Sprott’s New ATM Program: A Strategic Play in Precious Metals Markets?

The Sprott Physical Gold and Silver Trust (CEF) has expanded its “at-the-market” (ATM) equity program, unlocking up to $250 million in new capital-raising capacity to acquire physical bullion. This move underscores the trust’s ambition to capitalize on shifting investor sentiment toward precious metals while navigating a complex macroeconomic landscape. Let’s dissect the implications of this update for investors.

The Mechanics of Sprott’s ATM Program

The revised program allows the trust to issue up to $250 million in units on both the NYSE Arca and Toronto Stock Exchange, using the prevailing market price at the time of sale. Unlike traditional equity offerings, this structure grants Sprott discretion over the timing and volume of issuances, enabling it to scale its bullion holdings dynamically. Key agents in both the U.S. and Canada will execute sales, with proceeds directed entirely toward purchasing physical gold and silver.

This flexibility is critical. A reveals a persistent 4–5% discount to NAV. By issuing shares at market prices, the trust could theoretically narrow this gap if demand for its units outpaces supply—a potential tailwind for investors seeking to minimize valuation drags.

Market Context and Risks

As of April 2025, Sprott held $5.95 billion in physical assets, with a NAV per unit of $30.57 versus a market price of $29.20. The trust’s management fee of 0.47% is relatively low for a physically backed vehicle, but investors must weigh this against the risks of precious metals volatility and widening NAV discounts.

illustrates its outperformance relative to silver’s spot price but a slight lag behind gold’s trajectory. This divergence suggests the trust’s silver-heavy allocation (52.8 million ounces vs. 1.27 million ounces of gold) could amplify downside risk if gold outperforms silver in a prolonged bear market.

Why This Matters for Investors

The ATM program positions Sprott as a nimble player in a sector often constrained by fixed issuance schedules. By avoiding debt and focusing on organic growth through equity sales, the trust mitigates leverage risks while maintaining its core mandate. This is particularly advantageous in a market where central banks’ monetary policies and geopolitical tensions are major drivers of precious metals demand.

However, the success hinges on two variables:
1. Demand for physical exposure: If investors continue to favor ETFs or futures over physical bullion, the trust may struggle to justify its NAV premium.
2. Price discipline: Issuing too many units during periods of low demand could exacerbate the discount. Sprott’s track record—averaging a 10.98% annual NAV return since 2018—suggests management has historically balanced these risks effectively.

Conclusion: A Calculated Move with Upside Potential

The Sprott Physical Gold and Silver Trust’s ATM program update is a strategic response to the dual pressures of investor appetite and market volatility. With $250 million in new issuance capacity and a disciplined focus on physical assets, the trust is well-positioned to grow its holdings while offering investors a tangible hedge against economic uncertainty.

Yet, the 4.47% NAV discount and reliance on silver’s underperformance relative to gold highlight risks. A would further clarify its long-term viability. For now, the program’s flexibility and low fees make it a compelling option for those seeking physical precious metals exposure—provided investors remain aware of the valuation gap and metal-specific risks.

In a world where gold has surged 15% year-to-date and silver lags at 5%, Sprott’s silver-heavy portfolio demands close scrutiny. But with geopolitical tensions and central bank policies likely to keep metals in the spotlight, this update positions the trust to capitalize on the next leg of demand—if it can execute flawlessly.