Sprott shelf filing for PSLV to buy more silver

[pmbug]

Sprott made a few interesting comments in an interview with The Doc @ silverdoctors:

... I was sort of shocked that out of nowhere UC Resources said they bought a million dollars of the silver trust because I had not specifically spoken to them about it. But I can tell you that First Majestic did buy $10 million of our issue. ...

http://silverdoctors.blogspot.com/2012/02/eric-sprott-silver-will-become-currency.html

The miners are investing in PSLV?

 

[ancona]

Sounds like a damn good hedge. If they need the silver, they know Sprott has the goods. With SLV, all you have is a paper based, round-robin circle jerk.

 

[pmbug]

Sprott Physical Silver Trust Announces Follow-on Offering of Trust Units

Nov 8, 2012

TORONTO, Nov. 8, 2012 /CNW/ - Sprott Physical Silver Trust (the "Trust") (NYSE: PSLV) (TSX: PHS.U), 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.
...

http://sprottphysicalbullion.com/sprott-physical-silver-trust/press-releases/?cid= 19

h/t SilverDoctors

 

[ancona]

And, the Brotherhood of Darkness will do anything and everything to stand in his way, make it difficult and generally try and stop him from his acquisition of REAL metal. Sprott is doing exactly what the SLV and GLD folks do not want ANYONE doing, and that is offerring real physical metal in a trust that is not hypothecated, re-hypothecated, borrowed, loaned or leveraged. If more people would step up and start these funds, it would put a huge cramp in the style of some major banks and their continued manipulation of the metals markets. I would like nothing more than to see someone with a shitload of cash go around the world vacuuming up silver from every conceivable source, then start a fund like Sprott's. If someone like Carlos Slim got a bug in his britches, sent two hundred silver soldiers to the four corners of the earth to do nothing but buy up metals in whatever form they can get their hands on, it would be a sight to see.

With Slim's billions, I would set aside ten percent, or around seven billion dollars for this task. I would hit every single retail and wholesale outlet and clean them out. I would do it over and over again until I had the worlds largest stack of silver. With a four or five billion dollar pile of silver, he would have no trouble breaking the backs of the big banks silver monopoly, and he would become risher still as a result.

Carlos Slim could make Nelson and Bunker Hunt look like rank amateurs. He could buy a billion dollars worth of Comex futures and immediately stand for delivery. He could do the same thing in London and Dubai. If he was able to show they do not have the metals they promised, he could bankrupt them, sending his existing stack so high in price that the billion or so he "lost" in the ensuing bankruptcies at Comex and London would be inconsequential by comparison. I am surprised that one of these oligarchs have not done this yet.

 

[pmbug]

Status update:

...
Sprott also spoke about his latest silver offering and how much physical silver it will vacuum out of this strategic and critical market: “It’s around nine million ounces. For the most part we will have purchased that already. I don’t know that we have all of the delivery yet because we just had the green shoe exercised on Thursday night. So that purchase has been made, but obviously we wouldn’t have delivery yet.

I don’t think we’re going to have delivery problems. As you know, I’ve always hoped we can’t get that last bar (of silver) because we’ll publicize it. But so far the silver has come in. Again, it tightens down the market.”

Sprott also added: “... we ended up buying about 47 times more silver than gold, but it’s only available 7/1 for investment because most silver has to go into industrial uses. I just believe the consumer is speaking with his wallet. They like buying silver, and there just, ultimately, will not be enough silver to satisfy all that need.”
...

http://kingworldnews.com/kingworldn...o_Public_If_They_Dont_Send_Us_Our_Silver.html

 

[Jetstream]

...If more people would step up and start these funds, it would put a huge cramp in the style of some major banks and their continued manipulation of the metals markets. ... If someone like Carlos Slim got a bug in his britches, sent two hundred silver soldiers to the four corners of the earth to do nothing but buy up metals in whatever form they can get their hands on, it would be a sight to see.

With Slim's billions, I would set aside ten percent, or around seven billion dollars for this task. I would hit every single retail and wholesale outlet and clean them out. I would do it over and over again until I had the worlds largest stack of silver. With a four or five billion dollar pile of silver, he would have no trouble breaking the backs of the big banks silver monopoly, and he would become risher still as a result.

Carlos Slim could make Nelson and Bunker Hunt look like rank amateurs. He could buy a billion dollars worth of Comex futures and immediately stand for delivery. He could do the same thing in London and Dubai. If he was able to show they do not have the metals they promised, he could bankrupt them, sending his existing stack so high in price that the billion or so he "lost" in the ensuing bankruptcies at Comex and London would be inconsequential by comparison. I am surprised that one of these oligarchs have not done this yet.

If Carlos or anyone else did this, their life expectancy would probably be measured in hours, not years.

 

[DSAbug]

The further we get into the month, the more likely people will be standing for delivery. Given the COT numbers being so bearish (high spec long and high BullionBank shorts), it really makes me wonder if this is really "it". It's not normal for high spec interest to hold this far into a contract month. Usually, they would have already rolled their contracts to a more liquid month right?

 

[swissaustrian]

The further we get into the month, the more likely people will be standing for delivery. Given the COT numbers being so bearish (high spec long and high BullionBank shorts), it really makes me wonder if this is really "it". It's not normal for high spec interest to hold this far into a contract month. Usually, they would have already rolled their contracts to a more liquid month right?

This is on my mind, too.
It is either "IT" or we are up for a massive raid before the end of the year like last year. I guess a lot depends on the outcome of the FOMC meeting next week. Hilsenrath has telegraphed an increase in the amount of QE. That can't be bearish for the metals. A raid before next week could occur on thursday/friday when the ECB meets and November unemployment data is beeing released.

 

[ancona]

We'll see eventually, but it would be nice if the Comex and LBMA collapsed in upon themselves and if SLV wwas finally revealed as the fraud it truly is. Gold and silver at their real prices would absolutely shock people.

 

[DSAbug]

We'll see eventually, but it would be nice if the Comex and LBMA collapsed in upon themselves and if SLV wwas finally revealed as the fraud it truly is. Gold and silver at their real prices would absolutely shock people.

I think we are pretty far away from finally realizing those gains. I also don't think we will "just" be at "real" prices. IMO.. We will go to a bubble/mania phase similar to 1980. Bull markets end with blow off tops and we got a small taste of what that looks like when silver spiked.

 

[swissaustrian]

Why is Sprott selling at current prices? :doodoo:

Am I misunderstanding something?

Is he maybe selling on behalf of clients?

Filing
Date Transaction Date Insider Name Ownership Type Securities Nature of transaction # or value acquired or disposed of Price
Apr 5/13 Apr 5/13 Sprott, Eric S. Control or Direction Units 10 - Disposition in the public market -300,000 $10.70
Apr 5/13 Apr 4/13 Sprott, Eric S. Control or Direction Units 10 - Disposition in the public market -300,000 $10.55
Apr 3/13 Apr 3/13 Sprott, Eric S. Control or Direction Units 10 - Disposition in the public market -252,400 $10.64
Apr 3/13 Apr 2/13 Sprott, Eric S. Control or Direction Units 10 - Disposition in the public market -237,045 $10.81
Apr 5/13 Apr 1/13 Sprott, Eric S. Control or Direction Units 10 - Disposition in the public market -300,000 $11.06
Apr 3/13 Mar 28/13 Sprott, Eric S. Control or Direction Units 10 - Disposition in the public market -300,000 $11.25
Apr 3/13 Mar 27/13 Sprott, Eric S. Control or Direction Units 10 - Disposition in the public market -300,000 $11.32
Apr 3/13 Mar 26/13 Sprott, Eric S. Control or Direction Units 10 - Disposition in the public market -300,000 $11.39
Apr 3/13 Mar 25/13 Sprott, Eric S. Control or Direction Units [Amended Filing] 10 - Disposition in the public market -200,000 $11.44
Apr 3/13 Mar 22/13 Sprott, Eric S. Control or Direction Units 10 - Disposition in the public market -200,000 $11.42

http://canadianinsider.com/node/7 search for "Sprott Physical Silver Trust (THS)"

 

[pmbug]

The last time he sold off a lot of PSLV, it was purportedly because he was taking advantage of the arbitrage on the ~20% premium to NAV to buy more silver. Curiously, the premium to NAV for the last week or so has bounced around between 0% and 1%. I found this blog post stating that such a low premium to NAV for PSLV may be signalling a market bottom (corroborating the indications from the short interest).

I have no idea why he would be selling PSLV under these circumstances.

 

[swissaustrian]

I've been browsing arround the pm blogosphere and three explanations came up in addition to the premium reduction thesis:

1. He is shifting from metals to miners. We have heard that before in 2011 when he was selling the rally before the crash of May 2011: http://kingworldnews.com/kingworldn..._Has_More_Physical_Silver_Now_Than_Ever!.html
The market setup was totally different back then, however. Premiums on PSLV were high and paper positioning in silver was heavily leveraged. SLV (not: pSLV) was the biggest ETF at the NYSE right before the crash.

2. He's preparing another issue of PSLV shares. Some claim that he always sold before issuing new shares. I haven't found evidence for that, but I didn't search intensively...

3. He's redeeming shares for clients.

Another explanation would be that he is using leverage and had to sell to satisfy margin calls. That would in total contradiction to anything he ever said publicly, but one never knows...

 

[swissaustrian]

Sprott is just another insider afterall. Selling his stuff right before the crash while telling everyone how bullish he is:
http://www.pmbug.com/forum/f3/sprott-shelf-filing-pslv-buy-more-silver-218/index3.html#post20230

 

[Unbeatable]

Why is Sprott selling at current prices?

Interesting, good spot SA.

I think it's more probable some of his big clients are insiders rather than Sprott himself?

It makes sense that insiders were already smart enough to have their silver positions in an allocated silver trust rather than the alternative.

It also makes sense that if they knew about the coming silver raid they would have sold their positions, so that they could buy back cheaper now.

Edit: Or is that not how the trust works?

 

[swissaustrian]

I don't specifically know what "Sprott, Eric S. Control or Direction" means. But I think it is him personally. Some bloggers have asked Sprott for a comment on the sales. He didn't answer.

 

[swissaustrian]

Add this transaction on Friday right before the crash to the list:
Apr 12/13 Apr 12/13 Sprott, Eric S. Control or Direction Units 10 - Disposition in the public market -216,000 $10.33

 

[dali lambone]

He knew what was coming....

 

[pmbug]

... On Tuesday, April 16th Eric Sprott held a conference call with institutional investors. We tuned into the call. He made a point of commenting about the sales:

There’s been a lot of questions asked about our Sprott Foundation selling shares of PSLV, which we publicly announce every day that we sell them. It’s sold for two reasons. One, the foundation needs cash for various donation commitments. And two, I’m selling PSLV because the (mining) shares have been so distressed here that I think the (mining) shares are a better buy than the metals.

I’m obviously very optimistic on the metals, as are all of our partners. But I think the (mining) shares have been so collapsed here that it’s a better investment for us at this time. So that’s the reason I’ve made that change.

...

http://silverdoctors.com/eric-sprott-addresses-questions-on-sale-of-pslv-shares/

 

[swissaustrian]

A rather lame excuse given the timing of the sales, especially as he did the same in 2011 right before the crash.