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Old 10-30-2012, 10:20 AM   #1
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Royal Canadian Mint launches silver bullion-backed ETRs

That's etR, not ETF. Still some clauses sound paperish :
Quote :
The Royal Canadian Mint announced Monday it will make an initial public offering of C$100 million in silver exchange-traded receipts.

The Mint will offer exchange-traded receipts, priced at $20 each, which can be redeemed for silver or cash.

"The goal is to offer investors an exchanged-traded investment vehicle that tracks the price of silver and makes investing directly in physical silver available to institutional and retail investors," said the Mint.

Each exchange traded receipts represent "an equal undivided direct legal and beneficial interest in silver bullion to be held in custody by the Mint
. The silver bullion will be legally and beneficially owned by the ETF [sic!] Holders and not by the Mint."

The Mint's current IPO is being led by TD Securities and National Bank Financials, the same dealers that helmed the Mint's gold reserves program.

Proceedings from the C$100 million offering will be used to purchase silver bullion. The silver ETRs will trade on the TSX and will be redeemable once a month for either cash or silver bullion.

Unlike other silver investment products, the purchaser of an ETR owns the actual silver rather than a unit or share in an entity that owns the silver. ETRs holders can redeem their ETRs for physical silver, such as 99.9% pure bars or 99.99% Maple Leaf coins, or for cash based on the future silver price or market price of the ETRs.

ETRs will be listed in both Canadian and U.S. dollars and may be traded in either currency. However, "It follows that there will be no redemption of units for silver unless a minimum redemption amount (5,000 ETRs, or $100,000 of new issue stock) has been reached," said the Royal Canadian Mint.

"We believe that this new program will build on our reputation as a world-class custodian of precious metals with the drive to bring silver ownership to the market in creative and innovative ways," said Ian E. Bennett, CEO of the Royal Canadian Mint. "After the success of our Canadian Gold Reserves Program we are pleased to offer investors the same convenience, efficiency and security to invest in and own physical silver."

The Royal Canadian Mint's gold Exchange Traded Receipt IPO raised an astounding C$600 million in only three weeks when it was launched in November 2011.

The launch of the silver product was complicated by the fact it requires considerably more room to store silver bullion equivalent
than is required to store the gold bullion equivalent for the gold ETR program.

The silver ETRs have not been and will not be offered or sold in the United States and will not be registered under the U.S. Securities Act of 1933. However, U.S. customers are, by far, the largest buyers of Royal Canadian Mint gold although the U.S. Mint is the top gold bullion supplier globally.
http://www.mineweb.com/mineweb/view/...tail&pid=92730
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Old 10-30-2012, 10:44 AM   #2
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It will be interesting to see if institutional investors (hedge funds, IRAs, retirement funds, etc.) take notice.
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Old 10-30-2012, 06:00 PM   #3
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"silver bullion equivalent"

WTF is this?!?!

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Old 10-30-2012, 06:51 PM   #4
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Originally Posted by dontdeBasemebro View Post:
"silver bullion equivalent"

WTF is this?!?!

Yes, that's my question, too.
Some silver mining companies are reporting their byproduct gold production as "silver equivalent", but that's certainly not the meaning here. It could be unallocated LBMA accounts...
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Old 10-31-2012, 06:33 AM   #5
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Parsing error (or just poor writing/editing) IMO. It's not "silver bullion equivalent" (noun). It's "silver bullion equivalent to the same dollar value of gold bullion". They are comparing the required volume for storage. One would have to read the fine print in the prospectus to get the real story I'd imagine.
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Old 11-10-2012, 08:06 AM   #6
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New Royal Canadian Mint Silver ETR is Just Another Fractional Bullion Scam!

The Royal Canadian Mint Silver ETR is simply absurd. This security is a fractional bullion scam!

The new RCM paper form of silver has several embedded issues which can create the inability of the holder to actually receive the physical silver which they think they are investing in. At the end of the day, when you buy an RCM ETR thinking that you are investing in physical silver and thinking that you can take actual delivery if you want, the RCM has made it extremely burdensome to take actual delivery and can cancel your right to take delivery pretty much at its discretion. I don’t know about anyone else, but if I want to own physical bullion, I would not take the risks embedded in the Royal Canadian Mint ETR. It is nothing more than another version of the fractional ownership paper scam. Wash, rinse, repeat!

Submitted by Dave in Denver:

I just read through the prospectus for the new Royal Canadian Mint ETR, priced on Monday at $20 per unit. Each unit initially entitles the holder to a .619525 share of 1 oz. of silver bullion, to be safe-kept by the RCM. Notwithstanding the complicated formula required to calculate the share of bullion ratio on an ongoing basis for several reasons – the new RCM paper form of silver has several embedded issues which can create the inability of the holder to actually receive the physical gold which they think they are investing in.

The RCM does not directly link the prospectus on its website. In fact, it made it a pain the a** to track down and get a copy of it. My bet is that I’m one of the few people out there who has actually undertaken this task and read to the prospectus. I’ve linked it below.

To begin with, like all the other paper metal trusts (except the Sprott trusts – this write up does not apply to the Sprott trusts, let me make that clear), the RCM is the custodian of the bullion and states up front that the silver which is supposed to be for the trust will be held in an unallocated account. This may seem trivial right now, but if and when silver bullion becomes scarce and more people demand physical delivery of bullion that is being safekept by the RCM, the RCM ETR has NO LEGAL STANDING FOR A SUPERIOR CLAIM on the bullion.

In other words, let the lawsuits begin and wait in line if there’s more claims on the silver in at the RCM vault than the RCM can produce. This is the number one and most egregious problem with all paper bullion trusts. Quite frankly, it would not cost any more money to create a separate, allocated storage section which legally specificies that all silver in that part of the vault belongs to the ETR trust. Why do they not do this? Because this security is a fractional bullion scam. Also, don’t forget that it was just a couple years ago that both the U.S. and Canadian mints had suspend production of bullion products because of a shortage.

Second, in order to make a redemption claim on the bullion, the holder much own a minimum of 5000 ETRs, or roughly $100,000 worth of ETRs. This is another hurdle that the promoters of these trusts build into them in order to avoid creating a 1:1 physical backing and in order to try and avoid the problem created by using an unallocated account for the mint. For most investors, $100,000 is too high of a commitment. In other words, the RCM is hoping that most ETR holders never redeem then and instead sell the ETRs in the market in exchange for paper dollar settlement. This issue is endemic to the paper bullion trust scam and the RCM is perpetuating and expanding the scam.

Third, the redemption process itself is quite burdensome
. The person redeeming has to follow a mult-step redemption process perfectly, or the RCM can cancel the redemption. Besides the paper work involved, the redeemer ALSO has to provide for a Carrier to go to the RCM vault and pick up the silver. This includes the fact that the redeemer bears all the risk and expense of pick-up, transfer and delivery. While on the surface not unreasonable, typically the delivering party will take the responsibility of this step, including any insurance involved. The way this part of the ETR is structured tells me that the RCM was looking to erect yet another hurdle in order to discourage actual physical redemption and further reinforce the fractional scam that has been created.

Finally, just in case the holder seeking redemption successfully clears the above hurdles, the RCM has added a very broad clause giving it the power to suspend or cancel the redemption. This provision is directly from the prospectus: The Mint may suspend the right of an ETR Holder to redeem its ETRs or postpone the date of delivery or payment of the redemption proceeds (whether physical silver bullion and/or cash, as the case may be) for any period during which the Mint determines that conditions exist which render impractical the fabrication, evaluation or sale of silver or which impair the ability of the Mint to determine the value of the silver bullion owned by the ETR Holder or the redemption amount for the ETRs. Any declaration of suspension made by the Mint shall be conclusive.

I don’t think I need to restate the obvious there. At the end of the day, when you buy an RCM ETR thinking that you are investing in physical silver and thinking that you can take actual delivery if you want, the RCM has made it extremely burdensome to take actual delivery and can cancel your right to take delivery pretty much at its discretion. I don’t know about anyone else, but if I want to own physical bullion, I would not take the risks embedded in the Royal Canadian Mint ETR. It is nothing more than another version of the fractional ownership paper scam. Wash, rinse, repeat.

Here’s a link the prospectus: http://www.sedar.com/GetFile.do?lang...ficate-ENG.pdf
http://www.silverdoctors.com/new-roy...-bullion-scam/
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Old 11-10-2012, 08:19 AM   #7
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No quantity of words printed on heavy bond paper can convince me to give my fiat to some group claiming to maybe own silver and further claiming to be giving me some tenuous claim on said silver. It is always a scam unless the prospectus gives me the absolute right to take delivery of my silver with zero encumbrances whatsoever, and to do so whenever I wish to take posession of said silver. Sprotts silver pile seems to be the only one that approaches this standard.
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Old 11-10-2012, 09:06 AM   #8
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Well, I did say that one would need to read the prospectus to get the real story. I'll just keep stacking.
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