RANTING ANDY – All I can say is WOW – nice job to Eric, for attacking when the Cartel is down!
With gold closing at an all-time high yesterday, PHYS was able to price $266 million of stock (soon to be $305 million when the greenshoe is exercised) at $14.00/share, the EXACT price PHYS closed at last night.
As you know, I have been following CEF/GTU/SBT offerings for years, and on average the discount to the closing price has tended to be 7% in the past, or perhaps 4%-5% in recent years as PM demand has surged. PHYS actually closed its last deal at something like a 1% discount to the closing price, and this one AT the prior day’s closing price.
I have for many years stated that at some point these deals would trade at PREMIUMS to the close due to the likely positive impact of the purchases on physical markets, although of course at some point soon such deals will no longer occur because large amounts of physical gold will not be available. In fact, as I wrote last week, I am 99% sure that Sprott chose to offer PHYS (gold), trading at a 4% premium to NAV, instead of PSLV (silver), which trades at a whopping 20% premium, due to their fear that the silver will not be delivered. The last PSLV offering took 3-4 months to be delivered, and with the global financial system on the brink of collapse, I’d estimate delivery risk to be a 10 out of 10 right now!
Eric Sprott and his team have tightened the noose further, just as their early April $340 millon offering of PSLV (and a simultaneous Spicer $366 million offering of CEF) ignited silver’s run to $50 a month later, a level I am 100% confident will be seen again later this year.
As for the pitiful Cartel, as I wrote in my rant a week ago (“THE END GAME IS NOW (July 8, 2011), ARE YOU PREPARED?), they are finally being overrun by demand, with their only real goal today to protect $1,600 gold from being taken out (and simultaneously $40 silver).
I firmly believe they will be in body bags by the time GATA’s GOLD RUSH 2011 conference occurs in early August, and if not shortly thereafter.
You have perhaps three months before the massive increase in prices of life necessities occurs, and at some point in the not-so-distant future I believe that PHYSICAL gold and silver may not even be available for sale.
PROTECT YOURSELF, and do it NOW!