F-10EF: Sprott Physical Gold and Silver Trust Files for U.S.$500 Million Trust Unit Offering

Sprott Physical Gold and Silver Trust is set to offer up to U.S.$500 million in trust units over a 25-month period, aiming to provide investors with a secure and convenient way to hold physical gold and silver.

Summary

• Sprott Physical Gold and Silver Trust has filed a short form base shelf prospectus to offer up to U.S.$500,000,000 of trust units.
• The offering will occur over a 25-month period.
• The trust units represent an equal, fractional, undivided ownership interest in the net assets of the Trust attributable to the particular class of trust units.
• The Trust is a closed-end mutual fund trust managed by Sprott Asset Management LP.
• The Trust invests and holds substantially all of its assets in physical gold bullion and silver bullion.
• The trust units are listed on the NYSE Arca under the symbol CEF and on the TSX under the symbols CEF (Canadian dollar denominated) and CEF.U (U.S. dollar denominated).
• On April 30, 2025, the closing prices of the trust units on the NYSE Arca and the TSX were U.S.$28.99 and Cdn$39.93, respectively.
• The Trust may sell the trust units to or through underwriters or dealers purchasing as principals, directly to purchasers, or through agents designated by the Manager.
• The Trust is not a trust company and trust units are not deposits insured under the Canada Deposit Insurance Corporation Act.
• The Trust prepares its financial statements in accordance with IFRS.
• The total NAV of the Trust as of April 30, 2025 was U.S.$5,893,195,367.54.

Sentiment

Score: 7

Explanation: The document is a standard regulatory filing for a shelf offering. The sentiment is neutral to slightly positive, as it indicates the Trust's ability to raise capital and expand its holdings of physical gold and silver. However, potential investors should carefully consider the risk factors.

Positives

• The Trust offers a secure and convenient way for investors to hold physical gold and silver bullion.
• The trust units are exchange-traded, providing liquidity.
• The Trust invests primarily in long-term holdings of unencumbered, fully allocated, physical gold bullion and silver bullion.
• The Trust employs the Royal Canadian Mint as custodian for the Trusts physical gold bullion and silver bullion.
• The Manager has contractually agreed that, if the expenses of the Trust, including the management fee, at the end of any month, exceed an amount equal to 1/12 of 0.65% of the value of net assets of the Trust, the management fee payable to the Manager for such month will be reduced by the amount of such excess up to the gross amount of the management fee earned by the Manager from the Trust for such month.

Negatives

• Purchasing the trust units may subject investors to tax consequences in both the United States and Canada.
• The ability to enforce civil liabilities under United States federal securities laws may be affected adversely because the Trust is a mutual fund trust established under the laws of the Province of Ontario.
• The trading price of the trust units could potentially be more volatile relative to NAV.
• If you purchase trust units at a premium to NAV, you may incur losses if the factors that have contributed to the increase in premium to NAV were to disappear.
• Unitholders whose trust units are redeemed for cash will be entitled to receive a redemption price per trust unit equal to 95% of the lesser of (i) the volume-weighted average trading price of the trust units traded on the NYSE Arca or, if trading has been suspended on the NYSE Arca, the trading price of the trust units traded on the TSX, for the last five days on which the respective exchange is open for trading for the month in which the redemption request is processed and (ii) the NAV of the redeemed trust units as of 4:00 p.m., Toronto time, on the last day of the month on which the NYSE Arca is open for trading for the month in which the redemption request is processed.

Risks

• The CRA tax treatment of realized gains and losses could result in an increase in the net income of the Trust for tax purposes and the taxable component of any amounts distributed to unitholders.
• If the Trust experiences a loss restriction event it could result in unintended tax consequences for unitholders.
• Global events outside of the Trusts control may adversely affect the Trusts business, financial condition and results of operations.
• The Trusts reliance on third-party service providers and key information technology systems could have an adverse effect on its business.
• A large purchase of physical gold bullion and/or silver bullion by the Trust in connection with an offering may temporarily affect the price of gold and/or silver.
• A delay in the purchase by the Trust of physical gold bullion and/or silver bullion with the net proceeds of an offering may result in the Trust purchasing less physical gold bullion and/or silver bullion than it could have purchased earlier.
• Factors outside of the control of the Trust and the Manager may result in the Trust having a greater proportion of its assets invested in physical gold or silver bullion.
• If there is a loss, damage or destruction of the Trusts physical gold bullion and/or silver bullion in the custody of the Mint and the Trust does not give timely notice, all claims against the Mint will be deemed waived.
• Canadian registered plans that redeem their trust units for physical gold bullion and/or silver bullion may be subject to adverse consequences.
• The trading price of the trust units could potentially be more volatile relative to NAV.

Future Outlook

The Trust may offer up to U.S.$500,000,000 of trust units from time to time over the next 25 months.

Industry Context

This offering aligns with the broader trend of investors seeking exposure to precious metals as a hedge against economic uncertainty and inflation. Sprott, as a well-known name in the resource investment sector, is positioning itself to capitalize on this demand.

Comparison to Industry Standards

• Comparable closed-end funds and ETFs that hold physical gold and silver include the iShares Silver Trust (SLV) and the Sprott Physical Silver Trust (PSLV).
• The management fee of 0.40% is competitive with similar funds in the precious metals space.
• The ability to redeem trust units for physical bullion is a unique feature that differentiates Sprott's product from many other ETFs and funds.

Stakeholder Impact

• Shareholders will have the opportunity to invest in trust units backed by physical gold and silver.
• The Trust's activities may impact the gold and silver markets.
• The Trust's operations will generate fees for the Manager and other service providers.

Next Steps

• The Trust will file prospectus supplements to detail the specific terms of each offering of trust units.
• The Trust will use the net proceeds from the offerings to acquire physical gold and silver bullion.
• The Trust will continue to file reports with the SEC and Canadian securities regulatory authorities.

Key Dates

Keywords

trust units, physical gold, physical silver, Sprott, bullion, offering, Trust