GOLD UPDATE

Bernie Doyle

Investment Advisor

[email protected]

cell: 647-504-8757

Disclaimer

This, like all of our publications, is designed to provide authoritative information in regard to the subject
matter covered. Although great effort has been made to provide accurate information, the author, and
organizer of The Wealth Resource including Pope & Company assume no responsibility for errors,
inaccuracies, omissions, or any inconsistencies herein. This document is not an offer to buy or sell any
investments, or to hasten an individual to participate in any type of transaction.

Always consult with an investment professional before making investment decisions.

Dear Wealth Resource Member,

At the time of writing this the price of Gold was $1150/oz. Up 35% from its 12 month low!!!

Many are calling for $1500-$2000 soon. Wow!

How can you get into the action?

Plenty of ways. But it depends on what you are trying to do and in what time period.

Here are a few of your options.

 Bullion
 Producer Stocks
 Exploration Stocks
 ETF's
 Mutual Funds
 Flow-through Limited Partnerships

How you can participate is the basis of this writing. All the logos in this document are hyperlinks to
websites that you can refer to for more information.

First, we are going to look at current world events affecting Gold and the Gold market. Then we will
look at different ways to buy Gold or participate in the Gold Sector.

A total of 161,000 tonnes of gold have been mined in

GOLD human history, as of 2009.[1] This is roughly

equivalent to 5.175 billion troy ounces or, in terms of
volume, about 8,333 cubic metres, and could be
valued at just under six trillion United States dollars
at early March 2010 prices.

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 The 6 drivers in the above chart lay out a “perfect storm” scenario, the gravity of which can only be
truly understood with deep study. Nevertheless, participation in Gold is actually very easy. As an
Investment Advisor I’m leaning towards gold as being almost a necessity in one’s portfolio. There are
several ways to be exposed to gold that run the gamut from conservative to aggressive. As an investor
even if you are skeptical about gold, it is suggested that at least you avail yourself of what your options
are.

The people that hold gold already know the comfort that if offers, especially through the last dramatic
market catastrophe.

Dramatic and unexpected things happen in life all the time. In some cases the end results are
devastating. There are few things that be relied on completely. As an extreme example, if your house
burns down then all is lost, except for the foundation of the building, which doesn’t burn. On that
foundation one can rebuild.

Recently some economies in the world have suffered immeasurably; their currency has been left gutted,
Iceland for example.

Gold is a foundation that is always available to be built upon and it can be relied upon. Even in
catastrophic circumstances of hyper inflation when the buying power of a dollar is drastically reduced
gold has proven for centuries to hold its value. There has always been marketability of gold in every
circumstance that the human race has faced. Even when all else is crumbling around there still exists a
“grey market” where gold can be used in exchange for the necessities of life.

The purpose of this writing is to demonstrate the ways that an investor can participate in Gold. There
are two distinct categories described here. One is regarding gold that you have personal and instant
access to called Essential. The other is where you participate in exposure to gold though investments
called Speculation.

There will always be a market for the solid gold that you have in your hand. This in and of itself is reason
enough to own gold. When drowning you need oxygen, when starving you need food, when in
catastrophic economic circumstances you need gold. Nobody knows when or how catastrophic
economic events occur until after the fact, then it is too late. For survival you need your health, for
progress you need your skills, for exchange you need gold. Gold in a bank that has crashed is worthless
to you if you cannot get your hands on it. Oxygen is useless to you if you are underwater by just one
inch.

Nobody thought Lehman Brothers could go down. Nobody thought the Titanic could sink. Nobody
thought that Greece could go bankrupt. Nobody thought the American government would be writing
bad IOU’s to its civilians. Nobody thinks it can happen to them.

It’s interesting to note that the Chinese government has recommended to all of its citizens to have solid
gold as a personal possession. That’s over a billion people. They are buying.

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On the following pages we will look at a variety of ways that an investor can expose themselves to the
Gold Sector.

There are two categories detailed in the following.

1) Essential: The holding of physical gold, offering immediate possession of the gold

2) Speculative: The holding of gold in various other forms as an investment strategy.

Essential Gold

Bullion Many nations mint bullion coins. Although nominally

issued as legal tender, these coins' face value as
currency is far below that of their value as bullion. For
instance, Canada mints a gold bullion coin (the Gold
Maple Leaf) at a face value of $50 containing one troy
ounce (31.1035 g) of gold—as of July 2009, this coin is
worth about $1,075 as bullion.[citation needed] Bullion
coins' minting by national governments gives them some
numismatic value in addition to their bullion value, as
well as certifying their purity.

Where to buy gold Bullion:

Here are two trusted sources for bars and coinage.

ScotiaMocatta

ScotiaMocatta, a division of The Bank of Nova Scotia, is a global leader in precious metals innovation.
The Mocatta® name has been synonymous with bullion for over three centuries. As one of the world's
top bullion dealers, ScotiaMocatta is a global full-service organization that provides hedging, financing,
and physical products and services.

At ScotiaMocatta you can walk up to the counter and walk away with gold in your hand.

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The Royal Canadian Mint

There are 5 different locations in the GTA where most of them serve the public on a cash and carry
basis. Specific quantities or denominations may require arrangement.

There are other gold refineries around Toronto that may or may not deal with the public.

Selling:

The ease with which you can sell gold will depend largely on how easily the content of pure gold can be
determined in the bar or gold coin in your possession. This is one reason why gold bullion has become so
popular for gold investing. People are able to sell gold better as coins because the quality and quantity
of pure gold coins is guaranteed. This guarantee makes it easy to sell gold to dealers around the world.
All dealers will be familiar with the current value of gold.

You might be happy to see that the market value of gold has shot up overnight, and try to sell gold to a
dealer immediately or sell the gold on eBay at the current price. However, gold dealers might act less
interested in the gold that day, hoping the price will return to its previous position. Ideally, the dealers
you contact will offer you a small percent premium on the gold you sell. This is not always the case,
however; you may find the dealer asking to buy the gold at a percent discount.

Though all dealers will be familiar with the current standard value of gold, there will always be debate as
to whether that price will rise or fall in the near future. That's the reason for small discrepancies in offers
when you sell gold coins. Even with bullion like the Maple Leaf gold coins, this is the case, which is why
it's so important that you look around before deciding where to sell gold. Contact multiple dealers and
shop around before you buy or sell gold. Look for the best price when you put up your gold coins for
sale. Because the standard gold value is updated and relied on by everyone, you won't encounter
radically different offers, but the percent premium could be slightly better from some dealers than from
others.

You can consider selling gold online. You can sell gold directly to dealers, locating them simply by
searching for "sell gold" using Google. You can also sell your gold in auction on eBay. If you’re beginning
price is the current standard value, and yet that standard value of gold drops while your gold is up for
sale, then you probably won't be able to sell the gold until you remove the item and repost at the
current price. You can refer to Kitco for current gold pricing.

As noted above in dire circumstances gold can be used to buy just about anything in the “grey market”.
History has shown the “grey market” to be ubiquitous during turbulent times this is why it is called
Essential.

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The writer recommends the holding of physical gold in one’s own possession. Keep it in some safe
location or vault that only you have access to. Other physical gold holding can be kept in safety deposit
boxes, but it is important to get in writing that the possessions that you have in your safety deposit box
are the sole property of you personally and not that of the institution which is holding it for you.

There are other services that will hold your gold and you have legal ownership through certificate. This is
where a line is drawn in the philosophy of why to hold gold. Once your gold holdings are out of your
immediate possession then your participation in gold becomes “Speculative” rather than “Essential”.

The rest of this writing deals with the holding of gold in the “Speculative” sense either as a hedge
against inflation or a speculative play on the change in price.

Speculative Gold
Since 1919 the most common benchmark for the
Investment price of gold has been the London gold fixing, a
twice-daily telephone meeting of representatives
from five bullion-trading firms of the London bullion
market. Furthermore, gold is traded continuously
throughout the world based on the intra-dayspot
price, derived from over-the-counter gold-trading
markets around the world

These are exciting days for gold with new highs being reached and speculation going wild. Currencies are
experiencing tremors like never before and the emerging economies of the world are clamoring for
security of their currencies. Central Banks around the world are in a buying position on gold and nations
are buying it by the tonne, India for example.

The gold bugs are grinning and prices per ounce are being projected into the thousands. (So says Rob
McEwen of US Gold Corp. and many others).

What follows are a variety of ways that an investor can get a piece of the action.

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Central Fund of Canada

Easy to make a bullion investment. Central Fund shares trade on the open market like any other listed
stock. A call to your Advisor is all you need.

Central Fund of Canada Limited is “The Sound Monetary Fund”.

Central Fund's purpose is to hold gold and silver bullion on a secure basis for the convenience of
investors in the shares of Central Fund.
(At least 90% of Central's assets are Gold and Silver at all times.)
Central is listed on the Toronto Stock Exchange - Symbols: Cdn. $ CEF.A

Questrade

Bullion in Account:
Quest trade offers a way to have an investment in physical gold as an asset in an account, your gold is
not easily accessable but it is yours. Gold trading in stocks and options or registered accounts is
exclusively available at Questrade.

 Benefit from positive movements on the gold spot market1.

 Historically, gold tends to move in the opposite direction of stocks and bonds.

 Invest directly in gold, and avoid the management fees associated with gold certificates or
funds.

 All gold products purchased in stocks or options accounts can be stored at the Royal Canadian
Mint or the physical gold can be shipped. The purchaser will incur any applicable delivery
charges.

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Gold Stocks:

Participation in gold stocks is exposure to companies that are either operating a producing mine or are
in active exploration of gold. The Toronto stock exchange is a world class exchange for the Mining Sector
and offers investors the ability to participate with international gold companies in Canadian currency.

Toronto Stock Exchange

Toronto Stock Exchange (TSX) and TSX Venture Exchange are leaders in the mining sector. More mining
companies are listed on TSX and TSX Venture Exchange than any other exchange in the world. As a
result, we offer mining companies membership in the largest peer group of mining companies
anywhere, providing the benefits of premium valuations, visibility of transactions, analyst coverage,
specialized indices and specifically tailored listing requirements.

Typically the Toronto Venture Exchange (used to be Vancouver Exchange) is the home of Exploration
companies and the Toronto Stock Exchange is where larger estabilshed producers trade.

Standard & Poor have a Global Gold Index on the TSX.

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Mutual Funds:

Most investors will already has some exposure to gold stocks in one or more of their mutual funds. But
there are some that are more specific.

Sprott

Gold and precious Minerals Fund

One gold fund of note is Eric Sprott’s Gold and Precious Metal Fund. The primary objective of this Fund
is to provide long-term capital growth. In order to achieve its investment objective, the Fund invests
primarily in gold, gold certificates, precious metals and minerals, the certificates relating to such metals
and minerals and/or in equity securities of companies that are directly or indirectly involved in the
exploration, mining, production or distribution of gold and precious metals and minerals.

There are about 35 different Mutual funds that have a Gold focus or partial gold focus and will offer
exposure to the gold industry and the metal itself.

Exchange Traded Funds:

Gold ETF’s offer exposure to a basket of stocks and/or gold pricing that are traded on an exchange thus
offering the diversification of a mutual fund but without the management fees. Additionally there are
ongoing price changes as a stock on the exchange rather than the daily or weekly pricing of mutual fund
units.

Horizon BETAPRO ETF (registration required)

Bull plus or Bear plus (200% daily performance)

The Horizons BetaPro COMEX® Gold Bullion Bull Plus ETF (HBP COMEX® Gold Bullion Bull+ ETF) and the
Horizons BetaPro COMEX® Gold Bullion Bear Plus ETF (HBP COMEX® Gold Bullion Bear+ ETF)seek daily
investment results equal to 200% the daily performance, or inverse daily performance, of COMEX® Gold
Bullion, before fees and expenses. The HBP COMEX® Gold Bullion Bull+ and Bear+ ETFs are denominated
in Canadian dollars, as the U.S. dollar exposure of the underlying index is hedged daily.

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Global Gold Inverse

The Horizons BetaPro S&P/TSX Global Gold Inverse ETF (HBP S&P/TSX Global Gold Inverse ETF) seeks
daily investment results, before fees, expenses, distributions, brokerage commissions and other
transaction costs, that endeavor to correspond to one times (100%) the inverse (opposite) of the daily
performance of the S&P/TSX Global Gold Index™ .

Comex Gold

The Horizons BetaPro COMEX® Gold ETF (HBP COMEX® Gold ETF) seeks investment results, before fees,
expenses, distributions, brokerage commissions and other transaction costs, that endeavor to
correspond to the performance of the COMEX® gold futures contract for a subsequent delivery month.

Claymore

The Claymore Gold Bullion ETF seeks to replicate the performance of the price of gold bullion, less its
expenses and fees. The assets of the Claymore Gold ETF consist primarily of physical gold bullion (the
“Portfolio”) which the Claymore Gold ETF purchases and holds in accordance with its investment
objective, strategy, policies and restrictions, as well as any forward contracts relating to the currency
hedge of the hedged common units, cash and permitted gold certificates, if any.

Ishares

The iShares COMEX Gold Trust ("Gold Trust") seeks to correspond generally, to the day-to-day
movement of the price of gold bullion. The objective of the Gold Trust is for the value to reflect, at any
given time, the price of gold owned by the Gold Trust at that time, less the expenses and liabilities of the
Gold Trust.

Also available on the Toronto Stock Exchange under trading symbol "TSE: IGT".

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 Flow-through Shares and Flow-through Limited Partnerships:

Flow-though describes how the Canadian Government offers 100% tax deductions for investment made
in Canadian Resource Exploration companies. Especially mining exploration companies. This huge tax
decuction is designed to attract investors by providing incredible downside protection.

If an investor wants to have adiversified basket of resource companies but still get the tax decuctions
then there are Flow-through Limited Partnerships that offer professional portfolio management. It is an
attractive way to have exposure to companies that are involved in Gold exploration and although there
are not any Flow-through Limited Partnerships that focus completely on gold alone; the tax advantages
are still worth considering. I specialize in Flow-through investing and if you would like to know more
about this tax advantaged investing stratigy please contact me directly at [email protected] . I
keep my eye on about 30 different Flow-through Limited Partnerships and would be glad to help you
find the one that fits your requirements.

Great Online Resources for Gold and Gold Companies:

Sprott Mining Nerds

Kitco

Jim Sinclair Mineset

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