Sprott Physical Uranium Trust will hold uranium directly and in corporate form as a closed-end (non-MFT) trust

The Sprott Physical Uranium Trust was formed in April 2021 to acquire all the common shares of Uranium Participation Corporation (“UPC”), an OBCA corporation, under a Plan of Arrangement. UPC held over US$600 million in uranium through a Bermuda subsidiary, which will be wound-up under s. 88(3). The Trust has now issued a Short Form Base Shelf Prospectus for the further issuance of units by it, which will continue to be listed on the TSX.

As it is a closed-end trust (presumably with an eye to not triggering corporate tax), the Trust does not qualify as a s. 108(2)(a) unit trust or as a mutual fund trust. However, in order to avoid a deemed disposition on its 21st anniversary, it is directed in its trust agreement to become a unit trust before then.

It does not expect to be subject to SIFT tax, on the basis that the Uranium held by it and UPC will not be non-portfolio property. It and UPC do not expect to dispose of uranium except to fund administrative expenses, so that the uranium is expected to be capital property.

Neal Armstrong. Summary of 10 August 2021 Short Form Base Shelf Prospectus of Sprott Physical Uranium Trust under Commodity Funds – Metals Funds.