Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Discussion of the Gold portion of the Permanent Portfolio

Moderator: Global Moderator

Phalanx
Junior Member
Junior Member
Posts: 8
Joined: Thu Aug 28, 2014 5:53 pm

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Phalanx » Fri Nov 13, 2015 1:29 pm

I'm with you, AdamA. Getting pretty tired of the junk mail Sprott is sending. Was even called at home, ugh.
User avatar
AdamA
Executive Member
Executive Member
Posts: 2312
Joined: Sun Jan 23, 2011 8:49 pm

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by AdamA » Wed Nov 18, 2015 2:32 pm

http://m.marketwired.com/press-release/ ... 074806.htm

Maybe this is their way of trying to get Sprott to leave them alone.
"All men's miseries derive from not being able to sit in a quiet room alone."

Pascal
Reub
Executive Member
Executive Member
Posts: 3158
Joined: Fri Jan 21, 2011 5:44 pm

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by Reub » Wed Dec 02, 2015 4:32 pm

11/26/2015

"Today, Central GoldTrust ("GoldTrust") entered into a new definitive agreement with Purpose Investments Inc. ("Purpose") regarding the conversion of GoldTrust into a gold bullion exchange traded fund ("ETF") managed by Purpose and Central Gold Managers. The proposed ETF conversion,  which is subject to unitholder approval,  has the unanimous support of your Independent Trustees and represents an exciting opportunity for GoldTrust unitholders."

"The proposed conversion is expected to immediately result in the units trading in-line with net asset value ("NAV"), to eliminate any material future discounts to NAV and provide unitholders with significantly enhanced liquidity,  consistent with other gold bullion ETFs."

"Put simply: the proposed ETF conversion represents a clearly superior alternative for all GoldTrust unitholders compared to Sprott's inadequate offer."
Last edited by Reub on Wed Dec 02, 2015 5:38 pm, edited 1 time in total.
User avatar
dualstow
Executive Member
Executive Member
Posts: 10327
Joined: Wed Oct 27, 2010 10:18 am
Contact:

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by dualstow » Wed Dec 02, 2015 5:19 pm

Interesting development.
loot "goods taken from an enemy, etc.," 1839, Anglo-Indian, from Hindi lut, from Sanskrit loptram, lotram "booty, stolen property,"fm. PIE root *reup- "to snatch"
curfew - early 14c., curfeu, "evening signal, ringing of a bell at a fixed hour" as a signal to extinguish fires and lights, ... from Old French cuevrefeu, literally "cover fire"
dragoncar
Executive Member
Executive Member
Posts: 1111
Joined: Wed Aug 10, 2011 7:23 pm

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by dragoncar » Wed Dec 02, 2015 8:30 pm

What does that mean for us?  Higher expenses?  Different taxation?
User avatar
jason
Executive Member
Executive Member
Posts: 178
Joined: Mon Jun 10, 2013 4:10 pm

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by jason » Fri Dec 04, 2015 4:07 pm

I've owned GTU for years and I haven't been interested in the Sprott offer until now.  I bought GTU for four reasons: 1. It's in Canada, giving me at least some level of international diversification (I live in the US). 2. It's a closed end fund, which has lower tax rate than gold ETFs.  3.  In the very unlikely event gold in the US is confiscated like it was an 1933, it may not be affected and 4. I had the perception that it was less likely to be leveraged (have fractional reserves) than an ETF like GLD or IAU. 
I chose GTU over Sprott because Sprott's redemption feature can cause the fund to realize capital gains, triggering capital gains taxes that are to be absorbed by the shareholders.  GTU dos not have this issue.
Now GTU is saying they are changing over to become an ETF??  That makes little sense to me.  Anyone who was looking for an ETF would have bought IAU, GLD, etc., not GTU, right?  Am I going to lose all benefits that made me choose to buy GTU over IAU in the first place?
If so, I think I will vote to accept the Sprott offer.
But then there is a chance that both the Sprott offer and the ETF switch over could both get voted down. 
So, I am conflicted - should I vote to accept the Sprott offer, or should I just do nothing?  What I really want is to just keep GTU, with no changes.
It seems like there is a chess match going on here that I don't really understand.
Thanks!
User avatar
technovelist
Executive Member
Executive Member
Posts: 5635
Joined: Wed Sep 15, 2010 11:20 pm

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by technovelist » Fri Dec 11, 2015 6:56 pm

I just saw a notice from Fidelity that said that GTU's trustees have been replaced, effective immediately, by a board selected by a Sprott entity. Here's the relevant part of the announcement:

'GTU (US$)) announced today the removal of Brian E. Felske, Glenn C. Fox, Bruce D. Heagle, Ian M.T. McAvity, Michael A. Parente and Jason Schwandt as trustees of GoldTrust and the appointment of Marc Faber, James R. Fox, Sharon Ranson, John Wilson and Rosemary Zigrossi (the "Appointed Trustees") as trustees of GoldTrust. The removal and appointment of trustees was made pursuant to a written resolution of Sprott Asset Management Gold Bid LP, as the holder of powers of attorney from unitholders owning approximately 55.11% of the outstanding units of GoldTrust. The Appointed Trustees, in addition to J.C. Stefan Spicer, who was nominated as a trustee by Central Gold Managers Inc., the administrator of GoldTrust, shall remain trustees of GoldTrust until the next annual meeting of GoldTrust or until such trustees cease to hold office prior thereto.'

I find it very hard to believe that the unitholders realized that they were giving Sprott powers of attorney that authorized that. I also find it hard to believe that the "former trustees" are going to take this lying down, especially since I'm pretty sure that they got a court to tell Sprott they couldn't do that, as it violates Canadian security laws.

It's also not mentioned on the GTU website. I wish I had seen this earlier today so I could contact GTU and ask them what is going on.
Another nod to the most beautiful equation: e + 1 = 0
dragoncar
Executive Member
Executive Member
Posts: 1111
Joined: Wed Aug 10, 2011 7:23 pm

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by dragoncar » Fri Dec 11, 2015 7:59 pm

Interesting that GTU says "The ETF Conversion is not expected to have any material adverse tax effect on GoldTrust or its unitholders and will preserve GoldTrust’s tax efficient structure"

Since I did buy some at a premium, however, I'd like the opportunity to liquidate at a premium in the future
dragoncar
Executive Member
Executive Member
Posts: 1111
Joined: Wed Aug 10, 2011 7:23 pm

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by dragoncar » Tue Dec 15, 2015 1:55 pm

So how are you guys votings?
LazyInvestor
Executive Member
Executive Member
Posts: 190
Joined: Thu Aug 02, 2012 5:37 am

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by LazyInvestor » Tue Dec 15, 2015 1:58 pm

This is getting annoying. Not sure what to do...
User avatar
pugchief
Executive Member
Executive Member
Posts: 3467
Joined: Tue Jun 26, 2012 2:41 pm
Location: suburbs of Chicago, IL

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by pugchief » Tue Dec 15, 2015 2:15 pm

I don't think it matters any more. Sprott now controls >50% of the voting shares.
"Congressmen should wear uniforms, you know, like NASCAR drivers, so we could identify their corporate sponsors."
dragoncar
Executive Member
Executive Member
Posts: 1111
Joined: Wed Aug 10, 2011 7:23 pm

Re: Sprott Intends to Make Exchange Offers for Central GoldTrust and Silver Bullion

Post by dragoncar » Tue Dec 15, 2015 6:04 pm

pugchief wrote: I don't think it matters any more. Sprott now controls >50% of the voting shares.
I thought some votes needed more than a simple majority
Post Reply