The Royal Canadian Mint Tuesday announced the closing of the initial public offering of the Canadian Gold Reserves’ Exchange Traded Receipts (ETRs). Thirty million ETRs were issued at $20 each, raising gross proceeds of $600 million.
The ETRs are now trading on the Toronto Stock Exchange (TSX:MNT).
“The tremendous response to the Mint’s Canadian Gold Reserves ETR program is a compelling endorsement of this product as a convenient, economical and secure way to invest in gold,” says Ian Bennett, president and CEO of the Royal Canadian Mint. “By selling a security representing direct ownership to physical gold stored at the Mint, we have creatively leveraged our 100 year-old gold refining and storage expertise to help investors confidently own gold.”
After deducting the agents’ fee and expenses of the offering, net proceeds of $579.4 million were applied to purchase gold bullion on behalf of the purchasers of the ETRs, at US$1,717 per ounce.
Each ETR provides evidence of ownership in physical gold bullion held in the custody of the Mint at its facilities in Ottawa. The Canadian Gold Reserves program marks the expansion of the Mint’s core bullion and refinery business.
Unlike other gold investment products, the purchaser of an ETR owns the actual gold rather than a unit or share in an entity that owns the gold. Subject to certain restrictions, ETR holders are entitled to redeem their ETRs for physical gold products in the form of 99.99% pure gold bars or coins, or for cash based on the lesser of the gold price on the redemption date and the market price of the ETRs.
Future daily calculations of the per ETR entitlement to gold and the net asset value per ETR will be available on the Canadian Gold Reserves’ website at www.reserves.mint.ca.