If you think that silver demand is tempering as prices have passed $40.00 and then some, the iShares Silver Trust (NYSE: SLV) is about to get even larger. After reviewing SEC filings, a filing from last night shows that the trust has filed to sell 50,000,000 shares. The filing to sell more shares in the trust comes on the heels of news reports that its silver holdings had fallen by 198.78 tonnes.
The dollar figure used in the registration is $2.199 billion. After going to the iShares Silver website, the current market cap of the trust is $16.09 billion, its shares outstanding are 364.1 million, and it claims to hold more than 355.36 million ounces of silver.
As fas as the use of proceeds: Proceeds received by the trust from the issuance and sale of Baskets consist of silver deposits. Such deposits are held by the custodian on behalf of the trust until (i) delivered to Authorized Participants in connection with a redemption of Baskets or (ii) sold to pay the fee due to the sponsor and trust expenses or liabilities not assumed by the sponsor.
The trustee is The Bank of New York Mellon and the custodian is JPMorgan Chase Bank N.A., London branch. The trustee is responsible for the day-to-day administration of the trust and the custodian is responsible for safekeeping the silver owned by the trust.
The filing also keeps referring to baskets, which allow for baskets of 50,000 shares to be issued.
Keep in mind that this does not require a full secondary offering as you would see if this was a silver mining company raising cash. The trust is just about to get larger, and that means that if it does issue new shares that there will be more silver buying. The full SEC FILING is here.
JON C. OGG
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