Frequently Asked Questions

The following questions and answers have been prepared to provide potential investors with a brief summary of some of the features of the ETRs. The information given in such answers is subject to, and should be read in conjunction with, the Program Documents .

Who is the issuer and what are its obligations under the Canadian Silver Reserves Program?

The issuer of the ETRs is the Royal Canadian Mint.

The Mint is for all purposes an agent of Her Majesty in right of Canada. Subject to the terms of the ETRs, the ETRs constitute direct unconditional obligations of the Mint and as such constitute direct unconditional obligations of Her Majesty in right of Canada. Accordingly, the Mint's obligations under the ETRs are backed by the full faith and credit of the Government of Canada. If the Mint fails to make available silver bullion or cash in connection with a redemption, or cash in connection with a termination of the Program, ETR Holders would be entitled to enforce their rights against the Government of Canada.

The obligations of the Mint are to securely store the silver bullion underlying the ETRs in its facilities and, on redemption, to make available the applicable amount of silver bullion for physical delivery upon the request of an ETR Holder or to deliver the cash redemption amount. The silver bullion is stored by the Mint on an unallocated basis, such that the silver bullion owned by an ETR Holder is not held separately from the other unallocated silver bullion held at the Mint, including the silver bullion underlying other ETRs.

What does each ETR represent?

Each ETR represents an equal undivided direct legal and beneficial interest in physical silver bullion to be held for the account of the ETR Holder in custody by the Mint. The Per ETR Entitlement to Silver is fixed on the Issue Date and is expressed as a fraction of one troy ounce of silver as of the Issue Date, reduced daily by the Service Fee charged by the Mint.

Who owns the silver bullion underlying the ETRs?

The silver bullion underlying the ETRs is legally and beneficially owned by the ETR Holders and not by the Mint. The net proceeds of the Offering is applied to the purchase of silver bullion from third party suppliers on behalf of the initial purchasers of ETRs. Such silver bullion was delivered to the Mint's facilities on the Issue Date. The Mint acts as custodian of the silver bullion on behalf of the ETR Holders and holds the silver bullion in its facilities. Legal and beneficial ownership of the silver bullion at all times remains with the ETR Holders. In the ordinary course of its business of silver refining and coin manufacturing the Mint uses silver bullion held on an unallocated basis for third parties and expects to do the same with some or all of the silver bullion underlying the ETRs. The Mint at all times maintains in its facilities unallocated silver bullion in an amount that is equal to or exceeds the amount owned in aggregate by ETR Holders.

Will the purchasers of ETRs under this Offering receive certificates representing the ETRs purchased?

ETR Holders will not be entitled to receive certificates evidencing the ETRs in definitive form. One or more definitive silver ETR certificates evidencing the ETRs will be issued on the Issue Date to CDS as the nominal holder of all outstanding ETRs.

When can I redeem my ETRs for silver bullion or cash? Are there any restrictions on redemption and am I responsible for any related expenses?

ETR Holders can elect to redeem ETRs for silver bullion or cash on a monthly basis by delivery of a notice to redeem. Notices to redeem are irrevocable. The 15th day of each month (or, if not a business day, the next succeeding business day) will be a Redemption Date. A notice to redeem ETRs must be received by the Transfer Agent by 5:00 p.m., Toronto time, on the fifth business day immediately preceding a Redemption Date. Any notice of redemption received after such time will be processed on the subsequent Redemption Date.

Redemption requests for physical silver bullion must be in respect of a minimum of 5,000 ETRs. There is no minimum number of ETRs required for a cash redemption.

An ETR Holder redeeming for physical silver bullion is responsible for arranging pick-up and delivery via industry-recognized armoured carrier, as set out on the Program Website, at its own expense. The physical silver redemption proceeds are paid net of a redemption fee which is currently C$100 per redemption request, and fabrication fees in amounts based on the type of silver bullion product requested.

Does the Mint charge a fee for providing the Program?

Yes. The Mint charges a Service Fee in respect of its management, storage and custodial services. The Service Fee is calculated and accrued daily at an annual rate of 0.45% of the Per ETR Entitlement to Silver on each day on all outstanding ETRs and paid monthly in arrears on the 15th day of each month (or if not a business day, on the next succeeding business day). On such day each month, the Mint will withdraw an amount of silver bullion as necessary to satisfy the Service Fee payable in respect of the ETRs for the preceding month. Accordingly, the amount of silver bullion underlying each ETR will decrease daily as the Service Fee is accrued. The Service Fee may be varied by the Mint at any time, but only after giving not less than 10 days' advance notice in the event of a decrease in the Service Fee and not less than 90 days' advance notice in respect of any other change to the Service Fee.

Will the Mint pass along any additional fees or expenses to ETR Holders?

No. The Mint is responsible for all costs and expenses incurred in connection with the on-going operation and administration of the Program including regulatory compliance and legal expenses.

Why would I exercise a Purchase Right?

It would be beneficial to exercise a Purchase Right if an ETR Holder wanted to acquire additional silver and believed silver could be acquired on more favourable terms through the exercise of a Purchase Right than through the purchase of ETRs on the TSX. Assuming that the ETRs trade at a premium to the NAV per ETR, if an ETR Holder believes that the premium plus the trade execution expenses will exceed the costs expected to be associated with the exercise of a Purchase Right, it would be advantageous to acquire additional ETRs through the exercise of a Purchase Right rather than on the TSX. The quantum of the Mint's out-of-pocket expenses cannot be determined with certainty at this time. However, the Mint will notify ETR Holders of the estimated expenses sufficiently in advance of the applicable Exercise Date to enable ETR Holders to make an informed decision regarding the exercise of the corresponding Purchase Right.

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