Please note: The Author of this report is an outside director of Bullion Management Group, the manager of the BMG Bullion Fund.

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1 CHAPPY S PICKS Charts and commentary by David Chapman SEPTEMBER 3, Wellington Street East, Suite 900, Toronto, Ontario, M5E 1S2 phone (416) or (toll free) , fax (416) david@davidchapman.com dchapman@mgisecurities.com With a little over two weeks behind us we can report we are up on our three portfolios. The best performer to date is the junior exploration portfolio up 5.7%. The Gold portfolio is up 3.1% and the Conservative portfolio is up 1.7%. The latter two are of course before dividends. If the Golds are up the hedge using the Horizon BetaPro Inverse Gold ETF is of course down 12%. We will monitor this situation closely as the Gold stocks are showing bullish signs. We will not hesitate pulling the hedge if warranted. Please note: The Author of this report is an outside director of Bullion Management Group, the manager of the BMG Bullion Fund. Please note: The author may from time to time, be long and or short positions in the companies named within this technical market report. Please note: Horizon BetaPro products are securities of related issuers to MGI Securities. StockPicks August 19, 2009 page 1

2 The conservative portfolio contains only blue chip dividend paying stocks. We have picked them for some diversity and in areas we believe will weather the recession. We are avoiding financial stocks at this time. We base all our portfolios in bullion. Conservative Portfolio $100,000 Portfolio entered August 17, 2009 Current Value $101, Description Amount # Shares/Units Purchase Dividend Interest Current Sep 2 % Gain/Loss Stop (if required) Cash $24, BMG $25,000 2, $8.644 $8.82 2% BullionFund Metro Inc. $7, $35.10 $0.55 $ % $34 MRU.A/T Royal Gold $6, $43.25 $0.35 $ % $40 RGL Enbridge $6, $41.03 $1.48 $ % $37.50 ENB/T Shoppers Drug Mart SC/T $6, $43.05 $0.86 $ % $40 Franco Nevada FNV/T Crescent Point Energy CPG/T Horizons Beta Pro Inverse Gold ETF HIG/T Horizons Beta Pro Inverse S&P/TSX 60 HIX/T Total Income - $1, $7, $26.19 $0.29 $ % $23 $6, $33.75 $2.76 $ % $31 $5, $16.93 $ % $4, $13.70 $ % StockPicks August 19, 2009 page 2

3 Golds have been one of the best performing sectors over the past decade. We believe the best is yet to come and if the current bullish patterns are realized all of these stocks should perform well. Again we are holding back some cash and we base the portfolio in bullion. Senior/Intermediate Gold Portfolio $100,000 Portfolio entered August 17, 2009 Current Value $103, Description Amount # Shares/Units Purchase Dividend Interest Current % Gain/Loss Stop (if required) Cash $23,272 BMG $25,000 2, $8.644 $8.82 2% BullionFund Goldcorp $ $38 $0.20 $ % $32 G/T Eldorado $6, $11.55 $ % $9.00 Gold ELD/T IamGold $6, $12.81 $0.07 $ % $10.50 IMG/T Franco $6, $26.19 $0.29 $ % $23 Nevada FNV/T Centerra $6, $6.70 $6.73 0% $5 Gold CG/T Red Back $7, $9.85 $ % $8 Mining RBI/T Horizons Beta Pro Inverse Gold ETF HIG/T $10, $16.93 $ % Total Income $ StockPicks August 19, 2009 page 3

4 All of these stocks are trading near or under $1. They are all in either the gold/silver sector or other mining sector (primarily base metals). Some of these companies we know and follow closely and others we don t know as well but were intrigued by their charts. Junior Exploration Mining Stock Portfolio Entered August 17, 2009 Current Value $105,725 Description Amount # Shares/Units Purchase Current % Gain/Loss Cash $26,300 St. Andrews $4,200 10,000 $0.42 $0.41-2% Gold SAS/T Timmins $7,300 10,000 $0.73 $0.71-3% Gold TMN/V Explor $6,750 25,000 $0.27 $ % Resources EXS/V Animas $8,400 10,000 $0.84 $0.83-1% Resources ANI/V ECU Silver $5,000 10,000 $0.50 $0.49-2% ECU/T Creston $5,000 25,000 $0.20 $ % Moly CMS/V Bravo $5,500 10,000 $0.55 $0.60 9% Ventures BVG/V Fortuna Silver Mines FVI/V Ontex resources ONT/V Soltoro SOL/V Titanium Corp. TIC/V $10,500 10,000 $1.05 $ % $5,250 15,000 $0.35 $ % $ ,000 $0.335 $ % $9,100 10,000 $0.91 $0.83-9% Stop (if required) StockPicks August 19, 2009 page 4

5 Chappy s Picks Charts created using Omega TradeStation 2000i. Chart data supplied by Dial Data. Metro Inc. (MRU.A-TSX) is the big retailing and food distributor. Metro also distributes pharmaceutical products. Metro operates in both Quebec and Ontario through its network of supermarkets, discount stores and drugstores. Banners they operate under include Metro, Metro-Plus, A&P, Loeb, Super C, Food Basics and drugstores under Brunet, Clini Plus, Pharmacy and Drug Basics. Metro pays a dividend of $0.55 for a yield of 1.5%. Metro s dividend is considered one of the best around. Metro s chart right now could be construed as a mixed message. The highs came in Jan 2007 near $42. Metro seemed to precede the financial collapse hitting its low in February 2008 near $21 for a roughly 50% loss. Since then the rise has been strong with ongoing rising volume. The positive chart interpretation is a cup and handle formation and for the past six months we have been forming the handle. A breakout to new highs above $42 could lead to targets as high as $63. Others might try and interpret this as a potential giant double top with the two highs in the $40/$42 zone. We doubt that but that also helps set up our stop at $34. StockPicks August 19, 2009 page 5

6 Charts created using Omega TradeStation 2000i. Chart data supplied by Dial Data. Goldcorp (G-TSX) is one of Canada s preeminent gold mining companies with its operations in Red Lake Ontario. Goldcorp engages in the acquisition, exploration, development and operation of precious metals properties in Canada, the U.S.A., Mexico, and Central and South America. Its primary products are gold, silver, copper, lead and zinc. Goldcorp pays $0.20 for a yield of.5%. As with most of the PM (Precious Metals) stocks Goldcorp peaked in July 2008 at over $52. The financial collapse which also negatively impacted the gold stocks saw the company fall to just under $18 in October 2008 for a nasty collapse of 65%. Today at over $43 we are not only up 138% from the lows but closer to the highs then the lows. Since January 2009 we have stayed above the 200 day MA. The formation appears to a possible symmetrical triangle. Symmetrical triangles can be consolidation patterns and a firm break above $41 could target to $54. However, we have seen false breakouts as well and we would be more comfortable once we clear $45. A reversal and breakdown under $37 could target to $24 and a major test of the lows. StockPicks August 19, 2009 page 6

7 Charts created using Omega TradeStation 2000i. Chart data supplied by Dial Data. Fortuna Silver Mines (FVI-TSXV) is a junior exploration silver mining company operating the Caylloma zinc/lead/silver mine in Southern Peru and the San Josa silver/gold project in Mexico. Fortuna shows reserves proven and probable of 4023 tonnes of 156 g/t silver, 0.55 g/t gold and 2.58 g/t zinc. FVI topped near $4 back in November The financial collapse destroyed the junior mining market and by October 2008 FVI was under $0.40. Today we have recovered to over $1 and FVI is demonstrating a strengthening chart. We have now broken out of the recent consolidation pattern and technically we could rise to at least $1.50. Note the rising volume on the breakout. StockPicks August 19, 2009 page 7

8 General Disclosures The information and opinions contained in this report were prepared by MGI Securities. MGI Securities is owned by Jovian Capital Corporation ( Jovian ) and its employees. Jovian is a TSX Exchange listed company and as such, MGI Securities is an affiliate of Jovian. The opinions, estimates and projections contained in this report are those of MGI Securities as of the date of this report and are subject to change without notice. MGI Securities endeavours to ensure that the contents have been compiled or derived from sources that we believe to be reliable and contain information and opinions that are accurate and complete. However, MGI Securities makes no representations or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions contained herein and accepts no liability whatsoever for any loss arising from any use of, or reliance on, this report or its contents. Information may be available to MGI Securities that is not reflected in this report. This report is not to be construed as an offer or solicitation to buy or sell any security. The reader should not rely solely on this report in evaluating whether or not to buy or sell securities of the subject company. Definitions Technical Strategist means any partner, director, officer, employee or agent of MGI Securities who is held out to the public as a strategist or whose responsibilities to MGI Securities include the preparation of any written technical market report for distribution to clients or prospective clients of MGI Securities which does not include a recommendation with respect to a security. Technical Market Report means any written or electronic communication that MGI Securities has distributed or will distribute to its clients or the general public, which contains an strategist s comments concerning current market technical indicators. Conflicts of Interest The technical strategist and or associates who prepared this report are compensated based upon (among other factors) the overall profitability of MGI Securities, which may include the profitability of investment banking and related services. In the normal course of its business, MGI Securities may provide financial advisory services for issuers. MGI Securities will include any further issuer related disclosures as needed. The Author of this report is an outside director of Bullion Management Group, the manager of the BMG Bullion Fund. Also, the author may from time to time, be long and or short positions in the companies named within this technical market report. Technical Strategists Certification Each MGI Securities technical strategist whose name appears on the front page of this technical market report hereby certifies that (i) the opinions expressed in the technical market report accurately reflect the technical strategist s personal views about the marketplace and are the subject of this report and all strategies mentioned in this report that are covered by such technical strategist and (ii) no part of the technical strategist s compensation was, is, or will be directly or indirectly, related to the specific views expressed by such technical strategies in this report. Technical Strategists Trading MGI Securities permits technical strategists to own and trade in the securities and or the derivatives of the sectors discussed herein. Dissemination of Reports MGI Securities uses its best efforts to disseminate its technical market reports to all clients who are entitled to receive the firm s technical market reports, contemporaneously on a timely and effective basis in electronic form, via fax or mail. Selected technical market reports may also be posted on the MGI Securities website and davidchapman.com. For Canadian Residents: This report has been approved by MGI Securities which accepts responsibility for this report and its dissemination in Canada. Canadian clients wishing to effect transactions should do so through a qualified salesperson of MGI Securities in their particular jurisdiction where their IA is licensed. For US Residents: This report is not intended for distribution in the United States. Intellectual Property Notice The materials contained herein are protected by copyright, trademark and other forms of proprietary rights and are owned or controlled by MGI Securities or the party credited as the provider of the information. Regulatory MGI SECURIITES is a member of the Canadian Investor Protection Fund ( CIPF ) and the Investment Industry Regulatory Organization of Canada ( IIROC ). Copyright All rights reserved. All material presented in this document may not be reproduced in whole or in part, or further published or distributed or referred to in any manner whatsoever, nor may the information, opinions or conclusions contained in it be referred to without in each case the prior express written consent of MGI Securities Inc. StockPicks August 19, 2009 page 8