The Royal Canadian Mint is getting into the gold-fund game.
Investors have long been able to buy gold from the mint. They will soon be able to invest in the gold and keep their bullion in the Royal Canadian Mint's vault.
The mint is planning a $250-million initial public offering of exchange traded receipts representing holdings of gold stored at the mint. The mint will take the proceeds of the offering, buy gold and put it in the vault.
The receipts are expected to trade on the Toronto Stock Exchange, giving investors an easy way to buy and sell. Investors will also be able to redeem their receipts for bars or coins, or cash based on the gold price.
The sale means the mint will be in direct competition with some private-sector offerings, including gold ETFs, the Sprott Physical Gold Trust and Central Fund of Canada .
The mint, in an investor presentation, is billing the deal as the "purest gold listed investment in the world." Not only that, there's the Canadian government standing behind the gold holdings.
"Each Gold ETR constitutes a direct unconditional obligation of Her Majesty in right of Canada," the presentation says.
Just don't go thinking the government will be there to bail you out if gold crashes -- the Mint took pains to point out that "ETR holders will have no recourse to the Mint or the Government of Canada for any loss on their investment."
The Mint is said to have been thinking about such an offering for some time, but put out a request for proposals only a few weeks back. Through that process, Toronto-Dominion Bank and National Bank Financial won the rights to co-lead the deal.