TORONTO, June 9 /CNW/ - Gold Participation and Income Fund (the "Fund"),
an investment trust designed to provide investors with Canadian-dollar
exposure to the long-term performance of gold bullion and gold equity
securities, while providing a monthly distribution stream and mitigating
downside risk, is pleased to announce that it has filed and received a receipt
for its preliminary prospectus from the securities regulatory authority in
each province of Canada. Under its initial public offering the Fund is
offering Combined Units (each Combined Unit consisting of one Unit of the Fund
and one Warrant for one Unit) at a price of $12.00 per Combined Unit. The
offering is expected to close in mid-July 2009.
The Fund will seek to achieve its objectives by investing 100% of its net
assets in the gold sector - initially 50% in Shares of SPDR Gold Trust, an
exchange-traded fund that seeks to track the price of gold by investing
directly in gold bullion, and 50% in a portfolio (the "Managed Gold
Portfolio") of equity securities selected from the S&P/TSX Global Gold Index,
a dynamic international benchmark of the world's leading gold companies. The
Fund intends to take advantage of the current high volatility of the Managed
Gold Portfolio securities by writing covered call options on approximately 25%
of its portfolio securities in order to mitigate downside risk for holders of
its Units ("Unitholders") and to generate additional returns above the
distribution income earned on its portfolio.
The Fund's investment objectives are: (i) to maximize total returns for
Unitholders including both long-term appreciation in net asset value ("NAV")
per Unit and distributions; and (ii) to pay Unitholders monthly distributions
in an amount targeted to be 6.5% per annum on the NAV of the Fund.
Prospective purchasers may purchase Combined Units either by: (i) a cash
payment; or (ii) an exchange (the "Exchange Option") of Shares of SPDR Gold
Trust or of freely-tradeable listed securities of issuers in the S&P/TSX
Global Gold Index or the S&P/TSX 60 Index (the "Exchange Eligible Issuers").
To utilize the Exchange Option, a prospective purchaser must deposit (in the
form of a book-entry deposit) securities of Exchange Eligible Issuers with the
Fund's agent for the Exchange Option through CDS Clearing and Depository
Services Inc. prior to 5:00 p.m. (Toronto time) on June 26, 2009.
The offering is being made through a syndicate of investment dealers
co-led by RBC Capital Markets and CIBC that includes Scotia Capital Inc.,
National Bank Financial Inc., TD Securities Inc., Blackmont Capital Inc.,
Canaccord Adams, Desjardins Securities Inc., Dundee Securities Corporation,
GMP Securities L.P., HSBC Securities (Canada) Inc., Raymond James Ltd.,
Manulife Securities Incorporated, Richardson Partners Financial Limited and
Wellington West Capital Markets Inc.
For further information:
For further information: John Mulvihill, President and CEO, John
Germain, Senior Vice-President, Sheila Szela, Vice-President, Finance and CFO,
Mulvihill Structured Products, A member of the Mulvihill Capital Management
Inc., Group of Funds, 121 King Street West, Suite 2600, Toronto, Ontario, M5H
3T9, (416) 681-3900, (800) 725-7172, www.mulvihill.com, firstname.lastname@example.org