The Central Fund of Canada has been one of the leading (honest) bullion based stocks available in north america for years. They are now loooking to purchase more physical.
TORONTO, ONTARIO--(Marketwire - 05/11/10) - Central Fund of Canada Limited ("Central Fund") (TSX:CEF.A - News)(TSX:CEF.U - News)(AMEX:CEF - News) of Calgary, Alberta announced today that it has entered into an underwriting agreement with CIBC World Markets Inc., as lead underwriter, and Credit Suisse Securities (Canada) Inc. (the "Underwriters"), under which the Underwriters have agreed to buy and sell to the public, in Canada (except Quebec) and in the United States under the multijurisdictional disclosure system, 23,600,000 Class A Shares of Central Fund. The Underwriters have been granted the right to increase the size of the offering (the "Right") by up to an additional 1,700,000 Class A Shares, exercisable in whole or in part, at any point prior to 4:00 pm (EST) on May 11, 2010. The offering will be made under a second prospectus supplement to Central Fund's U.S.$1,000,000,000 base shelf prospectus dated September 8, 2009.
The purchase price of U.S.$14.85 per Class A Share is expected to result in gross proceeds of approximately U.S.$350 million. Substantially all the net proceeds of the offering have been committed to purchase gold and silver bullion for settlement at closing, in keeping with the asset allocation policies established by the Board of Directors of Central Fund. Any additional capital raised by this offering is expected to assist in reducing the annual expense ratio in favour of the Shareholders of Central Fund.
Closing is expected to occur on or about May 18, 2010.
