(Source: Canada Newswire)
TORONTO, Aug. 26 /CNW/ - Gold Participation and Income Fund (the "Fund"), a closed-end 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 completed an issuance of an additional 50,000 Combined Units pursuant to the exercise of the over-allotment option granted to the Fund's agents in its recently completed initial public offering. Altogether, the Fund has raised gross proceeds of $28.2 million under the offering, including the proceeds from the over-allotment option.
The Fund is also announcing the separation of the Combined Units into Units and Warrants to purchase Units of the Fund. The Units and the Warrants are listed on the Toronto Stock Exchange under the symbols GPF.UN and GPF.WT, respectively.
Each Warrant of the Fund entitles its holder to purchase one Unit of the Fund at a subscription price of $12.00 on November 6, 2009, February 5, 2010, May 7, 2010 or August 6, 2010 (each, an "Exercise Date"). Although the Warrants may be tendered for exercise during the two-week period up to and including each Exercise Date, it is recommended that holders tender their Warrants for exercise no later than two business days prior to the applicable Exercise Date.
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.
The offering was 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.
(c) 2009 Canada Newswire. Provided by ProQuest LLC. All rights Reserved.
A service of YellowBrix, Inc.
