Claymore Gold Bullion Trust has filed a preliminary prospectus in connection with a domestic initial public offering of units, Claymore Investments Inc. said Wednesday.

The offering price is $10 per unit. The fund proposes to issue units comprised of one transferable trust unit and one warrant, which is exercisable for $10 at any time before 16:00 ET on the date that is six months following the closing of the offering.

The fund’s investment objective is to replicate the performance of the price of gold bullion, less the fund’s expenses and fees. This objective will be accomplished by the fund investing the net proceeds of the offering in holdings of pure, unencumbered gold bullion.

“This strategy will provide investors with the ability to invest in gold bullion in a convenient, tradable and secure manner without the associated inconvenience and high transaction, handling, storage, insurance and other costs typical of direct gold bullion investment,” Claymore says.

Given that gold bullion is priced in U.S. dollars, the fund will hedge substantially all of the fund’s U.S. dollar currency value back to the Canadian dollar, providing exposure to gold while reducing the currency risk for Canadian investors.

The fund will automatically convert into an exchange-traded fund if the units trade at a discount to net asset value after the date that is six months following the closing of the offering.

The Offering is being made on a best efforts basis in each of the provinces and territories in Canada through a syndicate of investment dealers led by GMP Securities L.P. and TD Securities Inc., and including Genuity Capital Markets, Canaccord Capital Corp., Dundee Securities Corp., Richardson Partners Financial Ltd., Scotia Capital Inc., Blackmont Capital Inc., Desjardins Securities Inc., Haywood Securities Inc., Burgeonvest Securities Ltd., FirstEnergy Capital Corp., Research Capital Corp., Rothenberg Capital Management Inc. and Wellington West Capital Markets Inc.

IE