Gold Participation and Income Fund Completes Closing of Over-Allotment Option and Separation of Combined Units



    TORONTO, Aug. 26 /CNW/ - Gold Participation and Income Fund (the "Fund"),
a closed-end investment trust designed to provide investors with
Canadian-dollar exposure to the long-term performance of gold bullion and gold
equity securities while providing a monthly distribution stream and mitigating
downside risk, is pleased to announce that it has completed an issuance of an
additional 50,000 Combined Units pursuant to the exercise of the
over-allotment option granted to the Fund's agents in its recently completed
initial public offering. Altogether, the Fund has raised gross proceeds of
$28.2 million under the offering, including the proceeds from the
over-allotment option.
    The Fund is also announcing the separation of the Combined Units into
Units and Warrants to purchase Units of the Fund. The Units and the Warrants
are listed on the Toronto Stock Exchange under the symbols GPF.UN and GPF.WT,
respectively.
    Each Warrant of the Fund entitles its holder to purchase one Unit of the
Fund at a subscription price of $12.00 on November 6, 2009, February 5, 2010,
May 7, 2010 or August 6, 2010 (each, an "Exercise Date"). Although the
Warrants may be tendered for exercise during the two-week period up to and
including each Exercise Date, it is recommended that holders tender their
Warrants for exercise no later than two business days prior to the applicable
Exercise Date.
    The Fund will seek to achieve its objectives by investing 100% of its net
assets in the gold sector - initially 50% in Shares of SPDR Gold Trust, an
exchange-traded fund that seeks to track the price of gold by investing
directly in gold bullion, and 50% in a portfolio (the "Managed Gold
Portfolio") of equity securities selected from the S&P/TSX Global Gold Index,
a dynamic international benchmark of the world's leading gold companies. The
Fund intends to take advantage of the current high volatility of the Managed
Gold Portfolio securities by writing covered call options on approximately 25%
of its portfolio securities in order to mitigate downside risk for holders of
its Units ("Unitholders") and to generate additional returns above the
distribution income earned on its portfolio.
    The Fund's investment objectives are: (i) to maximize total returns for
Unitholders including both long-term appreciation in net asset value ("NAV")
per Unit and distributions; and (ii) to pay Unitholders monthly distributions
in an amount targeted to be 6.5% per annum on the NAV of the Fund.
    The offering was made through a syndicate of investment dealers co-led by
RBC Capital Markets and CIBC that includes Scotia Capital Inc., National Bank
Financial Inc., TD Securities Inc., Blackmont Capital Inc., Canaccord Adams,
Desjardins Securities Inc., Dundee Securities Corporation, GMP Securities
L.P., HSBC Securities (Canada) Inc., Raymond James Ltd., Manulife Securities
Incorporated, Richardson Partners Financial Limited and Wellington West
Capital Markets Inc.





For further information:

For further information: John Mulvihill, President and CEO, John
Germain, Senior Vice-President, Sheila Szela, Vice-President, Finance and CFO,
Mulvihill Structured Products, A member of the Mulvihill Capital Management
Inc. Group of Funds, 121 King Street West, Suite 2600, Toronto, Ontario, M5H
3T9, (416) 681-3900, (800) 725-7172, www.mulvihill.com, hybrid@mulvihill.com

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GOLD PARTICIPATION AND INCOME FUND

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