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Silver Bullion Trust proposes ETF conversion in partnership with Purpose Investments


Silver Bullion Trust (SBT) has entered into a letter of intent with Purpose Investments regarding the proposed conversion of SBT into an exchange-traded silver bullion fund (ETF). 

The proposed conversion will involve certain amendments to SBT's Declaration of Trust that will be subject to approval by SBT unitholders at a special unitholders' meeting expected to be held by the end of January 2016. The proposal is also subject to the execution of definitive agreements, receipt of regulatory approvals and other customary conditions for transactions of this nature. Full details regarding the proposed conversion and its anticipated benefits will be outlined in a management information circular which will be mailed to unitholders in advance of the proposed special meeting.

Purpose is an independent, employee-owned Canadian investment management company established in January 2013 by Som Seif, founder and former CEO of Claymore Investments, a leading Canadian ETF provider, which was purchased by BlackRock, Inc. in 2012. Purpose, which has current assets under management of over CAD1.4 billion across 17 funds, is one of Canada's most experienced ETF managers and has significant experience in managing bullion funds. Purpose and Silver Administrators Limited, SBT's current administrator, will jointly administer SBT following approval of the conversion by SBT unitholders.

Bruce Heagle, Chair of the Special Committee of Independent Trustees of SBT, says: "Your Trustees, acting in the best interests of all unitholders, have conducted a thorough review of available alternatives to address unitholder concerns regarding liquidity and trading discounts to NAV. We are confident that the proposed ETF conversion in partnership with Purpose, a recognised leader in ETFs with significant experience managing bullion funds, will address these concerns and is in the best interests of ALL SBT unitholders. Furthermore, the proposed conversion represents a clearly superior alternative for unitholders to Sprott's inadequate hostile offer. Unitholders are expected to benefit from the elimination of material discounts to NAV and enhanced liquidity, while preserving SBT's low management fees, industry-leading bullion security and safeguards and tax-efficient structure. We look forward to providing unitholders with further information regarding the proposed ETF conversion and partnership with Purpose, so that unitholders may make an informed decision on the future of their investment in SBT. We thank SBT Unitholders for their continued support."

Som Seif, President and CEO of Purpose, adds: "Purpose is honoured to partner with Silver Administrators Limited, a recognised leader in silver bullion investment products. We believe the proposed ETF conversion represents a unique and compelling opportunity for SBT unitholders to participate in a growing, more liquid entity, while maintaining SBT's low fees, industry-leading bullion security and safeguards and tax-efficient structure. In addition, we are very experienced in ETF conversions, as we successfully accomplished similar conversions in our Claymore bullion funds. At Purpose, we are confident that the proposed conversion of SBT to an ETF represents a more attractive alternative for SBT unitholders than the offer from Sprott. We look forward to engaging with unitholders on the benefits of the proposed conversion and to a long and prosperous partnership with SBT unitholders going forward."

SBT has applied to the Ontario Securities Commission to cease trade the Sprott offer. The Trustees have taken this action because they believe the Sprott offer, and Sprott's plan to use unitholder powers of attorney for unauthorised purposes, are contrary to the Securities Act and contrary to the public interest. SBT hopes that the Ontario Securities Commission makes orders that will give unitholders an opportunity to review the merits of the proposed ETF conversion relative to Sprott's hostile offer and be able to make a fully informed choice on the future of their investment in SBT.

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