The goal of the Sprott Physical Gold Trust and Sprott
Physical Silver Trust and Sprott Physical Platinum and Palladium
Trusts ("the Trusts") is to provide a secure, convenient
and exchange-traded investment alternative for investors who want
to hold physical bullion. The Trusts offer a number of compelling
advantages over traditional exchange-traded bullion funds.
1) Secure Storage
The Trusts' physical gold, silver, and platinum bullion is fully
allocated and stored at a secure third party storage location in
Canada. The physical palladium bullion is fully allocated and
segregated in a secure third party storage location in London and
Zurich. The physical bullion is subject to a physical count
periodically on a spot inspection basis and subject to audit
procedures by the Trusts' external auditors on at least an annual
2) Bullion Assets Not Held With a Bank Owned
Unlike most traditional exchange-traded precious metals funds,
the Trusts hold their bullion assets in custody at a Federal Crown
Corporation of the Government of Canada. There is no levered
financial institution between the unitholders and the Trusts'
physical bullion and no risk of financial loss in the event of a
bankruptcy or nationalization of the financial institution.
3) Potential Tax Advantage For Certain U.S.
For U.S. non-corporate investors who hold units for one year and
timely file a QEF form, gains realized on the sale of the Trusts'
units are currently taxed at a long-term capital gains rate with a
maximum of 20%, versus a maximum of 28% applied against most
precious metals ETFs and physical coins.
For more information, please see ''Tax Considerations-U.S.
Federal Income Tax Considerations" in the Prospectus and always
consult your tax accountant regarding your particular
4) Ability to Redeem Units for Physical
Subject to minimum redemption amounts, Unitholders have the
ability to redeem their units for physical bullion on a monthly
basis. Please see "Redemption of Units" in the Prospectus for
The bullion Custodian can deliver the bars almost anywhere in
the world via an Armored Transportation Service Carrier. Physical
redemptions will never dilute remaining unitholders. All physical
redemptions are equal to 100% of the NAV of the redeemed units,
less redemption and delivery expenses, including the handling of
the notice of redemption and the applicable bullion storage
5) Investment in Physical Bullion Only
With the exception of cash held by the Trusts to pay expenses
and anticipated redemptions, the Trusts exclusively invest in
physical bullion. At any given time, the Manager intends to hold
97% of the total net assets of the Trusts in physical bullion in
London Good Delivery bar form for the gold and
silver bullion and in Good Delivery plate and/or ingot form for the
platinum and palladium bullion. The Trusts do not invest in
precious metals or platinum or palladium certificates or other
financial instruments that represent precious metals or platinum or
palladium or that may be exchanged for precious metals or platinum
6) Fully Allocated Physical Bullion - No
The Trusts' bullion holdings are fully allocated. Unlike other
bullion funds, the Trusts do not have an unallocated account that
is used to facilitate transfers of bullion between financial
institutions that act as authorized participants. Without
exception, all of the bullion owned by the Trusts is held in the
Trusts' allocated accounts in physical form.
7) Potential to Trade at a Premium to Net Asset
Because of their unique features and favourable tax treatment,
units of the Trusts have the potential to trade at a premium to
their net asset value. This offers investors a unique opportunity
to profit from higher bullion prices as well as any market price
increases relative to the NAV. The Trusts may also trade at a
* The information provided is general in nature
and is provided with the understanding that it may not be relied
upon as, nor considered to be, the rendering or tax, legal,
accounting or professional advice. Readers should consult with
their own accountants and/or lawyers for advice on the specific
circumstances before taking any action.