Sprott Physical Gold Trust (PHY.U, PHYS-N) will use US$279.5 million raised in a follow-on offering to buy physical gold in response to investors’ ongoing interest in having direct exposure to the metal.
The trust had a US$430-million initial public offering in February selling units at US$10 apiece.
Sprott sold 24.8 million units in the follow-on offering at US$11.25 apiece and the total raised includes the overallotment option for the underwriters.
As of last night, the total net asset value of the trust was US$718.3 million.
The trust was created to invest and hold almost all of its assets in physical gold bullion. It intends to invest for the long term, not speculating on the short term but unit holders have the ability to redeem their holdings for gold bullion on a monthly basis.
Sprott teamed up with Central Fund of Canada in 2003 to create the Central Gold Trust.
Central Gold Trust currently holds nearly 397,000 oz. gold while the Sprott Physical Gold Trust holds nearly 548,000 oz. gold.
In Toronto, the Sprott Physical Gold Trust’s shares were up 7¢ today to $11.60 each on a trading volume of 130,000 shares. It reached a 52-week high on May 14 of $12.74 per share and has 44.23 million shares outstanding.
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