Best Picks 2013: Canada Research

Canada Research
Published by Raymond James Ltd.
Best Picks 2013

Raymond James Ltd.s Best Picks for 2013 are:
Aecon Group (ARE-TSX) Alamos Gold Inc. (AGI-TSX) B2Gold Corp. (BTO-TSX) Black Diamond Group Ltd. (BDI-TSX) Cameco Corp. (CCO-TSX | CCJ-NYSE) Canfor Corp. (CFP-TSX) Canfor Pulp Products Inc. (CFX-TSX) Copper Mountain Mining (CUM-TSX) Endeavour Mining Corp. (EDV-TSX | EVR-ASX) HudBay Minerals, Inc. (HBM-TSX | HBM-NYSE) Open Text (OTEX-NASDAQ | OTC-TSX) Potash Corp. of Saskatchewan Inc. (POT-NYSE | POT-TSX) Savanna Energy Services (SVY-TSX) Shoppers Drug Mart (SC-TSX)
December 10, 2012
Company Aecon Group Alamos Gold Inc. B2Gold Corp. Black Diamond Group Ltd. Cameco Corp. Canfor Corp. Canfor Pulp Products Inc. Copper Mountain Mining Endeavour Mining Corp. HudBay Minerals, Inc. Open Text Potash Corp. of Saskatchewan Inc. Savanna Energy Services Shoppers Drug Mart Raymond James Ltd.
Ticker Primary ARE-TSX AGI-TSX BTO-TSX BDI-TSX CCO-TSX CFP-TSX CFX-TSX CUM-TSX EDV-TSX HBM-TSX OTEX-NASDAQ POT-NYSE SVY-TSX SC-TSX
Ticker Secondary
Current Price C$10.33 C$18.26 C$3.42 C$20.30 C$18.03 C$14.55 C$8.28 C$3.74 C$2.08 C$9.64 US$56.79 C$38.60 C$6.72 C$41.63
Target Price (6-12 mths) Div. Yield C$16.50 C$24.50 C$5.50 C$28.00 C$25.00 C$17.50 C$13.00 C$5.85 C$4.00 C$11.75 US$72.00 C$50.00 C$10.50 C$48.00 3% 1% 0% 4% 2% 0% 0% 0% 0% 2% 0% 2% 5% 3%
Total Return To Target 62% 34% 61% 42% 39% 20% 57% 56% 92% 22% 27% 32% 62% 18%
Rating Strong Buy 1 Outperform 2 Outperform 2 Strong Buy 1 Outperform 2 Outperform 2 Outperform 2 Outperform 2 Outperform 2 Outperform 2 Outperform 2 Outperform 2 Strong Buy 1 Outperform 2
Analyst FB GB CT AB DSa DS DS AL BH AT SL SH AB KT
CCJ-NYSE
EVR-ASX HBM-NYSE OTC-TSX POT-TSX
Please read domestic and foreign disclosure/risk information beginning on page 24 and Analyst Certification on page 25.
Raymond James Ltd. | 2100 925 West Georgia Street | Vancouver BC Canada V6C 3L2
Canada Research | Page 2 of 34
Best Picks 2013
Dear Valued Clients,

We are pleased to present our Raymond James Ltd. Canadian Analysts 2013 Best Picks. The Raymond James Canadian research team is proud of our stock picking record with the annual best picks list delivering a simple average holding period return of 16.4% over the past 10 years, outpacing the S&P/TSX Small Cap index by 7.5% on the same basis (see Exhibit 1). With the pronounced market volatility amid macro uncertainty, the results for 2012 were, however, less encouraging. From January 3, 2012 to December 3, 2012 the average holding period return was -2.5% compared to -10.1% for the S&P/TSX Small Cap Index. Of the 10 stocks on the list, all but three outperformed the relevant benchmark. It was a humbling period for some of the analyst selections, whereas others outperformed with notable returns of 66.4% for Secure Energy Services, 34.8% for Methanex Corp., and 21.0% for Bird Construction (see Exhibit 2). Our analysts have provided a fresh list of 14 stocks for 2013. Two of the stocks remain unchanged although investment highlights have been refreshed to address developments over the past 12 months (see Exhibit 3 for details on the changes to the list). These stocks represent a current snapshot of our analysts best ideas; however, we continue to encourage investors to focus on risk adjusted returns and appropriate asset allocation while investing over the long term. With appreciation, Daryl Swetlishoff Head of Research (Canada)
Best Picks 2013
About Raymond James Ltd.

Raymond James Ltd. is a wholly owned subsidiary of U.S.-based Raymond James Financial Inc. (RJF-NYSE), and is a prominent, independent, full-service investment dealer in Canada. Raymond James Ltd. has Private Client offices across Canada and Equity Capital Markets offices in Toronto, Vancouver, Calgary and Montreal. The firm is a member of the Toronto Stock Exchange, the Montreal Exchange, and the TSX Venture Exchange as well as the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. For more information about Raymond James, please visit our website at: www.raymondjames.ca.
Exhibit 1: Best Picks Historical Performance Best Picks S&P/TSX Year List SmallCap Index 2003 11.6% 35.9% 2004 19.0% 4.1% 2005 33.2% 11.6% 2006 15.4% 7.8% 2007 13.9% -3.5% 2008 -59.6% -55.4% 2009 145.2% 86.7% 2010 22.0% 23.3% 2011 -34.1% -11.8% 2012 -2.5% -10.1% Average 16.4% 8.9%
Note: Historical performance 2010 and 2011 reflect the returns of an equally weighted hypothetical portfolio and include the effects of mid-year updates.
Exhibit 2: RJL Canadian Analysts 2012 Best Picks

Canadian Analysts Best Picks for 2012 Alamos Gold Inc. Bird Construction Inc. Domtar Corporation Eldorado Gold Corp. Fortress Paper Ltd. Legacy Oil + Gas Inc. Lumina Copper Corp. Methanex Corp. Secure Energy Services Inc. Shoppers Drug Mart Corp. Average Benchmarking Indicies S&P TSX Index S&P TSX SmallCap Index IQ2671800 IQ2671811 12,208.4 633.2 12,169.7 569.1 -0.3% -10.1% Symbol TSX:AGI TSX:BDT NYSE:UFS NYSE:EGO TSX:FTP TSX:LEG TSXV:LCC NASDAQ:MEOH TSX:SES TSX:SC Current 6-12 Month Target ($) 24.50 16.00 105.00 20.00 19.00 11.50 22.00 34.00 11.25 48.00 Current Rating 2 2 2 2 3 2 1 2 2 2 Analyst GB FB DS BH DS KZ AL SH AB KT Price ($) 3-Jan-12 18.36 11.94 83.98 14.74 27.09 10.99 13.00 23.55 7.36 40.65 Price ($) 3-Dec-12 18.26 13.75 79.11 14.08 7.15 6.81 8.67 30.50 10.01 41.63 Holding Period Return (%) 1.1% 21.0% -5.8% -3.5% -72.5% -38.0% -31.5% 34.8% 66.4% 2.7% -2.5%
Best Picks 2013
Exhibit 3: RJL Canadian Analyst 2013 Best Picks Additions/Deletions

Company Name No Change Alamos Gold Inc. Shoppers Drug Mart Additions Aecon Group B2Gold Corp. Black Diamond Group Ltd. Cameco Corp. Canfor Corp. Canfor Pulp Products Inc. Copper Mountain Mining Endeavour Mining Corp. HudBay Minerals, Inc. Open Text Potash Corp. of Saskatchewan Inc. Savanna Energy Services Deletions Bird Construction Inc. Domtar Corporation Eldorado Gold Corp. Fortress Paper Legacy Oil & Gas Inc. Lumina Copper Corp. Methanex Secure Energy Services Inc. Symbol Recent Price ($) Current Target ($) Current Rating
TSX:AGI TSX:SC
18.26 41.63
24.50 48.00
Outperform 2 Outperform 2
TSX:ARE TSX:BTO TSX:BDI TSX:CCO TSX:CFP TSX:CFX TSX:CUM TSX:EDV TSX:HBM NASDAQ:OTEX NYSE:POT TSX:SVY
10.33 3.42 20.30 18.03 14.55 8.28 3.74 2.08 9.64 56.79 38.60 6.72
16.50 5.50 28.00 25.00 17.50 13.00 5.85 4.00 11.75 72.00 50.00 10.50
Strong Buy 1 Outperform 2 Strong Buy 1 Outperform 2 Outperform 2 Outperform 2 Outperform 2 Outperform 2 Outperform 2 Outperform 2 Outperform 2 Strong Buy 1
TSX:BDT NYSE:UFS NYSE:EGO TSX:FTP TSX:LEG TSXV:LCC NASDAQ:MEOH TSX:SES
13.75 79.11 14.08 7.15 6.81 8.67 30.50 10.01
16.00 105.00 20.00 19.00 11.50 22.00 34.00 11.25
Outperform 2 Outperform 2 Outperform 2 Market Perform 3 Outperform 2 Strong Buy 1 Outperform 2 Outperform 2
Best Picks 2013
Canada Research
Aecon Group
ARE-TSX
Frederic Bastien CFA | 604.659.8232 | frederic.bastien@raymondjames.ca Jamil Murji CFA (Associate) | 604.659.8261 | jamil.murji@raymondjames.ca
Rating & Target
December 10, 2012
Infrastructure & Construction | Construction
Best Picks 2013 Investment Rationale

We urge investors to buy shares of Aecon as we feel there is a disconnect between the stocks recent performance and the healthy momentum the firm is carrying into 2013. From our perspective Aecon is leveraging its scope and scale into more profitable opportunities, moving away from the increasingly competitive buildings market andmore importantlyexecuting projects well. We believe this sharpened strategic and operational focus sets the stage for continued margin gains and significant shareholder value creation. Well Positioned For Growth. Aecon is a leading player in three of Canadas most promising construction sectorstransportation, energy and natural resources. It is also a large employer of building trades, making it an ideal partner for large construction firms seeking to secure boots on the ground in Canada. Finally it should be noted that Aecon is one of few suppliers capable of offering virtually every oil sands development requirement under a single umbrella, which is of increasing value to project owners. Embracing The One Aecon Approach. There has been a conscientious effort over the past 18 months to bring different business units together to perform larger and more comprehensive projects. One such example relates to leveraging the expertise of Aecon Mining and Lockerbie & Hole Eastern into synergies that enhance the firms ability to self-perform more potash mining work. While there is still work to be done, the simple but powerful concept of One Aecon appears to be already rooted in the firms culture and is, in our view, poised to drive the firms bid success rate higher. Record Backlog and Healthy Pipeline. Of the $2.8 bln in backlog as at Sept30-12, nearly $1.2 bln is tied to projects that extend beyond 12 months. This excludes the annual revenue in excess of $500 mln that can be reasonably expected from Aecons growing alliances and supplier-of-choice arrangements (but for which the value and/or amount of work to be carried out cannot be readily determined). Finally, despite a more cautious approach to capital spending globally, a number of projects falling within Aecons strike zone are expected to be tendered shortly. These include the John Hart Power Generation Project in British Columbia, the Northwest Upgrader in Alberta and K+S Legacy potash mine in Saskatchewan.
Strong Buy 1 Target Price (6-12 mos): C$16.50 Current Price ( Dec-03-12 ) C$10.33 Total Return to Target 62% 52-Week Range C$13.76 - C$9.48 Market Data Market Capitalization (mln) C$719 Net Debt (mln) C$355 Enterprise Value (mln) C$1,074 Shares Outstanding (mln, f.d.) 69.6 10 Day Avg Daily Volume (000s) 256 Dividend/Yield C$0.28/2.7% Key Financial Metrics 2011A 2012E 2013E P/E 12.3x 10.4x 7.4x EV/EBITDA 6.6x 6.2x 4.7x Construction Business: EPS C$0.70 C$0.88 C$1.22 Construction Business: P/E 12.1x 9.6x 6.9x Construction Business: EBITDA (mln) C$142 C$155 C$198 Construction Business: EV/EBITDA 6.5x 5.9x 4.7x Construction Business: Equity value (mln) C$591 Construction Business: Net Debt (mln) C$330 Construction Business: Enterprise Value (mln) C$921 BVPS C$9.25 Company Description Aecon is Canada's largest publicly-traded construction firm. The company and its subsidiaries provide services to private/public sector clients throughout Canada and, on a selected basis, internationally.
Valuation
We value Aecons core business at $14.43 per share using the contractors 10year average EV/EBITDA multiple of 5.2x our estimates for 2013. We add another $1.84 per share to reflect the investments made to date in Quiport.
EPS 2011A 2012E 2012E 2013E 2013E 1Q Mar C$(0.49) (0.33)A (0.33)A (0.22) (0.22) 2Q Jun C$0.07 0.07A 0.07A 0.17 0.17 3Q Sep C$0.49 0.50A 0.50A 0.65 0.65 4Q Dec C$0.49 0.55 0.55 0.66 0.66 Full Year C$0.84 1.00 1.00 1.40 1.40 Revenue (mln) C$2,896 2,805 2,805 2,950 2,950 EBITDA (mln) C$163 173 173 226 226
Old New Old New
Source: Raymond James Ltd., Thomson One
Best Picks 2013
Canada Research
Alamos Gold Inc.

AGI-TSX
Gary Baschuk | 416.777.7098 | gary.baschuk@raymondjames.ca Gordon Lawson MBA, PE (Associate) | 416.777.7102 | gordon.lawson@raymondjames.ca
Rating & Target
December 10, 2012
Mining | Precious Metals - Gold

Alamos is a consistent, low cost gold producer with $316.9 mln in cash, cash equivalents, and short-term investments (as at Sep-30-12) which we believe will grow and be sufficient for the capital required to build the A Da and Kirazli operations in Turkey. We continue to recommend accumulating shares of Alamos on its attractive growth profile, low cost operations, and disciplined management. Growth: We model production of ~234,000 oz gold in 2013E (up 17% from the ~200,000 oz expected in 2012) and with the inclusion of the assets in Turkey, we model Alamos to produce over 400,000 oz gold by 2017E. We believe the development capex required to build the oxide mines in Turkey, modeled at ~$550 mln, can be funded with internal cash flows. On the permitting front, A Da and Kirazli remain on track for submittal of the EIA in the next few months, with approval expected in 1Q13 and 2Q13, respectively. Low Cost Operations: We model 2012E total cash costs at $421/oz gold, below company guidance at $450/oz-$475/oz, and LOM $450/oz, a 74% discount to spot at $1,715/oz. With these strong margins, we model operating cash flows of between ~$170 mln and ~$200 mln over the next five years while continuing to pay a dividend and build the Turkey assets. Disciplined Management: The small management team focuses on the existing Mexican projects and advancing the Turkish assets with the goal of production in early 2015. The Turkish assets are similar to the Mexican operations and we believe the skill sets will be readily transferrable and result in a clean start-up. The Turkish projects are expected to be funded from internal cash flow illustrating the financial discipline of the team in an environment of rising costs.
Outperform 2 Target Price (6-12 mos): C$24.50 Current Price ( Dec-03-12 ) C$18.26 Total Return to Target 34% 52-Week Range C$21.00 - C$13.84 Market Data Market Capitalization (mln) C$2,205 Current Net Debt (mln) -US$287 Enterprise Value (mln) C$1,918 Shares Outstanding (mln, f.d.) 125.6 10 Day Avg Daily Volume (000s) 172 Dividend/Yield US$0.10/1.0% Key Financial Metrics 2011A 2012E 2013E P/E 35.5x 18.9x 14.4x CFPS US$0.91 US$1.48 US$1.67 Working Capital (mln) US$266.6 US$394.4 US$528.1 Capex (mln) US$82.0 US$44.1 US$68.5 Cash Costs (US$/oz) US$440 US$414 US$407 Gold Production ('000 oz) 153 198 234 Silver Production ('000 oz) 0 0 0 P/NAV (2012E) 0.9x Total Resource (Moz) 9 Valuation (US$EV/oz) 205 Company Description Alamos is a gold production, development and exploration company focused on its 100%-owned Mulatos mine in Mexico and its 100%-owned Agi Dagi/Kirazli project in Turkey.
Valuation
Our $24.50 target price is based on a cash-adjusted 1.3x P/NAV multiple applied to our NAVPS estimate of C$20.00. Alamos currently trades at 0.9x P/NAV vs. our gold producer average of 1.0x (at current spot prices, US$1,715/oz gold, Alamos is trading at 0.7x and the NAVPS jumps 32% to $26.40).
EPS 1Q 2Q 3Q Mar Jun Sep 2011A US$0.15 US$0.13 US$0.12 2012E 0.23A 0.24A 0.19 2012E 0.23A 0.24A 0.19 2013E 0.30 0.32 0.34 2013E 0.30 0.32 0.34 4Q Dec US$0.18 0.32 0.32 0.30 0.30 Full Year US$0.51 0.97 0.97 1.27 1.27 Revenue (mln) US$216 321 321 396 396 NAVPS
Old New Old New
20.00 20.00
Best Picks 2013
Canada Research
B2Gold Corp.
BTO-TSX Chris Thompson M.Sc. (Eng), P.Geo | 604.659.8439 | chris.thompson@raymondjames.ca Brian Martin (Associate) | 604.654.1236 | brian.martin@raymondjames.ca
Rating & Target
December 10, 2012

B2Gold is an aggressive growth-orientated gold producer with a two mine Nicaraguan production base, a prospective development stage project pipeline, and an attractive portfolio of exploration projects. Upon closing, the proposed merger with CGA Mining Ltd. would add another producing mine in the Philippines.
Management Track RecordWe believe B2Golds strong track record of past and current success in development, operating, and exploration sets the company apart from its gold producing peers as an aggressive growthorientated emerging mid-tier gold producer that continues to build on a track record of delivering on guidance. Plus-400 K oz Production in 2013E, at $650/ozWe look for near-term production growth, driven by the inclusion of Jabali ore in the La Libertad mill feed beginning in 4Q12 and the addition of the Masbate mine upon completion of the pending B2Gold/CGA merger (expected before Jan-31-13). Taken together, we expect production to grow to ~400 K oz Au at a total cash cost of $650/oz in 2013E (from ~155 K oz Au at $640/oz in 2012E). Medium Term (2015-2016) Development PotentialB2Golds prospective development pipeline provides medium-term production growth beyond 2013. Key near-term potential catalysts for development stage assets include: (1) a feasibility study at the Otjikoto project (4Q12E), with construction in 2013E/2014E, and (2) a pre-feasibility study at the JV Gramalote project (1Q13E). Compelling Exploration UpsideIn addition to B2Golds mine-site exploration success, JV partnerships continue to deliver positive exploration news from a portfolio of projects in Nicaragua and Uruguay. Strong & Flexible Balance SheetWith a pro-forma cash reserve of ~$150 mln as of Sep-30-12 (combined B2Gold/CGA), enhanced by un-drawn credit facilities, B2Golds strong and flexible balance sheet underpins the companys ability to fund its growing production base.
Outperform 2 Target Price (6-12 mos): C$5.50 Current Price ( Dec-03-12 ) C$3.42 Total Return to Target 61% 52-Week Range C$4.55 - C$2.64 Market Data Market Capitalization (mln) C$1,345 Current Net Debt (mln) -C$73 Enterprise Value (mln) C$1,272 Shares Outstanding (mln, f.d.) 393.3 10 Day Avg Daily Volume (000s) 1,594 Dividend/Yield C$0.00/0.0% Key Financial Metrics 2011A 2012E 2013E P/CFPS 10.9x 11.8x 6.9x P/NAV 0.9x NA Au Price (US$/oz) US$1,571 US$1,680 US$1,780 Attributable Au Production (oz's) 144,604 155,562 402,825 Au Total Cash Cost (US$/oz) US$612 US$642 US$648 EPS US$0.16 US$0.16 US$0.41 Company Description B2Gold is an emerging mid-tier gold producer with a robust growth profile from existing operations, a development stage project pipeline and an attractive portfolio of exploration joint ventures.
Valuation
To derive our C$5.50 target price, we apply a 10.0x multiple to our 2013 CFPS estimate, plus an additional C$0.52 credit for non-producing assets, which we feel captures the value of B2Golds growing Nicaraguan/Philippine production base and growth opportunities presented by the companys development stage assets.
CFPS 1Q 2Q 3Q Mar Jun Sep 2011A US$0.07 US$0.08 US$0.06 2012E 0.07A 0.07A 0.07 2012E 0.07A 0.07A 0.07 2013E 0.12 0.12 0.13 2013E 0.12 0.12 0.13 4Q Dec US$0.10 0.08 0.08 0.13 0.13 Full Year US$0.32 0.29 0.29 0.50 0.50 Revenue (mln) US$225 262 262 667 667 NAVPS
Old New Old New
3.86 3.86 NA NA
Best Picks 2013
Canada Research
Black Diamond Group Ltd.

BDI-TSX
Andrew Bradford CFA | 403.509.0503 | andrew.bradford@raymondjames.ca Nick Heffernan (Associate) | 403.509.0511 | nicholas.heffernan@raymondjames.ca
Rating & Target
December 10, 2012
Oil & Gas Energy Services | Facilities & Infrastructure

We believe Black Diamond is well-positioned to capture considerable growth in the remote accommodations business, particularly as it relates to Canadas energy sector. Black Diamonds shares had been drifting lower since its mid-September high, down 18% by late-November the stock has since recouped about one-third of this loss. We think the selloff was unwarranted and in its recent trading range, the stock presents a compelling buying opportunity; we rate Black Diamond Strong Buy (see our Dec-3-12 Industry Comment, Robust Economics in SAGD Oil Sands Projects Drives Demand for Remote Accommodations, for further details). Canadian remote accommodations rental demand is growing. We expect 25%-30% net growth in Western Canada bed demand in 2013E. This is largely stemming from SAGD oil sands development, west central and northwest Alberta (Cardium, Duvernay, Deep Basin) as well as infrastructure, likely offset by a decline in northeast B.C. natural gas. Black Diamond is advantageously positioned with a concentration of core SAGD customers. We expect that SAGD oil sands projects will be the fastest growing segment for accommodations companies in Western Canada. We are forecasting approximately 80% growth in SAGD remote beds in 2013E, and just over 150% between now and 2015E. We expect Black Diamond will garner a disproportionate share of the SAGD demand growth as a function of its incumbency with the major SAGD project developers. We estimate Black Diamond has about 70-75% of the northeast B.C. natural gas market. We think demand for beds in northeast B.C. will likely decline for the foreseeable future. That said, favourable investment conditions for West Coast LNG projects could spur incremental multi-year bed demand growth and Black Diamond is well-positioned to capture its share of this. Black Diamond stock offers an attractive yield. Black Diamonds $0.72 annual dividend ($0.06 monthly) implies a 3.5% yield on the $20.30 share price (Dec-312) and is only 25% of 2012E cash flow; 24% of 2013E cash flow.
Target Price (6-12 mos): Current Price ( Dec-03-12 ) Total Return to Target 52-Week Range Market Data Market Capitalization (mln) Current Net Debt (mln) Enterprise Value (mln) Shares Outstanding (mln, f.d.) 10 Day Avg Daily Volume (000s) Dividend/Yield Key Financial Metrics 2011A P/E 17.6x EV/EBITDA 8.5x EBITDA (mln) C$94 Capex (mln) C$95 Dividend (mln) C$20 BVPS (tangible) C$6.01 Debt/EBITDA 0.9x ROE 17.4%
Strong Buy 1 C$28.00 C$20.30 42% C$23.79 - C$16.60 C$834 C$72 C$906 44.7 108 C$0.72/3.5% 2012E 15.3x 7.5x C$116 C$136 C$27 C$7.73 0.7x 16.3% 2013E 12.5x 6.1x C$149 C$100 C$30 C$8.74 0.6x 17.7%
Company Description BDI rents modular structures used as workforce accommodation and temporary work space. It also provides ancillary services related to the transportation, installation and repair of modular structures and offers a suite of oilfield surface rental equipment.
Valuation
We derive our $28.00 target price from a 5-year discounted cash flow model. This target is 8.2x 2013E EV/EBITDA, higher than for conventional oilfield service companies given our expectations of Black Diamonds growth potential.
Adjusted 1Q EPS Mar 2011A C$0.30 Old 2012E 0.35A New 2012E 0.35A Old 2013E 0.43 New 2013E 0.43 2Q Jun C$0.27 0.30A 0.30A 0.37 0.37 3Q Sep C$0.30 0.34A 0.34A 0.40 0.40 4Q Dec C$0.28 0.33 0.33 0.43 0.43 Full Year C$1.15 1.32 1.32 1.62 1.62 Revenue (mln) C$242 272 272 346 346 Cash Flow (mln) C$105 106 106 125 125
Best Picks 2013
Canada Research
Cameco Corp.
CCO-TSX | CCJ-NYSE
David Sadowski | 604.659.8255 | david.sadowski@raymondjames.ca
December 10, 2012

Rating & Target Outperform 2 Target Price (6-12 mos): C$25.00 Current Price ( Dec-03-12 ) C$18.03 Total Return to Target 39% 52-Week Range C$26.43 - C$16.50 Market Data Market Capitalization (mln) C$7,128 Current Net Debt (mln) C$978 Enterprise Value (mln) C$8,106 Shares Outstanding (mln, basic) 395.3 10 Day Avg Daily Volume (000s) 1,118 Dividend/Yield C$0.40/2.2% Key Financial Metrics 2011A 2012E 2013E P/E 14.1x 18.5x 13.4x P/NAV 1.1x NA CFPS C$1.94 C$1.47 C$1.97 Working Capital (mln) C$1,877.3 C$1,295.2 C$1,286.5 Capex (mln) C$(647.2) C$(874.9) C$(580.3) Long Term Debt (mln) C$932.3 C$1,292.3 C$1,242.3 Production (Mlbs) 22.4 21.5 22.8 Cash Costs (US$/lb) US$25.0 US$30.8 US$29.9 Total Resource (Mlbs) 1,005.50 Shares Outstanding (mln, f.d.) 397.1 Company Description One of the largest, highest-grade & lowest-cost uranium producers globally. Cameco is vertically integrated via fuel services and electricity generation, adding exposure to the recovering nuclear industry.
Mining | Uranium

Positive Uranium Outlook. Bullish supply-demand fundamentals, including rising Asian demand, insufficient mine supply growth and the expiry of the Russian HEU Agreement (2013) bolster our positive outlook on uranium prices. We forecast US$58/lb U3O8 in 2013E and US$72/lb in 2014E (vs. US$42/lb today). Growing, Low Cost Production. Cameco is the worlds largest, publically-listed uranium producer with 2011A output of 22.4 Mlbs at C$25/lb production cash costs. We model 31.2 Mlbs in 2016E (+6.9% five-year CAGR), while keeping opex below C$32/lb. Start-up of 50%-owned Cigar Lake, which is slated to be the worlds second largest uranium mine, is a key growth catalyst in 4Q13E. Huge company-wide resources of 1.01 bln lbs of which 377 Mlbs grade 17.1% at Cigar and McArthur underline Camecos potential longevity as a producer. Safety. Cameco is focused on geopolitically safe jurisdictions, including Canada (78% of NAV) and the US (6%), while Kazakhstan makes up 12%. Unlike its peers, earnings are somewhat buffered from drops in the uranium price, given fixed price contracts (40%/60% target for fixed to market-related pricing mix), vertically-integrated business divisions (fuel services and nuclear power generation), and low opex. We also view liquidity risk as low: the companys market capitalization (C$7.1 bln) and dollar trading volume (C$22 mln, 30-day avg.) are the highest amongst TSX-listed uraniums. Healthy Balance Sheet. Following close of the Yeelirrie and Nukem transactions at year-end, we estimate 1Q13E cash of C$540 mln and working capital of C$1.3 bln. An additional C$1.75 bln is available in undrawn lines of credit. We would not be surprised to see this capital deployed for further opportunistic M&A. Cameco pays an annual dividend of C$0.40/sh (2.2%), implying a manageable payout ratio of 41% in 2012E. Attractive Valuation. We believe recent uranium market sentiment, revised guidance post-3Q12, and weak broader commodity market performance have unjustifiably weighed on Cameco. Though Cameco typically trades at a premium to its lower quality peers, shares are only 26% above Oct-08 financial crisis lows (vs. +165% for the S&P/TSX Metals & Mining) and are implying 1.1x P/NAV (vs. 1.5x historic, 1.7x peak) we view the stock as having asymmetrically positive risk/reward potential through 2013.
Valuation
Our $25.00 target is based on a 50/50-weighting of (i) a 1.3x P/NAV applied to the project component of our C$16.80 NAVPS (8%) and (ii) a 13x P/CF applied to our 2013E CFPS of C$1.97.
EPS 2011A 2012E 2012E 2013E 2013E 1Q Mar C$0.23 0.31A 0.31A 0.26 0.26 2Q Jun C$0.17 0.16A 0.16A 0.32 0.32 3Q Sep C$0.26 0.13A 0.13A 0.35 0.35 4Q Dec C$0.62 0.37 0.37 0.42 0.42 Full Year C$1.28 0.98 0.98 1.35 1.35 Revenue (mln) C$2,384 2,138 2,138 2,511 2,511 NAVPS
Old New Old New
16.80 16.80 NA NA
Best Picks 2013
Canada Research
Canfor Corp.
CFP-TSX
Daryl Swetlishoff CFA | 604.659.8246 | daryl.swetlishoff@raymondjames.ca David Quezada CFA (Associate) | 604.659.8257 | david.quezada@raymondjames.ca
Rating & Target
December 10, 2012
Forest Products | Building Materials

We remain very bullish on the outlook for all western Canadian lumber producers and highlight Canfor as our top pick in the sector due to attractive relative valuation, strong leverage to the US housing recovery, expected improvements in pulp segment earnings, and anticipated returns on the extensive ongoing capital plans. Bullish 2013 and 2014 outlook At US$320/mfbm and US$350/mfbm respectively our 2013 and 2014 lumber price forecasts are among the highest on the Street. Our bullish outlook is driven by our view of NA lumber markets nearing a tipping point where solid offshore shipments and improving US housing markets provide the impetus for sustainably higher lumber prices. We highlight benchmark WSPF 2X4 lumber prices are currently at US$352/mfbm (highest since Feb-06) despite US housing starts at an improved, but still modest, 894K annual rate. Importantly, we note the earnings boost of lumber prices in our forecasted range is amplified by the reduction of export duties on US shipments. Potential catch-up trade We suspect much of the reason shares of CFP have lagged lumber producer peers in recent weeks is due to weak commodity prices and mill downtime (both planned and unplanned) in the companys pulp segment. However, we have conviction that NBSK pulp prices have now bottomed and believe, in conjunction with returns on large, recently completed capital plans, CFXs profitability is poised to improve, starting in 4Q12. We see this providing an additional tailwind to Canfor Corp. Access to capital improves relative position In recent quarters Canfor has made significant strides in lumber segment profitability directing free cash flow to capital programs. We expect further progress on this front, in our view, and we highlight Canfors strong balance sheet and access to equity capital provides opportunities for growth through acquisition.
Outperform 2 Target Price (6-12 mos): C$17.50 Current Price ( Dec-03-12 ) C$14.55 Total Return to Target 20% 52-Week Range C$15.00 - C$9.83 Market Data Market Capitalization (mln) C$2,077 Current Net Debt (mln) C$246 Enterprise Value (mln) C$2,323 Shares Outstanding (mln, f.d.) 142.8 10 Day Avg Daily Volume (000s) 223 Dividend/Yield C$0.00/0.0% Key Financial Metrics 2011A 2012E 2013E 2014E P/E NA NA 12.6x 8.7x EV/EBITDA 7.9x 9.7x 4.7x 3.8x Lumber (US$/mfbm) US$255 US$292 US$320 US$350 Pulp (US$/mt) US$976 US$880 US$900 US$950 Net Debt (%) 15% Company Description Canfor produces and markets lumber and other wood products from 18 sawmills and 6 remanufacturing facilities located in BC, AB, QC and South Carolina. Canfor also holds a 50.2% stake in Canfor Pulp.
Valuation
Currently trading at 4.9x mid-cycle EV/EBITDA, Canfor has 20% upside to our $17.50 target which is based on a 5.8x mid-cycle EV/EBITDA - a premium to the 4.8x peer group average of building materials names in our coverage universe due to Canfors larger market cap and greater trading liquidity.
EPS 2011A 2012E 2012E 2013E 2013E 2014E 2014E 1Q Mar C$0.00 (0.13)A (0.13)A 0.14 0.14 NA NA 2Q 3Q 4Q Jun Sep Dec C$0.02 C$(0.01) C$(0.22) 0.08A 0.11A 0.12 0.08A 0.11A 0.12 0.45 0.40 0.16 0.45 0.40 0.16 NA NA NA NA NA NA Full Year C$(0.22) 0.17 0.17 1.16 1.16 1.67 1.67 Revenue (mln) C$2,421 2,715 2,715 3,330 3,330 3,587 3,587 EBITDA (mln) C$222 239 239 490 490 607 607
Old New Old New Old New
Best Picks 2013
Canada Research
Canfor Pulp Products Inc.

CFX-TSX
Daryl Swetlishoff CFA | 604.659.8246 | daryl.swetlishoff@raymondjames.ca David Quezada CFA (Associate) | 604.659.8257 | david.quezada@raymondjames.ca
Rating & Target
December 10, 2012
Forest Products | Pulp & Paper

We highlight Canfor Pulp as the top pick in our universe of pulp and paper producers based on a combination of tight global pulp markets which we expect will lead to rising NBSK pulp prices, as well as company-specific factors including an inexpensive valuation, returns on extensive recently completed discretionary capex, and a potential 2013 dividend re-instatement. Bottom in for pulp markets At just 25 days, global softwood pulp inventories are tight well below the 30 days generally considered to be balanced. Capacity restarts and macro weakness are, however, creating uncertainty around the timing of further price increases. Nonetheless, we are confident that, at a minimum, Northern Bleached Softwood Kraft (NBSK) pulp markets have bottomed for this cycle and we note that after consecutive NA NBSK price hikes in Oct-12 and Nov-12, Dec-12 pulp prices are holding firm at US$870/mt. Benefits of discretionary capital program to be felt in current quarter Over the past 2.5 years Canfor Pulp has undertaken roughly $250 mln in discretionary capex, however, due to mill downtime (both planned and unplanned) the company has yet to run at capacity for a full quarter since this work has been completed. Beginning in 4Q12, we expect higher operating rates to begin to illustrate the cost savings associated with this capex, leading to improved profitability for given pulp prices. Potential dividend reinstatement a catalyst While we expect Canfor Pulps new management team will likely adopt a more conservative dividend policy, we continue to view a reinstatement as likely, representing a significant catalyst for the stock. We highlight the strong balance sheet (at 24% net debt) and note that a 66% - 75% payout ratio on 2013E EPS of $1.18 would equate to annual dividends of $0.78 $0.89/share (or a 9.4% - 10.7% yield) with the reduced payout ratio providing the ancillary benefit of greater expected stability.
Outperform 2 Target Price (6-12 mos): C$13.00 Current Price ( Dec-03-12 ) C$8.28 Total Return to Target 57% 52-Week Range C$15.19 - C$7.60 Market Data Market Capitalization (mln) C$590 Current Net Debt (mln) C$120 Enterprise Value (mln) C$710 Shares Outstanding (mln, f.d.) 71.3 10 Day Avg Daily Volume (000s) 59 Dividend/Yield C$0.00/0.0% Key Financial Metrics 2011A 2012E 2013E 2014E P/E 4.3x 46.0x 7.0x 4.5x EV/EBITDA 3.3x 8.2x 3.9x 2.9x Pulp (US$/mt) C$976 C$880 C$900 C$950 Net Debt (%) 24% Company Description Canfor Pulp Products operates three northern bleached softwood kraft (NBSK) pulp mills in the Prince George region of the British Columbia interior having over 1.0 mln tonnes of annual capacity.
Valuation
Canfor Pulp is currently trading at 3.9x our 2013E EBITDA and 2.9x our 2014E EBITDA and has 57% upside to our $13.00/share target price which is based on a 5.7x 2013E EV/EBITDA multiple. This target multiple is in-line with the peer group average of pulp weighted comps in our coverage universe.
EPS 2011A 2012E 2012E 2013E 2013E 2014E 2014E 1Q Mar C$0.71 0.13A 0.13A 0.28 0.28 NA NA 2Q Jun C$0.68 0.05A 0.05A 0.36 0.36 NA NA 3Q Sep C$0.47 (0.10)A (0.10)A 0.29 0.29 NA NA 4Q Dec C$0.22 0.10 0.10 0.24 0.24 NA NA Full Year C$2.08 0.18 0.18 1.18 1.18 1.85 1.85 Revenue (mln) C$941 748 748 765 765 821 821 EBITDA (mln) C$218 87 87 182 182 241 241
Old New Old New Old New
Best Picks 2013
Canada Research
Copper Mountain Mining

CUM-TSX
Adam Low CFA | 416.777.4943 | adam.low@raymondjames.ca Tracy Reynolds (Associate) | 416.777.7042 | tracy.reynolds@raymondjames.ca
Rating & Target
December 10, 2012
Mining | Base Metals & Minerals

Copper Mountain is the 75% owner and operator of the Copper Mountain mine in southern British Columbia, Canada. Production commenced in June 2011 and the ramp-up to full operation is nearly complete. Turnaround in effect Since June 2011 Copper Mountain has spent nearly 18 months in ramp-up mode at its namesake mine, a process which has taken longer and been more challenging than expected. However, since implementing amendments to the mill in early August 2012, the facility has been nearing its targeted 35,000 tonnes/day operating level. During the difficult ramp-up the share price came under severe pressure. Although the issues that created this negative sentiment on the stock have largely been resolved the share price has not yet recovered. Significant earnings growth expected in 2013 We expect 2013 to be the first full year in which the companys mine operates at close to capacity. This should translate into significant earnings growth relative to 2012. Low political & development risk The Copper Mountain mine is located in the low political risk jurisdiction of British Columbia, and is generating positive cash flow. The company has a strong minority partner in Mitsubishi Materials Corp., and offers 100% production exposure with no development-stage assets that are exposed to capital expenditure inflation and permitting risks. Consolidation Candidate In our opinion, Copper Mountains attributes as the majority owner of an operating, profitable copper mine, in mining-friendly Canada makes it an acquisition target.
Outperform 2 Target Price (6-12 mos): C$5.85 Current Price ( Dec-03-12 ) C$3.74 Total Return to Target 56% 52-Week Range C$6.39 - C$2.43 Market Data Market Capitalization (mln) US$371 Current Net Debt (mln) US$307 Enterprise Value (mln) US$914 Shares Outstanding (mln, basic) 98.5 10 Day Avg Daily Volume (000s) 533 Dividend/Yield C$0.00/0.0% Key Financial Metrics 2011A 2012E 2013E P/E NA 11.0x 3.9x P/NAV 0.51x NA EBITDA (mln) C$21 C$86 C$203 Cu Production (Attributable 000's MT) 5.7 22.1 31.4 Cu Cash Costs (US$/lb) US$1.79 US$2.16 US$1.47 Company Description Copper Mountain is the operator and 75% owner of the Copper Mountain mine project in BC. The company aims to rehabilitate 3 historic open pits to create one Super Pit at the property's porphyry copper deposit.
Valuation
Copper Mountain is currently trading at a P/NAV of 0.51x, a discount to the RJL research-covered copper producer peer group average of 0.74x. On a 2013E P/E and P/CF basis, the company is trading at 3.7x and 2.9x, respectively, which is also a discount to the peer group at 13.0x and 9.9x, respectively. Our target price of C$5.85 is based on a 0.80x multiple applied to our NAV/share of C$7.34 (in-line with risk and liquidity-adjusted historic producer multiples).
EPS 2011A 2012E 2012E 2013E 2013E 1Q 2Q 3Q Mar Jun Sep C$0.02 C$(0.04) C$(0.17) 0.22A (0.07)A 0.03A 0.22A (0.07)A 0.03A 0.23 0.24 0.24 0.23 0.24 0.24 4Q Dec C$0.06 0.16 0.16 0.24 0.24 Full Year C$(0.13) 0.34 0.34 0.95 0.95 Revenue (mln) C$67 264 264 401 401 NAV
Old New Old New
7.34 7.34 NA NA
Best Picks 2013
Canada Research
Endeavour Mining Corp.

EDV-TSX | EVR-ASX
Brad Humphrey | 416.777.4917 | brad.humphrey@raymondjames.ca Phil Russo (Associate) | 416.777.7084 | phil.russo@raymondjames.ca Tom Halton (Associate) | 416.777.7074 | tom.halton@raymondjames.ca
Rating & Target
December 10, 2012

With the Avion transaction now closed, shares of Endeavour Mining remain at depressed levels, trading at 0.6x NAV relative to peers at 1.0x. We view this as an opportunity for investors to build positions in the name as the company moves forward developing its Agbaou project (with production slated for 1Q14), as well as optimizing the performance of its newly acquired Tabakoto mine. Endeavour Mining is one of the few emerging mid-tiers that has the balance sheet strength to largely fund its growth with access to $130 mln in cash and equivalents and $100 mln in undrawn credit. Current Valuation Compensates Investors for Tabakoto Discount Trading at 0.6x NAV, we believe now is an opportune time to own Endeavour Mining. With the lagging share price, arguably investors are electing to wait on the sidelines until Endeavour Mining reports consistent performance from the recently acquired Tabakoto mine. However, we believe, at these depressed levels investors are more than compensated for that risk. We would also highlight that over the past couple of years Endeavour Mining has built a favourable track record with consecutive quarters of solid performance from its current operations, positioning the company to garner the benefit of the doubt, in our view. We believe Endeavour Minings share price is poised to appreciate through consecutive quarters of improving performance from Tabakoto and continued positive operational results from its existing mines. Above-Average Growth Profile Expected for the Near-Term The company boasts an attractive growth profile, with production estimated to increase by ~50% (300koz to 450koz) in 2014, primarily driven by Agbaou coming on-line in 1Q14.
Outperform 2 Target Price (6-12 mos): C$4.00 Current Price ( Dec-03-12 ) C$2.08 Total Return to Target 92% 52-Week Range C$2.74 - C$1.84 Market Data Market Capitalization (mln) C$851 Current Net Debt (mln) -C$27 Enterprise Value (mln) C$824 Shares Outstanding (mln, f.d.) 409.1 10 Day Avg Daily Volume (000s) 577 Dividend/Yield C$0.00/0.0% Key Financial Metrics 2011A 2012E 2013E P/E 7.7x 9.5x 9.5x P/NAV 0.6x nm Au Price (US$/oz) US$1,571 US$1,680 US$1,780 Au Production Attributable (oz) 85,260 193,994 260,178 Au Total Cash Cost (US$/oz) US$682 US$779 US$849 CFPS US$(0.09) US$0.39 US$0.26 P/CFPS nm 5.4x nm Company Description Endeavour Mining is a West African focused gold producer with assets in Burkina Faso, Cte d'Ivoire, Ghana and Mali.
Valuation
Endeavour is currently trading at 0.6x NAV (assuming spot prices 0.5x NAV) below the producer average of 1.0x. Our target price is based on a 1.2x multiple, given our views on Endeavour Minings growth, execution risk, geopolitical risk, and balance sheet.
EPS 1Q 2Q 3Q 4Q Mar Jun Sep Dec 2011A US$0.04 US$0.09 US$0.10 US$0.04 2012E 0.07A 0.07A 0.06A 0.02 2012E 0.07A 0.07A 0.06A 0.02 2013E 0.05 0.04 0.06 0.07 2013E 0.05 0.04 0.06 0.07 Full Year US$0.27 0.22 0.22 0.22 0.22 Revenues (mln) US$147 331 331 432 432 NAV
Old New Old New
3.38 3.38 NA NA
*Au Production Attributable figure includes only 4Q12E production from Tabakoto. Source: Raymond James Ltd., Thomson One
Best Picks 2013
Canada Research
HudBay Minerals, Inc.

HBM-TSX | HBM-NYSE Alex Terentiew MBA, P.Geo | 416.777.4912 | alex.terentiew@raymondjames.ca Ross Yakovlev CA, MBA (Associate) | 416.777.7144 | ross.yakovlev@raymondjames.ca
Rating & Target
December 10, 2012
Mining | Base Metals & Minerals

With new production ramping up in each of the next three years, HudBay is set to reemerge as a multi-mine company, concurrently increase its cash-generating abilities and deliver peer-leading growth in NAV and EBITDA. Although the full extent of the growth will not be realized until 2016, we view 2013 as a time to start accumulating HBM shares.
As Lalor ramps up and Reed (4Q13) and Constancia (2Q15) are brought into production, we forecast HBM to have the greatest NAV growth over the next year, and largest EBITDA growth each year until 2016 after the 2013 trough. In 2013, we expect HudBay to declare commercial production at Lalor, commence production at Reed and continue development of and de-risking its Constancia project. Although Constancia is not, in our view, a world-class project, its valuation has potential for significant improvement should the exploration program deliver some new high-grade zones that could be added to the mine plan. With the minesite NAV declining beyond 2015, management may consider introducing additional projects into the portfolio in the next year or two. We expect that any incremental 10% stake sale in Constancia would free up ~$200 mln in capital for HudBay (proceeds from sale plus reduction in capex commitments), with a 20-30% stake sale freeing up enough capital to make a sizeable acquisition. Buying opportunities may occur around earnings releases. We note that our 4Q12 and 2013 EPS estimates of $0.01 and $0.05, respectively, are well below the consensus estimates of $0.03 and $0.22. In our view, an accurate impact of the gold and silver stream sale for the 777 mine may not be properly reflected in the consensus estimates. As such, possible earnings misses may provide an opportunity to buy on weakness.
Outperform 2 Target Price (6-12 mos): C$11.75 Current Price ( Dec-03-12 ) C$9.64 Total Return to Target 22% 52-Week Range C$12.47 - C$7.36 Market Data Market Capitalization (mln) C$1,647 Current Net Debt (mln) -C$1,111 Enterprise Value (mln) C$536 Shares Outstanding (mln, basic) 171.9 10 Day Avg Daily Volume (000s) 310 Dividend/Yield C$0.20/2.1% Key Financial Metrics 2010A 2011A 2012E 2013E P/E 60.9x 13.5x 71.1x 213.1x P/NAV NA 0.72x NA CFPS C$1.25 C$1.40 C$3.69 C$0.07 EBITDA (mln) C$226.9 C$323.3 C$172.2 C$130.0 Working Capital (mln) C$883.5 C$841.7 C$1,141.8 C$518.9 Capex (mln) C$(112.8) C$(241.6) C$(622.1) C$(1,173.4) Total Debt (mln) C$0.0 C$0.0 C$489.8 C$722.4 Production (Cu tonnes) 52,413 54,324 39,002 32,012 M&I Resource (Cu Mt) NA NA 3.1 NA Shares Outstanding (mln, f.d.) 153.8 176.0 176.0 176.0 Company Description HudBay Minerals Inc. is a Canadian diversified mining company with assets in North and South America that produce copper, zinc, gold and silver.
Valuation
We estimate a NAVPS of C$13.46, implying a current P/NAV of 0.72x, which is below the covered mid-tier Cu producer average of 0.79x. Our PT is based on a 70/30 weighting of a blended 0.88x our 8% NAV estimate and a 5.0x multiple to our NTM EV/EBITDA (vs. its peers at 1.0x and 5.1x, respectively). These multiples reflect our view of the relative risk of HBMs operations, balance sheet, size and liquidity. The higher P/NAV weighting reflects the long-term nature of HBMs projects.
EPS 2010A 2011A 2012E 2012E 2013E 2013E 1Q Mar C$0.07 0.11 0.07A 0.07A 0.00 0.00 2Q 3Q Jun Sep C$0.03 C$(0.01) 0.28 0.12 0.05A 0.00A 0.05A 0.00A 0.01 0.01 0.01 0.01 4Q Dec C$0.07 0.21 0.01 0.01 0.03 0.03 Full Year C$0.16 0.71 0.14 0.14 0.05 0.05 Revenues (mln) C$781 891 664 664 611 611 NAVPS
Old New Old New
NA 13.46 13.46 NA NA
Best Picks 2013
Canada Research
Open Text
OTEX-NASDAQ | OTC-TSX
Steven Li CFA | 416.777.4918 | steven.li@raymondjames.ca Diane Yu (Associate) | 416.777.6414 | diane.yu@raymondjames.ca
Rating & Target
December 10, 2012
Software/IT Services

We present Open Text as our top pick and recommend buying shares as we believe the companys organizational changes are largely behind them under the new CEO leadership and the share price should respond positively to organic growth in 2013 driven by the following factors: 1) Significant new product cycle. At its user conference Open Text recently unveiled its next-generation ECM, CEM, and BPM platforms focusing on both on-premise and cloud delivery, integration across the entire product family, as well as applications (13 products in total). We believe this new product cycle should buoy organic growth throughout C2013E. 2) Expanded sales force. Open Texts sales force expansion (+20%) should be complete by the end of December, with sales contribution starting in a couple of quarters. Management also plans to set up an additional telesales team over the next 6 months (+40 reps) to target accounts that its direct sales and partners cannot get to. 3) M&A opportunities. Open Text recently hired James Mackey from SAP as SVP of Corporate Development. The acquisition war chest includes cash on hand of $300 mln and $475 mln in debt capacity. LTM FCF is now at $260 mln ($4.41/share). This continues to position Open Text well in seeking strategic, accretive M&A opportunities, in our view.
Outperform 2 Target Price (6-12 mos): US$72.00 Current Price ( Dec-03-12 ) US$56.79 Total Return to Target 27% 52-Week Range US$62.70 - US$44.67 Market Data Market Capitalization (mln) US$3,346 Current Net Debt (mln) US$287 Enterprise Value (mln) US$3,633 Shares Outstanding (mln, f.d.) 58.9 10 Day Avg Daily Volume (000s) 292 Dividend/Yield US$0.00/0.0% Key Financial Metrics 2012A 2013E 2014E P/E 12.4x 10.9x 10.0x EV/EBITDA 10.9x 9.6x 9.1x Company Description Open Text develops and markets software that allows users to collaborate, share, store and retrieve information. The company is the largest independent Enterprise Content Management (ECM) vendor.
Valuation
Our target price of $72.00 represents 14x C2013E EPS, at a discount to software peers given organic growth challenges.
EPS 1Q 2Q Sep Dec 2012A US$1.01 US$1.39 2013E 1.31A 1.35 2013E 1.31A 1.35 2014E na na 2014E na na 3Q Mar US$1.01 1.22 1.22 na na 4Q Jun US$1.17 1.33 1.33 na na Full Year US$4.58 5.20 5.20 5.66 5.66 Revenue (mln) US$1,207 1,402 1,402 1,476 1,476 EBITDA (mln) US$333 379 379 399 399
Old New Old New
Best Picks 2013
Canada Research
Potash Corp. of Saskatchewan Inc.

POT-NYSE | POT-TSX Steve Hansen CMA, CFA | 604.659.8208 | steve.hansen@raymondjames.ca Arash Yazdani MBA (Associate) | 604.659.8280 | arash.yazdani@raymondjames.ca
Rating & Target
December 10, 2012
Fertilizers

Potash Corp., ranked #1 in global potash capacity and #3 in phosphate and nitrogen, boasts a formidable competitive position and world-class assets within Saskatchewans basin at the low-end of the industry cost curve. We believe POTs sell-off over the past 6 months, making it one of the worst performing N.A. fertilizer equities, is overdone and there are good reasons to suggest the stock will recover over the next 6-12 months. As a result, we believe value-oriented investors accumulating POT shares will be well rewarded by POTs: (i) formidable competitive position; (ii) superior industry margins; (iii) accelerating free cash profile; (iv) attractive valuation diverging from historical trading relationships; and (v) solid long-term industry fundamentals. We highlight: Extraordinary Ag FundamentalsThe incentive for farmers to apply potash remains very strong, with major Ag commodities at near-record prices. We expect strength in fall N.A. fertilizer demand to continue into the spring application period. Combined with record farmer profits (on price and insurance payouts) and recordlow stocks, we believe farmers are well incentivized to increase application rates. Demand Cloud Expected to Lift; Catalysts ExpectedChina and India have been a consistent demand cloud over potash demand for the past year. As with previous demand strikes, we expect buyers to eventually capitulate and new Chinese/Indian contracts to be signed in 1H13, providing a welcome catalyst for potash equities and POT in particular. Further signs of the potash market nearing a turning point include Chinese prices stopping their recent slide and indications of a halt in Russian deliveries by rail in January (squeezing supply and likely increasing prices). Superior Industry MarginsPOTs superior industry margins reflect the firms robust competitive position, in our view. Specifically, we note that the Potash Corp.s gross margins have consistently outperformed its N.A. fertilizer peers over the past seven years. FCF Poised to Surge; Buybacks & Dividend Increases on the TablePOTs 12-year, $7.7 bln capacity expansion program designed to nearly double annual operating capacity by 2015 is nearing completion. As a result, we expect POTs free cash flow to surge over the next five years alongside rising sales volumes, improving margins, and declining capacity expansion outlays. This should, in our view, help facilitate further stock buybacks and continued dividend increases. Sharp Divergence in Historical Trading RelationshipsMany of POTs historical trading relationships, which have been consistently in place for years, have deviated sharply from their historical patterns over the past six months. These include a divergence from the movement in corn/soybean prices, as well as a disappearance in the forward P/E premium to its lower-margin peers.
Outperform 2 Target Price (6-12 mos): US$50.00 Current Price ( Dec-03-12 ) US$38.60 Total Return to Target 32% 52-Week Range US$48.00 - US$36.73 Market Data Market Capitalization (mln) US$33,815 Current Net Debt (mln) US$3,577 Enterprise Value (mln) US$37,392 Shares Outstanding (mln, f.d.) 876.0 10 Day Avg Daily Volume (000s) 3,348 Dividend/Yield US$0.84/2.2% Key Financial Metrics 2011A 2012E 2013E P/E 11.00x 15.70x 11.20x EV/EBITDA 7.80x 9.20x 7.90x EBITDA Margin 55.00% 49.90% 51.90% Potash (US$/MT) US$402.00 US$466.00 US$465.00 Potash Sales (k MT) 9,046 7,683 10,032 Phosphate Sales (k MT) 3,854 3,745 3,875 Nitrogen Sales (k MT) 5,012 4,875 5,575 Net Debt/Equity (mrq) 0.4x Net Debt/Trailing EBITDA (mrq) 0.8x BVPS (mrq, tangible) US$10.93 Company Description Potash Corporation of Saskatchewan is the global leader in fertilizer production. The company is the largest producer of potash, and top-three in phosphate and nitrogen, and a member of Canpotex.
Valuation
Our US$50.00 target price is based upon a 14.5x P/E target multiple applied to our F2013E EPS estimate, below POTs 5-year historical average (~17.0x).
EPS 1Q 2Q 3Q 4Q Mar Jun Sep Dec 2011A US$0.84 US$0.96 US$0.94 US$0.78 2012E 0.56A 0.60A 0.74A 0.56 2012E 0.56A 0.60A 0.74A 0.56 2013E NA NA NA NA 2013E NA NA NA NA Full Year US$3.51 2.45 2.45 3.45 3.45 Revenues (mln) US$8,715 8,127 8,127 9,182 9,182 EBITDA (mln) US$4,797 4,055 4,055 4,758 4,758
Old New Old New
Source: Raymond James Ltd., Thomson One. * Figures displayed are unadjusted.
Best Picks 2013
Canada Research
Savanna Energy Services

SVY-TSX Andrew Bradford CFA | 403.509.0503 | andrew.bradford@raymondjames.ca Nick Heffernan (Associate) | 403.509.0511 | nicholas.heffernan@raymondjames.ca
Rating & Target
December 10, 2012
Oil & Gas Energy Services | Contract Drillers

No Canadian Best Picks list would be complete without at least one highly cyclical resource-oriented stock. We submit Savanna Energy Services as a strong contender in this context. Savanna is a drilling contractor with a balanced fleet of 97 rigs in Canada, the US, and Australia. It also operates a fleet of 102 service (workover) rigs in Canada, the US, and Australia. According to our estimates, ever since the decline in shallow gas drilling 5 6 years ago, Savannas Canadian rig fleet has been generating some of the lowest average cash flow per rig figures among the mid-to-large-cap contract drilling group. But some historical context is important here. Savanna began operations in 2002 and quickly developed a fleet of extremely efficient hybrid drilling rigs. The hybrid moniker relates to the dual functionality to drill with either straight jointed pipe or continuous coiled tubing. These rigs were highly effective shallow gas development tools. In fact, they were so effective that Savanna was drilling about 25% of all the wells in Western Canada with about 38 rigs. However, the rapid adoption of economically superior shale gas developments drove gas prices below the economical thresholds of shallow gas plays. Consequently Savannas fleet of hybrid rigs suffered a dramatic decline in utilization that has persisted to this day. In response to this adversity, management set about a series of initiatives to (a) address the demands of the new oilpatch and (b) salvage a return on its under-utilized assets. With respect to the former, Savanna has developed a portfolio of modern mid-to-deep oriented rigs that address the horizontal market. Secondly, Savanna has relocated 4 of its hybrid rigs to Australia to develop coal seam gas for the Queensland LNG projects. Third, by mid-4Q12, Savanna had converted 15 of its hybrid rigs to high-horsepower automated singles for horizontal field development. Its remaining 19 Canadian hybrid rigs now comprise just 20% of its total drilling fleet and have been effectively targeting the oil sands delineation and heavy oil markets in Alberta. Its our belief that the cumulative impact of these initiatives will drive noticeable improvements in Savannas cash flow per rig figures.
Strong Buy 1 Target Price (6-12 mos): C$10.50 Current Price ( Dec-03-12 ) C$6.72 Total Return to Target 62% 52-Week Range C$8.42 - C$6.30 Market Data Market Capitalization (mln) C$575 Current Net Debt (mln) C$215 Enterprise Value (mln) C$790 Shares Outstanding (mln, f.d.) 91.0 10 Day Avg Daily Volume (000s) 109 Dividend/Yield C$0.36/5.4% Key Financial Metrics 2011A 2012E 2013E P/E 12.2x 12.3x 10.6x EV/EBITDA 5.2x 4.7x 4.4x EBITDA (mln) C$136 C$164 C$178 Capex (mln) C$190 C$167 C$107 Dividend (mln) C$0 C$18 C$31 BVPS (tangible) C$9.85 C$10.10 C$10.47 Debt/EBITDA 1.5x 1.3x 1.2x ROE 5.9% 5.5% 6.3% Company Description SVY operates in two primary segments: contract drilling (which include its hybrid coiled tubing drilling rigs) and well servicing. SVY operates throughout Canada, the US and Australia.
Valuation
We target Savanna at 6.2x 2013E EV/EBITDA, yielding our $10.50 target price. This multiple is within the historical range for Canadian contract drillers.
Adjusted EPS 1Q Mar 2Q Jun 3Q Sep C$0.17 0.08A 0.08A 0.19 0.19 4Q Dec C$0.19 0.15 0.15 0.18 0.18 Full Year C$0.55 0.55 0.55 0.63 0.63 Revenue (mln) C$611 671 671 692 692 Operating Cash Flow (mln) C$139 151 151 154 154
Old New Old New
2011A C$0.19 C$(0.01) 2012E 0.40A (0.09)A 2012E 0.40A (0.09)A 2013E 0.29 (0.03) 2013E 0.29 (0.03)
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Canada Research
Shoppers Drug Mart

SC-TSX
Kenric S. Tyghe MBA | 416.777.7188 | kenric.tyghe@raymondjames.ca Parisa Naghibi MBA (Research Associate) | 416.777.7060 | parisa.naghibi@raymondjames.ca
Rating & Target
December 10, 2012
Consumer Products & Retail
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Investment Rationale
The key recent change in the discussion in Ontario, whereby pharmacists are now reimbursed by the province for key services, in our opinion marks a critical inflection point in the evolution of healthcare funding in Canada. This positive inflection point is reinforced by the acceleration of SSS script volume growth from a historical average of 3.5% to 5.0% in 3Q12, which we believe denotes increased penetration of the key 65-plus demographic (on recent changes in Shoppers model, and the disruptive change that is the closures of seniors-indexed Zellers pharmacies). The above augers well for a recovery in earnings power in the public sector funded segment of Shoppers Rx business (despite the continued regulatory headwinds and the deflationary impact of increased generic penetration). In addition, it dovetails with what we believe is the story in 2013, namely the accelerated rollout of preferred provider networks within the private sector (we believe Shoppers, as the largest national player, would be a major beneficiary). While, according to National Health Expenditures 2011 data, public sector health expenditure per capita in Canada is $4,100 versus the private sector at $1,725, two key underlying dynamics are creating the imperative that is preferred provider networks rollout with major private insurers. The private insurers cover approximately 54% of prescription drug costs; The private insurers (versus household out of pocket) share of Rx drug costs has increased from approximately 59% to 67% in the last 10-years. In addition, with (i) the increased loyalty analytics driving increased promotional effectiveness and peer leading front store SSS growth, (ii) the appeal of the Shoppers model to a wider demographic (the stickiness and breadth of the Rx business is a significant contributor to FS sell-through), (iii) recent rewiring and cost cutting announcements, and (iv) our expectations of accelerated dividend growth in 2013E, we believe Shoppers is well positioned.
Outperform 2 Target Price (6-12 mos): C$48.00 Current Price ( Dec-03-12 ) C$41.63 Total Return to Target 18% 52-Week Range C$44.44 - C$39.30 Market Data Market Capitalization (mln) C$8,635 Current Net Debt (mln) C$1,288 Enterprise Value (mln) C$9,923 Shares Outstanding (mln, f.d.) 207.0 10 Day Avg Daily Volume (000s) 418 Dividend/Yield C$1.06/2.5% Key Financial Metrics 2011A 2012E 2013E P/E 14.7x 14.3x 13.5x EV/EBITDA 8.2x 10.1x 7.8x Company Description Shoppers Drug Mart operates more than 1,200 Shoppers Drug Mart/Pharmaprix retail drug stores, 56 medical clinic pharmacies, 63 Home Health Care stores and 6 stand-alone prestige cosmetic stores.
Valuation
Our $48.00 price target is based on target multiples of 15.0x our 2013E EPS of $3.08 and 9.0x our 2013E EBITDA of $1,269 mln, the blended average of which imputes a $47.61 value for Shoppers, supporting our $48.00 target price. Our target multiples are slightly below Shoppers 5-year average EV/EBITDA and P/E multiples of 9.1x and 15.9x respectively.
Adjusted 1Q EPS Mar 2011A C$0.54 Old 2012E 0.56A New 2012E 0.56A Old 2013E 0.60 New 2013E 0.60 2Q Jun C$0.68 0.71A 0.71A 0.75 0.75 3Q Sep C$0.80 0.81A 0.81A 0.87 0.87 4Q Dec C$0.82 0.82 0.82 0.87 0.87 Full Year C$2.84 2.91 2.91 3.08 3.08 Revenue (mln) C$10,459 10,759 10,759 11,113 11,113 EBITDA (mln) C$1,209 982 982 1,269 1,269
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Company Citations Company Name CGA Mining Ltd. SAP AG
Ticker CGA SAP
Exchange TSX NYSE
Currency C$
Closing Price 2.49
RJ Rating UR NC
RJ Entity RJ LTD
Notes: Prices are as of the most recent close on the indicated exchange and may not be in US$. See Disclosure section for rating definitions. Stocks that do not trade on a U.S. national exchange may not be approved for sale in all U.S. states. NC=not covered.
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Analyst Profiles
Head of Equity Research Daryl Swetlishoff, CFA | Forest Products Daryl Swetlishoff was named Head of Research of Raymond James Ltd. in May 2007. Based in Vancouver, he is responsible for a group of 40 research and operations professionals, providing research coverage on over 240 companies across seven sectors. Daryl is also a ranked analyst covering Paper & Forest sector equities since joining the firm in 2001. Daryl holds the Chartered Financial Analyst designation, and earned an MA (Economics) from the University of Victoria.
Energy
Andrew Bradford, CFA | Head of Energy Research | Oil & Gas Energy Services Andrew Bradford originally joined Raymond James in an analyst capacity in 2000, and after a brief hiatus, returned to the firm in December 2007. Andrew has been performing investment analysis for investment dealers on the energy sector and the energy services industry since 1998. Prior to that, he spent two years with a Calgarybased energy-focused private equity firm. Andrew earned a Masters degree in Economics from the University of Calgary in 1996 and is a CFA charterholder. Justin Bouchard, P.Eng., CFA |Oil Sands / Oil & Gas Producers Justin Bouchard joined the firm in September 2006 and covers oil sands and oil and gas producer and exploration companies. For the year prior, Justin was employed as a Research Associate at another investment dealer as part of a group covering oil sands companies and producers. Prior to that, he was employed for ten years in various roles in the energy sector including as a Facilities/Production Engineer and Field Operator, and as a Product Manager of specialized oil & gas software products. Justin has an MBA from Queens University (2004), a Bachelor of Science degree (Mechanical Engineering) from the University of Alberta (1995) and holds the Chartered Financial Analyst designation. Rafi Khouri, B.Sc., MBA |International Oil & Gas Rafi Khouri is an oil & gas equity analyst at Raymond James Ltd., focusing on the international oil & gas sector. Prior to joining the firm, he was an oil and gas analyst at two other investment dealers, including a year with a top tier investment dealer in London (UK). Rafi has also spent 10 years in various technical and managerial roles in the oil & gas industry, including 4 years as a field engineer with Exxon in the Middle East, and one year as a corrosion engineer with Total in West Africa. Rafi holds a B.Sc. in Applied Chemistry from the American University of Beirut and an MBA from the University of Alberta. Luc Mageau, CFA | Oil & Gas Producers Luc Mageau joined the firm in March 2006. He was promoted to equity analyst in May 2009 and is responsible for covering junior and intermediate oil and gas producers. Prior to joining the firm, Luc was employed as a commercial lender at a major bank and as a research analyst at a U.S. based equity research firm. Educationally, Luc has a Bachelor of Commerce degree from the University of Alberta (2001) and holds the Chartered Financial Analyst designation.
Best Picks 2013 Kristopher Zack, CA, CFA |Oil & Gas Producers Kristopher Zack joined the firm as an equity analyst in April 2006 and is now covering senior / intermediate oil & gas companies. For 2.5 years prior to joining the firm, Kris was employed as an associate analyst at another investment dealer covering integrated oil and gas, senior producers, and oil sands companies. Prior to that, he was employed for six years with Deloitte & Touche and finished as a Manager, Financial Advisory Services. In StarMines 2009 annual survey of analyst performance for Canada, Kris was the number one Earnings Estimator for Oil & Gas Royalty Trusts and he was the Starmine Top Stockpicker in the Oil & Gas Royalty Trust space for 2010. Educationally, Kris has a Bachelor of Commerce degree from the University of Alberta (1998) and holds the Chartered Accountant and Chartered Financial Analyst designations.
Industrial
Ben Cherniavsky | Head of Industrial Research | Infrastructure & Construction / Transportation Ben Cherniavsky joined the firm as a research associate in 1998 following his completion of the MBA program at the University of Western Ontario. As an analyst, Ben covers industrial product and aerospace & aviation companies. Prior to his MBA, Ben worked in public finance as a research analyst for the Ministry of Finance in Ottawa and at the University of Torontos International Centre for Tax Studies. In addition to his MBA, Ben holds a B.A. in Economics from the University of Alberta. Frederic Bastien, CFA | Infrastructure & Construction Frederic joined the firm in 2003 and was promoted to equity analyst covering the Industrial sector in 2005. Frederic has achieved Brendan Wood Internationals annual Top Gun status in the Small Cap/Special Situations category since 2008, and in 2009 he ranked as the number one Diversified Industrials Earnings Estimator in StarMines annual survey of analyst performance for Canada. Educationally, Frederic holds an MBA (2002) from the Sauder School of Business at the University of British Columbia, a Bachelor of Engineering (Mechanical) degree (1995) from McGill University, and the CFA designation. Steven Hansen, CFA, CMA | Transportation / Agribusiness & Food Products Steven Hansen joined the firm in October 2005 as an associate equity analyst covering the Industrial sector and was promoted to equity analyst in April 2007. Prior to joining the firm, Steve was employed as a stock analyst with Morningstar covering the Paper and Forest products sector. Steve holds an MBA (2004) from the Richard Ivey School of Business and a Bachelor of Science in Forestry (1999) from the University of British Columbia. Steve also holds his CMA designation and has the CFA designation.
Mining & Natural Resources

Brad Humphrey | Head of Mining Research |Precious Metals Brad Humphrey joined Raymond James Ltd. in April 2008 as a mining equity research analyst, focusing on the gold and silver sector. Brad has nearly 10 years experience in the investment business providing research on gold and silver equities at several major investment dealers. Prior to beginning his career in the investment industry, he worked in various positions in the mining industry, including underground mining and corporate development.
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Gary Baschuk | Precious Metals Gary joined Raymond James in October 2010 as a mining equity research analyst focusing on precious metals small to mid-capital explorers, developers and producers. Prior to joining the investment business seven years ago, Gary spent twenty years as a geologist employed by Barrick Gold Corp. working in northern Ontario, Quebec, Nevada and Spain. Gary holds a BSc, Geology Specialist degree from the University of Toronto and is a Fellow of the Geological Association of Canada, a member of the Society of Economic Geologists and the Prospectors and Developers Association of Canada. Adam Low, CFA | Base Metals & Minerals / Iron Ore Adam Low joined the firm in April 2005. He is part of the equity research team covering base metal producers and developers. Prior to joining the firm, Adam was employed as a financial analyst with IBM. Educationally, Adam has a Bachelor of Commerce degree from the University of Manitoba (2002) and holds the Chartered Financial Analyst designation. David Sadowski | Uranium David Sadowski joined Raymond James in June 2008, and covers the uranium space, as well as precious metals exploration and development companies. Prior to joining the firm, David worked as a geologist in central and northern BC with multiple Vancouverbased junior exploration companies, focused on base and precious metals. David holds a Bachelor of Science in Geological Sciences from the University of British Columbia. Alex Terentiew, MBA, P.Geo. | Base Metals & Minerals / Platinum Group Metals Alex joined Raymond James in November 2011 as a mining equity research analyst focusing on base metals, both producers and developers. Over the past six years, Alex has provided research coverage of base and precious metals and mining equities in similar roles at Credit Suisse Securities (Canada) and Scotia Capital Inc. Prior to joining the investment industry, Alex worked as a Geoscientist at various environmental and engineering consulting companies. Alex holds a BSc from the Dept. of Geology at the University of Toronto, a MASc in Civil Engineering (U of T), and an MBA (Rotman School of Management at the U of T), is a member of the Association of Professional Geoscientist of Ontario, The Canadian Institute of Mining, Metallurgy and Petroleum (CIM), and the Prospectors and Developers Association of Canada. Chris Thompson, M.Sc. (Eng), P.Geo | Precious Metals Chris joined Raymond James in September 2012 as a mining equity research analyst focusing on precious metals small to mid-capital developers and producers. Prior to joining Raymond James Chris worked for Haywood Securities for seven years covering small to mid-capital explorers, developers and producers, and as a geologist and mineral economist for junior exploration through to major mining companies. Chris holds a MSc in Mineral Economics, a Graduate Diploma in Mining Engineering and a BSc in Mining and Exploration Geology from the University of the Witwatersrand in South Africa and is a registered P.Geo with the Association of Professional Engineers and Geoscientists of British Columbia, and a member of the Prospectors and Developers Association of Canada. Chris was awarded the 2011 StarMine Top Analyst Award for Stock Picker in the Metals and Mining sector.
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Consumer
Kenric S. Tyghe, MBA | Consumer Products & Retail Kenric Tyghe joined the firm in July 2009 as an Equity Analyst covering Consumer Products and Retail. Prior to joining the firm Kenric had in excess of 8 years experience in equity research and trading at other leading investment dealers in Canada and South Africa. Kenric holds an MBA from the Richard Ivey School of Business.
Real Estate
Ken Avalos, MBA | Real Estate & REITS Ken joined Raymond James Ltd. in October of 2011 as an equity research analyst covering REITs and real estate operating companies. Ken has over 15 years of experience in the investment, lending and real estate industries. He returns to the Raymond James organization after spending the last two years as the Director of Finance and Capital Markets at First Potomac Realty Trust where he was responsible for debt, equity and hedging transactions, investor relations and risk management. First Potomac is a $2 billion office/industrial REIT based in Washington D.C., which doubled in size during Kens tenure. Prior to First Potomac, Ken held various positions in equity research at Raymond James & Associates in St. Petersburg, FL, most recently holding the title of VP REIT Analyst while covering nearly 25 stocks. Ken holds a BA from Boston College, and earned an MBA from the Stern School of Business at NYU with a concentration in Finance and international Business
Technology & Communications

Steven Li, CFA | Technology / Alternative Energy & Clean Tech Steven Li joined the firm in July 2001 as an equity analyst. Before joining Raymond James Ltd., Steven spent a total of four years as a research associate at three other investment dealers. In StarMines annual survey of analyst performance for Canada, Steven was the number one Stock Picker for Software and IT Services in 2007. He also ranked 8th in the Top 10 Overall Stock Pickers of 2009 for his coverage of IT Equipment, Software, and IT Services. Steven holds the Chartered Financial Analyst designation and earned a BA and MA from the University of Cambridge (England) and an MBA from York University.
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Important Investor Disclosures

Raymond James & Associates (RJA) is a FINRA member firm and is responsible for the preparation and distribution of research created in the United States. Raymond James & Associates is located at The Raymond James Financial Center, 880 Carillon Parkway, St. Petersburg, FL 33716, (727) 567-1000. Non-U.S. affiliates, which are not FINRA member firms, include the following entities which are responsible for the creation and distribution of research in their respective areas; In Canada, Raymond James Ltd., Suite 2100, 925 West Georgia Street, Vancouver, BC V6C 3L2, (604) 659-8200; In Latin America, Raymond James Latin America, Ruta 8, km 17, 500, 91600 Montevideo, Uruguay, 00598 2 518 2033; In Europe, Raymond James Euro Equities, SAS, 40, rue La Boetie, 75008, Paris, France, +33 1 45 61 64 90. This document is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. The securities discussed in this document may not be eligible for sale in some jurisdictions. This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal recommendation nor does it take into account the particular investment objectives, financial situations, or needs of individual clients. Information in this report should not be construed as advice designed to meet the individual objectives of any particular investor. Investors should consider this report as only a single factor in making their investment decision. Consultation with your investment advisor is recommended. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. The information provided is as of the date above and subject to change, and it should not be deemed a recommendation to buy or sell any security. Certain information has been obtained from third-party sources we consider reliable, but we do not guarantee that such information is accurate or complete. Persons within the Raymond James family of companies may have information that is not available to the contributors of the information contained in this publication. Raymond James, including affiliates and employees, may execute transactions in the securities listed in this publication that may not be consistent with the ratings appearing in this publication. With respect to materials prepared by Raymond James Ltd. (RJL), all expressions of opinion reflect the judgment of the Research Department of RJL, or its affiliates, at this date and are subject to change. RJL may perform investment banking or other services for, or solicit investment banking business from, any company mentioned in this document. All Raymond James Ltd. research reports are distributed electronically and are available to clients at the same time via the firms website (http://www.raymondjames.ca). Immediately upon being posted to the firms website, the research reports are then distributed electronically to clients via email upon request and to clients with access to Bloomberg (home page: RJLC), Capital IQ and Thomson Reuters. Selected research reports are also printed and mailed at the same time to clients upon request. Requests for Raymond James Ltd. research may be made by contacting the Raymond James Product Group during market hours at (604) 659-8000. In the event that this is a compendium report (i.e., covers 6 or more subject companies), Raymond James Ltd. may choose to provide specific disclosures for the subject companies by reference. To access these disclosures, clients should refer to: http://www.raymondjames.ca (click on Equity Capital Markets / Equity Research / Research Disclosures) or call toll-free at 1-800-667-2899.
Analyst Information
Analyst Compensation: Equity research analysts and associates at Raymond James are compensated on a salary and bonus system. Several factors enter into the compensation determination for an analyst, including i) research quality and overall productivity, including success in rating stocks on an absolute basis and relative to the local exchange composite Index and/or a sector index, ii) recognition from institutional investors, iii) support effectiveness to the institutional and retail sales forces and traders, iv) commissions generated in stocks under coverage that are attributable to the analysts efforts, v) net revenues of the overall Equity Capital Markets Group, and vi) compensation levels for analysts at competing investment dealers. Analyst Stock Holdings: Effective September 2002, Raymond James equity research analysts and associates or members of their households are forbidden from investing in securities of companies covered by them. Analysts and associates are permitted to hold long positions in the securities of companies they cover which were in place prior to September 2002 but are only permitted to sell those positions five days after the rating has been lowered to Underperform.
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The views expressed in this report accurately reflect the personal views of the analyst(s) covering the subject securities. No part of said person's compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. In addition, said analyst has not received compensation from any subject company in the last 12 months.
Ratings and Definitions

Raymond James Ltd. (Canada) definitions Strong Buy (SB1) The stock is expected to appreciate and produce a total return of at least 15% and outperform the S&P/TSX Composite Index over the next six months. Outperform (MO2) The stock is expected to appreciate and outperform the S&P/TSX Composite Index over the next twelve months. Market Perform (MP3) The stock is expected to perform generally in line with the S&P/TSX Composite Index over the next twelve months and is potentially a source of funds for more highly rated securities. Underperform (MU4) The stock is expected to underperform the S&P/TSX Composite Index or its sector over the next six to twelve months and should be sold. Raymond James & Associates (U.S.) definitions Strong Buy (SB1) Expected to appreciate, produce a total return of at least 15%, and outperform the S&P 500 over the next six to 12 months. For higher yielding and more conservative equities, such as REITs and certain MLPs, a total return of at least 15% is expected to be realized over the next 12 months. Outperform (MO2) Expected to appreciate and outperform the S&P 500 over the next 12-18 months. For higher yielding and more conservative equities, such as REITs and certain MLPs, an Outperform rating is used for securities where we are comfortable with the relative safety of the dividend and expect a total return modestly exceeding the dividend yield over the next 12-18 months. Market Perform (MP3) Expected to perform generally in line with the S&P 500 over the next 12 months. Underperform (MU4) Expected to underperform the S&P 500 or its sector over the next six to 12 months and should be sold. Suspended (S) The rating and price target have been suspended temporarily. This action may be due to market events that made coverage impracticable, or to comply with applicable regulations or firm policies in certain circumstances, including when Raymond James may be providing investment banking services to the company. The previous rating and price target are no longer in effect for this security and should not be relied upon. Raymond James Latin American rating definitions Strong Buy (SB1) Expected to appreciate and produce a total return of at least 25.0% over the next twelve months. Outperform (MO2) Expected to appreciate and produce a total return of between 15.0% and 25.0% over the next twelve months. Market Perform (MP3) Expected to perform in line with the underlying country index. Underperform (MU4) Expected to underperform the underlying country index. Suspended (S) The rating and price target have been suspended temporarily. This action may be due to market events that made coverage impracticable, or to comply with applicable regulations or firm policies in certain circumstances, including when Raymond James may be providing investment banking services to the company. The previous rating and price target are no longer in effect for this security and should not be relied upon. Raymond James Euro Equities, SAS rating definitions Strong Buy (1) Expected to appreciate, produce a total return of at least 15%, and outperform the Stoxx 600 over the next 6 to 12 months. Outperform (2) Expected to appreciate and outperform the Stoxx 600 over the next 12 months. Market Perform (3) Expected to perform generally in line with the Stoxx 600 over the next 12 months. Underperform (4) Expected to underperform the Stoxx 600 or its sector over the next 6 to 12 months. Suspended (S) The rating and target price have been suspended temporarily. This action may be due to market events that made coverage impracticable, or to comply with applicable regulations or firm policies in certain circumstances, including when Raymond James may be providing investment banking services to the company. The previous rating and target price are no longer in effect for this security and should not be relied upon.
In transacting in any security, investors should be aware that other securities in the Raymond James research coverage universe might carry a higher or lower rating. Investors should feel free to contact their Financial Advisor to discuss the merits of other available investments. Suitability Categories (SR)
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For stocks rated by Raymond James & Associates only, the following Suitability Categories provide an assessment of potential risk factors for investors. Suitability ratings are not assigned to stocks rated Underperform (Sell). Projected 12month price targets are assigned only to stocks rated Strong Buy or Outperform. Total Return (TR) Lower risk equities possessing dividend yields above that of the S&P 500 and greater stability of principal. Growth (G) Low to average risk equities with sound financials, more consistent earnings growth, at least a small dividend, and the potential for long-term price appreciation. Aggressive Growth (AG) Medium or higher risk equities of companies in fast growing and competitive industries, with less predictable earnings and acceptable, but possibly more leveraged balance sheets. High Risk (HR) Companies with less predictable earnings (or losses), rapidly changing market dynamics, financial and competitive issues, higher price volatility (beta), and risk of principal. Venture Risk (VR) Companies with a short or unprofitable operating history, limited or less predictable revenues, very high risk associated with success, and a substantial risk of principal.
Rating Distributions
Coverage Universe Rating Distribution RJL Strong Buy and Outperform (Buy) Market Perform (Hold) Underperform (Sell) 65% 33% 1% RJA 52% 41% 7% RJ LatAm 30% 64% 6% RJEE 50% 36% 14% Investment Banking Distribution RJL 32% 21% 33% RJA 21% 8% 0% RJ LatAm 0% 0% 0% RJEE 0% 0% 0%
Raymond James Relationship Disclosures

Raymond James Ltd. or its affiliates expects to receive or intends to seek compensation for investment banking services from all companies under research coverage within the next three months. Company Name Aecon Group Alamos Gold Inc. Disclosure Raymond James Ltd - the analyst and/or associate has viewed the material operations of Aecon Group. Raymond James Ltd - the analyst and/or associate has viewed the material operations of Alamos Gold Inc.. Raymond James Ltd - within the last 12 months, Alamos Gold Inc. has paid for all or a material portion of the travel costs associated with a site visit by the analyst and/or associate. Raymond James Ltd. has provided non-investment banking securities-related services within the last 12 months with respect to Alamos Gold Inc.. Raymond James Ltd. has received compensation for services other than investment banking within the last 12 months with respect to Alamos Gold Inc.. B2Gold Corp. Raymond James Ltd - the analyst and/or associate has viewed the material operations of B2Gold Corp.. Raymond James Ltd. has provided non-investment banking securities-related services within the last 12 months with respect to B2Gold Corp.. Raymond James Ltd. has received compensation for services other than investment banking within the last 12 months with respect to B2Gold Corp.. Bird Construction Inc. Raymond James Ltd - the analyst and/or associate has viewed the material operations of Bird Construction Inc..
Best Picks 2013 Company Name Black Diamond Group Ltd. Disclosure
Raymond James Ltd - the analyst and/or associate has viewed the material operations of Black Diamond Group Ltd.. Raymond James Ltd. has managed or co-managed a public offering of securities within the last 12 months with respect to Black Diamond Group Ltd.. Raymond James Ltd. has provided investment banking services within the last 12 months with respect to Black Diamond Group Ltd.. Raymond James Ltd. has provided non-investment banking securities-related services within the last 12 months with respect to Black Diamond Group Ltd.. Raymond James Ltd. has received compensation for services other than investment banking within the last 12 months with respect to Black Diamond Group Ltd..
Cameco Corp.
Raymond James Ltd - the analyst and/or associate has viewed the material operations of Cameco Corp.. Raymond James Ltd - within the last 12 months, Cameco Corp. has paid for all or a material portion of the travel costs associated with a site visit by the analyst and/or associate.
Canfor Corp.
Raymond James Ltd - the analyst and/or associate has viewed the material operations of Canfor Corp.. Raymond James Ltd - within the last 12 months, Canfor Corp. has paid for all or a material portion of the travel costs associated with a site visit by the analyst and/or associate. Raymond James Ltd. makes a market in the securities of Canfor Corp..
Canfor Pulp Products Inc. CGA Mining Ltd. Copper Mountain Mining Domtar Eldorado Gold Corp.
Raymond James Ltd - the analyst and/or associate has viewed the material operations of Canfor Pulp Products Inc.. Raymond James Ltd - within the last 12 months, CGA Mining Ltd. has paid for all or a material portion of the travel costs associated with a site visit by the analyst and/or associate. Raymond James Ltd - the analyst and/or associate has viewed the material operations of Copper Mountain Mining. Raymond James Ltd - the analyst and/or associate has viewed the material operations of Domtar. Raymond James Ltd - the analyst and/or associate has viewed the material operations of Eldorado Gold Corp.. Raymond James Ltd - within the last 12 months, Eldorado Gold Corp. has paid for all or a material portion of the travel costs associated with a site visit by the analyst and/or associate. Ross Cory who is an employee of Raymond James Ltd. or its affiliates serves as a director of Eldorado Gold Corp..
Endeavour Mining Corp. Fortress Paper
Raymond James Ltd - the analyst and/or associate has viewed the material operations of Endeavour Mining Corp.. Raymond James Ltd - the analyst and/or associate has viewed the material operations of Fortress Paper. Raymond James Ltd - within the last 12 months, Fortress Paper has paid for all or a material portion of the travel costs associated with a site visit by the analyst and/or associate. Raymond James Ltd. has managed or co-managed a public offering of securities within the last 12 months with respect to Fortress Paper. Raymond James Ltd. has provided investment banking services within the last 12 months with respect to Fortress Paper. Raymond James Ltd. has received compensation for investment banking services within the last 12 months with respect to Fortress Paper.
Canada Research | Page 28 of 34 Company Name HudBay Minerals, Inc. Disclosure
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Raymond James Ltd - the analyst and/or associate has viewed the material operations of HudBay Minerals, Inc.. Raymond James Ltd - within the last 12 months, HudBay Minerals, Inc. has paid for all or a material portion of the travel costs associated with a site visit by the analyst and/or associate. Raymond James Ltd. makes a market in the securities of HudBay Minerals, Inc..
Legacy Oil & Gas Inc. Lumina Copper Corp.
Raymond James Ltd. has received compensation for investment banking services within the last 12 months with respect to Legacy Oil & Gas Inc.. Raymond James Ltd - within the last 12 months, Lumina Copper Corp. has paid for all or a material portion of the travel costs associated with a site visit by the analyst and/or associate. Raymond James Ltd. has received compensation for investment banking services within the last 12 months with respect to Lumina Copper Corp.. Ross Cory who is an employee of Raymond James Ltd. or its affiliates serves as a director of Lumina Copper Corp..
Methanex Open Text
Raymond James Ltd - within the last 12 months, Methanex has paid for all or a material portion of the travel costs associated with a site visit by the analyst and/or associate. Raymond James & Associates received non-securities-related compensation from OTC within the past 12 months. Raymond James Ltd - the analyst and/or associate has viewed the material operations of Open Text. Raymond James Ltd. or an affiliate received non-securities related compensation from Open Text within the past 12 months.
Savanna Energy Services Secure Energy Services Inc.
Raymond James Ltd - the analyst and/or associate has viewed the material operations of Savanna Energy Services. Raymond James Ltd - the analyst and/or associate has viewed the material operations of Secure Energy Services Inc.. Raymond James Ltd. has managed or co-managed a public offering of securities within the last 12 months with respect to Secure Energy Services Inc.. Raymond James Ltd. has provided investment banking services within the last 12 months with respect to Secure Energy Services Inc.. Raymond James Ltd. has received compensation for investment banking services within the last 12 months with respect to Secure Energy Services Inc.. Raymond James Ltd. makes a market in the securities of Secure Energy Services Inc..
Shoppers Drug Mart
Raymond James Ltd - the analyst and/or associate has viewed the material operations of Shoppers Drug Mart.
Stock Charts, Target Prices, and Valuation Methodologies

Valuation Methodology: The Raymond James methodology for assigning ratings and target prices includes a number of qualitative and quantitative factors including an assessment of industry size, structure, business trends and overall attractiveness; management effectiveness; competition; visibility; financial condition, and expected total return, among other factors. These factors are subject to change depending on overall economic conditions or industry- or companyspecific occurrences.
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Risk Factors
General Risk Factors: Following are some general risk factors that pertain to the projected target prices included on Raymond James research: (1) Industry fundamentals with respect to customer demand or product / service pricing could change and adversely impact expected revenues and earnings; (2) Issues relating to major competitors or market shares or new product expectations could change investor attitudes toward the sector or this stock; (3) Unforeseen developments with respect to the management, financial condition or accounting policies or practices could alter the prospective valuation. Risks - Alamos Gold Inc. Socio-Economic Risk. Alamos continues negotiating with local land owners for surface rights to access exploration areas and potential mine areas including Cerro Pelon, La Yaqui and El Carricito. The company also continues negotiations with the towns people of Mulatos re: a previous relocation agreement. Resource Risk. Geological models and mineralization are interpretative and the current resource may be more complex than modeled, resulting in less grade and tonnage than estimated. That said, we are confident part of Alamos ongoing drill program will increase the level of confidence of the current resource estimate. Capital Requirements. The company has sufficient funds to complete its 2011 drill program, however a market decline could make it difficult for the company to raise the capital required for possible future expansion and/or project construction. Risks - Aecon Group (i) The companys fortunes are closely linked to the wellbeing of the Canadian economy and the regional markets in which it operates; accordingly a sustained downturn in one or more markets could adversely impact it; (ii) any reduction in demand for the companys services by various governments and their agencies could affect Aecons revenues to the extent the lost business cannot be replaced from within the private sector; (iii) participation in large international joint venture projects can expose the company to geopolitical, military, currency and foreign exchange risks; (iv) significant delays and cost overruns can render construction projects unprofitable; (v) approximately 70% of the companys workforce is unionized, or governed by industry-wide field agreements, exposing the company to labour disruptions; (vi) the companys activities are exposed to competitive pressures from companies that have greater financial and operating resources; (vii) success in the construction industry is predicated on the companys ability to secure increased surety capacity (i.e., to obtain sufficient bonding); (viii) construction operations are highly weather dependent; (ix) Aecon is exposed to various litigation, environmental, and safety risks, and (x) the company may or may not be able to collect all or part of its current claims outstanding. Risks - Black Diamond Group Ltd. i) The demand, pricing and terms for modular structures is highly dependant on the level of industry activity for Canadian resource companies and infrastructure development. The level of activity is influenced by several factors outside of Black Diamonds control, including but not necessarily limited to; commodity prices, the cost of exploring for and developing resources, available infrastructure capacity, and the ability of project oriented resource companies to raise equity capital or debt financing. ii) The modular structures market is highly competitive with both regional suppliers and large multi-national companies in the industry. Although Black Diamond believes that it is continuing to build market share, it does not presently hold a dominant market position with respect to any of the services it offers. iii) Future development in Albertas oil sands is subject to environmental regulations which could potentially reduce overall investment in the region. A material portion of Black Diamonds near term growth is dependant on continued investment in the oil sands. Risks - B2Gold Corp. Development Risk. 2013 and 2014 are critical years for B2Gold as it prepares to double existing production by developing its Jabali (La Libertad) and Otjikoto projects as well as execute on its operational / development plans for Masbate. Political Risk. BTOs asset base is located in Nicaragua, Namibia and Colombia. With the successful merger of B2Gold and CGA, this asset base will also include CGAs Masbate operation in the Philippines. Despite Nicaraguas rank as the second poorest country in the Western Hemisphere next to Haiti, the country remains a stable democracy. Whilst mining ranks as the biggest contributor to Namibia's economy in terms of revenue and infrastructure is rated as one of the best in Africa, changes in tax and royalty rates are being considered. An export levy on raw materials, increases in the corporate income tax rate and a windfall tax on profits are being considered. Also, whilst the risk of nationalization of mining projects in Namibia are low, uncertainty prompted by last years declaration of uranium, copper, gold, zinc and coal as strategic minerals for exploitation by state-owned Epangelo Mining should be noted. A major mining reform was undertaken last year in the Philippines including a moratorium on new projects. A new executive order detailing the government's policy on
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mining was signed in July, and is waiting to be implemented. The moratorium on new projects remains and is expected to be lifted when a new law of passed by the Philippines congress giving the government a larger share in resource contracts. Risk of an increase in royalties and a level of revenue-sharing should be noted. Security and geopolitical risks remain a concern in Colombia. Gold Price Risk. A drop in the gold price could cause deterioration in B2Golds ability to fund its development project pipeline, part of which Raymond James estimates will be financed via cash flow. Cost Inflation Risk. Our outlook assumes certain future capital and operating costs for development projects. Although we apply conservative estimates to these assumptions there is a risk that we have understated these costs or that these costs may increase in the future. Operational and Labour Risk. There is a risk that the El Limon, La Libertad and Masbate operations suffer accidents or disruptions to production or development which could impair the value of the assets. Risks of labour disruptions due to strike action, may also impact production and profitability. We also note that Nicaragua and the Philippines are located in active earthquake regions. Risks - Cameco Corporation i) A decline in the price of gold affects the equity resource market independent of commodity; as such, Cameco may be at risk of not being able to fund future exploration or development if gold prices decline; ii) uranium is a highly regulated business and therefore requires long lead times in order to permit projects; Cameco is at risk of being delayed on future development of current or future projects; iii) continued escalation of mining-related capital costs may reduce profitability; iv) uncertainty surrounding the long-term uranium supply-demand framework and resulting price levels. Risks - Canfor Corp. Forest product prices are cyclical, worse than expected economic conditions could reduce our price forecasts. ii) As sales are typically denominated in U.S. dollars, a depreciation of the U.S. dollar could negatively affect earnings. iii) Canfor operates on Crown land. Government policy changes could negatively affect operating margins. v) Forest product markets are global in nature issues affecting transportation or market access could impact earnings. vi) Extreme weather conditions or fires could impact harvesting plans and hence earnings. Risks - Canfor Pulp Products Inc. i) Slower than expected economic growth could reduce our commodity price forecasts. ii) A strengthening of the Canadian dollar could negatively affect earnings. Downward pressure could be placed on pulp price forecasts if the Euro depreciates relative to the US$. iii) CFX has a fibre agreement with Canfor Corporation, a shortage of fibre supply or higher chip prices could negatively affect earnings. iv) A rise in interest rates would place downward pressure on CFXs high-yielding units. Risks - Copper Mountain Mining Mining companies are subject to a range of risks, including, but not limited to: environmental risk, political risk, operational risk, financial risk, hedging risk, commodity price fluctuation risk, and currency risk. Any difference between our metal price forecasts and realized metal prices will likely have an impact on our earnings and valuation estimates for the mining companies in our research coverage universe. The operation of mines, and mills is complex and is exposed to a number of risks, most of which are beyond the companys control. These include: environmental compliance issues; personal accidents; metallurgical/other processing problems; unexpected rock formations; ground or slope failures; flooding or fires; earthquakes; rock bursts; equipment failures; consultant errors and, interruption due to inclement, weather conditions, road closures, and/or local protests. Other risks include, but are not limited to: uncertainties surrounding reclamation costs; aging equipment and facilities which could lead to increased costs; strikes; and, transportation disruptions. Risks - Endeavor Mining Corp. Mining is an inherently risky business with the most prevalent risks related to mining assets, the political environment and metal prices. Company specific risks relating to Endeavour include: 1) potential change to Ghanas current tax rate 2) potential for operating delays and cost overruns its currently operating asset locations or challenges to obtaining adequate and timely financing and permits at its development propertie(s), and 3) any adverse mining policy changes in Ghana, Burkina Faso or Cote dIvoire. HudBay Minerals Inc. Commodity Price and Funding Risk. The prices of copper, and to a lesser extent zinc, gold and silver, have a large influence on the share price of HudBay. An unexpected slowdown in global industrial production (IP), construction and housing development, and automobile sales could have a material negative impact on HudBays share price, profitability and ability to raise capital. Geopolitical and Permitting Risk. With producing mines and exploration and development projects located in several countries and continents, HudBay is exposed to varying levels of political risk, including mine nationalization, higher
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royalties and taxes, and other regulatory challenges that may impact production levels and profitability. In addition, there is always a risk permits for continuing production or new development may not be attainable due to unforeseen circumstances. Furthermore, HudBay may be the subject of claims and litigation arising in the ordinary course and conduct of business, and thus may be forced to defend itself in court. Labour Risk. Labour markets around the world as they relate to mining activities have been experiencing significant challenges hiring and retaining a sufficiently large workforce. In response to the labour tightness, compounded with high levels of inflation in many countries, there has been substantial upward pressure on wages. An inability to hire an adequate workforce and the rising wage demands continues to elevate the risk of labour disputes, which may result in strikes, and thereby impact future levels of production and sales. Power Supply Risk. Many regions around the world continue to have limited excess power supply, with the start-up of new power supply projects and delays in bringing on new sources of power impacting a mining companys ability to develop a new project on time and budget. HudBays Constancia project is currently in the development stage and one of the Companys next steps is to secure the necessary power supply contract, with the Tintaya substation the targeted supply point. Resource Risk. Although the company has NI43-101 compliant resources, there exists a risk that further work leads to a deterioration of the grade and/or size of the deposit. Also, our outlook hinges on an expansion of the current resource; further work may show further expansions are not possible. Cost Inflation Risk. Our outlook assumes certain future capital and operating costs for development projects. Although we apply conservative estimates to these assumptions, there is the risk we have underestimated these costs or that these costs may increase in the future. Risks - Open Text Like most software companies, there is a tendency for a substantial proportion of Open Texts sales to be closed at the end of the quarter. With the ongoing difficult business climate, there is a risk that Enterprise Content Management (ECM) does not outperform the broader software market as expected. Changes in competitive landscape. Please refer to the company's MD&A for a full briefing of risk factors. Potash Corp. of Saskatchewan VolumePotash Corp.s business is volume driven. Because of the high fixed costs, volatility in volume can significantly impact margins. Commodity Price RiskPrice is a key driver for Potash Corp.. Lower realized potash prices will have material impact on the companys profitability. General Mining Company RisksMining operations have exposure to a number of operational and technical risks including: environmental risks, personnel accidents, production processing problems, unexpected geological anomalies, flooding, fires, earthquakes, equipment failures and consultant errors. Farmer Holiday RiskFarmers may exercise a potash holiday, similar to what we have seen in 1Q12, where they defer from potash application for a season or two. This may cause volatility in Potash Corp.s earnings and profitability. Additional New Capacity RiskSubstantial new potash capacity coming on-line, may lead to depressed potash pricing, which could lead to material impacts on Potash Corp.s earnings and profitability. Regulatory RiskIndustry regulations, particularly within Canada, can affect Potash Corp.s performance, especially as related to brownfield and greenfield programs, as well as nitrogen production facilities. Government InterventionGovernment policies around the world, particularly in fertilizer-consuming regions, can dramatically impact demand. Specific examples include tariffs, import/export restrictions, subsidies, etc. Policies that negatively impact fertilizer imports and/or consumption could adversely impact Potash Corp.s sales volumes. Transport Risks/BottlenecksWith Potash Corp. expecting significant additional new capacity schedule for 2015, transportation bottlenecks may occur. The company is working with Canpotex to develop additional infrastructure for the planned capacity expansion. Bottlenecks / increased transportation costs may occur and have impact on Potash Corp.s profitability.
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Risks - Shoppers Drug Mart Changes in local laws and regulations - Given the level of government oversight in pharmaceutical and retail drug store industry, any amendments to current regulation could negatively impact the prescription sales, and/or adversely affect margins and profitability. Competition - While we anticipate Shoppers to continue to grow organically, we believe that certain regional markets could subsequently become saturated. Hence, Shoppers return on invested capital from its network expansion could face a declining trend. We further note that although the overall increase in floor space could potentially improve the margins from front-store sales, prescription sales grow at a relatively constant rate, independent of store size. Inability to attract and retain pharmacists - Aside from drug plan issues and government reforms, staff shortage is considered to be one of the main challenges that pharmacies face in Canada. The staff shortage coupled with the challenges of managing and retaining current staff weighs heavily on the industry as whole. Furthermore, higher wages could negatively affect franchise operations. Notably, according to CACD, the average hourly wage for pharmacists increased from $26.60 in 1998 to $45.70 in 2008 (up ~72%). Interest risk and other economic factors - SC has very limited exposure to currency exchange risk, as most of the Companys operations are based in Canada. Nonetheless, given the magnitude of its debt, the Company is susceptible to risks inherent in interest rate fluctuations. The companys business and operating performance may be adversely affected by economic forces beyond its control, such as changes in consumer preferences and spending patterns and general economic downturns. Risks - Savanna Energy Services i) The company is highly susceptible to activity levels that are largely determined by volatile oil and natural gas prices. ii) New entrants and increased competition from existing competitors can have an adverse impact on the pricing and utilization of Savannas services. iii) Oilfield operations are inherently dangerous. Savannas equipment can be damaged during operations. Additional Risk and Disclosure information, as well as more information on the Raymond James rating system and suitability categories, is available for Raymond James at rjcapitalmarkets.com/Disclosures/index and for Raymond James Limited at www.raymondjames.ca/researchdisclosures.
International Disclosures
For clients in the United States: For clients in the United States: Any foreign securities discussed in this report are generally not eligible for sale in the U.S. unless they are listed on a U.S. exchange. This report is being provided to you for informational purposes only and does not represent a solicitation for the purchase or sale of a security in any state where such a solicitation would be illegal. Investing in securities of issuers organized outside of the U.S., including ADRs, may entail certain risks. The securities of non-U.S. issuers may not be registered with, nor be subject to the reporting requirements of, the U.S. Securities and Exchange Commission. There may be limited information available on such securities. Investors who have received this report may be prohibited in certain states or other jurisdictions from purchasing the securities mentioned in this report. Please ask your Financial Advisor for additional details and to determine if a particular security is eligible for solicitation in your state. Raymond James Ltd. is not a U.S. broker-dealer and therefore is not governed by U.S. laws, rules or regulations applicable to U.S. broker-dealers. Consequently, the persons responsible for the content of this publication are not licensed in the U.S. as research analysts in accordance with applicable rules promulgated by the U.S. Self Regulatory Organizations. Any U.S. Institutional Investor wishing to effect trades in any security should contact Raymond James (USA) Ltd., a U.S. broker-dealer affiliate of Raymond James Ltd. For clients in the United Kingdom: For clients of Raymond James & Associates (London Branch) and Raymond James Financial International Limited (RJFI): This document and any investment to which this document relates is intended for the sole use of the persons to whom it is addressed, being persons who are Eligible Counterparties or Professional Clients as described in the FSA rules or persons described in Articles 19(5) (Investment professionals) or 49(2) (High net worth companies, unincorporated associations etc) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) or any other person to whom this promotion may lawfully be directed. It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons and may not be relied upon by such persons and is therefore not intended for private individuals or those who would be classified as Retail Clients.
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For clients of Raymond James Investment Services, Ltd.: This report is for the use of professional investment advisers and managers and is not intended for use by clients. For purposes of the Financial Services Authority requirements, this research report is classified as independent with respect to conflict of interest management. RJA, RJFI, and Raymond James Investment Services, Ltd. are authorised and regulated by the Financial Services Authority in the United Kingdom. For clients in France: This document and any investment to which this document relates is intended for the sole use of the persons to whom it is addressed, being persons who are Eligible Counterparties or Professional Clients as described in Code Montaire et Financier and Rglement Gnral de lAutorit des Marchs Financiers. It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons and may not be relied upon by such persons and is therefore not intended for private individuals or those who would be classified as Retail Clients. For institutional clients in the European Economic Area (EEA) outside of the United Kingdom: This document (and any attachments or exhibits hereto) is intended only for EEA institutional clients or others to whom it may lawfully be submitted. Raymond James International and Raymond James Euro Equities are authorized by the Autorit de Contrle Prudentiel in France and regulated by the Autorit de Contrle Prudentiel and the Autorit des Marchs Financiers. Proprietary Rights Notice: By accepting a copy of this report, you acknowledge and agree as follows: This report is provided to clients of Raymond James only for your personal, noncommercial use. Except as expressly authorized by Raymond James, you may not copy, reproduce, transmit, sell, display, distribute, publish, broadcast, circulate, modify, disseminate or commercially exploit the information contained in this report, in printed, electronic or any other form, in any manner, without the prior express written consent of Raymond James. You also agree not to use the information provided in this report for any unlawful purpose.
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EQUITY RESEARCH HEAD OF EQUITY RESEARCH DARYL SWETLISHOFF, CFA
CONSUMER
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RAYMOND JAMES LTD. CANADIAN INSTITUTIONAL EQUITY TEAM WWW.RAYMONDJAMES.CA INSTITUTIONAL EQUITY SALES
604.659.8246 HEAD OF SALES MIKE WESTCOTT MICHELLE MARGUET (MARKETING COORDINATOR) LAURA ARRELL (U.S. EQUITIES) SEAN BOYLE JEFF CARRUTHERS, CFA RICHARD EAKINS JONATHAN GREER DAVE MACLENNAN ROBERT MILLS, CFA DOUG OWEN NICOLE SVEC-GRIFFIS, CFA (U.S. EQUITIES) NEIL WEBER CARMELA AVELLA (ASSISTANT) ORNELLA BURNS (ASSISTANT) 416.777.4935 416.777.4951 416.777.4920 416.777.4927 416.777.4929 416.777.4926 416.777.4930 416.777.4934 416.777.4945 416.777.4925 416.777.4942 416.777.4931 416.777.4915 416.777.4928 604.659.8225 604.659.8220 604.659.8228 514.350.4462 514.350.4460 514.350.4458 0.207.426.5632 0.207.426.5612
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ENERGY
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JOHN HART DAVID MAISLIN, CFA TANYA HATCHER (ASSISTANT)
INDUSTRIAL | TRANSPORTATION, HEAD OF INDUSTRIAL RESEARCH 604.659.8244 BEN CHERNIAVSKY 604.659.8234 THEONI PILARINOS, CFA (ASSOCIATE) GREG JACKSON (ASSOCIATE) 604.659.8262 INFRASTRUCTURE & CONSTRUCTION FREDERIC BASTIEN, CFA 604.659.8232 604.659.8261 JAMIL MURJI, CFA (ASSOCIATE) TRANSPORTATION | AGRIBUSINESS & FOOD PRODUCTS STEVE HANSEN, CMA, CFA 604.659.8208 604.659.8280 ARASH YAZDANI, MBA (ASSOCIATE)
MINING
LONDON
JON DE VOS ADAM WOOD
INSTITUTIONAL EQUITY TRADING

CO-HEAD OF TRADING BOB MCDONALD, CFA ANDREW FOOTE, CFA TORONTO (CANADA 1.888.601.6105 | USA 1.800.290.4847) PAM BANKS ANTHONY COX OLIVER HERBST ANDY HERRMANN ERIC MUNRO, CFA JAMES SHIELDS BOB STANDING PETER MASON (ASSISTANT) VANCOUVER (1.800.667.2899) NAV CHEEMA FRASER JEFFERSON DEREK ORAM MONTREAL (514.350.4450 | 1.866.350.4455) JOE CLEMENT PATRICK SANCE 604.659.8222 416.777.4924 416.777.4923 416.777.4922 416.777.4947 416.777.4937 416.777.4983 416.777.4941 416.777.4921 416.777.7195 604.659.8224 604.659.8218 604.659.8223 514.350.4470 514.350.4465
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FOREST PRODUCTS DARYL SWETLISHOFF, CFA DAVID QUEZADA, CFA (ASSOCIATE)

REAL ESTATE
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TECHNOLOGY, ALTERNATIVE ENERGY & CLEAN TECH STEVEN LI, CFA DIANE YU (ASSOCIATE) EQUITY RESEARCH PUBLISHING SENIOR SUPERVISORY ANALYST HEATHER HERRON HEAD OF PUBLISHING | SUPERVISORY ANALYST CYNTHIA LUI TYLER BOS (SUPERVISORY ANALYST | EDITOR) INDER GILL (RESEARCH EDITOR) KATE MAJOR (SUPERVISORY ANALYST | EDITOR) CHRISTINE MARTE (RESEARCH EDITOR) ASHLEY RAMSAY (SUPERVISORY ANALYST |EDITOR)
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Best Picks 2013: Canada Research

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Published by Raymond James Ltd.

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December 10, 2012

EVR-ASX HBM-NYSE OTC-TSX POT-TSX

Canada Research | Page 2 of 34

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Dear Valued Clients,

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Canada Research | Page 3 of 34

About Raymond James Ltd.

Exhibit 2: RJL Canadian Analysts 2012 Best Picks

Canada Research | Page 4 of 34

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Exhibit 3: RJL Canadian Analyst 2013 Best Picks Additions/Deletions

TSX:BDT NYSE:UFS NYSE:EGO TSX:FTP TSX:LEG TSXV:LCC NASDAQ:MEOH TSX:SES

13.75 79.11 14.08 7.15 6.81 8.67 30.50 10.01

16.00 105.00 20.00 19.00 11.50 22.00 34.00 11.25

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Canada Research | Page 5 of 34

December 10, 2012

Infrastructure & Construction | Construction

Best Picks 2013 Investment Rationale

Old New Old New

Source: Raymond James Ltd., Thomson One

Canada Research | Page 6 of 34

Best Picks 2013

Alamos Gold Inc.

December 10, 2012

Mining | Precious Metals - Gold

Best Picks 2013 Investment Rationale

Old New Old New

Source: Raymond James Ltd., Thomson One

Best Picks 2013

Canada Research | Page 7 of 34

December 10, 2012

Mining | Precious Metals - Gold

Best Picks 2013 Investment Rationale

Old New Old New

Source: Raymond James Ltd., Thomson One

Canada Research | Page 8 of 34

Best Picks 2013

Black Diamond Group Ltd.

December 10, 2012

Oil & Gas Energy Services | Facilities & Infrastructure

Best Picks 2013 Investment Rationale

Source: Raymond James Ltd., Thomson One

Best Picks 2013

Canada Research | Page 9 of 34

December 10, 2012

Best Picks 2013 Investment Rationale

Old New Old New

Source: Raymond James Ltd., Thomson One

Canada Research | Page 10 of 34

Best Picks 2013

December 10, 2012

Forest Products | Building Materials

Best Picks 2013 Investment Rationale

Old New Old New Old New

Source: Raymond James Ltd., Thomson One

Best Picks 2013

Canada Research | Page 11 of 34

Canfor Pulp Products Inc.