Tuesday, May 25, 2010

Eric Sprott To Buy $235 Million In Gold, Or Over 6 Metric Tonnes, As Part Of PHYS Follow-On Offering

"Eric Sprott's Physical Gold Trust (PHYS) has just announced it is issuing a follow-on offering of 18 million trust units, with an overallottment option of another 2.7 million, for a total, including the greenshoe, of 20.7 million new units. The proceeds, as expected, will be used to purchase physical gold bullion to satisfy unprecedented investor demand for a safe haven away from the central bank printing press madness. At a post-announcement per unit price of $11.40, this means Sprott will buy $235 million worth of gold in the open market. At today's gold price of $1,200 this translates into 195,833 troy ounces of gold to be acquired, or roughly 6 metric tonnes. Somehow, we don't think the LBMA will be too thrilled with this extraction of physical gold out of the controlled synthetic precious metal ponzi system."

Tyler Durden - Zero Hedge

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