We tuned into the call.  He made a point of commenting about the sales:

1 oz Silver Buffalos As Low As $1.99 Over Spot!
Call Now to Order at 614.300.1094


Regarding the sale of PSLV shares Sprott stated:

 

There’s been a lot of questions asked about our Sprott Foundation selling shares of PSLV, which we publicly announce every day that we sell them.  It’s sold for two reasons.  One, the foundation needs cash for various donation commitments.  And two, I’m selling PSLV because the (mining) shares have been so distressed here that I think the (mining) shares are a better buy than the metals.

I’m obviously very optimistic on the metals, as are all of our partners.  But I think the (mining) shares have been so collapsed here that it’s a better investment for us at this time.  So that’s the reason I’ve made that change.

 

Ironically enough, this isn’t the first time Sprott sales of PSLV have inspired speculation in the blogosphere and beyond.  Nevertheless, reporting requirements are relatively straightforward and this speculation is unfounded.

  1. God bless Eric Sprott. The guy can’t even run a charity without getting hate.
     
    Now the loud mouth know nothing internet based a55 hole haters can shut their flange holes and focus on playing world of warcraft in their parent’s basement.
     
     

    • Based on some of the details I saw, he sold in tranches so as to limit the charities losses / maximize their profits – just like what we would see when someone organically sheds a position – as opposed to what we see in the Crimex when some mystery entity comes and blows out a massive position all at once.
      Your point is well taken of course, and I would think it would have put some downward pressure on the fund, but was done is the best way possible, not to mention when his trust was established, he was transparent about their position in the fund.

    • Long term investor in PSLV, and it had little or no affect RRG.
      The Trust share price follows spot silver naturally (through the market), with the variable being the premium buyers bid the price up to. These sales were completed at historically low premium levels (another reason he did it at this time IMO… he took a lot of heat for the same thing when it whacked the very high premium at the time) so the effect was minimal.
      Last time he did this it was also to build his position in the miners, and we could use all the help we can get just now (ouch…lol)… as far as billionaires go, Eric is as good as it gets. His bashers are just uninformed or paid trolls… I hear the banksters are not fans…lol!

  2. He’s consistent with his actions.  He’s sold metal in the past to purchase/fund miners and juniors. Like I wrote earlier listen to Rick Rule’s interviews and you will find out Sprott’s strategy. Rick Rule is wildly bullish on miners right now. 

    • A lot of people have been bullish on the miners for some time now, yet those shares just continue to get cheaper.  Makes me wonder what Sprott knows about why NOW is the time to be buying them.  I’m sure that he has info sources that most can only dream of having but it would still be good to know what has influenced his timing on this.  I would like to invest some money in a mining share ETF but see little reason to do so as the shares just keep on getting hammered over and over again.  They WILL have their day in the sun at some point but… just WHEN will that be?
       

    • Any mines you like especially? For mining newbies it’s kind of hard to make any kind of pick. 
       
      How are you secured in case of a system crash? Will you shares be honored? In hurricane Sandy supposedly most stock certificates were lost, for dozens of trillions worth. Gave the impression that nothing is safe anymore. Isn’t a stock kind of a promise?

  3. MY WIFE AND I ARE INVESTORS IN PSLV AND HAVE GREAT RESPECT FOR MR. SPROTT.  HOWEVER, HE IS EXTREMELY VISIBLE, THE MAN AT SPROTT AND NOTEABLE IN THE INDUSTRY.  CHARITIES ARE IMPORTANT, SHOWING A PERSON’S CARE, BUT HE HAS A RESPONSIBILITY TO THE SHAREHOLDE.  THEREFORE, ANY TRANSACTION HE MAKES SHOULD HAVE A 3 DAY NOTICE TO THE INVESTOR.  IN MY OPINION,  ERIC USED BAD JUDGMENT AND SHOWED LITTLE CONCERN FOR THE SHAREHOLDER.
     
     
    “S 

  4. Is Sprott also securing the supply for the fund. Is it possible, that Sprott has the last word now concerning some part of North American suppliers. That would be a double win-win for the whole industry, collapse the cartel, and add to the landslided mine’s burden.
     
    Is my scale realistic at all? Could he really corner the supply?

    • @Luigi
      My 2 cents… in a word, no.
      This is a NY, London / China, Russia central/bullion bank battle and Eric is clearly betting on China, and I hope he’s right ’cause I’m all in and have been since 2009.
       
      @XC Skater
      You may want to check out Tinka Mines (TK on TSX)… I’ve lived off the profits for over six months now on a $10K investment… good entry point after the last week. But of course do your own DD.
      Also, Sprott has a Precious Minerals fund that has been whacked the last few months (several junior, a few majors, and some metal). Great buy at this point, it’s outside the US, and while all paper investments are a risk, I’d put Sprott at the low end of the risk scale. 
      Good luck.

    • It should be pointed out that EVERYTHING has “risk” attached to it.  Life itself is a risk.  We cannot escape risk, so it cannot be our reason for doing or not doing something.  Instead, we must manage the type and amount of risk that we are willing to accept and then get on with our business.

  5. My understanding is that these moves by Sprott are ring fenced firmly within the confines of his trust. What Sprott the business man, and the Sprott trust does is 2 different things. I don’t think mental masturbation about complex strategic implications of this beyond raising money for the trust or making more money for the trust is time well spent.
     

    • “I don’t think mental masturbation about complex strategic implications of this beyond raising money for the trust or making more money for the trust is time well spent.”
       
      Ah, then you prefer the “physical” as a better use of your time?  :-D

  6. I would like to invest some money in a mining share ETF but see little reason to do so as the shares just keep on getting hammered over and over again. They WILL have their day in the sun at some point but… just WHEN will that be?
    -  -  -  -  -  -
    @Ed_B, since most mines are underground, many will never have their day in the sun.
    LOL!

  7. o leary…is that really you? I’d hate it if some poser was using your name and considered opinion in some vain attempt to give himself. props.  Question for ya, Is A lange as hot in person as she is on the exchange?

  8. I’m sorry, but if you put your name on a product but you won’t personally eat it yourself? doesn’t look good does it? Doesn’t matter if what he did was honourable which no doubt it was.
     
    For me also it leads to questions about his confidence in silver as a whole. If he thinks his charities would loose money in his index, but would do better in mining shares…really?
     
    Why even pretend any more, just wack your money into Heinz and MacDonald. I am sorry if this sounds negative and I am sure I will be blasted out the water by the true believers in the one god, but I am not buying his story any more.
     
    The fundamentals in PM’s in my mind still look good.  But the divine rhetoric that he preached for so many years, doesn’t sound so divine in my ears.

    Why put money into mines, if the price of mining becomes too expensive then the mines will close, share price go down, you loose money. You guys really buying into this?

    Can someone give me a mining figure for how much it costs to mine silver at the moment? I can’t imagine a mine remaining open unless there isn’t a 40% profit on mining costs (number plucked out the air, Fu*k it, Mr Sprott’s been doing it for years, I thought I would come up with some rubbish)

     

    • Well, did some reading about, apparently at the moment its costing about $7 dollars to mine for silver. This is the primary market, there is no way that this is sold onto refiners at spot price. I would take spot price and half it ($12 roughly).
       
      $12-$7 = $5 dollars. 58% profit before tax.
       
      Wow even in my made up world with made up figures, Mines look good, apart from the fact that Silver is a by product and not a main line product, so I should be looking at copper mining. :)
       
      whats the figures on copper again, oh that’s right, that’s hit the floor as well.

    • So, how does all this relate to the “Not enough silver in the world!!!!” story?
       
      You can’t sell one story and buy another?
       
      Is there a silver shortage? 
       
      This rhetoric is sounding more and more like B*llSh*t by the day.
       
      I think I will trust my instincts. Why did I start to buy metals? Because of macro economics. Period. I don’t believe in the concept of Fiat. I don’t believe in Central Banks. I have never believed in Keynesian economics or the ability of belief in paper.
       
      For the time being I am an Austrian school kinda guy, sound money is everything. The dollar needs to die a painful and horrible death, bringing down the regime.
       
       

Leave a Reply