RCM amends its ‘net asset value’ calculation

The Royal Canadian Mint recently announced it is changing the way it calculates the net asset value (NAV) for its Canadian Gold and Silver Reserves exchange-traded receipt (ETR) programs.

On Oct. 10, the Mint will stop using the daily London fix gold and silver prices provided by the London Bullion Market Association (LBMA) to compute the daily NAV per ETR. The Mint will instead use the daily gold and silver spot prices made available by Thomson Reuters at the time of the regular closing of trading of the Toronto Stock Exchange (TSX), which is 4 p.m. EST. This change will not affect the price of the ETRs—only how the NAV is calculated.

COST BRINGS CHANGE

According to the Mint, the man reason for this change is cost as the administrators of the LBMA gold and silver prices have materially increased licensing fees on exchange-traded products.

Another reason for the change is timing: LBMA prices are quoted many hours prior to the TSX closing time, shortly after which the Mint calculates and publishes the daily NAV per ETR. The spot prices are available as of the TSX closing time, providing a more timely and accurate basis for the calculation of the daily NAV per ETR.

A link to the daily LBMA prices will be available on the websites of both the Canadian Gold Reserves program and the Canadian Silver Reserves program, allowing ETR investors to access them if desired. We also note that LBMA gold and silver prices continue to be accessible to the public from multiple sources other than the websites of the programs.

NEW EXCHANGE RATE

This change is in addition to the new exchange rate that the Mint commenced using on May 1, after the Bank of Canada ceased publishing the closing exchange rate on April 28. As a result, the Mint now uses a daily average rate, which is reported by the Bank of Canada at 4:30 p.m. EST.

RISK IN ETRs

An investment in ETRs involves a degree of risk. These risks result primarily from fluctuations in the price of gold or silver, as applicable. A detailed description of these risks and other important information about the ETRs and the programs are contained in the information statement for the Canadian Gold Reserves program dated Sept. 17, 2013 and in the information statement for the Canadian Silver Reserves program dated Oct. 29, 2012, which are available at reserves.mint.ca and sedar.com. ETR holders have no recourse to the Mint or the Government of Canada for any loss on their investment.

The ETRs have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the U.S. absent registration or an applicable exemption from the registration requirements. This media release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of the ETRs in any jurisdiction in which such an offer, solicitation or sale would be unlawful.

Leave a Reply

Keep up to date with the numismatic community

Sign up to receive our newsletter.

Canadian Coin News

Canada

Canadian Coin News is Canada's premier source of information about coins, notes and medals.

Although we cover the entire world of numismatics, the majority of our readers are Canadian, and we concentrate on the unique circumstances surrounding collecting in our native land.

Send Us Your Event

Running an event? Send it to us and we will display it on Canadian Coin News!

Submit Event →

Subscribe To 26 Issues For Just $47.99/year

Subscribe today to receive Canada's premier coin publication. Canadian Coin News is available in both paper and digital forms.

Subscribe Now

We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.