Perth Mint Gold product (PMG)

The Perth Mint Gold product (PMG) is a warrant which provides you with direct, non-leveraged exposure to gold. The PMG product is essentially a right created on-market by Gold Corporation to facilitate trading in gold on market.

  • PMGs are structured as long-dated call warrants with a very low exercise price of  50 cents per 100 warrants (no leverage).
  • Tracking the international over-the-counter market spot price of gold, the price will be based on the market value of the gold backing  (1/100th of a troy ounce).
  • The minimum exercise set is 100 warrants, which entitles you to take delivery of 1 troy ounce of fine gold (99.99% purity). An additional fee may be payable at the time of exercise, depending on the form of settlement that is elected.
  • An annual management fee is payable to the issuer on 31 December each year. The issuer will deduct the appropriate number of warrants from your total holding during a period of deferred settlement trading commencing on 31 December each year. 
  • Throughout the year, the time value of the annual management fee will be included in the warrant price.

Benefits of the PMG product

  • The PMG product allows you to effectively diversify your portfolio into gold. Rather than purchasing physical gold, the PMG product tracks the Australian Dollar gold price cent for cent (adjusted for the conversion ratio).

Risks of the PMG product

  • The underlying asset fails to perform as you expected.

Example


Warrant code ZAUWBA
Underlying parcel One troy ounce of fine gold (99.99% purity)
Warrant type Low exercise price call warrant
Expiry date 31 December 2013
Exercise price $0.50 per 100 PMGs
Exercise style American-style
Conversion ratio 100
Management fee An annual Management Fee is payable to the issuer on 31 December each year
Settlement method Physical delivery or cash settlement (fees may apply)

Each PMG entitles you to buy one hundredth of a troy ounce of fine gold on or before 31 December 2013.  Upon exercise of 100 warrants and payment of the exercise price of $0.50 (per 100 PMGs) you may take physical delivery in any of the Perth Mint's bar or coin products. Alternatively you can nominate cash settlement (additional fees apply). The disclosure document outlines the terms and conditions.

You should be familiar with those prior to trading. You can access information on how to find a disclosure document on the ASX website. Alternatively, you may contact your adviser or the warrant issuer.

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