Sprott Asset Management has filed prospectuses for the Sprott Physical Silver Trust. The document was accepted at the Securities and Exchange Commission in the United States on 29th October, a day on which silver jumped from just below $24/ounce to very nearly reach $25. Silver has subsequently poked its nose over $25 although - so far at any rate - that level has not held. Investors may have decided to take a small slice of profits at the end of last month, with the iShares silver fund in NEW York experiencing redemptions of over 82 tonnes last week; although there was a small increase in interest in the ETF Securities funds, while the Zurich cantonal Bank fund has been broadly steady.
The listing certainly comes at an interesting time, given silver's current high profile. The Trust has been created to "invest and hold substantially all of its assets in physical silver bullion", the Custodian for which is the Royal Canadian Mint and will "purchase silver bullion" in an amount equivalent to the net proceeds of the offering less an amount to be withheld for ongoing expenses. The Trust is thus closed end. The implication from the figures in the prospectus suggest that, if fully funded, the Trust will be looking to purchase over 500 tonnes of silver. To put this in context, world industrial demand for silver is currently running at approximately 24,000 tpa, so 500t is equivalent to about a week's demand. Holdings in the major ETFs currently amount to just below 13,900t.
Meanwhile silver itself, although balking slightly at $25, is still in an...