SOURCE: Bullion Management Group Inc.

Bullion Management Group Inc.

June 16, 2011 11:18 ET

Bullion Shines Brighter as Canadian Stock Market Correction Underway -- But Not All Bullion Is Created Equal

Bullion Management Group Says Physical Bullion Investments Stored in Allocated, Insured Form Are Safe Even in the Event of a Bankruptcy or Insolvency of the Custodian

TORONTO--(Marketwire - Jun 16, 2011) - As the S&P/TSX composite index slumped 9.9 percent this week from its intraday peak in early March, perilously close to a technical correction of 10 percent, investors are once again on the hunt for safe haven assets. Physical bullion is a logical choice to weather incoming storms caused by further stock market slumps, increasing risk of sovereign debt defaults, and stumbling growth prospects in the world's largest economies of the U.S. and Japan. But not all bullion investments are created equal.

"Much of the bullion that is purchased and traded on the world's bullion markets is owned in unallocated form. Holders of unallocated bullion do not own any specific bullion bars, they merely have a claim on an unspecified portion of a general pool of bullion or an equivalent liability," says Nick Barisheff, CEO of Toronto-based Bullion Management Group Inc. (BMG). "As a result, they take the risk that their bullion may be leased out without their knowledge or consent, or that the implied bullion may not be there at all."

BMG provides investors with a cost effective and convenient method of obtaining the benefits of holding uncompromised bullion. It offers two open-end mutual fund trusts that do not compromise the fundamental attributes of bullion (highly liquid, no counterparty risk, independent of management skills). BMG BullionFund invests equal dollar amounts into gold, silver and platinum, while BMG Gold BullionFund invests wholly in gold.

No derivatives, futures contracts, options or certificates are used in either fund, nor does BMG ever lease or borrow any gold or precious metals at any time.

BMG also offers the BMG BullionBars program, which enables investors to purchase and store certified, investment-grade, good delivery standard bars of gold, silver and platinum on an allocated and insured basis under custodial agreement with a Canadian chartered bank who is a member of the London Bullion Market Association (LBMA).

When BMG BullionBars are purchased, a registered Bullion Deed showing the owner's name, bar weight, assayer, purity and bar serial number is issued with each bar. This process identifies each bar as belonging to a specific owner and ensures proper custodial or "allocated" storage.

In the event of bankruptcy or insolvency of the custodian, the holders of unallocated bullion rank as unsecured creditors. In contrast, BMG BullionBars are allocated to the purchaser, who receives title to specific bars identified by refiner, exact weight, fineness and serial number. Allocated bullion does not form part of the custodian's assets and may not be leased into the market or used in any way. In the event of bankruptcy or insolvency, allocated BMG BullionBars are not subject to third-party claims.

BMG BullionBars are available in five different forms: Gold in 1-kilogram, 100-ounce and 400-ounce bars; silver in 1,000-ounce bars; and platinum in 50 ounce bars. Most investment-grade bullion bars vary slightly in weight. The 100 ounce and 400 ounce gold bars can vary in weight up to +/-5%, the silver and platinum bars vary by +/-10%, while the gold 1 kilogram bar does not vary in weight.

In 2002 BMG began offering the BMG BullionFund, the world's first open-ended mutual fund trust that invests in equal dollar amounts of fully allocated physical gold, silver and platinum bullion. BMG launched BMG BullionBars in 2008.

About Nick Barisheff
Nick Barisheff is president and CEO of Bullion Management Group Inc. Widely recognized as a North American bullion expert, Mr. Barisheff is an author, speaker and financial commentator who is a regular contributor to several investment newsletters and magazines, and regularly appears in the media to comment on precious metals, economics and the markets.

About Bullion Management Group Inc.
Toronto-based Bullion Management Group Inc. is one of the world's fast-growing precious metals bullion investment companies, with over $CDN 555 million of bullion investments under management. For more information on BMG bullion investment products, please visit: www.bmgbullion.comor call 1-888-474-1001.

Contact Information

  • Note to media:

    Nick Barisheff will be available for media interviews this week. If you would like to set up an interview please contact:

    Jill McCubbin
    Conversation Architect
    market2world communications inc.
    Phone: 613-256-3939
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