Sprott is short 1.8moz of silver

[heyimderrick]

I think here, nobody think sprott know a lot of precious metals. And i think he first buy long silver futures and when he lock in the price he put the price in the ipo.
Its a very easy thing and i think here a lot of dealers use the same tool to hedge the stock when they think silver is overbought.

Maybe you lost me in translation.... Sprott doesn't know a lot about precious metals, and establishing/managing a fund in a regulated market is a very easy thing? I'm sorry, but I have to respectfully disagree that growing a fund into a respectable $1.1 billion investment vehicle is easy.

 

[Thor122]

I think here, nobody think sprott know a lot of precious metals. And i think he first buy long silver futures and when he lock in the price he put the price in the ipo.
Its a very easy thing and i think here a lot of dealers use the same tool to hedge the stock when they think silver is overbought.

Maybe you lost me in translation.... Sprott doesn't know a lot about precious metals, and establishing/managing a fund in a regulated market is a very easy thing? I'm sorry, but I have to respectfully disagree that growing a fund into a respectable $1.1 billion investment vehicle is easy.

I say is easy to eric sprott make a ipo to raise funds. And lock in price before fix the ipo price.
Pslv allways trade a premium over spot or slv.
But i like more slw.

 

[THUCYDIDES79]

Everyone will now try to make money of these news.

and we will see each other in a few months when the dust settles.

 

[bron suchecki]

Your title is misleading by confusing a trading term that implies Sprott is shorting silver with contracts equivalent to 1.8m ounces, which is not the case. But, looking at the comments from others above, that seems to be what others thought after reading it.

In the world of trading the word "short" does not imply active purchase of short contracts. "Short" just means that the person is taking a position that requires prices to fall to make money (or lose money if prices rise). That can come about by selling a futures contract or by taking people's money and NOT buying what you said you would. Sprott took $200m of cash and only bought $150m of silver. He is therefore still "short" another $50m.

The language of the prospectus leads me to believe that the fund does not purchase any of the bullion through a paper exchange like COMEX.

Agreed, Sprott would have bought the metal via his underwriters which have bullion banking arms, being Morgan Stanley, RBC Capital Markets, TD Securities Inc, & HSBC Securities.

The current cash holding is equivalent to about 5.4%, not a considerable difference from the 3% they aim to hold.

Pre the issue he was holding 1% as cash, so it is reasonable to expect that he should get back to that, but even if he decides to hold 3% as cash, that still leaves him "short" 2.4%

 

[Club2USilver]

If he buys all that in physical silver, even 1.8 million at once, would that even register in the manipulated paper price exchanges? Don't they buy and sell a years worth of physical some trading days?

How many million ounces did they put together to establish the entity, i cant remember, the fact that did stick was that it took 3 months to collect it all and take delivery

 

[bron suchecki]

Regarding that 3 months to get the silver, the fact that Sprott did not sue anyone means there was no breach of contract, that is, he purposely contracted with the bullion banks with delayed settlement dates. Read this for an alternative to the "shortage" meme view http://screwtapefiles.blogspot.com.au/2011/08/erics-delivery.html

 

[Silverthorn]

Regarding that 3 months to get the silver, the fact that Sprott did not sue anyone means there was no breach of contract, that is, he purposely contracted with the bullion banks with delayed settlement dates.

That's just speculation surely?

Read this for an alternative to the "shortage" meme view http://screwtapefiles.blogspot.com.au/2011/08/erics-delivery.html

I thought getting silver was supposed to be easy? From what you've said previously I thought the Perth Mint gets silver delivered by the container load from London with out any dramas.

 

[Silverthorn]

Looking back Sprott was talking about taking delivery of 15,000,000 ounces of silver which, using that calculator, comes out as 425 tonnes. That's about 22 containers going by the 20 tonnes per container he is using. Not a big task for a couple of good forklift drivers and a bunch of trucks. That's assuming any of this if factor when Sprott talks about taking delivery.

edit

the more I look at this the more I think its a tempest in a teapot. the propestus indicates he can hold up to 10% in cash etc and the 50-60 million being talked about are in regard to a 1billion dollar fund.

 

[bron suchecki]

Not speculation, a blogger I know contacted Sprott investor relations people and asked the direct question and they said there was no breach of contract.

We were shipping in 20t a week, not all at the same time.

As to the logistics, the linked article contains my comments on that (and it was 632t, not 425t) eg have you considered the fact that each bar should be checked off against the bar list re weight, bar number etc or do you suppose Sprott should just trust the bullion banks?

 

[Silverthorn]

Perhaps I'm a talking about a different delivey then. I watched Sprott on youtube and he said 15,000,000 ounces took 3 months to deliver? Has he had further delivery problems?

The prospectus says, where it can be, the silver will be purchased in the US and Canada so no I don't think its that big a deal. Worst case its only twenty times bigger than your 20ton shipments going by my estimates. Biggest bottle neck I'd see is the ports and 20 containers is not a big deal for international ports but getting your trucks back and forth might be an issue. Inventory as you go I can't see as being a major deal either unless the industry is not geared up to handle significant volumes this should all be straight forward stuff I'd of thought. You seemed to indicate previously getting silver was no big deal and now it is.

Nor do I think 50 or 60 million in a billion dollar fund is a big deal or do I have that wrong as well?

Did your blogger also say they had delayed settements dates or is that your interpretation about there being no breach of contract. I take it when you say no breach of contract that you mean there can't have been any delays?

 

[bron suchecki]

Perhaps I'm a talking about a different delivey then. I watched Sprott on youtube and he said 15,000,000 ounces took 3 months to deliver? Has he had further delivery problems?

He said he only had 3 month delivery with intial offerring, which was 22moz so maybe Canadian Mint already had 7moz on site.

Biggest bottle neck I'd see is the ports and 20 containers is not a big deal for international ports but getting your trucks back and forth might be an issue. Inventory as you go I can't see as being a major deal either unless the industry is not geared up to handle significant volumes this should all be straight forward stuff I'd of thought.

You might want to consider that shipping sea containers of undies from China is a bit different than shipping precious metals, so maybe not as straight forward as you might think.

You seemed to indicate previously getting silver was no big deal and now it is.

Buying the silver is no big deal. But asking for it to go to locations like Canada or Perth which are not where the majority of physical is located (being London & New York) is a big deal when you are talking about one lot of 15moz. It is why all the ETFs hold their silver in London.

Nor do I think 50 or 60 million in a billion dollar fund is a big deal or do I have that wrong as well?

If it dilutes the amount of ounces backing your shares then I'd think the existing holders of PSLV might consider it a big deal.

Did your blogger also say they had delayed settements dates or is that your interpretation about there being no breach of contract. I take it when you say no breach of contract that you mean there can't have been any delays?

The investors relations people just said that there was no breach of contract but declined to say how it was purchased. Logically then this means that Sprott knowingly entered into contracts with bullion banks which specified delivery in the future. He did not have to do this and had alternatives, as I explain in the screwtapefiles post.

 

[fiatphoney]

If ya itching for a fight, if you pick the Bron, don't expect Victor to come cleaning up the mess

 

[Silverthorn]

Perhaps I'm a talking about a different delivey then. I watched Sprott on youtube and he said 15,000,000 ounces took 3 months to deliver? Has he had further delivery problems?

He said he only had 3 month delivery with intial offerring, which was 22moz so maybe Canadian Mint already had 7moz on site.

Biggest bottle neck I'd see is the ports and 20 containers is not a big deal for international ports but getting your trucks back and forth might be an issue. Inventory as you go I can't see as being a major deal either unless the industry is not geared up to handle significant volumes this should all be straight forward stuff I'd of thought.

You might want to consider that shipping sea containers of undies from China is a bit different than shipping precious metals, so maybe not as straight forward as you might think.

You seemed to indicate previously getting silver was no big deal and now it is.

Buying the silver is no big deal. But asking for it to go to locations like Canada or Perth which are not where the majority of physical is located (being London & New York) is a big deal when you are talking about one lot of 15moz. It is why all the ETFs hold their silver in London.

Nor do I think 50 or 60 million in a billion dollar fund is a big deal or do I have that wrong as well?

If it dilutes the amount of ounces backing your shares then I'd think the existing holders of PSLV might consider it a big deal.

Did your blogger also say they had delayed settements dates or is that your interpretation about there being no breach of contract. I take it when you say no breach of contract that you mean there can't have been any delays?

The investors relations people just said that there was no breach of contract but declined to say how it was purchased. Logically then this means that Sprott knowingly entered into contracts with bullion banks which specified delivery in the future. He did not have to do this and had alternatives, as I explain in the screwtapefiles post.

So the problem is a third less than your link indicates. We also don't know how much is coming from overseas. It could be coming from multiple locations some from Canada, the US and overseas we just don't know and at any rate is being handle by people who presumably are use to shipping so I think I stick to it being not so much of a big deal. I've worked in warehouses, driven forklifts, packed containers. Nothing you've said would indicate to me delivery would be a big deal in what should be an even more professional and on the ball organisations.

And from one blogger's account we are speculating specification of delivery dates in the future.

It seems to be a tempest in a speculative teapot.

edit

I should say its not a big deal if the silver sitting inventoried and ready to go. If they have to manufacture it that's a different thing again and from what sprott said he thought some it was manufactured after the order was put in.

 

[havo]

honestly, ask yourselves are you smarter than sprott?

 

[Silverthorn]

honestly, ask yourselves are you smarter than sprott?

Sprott's dumb. He got screwed over buying silver which we're told is easy to buy but it gets mixed up with the platinum and palladium and has to be sorted before it gets shipped.

It only comes from London. North America can't supply silver of any quantity.

 

[havo]

get back to us all when you make your first billion

 

[bron suchecki]

So the problem is a third less than your link indicates. We also don't know how much is coming from overseas. It could be coming from multiple locations some from Canada, the US and overseas we just don't know and at any rate is being handle by people who presumably are use to shipping so I think I stick to it being not so much of a big deal. I've worked in warehouses, driven forklifts, packed containers. Nothing you've said would indicate to me delivery would be a big deal in what should be an even more professional and on the ball organisations.

You haven't worked with precious metals, and vaults are not warehouses where you can zoom around with a forklift - they are designed to slow down as much as possible the getting out of stuff so it is harder to steal, so slow to get it in as well.

Anyway, with your expertise you should be able to estimate how long it would take to unload 15,000 30kg silver bars (based on the details in the screwtapefiles post) into a sally port with room for probably only 2 containers worth, say only check weighing 3 bars per pallet (10% sample), then moving into a vault where the door/entry has only about 2cm clearance either side of a standard pallet, and stacking as per the picture in the screwtapefiles post. How many people and total man hours, with a breakdown per task so everyone can see your hours are realistic.

And from one blogger's account we are speculating specification of delivery dates in the future.

I saw the emails from Sprott's IR to the blogger so it is not a speculation, but a logical conclusion. The bars were delivered after the purchase (ie priced agreed) and there was no contractual breach, therefore the contract was for future delivery dates. Care to provide another logical explaination of those facts?

I should say its not a big deal if the silver sitting inventoried and ready to go. If they have to manufacture it that's a different thing again and from what sprott said he thought some it was manufactured after the order was put in.

Exactly, Sprott knowingly contracted for future delivery and confirmed that occured in his various podcasts. Where he was misleading was saying he was surprised about that

 

[Silverthorn]

Sorry. All I see is hype in one of your links, a huge error and hype in the other and speculation on your part about the meaning of something.

 

[BootyBandit]

Source:

 

[Black_Sun]

... vaults are not warehouses where you can zoom around with a forklift - they are designed to slow down as much as possible the getting out of stuff so it is harder to steal, so slow to get it in as well... then moving into a vault where the door/entry has only about 2cm clearance either side of a standard pallet ...

Interesting point.