Sprott shelf filing for PSLV to buy more silver

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vamoose1 said:
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Most people here know what Eric Sprott did to the silver market 14 months ago. It was moping along at 18, and from deep left field he did the Sprott Physical Silver Fund (580 million most of which he bought himself) and blew the Silver price to 50 in 5 months, almost taking JP Morgan to Chapter 11 in the process . They have been trying to raid it down ever since, including today, given that they were probably titularly bankrupted by the move.
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It took 3 months for Comex to deliver that much physical, many bars POSTDATED the issue, some still warm from the refinery, meaning, in short , there is no size physical silver ANYWHERE and it certainly hasnt improved a year later. In effect Sprott did a perfectly aboveboard Hunt brothers corner on these Comex thieves, and hoist them on their own petard, talk about clever. ...

IMHO, one incontrovertible fact thus holds, there is no material size Physical Silver anywhere, Comex, LBMA, pick it, so silver is wildly vulnerable to a second similar sized issue. We would see 50 far in the rear view mirror. The JP Morgan raids, the coordinated margin call raises, the Sunday night massacres , all these are testimony to this fact. Silver is in substantial shortage and preposterously mispriced as JPM desperately tries to wriggle out from under their nightmare short position.

Ok fine, got it vamoose, we know all this. So then why doesnt that moron Sprott just do another 500 million and blow the shorts away once and for all, and have Blylthe turning tricks in the Bronx?

Well the short answer is he COULDN"T he had a 365 day waiting period, Obligatory , which ended two weeks ago. Please consider that the 580 million PSLV Issue tripled the silver price, 18 to 50, so....rinse and repeat, do we go to 100 if he does another? For starters yes.

The Toronto Globe and Mail announced this morning that Sprott has just filed a shelf offering for , brace yourselves, a billion five, followup, Physical Silver, same as PSLV so here we go. ...
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http://www.tfmetalsreport.com/comment/90085#comment-90085

Sprott filing:
http://www.sec.gov/Archives/edgar/data/1494728/000091957411006436/d1243774_6-k.htm

This could get interesting.

:popcorn:
 
Interesting bit of speculation here following up on the comment above and the Canadian Mint Gold trust story:
vamoose1 said:
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What we have here is a match race, Secretariat vs. War Admiral, one or the other of these guys is going to do a Physical Silver issue very very soon and blow the Silver market apart again, , and the last such issue tripled the Silver price. its possible this Silver air raid stems from Eric filing that shelf Prospectus and i am told by informed people, it could be approved in two weeks. And importantly , once approved , he can move overnight, just bang, no road shows, no dog and pony shows giving JPM a few weeks to work with. NOPe, and critically, if he has the orders , its BANG , and Ciao manhattan for JP Morgan/ I am cheering for Eric, for many reasons, but one is the electrifying effect such an issue would have on the Silver price. Oerhaps this explains the current counterintuitive takedown.

Thats about enough from you Vamoose, watch on Tuesday to see the size of the Royal Canadian Mint Issue, if its 500 then they have street cred and the SILVER is coming in 30 days. People, this is a bit wild you know. If you held SLV god knows where in the HSBC vaults somewhere (you don't, its papar) and you could switch to a triple AAA Credit at half the carrying costs and many times the redemption convenience, well, connect the dots.
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http://www.tfmetalsreport.com/comment/90104#comment-90104
 
This is great news. Sprott will gladly take the low prices.
I don´t like what he did in late April and mid September this year though. He did interviews saying he sold some PSLV to buy mining shares when in fact he knew somehow (why???) that the big downturns for silver were right arround the corner. This perfect "timing" is a bit suspicious...
 
$1.5B is roughly 46 to 47 million ounces of silver. How in the world is Sprott going to obtain that much physical silver in this market? The COMEX has less than 33 million ounces (supposedly). Will he raid the SLV vaults?
 
PMBug said:
$1.5B is roughly 46 to 47 million ounces of silver. How in the world is Sprott going to obtain that much physical silver in this market? The COMEX has less than 33 million ounces (supposedly). Will he raid the SLV vaults?
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He´ll probably get some out of Europe and Asia aswell.
Supply of 1000 oz bars over here in Switzerland isn´t a big issue so far.
But, I agree: This is going to be funny. :popcorn:
 
swissaustrian said:
He´ll probably get some out of Europe and Asia aswell.
Supply of 1000 oz bars over here in Switzerland isn´t a big issue so far.
But, I agree: This is going to be funny. :popcorn:
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Yeah try getting a few thousand bars and let me know if there is a supply issue or not...
 
ok.. this is a huge story. Why isn't zerohedge talking about it?
 
Maybe they haven't heard about it yet. Sprott didn't publish a press release on it and it's flown somewhat under the radar at the moment.

I expect that it will be posted there soon though.
 
PMBug said:
Maybe they haven't heard about it yet. Sprott didn't publish a press release on it and it's flown somewhat under the radar at the moment.

I expect that it will be posted there soon though.
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Any word on how long it will take for Sprott to enter the market? I'm assuming he's going to have to put at least 1/3 of that amount into the market by year end which would put a huge bid under silver.
 
From what I've read (and not verified so FWIW), the shelf filing has to be approved. That could take up to 2 weeks from the filing date, so another week or so to go. I don't know if there is a timetable for the purchases once the filing is approved.

Based upon what he did last time with PSLV, I'd expect his purchases to phase in over a period of a 4-6 months.
 
PMBug said:
Based upon what he did last time with PSLV, I'd expect his purchases to phase in over a period of a 4-6 months.
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4-6 month is reasonable but December is the big delivery month. They are going to have to buy balls this next month if they want to get 1.5 billion on by middle of next year.
 
Wow, tripling down - an actual run on physical silver, and in broad daylight. Totally expected, but I was hoping for selfish reasons that it wouldn't happen for another year, and not at this magnitude. Oh well, strap in tight - here we go, as we find out if JPM et al have any more tricks left up their sleeve. If they do, it will be the last ace they play.
 
Follow up article:

http://profitimes.com/free-articles/sprott-to-buy-1-5b-of-silver-bullion/

From the article:

Yet, only two Web sites mention the breaking news, The Globe and Mail and bullion market reporter Harvey Organ, HarveyOrgan.blogspot.com. Don’t expect Eric Sprott to herald the milestone purchase; he’s trying to avoid investors front running the purchase.

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Looks to me like they missed a website! Way to go PMBUG!
 
Not to crash the party, BUT the prospectus says he MAY issue the shares. Not he Will.. Also up to 1.5 B. It could be less.
Sprott Physical Silver Trust (the “Trust”) may offer from time to time, during the 25 month period that this short form base
shelf prospectus (including any amendments hereto) (the “prospectus”) remains effective, up to U.S.$1,500,000,000 of
transferable, redeemable trust units (the “trust units”)
Click to expand...
 
If it's approved, it's pretty much guaranteed that he will issue shares and start buying as much silver as is economically feasible (not all at once though). IIRC, it's the same wording as the original PSLV prospectus.
 
Sprott confirms:
...
When asked to clarify what is happening with his company’s silver vehicle PSLV, Sprott replied, “Well, because we had to wait one year as a public company to file a new registration statement, we did that at our one year anniversary.

“That gives us the right because it’s now called a ‘continuous filing,‘ it gives us the right on an overnight basis to raise money for the silver fund, which would be used to buy physical silver.

I’ve always stated that I’m not going to do anything that would negatively affect the premium of that fund. In my ideal, we get a couple of institutions come in here and say, ‘Hey we’d like to take down a couple of hundred million bucks worth of silver, we love your vehicle.’ And then we might go and say, ‘Okay, I think it’s time to go out there and go raise some money to buy silver.’

So we’ll just have to wait for the right time and who knows when it happens? Maybe we have to imagine that the silver price is moving up, which we haven’t been in that environment recently, but the interest can come back very quickly.”
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More and link to audio interview: http://kingworldnews.com/kingworldn...sking_Silver_Producers_to_Save_in_Silver.html
 
It could very well be. I want to see what happens in Asia tonight, and in Europe before the bell tomorrow.
 
i really feel this is a fed engineered step toward deflation. Rubino from Dollarcollapse.com talks about this. The fed does not have the political cover anymore to do another big QE so they need to wait until its obvious we are heading into a deflationary spiral. so they say they wont do anything(yesterday's FOMC release), let mkts crash for a month or 2 and then when all panic is in they will announce the biggest MBS monetization yet. but they need to wait til commodities are knocked down some so when they rally they are coming off a lower base.

He said this 6 months ago in a podcast w chris martenson. I think this is how its playing out.

the whole stock mkt has become a big game the fed plays with. you can see the volitility last 5 yrs has been insane.
 
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escobar said:
... so they say they wont do anything(yesterday's FOMC release), let mkts crash for a month or 2 and then when all panic is in they will announce the biggest MBS monetization yet. but they need to wait til commodities are knocked down some so when they rally they are coming off a lower base.

He said this 6 months ago in a podcast w chris martenson. I think this is how its playing out.
...
Click to expand...

It's the same game plan that Martenson warned was possible back in March when the metals were screaming and QE II was due to end in June:
There's a scenario that could play out between May and September in which commodities (including my beloved silver) and the stock and bond markets could all sell off between 20% and 40%. The trigger will be the cessation of QE II and a multi-month pause before QE III.
...
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http://www.chrismartenson.com/blog/coming-rout/53869
 
It's on like Donkey Kong:
TORONTO, ONTARIO--(Marketwire - Jan. 17, 2012) - Sprott Physical Silver Trust (the "Trust") (TSX:PHS.U)(NYSE:PSLV), a trust created to invest and hold substantially all of its assets in physical silver bullion and managed by Sprott Asset Management LP, announced today that it has launched a follow-on offering (the "Offering") of transferable, redeemable units of the Trust ("Units").

The Trust will use the net proceeds of the Offering to acquire physical silver bullion in accordance with the Trust's objective and subject to the Trust's investment and operating restrictions described in the prospectus related to the Offering. Under the trust agreement governing the Trust, the net proceeds of the Offering per Unit must be not less than 100% of the most recently calculated net asset value per Unit of the Trust prior to, or upon determination of, pricing of the Offering.
...
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http://www.marketwire.com/press-rel...offering-of-trust-units-tsx-phs.u-1607842.htm
 
Anyone called sprott to see how much they are doing on this shelf offering?
 
IIRC, he could buy up to $1.5B (or roughly 50MM ounces of silver at $30/ozt).
 
PMBug said:
IIRC, he could buy up to $1.5B (or roughly 50MM ounces of silver at $30/ozt).
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yep.. I just wonder how much they raised today because that's definitely not how much they just raised. They had about a 30% premium and lost about 10% of that.
 
looks like $300 million worth. So i'd expect about 10 million ounces to be off the market in no time.
 
I can't believe Sprott doesn't have more people wanting in. A billion dollars is a rounding error these days after all.
 
yeah i think he could raise more but he seems to want to maintain this premium for some reason which does not make sense to me. if he raised a billion then the premium would shrink even more.
 
escobar said:
yeah i think he could raise more but he seems to want to maintain this premium for some reason which does not make sense to me. if he raised a billion then the premium would shrink even more.
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There has to buyers in order for him to raise a billion. $300 million cut it in half so logic would dictate he could potentially raise another $300 without trading at a discount.
 
So they drove his PSLV price down over night (and truthfully ever since they knew he would announce) to help mitigate the amounts he could take delivery on..?
 
Dave in Denver said:
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Of course, one of the technical factors that will drive silver higher for awhile is the money raised by Sprott to buy 10,000,000 ounces silver. Although they have already accounted for the silver on their NAV website, it will be interesting to see how long it takes for the silver to actually be delivered. Ted Butler has issued a comment in which he thinks that this time around delivery will made quickly, as Sprott and Embry were quite vocal about how long it took to get delivery last time around. Based on everything I see, hear, read and experience as a trader with regard to the silver market and readily available supply, I respectfully disagree with Mr. Butler.

The United States produces about 35 million ounces of silver per year. Already U.S. Mint silver eagle sales are running at a 60 million ounce run-rate. This will undoubtedly slow down, but I think it's safe to say that silver eagle investment demand alone will easily exceed the 40 million ounces sold in 2011 and thus the mining supply from this country in 2012. Add on to that the 10 million ounces Sprott is contracting to purchase and those two buying entities alone create a big supply deficit in this country. Of course, silver is mined globally and, based on reports out of London, the international demand for actual, delivered physical silver is enormous and waiting times for delivery are stretched.

There's one of other factor the I'm surprised has not been mentioned in silver market commentary. Hecla Mining, one of the largest pure silver miners in the world, had to shutter one of its mines in order to comply with safety regulations and clean out the access shaft. Although this is a temporary situation - Hecla managment has said that this will reduce its silver production from 9 million ounces in 2012 to 7 million ounces. So the mined output of silver in the U.S. will be around 33 million instead of 35 million ounces.

It would be a big mistake to assume that this 2 million ounces taken of the market this year will not affect the supply/demand situation, reducing supply and therefore adding to the demand forces that will force the price of silver higher this year. A lot higher...
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http://truthingold.blogspot.com/2012/01/got-silver-overlooked-factor-that-will.html
 
When asked about his latest PSLV offering, Sprott stated, “We closed on $349 million. The underwriters did exercise the over-allotment in rather short order. We have committed to purchase it (silver). I think the deal was very successful. Obviously the premium has come down here (on PSLV), but it’s typically traded at a 16% premium and right now it’s at 8%. It takes a little while to digest the stock that was issued, but I’m hopeful we will get back to where we were.
There’s been a big move since we did the issue....
“We’ve all heard the reports that it’s pretty tight (in terms of supply). Every data point I see suggests people and institutions want to buy silver in the same dollar amount as they are buying gold.
We see the US Mint has sold 5.6 million ounces so far in January and I’m sure they will have a record high month. We’re selling as many dollars of silver coins as we are gold coins by the mint, which means we are selling 50 times more physical volume of silver. The availability (of silver to gold) is 7 to 1 in physical, but people are buying it at like 50 to 1. So something has to give there.
I would love to share with your viewers I was speaking with a company, this is a gold company, who is trying to organize a dividend payment being made in gold or silver and/or cash. Apparently 60% of the people (asked) were opting for the precious metal and half of those agreed to take it in silver. Again, another confirmation of silver buying. Our last tranche (in PSLV) we raised $349 million. Our last tranche in gold we raised $312 million. Again, one to one buying, so I’m pretty upbeat about where silver should be going.
As you know I always thought we would go back to the 16 to 1 ratio to gold, which means based on today’s prices silver should be $100. I really do believe silver was going to blow through $50 back in April/May when, all of the sudden, margin rate increases came through and one billion ounces of paper silver was sold that day.
I’m of the feeling that it will go back through $50 this year. Once it goes through $50 I think it could take on a whole new life and really energize itself. Longer-term my target is 16 to 1 to gold and I’m very upbeat on gold. I’m sure gold is going north of $2,000 this year, so obviously silver can get up to $150 in due course.”
Click to expand...
http://kingworldnews.com/kingworldn...ive_Chinese_Buying_Will_Spike_Gold_Price.html
 
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