The Central Group Alberta Ltd. in the acquisition of Central Fund of Canada Limited by Sprott Inc.

On January 16, 2018, Sprott Inc. (“Sprott”) and Central Fund of Canada Limited (“Central Fund“) announced the completion of the previously announced Arrangement Agreement which resulted in:

• the assets of Central Fund being transferred to Sprott Physical Gold and Silver Trust (the “Trust”), a new trust to be formed under the laws of Ontario and managed by Sprott Asset Management LP (“SAM“), a wholly-owned subsidiary of Sprott; and
• each outstanding Class A non-voting share of Central Fund being converted into one trust unit (“Unit”) of the Trust.

In addition, Sprott:

• acquired each outstanding common share of Central Fund at a price of $500 per share payable in cash; and
• indirectly acquired Central Fund’s existing administration agreement from The Central Group Alberta Ltd. (the “Administrator”) for an aggregate purchase price of $100 million, consisting of $85 million in cash and $15 million of common shares (or 6,997,378 common shares) of Sprott. In addition, Sprott and the Administrator will enter into an earnout agreement pursuant to which the Administrator may earn an amount equal to the greater of (1) $5 million and (2) an amount based on a formula related to assets under management on the first anniversary of the Arrangement.

Central Fund is an investment holding company. Central Fund’s investment objective is to provide a secure, convenient, low-cost, exchange tradable investment alternative for investors interested in holding an investment in gold and silver bullion for long-term appreciation.

Sprott is a publicly owned asset management holding company. Through its subsidiaries, the firm provides asset management, portfolio management, wealth management, fund management, and administrative and consulting services to its clients.

Osler, Hoskin & Harcourt LLP represented the Administrator with a team consisting of Jeremy Fraiberg, Alex Gorka and Justin Dharamdial (Corporate), Tristram Mallett (Litigation), and Dov Begun and Chris Sheridan (Taxation).