Precious Metals Strategy

ObjectiveThe objective of the BMO Precious Metals Strategy is to provide long-term growth by investing in securities of primarily Canadian companies whose value is dependent on the value of gold, silver, platinum and other precious metals.

PhilosophyAt BMO Asset Management (BMO AM), we believe that capital markets are not perfectly efficient and, there-fore ,investment opportunities can be identified and captured through fundamental security analysis, disciplined portfolio construction and a strong risk management approach.

StrategyThe portfolio manager combines bottom-up fundamental analysis with an outlook for commodities markets to seek to identify attractively priced companies operating in the explora-tion, mining, production or distribu-tion of precious metals. The team adheres to a disciplined investment process and securities selection criteria irrespective of market trends.

Investment ProcessIdentifying precious metals compa-nies with sustainable competitive advantages.

Idea Generation

Screening techniques are used to establish the investable universe. Eligible investment securities typi-cally have a market cap of greater than $20 million and must provide

About the StrategyFor institutional investors – a bottom-up GARP strategy with focus on growth, quality and valuation. Key differentiators:

Experience: Experienced portfolio management team

Discipline: Thorough and repeatable process, paired with team collaboration, offers optimal performance

Strong risk/return pro�le: Multi-dimensional risk management to ensure portfolio is reflecting the best risk/reward ideas

Process: Thorough and disciplined approach works to ensure the best growth oppor-tunities are captured

Inception Date:January 7, 1997

sufficient trading liquidity. These securities are primarily sourced from the S&P/TSX Composite Index or the S&P/TSX Venture Composite Index. Our secondary screens use both qualitative and quantitative factors to further narrow the universe and identify the companies on which we conduct our detailed analysis.

Fundamental Research Process

Stringent analysis to generate the best growth opportunities.

BMO AM applies a disciplined research process to a list of securi-ties, which is conducted by our dedicated team of sector analysts. Through the cumulative process of screening techniques and research, a series of portfolio recommendations are made. A majority of the research utilized by portfolio managers is generated internally, with manage-ment interviews playing an important role in the qualitative assessment. External research on companies under consideration may also be utilized to provide an alternative analysis of the company’s business opportunities.

Portfolio Construction andManagement

Security selection is at the core of our portfolio construction process. “Buy” opportunities are identified using both quantitative and qualitative criteria. Quantitative criteria include performance track record, growth potential and outlook, balance sheet quality, and valuations or share price appreciation potential. Qualitative criteria include management quality, corporate strategy, management ownership, and corporate governance.

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Our bottom-up fundamental analysis identifies the best risk/reward ideas along the value chain for resource companies.

ObjectiveThe objective of the BMO Precious Metals Strategy is to provide long-term growth by investing in securities of primarily Canadian companies whose value is dependent on the value of gold, silver, platinum and other precious metals.

PhilosophyAt BMO Asset Management (BMO AM), we believe that capital markets are not perfectly efficient and, there-fore ,investment opportunities can be identified and captured through fundamental security analysis, disciplined portfolio construction and a strong risk management approach.

StrategyThe portfolio manager combines bottom-up fundamental analysis with an outlook for commodities markets to seek to identify attractively priced companies operating in the explora-tion, mining, production or distribu-tion of precious metals. The team adheres to a disciplined investment process and securities selection criteria irrespective of market trends.

Investment ProcessIdentifying precious metals compa-nies with sustainable competitive advantages.

Idea Generation

Screening techniques are used to establish the investable universe. Eligible investment securities typi-cally have a market cap of greater than $20 million and must provide

sufficient trading liquidity. These securities are primarily sourced from the S&P/TSX Composite Index or the S&P/TSX Venture Composite Index. Our secondary screens use both qualitative and quantitative factors to further narrow the universe and identify the companies on which we conduct our detailed analysis.

Fundamental Research Process

Stringent analysis to generate the best growth opportunities.

BMO AM applies a disciplined research process to a list of securi-ties, which is conducted by our dedicated team of sector analysts. Through the cumulative process of screening techniques and research, a series of portfolio recommendations are made. A majority of the research utilized by portfolio managers is generated internally, with manage-ment interviews playing an important role in the qualitative assessment. External research on companies under consideration may also be utilized to provide an alternative analysis of the company’s business opportunities.

Portfolio Construction andManagement

Security selection is at the core of our portfolio construction process. “Buy” opportunities are identified using both quantitative and qualitative criteria. Quantitative criteria include performance track record, growth potential and outlook, balance sheet quality, and valuations or share price appreciation potential. Qualitative criteria include management quality, corporate strategy, management ownership, and corporate governance.

Risk Management

ST-022013-PRM-E

TM/® Trade-marks/registered trade-marks of Bank of Montreal, used under licenceThe information provided herein does not constitute a solicitation of an offer to buy, or an offer to sell securities nor should the information be relied upon as investment advice. All Rights Reserved. The information contained herein: (1) is confidential and proprietary to BMO Asset Management Inc. (“BMO AM”); (2) may not be reproduced or distributed without the prior written consent of BMO AM; and (3) has been obtained from third party sources believed to be reliable but which have not been independently verified. BMO AM and its affiliates do not warrant or make any representations regarding the use or the results of the information contained herein in terms of its correctness, accuracy, timeliness, reliability or otherwise, and do not accept any responsibility for any loss or damage that results from its use. ® Registered trade-mark/trade-marks of Bank of Montreal, used under license.

Call to ActionFor more information about this strategy or our line-upof Equities, Fixed Income, Currency solutions and ETFs,please contact Marija Finney:Marija Finney, Senior Vice President,Head of Institutional Sales & ServiceTél. : 416-359-5003marija.finney@bmo.com

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Our bottom-up fundamental analysis identifies the best risk/reward ideas along the value chain for resource companies.

Risk management is an inherent part of portfolio construction. Risk control parameters are applied to the selection of stocks comprising portfolio recommen-dations. Considerations for risk control include specific industry or sector constraints, individual company constraints and client imposed investment guidelines.

Additionally, operational risk controls ensure a strong governance structure is in place to safeguard client assets. These include segregation of portfolio manage-ment, research, and trading responsibilities which are reinforced by pre- and post-trade compliance activi-ties, as well as daily monitoring of client and strategy guidelines.

Sell Discipline

Should the original factors underlying our purchase of a security change, the investment fundamentals are reviewed. A review is triggered by events such as achieving the target return; a change in fundamentals, management or corporate strategy; or the company doesn’t meet expectations. If the stock fails to meet our standards, it will be sold.

BMO Global Asset Management, our global brand, is a multi-asset management business with offices located worldwide. BMO Asset Management Inc. (BMO AM) is the operating entity in Canada.BMO AM is a multi-disciplined provider of investment solutions across a diverse set of investment approaches:

■ Pure beta■ Risk controlled alpha■ Fundamental strategies■ Market neutral and long/short

We also offer customized solutions based on clients’ investment beliefs and risk preferences.

Key Investment Professionals

Firm Overview

Mark Serdan, CFA, CA

Vice President, Portfolio Manager, Canadian Equities

Mark joined BMO Asset Management Inc. in the fall of2009 and has over 16 years of investment industryexperience. He is the lead Portfolio Manager for theBMO Precious Metals Fund, BMO Resource Fund andBMO Global Energy Class. Mark has spent the past9 years exclusively focused on the Materials sector witha concentration on precious metals. Prior to joining thefirm, he was responsible for all investment decisionsrelated to the Canadian materials sector at a majorinternational investment management firm. Mark holdsan Honours Bachelor of Commerce degree from theUniversity of Windsor, received his CA from the Instituteof Chartered Accountants of Ontario, and is a CFAcharterholder.

Kyle Hunter, CFA, MBA

Associate Portfolio Manager, Canadian Equities

Kyle is an Associate Portfolio Manager for the BMOResource Fund and BMO Global Energy Class and hasresearch responsibilities for the Energy sector. Kylejoined BMO Asset Management Inc. in 2010, bringingwith him experience working for an independentsell-side firm as an oil and gas research associate.Prior to that, he worked as a consultant with a majorinternational accounting and consulting firm. Kyle hasan MBA from the Richard Ivey School of Business andis a CFA charterholder.