TORONTO, ONTARIO--(Marketwired - Apr 25, 2015) - Central GoldTrust ("GoldTrust") (TSX:GTU.UN) (C$) (TSX:GTU.U) (US$) (NYSE MKT:GTU) (US$): As we noted in our April 23, 2015 press release, Sprott Asset Management LP ("Sprott Asset Management") has announced its intention, together with Sprott Physical Gold Trust ("Sprott Physical Gold" and together with Sprott Asset Management, "Sprott") to make a hostile offer to acquire all of the outstanding units of GoldTrust. No offer has yet been received, and unitholders are advised to do nothing until after an offer is actually made and GoldTrust's Independent Trustees make their recommendation to unitholders.
Since announcing its intention to make an offer, Sprott's management has made several comments in the media, promoting Sprott and its products, and making disparaging remarks about GoldTrust and your management, being the Trustees and senior officers of GoldTrust.
GoldTrust wishes to set the record straight.
Sprott Physical Gold is not the "gold standard" of gold bullion investment entities, as Sprott suggests - it is simply a different product. Moreover, Sprott Physical Gold does not compare favourably to GoldTrust in a number of important areas that are highlighted below. We believe that these differences explain why many investors have purchased and continue to hold units of GoldTrust, instead of competing products such as Sprott Physical Gold:
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GoldTrust has an Independent Board of Trustees, a Corporate Governance and Nominating Committee and an Audit Committee whereas Sprott Physical Gold does not.
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GoldTrust's administration fees are 43% lower, and its total expense ratio is 30% lower than Sprott Physical Gold's, even though GoldTrust's asset base is much smaller than Sprott Physical Gold's. GoldTrust is also the only gold bullion entity with a sliding scale administration fee that decreases as the trust's net assets grow.
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GoldTrust's bullion is stored in the highest security rated underground vault of a major Canadian chartered bank on a fully allocated and physically segregated basis. This makes GoldTrust the most secure of any Canadian gold bullion entity.
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GoldTrust's administrator and founder, Central Gold Managers Inc., is North America's most experienced administrator of a publicly traded gold bullion investment entity.
Bruce Heagle, Chairman of the Special Committee of Independent Trustees, stated: "We are surprised and disappointed that Sprott did not approach GoldTrust prior to announcing its intended offer. We also find the timing of the announcement very curious, in that it occurs just prior to our upcoming annual and special meeting of unitholders and after independent proxy advisory firms Institutional Shareholder Services Inc. (ISS) and Glass, Lewis & Co. have both recommended that GoldTrust unitholders vote against the dissident proposals made by Polar Securities Inc., on behalf of its Cayman Islands based hedge fund, North Pole Capital Master Fund (together, "Polar"), which call for the adoption of a physical bullion redemption feature similar to the one currently available from Sprott Physical Gold. However, your Trustees will diligently evaluate any Sprott offer if and when made, and report back to unitholders in due course. In the interim, GoldTrust unitholders are advised to take no action in relation to Sprott's anticipated offer."