Tuesday, November 01, 2011

Royal Canadian Mint's New Gold ETRs Program

The Royal Mint is introducing a new gold ETR program of Exchange Traded Receipts (ETRs) under the Mint's new Canadian Gold Reserves program. According to the Mint, '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 gold ETFs and some other gold investment products the owner of the gold ETR actually owns the gold and not just a share in an entity that owns the gold.

The Issue price will be 20 Canadian Dollars and the amount of gold for that will be determined at the closing date which will be in late November. This will be a prospectus exempt issue and, subject to the usual conditions will be listed on the Toronto Stock Exchange with trade commencing on the closing day of the offer.
Unlike Gold ETFs, ETR holders will be entitled to redeem their ETRs if required in the form of 99.99 percent pure gold bars, coins or cash all of which will be based on the future gold price or market price of the ETRs at the time of redemption or sale.

ETRs will not be available for sale in the USA, this is a Canadian initiative only and will be available only through 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.

For Canadians the Royal Canadian Mint's New Gold ETRs Program could be a good way to buy gold.

No comments: