Central Fund of Canada

Central Fund's Gold and Silver Bullion is stored in the highest security rated treasury vaults at a Canadian chartered bank on an unencumbered, allocated, segregated and insured basis.

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Questions for CEF
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duncanmcl
Jan 18, 2010 06:58PM

additional statements from recent annual report////I feel secure!

The governing articles of Central Fund require that at least 75% of Central Fund’s

non-cash assets be invested in gold and silver bullion investments. This cannot be

changed without shareholder approval.

The stated policy of the Board of Directors requires Central Fund to maintain a

minimum of 90% of its net assets in gold and silver bullion of which at least 85%

must be in physical form. On October 31, 2009, 97.4% of Central Fund's net assets

were invested in gold and silver bullion. Of this, 99.4% was held in physical form

and 0.6% was held in certificate form.

Central Fund's physical gold and silver bullion holdings may not be loaned, subjected

to options or otherwise encumbered in any way.

Safeguards

Central Fund’s bullion is stored on an allocated and fully segregated basis in the

underground vaults of the Canadian Imperial Bank of Commerce (the “Bank”), one of

the major Canadian Banks, which insures its safekeeping. Additional insurance

against destruction, disappearance or wrongful abstraction is carried by Central Fund

on its physical gold and silver bullion holdings.

The Bank may only release any portion of Central Fund’s physical bullion holdings

upon receipt of an authorizing resolution of Central Fund's Board of Directors.

Bullion holdings and Bank vault security are inspected twice annually by Directors

and/or Officers of Central Fund. On every occasion, inspections are required to be

performed in the presence of both Central Fund's external auditors and Bank

personnel.

Central Fund is subject to the extensive regulations and reporting requirements of the

United States Securities and Exchange Commission, two stock exchanges and various

Canadian provincial securities regulatory authorities.

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