Precious Metals Bullion Trust

Precious Metals Bullion Trust

June 16, 2009 08:59 ET

Precious Metals Bullion Trust Announces Initial Public Offering

TORONTO, ONTARIO--(Marketwire - June 16, 2009) - Brompton Funds Management Limited (the "Manager") is pleased to announce that Precious Metals Bullion Trust (the "Fund") has filed a preliminary prospectus for a public offering of Combined Units at a price of $12.00 per Combined Unit. Each Combined Unit consists of one transferable, redeemable unit of the Fund and one transferable warrant of the Fund. Each Warrant entitles the holder to purchase one Unit at a subscription price of $12.00 on or before 5:00 p.m. (Toronto time) on January 31, 2010.

The investment objective of the Fund is to provide Unitholders with a secure, low cost and convenient method of investing in gold, silver and platinum (together, "Precious Metals") bullion on a Canadian dollar-hedged basis. The Units are redeemable quarterly for a redemption price equal to 100% of the Net Asset Value per Unit.

The net proceeds of the offering will be used to purchase approximately equal dollar amounts of physical gold, silver and platinum bullion as soon as practicable following closing in accordance with the investment objective and restrictions of the Fund. All of the Fund's physical bullion will be stored on an allocated, segregated and insured basis. As Precious Metals are typically quoted in U.S. dollars, substantially all of the value of the portfolio denominated in U.S. dollars will be hedged to the Canadian dollar. The Fund will not rebalance the portfolio back to equal weight following closing.

Precious Metals have historically been regarded as a store of value, a hedge against inflation and a safe harbour in times of financial and geopolitical distress. During periods where inflation was greater than 5% per annum, an equal dollar-weighted investment in Precious Metals outperformed major equity and bond indices. An equal weighted investment in Precious Metals would have provided investors with a 237% aggregate U.S. dollar total return (an annual compound return of 12.9%) over the 10-year period ending May 31, 2009. Precious Metals have low or negative correlations with bonds and equities, providing portfolio diversification benefits. By purchasing Units, Unitholders will enjoy many of the benefits of a direct investment in Precious Metals such as avoiding counterparty or company specific risks typically associated with derivative-based exposure to commodities and equity securities.

The syndicate of agents for the offering is being co-led by BMO Nesbitt Burns Inc., RBC Dominion Securities Inc., and Scotia Capital Inc., and includes Canaccord Capital Corporation, HSBC Securities (Canada) Inc., Dundee Securities Corporation, Raymond James Ltd., Research Capital Corporation, Wellington West Capital Markets Inc., Blackmont Capital Inc., Desjardins Securities Inc., Manulife Securities Incorporated, Haywood Securities Inc. and Richardson Partners Financial Limited.

For further information, please contact your financial advisor, call our investor relations line at 416-642-9051, (toll-free at 1-866-642-6001) or visit our website at www.bromptongroup.com.

Commissions, trailing commissions, management fees and expenses all may be associated with investment funds. Please read the prospectus before investing. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to matters disclosed in this press release and to other matters identified in public filings relating to the Fund, to the future outlook of the Fund and anticipated events or results and may include statements regarding the future financial performance of the Fund. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information.

Contact Information

  • Brompton Funds Management Limited
    David E. Roode
    Senior Vice-President
    416-642-6008