The Royal Canadian Mint is pleased to announce its initial public offering of Exchange Traded Receipts (ETRs) under the Mint's new Canadian Gold Reserves program. Each ETR provides evidence of ownership in physical gold bullion held in the custody of the Mint at its facilities in Ottawa, Ontario. The Canadian Gold Reserves program marks the expansion of the Mint's successful core bullion and refinery business.
"We believe that this new program will build on our reputation and continued success as a world-class custodian of precious metals," said Ian E. Bennett, President and CEO of the Royal Canadian Mint. "With the introduction of the Canadian Gold Reserves ETR program we hope that investors will see this as a convenient, efficient and secure method for investing in and owning physical gold."
Unlike other gold investment products, the purchaser of an ETR owns the actual gold rather than a unit or share in an entity that owns the gold. The net proceeds of the offering will be used to purchase gold on behalf of the initial purchasers of ETRs at the London pm fix price on the closing date of the offering (Closing Date). Subject to certain restrictions, ETR holders will be entitled to redeem their ETRs for physical gold products in the form of 99.99 per cent pure gold bars or coins, or for cash based on the future gold price or market price of the ETRs.
Subject to market conditions, the initial offering of ETRs is targeting an issue size of approximately CAD$250 million. The issue price per ETR will be CAD$20.00 or the USD equivalent and the Per ETR Entitlement to Gold will be determined on the Closing Date and will be reduced daily by an annual service fee of 0.35 per cent.
Subject to the satisfaction of certain conditions, the ETRs will be listed on the Toronto Stock Exchange and commence trading on the Closing Date. ETRs will be listed in both Canadian and U.S. dollars and may be traded in either currency.
Through a competitive process, the Mint has selected a syndicate of investment dealers led by TD Securities Inc. and National Bank Financial Inc., and including BMO Nesbitt Burns Inc., CIBC World Markets Inc., RBC Dominion Securities Inc., Canaccord Genuity Corp., Cormark Securities Inc., MGI Securities Inc. and Raymond James Ltd. to distribute the ETRs on a best efforts agency basis.
Closing is expected to occur in late November 2011. The offering is being made on a prospectus-exempt basis pursuant to the terms of an order of the Ontario Securities Commission dated August 30, 2011.
The ETRs have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States. This media release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
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