One point he makes is that there was 0.3920oz per share before the offerring but as Sprott did not buy all the silver, the silver backing the shares is now only 0.3738oz. So Sprott has to buy another 1,858,312oz to bring the ounces per share back up to 0.3920oz otherwise existing holders get screwed as they will have less silver per share than they had before the offerring (calc is number of shares 101,966,125 x 0.3920oz/share less ounces already in the trust of 38112409).
So Sprott is currently short 1.8 million ounces of silver, which is why Kid Dynamite says Sprott think the price is going lower.
The question this raises is what is Sprott's breakeven price above which he starts to lose money. This depends on how much cash he leaves in the fund. Say he keeps same % cash buffer as before. The calc is $889,768,892 / $898,311,957 = 99.05% or 0.95% of total net assets of the fund as cash. Therefore we take the cash the fund has now of $1,095,058,167 x 0.95% = $10,403,052. As the fund currently has $59,734,563 in cash as per Kid Dynamite's calculation, this means he has $49,331,511 to spend on buying silver (59,734,563 - 10,403,052).
So if we divide $49,331,511 by 1,858,312oz we get $26.54. However, he could hold a lower amount of cash. I'd guess the lowest reasonable cash balance would be $8m as this is less than he had prior to the offerring. In this case ($59,734,563 - $8,000,000) / 1,858,312oz = $27.84.
So if silver goes any higher than $27.84 Sprott loses money. If Sprott is as smart as many think he is then $27.84 or thereabouts represents an intermediate top for silver.
What makes this interesting is that while 1.8moz is not that much relative to the market volumes and would not usually move the market if executed properly, all the bullion market players know Sprott has to buy it. Will be interesting to watch the price Friday US time as I'd be surprised if Sprott would want to leave his 1.8moz short position open over the weekend as if there is some market moving news and gold/silver put on a big move, he is stuffed.