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morrison & foerster llp

beijing, berlin, brussels, denver,

hong kong, london, los angeles,

new york, northern virginia,

palo alto, sacramento, san diego,

san francisco, shanghai, singapore,

tokyo, washington, d.c.

August 13, 2014

Writer’s Direct Contact

+1 (212) 468.8179

apinedo@mofo.com

VIA EDGAR

Shannon Sobotka

Staff Accountant

Securities and Exchange Commission

Office of the Chief Accountant

100 F Street, NE

Washington, D.C. 20549

Re:           Vaulted Gold Bullion Trust

Registration Statement on Form S-1

File No. 333-194144

Dear Ms. Sobotka:

On behalf of our clients, the Bank of Montreal and the Vaulted Gold Bullion Trust (the “Trust”), we are responding to questions posed by the Staff of the Securities and Exchange Commission (the “Commission”) during a conference call on Wednesday, July 16 in connection with the Trust’s supplemental submission dated June 25, 2014.  Below, we identify in bold the SEC Staff’s comment and note in regular type our response.

Also enclosed on Annex A hereto is a draft of the revised financial statements reflecting our discussion with the Staff.  We have presented these under cover of a sample Current Report on Form 8-K.  As you know, we continue to discuss the need, and the appropriate format, for periodic reports relating to the Trust.  We have suggested to the Staff that it might be appropriate to analogize to a structured finance transaction and therefore the Trust would regularly file “investor reports” and quarterly information under cover of an 8-K.  To help in considering this, we have included such a sample here.

1.

Will the Gold Deposit Receipts be classified as financial liabilities or as equity on the Trust balance sheet and how will the Gold Deposit Receipts be accounted for?

August 13, 2014

Page Two

The Gold Deposit Receipts do not meet the criteria in ASC 480-10-25-8 and 25-10 through 12 to be classified as financial liabilities.  Redemption of the receipts is outside the control of the Trust and therefore, in accordance with SEC Financial Reporting Release 211, the Trust will present the receipts as Redeemable Gold Deposit Receipts.  As such, the receipts will be reported on the balance sheet between liabilities and equity.  The receipts will be recorded at the value received from investors.

2.

Will the Investment in Gold be reflected as a Level 1 or Level 2 financial instrument in the financial statement footnotes?

In accordance with US GAAP codification 820-10-50-2(b), the investment in gold will be disclosed as a Level 1 fair value measurement because the quoted prices provided from various sources typically have a narrow range and are for an identical asset, without any adjustment.

For reference, all transactions are based on the prevailing over-the-counter interbank spot market for gold.  Consistent with disclosures in the prospectus, the price of gold will be based on prevailing interbank U.S. dollar spot prices, as determined by Bank of Montreal, acting in its sole discretion.  Bank of Montreal will use multi-contributor systems, such as Reuters, Bloomberg, and Electronic Brokering Services as primary sources to determine the prevailing interbank spot price of gold.

3.

How are issuance costs being treated pursuant to SEC SAB Topic 1B?  Note on the call with the SEC, management of BMO heard the staff reference SAB Topic 5D.

We have conveyed that the SEC Staff was inquiring about the application of SAB Topic 1.B in regard to Trust expenses.  SAB Topic 1.B, question 1, by analogy addresses whether a reporting issuer needs to include expenses incurred on its behalf in the issuer financial statements.  The SEC Staff mentioned SAB Topic 5D on the call.  If SAB Topic 5D was the intended reference, by analogy, the issue appears to be similar in terms of whether the Trust should record the expenses and related deposit fee revenue directly in its financial statements.

Bank of Montreal is the initial depositor of the Trust and will not consolidate the Trust.  Substantially all costs associated with the operation of the Trust, including costs associated with issuance of Gold Deposit Receipts, are contractually entered into by Bank of Montreal so will be incurred and paid by Bank of Montreal.  The Trust collects a per receipt deposit fee from each investor that subscribes for Gold Deposit Receipts and passes this fee on to Bank of Montreal as Initial Depositor of the Trust.  This fee compensates Bank of Montreal for the various expenses it will incur for the Trust, including costs associated with issuance of Gold Deposit Receipts. The fee and related expenses are proposed not to be reflected in the income statement of the Trust.  However, the Trust plans to provide fulsome disclosure of this arrangement, as outlined in note 2.7 to the draft financial statements so an investor clearly understands how the deposit fee and Trust related expenses are treated.

August 13, 2014

Page Three

We appreciate in advance your time and attention to this matter.  Should you have any additional questions or concerns, please call me at 212-468-8179.

Sincerely,

/s/ Anna T. Pinedo

Anna T. Pinedo

Enclosure

cc:          Kevin Woody

Coy Garrison, Esq.

Duc Dang, Esq.

DRAFT – For Discussion Purposes

ANNEX A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): _________, 2014

Bank of Montreal

Initial Depositor

(Exact name of registrant as specified in charter)

Vaulted Gold Bullion Trust

Issuer with respect to the Gold Deposit Receipts

(Exact name of registrant as specified in its charter)

Delaware

1040

46-7176227

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

100 King Street

First Canadian Place

Toronto, Ontario

Canada M5X 1A1

M5X 1A1

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code (416) 867-6785

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

[Monthly: This current report on Form 8-K has been filed to provide investors with a monthly report.]

[Quarterly: This current report on Form 8-K has been filed to provide quarterly financial statements of Vaulted Gold Bullion Trust for the quarter ended ___________, 2014.]

Item 9.01. Financial Statements and Exhibits.

(a)

Financial Statements

Exhibit

No.

Description

[99.1

Monthly Report.]

[99.1

Unaudited Financial Statements of Vaulted Gold Bullion Trust for the quarter ended ___, 2014.]

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

VAULTED GOLD BULLION TRUST

By:

Name:

Title:

3

EXHIBIT INDEX

Exhibit

No.

Description

[99.1

Monthly Report.]

[99.1

Unaudited Financial Statements of Vaulted Gold Bullion Trust for the quarter ended ___, 2014.]

4

  DRAFT – For Discussion Purposes

[EXHIBIT 99.1] [QUARTERLY]

VAULTED GOLD BULLION TRUST

Financial Statements (Unaudited)

Balance Sheet (Unaudited)

At [Date], 2014 (1)

[Date], 2014

(Amounts in 000’s of US$)

ASSETS

Cash

Investment in gold (Note 2.2. 2.6)

$

X,XXX,XXX

Gold receivable (Note 2.3)

XX,XXX

Total Assets

X,XXX,XXX

LIABILITIES

Gold payable (Note 2.3)

XX,XXX

REDEEMABLE GOLD DEPOSIT RECEIPTS (Note 2.5)

X,XXX,XXX

RETAINED EARNINGS

XX,XXX

Total Liabilities and Equity

$

X,XXX,XXX

(1)

The Trust was created on December 10, 2013 but there were no operations until [Date], 2014.

 See Notes to the Unaudited Financial Statements

F-1

VAULTED GOLD BULLION TRUST

Schedule of Investments (Unaudited)

At [Date], 2014

[Date], 2014

Description

Oz

Cost

Fair Value

% of Net Assets

(1)

Investment in gold (in 000’s of US$, except for oz data)

Gold

XX,XXX

$
X,XXX

$

XXX,XXX

100%

Total investment in gold

XX,XXX

$
X,XXX

$

XXX,XXX

100%

(1)

Calculated as investment in gold at fair value divided by net assets, as at [Date], 2014

See Notes to the Unaudited Financial Statements

F-2

VAULTED GOLD BULLION TRUST

Statements of Operations (Unaudited)

For the X months ended [Date], 2014

X months Ended

[Date], 2014 (1)

(Amounts in 000’s of US$)

REALIZED AND UNREALIZED GAINS / (LOSSES)

Realized gain (loss) on gold distributed for the redemption of Receipts

$
XXX

Change in unrealized gain (loss) on investment in gold

XX,XXX

Total gain (loss)

XX,XXX

Change in net assets from operations

$

XX,XXX

(1)

The Trust applies the provisions of Topic 946, Investment Companies.

See Notes to the Unaudited Financial Statements

F-3

VAULTED GOLD BULLION TRUST

Statement of Changes in Net Assets (Unaudited)

For the X months ended [Date], 2014

X months Ended [Date], 2014 (1)

(Amounts in 000’s of US$, except for Receipt data)

Receipts

Amount

Opening balance at [date], 2014

X,XXX,XXX

$

X,XXX,XXX

Net investment loss

(X,XXX

)

Realized gain (loss) on investment in gold

XXX

Change in unrealized investment in gold

XX,XXX

Issuances

X,XXX

XX,XXX

Redemptions

(X,XXX

)

(XX,XXX

)

Closing balance at [date], 2014

X,XXX,XXX

$

X,XXX,XXX

(1)

The Trust applies the provisions of Topic 946, Investment Companies.

See Notes to the Unaudited Financial Statements

F-4

VAULTED GOLD BULLION TRUST

Notes to the Unaudited Financial Statements

1.

Organization

The Vaulted Gold Bullion Trust.  The Vaulted Gold Bullion Trust (the “Trust”) was initially formed on December 10, 2013 pursuant to an interim trust agreement that was amended and restated by the Depositary Trust Agreement, dated ___________, 2014 (the “Depositary Trust Agreement”).  The Trust had no operations until [date, 2014]. The Bank of New York Mellon will be the trustee and BNY Mellon Trust of Delaware will be the Delaware trustee.  The Initial Depositor sells Gold Bullion to the Trust, arranges custodial services through its storage account and provides administrative services from time to time.  The Vaulted Gold Bullion Trust is not a registered investment company under the 1940 Act.

The Vaulted Gold Bullion Trust is intended to hold Gold Bullion for the benefit of owners of Gold Deposit Receipts.  One receipt represents the undivided beneficial ownership of one troy ounce of Gold Bullion.  The trustee will perform only administrative and ministerial acts.  The property of the Trust will consist of the Gold Bullion and all monies or other property, if any, received by the trustee.  The fiscal year end for the Trust is December 31.

The accompanying unaudited financial statements were prepared in accordance with the accounting principles generally accepted in the United States of America. In the opinion of the Trust’s management, all adjustments necessary to present fairly the financial position, results of operations as of and for the X months ended [Date], 2014 have been made.  In accordance with Topic 946, Investment Companies, the Trust meets the exemption criteria to exclude a statement of cash flows.

2.

Significant Accounting Policies

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires those responsible for preparing financial statements to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Trust.

2.1.

Basis of Accounting

The Trust is an investment company within the scope of Financial Accounting Standards Board (“FASB”) Codification of Accounting Standards, ASC 946, Financial Services—Investment Companies (“Topic 946”).  The Trust has determined it falls within scope of Financial Accounting Standards Board (“FASB”) Codification of Accounting Standards, ASC 946, Financial Services—Investment Companies (“Topic 946”).  As the Trust meets the exemption criteria under Topic 946, a cash flow statement is not required for the period ended [Date], 2014.  The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act.

2.2.

Valuation of Gold

The Gold Bullion will be held for the benefit of holders of Gold Deposit Receipts in an custodial account operated by Bank of Montreal at the Royal Canadian Mint (the “Mint”) and is valued, for financial statement purposes, at fair value.

The Trust follows the provisions of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 provides guidance for determining fair value and requires disclosure regarding the inputs to valuation techniques used to measure fair value. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Trust records its investment in gold at fair value and recognizes changes in fair value of the investment in gold as changes in unrealized gains or losses on investment in gold through the Statement of Operations.

F-5

2.2.

Valuation of Gold (continued)

Inputs

Generally accepted accounting principles establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs are as follows:

–

Level 1.

Unadjusted quoted prices in active markets for identical assets or liabilities that the company has the ability to access.

–

Level 2.

Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments and similar data.

–

Level 3.

Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the company’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.

The Trust’s holds primarily Gold Bullion which is classified as Level 1 as pricing is based on quoted prices which are observable inputs. There were no re-allocations or transfers between levels during the period.

2.3.

Gold Receivable and Payable

Gold receivable or payable represents the quantity of gold covered by contractually binding orders for the issuance or redemption of Receipts respectively, where the gold has not yet been transferred to or from the Trust’s account. Generally, ownership of the gold is transferred within three business days of the trade date.

2.4.

Issuance of Receipts

The Trust will issue Gold Deposit Receipts on a continuous basis pursuant to the Depositary Trust Agreement.  Authorized receipts are unlimited.  There are XX,XXX receipts issued and outstanding at [Date], 2014.   Holders of Gold Deposit Receipts will receive no cash distributions.  Gold Deposit Receipts are recorded at the value received from the investor.

F-6

Subject to certain exceptions described herein, holders of Gold Deposit Receipts will have the option to exchange the