Sprott Asset Management Requisitions Meeting of Central

• Class A Shareholders with a 99.98% economic interest in the approximately US$3.2 billion Central Fund of Canada Limited will have an opportunity to express their views regarding their company that is controlled by conflicted directors and common shareholders with only a 0.02% economic interest  
• Class A Shareholders will have an opportunity to gain voting rights equivalent to those of the CEF common shareholders, change the underperforming administrator and replace a conflicted and entrenched Board

TORONTO, June 16, 2015 (GLOBE NEWSWIRE) -- Sprott Asset Management LP ("Sprott") announced it has requisitioned a special meeting of Central Fund of Canada Limited's ("CEF") Class A non-voting shareholders ("Class A Shareholders") to bring about positive and necessary change at CEF. The meeting is being requisitioned due to the unwillingness of CEF's Board of Directors (the "CEF Board") to engage with Sprott about potential alternatives that could be attractive to Class A Shareholders and concerns about the conflicted relationships between CEF directors and the Spicer family who own 100% of CEF's administrator (The Central Group Alberta Ltd. ("CGAL")) and control CEF through their ownership of common shares.

In short, Class A Shareholders are currently trapped in a vehicle that trades at an unacceptable discount to its net asset value ("NAV"), with limited liquidity (in particular for a vehicle of its size) and a board that has little or no motivation to explore or implement change due to their close relationships with the Spicer family and the benefits they and/or their family members receive in ensuring that their holding company, CGAL, continues to be paid its annuity under the current administration agreement.

The requisition was made by six of the top Class A Shareholders who together hold approximately 5.4% of the issued and outstanding Class A shares.

Sprott has requested that the requisitioned meeting be held prior to August 15, 2015 in order to permit sufficient time for CEF to implement the will of Class A Shareholders to terminate the administration agreement with CGAL in accordance with its terms.

At the meeting, Class A Shareholders will have the chance to consider resolutions that will, subject to the terms and conditions therein, provide Class A Shareholders who currently have a 99.98% economic interest in CEF the opportunity to:

1. advise the CEF Board with respect to, and ultimately replace, the current administrator with Sprott, a professional manager that will apply its best-in-class management practices with no increase in fees as compared to CEF's current administration agreement and, if mandated by the Class A Shareholders, review and make recommendations with respect to CEF`s redemption features;  
2. gain voting rights equivalent to the common shareholders who only have a 0.02% economic interest in CEF yet currently control 100% of the votes; and  
3. remove the conflicted, non-independent incumbent directors and replace them with accountable and professional Sprott nominees.

The poor performance of CEF relative to its NAV under its current administrator and board is highlighted in the table below, as is the poor performance of the other funds managed by Spicer-controlled entities, Central GoldTrust and Silver Bullion Trust. 

"Sprott believes that CGAL as administrator and the CEF Board have done an unacceptable job of managing this product and we intend to change that," said John Wilson, CEO of Sprott Asset Management. "For the same fee shareholders are paying now and getting virtually nothing in return, Sprott will work hard to eliminate the NAV discount that has plagued your CEF investment and add features that are in the best interest of shareholders. We expect the current Board to treat an expression of will from Class A Shareholders, who represent 99.98% of the equity outstanding in CEF, as binding and not do anything to deny Class A Shareholders the opportunity to have their voices heard."

As proof of the significant potential that Sprott management represents, Wilson pointed to Sprott's offers for units of Central GoldTrust ("GTU") and Silver Bullion Trust ("SBT"). Since Sprott's intention to make the offers was announced, the discounts at which GTU and SBT units trade have already narrowed by 22% and 41%, respectively ¹ .

Sprott first brought the concerns of the Class A Shareholders to the attention of the CEF Board and expressed an interest in exploring alternatives with CEF in a letter on April 23, 2015. Sprott further indicated it would be prepared to discuss such alternatives in the context of Sprott's offers to acquire GTU and SBT. Having since launched these offers, Sprott has still not received from CEF even the courtesy of an acknowledgement of receipt of such letter. This alone is inconsistent with the duty of each member of the CEF Board to act in CEF's best interest; particularly as the financial advisor to the Special Committees of GTU and SBT contacted Sprott to discuss a potential negotiated transaction approximately three business days before the April 23, 2015 letter. Members of the CEF Board are also members of the Special Committees of GTU and SBT, and were presumably aware of and supportive of such contact.

The unwillingness of the CEF Board to discuss or even respond to Sprott`s April 23rd letter highlights the serious issues that exist as to the lack of independence of the CEF Board from CGAL and the members of the Spicer family who own it, and the failure of the directors of CEF to adequately discharge their fiduciary responsibilities in the circumstances.

THE PROBLEM AT CEF

• For more than two years, CEF has traded at a discount to NAV and, in the past, it has traded at a discount in excess of 25%.  
• Sprott believes this poor performance comes as the direct result of the failure to market CEF and is the responsibility of the current administrator, CGAL, and the current CEF Board that has failed to implement change.  
• For more than 20 years, CEF has had a contract with CGAL to provide administration services. CGAL is owned 60% by Philip Spicer and 40% by J.C. Spicer. Since 2012 alone, the Spicers have collected in excess of $24 million in administrative fees from shareholders at CEF and provided little in return while also engaging several directors and their family members as either employees or consultants of CGAL and/or CEF.  
• The current term of the CGAL agreement expires on October 31, 2015 but will continue in force for successive three-year periods unless terminated by the CEF Board at the behest and with the approval of the holders of at least 50% of the Class A Shares. Now is the opportunity for Class A Shareholders to have their voices heard.  
• The CEF Board is made up of friends and insiders with close connections to the Spicers. All of the incumbent CEF directors also sit, or have sat, on at least one of the boards of two other bullion funds managed by the Spicers and/or are "consultants" of CGAL and/or have family members who are paid by CEF or CGAL. In addition, a number of the incumbent CEF directors have participated in a variety of business ventures with the Spicers.  
• Unless the Class A Shareholders are provided with a vote, the CEF Board can only be changed by the holders of common shares of CEF who hold a 0.02% economic interest in CEF, not the Class A Shareholders who hold 254,432,713 shares and a 99.98% economic interest in the company. Similarly, the CEF Board and the holders of common shares are vested with control over all other important decisions made at CEF. The Spicer family owns 49.47% of the common shares and CEF's current board, together with the Spicer family, controls 61% of such shares. Clearly, it is not in the best interests of CEF or the Class A shareholders for this situation to persist.

While the Spicers have collected fees through the administrator on the backs of non-voting shareholders, their friends on the CEF Board appear to have failed to discharge their fiduciary duties. If the Spicers and their friends are firmly entrenched and cannot be removed, nor feel the negative economic impact of their decisions, what incentive do they have to remove themselves as administrator and improve performance?

"Class A Shareholders should have the opportunity to evaluate for themselves whether the incumbent directors are independent from Mr. Spicer and the Administrator," said James Fox, President of Sprott Asset Management. "In our view, the current CEF Board is entrenched, conflicted and is clearly not acting in the best interests of CEF shareholders. Sprott has the proven experience managing bullion products needed to improve performance while maintaining the same fee structure."

THE SPROTT BOARD NOMINEES

The concerned shareholders feel it is necessary and appropriate for Class A Shareholders to be provided with the right to vote, and for the current CEF Board to be replaced with the accountable and experienced nominees being put forward by Sprott in light of CGAL's unsatisfactory performance and the current CEF Board's allegiances to the Spicer family (who control the common shares) and CGAL. The Sprott nominees are as follows:

• Eric Sprott – Chairman of Sprott Inc. and Kirkland Lake Gold Inc.  
• John Wilson – Chief Executive Officer, Co-Chief Investment Officer and Senior Portfolio Manager of Sprott Asset Management GP.  
• Danesh Varma – Chief Financial Officer of Anglesey Mining plc and Minco plc.  
• James (Jim) Sinclair – Chief Executive Officer and President and Director of Tanzanian Royalty Exploration Corp., Chief Executive Officer of Northwestern Basemetals Company Limited and the Chairman of Singapore Precious Metals Exchange.  
• Roman Doroniuk – Financial and strategic advisory consultant and a director of Aimia Inc. and Martinrea International Inc.  
• Mel Leiderman – Senior partner of Lipton LLP, Chartered Accountants and a director of Agnico-Eagle Mines Limited and a trustee of Morguard North American Residential REIT.  
• Jacqueline Jones – Senior legal executive. Recently served as Chief Legal Officer & Corporate Secretary at Franco-Nevada Corporation and previous to that as Senior Vice President, Legal, General Counsel and Corporate Secretary at Yamana Gold Inc.

ABOUT SPROTT ASSET MANAGEMENT LP

Sprott Asset Management LP is the investment manager to Sprott Physical Gold Trust and Sprott Physical Silver Trust (the "Sprott Physical Trusts"). Important information about each of the Sprott Physical Trusts, including its investment objectives and strategies, applicable management fees, and expenses, is contained in the current annual information form for each of the Sprott Physical Trusts, which can be found on its website, in the U.S. on www.sec.gov and in Canada on www.sedar.com . Commissions, management fees, or other charges and expenses may be associated with investing in the Sprott Physical Trusts. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. To learn more about Sprott Physical Gold Trust or Sprott Physical Silver Trust, please visit sprottphysicalbullion.com.

For further information:

Glen Williams Director of Communications Sprott Group Direct: 416-943-4394 or Cell: 647-823-3971 gwilliams@sprott.com

or

Ian Robertson Kingsdale Shareholder Services Vice President, Communications Direct: 416-867-2333 or Cell: 647-621-2646 irobertson@kingsdaleshareholder.com

ADDITIONAL INFORMATION

Full details of the Sprott offers for units of GTU and SBT are set out in a takeover bid circular and accompanying offer documents (collectively, the "Offer Documents"), which have been filed with the Canadian securities regulatory authorities. In connection with each Sprott offer, each of Sprott Physical Gold Trust and Sprott Physical Silver Trust has also filed with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on Form F-10 (each a "Registration Statement"), which contains a prospectus relating to the applicable Sprott offer (each a "Prospectus"). Sprott and Sprott Physical Gold Trust have also filed a tender offer statement on Schedule TO (the "Schedule TO") with respect to the Offer for GTU. This news release is not a substitute for the Offer Documents, the Prospectuses, the Registration Statements or the Schedule TO. GTU AND SBT UNITHOLDERS AND OTHER INTERESTED PARTIES ARE URGED TO READ THESE DOCUMENTS, ALL DOCUMENTS INCORPORATED BY REFERENCE, ALL OTHER APPLICABLE DOCUMENTS AND ANY AMENDMENTS OR SUPPLEMENTS TO ANY SUCH DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE EACH WILL CONTAIN IMPORTANT INFORMATION ABOUT SPROTT, THE SPROTT PHYSICAL TRUSTS, GTU, SBT AND THE SPROTT OFFERS. Materials filed with the Canadian securities regulatory authorities are available electronically without charge at www.sedar.com . Materials filed with the SEC are available electronically without charge at the SEC's website at www.sec.gov

The information contained in this press release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable securities laws. Although Sprott has requisitioned the CEF Board to call a special meeting of Class A Shareholders, there is currently no record date or meeting date set for such meeting and Class A Shareholders are not being asked to execute a proxy in favour of the matters set forth in this press release at this time. Sprott intends to file a dissident information circular in due course in compliance with applicable law. Notwithstanding the foregoing, Sprott is voluntarily providing the disclosure required under section 9.2(4) of National Instrument 51-102 – Continuous Disclosure Obligations in accordance with securities laws applicable to public broadcast solicitations.

This press release and any solicitation made by Sprott in advance of any CEF meeting will be made by Sprott and not by or on behalf of the management of CEF. Sprott may engage a solicitation agent to make any such solicitations. All costs incurred for any solicitation will be borne by Sprott, provided that, subject to applicable law, Sprott may seek reimbursement from CEF of Sprott`s out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection with a successful result at any meeting of shareholders of CEF.

As noted above, Sprott is not hereby soliciting proxies in connection with any CEF shareholder meeting and shareholders are not being asked at this time to execute proxies in favour of the matters set forth in this press release. Any proxies solicited by Sprott will be solicited in accordance with applicable securities laws, including pursuant to a dissident information circular sent to Class A Shareholders after which solicitation may be made by or on behalf of Sprott, by mail, telephone, fax, email or other electronic means, by public announcement and in person by representatives of Sprott or proxy advisors retained by Sprott or by Sprott's nominees. Any proxies solicited by Sprott in connection with any CEF shareholder meeting may be revoked by instrument in writing by the shareholder giving the proxy or by its duly authorized officer or attorney, or in any other manner permitted by law.

None of Sprott or, to its knowledge, any of its associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter proposed to be acted on at a meeting of CEF shareholders other than as set forth herein.

CEF`s registered office address is 3300, 421 – 7 ^th Avenue S.W., Calgary, Alberta, Canada T2P 4K9. 

A copy of this press release may be obtained on CEF`s SEDAR profile at www.sedar.com .

¹ Based on the closing prices of: (i) GTU and Sprott Physical Gold Trust units on NYSE MKT and NYSE Arca, respectively, and (ii) SBT Units and the Sprott Physical Silver Trust Units on the Toronto Stock Exchange and NYSE Arca, respectively, on June 12, 2015.