Shares of Sprott Physical Silver Trust (NYSEArca: PSLV) were down 9% on Wednesday morning after the exchange traded fund announced a follow-on offering, the proceeds of which will be used to purchase silver bullion.

The closed-end fund is listed on NYSE Arca and the Toronto Stock Exchange, and is managed by Sprott Asset Management, which is based in Canada.

Sprott in a press release Wednesday said it priced the follow-on offering of 23 million units at a price of $13.20 each. The gross proceeds from the offering will be $303.6 million, the firm said. Therefore, the offering is projected to take about 10 million ounces of silver off the market.

The silver fund is unique because large shareholders are able to redeem shares on a monthly basis in exchange for silver bullion. The ETF’s silver is stored by the Royal Canadian Mint.

Since it is a closed-end fund, Sprott Physical Silver Trust can trade at a premium or discount to net asset value. For example, the silver ETF was trading at a premium of more than 20% on Tuesday.

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