*Update: Size of the follow-on offering has now been released: 23 million shares for proceeds of $341 million.  Nearly identical to the size of the latest PSLV follow-on.

Sprott Asset Management has launched a follow-on offering of it’s physical gold trust PHYS.
The offering will be underwritten by Morgan Stanley and RBC Capital Markets.

Full Release below:

TORONTO , Sept. 6, 2012 /CNW/ – Sprott Physical Gold Trust (the “Trust”) (PHYS) (PHY-U.TO), 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 has launched a follow-on offering (the “Offering”) of transferable, redeemable units of the Trust (“Units”).

The Trust will use the net proceeds of the 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 the 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 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 by 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 the Offering may be obtained by contacting Morgan Stanley & Co. LLC, 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 [email protected], or RBC Capital Markets, LLC, 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).  Copies of the Canadian prospectus related to the Offering may be obtained by contacting RBC Capital Markets, Attention: Distribution Centre, 277 Front St. W., 5th Floor, Toronto , Ontario M5V 2X4 (fax:416-313-6066) or Morgan Stanley & Co. LLC, 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 [email protected].  The offering in Canada is only being made by the Canadian prospectus, which includes important detailed information about the Units being offered.

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.

SOURCE: Sprott Physical Gold Trust

  1. I hold a pretty sizable position in both of Sprott’s PHYS and PSLV.

    (I would have nothing to do with “paper” gold and silver except that I have to invest the money I get everyyear in profit sharing in some sort of paper product / stock / bond / etf….so I chose his as they seemed to be the most stable and backed by actual metal.

    However…now that I hear he is colluding with Margin Stanley…it makes me wonder about Mr. Sprott?   Wasn’t there any other way to bring this offering public?   Why on earth would anyone, who is obviously as smart as Eric Sprott have anything to do with Margin Stanley, JPM, Goldman…or any of the other parasites out there?   Or, is the casino rigged in a way that they HAVE to use one of these criminals n this type of case?

    ANy thoughts from any of you who might know what this means….and why Sprott would have done this?

    Should I sell all of my shares before they end up being “rehypothicated” or something?  hahahaha

    • Yesterday I asked Doc if he thought Sprott was trustworthy as the Doc always advocates “if you don’t hold it your hand then it’s not yours”.   The Doc didn’t give me an answer so I guess by his silence he doesn’t consider Sprott will keep his promise when the chips are down.

      I could have got the Doc wrong but it would be nice to know if he considers Sprott, Turk and Maloney sound bets.

      Maybe he’s being diplomatic and want to do interviews with them.
      Anyway for me his silence says don’t touch them. 

    • Trust no one but thyself. Sprott or any other silver bug’s actions have nothing to do with my plans. My actions will be based upon my own due diligence and not by some newsletter by some self-proclaimed Mr. Majestic who knows more than me. Who you do business with tells me a lot about WHO YOU ARE!! Even if you last name is Sprott!

    • It always seemed to me that Sprott was the “closest” to the real thing.  He has repeatedly provided ample opportunities for investors to assess their situation and move accordingly.

      Having said that.  Me, I have always proceeded this way, after having it drummed into me by learned scholar silver people:  IF YOU DON’T HOLD IT IN YOUR HAND, YOU DON’T OWN IT, PERIOD!

      So, with that Shock and Aweful, I hope that which ever method you choose you can sleep nights.  After all, that’s what its all about, isn’t it?  Good luck, and God Bless.     

  2. I was thinking the same as the two previous posts regarding Morgan Stanley and figured maybe I was missing something here. I am thinking that since Morgan Stanley is underwriting it they are assuming liability while Sprott gains possession and manages it. Does this sound accurate?

  3. I am not concerned with Sprott. He may not know of the issues with MS.  But if MS has accounts that have PSLV and PHYS these would be tempting targets for those traders who have accepted rehypothecated accounts with these assets attached.  Since you can take possession of gold and silver through Sprotts holdings, MS might not be the best way to buy this issue. Maybe another brokerage would be able to handle your trade if you want to buy PSLV or PHYS.

  4. According to http://www.mineweb.com/mineweb/view/mineweb/en/page67?oid=156407&sn=Detail&pid=102055

    The initial PSLV originated with 15 million ounces of silver that took three months to aquire–when silver was relatively easy to aquire. The Morgan Stanley offering will buy 8 million ounces  during a time of shortage and when JP Morgan could be exposed for silver manipulation this month/September 2012–according to GATA’s Bill Murphy.

    What if Morgan Stanley knows that they’re getting the shaft by JP Morgan–as the next MF Global. So they decided to stick it to JP Morgan with a massive silver puchase–just before JP is exposed for silver manipulation?   If this is the case, I’d like to know the legal implications of silver being held in a trust (in Canada) if/when they try to rehypothicate Morgan Stanley.


  5. Maybe this is the news that Mr. Murphy has been talking about.  He is certain that JPM is going to get caught with their hands in the cookie jar.  MS is supposed to be the next sacrificial lamb and just maybe they found out and decided they didn’t like the idea of becoming lamb chops.  There is something big brewing here and we certainly don’t have all the details.  I will be happy to hear all of them soon since that is what has been promised.  MS is down 76% over the last 5 years and that’s a fact.  All of this could be completely on the up and up and a fight for survival.  Seems to go against the grain though.
    Still all my personal research, advice in hundreds of articles and recent events have taught me one thing for sure — if you don’t hold it, you really don’t own it.  Possession is 9/10ths of the law as the saying goes.

    • “Possession is 9/10ths of the law as the saying goes.”

      Indeed so.  But here is an updated version:  Possession AND enough firepower to defend it is 10/10ths of the law!

  6. Eric Sprott probably started this cycle well before the MS news was leaked. These things take a while to gel. Thinking about it, I don’t think he had much of a choice on underwriters. Look, he holds his current gold and silver himself in Canada. Getting this latest installment appears quite risky until he’s holding it in his hands so to speaks. Meanwhile he has to dance with the devil until that counter party risk disolves with him holding it himself in his own vaults.
    Eric Sprott has contributed quite a bit to the education and liberation of many folks in North America. While I wouldn’t go in on this cycle (if I could) I wouldn’t be too fast in disparaging remarks about Eric Sprott. He’s a good man , with a keen business sense and a decidedly Canadian sense of ethics so sorely missing here in the states. I hope he pulls this one off with no hitches.
    My 2 cents

  7. I trust Sprott, and his ETFs are the only ETFs that I would buy.  Sprott needs someone to underwrite his ETFs in the United States and to be credible to the mainstream investment community, there are few choices.  I’m guessing that Sprott thinks Morgan Stanley to be the least onerous of the TBTF banks.  There’s really very little choice for Sprott if his company wants to do business in the US.

    OT: If you have a relatively small sum of metals, its fine to have it in your possession. But once you have a sizeable sum (6-7 figures) I don’t see how you can hold all your metals and feel safe. IMO this is when you want to have some of your metals stored in private vaults outside of the banking system. Sprott’s ETFs are one such possibility (Sprott’s gold/silver are stored in Canada Mint’s vaults).

  8. I trust Sprott enough to know he has something up his sleeve.

    He helped keep Silver above $26.10 back in either June or July. Otherwise it looked like it was about to break below this technical resistance level and might of dropped to $20-22. Because he intervened Silver jumped like $1 into the $27 range. 

    As well intentioned as anyone can be, Sprott is concentrating Silver and Gold in large quantities in few locations. If it was his life or families existance . . .
    Where is his army to guard it or legal system to uphold the integrity of the intent of it’s creation ?
    If the old regiem wants it or worse a dictator in control of the US forces requires it, who will stop the theft ?
    Take some good advive, IF YOU DON’T HOLD IT THEN YOU DON’T OWN IT !

    • Sprotts cache is a known entity with arrows pointing the direction and thd reward for effort is high, specifically speaking, the PM’s I have are divided in weight and divided in location, my parents know of some and believe it all, my wife knows more but not what my folks know, my kids know acouple of these and it is “secret squirrel club” stuff, my brother knows one cache of his own and about a third I know alone. I doubt there’s an army plotting to take my PM’s.

  10. If Morgan Stanley is involved with the PHYS, then I would avoid the gold trust because I believe that Morgan Stanley is the next Lehman Brothers. I would rather buy physical gold and silver and not paper trust because “If you don’t hold it, you don’t own it!”

Leave a Reply