Investors have purchased nearly $33 million worth of new Royal Canadian Mint receipts that give their owners a direct stake in physical gold held in the Mint’s Ottawa vaults.
In a Sept. 24 news release, the Mint announced it had completed the sale of 501,175 new Exchange-Traded Receipts (ETRs) through its Canadian Gold Reserves program. Each was sold for $65.82, generating gross proceeds of $32.99 million.
While the name may sound complicated, the concept is relatively simple.
Rather than purchasing gold bullion and arranging to store it themselves, investors can purchase ETRs representing ownership of a specific amount of physical gold held by the Mint.
The Mint says each of the newly issued receipts represents 0.010349 of a fine troy ounce of gold.
Together, the latest offering represents approximately 5,187 troy ounces – or about 161 kilograms – of gold.
The proceeds from the offering are being used to purchase gold bullion on behalf of the purchasers of the ETRs, according to the Mint.
The receipts trade on the Toronto Stock Exchange under the symbols MNT and MNT.U, allowing investors to buy and sell their interest in the gold without physically moving bullion in and out of the Mint’s vaults.
Unlike buying shares in a company, purchasing an ETR does not give an investor ownership in the Royal Canadian Mint. Instead, the Mint says each receipt provides its holder with direct legal and beneficial ownership of the corresponding physical gold bullion held in its custody.
Subject to certain restrictions, holders can also redeem their ETRs for physical gold bullion with a minimum purity of 99.99 per cent, or for cash.
The Sept. 24 transaction was what is known as a “follow-on offering.” In simple terms, the Canadian Gold Reserves program was already operating and the Mint has now issued additional receipts through the existing program.
The newly issued ETRs have been listed on the Toronto Stock Exchange and carry the same gold entitlement as the receipts already outstanding.
The ETRs are not registered for sale in the United States and generally cannot be offered or sold there unless an applicable exemption from U.S. securities registration requirements applies.
The Mint also operates a Canadian Silver Reserves program, with exchange-traded receipts providing holders with direct ownership of physical silver bullion held in the Mint’s custody.