Institutional Equity Research Industry Update

January 17, 2011 Off The Press

Top Picks Of 2011

In 2010 our top picks, as a portfolio and if held for the full year, performed well ahead of the TSX Composite – up 20.5% on a price basis vs. 12.5% for the Composite. Of our top picks, nine outperformed the index and seven performed worse; all but one of our picks generated a positive return. 2011 has opened with an even better tone than was the case in 2010, as much of the economic malaise seems to be behind us, although there are issues of concern, the long-term risk being deflation and the short-term risks likely more inflationary. Despite the positive market moves over these past 18 months, our Head of Portfolio Strategy believes there is still very good reason to stay long stocks (vs. bonds) over the next 12 months, provided short-term market weakness is not a concern and the Fed is successful with QE2/3. We summarize our fundamental analysts' top picks for 2011 in this report, including a full tear sheet of key fundamentals for each pick and a technical view from Sid Mokhtari, our technical analyst.

All figures in Canadian dollars, unless otherwise stated.

11-106911 © 2011

CIBC World Markets does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. CIBC World Markets Inc. 1 (416) 594-7000
Find CIBC research on Bloomberg, Reuters, firstcall.com and ResearchCentral.cibcwm.com

See "Important Disclosures" section at the end of this report for important required disclosures, including potential conflicts of interest. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report, or at the end of each section hereof, where applicable.
CIBC World Markets Inc., P.O. Box 500, 161 Bay Street, Brookfield Place, Toronto, Canada M5J 2S8 (416) 594-7000

Top Picks Of 2011 - January 17, 2011

TABLE OF CONTENTS
Director’s Overview................................................................................ 3 Portfolio Strategy: Do You Believe In Magic? ............................................. 6 TOP PICK PROFILES 5N Plus, Incorporated .......................................................................... 30 Angle Energy Inc. ................................................................................ 33 Black Diamond Group Limited................................................................ 36 Bombardier Inc. .................................................................................. 39 C&C Energia Ltd. ................................................................................. 42 Canadian Pacific Railway Limited............................................................ 44 Chartwell Seniors Housing REIT ............................................................. 47 Daylight Energy Ltd. ............................................................................ 50 EnCana Corporation ............................................................................. 53 Jean Coutu Group (PJC) Inc. ................................................................. 56 Kirkland Lake Gold Inc. ........................................................................ 59 NAL Energy Corporation ....................................................................... 62 Onex Corporation ................................................................................ 65 Pacific Rubiales Energy Corp. ................................................................ 68 Pan American Silver Corp. .................................................................... 71 Penn West Petroleum Ltd...................................................................... 74 Petrominerales Ltd............................................................................... 77 Quadra FNX Mining Ltd......................................................................... 80 Rogers Communications Inc. ................................................................. 83 Semafo Inc......................................................................................... 86 Suncor Energy Inc. .............................................................................. 89 Toronto-Dominion Bank........................................................................ 92

2

Top Picks Of 2011 - January 17, 2011

Director’s Overview
It has been a rollercoaster of a market ride over the past five years during which I have had the pleasure of managing the equity research team at CIBC. By their very nature, the markets consistently make successful and consistent stock picking a challenge. The notion of top picks at a firm that prides itself on delivering differentiated research is always a very public and measured test of our capabilities, one that our investor clients seem to look forward to each year. The first three years of my tenure as Head of Research, the average total price return for the team’s top picks for each year had been underperforming the benchmark TSX by a meaningful margin; however, this tide has turned in the past two years. In 2010 our top picks as a portfolio (if held for the full year) performed well ahead of the TSX Composite – up 20.5% on a price basis vs. 12.5% for the Composite. Of the 16 top picks, nine outperformed the index and seven performed worse, although all but one of our picks generated a positive return.

Exhibit 1. Five-year History Of Annual Top Picks Returns
CIBC Top Picks' Portfolios (Held For The Full Year) 2006 (Publishing Date – January 5, 2006) 2007 (Publishing Date – January 11, 2007) 2008 (Publishing Date – January 11, 2008) 2009 (Publishing Date – January 16, 2009) 2010 (Publishing Date – January 8, 2010) Average Annual Price Return For Last Five Years
Source: Bloomberg and CIBC World Markets Inc.

Average Full-year Price Return 10.30% (0.90%) (36.80%) 81.60% 20.50% 14.9%

TSX Annual Return 14.51% 7.16% (35.03%) 30.69% 12.52% 6.0%

2011 has opened with an even better tone than was the case in 2010, as much of the economic malaise seems to be behind us, although, as Peter Gibson enumerates elsewhere, there are still lots of issues of concern, the biggest long-term risk being deflation although the short-term risks are likely more inflationary as the Fed wrestles with reviving an economy through quantitative easing. Critical, in Peter’s view, will be the Fed’s success in keeping the bond yield below a ceiling of 3.8%, the level at which equities will become pricey and forecasting messy. With a strong recovery in the wider benchmark indices on both sides of the border in 2009 and 2010, investors may have to settle in for a slightly more reserved market. Despite the positive market moves over these past 18 months, our Head of Portfolio Strategy believes there is still very good reason to stay long stocks (vs. bonds) over the next 12 months, provided short-term market weakness is not a concern and the Fed is successful with QE2/3. In addition, the emerging economy theme for China and India positions Canada’s resource economy to experience ROE recovery that should be quite robust, although the absolute levels are being forecast to remain below those to be delivered south of the border. Peter is forecasting year-end levels for the TSX and S&P 500 of 14,800 and 1,384, respectively, suggesting that Canada’s stock market will outperform its neighbor to the south. For the year just ended, our analysts’ top picks, as a portfolio (if held for the full year), performed well ahead of the TSX – up 20.5% on a price basis (see Exhibit 2) vs. 12.5% for the Composite during the same period (1/11/10 to 12/31/10). Within our returns, nine of the 16 stocks outperformed the TSX Composite Index for the period and seven performed worse, although all but one achieved positive returns for shareholders.

3

5% 12.99 13443 Full-year Price Return 12. Pan American Silver Corp.94 $9.4% (0. Despite a more active M&A environment. Franco-Nevada Corporation Genworth MI Canada Inc.0%.51% 32. held for the full year. was Jeff Fetterly’s pick of Total Energy Services (TOT–TSX. Avery Shenfeld outlines what he thinks is in store for the coming year.9% 6. SP rated).26 $27. we provide the date and price of the security on the day the report was released to the market and a calculated price return to that date.0% 17. it will not be aggressive and will likely revert to “stand-by” mode until the end of the year. While the economics team believes the Fed may act early in the year.00 $33.3% 1. but with the U.Top Picks Of 2011 .89 $35. as he downgraded the stock after a 33% gain through April 2010. 2011 The highest Sector Outperformer return achieved by our analyst team.35 $38. our total return for the portfolio of top picks drops to 14. Canadian National Railway Company Eldorado Gold Corporation (US$) Empire Company Limited First Quantum Minerals Ltd. (US$) Shaw Communications Inc. Price On 1/11/2010 $6.4% 17. at just about 2.57 $55.17 $15.20 $14. none of the top picks benefitted from a big takeover premium that has been available in past years and something Jeff benefitted from with his pick in 2008.9% 20. If we use these returns (and pretend the investor simply put the cash raised from the sale under their pillow). Incorporated BPO Properties Ltd.3% 106.2% 4.82 $108.6% – led by a slightly more confident consumer.0% 8. although this year he didn’t recommend investors hold it for the full period. Suncor Energy Inc.35 $18.S.78% 4.65 $66.70 $94.17 $3.7% 23.28 $5.05 $38. This is a three-peat for Jeff in delivering the top-returning stock (full-year return).00 $21.25% 1/26/2010 11/3/2010 4/15/2010 12/1/2010 $35.47 $6.1% 20.S.88 (9.75 $30. still 150 basis points (bps) better than the Composite Index price return.20%) 10. generating slightly better GDP growth than previously forecast.16 $36. which generated a 106% price return for the full holding period.58 $4. 4 . economy for better job recovery in the back half of the year.93 $25.95% 4. In his most recent economics piece.0% 14.38 $15. Top Pick Performance For 2010 Return To Change Of Rating Or Dropped Price On Date Of Change Coverage Date Top Picks For 2010 5N Plus.15 11947 Drop Coverage Or Changed Rating 4/9/2010 7/21/2010 $61.59 $19. Taseko Mines Limited Total Energy Services TransCanada Corp.69 4.92% Price On 12/31/10 $7.21 $21. Average Price Return For Holding Through 12/31/10 TSX Composite Return Source: Bloomberg and CIBC World Markets Inc. but the recent efficiency push on the back of capital spending should position the U.25 $18.03 $4. Exhibit 2. This positioning should help to create an investment environment that continues to have more stability.43 $4.3% 60.48 $58. Not Yet Heaven in Twenty Eleven. We highlight in Table 2 those four stocks for which we lowered our rating from Sector Outperformer during the course of the year and those two stocks for which we had a change in analyst coverage.0% 8.January 17.10 $41.5% Reason For Change Rating Downgrade Rating Downgrade Analyst Departure Rating Downgrade Rating Downgrade Analyst Departure Avery Shenfeld and our economics team believe that we are still a way from the stairway to heaven of big job gains that would reduce the unemployment levels materially.8%) 16.19 $37. Much of it is expected to be the same as 2010.05 $47. H&R REIT March Networks Corp.71 $21.82 $16.55 $25. In both cases.2% 13.

consumption growth.50 $9.B CZE CP CSH.B SMF SU TD Company 5N Plus. Semafo Inc. Toronto-Dominion Bank Rating Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer Sector Outperformer 12.Top Picks Of 2011 . we wish all of our clients a healthy and prosperous new year.UN DAY ECA PJC. Petrominerales Ltd.00 $18. Once again for 2011 there is a full tear sheet of key fundamentals for each of our top picks (these are found on an ongoing basis on the second page of our fundamental research reports) and a technical view.00 $7.50 US$36. NAL Energy Corporation Onex Corporation Pacific Rubiales Energy Corp.50 $44. the economic indicators like GDP growth. Head of Equity Research 5 .00 $11.00 $15.month Price Target $8.50 US$52. We summarize the fundamental analysts’ top picks for 2011 throughout the rest of the report along with the technical view for each of these top picks from Sid Mokhtari. Kirkland Lake Gold Inc. Black Diamond Group Limited Bombardier Inc. Rogers Communications Inc.50 $22.25 $43. On behalf of CIBC. Pan American Silver Corp. and unemployment rate suggest.00 $32. 2011 The backdrop in Canada remains better than we foresee globally. We anticipate that this article will be followed up in the coming month with some additional color on where our quantitative models are predicting differentiated performance in the market. Exhibit 3. Quentin Broad Managing Director. that Canada should fare better than our neighbors south of the border.00 $25. Quadra FNX Mining Ltd.75 $13.75 $78.00 $9.. in composite.00 $42. Suncor Energy Inc. Head of Portfolio Strategy. Penn West Petroleum Ltd.50 $84.January 17. We asked Peter Gibson. Incorporated Angle Energy Inc. although there is some concern over the strength of the consumer and their ability to contribute to the economic expansion with the same vigor as they delivered in 2010. Top Picks Of 2011 Ticker VNP NGL BDI BBD.00 $16. Strong prospects for our resource industries and improving manufacturing and business investment should start to shoulder more of the economic growth as it is offloaded by the consumer in Canada. Canadian Pacific Railway Limited Chartwell Seniors Housing REIT Daylight Energy Ltd. to provide us with a macro view on where he expects the markets to go in 2011.S. When we compare the outlooks for the economies of Canada and the U. EnCana Corporation Jean Coutu Group (PJC) Inc.25 $24. our technical analyst.00 Source: CIBC World Markets Inc.50 $47.To 18.A KGI NAE OCX PRE PAAS PWT PMG QUX RCI. C&C Energia Ltd.00 $40.

S.272 0.3 3. therefore. to help underpin their recovery while trying to stabilize the debt crisis in Europe.Top Picks Of 2011 . Federal Reserve continues to rely on quantitative easing.34 1.S.28 3.369 1.46 93-103 1.S. Most strategists would say the same for 2011. Toronto (416) 594-7194 Jeff Evans.5% with a dividend yield of over 2% for a total return of approximately 14% for the year.44 1. CFA.S.03 13.S. We expect that the S&P 500 will record a total return gain of over 10% comprised of price appreciation on the order of 9%.800 1. Relatively high structural unemployment in the U. Exhibit 4.S. The benefits which Canada enjoys as an exporter of commodities while benefiting from sustainably low U. begin to see self-sustaining economic growth in 2011 that resembles the early stages of recovery witnessed in 2004? 6 .271 0.384 0. Presumably. economy is weak but should gain some momentum in 2011. S&P 500 T-Bills Bond Yields WTI Oil (US$/Bbl) Gold (US$/oz. real estate market have resulted in a U. is on the path to recovery then the longer that BRIC nations will grow.8% ceiling is the key to appreciating how long gold and oil prices and the TSX can likely rise. and continued weakness in the U.S. rates is obvious – The question is simply one of how long can the U.95 3. North American equity markets.January 17. relies on the U. Coordinated global growth is clearly a leading cause of persistently higher average oil prices. combined with a dividend yield of approximately 1.8%.97-1. in particular. Exhibit 4 is a summary of our forecasts for 2011. 2011 Forecasts Summary Recent Canada TSX T-Bills Bond Yields U. the outlook for the global economy and.33 88 1.S. Understanding the link between quantitative easing and preventing bond yields from reaching our estimated 3.S. the longer that the U. China and Japan have a vested interest in working with the U.S.S. At the same time. albeit at much faster rates. Every year of economic growth is another year of growing global oil consumption. Federal Reserve's successful administration of quantitative easing through 2011.00 Themes By traditional measures.) C$/US$ Source: Bloomberg and CIBC World Markets Inc.S. Unfortunately.16 3. 2011E 14. The TSX should continue to outperform the S&P 500 as a result of continued growth in the emerging nations as the U. the U. recovery that is approximately one-third to one-half the rate of growth we would like to see.580 0. Toronto (416) 956-3250 We believe that by the end of 2011 the TSX will have recorded gains of approximately 11. So far it appears to be working. quantitatively ease and can the U. 2011 Do You Believe In Magic? Peter Gibson.

specifically. the ongoing risks in Europe. dollar devaluation below the recent lows. The recently recorded record-low volatility is very unusual.S. We believe that the safe haven. Yet. that of food and energy inflation at a time when North America is not recording any wage inflation.S. Historically.S.S. Biggest Risk Is Deflation Although deflation is. then the U. weak rate. recovery is taking hold.S. relatively. Global investors are placing their full faith and confidence in the Fed’s successful administration of quantitative easing as there remains a long list of ongoing risks.S. Risks For The Fed The range of possible outcomes for North American stocks and bonds is perhaps greater than it has been in years.S.8% level.S.S. It is more a matter of understanding the Fed’s ability to continue administering quantitative easing because the day that it becomes necessary to withdraw substantial liquidity is the day investors risk forecasting chaos. we still believe that. If the U.8% level and. Weak corporate profit growth makes North American stock markets very sensitive to the level of interest rates.S. reserve currency. markets have recorded very low volatility immediately before crisis. due to the fact that low volatility often implies a sense of complacency. We cannot over-emphasize the significance we attach to the Fed’s goal of holding 10-year U. As long as quantitative easing holds the bond yield below 3. dollar devaluation further. then more can be done which still pushes the U. This fact underpins investors’ reliance on the Fed’s ability to continue administering quantitative easing. the fact that the U.700/oz. dollar should strengthen.S. gold price target. If bond yields. housing market must stabilize. the U. gives it the room to continue relying on the use of quantitative easing. yield curve tilts. Nonetheless. These risks include a number of geopolitical hotspots.January 17. the biggest risk that the North American economy faces. We. government would still choose to push the U. the short-term cyclical risk is the growing fear of inflation. should rise above the 3. it is unlikely that we will witness secular profit growth driven by inflation in the way it was witnessed in the 1970s. Treasury bond yields below the 3. the implication would be that quantitative easing is losing its effectiveness.Top Picks Of 2011 .8%. below the 3. In 2004. status of the U. hence the US$1. often in part. bond yields below the critical 3. 2011 To do this. which is indicated by our asset mix models. we would expect continued but slower appreciation in gold prices owing to emerging economy growth. but it is an inherently risky strategy.5% level. Treasury Yield Below 3. the Fed tilted the yield curve. however. preferably. therefore. 7 . Historically. Fed strategy of quantitative easing is intended to hold U. in which case US$1. stock market has now rallied 85% from its 2009 lows and that the recent rally has been so significant that markets are well above mean reversion levels. economy can continue to recover at the current. when the U.S.8% In the absence of wage inflation. The Fed Is Trying To Hold The 10-year U.S. it is impossible to pass price increases through to consumers and. if possible. it is very favorable for equity markets as long as corporate profitability is stable or rising. gold is likely. ultimately. reluctantly. raise short-term interest rates slightly in the hope that bond yields would then fall.580/oz. therefore. We refer to this as a tilting yield curve and it could still be a last resort strategy for the Fed in an attempt to prevent bond yields from rising too much. Emerging economy growth is underpinning commodity inflation while the West is not demonstrating any evidence of wage inflation. during the early stages of that five-year recovery. The Fed then could still. believe that the U.5% level for as long as possible so that the U. the U.S.

the 3.3% when. 8 .S. On the one hand.Top Picks Of 2011 . This is the dilemma the Fed faces and it is the direct result of too much government and consumer debt.8% 10-year U. high oil prices should underscore the safe haven status of the U.S. 2011 The Circular Irony Of Quantitative Easing. perhaps. Treasury market.e.January 17. Implications At present. i.. our view is a little different. yet. develop energy substitutes faster and withstand sustainably higher oil prices longer than others. Should the Fed be forced to tighten because the bond yields reaches the 3. We would think that sustainably high oil prices actually contribute to weaker U. it is a race against time to see which nation is more energy efficient. From time to time. mortgage rates would be catastrophic for home prices and consumer confidence in the absence of wage inflation and inflationary profit growth stock markets would be crippled when bond yields rise too much. In fact. Exhibit 5 illustrates that the implied ceiling for bond yields has been falling steadily for many years. A sudden significant upward move in bond yields and. Eventually.S. growth relative to their historical experience and contribute to holding bond yield in the desired rate (i.S. they skyrocket. 3%–3.S. although even moderate tightening by the U. the 10-year Treasury would naturally be at 4. however.. Higher Oil Prices And Stable Bond Yields In a sense. resulting in capital flow back into the U.S. real estate prices. The irony being that this level of bond yields increases the likelihood of more quantitative easing.1%. desperately needs a faster rate of economic recovery and.S. The longer that the Fed can do this. we would also anticipate significant new pressure for U. therefore. Treasury bond yield level represents the level of yields that causes the S&P 500 to appear significantly overvalued.3%). the U. economic growth gains momentum and that growth becomes self-sustaining.S. At these levels and above. would probably be perceived as a greater risk for Europe. the goal would be to hold bond yields at 3. then the risk of another U. given the sheer potential size of emerging economies. The risk is that inflation gains momentum and when the Fed no longer has the resources to fight the upward tendency in yields.S. it is like trying to stop the water flowing from a garden hose by holding your thumb over the end. the greater the likelihood that U. if bond yields rise too much then the risk of a panic in debt markets also exists. can adapt faster.8% ceiling too quickly while the U.S. and act as a growth tax rather than a cause of secular inflation at first. economy is still relatively weak.e. recession still exists.

however. the bid-to-cover ratio for U. then we remain optimistic about the outlook for North American equities. Treasury yield exceeded the then current bond yield ceiling. bond yield How Long Can The Fed Keep The Investing Window Open? Our View On Bond Yields Below The Ceiling As long as the 10-year bond yield remains below the 3. the recovery in 2009 coincided with bond yields at the low end of our estimated range and forward ROE was recovering. Treasury bond yield.S. 2011 Exhibit 5.S. S&P 500 profitability had started to decline.S. corporate profitability is rising.Top Picks Of 2011 .S.S. 10-yr U. Treasuries was also at relatively low levels (see Exhibit 8). We believe that. is at very high levels and the U. First. The second collapse occurred during the housing crisis of 2007 and the banking crisis of 2008. the 10-year U. yield curve became inverted (see Exhibit 7). The first collapse occurred from 2000 until October 2002.S.2% ceiling 5 Bond Yield (%) 8 7 6 +57% -50% +94% -57% +85% 9 3. Since the year 2000. The 10-year U. By contrast.S.January 17. Treasury Floors And Ceilings 1800 1995 ceiling 1600 1400 1200 S&P 500 Index 1000 800 600 400 200 0 1998 1999 2000 2001 2002 2003 2012 1994 1995 1996 1997 2004 2005 2006 2007 2008 2009 2010 2011 Term Structure 0% 0 4% 1997 floor 3. 9 . has recently been as high as 3.S.0% Ultimate floor 1 S&P 500 Source: Bloomberg and CIBC World Markets Inc. equity market.S.5% and it is likely that quantitative easing has played a significant role in preventing yields from rising further.8% ceiling 4. this would imply.8% ceiling.9%) 2002 ceiling 4. there have been two massive collapses in the U. yield curve maintains a steep positive slope. based on the fact that the bid-to-cover ratio. Treasury bond yield below the critical 3. the first critical step demands that we check Exhibits 5 to 8.S. for now. Third. the Fed can continue to quantitatively ease and hold the 10-year U.8% 4 3 3. To assess the ongoing potential for the U. albeit manipulated by the Fed. 10-year U. this decline probably resulted from the fact that the Fed had tightened until the U. Second.8% ceiling and U.5% Excess debt floor 1997 ceiling 2000 ceiling 2003 ceiling (5. On both of these occasions. This is crucial since Exhibit 6 for S&P 500 ROE indicates that trailing and forward ROE are growing at approximately one-third to one-half the desired rate.0% Desired long term average 2 2.1 5. The Fed had restored a steep positive slope to the yield curve. trailing ROE was on the verge of recovery and the bid-to-cover ratio began to rise due to the safe haven status of the U. stock market.S.S. Both major market collapses were signaled by three critical observations. Treasury market demonstrated during the global banking crisis.

5 1 0.5 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: CIBC World Markets Inc.5 3 2. Exhibit 8.January 17. S&P 500 Index And ROE (Forward And Trailing) 1800 1600 1400 S&P 500 Index 1200 1000 800 600 400 200 0 Jan-94 Jan-98 Jan-03 Jan-07 Jan-11 2012 Jan-11 25 20 15 10 5 0 Jan-96 Jan-97 Jan-00 Jan-01 Jan-02 Jan-04 Jan-05 Jan-06 Jan-09 Jan-10 Jan-95 Jan-99 Jan-08 S&P 500 ROE Trailing ROE Forward Source: Bloomberg and CIBC World Markets Inc.5 2 1. 2011 Exhibit 6. Exhibit 7.Top Picks Of 2011 . Bid-to-Cover Ratio 5 4. Yield Curve 2 1 0 -1 % -2 -3 -4 -5 Jan-96 Jan-01 Jan-06 Jan-09 Jan-98 Jan-94 Jan-97 Jan-02 Jan-05 Jan-10 Jan-95 Jan-99 Jan-00 Jan-03 Jan-04 Jan-07 Jan-08 Yield Curve Source: Bloomberg and CIBC World Markets Inc. 10 ROE (%) .5 4 3.

Cash And Real Estate) U. as in 2004. Residential U. Quantitative easing. emerging economy growth.S. but. gold prices and the Canadian dollar. impacts our outlook for the U. economic recovery.S.S.January 17. Could This Be 2004 Because We Are Recovering From Recession? Exhibit 9 further underscores the fine line that the Federal Reserve is walking. is directly impacted by the Fed’s ability to quantitatively ease and hold bond yields below the critical level. Given these facts.Top Picks Of 2011 . equity market began to recover in October 2002 from the recession witnessed during that period. The equity market recovery was supported by corporate profit growth and the equity market rally persisted until 2007 when bond yields again reached the then current ceiling. Exhibit 9. recession. Treasury bond yields below the critical 3. in fact. Fortunately. Usually after the late-cycle crises. 3 and the bond yield ceiling.S. resulted in a very significant U. The U. If the Fed fails. in turn. The U. residential and commercial real estate prices remain weak. Virtually every forecast. we view it as very dangerous to be naively making forecasts for gold and oil prices and the Canadian dollar based on emerging economy growth without realizing that. then we would expect forecasting chaos. at the present time. quantitative easing is underpinned by a significant rally in the S&P 500. Cash S&P 500 U. 11 . thereby holding 10-year U. dollar and. U. they all turn on QE 2.S. Economic Recovery Still Depends On Quantitative Easing In fact. At the same time that bond yields are a mere 50 bps from the ceiling.8% level. It is very common to experience crises late in an economic cycle such as 1987/1988 and 1997/1998 and then again recently in 2007/2008. 2011 Self-sustaining U. the market rebounds for about two years before higher rates lead to another recession. we are optimistic about the Fed’s chances of success in eventually establishing a self-sustaining U. therefore. but we know full well that this view depends entirely on quantitative easing. Economy (Equities.S.S. we are trying to emerge from a recession. The 2007/2008 crisis.S.S.S. in reality. whereas other late-cycle crises do not. oil prices. Commercial Source: Bloomberg and CIBC World Markets Inc. typically.S. result in technical recessions. however.

We probably face a similar outcome today. What Pattern Is The Fed Hoping For? We would think that the Fed is hopeful that the current period resembles 2004. Although corporate profit growth was stronger then compared with today. yet. there were other ancillary indications pointing to a continued recovery in equity prices. then the U. Head-and-shoulder patterns are among a few of the patterns that seem to have a demonstrable history of success. stock market may pause for part of 2011 while keeping a longer-term upward trend intact. but finishes the year modestly higher after the big year-end run-up in 2010. The simplistic implication here would be that the S&P 500 goes sideways for several months. very modest tightening to keep bond yields within a critical range.S. became the basis for a sustainable stock market advance. the S&P 500 moved sideways to slightly down for the first part of 2004 and bond yields fell modestly. 12 . Resembles 2004? A Minor Positive Supporting A Growing Investor Confidence In Exhibit 10. 2009 and during 2010. It would be a minor indication of growing confidence and a sustainable expansion. If the Fed can use quantitative easing or. ultimately. if necessary.Top Picks Of 2011 . the S&P 500 total return graph demonstrates how persistent and significant that equity rally proved to be from 2002 to 2007. After a sharp run-up in 2003. Corporate profitability continued to grow during that time and. some very modest Fed tightening prevented the bond yield from rising above critical levels.January 17. 2011 Exhibit 10. One of the key takeaways from that period is that bond yields came very close to our calculated ceilings and. It was interesting to note that there was an inverted head and shoulders pattern that occurs in 2002 and again in 2004. We witness this pattern again during 2008. S&P 500 Total Return (2000 To Present) Source: Bloomberg and CIBC World Markets Inc.

S. Exhibits 11 and 12 illustrate the returns from Canadian and U. including a stronger banking system and sustainably higher oil and gold prices because of emerging economic growth. Stocks Still Outperform Bonds And T-bills The very significant U. 2011 In Canada. Exhibit 12. In fact. the S&P 500 five-year rate of return is still less than that of T-bills and far less than that of U. stocks. By comparison. These exhibits also show that.S.S.S. Five-year Historical Returns: TSX. bonds.Top Picks Of 2011 . 10-yr Bonds And T-bills CDN Bonds U. Cash S&P 600 S&P 500 Source: Bloomberg and CIBC World Markets Inc. Five-year Historical Returns: S&P 500/600.S. 13 . Exhibit 11.S. Canada’s superior performance resulted from a number of important factors. stock market needs to pause. 10-yr Canadian Gov't. stock market rally at the end of 2010 and the ongoing problems in Europe would suggest that the U. bonds and T-bills and shows very significant short-term losses in bonds since the summer of 2010 while stock prices soared. the cumulative rate of return for the TSX over the last five years again exceeds the rate of return for Canadian bonds and T-bills. Bonds And T-bills CDN Bonds CDN Cash TSX Source: Bloomberg and CIBC World Markets Inc. despite all the turmoil of the last few years.January 17. Not The Case In The U.

S.Top Picks Of 2011 .S. dollar then this implies generally higher gold and oil prices. to continue quantitative easing is a major driver of potential returns for the TSX. To the extent that this contributes to a further devaluation of the U.8% ceiling. Not surprisingly. 14 .S. Exhibit 13.S. yet. has completely overtaken the S&P 500 and the TSX. dollar and gold and oil prices. Our preference for the TSX relative to the S&P 500 depends entirely on the Fed’s ability to keep bond yields below the 3.8% Ceiling In The U. therefore. Five-year Historical Returns: TSX And S&P 500 TSX S&P 500 CIBC Small Cap Source: Bloomberg and CIBC World Markets Inc. Exhibit 14 illustrates the inverse relationship between the U. bond yields and the ability of the U. 2011 TSX Versus S&P 500 Exhibit 13 further illustrates the significant performance of the TSX relative to the S&P 500 but also demonstrates the very dramatic outperformance posted by our CIBC Small-cap Index. and Exhibit 15 illustrates the very high correlation between TSX total returns and the commodity Index. The CIBC small-cap universe started from lower levels in 2008 and. Since approximately 50% of the TSX is comprised of the energy and materials sectors. rally in the shares of commodity sectors. the TSX has also demonstrated both a small-cap effect and a significant. Preference For TSX Over S&P 500 But Only If Bond Yield Stays Below The 3.S. Since the lows of 2009.3% then the Fed is able to continue quantitatively easing. If bond yields are held in the range of 3% to 3. the level of U.January 17. related.

dollar as a result of monetizing debt and debasing the U. Cumulative Returns: US$ Trade Weighted. rather. 15 . is likely to pursue this strategy for as long as it possibly can. This is likely to remain the case until countries like China face a serious threat from inflation. High Correlation Between TSX And CRB Returns Source: Bloomberg and CIBC World Markets Inc.S. in general. Oil And Gold 10 9 8 7 6 5 4 3 2 1 0 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 TSX CRB 120 115 110 105 100 95 90 85 80 75 70 Oil (rebased) Source: Bloomberg and CIBC World Markets Inc. 2011 Exhibit 14.8% but it also contributes to the devaluation of the U. for the world. therefore. is intended to hold bond yields below the critical ceiling levels of 3.S. it is a strategy that contributes to lower interest rates for export-dependent countries and.Top Picks Of 2011 .S. but.January 17. The goal is not so much for the U. dollar in the process. to become an export-dependent country as a result of devaluing the dollar. The U.S. Gold (rebased) Trade-weighted USD (RHS) Exhibit 15. Other Important Circular Implications Of Quantitative Easing Quantitative easing. has a number of other important implications. Quantitative easing. for example.

It comes full circle then. dollar devaluation also contributes to higher oil prices. Higher Oil Prices Curiously.S. to extend its quantitative easing strategy. In turn. economy. to pursue energy substitutes and. case can help hold bond yields down. therefore. which is relatively more punitive for other nations than the U. these sectors are supercritical to the outlook for the TSX. a sustainably higher oil price places relatively more pressure on other economies and may. 16 .S.S. Sustainably high oil prices are crucial today if the U. dollar. Sustainably high oil prices.S. Dollar Devaluation In the short term. This has important long-term potentially crisis implications for China. and in the U.S. can get away with more quantitative easing. are a cause and effect of quantitative easing. easy. as well as how significant. is the largest consumer of oil globally. U. obviously. U. Although the U.Top Picks Of 2011 . perhaps.S. thereby making the U. force its conversion to natural gas just as the British economy once converted from coal to oil dependence. therefore. therefore.S. more of a safe haven and simultaneously increasing the likelihood that the U. Yet.. the opportunity is for continued investment in these sectors. the U. monetary policy for China.S.S. Sustainably high oil prices also create economic incentive for the U. easy. ultimately. we believe that the Fed's ability to hold bond yields below the critical ceiling is the single most important determinant of how high gold and oil prices can rise and for how long. 2011 Economic theory suggests that China cannot maintain an independent monetary policy relative to the United States if it fixes its currency and tries to control capital flows at the same time. quantitative easing tends to contribute to rapid growth in emerging economies and. higher oil prices create relatively more pressure for less energy efficient.S.S. high oil prices are a growth tax. allow the U. The sheer potential size of the Chinese and Indian economies. Higher oil prices can increase the risk of chaos elsewhere. is to have the economic incentive to lessen its reliance on oil before the emerging economies become so large that oil prices are crippling. therefore. as long as it tries to maintain its currency peg to the U. is walking a fine line between using quantitative easing in an attempt to re-establish self-sustaining economic growth while risking much higher oil prices that could derail both the U. for investing opportunities in Canada. In effect.S. This would imply that aggressive.S. monetary policy results in aggressive. even inflationary growth in time. it is also relatively more efficient in its use of oil in generating GDP growth.S. In a sense. ironically.January 17. The U.S. has enormous implications for the average level of oil prices longer term and. which contributes to holding bond yields down at the same time. and global recovery. Therefore. perhaps. emerging economies but it also represents a growth tax on the U.

Although the timing of the gains from the energy and materials sectors differs a little. The TSX energy sector has moved sharply higher as West Texas Intermediate oil prices have reached the mid-90s. material and financial sectors alone represent almost 80% of the TSX market capitalization. we believe that the Fed will attempt to devalue the U. Higher Gold Prices The energy. Materials And Energy TSX Energy TSX Materials TSX Financials Source: Bloomberg and CIBC World Markets Inc. however. the materials sector has recorded gains as a result of higher gold prices from 2001 to the present. This represents the level we expected to see for year-end 2010 and we should witness improving profitability for the energy sector as a consequence in 2011.S.S. We expect oil prices to trade in a range of US$93/Bbl–US$103/Bbl throughout 2011.Top Picks Of 2011 .S. TSX Sector Returns: Financials. 2011 Exhibit 16. Up to this point.January 17. In general. 17 . these two sectors have been the leading drivers that have allowed the TSX to dramatically outperform the S&P 500. Dollar. Exhibit 16 illustrates the relative performance of these three sectors since the beginning of 2000. we have argued that the U. Since 2001. dollar for as long as possible and that this is the main driver for higher gold prices as gold is often a currency proxy. Devalue The U. dollar devaluation strategy is ongoing and a main driver of higher gold prices.

it should be noted that the energy.19 standard deviations. In effect. In fact. materials and financial sectors account for 78. although the big five banks in Canada are. Given the recent significant run-up in oil prices. we anticipate stable to weaker ROE and earnings for 30% of the TSX. it would be expected that forward return on equity would rise.January 17. Trailing Now Leading Forward Earnings In general. We would expect that to change as oil prices remain close to US$100/Bbl US for West Texas Intermediate.S. recording ROE declines on a trailing basis. The energy sector return on equity is also largely unchanged on the trailing basis. This is also significant to the overall return on equity characteristics of the TSX since the financial sector represents approximately 29% of the index weight. TSX ROE. We noted earlier that for both the S&P 500 and the TSX the rate of profit growth on both the forward and on a trailing basis remains unusually weak. Median Values: Key Data Points For The TSX Exhibit 17 summarizes some of the key data points relating to the S&P/TSX Index. This underpins our outlook for $830 aggregate TSX earnings. to minimize the impact of outliers. This equally weighted small-cap index has soared in just two years. Street forward ROE growth rates are still showing minimal growth. As indicated by the sector relative weights in the first column. Key Is Stable S&P 500 ROE The North American equity market gains and concurrent U. it comes as little surprise that trailing earnings are now rising very slowly in the S&P 500. The median value for financial sector profit growth is 0.22 standard deviations. the weighted average return on equity for the sector is unchanged. Even more dramatic. are the gains that were recorded by the small-cap TSX materials sector. improving earnings for the energy sector (26%) and much stronger earnings for the materials sector.3 standard deviations or better. Therefore.45% of TSX market capitalization. The strongest profit growth is being recorded by the materials sector at 0.Top Picks Of 2011 . For example. however. bond market losses since the summer of 2010 are both unusually large. generally. however. the table summarizes the median values for each of the sectors. It is likely that forward Street forecasts will rise slightly so that S&P 500 ROE is likely to remain flat at the currency very high levels (over 20%). is likely to record better growth but from lower levels (recently 12%.11 standard deviations. we prefer to see return on equity growth rates of 0. In order. economy. however. 18 . while forward earnings forecasts are falling. median TSX profit growth is a mere 0. median 8%). 2011 TSX Earnings Forecasts. At this point in the cycle and given pervasive concerns about the U.S.

44 4.07 0.98 15.15 5.03 0.21 0. although this sector is 2.08 25.94 29.29 12.95 13. more than 50% of their revenues come from international operations and emerging economies.42 15.72 16.20 2.42 All Sectors Energy Materials Industrial Consumer Discretionary Consumer Staples Healthcare Financials Info Tech Telecom Utilities Source: CIBC World Markets Inc.5% of the TSX market capitalization.Top Picks Of 2011 .09 -0. the two sectors with the most substantial amounts of cash on the balance sheets would be the materials sector and the information technology sector.80 9.76 12.34 -0.11 16.53 Forward P/E (x) 14.61 13.34 10.05 -0.79 12.S.03 20.56 2.00 Dividend Yield (%) 1.S.64 16.89 11.84 Forward Roe Growth (stddev) 0.93 9. materials and financial sectors.36 -0.11 -0.86 11.76 3.80 19.55 5. our TSX target of 14. and Canada but especially in the U.94 0.05 -0. That is.56 41.80 18.76 10.03 10.93 0. It is also worth noting that the CIBC analyst median return is expected to be 15.18 5. information technology sector companies are frequently what we also call value-added exporters.17 0. case.00 5.53 -0.70 0.82 7. this would imply a current P/E on forward earnings of less than 15x for the TSX overall.15 CIBC Analyst Implied Return (%) 15.11 25.12 3.39 13.38 2. If the Street forward earnings forecast is correct.06 13. Especially In The U. and Canadian information technology sectors. Now Just Make Sure ROE Is Rising Although the financial sector is not demonstrating significant profit growth at present.54 0.02%. companies have accumulated significant amounts of cash on their balance sheets as a percent of common equity.54 3.10 23.02 7.46 9.16 Street Implied Total Return (%) 11.85 7.23 13. Sustainably high dividend-yielding stocks will continue to be a crucial long-term investing strategy for those that choose not to be active tactical asset allocators.19 0.56 -0. the median forward P/E ratios for the materials sector and the financial sector would be close to 13x one-year forward earnings. Both trailing and forward growth is being recorded by the information technology sector.57 4.76 Trailing Roe Growth (stddev) 0.72% and the Street median return is expected to be 11.92 11.21%. In Canada.49 0. We believe that TSX earnings will be a little weaker than the Street expects and that there will be slight compression of the earnings multiple during the course of the year.59 12. Attractive Financial Sector Yield.74 13.59 13.84%. Treasury bond yield remains below the ceiling.January 17.09 11.84 12. Key Data Points For The TSX Median Sector Relative Weight (%) 100.52 5.03 13.22 13.99 11.31 6.40 22.22 Trailing P/E (x) 17.00 26. Very Large Cash Holdings On The Balance Sheet. 19 . in both the U.21 0.72 Forward Roe (%) 11.47 14.47 13.32 -0.08 -0.55 15.97 10.29 12.07 17.21 8.69 16. In fact.61 10.57 1. as long as the 10-year U. In the U. ROE (%) 8.58 21.89 Forward Earnings And Traditional Valuation Aggregate earnings for the TSX should be capable of reaching $830 judging by the anticipated return on equity growth for the energy.89 18..00 1.S.S.41 9.99 14.55 12. Our global portfolio system indicates that the weighted average dividend yield for the financial sector is an impressive 3. This is especially true for the U.80 21.S.800 for year-end 2011 appears likely.08 0.83 13. 2011 Exhibit 17.22 18.08 21.42 1.03 0.22 0. Nonetheless.S.36 Cash As % Of Equity 13.44 11.79 1.71 12.04 18.67 5. Finally.30 10.38 24. it is recording a median dividend yield of 4.

There is a large list of blue-chip. economy to recover and for consumer confidence to improve. info tech prices from 2000 to 2003 and the collapse in financial sector share prices from 2007 until 2009. are recording profit growth at present and although both areas have risen steadily since market lows of 2009. If. economy appearing stable for long enough that U. 20 . they remain far below the levels recorded during their respective speculative manias. Our counterparts in the TSX are the energy and materials sectors. S&P 500 Consumer Discretionary Financials Info Tech Source: Bloomberg and CIBC World Markets Inc.S.January 17. This should remain a dominant theme for many years. Their links to emerging economy revenues are fuelling significant profit growth in many cases. Exhibit 18. however. consumer. S&P 500 companies that are benefiting from their exposure to emerging economy growth.S. ultimately.S. share buybacks and capital investment. It is simply a matter of the U.S. To some extent. allowing more time for the U.S. used for mergers and acquisitions.S. Info Tech Not A New Mania Yet. increased dividend payouts.S. Furthermore. financial sector has better positioned the U. the U. we believe that these high cash holdings reflect concern about the state of the North American economy and that these high cash holdings amount to a war chest.Top Picks Of 2011 . however. 2011 At present. specifically the collapse in U. despite all the justified concern about the state of the U. We often wonder if the massive reorganization of the U. consumer discretionary sector has also benefited from exposure to value-added exporters.S. for dealing with future emerging economy banking crises.S. The Last Two Major Bubbles In The U. the Fed can keep bond yields below the ceiling. then it is possible that these substantial cash holdings are. consumer and business confidence eventually returns. Both of these sectors in the U. Financials Recovering And Galvanized Exhibit 18 summarizes nicely the impact on share prices of the last two major bubbles.S. the consumer discretionary sector has been one of the leading performers through 2010. large-capitalization.

at least. i. 2011 Exhibit 19. We have benefited significantly by being overweight equities since January 2009 and by staying the course in our Investment Strategy Committee publication from November 2010. 2011. namely the bond yield ceiling. should mark time. Our Recommended Asset Allocation The following is a partial summary of our recommended asset mix given our 2011 targets and limited space in this publication. Exhibit 20 illustrates the standard format for our basic scenario analysis for asset allocation. ROE growth and quantitative easing. Our recommended asset mix is shown for our various investor profiles in the top right-hand corner of Exhibit 20. our recommended asset allocation and the implied total portfolio returns. The gold and oil price targets for 2012 and the related level for the TSX depend almost entirely on the arguments that we’ve already made with respect to the level of U. bond yields and the need for continued profit growth.e. depends on all the issues this publication addresses. however. Gold And Materials Sector Performance Small Cap Materials Gold TSX Materials S&P 500 Materials Source: Bloomberg and CIBC World Markets Inc. that we may be required to change our asset allocation in the next couple of months. we are focused on our 2011 forecasts. however. It is true. We will look seriously at 2012 targets later in 2011 but for now our concern is with getting this year’s levels correct. North American equity markets are overdue for a correction now or. 21 . For the purpose of this article.Top Picks Of 2011 . outlook.S. We have indicated target levels for 2012 but these targets are highly dependent on a number of things as we go through 2011.January 17.. Our long-term. far more significant.

This is shown just under the blue “optimistic” button allocation asset mix ranges. This is especially true if the 10-year U.S.S.January 17. bonds and T-bills. In order to provide some indication of our current view with respect to North American stocks. We have not yet changed our recommended asset allocation for the various investor profiles outlined in the top right-hand corner of Exhibit 20. 2011 Exhibit 20. Basic SAS Source: CIBC World Markets Inc. as indicated in Exhibit 21. This would permit us to alter our stock and bond allocation within a range of 20% to 70% and alter the T-bill exposure from 0% to 50%. It is extremely likely that we will change our recommended asset allocation over the course of the next two to three months. When we first introduced the growth investor profile at CIBC.Top Picks Of 2011 . Treasury bond yield level gets any closer to the 3. we recommended a 45% Canadian equity exposure. a 20% U. 20% U.8% ceiling. we have decided to focus on only one of the several investor profiles. A Discussion Of Only One Of Our Common Investor Profiles: The Growth Profile The most traditional investor profile we have referred to over the years is probably best represented by a growth profile and an allowable asset mix range as indicated by point C – tactical asset allocation (refer to Exhibit 20). 22 .S. equity exposure and a 35% Canadian bond exposure. If our year-end 2011 targets prove to be correct then. equities and 35% Canadian bonds. Within this allowable range we have remained at 40% Canadian equities.

Understanding and adjusting to these market moves is crucial to investor success.67% p. –57% and +85% since 1998. –50%. long-term average equity returns were expected to collapse and did collapse starting in 1998 (3. Our floor and ceiling calculations in Exhibit 5 result from our asset mix modes. 2011 according to our Scenario Analysis System (SAS) for asset allocation.S. As we have noted often in the last 15+ years.January 17. bond yield levels and North American corporate profitability. Performance Attribution Exhibit 21 shows the 65% total allocation to U. we would expect a portfolio with the growth-oriented investor profile to achieve a 9.e. We steadfastly believe that making changes to asset allocation on an arbitrary and infrequent basis (i.35%. yet.S..a. once a year or once every two years) is extremely dangerous in the current environment.Top Picks Of 2011 . Growth – Optimistic (In Local Currency) Source: CIBC World Markets Inc. The bar graph under the performance attribution section of Exhibit 21 indicates that we expect the majority of returns to result from being invested in Canadian equities in 2011.83% of the total portfolio returns of 9. Optimization Our scenario analysis system for asset allocation also allows us to compare what our original recommended asset allocation would be with recommended weights that result from mathematically optimizing exposure across all possible asset classes. with the remainder of 35% invested in Canadian bonds. 23 .26% but it also contributes a disproportionately larger portion of the volatility for the total portfolio at 7. The Canadian equity component is expected to contribute 5. for the S&P 500 since then) and. Our asset mix models play a very important role in determining the timing of our exposure to a variety of asset classes. It should be noted that we also choose to alter our asset mix exposure anytime we observe significant changes in U.25% standard deviation of returns. and Canadian equities. +94%. the S&P 500 recorded rallies and collapses of +57%. Exhibit 21.26% total return with a 10.

we do this to see how much our short-term. If our goal was to maximize return for a 10% maximum total portfolio variance over the next 12 months then we should hold 10% U. equities for our growth investor profile. equities instead of our currently recommended 20% and 50% Canadian equities instead of 45%. Optimizing the portfolio with the goal of maximizing returns at 10% total portfolio variance would also suggest that we reduce Canadian bond exposure from 35% currently to 15% while raising the AA Canadian corporate bond exposure to 20%. while calculating these returns in local currency terms. Max Return For A 10% Maximum Total Portfolio Variance Source: CIBC World Markets Inc. maximizing the Sharpe ratio (return to risk ratio) or maximizing the total portfolio variance. recommended asset mix varies from the one-year mathematically optimized version based on our own targets and assumptions.S. we can optimize the portfolio based on maximizing return.January 17. we might choose to maximize total portfolio variance in order to reduce the total perceived portfolio risk. currently. Our likely changes in the next few months should be guided by these optimized results. our optimization techniques are creating thousands of combinations of portfolios in order to achieve the necessary combination and resulting asset mix for our return for various objectives. We must stress that the recommended asset mix depends almost entirely on our forecasts. In the last example.S. In our case. The objective.Top Picks Of 2011 . assuming our optimistic set of targets for 2011. Exhibit 22. however. In every case. If we could simply set our asset allocation and leave it unchanged for an entire year and assuming that our year-end targets are all perfectly correct this would be the correct implied asset allocation for maximizing returns for the total portfolio. Exhibit 22 shows our currently recommended exposure to Canadian equities. 2011 Choice Of Optimization Using our SAS optimization techniques. is to use the forecast return and volatility of each asset class as well as the correlation between asset classes to see what asset mix is required for our objectives. 24 . Canadian bonds and U. Maximize Returns For example.

as long as U. the Canadian bond exposure would be reduced by 5% and AA Canadian corporate bond exposure would rise from 0% to 20%. A more conservative asset allocation would resemble a constant 45% equities. 25 .S. Exhibit 23.January 17. Our Targets But Reducing Portfolio Volatility We note in Exhibit 21 that our current recommended asset location based on our 2011 targets implies a 9. Nonetheless. 45% bonds and 15% T-bill mix. the optimization system chose to reduce the U. Using A Growth Profile Allowable Range. For the purpose of this article.S. we want to consider what the recommended asset allocation would be if our goal were to limit the total portfolio variance. however.26% return with a total volatility of 10.25% standard deviation of returns. equity exposure to zero in favor of Canadian AA corporates. bond yields remain below the critical ceiling. If we optimize. therefore. the Canadian equity allocation remains at 45%. the portfolio based on the total volatility of 8% but incorporate our asset mix timing then the new recommended asset allocation is shown under the “Return Max” column heading (refer to Exhibit 23). 2011 Maximize Sharpe Ratio If we choose to maximize the ratio of return to volatility (risk and volatility are not exactly the same) rather than just maximizing portfolio return. it supports our conclusion that. We know from other analysis that that would result in a total portfolio variance of approximately 8%. It appears that in order to reduce the variance of the total portfolio. a large portion of our expected returns should result from Canadian equities. this assumes that our targets for the various asset classes are correct.Top Picks Of 2011 . In this case. of course. then the recommended weights are found under the column heading Sharpe Max in Exhibit 22. Maximize Return For An 8% Maximum Total Portfolio Variance Source: CIBC World Markets Inc.

S. as long as the Fed can use the magic of quantitative easing to restrict the upward movement in the 10-year U. the annualized total growth portfolio returns from August to the present was roughly 27%. In August 2010. This is approximately 434 bps better than a portfolio with a fixed exposure of 45% in equities.92% compared with 5% loss from 10-year U. The combination of the rising bond yields in the U. our relatively traditional growth portfolio held a 35% exposure to Canadian bonds for the purpose of improving diversification. we published our Investment Strategy Committee Prequel asset mix document. At the risk of being silly. entirely. Such significant gains in such a short period of time are cause for concern. One of our near-term concerns stems from just how dramatic the recent gains were from our over-weighted equity exposure while the under-weighted bond portfolio recorded massive recent losses. The reason for doing so is. This also supported our decision to remain over-weighted equities in order to capture the anticipated gains in stock prices while simultaneously avoiding the bond losses. Given that the U. is enough to cause some concern in and of itself. which could materially change our outlook for stocks and bonds in 2011. and Canada resulted in massive outperformance from equities relative to bonds.January 17. equities between August 2010 and the present was approximately 61%.Top Picks Of 2011 . 2011 Recent Performance Since August 2010 We are optimistic about the rate of return for U. 45% in bonds and 10% in T-bills. in which we indicated that bond yields were unlikely to fall any further near term and.S. were more likely to rise significantly. in fact. and especially given the significant incremental returns in a very short period of time. and Canadian equities. otherwise. in local currency terms. We have a long list of concerns with respect to exogenous risk factors. Treasury. Fortunately. we 26 .33% during the same timeframe. our total portfolio returns for the growth investor profile amounted to 10. generally. Bond losses in the Canadian bond portfolio were very slight at –0. equity market has now risen 85% from the 2009 lows and bond yields have risen from 2. Our over-weighted equities exposure benefited the total portfolio return considerably and we managed to avoid. bonds in the growth portfolio. would prefer to avoid. the annualized return from U. Our Overall Total Portfolio Returns Relative To Average Balance Portfolios Six of our seven investor profiles require that we maintain balanced portfolios of various degrees. Naturally.S.78% in a little over a four-month period. the 5% loss from U.S. In fact. and rising stock prices in the U. By maintaining the correct overweight recommendation for stocks and correctly underweighting bonds.S.S.S.S. bonds would have lost over 20% on an annualized basis. to have some degree of prudent diversification. bonds that resulted in just the last four months of 2010 by having no exposure to U. Treasury bonds.S.S. From August 2010 until recently the TSX rose approximately 15% and the S&P 500 rose approximately 21%. usually requiring that we have some exposure in asset classes that we. 45% bonds and 10% cash asset mix. while U. For example. The sheer magnitude of these gains relative to a very conservative asset allocation. we generated a significant 434 bps of outperformance in just four months compared with a fixed 45% equities. we would have experienced far greater returns if we had been all stocks and no bonds but the prudent goal is to try and correctly adjust asset mix while generally maintaining a balanced portfolio.04% to 3.

Exhibit 24.97-1.87 0.11 2011 14. therefore.02 0.S.91 0.01 2.580 0.33 88.) C$/US$ GPS data calculated through our Global Portfolio System Source: Bloomberg and CIBC World Markets Inc.01 14. As we have stated.41 15.92x and 14x.01 - 12.272 676 19.44 1.18 15.28 15.42 0.28 3.800 830 17.68 19.73 14. 2011 Forecasts TSX Earnings Top-down P/E (x) Bottom-up GPS P/E Median Weighted Average Street Fwd P/E (14.800 / 870) Trailing ROE Median Weighted Average Street Fwd ROE Median Weighted Average Trailing ROE Growth Rate & Fwd (GPS) Median Weighted Average S&P 500 Earnings Top-down P/E (x) Bottom-up GPS P/E Median Weighted Average Street Fwd P/E (1. S&P 500 Yield (market cap weighted) T-Bills (%) 10-year Bond Yield (%) WTI Oil (US$/Bbl) Gold (US$/oz.46 93-103 1. Detailed Targets For 2011 Exhibit 24 provides more detail as to the basis for our 2011 targets.83 14.34 1.12 0. as well as our gold and oil price targets and our Canadian dollar outlook are extremely dependent on the Fed’s ability to continue to successfully administer quantitative easing such that it can keep this stock market recovery intact.6 17.89 8. our optimistic outlook for North American equities.January 17.800 TSX price target at year-end.1 16. the resulting top-down P/E would be approximately 17.16 3. repeatedly.02 0.09 1271 79 16.04 19.34 1. Recent 13.14 20.03 27 . Based on a 14.384 / 90.78 0.92 14 17.39 0. 2011 are becoming increasingly concerned about how far the North American equity markets can go from here.98 12.03 1.95 3.Top Picks Of 2011 .67 17.83 times. It is our current view that the TSX aggregate earnings will reach $830 as a result of further earnings growth in the materials and energy sectors and a slight recovery in the financial sector during 2011.11 0.55) Trailing ROE Median Weighted Average Street Fwd ROE Median Weighted Average Trailing ROE Growth Rate & Fwd (GPS) Median Weighted Average Canada TSX Yield (market cap weighted) T-Bills (%) 10-year Bond Yield (%) U.0065 0.01 1384 88 15. respectively.3 3.95 14.97 0. Our global portfolio system indicates that the median and bottom-up weighted-average P/E based on current company prices divided by their one-year forward operating earnings would be 14.13 2.369 1.

the magic of quantitative easing is working. It is very difficult in a weak economic environment to make a case for the S&P 500 ROE growing robustly from the current very high weighted-average level of 20%. Treasury remains below the 3.S. Conclusion To summarize. It would appear. ending in 2007. however. as now.384 S&P 500 target divided by $88 of earnings results in a top-down price earnings ratio of 15. We would also expect that given the structural characteristics of the TSX and a number of more favorable economic fundamentals in Canada. however. two years ago. As long as S&P 500 ROE is stable and bond yields remain at satisfactory levels then a respectable rate of return is implied. All things considered. and given also that the U. the market tended to rise and fall over timeframes of about one-and-a-half to three-year intervals. Federal Reserve faces. it would be imprudent to simply set the asset allocation at the beginning of the year and not consider the possibility of significant changes to the asset mix throughout this year. at least. we would expect the S&P 500 is capable of posting a 9% to 10% total return for the year.Top Picks Of 2011 . we remain optimistic about the outlook for North American equities. but there is no evidence that the S&P 500 ROE is expected to grow significantly from here. Other than 1998 and the stock market low of 2009. We believe that the U. The current rally is now about 85% since the market low of 2009. our 1. namely quantitative easing. that we begin during 2011 to see selfsustaining growth with stable interest rates similar to 2004. economy begins to demonstrate evidence of self-sustaining growth and companies also begin to deploy the massive quantities of cash on their balance sheets. but it can only do this as long as the 10-year U. our market should continue to trade at approximately 2 P/E multiple points higher than the S&P 500.73 times. the key to sustaining the equity cycle was the fact that bond yield stayed in the desired range. but then.S. 2011 It is difficult to reconcile the trailing operating ROE on both the median and weighted-average basis with the one-year forward Street estimates of ROE.S. there is little or no evidence of ROE growth. this would imply a 12% rise in the S&P 500 Index price. the resulting implied rise in the S&P 500 Index level should be on the order of 8% or 9%. another two to three years. is a cause for concern. government is still determined to push the U. but it is hard to imagine a time when our view has turned so significantly on just one factor. however. 28 . This could change if the U. 2011 could resemble 2004. This. therefore. if we drew parallels with the equity cycle which spanned the period from October 2002 to mid-2007. so far. just as the Fed probably does. is emerging from recession. Since we anticipate some compression in multiple levels. that during the next 12 months. The one-year forward ROE levels are roughly 200 bps to 300 bps higher than the current trailing ROE for the TSX.January 17. a 12% internal growth rate in book value. at least. dollar devaluation further if it can. This is really the test that the U.S.8% level. For example. this is not the case for the S&P 500 where the ROE levels are considerably higher than the TSX levels at present. We hope. S&P 500 ROE can simply maintain the current 20% level then this would imply. Crucially. The equity cycle which began in October 2002 extended through the next five years. We believe. we have far greater potential to witness growth in TSX ROE from much lower levels than those currently being recorded by the S&P 500. Admittedly. Although S&P 500 aggregate earnings are expected to rise from $79 recently to $88 by year-end 2011.S. The S&P 500 was recording stronger ROE growth at that time and profitability was at relatively higher levels. too. If. After adding in an S&P 500 dividend yield of approximately 2%. and the Fed must find a way of sustaining the economic expansion and stock market rally for. but. its actions are unprecedented. If P/BV ratios were constant.S.

Top Picks Of 2011 . 2011 TOP PICKS OF 2011 29 .January 17.

50E 21. 161 Bay Street. which is at a significant discount to the peer solar group at 16. including potential conflicts of interest. Incorporated Shining Bright In The Land Of Cloudy Sky Market Weight 12-18 mo. We expect the company to continue to use these resources to pursue greenfield expansion and further acquisitions. Box 500.cibcwm.74 GW annually. produces and recycles high-purity metals and compounds for electronic and solar applications. See "Important Disclosures" section at the end of this report for important required disclosures.3x 6. www.6x F2012E FD EPS (ex. firstcall.4x Stock Price Performance 2010A 2011E 2012E 10.com .7 million in cash and cash equivalents ($1. cash).50 $7. Canada M5J 2S8 (416) 594-7000 Ian Tharp. Daily Trading Vol. the global low-cost producer of solar PV modules and 5N Plus' biggest customer. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.37E $0. Full contribution from its Firebird expansion is expected in Q1/F12.0x F2012E FD EPS (ex. Investors should consider this report as only a single factor in making their investment decision. 2010 2011 2012 P/E 2010 2011 2012 Fully Diluted.com All figures in Canadian dollars.2M No Current $8.50 is based on 15. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.com and ResearchCentral.4x 14. 5N Plus draws its name from the 99. Rate (E) 52-week Range Shares Outstanding Float Avg.9x 9.7% $4. cash) and $1. expects to expand capacity by 92% by 2012 to 2.0M Nil / Nil May $2. Excluding Unusuals EV/EBITDA $0. CIBC World Markets Inc. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2011 ROE (E) LT Debt Preferred Common Equity Convertible Available Earnings per Share VNP supplies 60%-70% of First Solar's CdTe needs and is expected to directly benefit from its aggressive expansion plans.O.8x 19.7x 2012E FD EPS.653 $329.09 in cash per share.ca Find CIBC research on Bloomberg.Tharp@cibc. 2011 Stock Rating: Clean Technology Sector Outperformer Sector Weighting: 5N Plus.85 per Shr 12. CFA 1 (416) 594-7296 Ian. unless otherwise stated.0% NA Nil $130. CIBC World Markets does and seeks to do business with companies covered in its research reports. 5N Plus has $56.0M Shrs 89. Reuters.77-$7. where applicable.5nplus. Management expects to double the top line in the next three years on the back of its new Firebird facility and a ramp-up in sales to solar customers such as Abound and Calyxo.Institutional Equity Research Company Update January 17.999% purity of its products.35 45.33A $0.. 5N Plus is on an aggressive organic growth trajectory. Price Target VNP-TSX (1/12/11) Key Indices: S&P/TSX Smallcap 25. Toronto.09 per share) on its balance sheet and generates $15 million-$20 million annually in operating cash flow.8x Source: Reuters Company Description 5N Plus develops.Mahesh@cibc. First Solar.ca Sumeet Mahesh 1 (416) 594-7293 Sumeet.21 3-5-Yr. P. Brookfield Place. EPS Gr. 5N Plus is trading at an attractive valuation of 10.6M 27. As a result. Our price target of $8.

6 $167.2 ($8.9x $3.0 $20.7x -2.1 $4. Diluted (Ex.0 $0.7% 76.4% F2010A 1.49) -1.14) -2.4 $35.2 ($16.50 17.33 45.1x 18. 31 .1x $324. Management is targeting three main markets: i) the CIGSbased thin film solar market.37 46.7% 41.2 $28.8 $20.19) F2011E $57.2% 45.January 17. CFA Sumeet Mahesh.2x 13.0x 20.8 ($4.4x 10.27 F2010A $68.9 $ 0.0x F2011E 11.8% 18.76 2011E P/E 14. except per share data Key Multiples 5N Plus Peers First Solar Operating Performance Return on Equity Return on Capital Employed Gross Margin EBITDA Margin Operating Margin Pre-tax Margin Net Margin Quality of Earnings Cash Realization Ratio1 P/FCF FCF Yield Implied Tax Rate Interest Coverage Income Statement Revenue Gross Profit SG&A R&D EBITDA Interest Expense Depreciation & Amortization EBIT Net Income EPS.50 46.0 $46.1% 113.50 All Figures in CAD$ millions.9) $7.6 F2010A $16.1x 3. (VNP-TSX) Current Price: $7. 2011 5N Plus Inc.2x 19.0 $0.3x 4.5) ($1.2 14.0% 32.7 $16.3x 12. 5N Plus continues to be well capitalized .1) $12.0x 3. MBA 416-594-7296 416-594-7293 ian.4% in Q1/F2011 but below 85.3 $2.4 11.3x 4.9 $0.7x F2010A 12.7% 28.11 2011E EBITDA 9.6 $36.1 $ 0.0% 24.7x -2.1% 27.9 F2009A $16.0 F2012E $73.3% 21.8 $32.9x $323.0 $4.1% F2009A 0.9 $23.9% 29.5) Investment Thesis 5N Plus develops and produces high-purity metals and compounds for electronic applications and offers related recycling services.8 $125. EBITDA & EBITDA margin $120.2% F2012E 17.2x 2.3 13.3% 41.8x 43.8x $2.8x 17.1x $2.6) ($3.7) ($6.6 $0.ca sumeet.9 $ 0.7) ($1.3 $80. Sales to the solar industry represented 74.0% F2012E 1. Through the Firebird acquisition.0% F2011E 23.4% 30.1% SO $0.2% 45. Source: Company reports and CIBC World Markets Inc.2% 29.2x F2011E $81.4 $4.2 ($68.9 $22.8x $339.5 ($52.9 $ 0.6x 21.2 $0.3 $1.3 $2.6% 44.45 45.4% 29.4 ($60.2x F2009A $69.1x 4.8x F2010A $70.9% F2009A 18.5x 1. Company reports and CIBC World Markets Inc.1x 2. Management indicated that sales into these markets have the potential to double its current annual revenues within the next three years. The recent equity investment in Sylarus has further strengthens this effort.7 $0.3 9.0% 34.6% 40.9% Dividend: Yield: F2010A 25. Unusuals) FD S/O Cash Flow Operating cash flow Capex Changes in working capital Free Cash Flow2 FCF per Share Balance Sheet Cash Total debt Equity Net debt (Cash) Net debt per share Net debt/EBITDA Book Value Per Unit (FD) 1 2 Sector Outperformer Ian Tharp.3x F2012E 13.Its favorable cash position should allow for growth through Greenfield expansions or acquisitions.1 $1.1 $15.0% 142.7% 31.3% 29.9 $22.0% 20.6 $143.00 0.45 LTM EBITDA 10.5 $21.4x -37.2% Chart: Sales.6x 3.9 $7.6x 10.0x 3.8 ($6.8 $35.7% F2011E 0.2 $5.To 18-Month Price Target: $8.8) ($0. Valuation & Outlook Current Price: Price Target: 12-18 Mo Return: Price Target Represents: P/E: P/E (less cash): Enterprise Value: EV/EBITDA: EV/Sales: P/BV: FCF Yield: $7.4% 31.5) ($1.0) ($13.1x $3.39) -2.9x F2009A 18.1 F2011E $7.7% 30. 5N Plus products are utilized in a number of electronic applications including Thin-Film photovoltaics (PV) and the radiation detector market.7 $0.1x 46.0 Revenues EBITDA EBITDA Margin Calculated as CFO divided by Net Income.9 $25.4 $0.2 $2.3 $2.7 ($63.2) ($1. ii) the semiconductor wafer market and iii) the germanium market.7x 15.1x 27. Cd and Se and on related compounds such as CdTe and CdSe. Calculated as CFO less Capex Source: Bloomberg.7x 2.1 $4.ca LTM P/E 15.0 $16.21 Rating: $8.9% 31.5 $112.1 F2012E $22.32) -2. 5N Plus focuses on specialty metals such as Te.0% 22.5% 35.mahesh@cibc.6% 77.2% in Q2/F2010.7x 3.35 $60. the above 70.6) ($8.0 50% 40% 30% 20% 10% 0% 2007A 2008A 2009A 2010A 2011E 2012E ($4.7% 23.5x 38.8% 27.8 $31.1x 12.6x $329.21 12.4x F2012E $104.17 F2009A $65.7) $100.4% of total sales in Q2/F2011. We estimate these markets to be in excess of $380 mln in size with prospects of substantial future growth.Shining Bright In The Land Of Cloudy Sky .tharp@cibc.8 $8.2% 50.62 $40.5x 4.4 $2.2 $28.6 $8.2 $3.4x 4.

Shining Bright In The Land Of Cloudy Sky .January 17. Bloomberg 32 . 2011 Source: CIBC TrendSpotting Matrix.

5% $6.9x 11. firstcall. including potential conflicts of interest. where applicable.39E 8.4 $65. Market Weight 12-18 mo.4M Shrs 290.ca Mike Woodward.7x Stock Price Performance DACF ($ mlns. By 2012. Reuters. Brookfield Place. Investors should consider this report as only a single factor in making their investment decision. While Angle has better-than-average exposure to multiple high-impact developments.ca Find CIBC research on Bloomberg. 7.Woodward@cibc. Results from the initial five wells have been impressive.Intermediate & Junior Producers Sector Outperformer Sector Weighting: Angle Energy Inc. Market Capitalization Dividend/Div Yield Fiscal Year Ends P+P RLI (years) 2011 EV/DACF Net Debt Net Asset Value Net Debt/CF Convertible Available *Basic Cash Flow Per Share 2009 2010 2011 P/CF 2009 2010 2011 $0.) 2009A 2010E 2011E EV/DACF 2009 2010 2011 $40.71-$9. 89% grp).angleenergy.93E $1.com and ResearchCentral. Canada M5J 2S8 (416) 594-7000 Adam Gill. P.0M $8. We believe Angle will start to trade at a premium over the year with continued success in the Viking.com . unless otherwise stated. The company's asset base is concentrated in the prolific west central Alberta area. Looking Towards Continued Success In Emerging Central Alberta Viking Play $9.200 Boe/d) and a number of gas resource plays.000 Boe/d of light oil and liquids-rich gas. Price Target NGL-TSX (1/12/11) Key Indices: None 17.35 per Shr 1. Daily Trading Vol. As a result. which posted a marked increase in industry activity over 2010.1x Source: Reuters Company Description Angle Energy Inc. its valuation today is at 6.90A $0. www.5X No Current Projected Total Return 52-week Range Shares Outstanding* Float Avg.500 Boe/d today). CA 1 (403) 216-3404 Mike.Institutional Equity Research Company Update January 17.O.5 7. including the Wilrich. Angle is also developing a Cardium light oil play (last well tested at over 1.000 $562.cibcwm. providing the company with a number of light oil and gas targets to develop.7M Nil / Nil December 11. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.20 71. Toronto. CFA 1 (403) 216-3405 Adam.2 9. is a natural gas-weighted junior E&P company with operations focused in west central Alberta that was founded in 2004 and went public in 2008.Gill@cibc. CIBC World Markets does and seeks to do business with companies covered in its research reports. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.com/ All figures in Canadian dollars. Box 500.. as well as a solid ability to control cost. CIBC World Markets Inc. 2011 Stock Rating: Oil & Gas . 161 Bay Street.0 $110.8x 2011E EV/DACF (vs.1X $167. with Angle having up to 195 potential new drilling locations.7x 8. See "Important Disclosures" section at the end of this report for important required disclosures. The emerging focus for the company has been the Viking light oil play in Harmattan.5M 60.2x 7. production from this play could reach 5.2x grp) and at 96% of our Risked NAV (vs.5x 5.87 Angle Energy is an intermediate-sized E&P company (~13.25 $7.

27A $0. Barnwell of Canada Directors Name Edward Muchowski John Gareau Clarence Chow Noralee Bradley Timothy Dunne Gregg Fischbuch Jacob Roorda Principal Occupation Independent Businessman Independent Businessman President.48E 55% Commodity Assumptions WTI Oil (US$/Bbl) Edmonton Par Oil (C$/Bbl) Henry Hub Gas (US$/MMcf) AECO Gas (C$/MMcf) Exchange Rate (US$/C$) Netback Analysis ($/Boe) Gross Revenue (Net of Trans.3) Total Debt / CF (Y/E Debt To Year CF) (1. Enterprise value to reserves (based on current reserves.04 1.37 $3.00 $20.Proven 3.2 27.2x.000 2010E P/CF EV/DACF EV/Boe/d EV/Boe . 7) Year operating netbacks divided by reported P+P FD&A cost.75 $4.25/Boe vs.250E 48% 58% 31% 2011E 16.7x 1.24A $0. 2011 Angle Energy Inc (NGL .25/share as Angle has best in class operating costs (2011E $6.5x 11.8x $54.0x) Group Average Total Credit Facility . and its asset portfolio has exposure to both high impact natural gas (Falher/Wilrich) and oil (Viking/Cardium) development opportunities. group at ~$9. Canoe Capital Notes: 1.2x 11.662 $26. 5) Equals cash distributions/dividends divided by cash flow.0x $106.TSX) Current Price: C$7.99 $0.528A 58% 2010E 8.00 $84. Financial Flexibility ($MM) Bankers: CIBC. Land Yangarra. * Reserves are updated for acquisitions/divestitures. 6) Y/E P+P reserves divided by Q4 annualized production. Oil & Gas CEO.72 $0.25/share is based on a 1.18A $0.P+P (incl.Current Reserves Information Reserve Engineers: GLJ Petroleum Consultants Year-end 2009 Reserves (MMBoe) Proved Developed Producing Total Proved (1P) Proved + Probable (2P) PDP % of Total Proved Total Proved % of P+P 2P Reserve Life .98 ($2. EV/Boe .21A $0.49) ($6. FD&A Cost .28E $0. Sproule Graham Cormack VP. incl.00 ($9. CA: (403)-216-3404 / mike.472A 7.Looking Towards Continued Success In Emerging Central Alberta Viking Play .) Hedging Gains / (Losses) Royalties Operating Costs Operating Netback G&A Interest Cap Tax/Other Cash Flow Netback $61. Exploration Flagship.3 50.2x $74.11 $85. We also see Angle as a safe way for investors to get exposure to natural gas given the company's solid operating cost and the high liquids content of its gas production.42 $3. Shares O/S based on most recent quarterly balance (adjusted for recent acquisitions and equity issues).Announced operational and reserves update Management (Ownership: 9.290A 10. $44. Amoco Matthew Mazuryk VP.003A 7. including acquisitions). Net debt includes convertibles and is based on most recent quarterly balance (adj.3x $75.com Mike Woodward.20A $0.55 $4.com 2011E NGL 5.3 Total Net Debt at Year-end ($38. Encal Glen Richardson VP.Years 6.75 $0. CFA: (403)-216-3405 / adam.3x 6.5 $16.61 $79. Crossfield. FDC.8x (versus the group averages of 89% and 7.7x 1.31) ($0.48) $0. E3 Energy.5x $180.05) ($1. and tight gas assets at Edson.55/Boe). Avid Elizabeth More VP. for recent acquisitions and equity issues).24A $0.P + P 3.0x Cash Flow Per Share CFPS (Diluted) Q1 Q2 Q3 Q4 Diluted Growth 2009A $0.Announced operational update and 13.0 $150.Month Price Target: C$9.4 $187. Key Stock Catalysts and Asset Overview Investment Thesis: We have a Sector Outperformer rating on Angle with a 12-18 month target price of $9.382 $36. KPMG.021A 13. FDC) Cash Basis Recycle Ratio (Incl FDC) 7.00) $20. Finance & C Lightning.4x 1.94 $3.25 Capitalization And Market Statistics Share Price Shares Outstanding 1.Announced completion of $60 million public offering of convertible debt Dec 16/10 . Key Catalysts: Catalyst for Angle include continued drilling success by the company and industry in the Viking light oil play in Harmattan and Falher/Wilrich tight gas play in Edson.87 71. 2010E 2011E $60.0x.To 18.76 $21.06 $8.9700 2011E $39. respectively). Our 12-18 month price target of $9.90A $1.45 Recent News Jan 6/11 .01) $14.085 Group 6.645A 7.54 $4.500 Boe/d production goal Nov 10/10 .552A 7.24) ($4.9707 2010E $33. Hoskin & Harcourt LLP CFO.95E 6% 2011E 14.January 17.00 ($7. Core NAV Risked NAV P/Risked NAV P/Risked NAV (Group Average) Fiscal Year End NGL 8.Announced $25 million bough deal equity financing Oct 20/10 . Fekete Stuart Symon VP. AGS Capital Management Partner.53 Group 9.7 (41%) Production Production (Boe/d) Q1 Q2 Q3 Q4 FY Growth % Gas Per-Share Growth 2009A 7.TSX Only Relative Valuation $7.0 $163. ATB and BMO 2009A Cash Flow from Operations $40. Market Capitalization Net Debt 2.51 $77. Key Assets: Key assets are the Viking drilling inventory of approximately 195 wells in the Harmattan area. Penn West.36 ($7.21) ($0.73 ($2.5 $147.591 Investment Thesis. Source: Company reports and CIBC World Markets Inc.25) $23. TriGas Heather Christie-Burns President & COOCrossfield.22/share versus the group average of 1.0 $73.2 Development Spending 5. 2.gill@cibc.Announced completion of $25 million flow-through financing Nov 2/10 .Current Total Credit Facility Unutilized (% Of Capacity) .2 59% 54% 11.1x target multiple to our Risked NAV of $8.8 $106. Engineering Harvest. 34 . Encal Heather Post Controller PwC.03 ($2.22 96% 89% December Sector Outperformer Adam Gill.5 $563 $167 $729 n/a 290.600E 28% 62% -11% 2010E $0.8768 2009A $28. Cardium and Ellerslie rights in Ferrier. Penn West.05) $17.20A $0. 3. 4) Excludes net acquisitions. Crossfield.74 $14.87 12.Released Q3/10 results Oct 21/10 .woodward@cibc. Encal. Ret.76 $0.9 2.6%) Name Position Recent Positions Gregg Fischbuch CEO Brooklyn.026E 9.08 $4. Angle Energy President & CEO.37) ($1. Operations E4 Energy.37) ($6.49) $17.09) ($0. Enterprise Value Distribution (Current) / Frequency / Yield Average Daily Trading Volume (50 Day) .35 $0. Brooklyn.446A 7.99 $66.99 $0. Relative Valuation: Angle is currently trading at a Price to Risked NAV ratio of 96% and a 2011E EV/DACF multiple of 6. Osler.2x 7.

January 17. 2011 Source: CIBC Trendspotting Matrix. Bloomberg. 35 .Looking Towards Continued Success In Emerging Central Alberta Viking Play .

161 Bay Street. In our view. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2009 ROE (E) Net Debt Preferred Common Equity Convertible Available EBITDA ($ mlns.7M Nil $195. Black Diamond has developed a strong competitive position in remote workforce accommodations in the oil sands and is well positioned to gain additional contracts as future projects are awarded.cibcwm.S. 2011 Stock Rating: Energy Equipment & Services Sector Outperformer Sector Weighting: Black Diamond Group Limited Accelerating Oil Sands Development Will Drive 2011 Performance $24.0M No Current 3-5-Yr.00-$22.6% $49. Canada M5J 2S8 (416) 594-7000 Jeff Fetterly. www.02 16. Reuters.com and ResearchCentral.72 Black Diamond is a leading provider of remote workforce accommodation and workspace solutions in the WCSB and regionally in the U.88 per Shr 9.3x Source: Reuters Company Description Black Diamond Group Limited is a provider of remote workforce accommodation services and work space solutions throughout the WCSB and regionally in the U.7E $66.45E 9.9E 11. where applicable. including potential conflicts of interest.S.0x Stock Price Performance Cash Flow Per Share 2009 2010 2011 P/CF 2009 2010 2011 $2.4x 8.O. the company is well positioned to benefit from increased capital spending in the Canadian oil sands and from accelerating resource play development..2x 6.4x 2011E EV/EBITDA. Black Diamond is trading at 6.6M $1.66E $3.com . See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.) 2009 2010 2011 EV/EBITDA 2009 2010 2011 $35.08 / 4.Institutional Equity Research Company Update January 17. In our view.00 $21. See "Important Disclosures" section at the end of this report for important required disclosures.ca Jon Morrison 1 (403) 216-3402 Jon. Toronto. Investors should consider this report as only a single factor in making their investment decision. As a result.ca Find CIBC research on Bloomberg.9% December $11. firstcall. We expect oil sands capital investment to accelerate in the coming years. Rate (E) 52-week Range Shares Outstanding Float Avg. EPS Gr. Brookfield Place. at a slight premium to the average for its peer group. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.com All figures in Canadian dollars. We have a Sector Outperformer rating on the company. P. CIBC World Markets Inc.Morrison@cibc.1x 6.blackdiamondlimited.4A $49.2x 2011E EPS and 6. In addition to the recent award of a long-term rental agreement for an 800person remote accommodation project with Suncor Energy.3x 2011E CFPS. 14.3x 8. CFA 1 (403) 216-3400 Jeff. Box 500. Price Target BDI-TSX (1/12/11) Key Indices: None NM $16.Fetterly@cibc.6M Shrs NM $356. we would not be surprised to see Black Diamond secure additional oil sands awards in coming months and expand its 2011 capital program.33A $2.4M 10. Daily Trading Vol. Market Weight 12-18 mo. 10-106661 © 2010 CIBC World Markets does and seeks to do business with companies covered in its research reports. unless otherwise stated.

1% 10.7 $21.7 2011E $101.1% 16.8x 8.25 1.4 $20.0 2010E $79.26 Q3/09 $16.7 $10. and Energy Services.8 47% $7. CFA | (403) 216 .8 $2.51 $33.4 $1.3400 | jeff.00 Company Description 2008 $43.8 $1.3 Investment Thesis 2008 8.3% 2010E 8.6% Black Diamond has established itself as one of the leading remote accommodation providers.5 $9.8 ($5. 37 .8 $4.4 $75.2x $12.2x $10.8 $10.0 $40.95 2010E $1.9 $25.0 $19.2 $17. Space Rentals.0% 2009 9.9 ($3.4x 6.5 $17.6 $0.05 2011E $170.45 $3.3x 14.4 $2.0 $24.S.08 2.20 Space Rentals 30% Workforce Accommodations 57% Energy Services 13% Distribution Analysis 2008 Dividends Per Share Cash Flow Analysis Cash Flow from Operations Less: Maintenance Capital Distributable (Free) Cash Flow Dividends Paid Out CFPS (fd) Distributable CFPS (fd) Payout Ratios Dividends / Cash Flow Dividends / Free CF $1. (2) a proven management team that has extensive experience operating within its business.94 1.4 $10.6 ($0.3 $10.0) $30.8 $18.7 $3.7 $15.4 $1.6 $20. Black Diamond Group is an established provider of remote workforce accommodation services and work space solutions throughout the Western Canadian Sedimentary Basin (WCSB) and regionally in the U.5 $2.06 2011E $1.33 $2. Chart 1: Revenue By Geographic Segment (2010E) 2008 $73.1 ($4.0% 2011E 6.ca Jon Morrison | (403) 216 .2x 9.4 40% $11.7 $73.0) $42.58 $0.53 Key Operating Statistics (Current Quarter) Reported Q3/10 Total Revenue $32.8 64% $7.0 $35.63 $2.13 $46.4) $19.40 1.8 $26.0) $54. The company has three business segments.67 $0.6 $34.14 % Y/Y 87% 65% 60% 57% 32% 33% 38% 41% 38% 42% 31% 34% 31% (1) Adjusted for stock-based compensation and one-time items.6% 8.Accelerating Oil Sands Development Will Drive 2011 Performance .8x 13.4 $2.ca $21. including: (1) exposure to a business and competitive landscape with attractive fundamentals.72 $24. and (3) a robust and visible pipeline of growth opportunities. 2011 Black Diamond Group (BDI-SO) Current Share Price: 12-18 Month Target Price: All figures in C$ millions except per share data Segmented Revenue Breakdown Workforce Accommodations Space Rentals Energy Services Total Key Financial Metrics EV/EBITDA P/CF P/E (1) BVPS P/Book ROE ROIC Income Statement Revenue EBITDA Depreciation & Amortization EBIT Net Interest Expense Tax Expense (Recovery) Net Income (1) EPS (fd) (2) Sector Outperformer Jeff Fetterly.7 57% $12.5) $31.7 $1.66 $2.1% 12.2x 20.1 $17. In our view.4 $20. the company offers several key attributes for oilfield services investing.8 ($1.6x 8.4 $0.4 $14.65 2009 $75. (2) Based on adjusted fully diluted figures.3 $66.1 $41.9 $13.8 $49.23 2009 $0.37 2010E $136.6 $170. Source: Company reports and CIBC World Markets Inc.9x 15.0 $1.9 $12.3402 | jon.fetterly@cibc.7 $49.2 $28.3x 15.3 $1. Workforce Accommodations.6 2009 $45.9 $18.morrison@cibc.8x $11.2x 20.January 17.6 $7.43 $59.6x $11.16 Gross Margin Gross Margin % EBITDA (1) EBITDA % Cash Flow From Operations (2) CFPS (fd) EPS (fd) (2) $31.6 $2.8x 9.3x 13.2 $136.

Accelerating Oil Sands Development Will Drive 2011 Performance .January 17. 2011 Source: CIBC TrendSpotting Matrix. Bloomberg. 38 .

20 for the CSeries.674 $9.41E 14.446. www. Continued strength in emerging market economies (particularly China and the Middle East) is resulting in strong international demand for long-range business jets. CFA 1 (416) 594-7285 Michael.0M No Current 3-5-Yr. is an internationally diversified manufacturer supplying aerospace and rail transportation equipment and services. Systems and Signaling for the rail public transit sector).25-C$6. CIBC World Markets Inc. Customer Services and Flexjet/Skyjet) and Transportation (Rolling Stock.459. If the business jet operations can return to a book-to-bill ratio of 1:1 in Q1/F12. C$2.39 BBD has two reportable manufacturing segments: Aerospace (Business Aircraft.O.29 per Shr 15. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2010 ROE (E) Net Debt Preferred Common Equity Convertible Available Earnings Per Share 2010 2011 2012 P/E 2010 2011 2012 $0. BA has received orders for 15 business jets and 15 commercial aircraft.986:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports.. firstcall.0M $347.39A $0.481.2M C$0. 161 Bay Street.cibcwm.24 1. See "Important Disclosures" section at the end of this report for important required disclosures. as the large business jet market represents approximately 80% of its business jet sales. CSeries Risk Well Priced In C$7.B-TSX (1/12/11) Key Indices: Toronto 26. EPS Gr.3x Stock Price Performance Source: Reuters Company Description Bombardier Inc. BBD remains optimistic about order activity and execution of the CSeries launch.30 for BT.(C$0. Brookfield Place.com All figures in US dollars. Specialized and Amphibious Aircraft. Canada M5J 2S8 (416) 594-7000 Michael Willemse.com and ResearchCentral.00 price target is based on C$3.Galison@cibc. Daily Trading Vol. Rate (E) 52-week Range Shares Outstanding Float Avg. Order activity at BA has picked up in recent weeks. Services.8x 13.00 C$5.Institutional Equity Research Company Update January 17. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. 2011 Stock Rating: Aerospace & Defense Sector Outperformer Sector Weighting: Bombardier Inc.991. unless otherwise stated. Commercial Aircraft. including potential conflicts of interest.com .37E $0. So far in Q4/F11.ca David Galison 1 (416) 956-3548 David. As a result.0M 1.728.50 for BA and C$1. Reuters. Toronto. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.bombardier.763. Bombardier Aircraft Orders Starting To Pick Up.Willemse@cibc. P.9% January $2.00M $3. Industry surveys continue to suggest favorable demand for the CSeries over the next few years. Price Target BBD.10 / 1.ca Find CIBC research on Bloomberg. Our C$7. Box 500. Market Weight 12-18 mo.0M Shrs 5.5% C$4.7% $1. Investors should consider this report as only a single factor in making their investment decision.0x 14. investors should start to generate strong interest in the stock once again. BA is well positioned to benefit from this. where applicable.

574.5 $1.9852 F2012E EBITDA Investment Thesis 12-Jan-11 F2011E P/E 14. EBITDA EBITDA Margin EBIT EBIT Margin 40 . CSeries Risk Well Priced In .0 $4. MBA 416-594-7285 416-956-3548 michael.9 $66. Bombardier is actively seeking to grow by providing new products in the 4.6) EV/Sales: $563.604.103.0 $346.00 29. Commercial 8.0% 5. (Ex.7% F2011 E 1.3 $66.8x $3.4% the company to offset weakness in one area with other segments that have a more stable growth 6.6x 1.1% F2012 E 17.565.26 F2010 A $4.37 1.7% Transportation has been somewhat sheltered from the economic downturn. Bombardier's diversification strategy has allowed 7.269.8x 8. Oper.5 $3.2 $0.1% 5.162.9 $5.0 $0.6) EV/EBITDA: ($216.1 $0.763.7 F2012 E 152 94 5 Q3/F11 A Q3/F11 A F2013 E 183 105 5 SO Price Target Represents: F2013 E P/E: $1.6x 9.5) $165.39 Rating: C$7.32 $3.3) $137.0 $0.2 ($1. FD EPS.Aerospace *Current Backlog .7% 4.7) ($365.1x $2.4x 7.2 $8.0% 16. *Bombardier Fiscal Years Ending January 31.460.8% 3.3x C$13.2x 69.0 $1. BA has been negatively impacted by 9.2 $32.7x 2.5 $8.054.0x 0.7x 15.500 $1.0 $712.9x F2010 A $19.6% 8.743 Commercial Aircraft Amphibious Aircraft * Current Backlog .0 $1.3 $0.9x $2.000 $1.3x F2012 E $19. Services.500 $2. Customer Services and Flexjet/Skyjet) and 8.08 F2011 E $3.0) $456.098.2 $9.2 $994.5x 12.1x 4.7% 8.39 1.000 $500 $0 F2013 E Consolidated Chart Calculated as CFO divided by Net Income.8 $0.842.January 17.9x C$13.To 18-Month Price Target: F2011E EBITDA 9.0 $1.380.7% 22.6 $5.366.236.215.40 F2012 E 15.galison@cibc.00 Michael Willemse.09 F2012 E $3.0 $346. Aerospace (Business Aircraft. Company reports and CIBC World Markets Inc. F2013 E 1.8 ($1. albeit at a moderate rate.5x 13.3 $3.7% F2012 E 1.6x 2. 17.9 $1.5% 23.2x 4.9% 28. Management intends to maintain a diversified product strategy with a continued focus on the rail and aerospace markets.2 $845.6% F2010 A 0.442 9.0 $1.1x 11.596. 2 Calculated as CFO less Capex Source: Bloomberg.B-TSX) Current Price: 12.9 $1.606.8x 57.7% 17.7 $1.2 $1.0 $347.5x 12.8x 21.ca david.Transportation *US$ bln Valuation & Outlook Current Price: Price Target: 12-18 Mo Return: C$5.0 $698.0 $655.9 $1.0 $0.442 10.8x 6.6x Deliveries (units) F2013 E Business Aircraft $21.4x F2010 A 18.5x 16. Specialized and Amphibious Aircraft.751.4 $0.5% 4.2 $66.3) ($42.3% F2013 E 12.0 $3.3x Bombardier has two reportable manufacturing segments.8% 4.Cont.0x F2011 E $17.5% 12% 10% 8% 6% 4% 2% 0% F2005 A F2006 A F2007 A F2008 A F2009 A F2010 A F2011 E F2012 E F2013 E F2010 A 176 121 5 F2011 E 149 97 5 $16.017.037. However.4% company’s traditional markets (North America and Europe) as well as through an increased focus on emerging markets such as Asia.0 $9.9 $4. CFA David Galison. given that large-scale transit infrastructure is typically funded by the public sector.3% 6.4% 4.175.0 $958. Unusuals) FD S/O Cash Flow Operating cash flow (ex WC) Capex Working Capital Investments Free Cash Flow2 FCF per Share Balance Sheet Cash And Equivalents Total debt Equity Minority Interest Preferred Value Net debt (Cash) Net debt per share Net debt/EBITDA Book Value Per Unit (FD) 1 USD:CAD 0.73 Sector Outperformer C$5.8x 3.304.2% 8.4x 1.0x 1.9 Enterprise Value: ($1.Bombardier Aircraft Orders Starting To Pick Up.0x 0.7x Transportation (Rolling Stock.0x Aircraft.442 7.4 $2.0 $5.10 0. We expect that business jet demand will begin to recover in calendar 2011.621.0 $68.570.2% 18.4% cyclical swings in the aerospace sector.653.02 1.743 F2011 E $1.223.41 1.773.ca All Figures in USD$ millions.1x 0.39 C$7.755 F2010 A $1. 2011 Bombardier (BBD.5 $0.55 1.1% 3.0% 5.769.0 ($767.7x F2012E P/E 13.020. Systems and Signaling).1 $1.0x Aerospace: the major growth driver for regional jets beyond F2013 will be reflected by demand from the CSeries.4% and demand profile.7x 9.2% 5.304.9x 5.20 P/BV: FCF Yield: $2.0 $1.Consolidated Gross Profit EBITDA EBIT EBT Minority Interest Net Income .0 $915.4 $0.0 $3.6x 1.1 $2.7% 27. Fiscal 2011 = Calendar 2010 for comparative purposes.171.0) ($671. except per share data unless otherwise stated Key Multiples Bombardier Aerospace Companies Diversified Manufacturers Transportation Companies Historical P/ 1yr EPS Historical EV/TTM EBITDA Operating Performance Return on Equity Return on Capital Employed EBITDA Margin EBIT Margin EBT Margin Net Margin Quality of Earnings Cash Realization Ratio1 P/FCF FCF Yield Effective Tax Rate Interest Coverage Income Statement Revenue .71 0.4x C$13.92 0.743 F2012 E $1.663.666.15 F2011 E 15.405.7% 3.0 $4.2x 17.824.9% F2011 E 19.5 $0.0 $346.175.willemse@cibc.4% 21.0 $4.336.980.164. 7. Growth for business jets beyond F2013 will likely benefit from the introduction of the F2013 E Learjet 85.7% 3.1x $2.5x 12.0 $176.

CSeries Risk Well Priced In . 41 .January 17. Bloomberg.Bombardier Aircraft Orders Starting To Pick Up. 2011 Source: CIBC TrendSpotting Matrix.

development and production of oil resources in Colombia. The company has a 77% average working interest in 766. Daily Trading Vol. Reuters.1x Stock Price Performance Source: Reuters Company Description C&C Energia Ltd. where applicable. We have also included C$8.75.17/FD share. In our view.. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. EPS Gr.7x 6. acquisition.75. Price Target CZE-TSX (1/12/11) Key Indices: TSXOilGas NM C$6. P. Brookfield Place.985:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports. www.0M Shrs 65.cibcwm.com and ResearchCentral. See "Important Disclosures" section at the end of this report for important required disclosures.300 Bbls/d from the Cravoviejo and Cachicamo blocks.ccenergialtd. is an independent oil and gas company engaged in the exploration. Rate (E) 52-week Range Shares Outstanding Float Avg. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.O. unless otherwise stated. Canada M5J 2S8 (416) 594-7000 Ian Macqueen. As a result. CZE has identified 30 prospects and leads and plans to drill 15 exploration wells in 2011. is C$7.to 18-month price target of C$15.Institutional Equity Research Company Update January 17.514 gross acres in nine E&P blocks and produces ~7.75 C$11.70-C$12.Macqueen@cibc.3M 29.0M Nil / Nil December $15. Investors should consider this report as only a single factor in making their investment decision. CZE is relatively undervalued considering the magnitude of its upcoming exploration program.000 Bbls/d from two of its four Llanos Basin blocks. Box 500. Market Capitalization Dividend/Div Yield Fiscal Year Ends Net Asset Value 2011 ROE (E) Net Cash Preferred Common Equity Convertible Available Cash Flow Per Share We recently initiated coverage of C&C Energia with a Sector Outperformer rating and now have a 12.87E $1.53M Nil NM No Current C$15.90 3-5-Yr.000 Bbls/d-7.com/ All figures in US dollars. Our base NAV estimate for CZE. 2011 Stock Rating: Oil & Gas . which could be realized from 2011 exploration drilling. Management expects that 2011 production will range from 7.ca Find CIBC research on Bloomberg.ca Paul Nielsen 1 (403) 216-3403 Paul.Nielsen@cibc. including development of the producing assets.85 per Shr NM $69.021 $656. 161 Bay Street.23/FD share unrisked).com . including potential conflicts of interest.56E $1. firstcall.(C$0.International E & P Sector Outperformer Sector Weighting: C&C Energia Ltd. 1 (403) 260-8675 Ian. 2010 2011 2012 P/CF 2010 2011 2012 $1. bringing our price target to C$15. Middle Magdalena and Putumayo basins of Colombia. Toronto. CIBC World Markets Inc.68/FD share in risked upside (C$20.73 54. P. CZE's operations are focused in the Llanos.Geol. The Right Ingredients For Success Market Weight 12-18 mo. It approved a 2011 capital investment budget of $130 million to $145 million.69E 7.5x 7.

7x) (0.90 Price Target: C$15.87 $39 $0.72 $145 143% ($43) 2011E ($13) (0.5 0% 151 29% 167 2011E $120 $120 $102 $1.6x 2012E $85.Debt Adjusted Financial Statistics .352 6.842 5.1x 2012E 7.ca 2010E C$11.4x 6.% Free Cash Flow Debt Analysis Net Debt .541 7.0x) 2011E 6. 2011 C&C Energy Ltd.64 $83 107% ($5) 2010E ($56) (0.56 $32 $0.6x 9. Ph: (403) 260-8675 E-mail: Ian.40 P/NAVPS (Unrisked) 43% Target P/NAVPS (UnRisked) 57% CIBC Deck NYMEX WTI (US$/bbl) NYMEX Gas (US$/mcf) FX (US$/C$) Operating Statistics Colombian Natural Gas Production Natural Gas (mmcf/d before royalties) Colombian Oil Production Oil & Liquids (bbl/d before royalties) Production (mboe/d before royalties) Natural Gas % Production Per Share (boe/d per MM FD) Production Growth Per Share .00 $4.7x 10.618 Total Unrisked NAVPS .75 Target Return: 32.$mm Enterprise Value .0x 9.$mm (except per share values) Colombia EBITDA Total EBITDA Total Company Operating Cash Flow (US$mm) CFPS (Diluted) Operating Income Operating EPS (Diluted) Net Capex Net Capex/Cash Flow .ca Net Asset Valuation .$M Net Debt .021 C$0.The Right Ingredients For Success .$M Float .0% Associate: Paul Nielsen.10% C$27.842 5.4% Financial Statistics And Current Valuation Share Price ($) Weighted Average Diluted Shares O/S Market Capitalization .72 $150 163% ($58) 2012E $45 0.37 $0.00 / 0. P.2009 Total Risked Asset Value C$936 Total Risked NAVPS .97 2012E 6.69 $39 $0. Ph: (403) 216-3403 E-mail: Paul.1x) (0.3x 8.352 6.4 0% 128 (16%) 141 2012E $111 $111 $92 $1.50 $0. 2010E $79.85 P/NAVPS (Risked) 75% Target P/NAVPS (Risked) 99% Total Unrisked Asset Value C$1.2x 2011E $85.51 $4.8 0% 117 nmf 130 2010E $81 $81 $78 $1. (CZE-TSX-V) Current Price: C$11.mm Average Trading Volume (50 Day) Annual Dividend / Yield Sector Outperformer Analyst: Ian Macqueen.97 2010E 5.10% C$15.97 2011E 7.% Production Per Share (boe/d per MM FD) .4x 43 .90 50 C$593 (C$57) C$536 29 65.9x 7.5x 8.50 $0.5x 7.Nielsen@cibc.Macqueen@cibc.541 7.Geol.$mm Net Debt/Cash Flow Net Debt/EV Valuation EV / DACF Target EV / DACF P/CFPS Target P / CFPS Source: Company reports and CIBC World Markets Inc.1x) 2010E 7.00 $4.5x 0.January 17.1x 9.

2x Stock Price Performance Source: Reuters Company Description CP is one of two Canadian Class 1 railways and has a bulk freight orientation. CP is our top pick given its leverage to bulk commodities (i. unless otherwise stated. Reuters. including potential conflicts of interest.7% $4..cibcwm. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. Investors should consider this report as only a single factor in making their investment decision. CP remains the railway with the best opportunity to improve its operating performance.03E 17.04 per Shr 11. Toronto.184. Brookfield Place.81E $4. Price Target CP-TSX (1/12/11) Key Indices: Toronto 12. 2011 Stock Rating: Transportation Sector Outperformer Sector Weighting: Canadian Pacific Railway Limited Rail With Option Value Market Weight 12-18 mo.com .cpr. CIBC World Markets Inc. Canada M5J 2S8 (416) 594-7000 Jacob Bout.389. CFA 1 (416) 956-6766 Jacob.6% December $30.4x 15. See "Important Disclosures" section at the end of this report for important required disclosures. such as building materials. EPS Gr. Daily Trading Vol. 161 Bay Street. www. It is targeting an operating ratio in the low 70% range within the next three to five years (from high 70%s currently). firstcall.58-$67.08 / 1.Bout@cibc.41E $5.6M Shrs 661. CIBC World Markets does and seeks to do business with companies covered in its research reports..ca Find CIBC research on Bloomberg.20 in EPS.O. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. P.e. where applicable. 2010 2011 2012 P/E 2010 2011 2012 $3.Institutional Equity Research Company Update January 17. continues to play catch-up.50 168. we believe the company is well positioned to take advantage of the second legup in rail volumes as North American-centric cargo.com and ResearchCentral.8M No Current $78.ca All figures in Canadian dollars.25 3-5-Yr. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2011 ROE (E) LT Debt Preferred Common Equity Convertible Available Earnings Per Share While we are bullish on rails in general as a long-term investment trend.9M $1. forestry and automotive.071. Rate (E) 52-week Range Shares Outstanding Float Avg.115 $11. It provides freight services across Canada from Montreal to Vancouver and into key centers in the US Midwest & Northeast.0x 13.00 $66. With ~20% of CP's 2011 capital program focused on growth initiatives. As a result. metallurgical coal.8M 168. Box 500. potash) and the option value associated with its operating ratio. We estimate that every 1-point change in operating ratio is equivalent to $0.Chiang@cibc.0M Nil $5.15-$0.ca Kevin Chiang 1 (416) 594-7198 Kevin. The diminishing risk of re-regulation in the rail industry bodes well for CP (and the railroad industry). There were concerns in 2010 about increased regulatory oversight of the rail industry as shippers looked to reduce freight rates.5% $49.

CP-NYSE) Current Price: C$66.To 18-Month Price Target: C$78.1x 14.81 2011E 5.58 169 $11.26 2011E $8. Midwest and 1.00 All figures in $ millions. merchandise freight and intermodal traffic.20 in EPS.07 $2.92 0.15-$0.800 miles of track. DM&E: Expect EBITDA to double from $100 million to $200 million in five years. 2009A Sales Breakdown Forestry 4% Industrial Products 18% Automotive 5% Grain 27% Intermodal 29% Operating Ratios Operating Ratio Return On Equity Current Ratio Quick Ratio LT Debt/Total Capitalization Dividend Yield 2010E 77.300 miles are located in Western Canada.768 746 $4.6x 10.61 34% 1.07 Balance Sheet Cash + ST Investments Current Assets PP&E Total Assets Current Liabilities LT Debt Total Liabilities Shareholders' Equity Q3/10 268 1. 45 .bout@cibc.ca Company Profile Share Price 52 Week High 52 Week Low Shares Outstanding (Mln) Market Capitalization ($ Bln) $66.50 $49.599 1.9x 8. We estimate that every 1-point improvement in CP's operating ratio adds ~$0.January 17.1% 11% 1.0x 8.619 645 $3. An additional 4.8x 9.21 1.0x 17.389 8.4% Coal Sulphur & Fertilizer 7% 10% Income Statement Sales EBITDA From Operations Earnings From Operations FD EPS From Operations 2010E 4.0x 10.4% 2011E 76.03 Investment Thesis Focus On Cost Cutting And Improving Operating Efficiency: CP is considered the Class 1 with the most opportunity for improvement in operating ratio (it has the highest operating ratio amongst the major Class 1s). CP is targeting an operating ratio in the low 70% range.973 1. and into Mexico.3x CP’s railway feeds directly into the U.01 37% 1. through the U. Met Coal .072 Operating Ratio Return On Invested Capital (ROIC) 16% 84% 82% 80% 78% 76% 74% 72% 70% 2010E 2011E 2012E 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 12% 8% 4% 2002 2003 2004 2005 2006 2007 2008 Source: Company reports and CIBC World Markets Inc.800 miles in the U. leased or operated under trackage rights. Key Multiples CP P/E Peer P/E CP P/CF Peer P/CF CP EV/EBITDA Peer EV/EBITDA 2010E 17.S. Deregulation Of Canadian Grain: Ability to increase “turn” – grain handlers on side.9x 7. 2011 Canadian Pacific (CP-TSX.15 -$1.2 Canadian Pacific Railway Company (CP) is one of seven Class 1 North American railroads and the second largest in Canada.4x 32. CP transports bulk commodities.Rail With Option Value .6x 7.957 13.10-year agreement with Teck provides increased stability in the coal division. except per share data Sector Outperformer Jacob Bout (416) 956-6766 jacob.80 $4.459 5.2% 12% 1.4x 8.73 45% 1.200 miles in Eastern Canada.4% 12% 0.16 2012E $8. Northeast.080 4. Cash Flow CFPS FCFPS 2010E $3. 2. Of the total mileage operated.25 $67. Potash: Risk of Canpotex diversifying potash contract post-2012 (CP currently the exclusive shipper for Canpotex).41 2012E 5.2x 8.1x 2012E 13.700 miles of track are owned jointly.084 11.S. Agreements with other carriers extend its market reach east of Montreal in Canada.5x 7. from the East and West Coasts.4x 2011E 15. approximately 6.531 1.81 1. 5. Pension: Pension expense will be headwind over the next three to four years. The company owns approximately 10.S.S.4% 2012E 75.314 1.200 miles in the U.7x 21.25 12.2x 7.882 852 $5.

January 17. Bloomberg. 2011 Source: CIBC Trendspotting Matrix.Rail With Option Value . 46 .

6x Source: Reuters Company Description Chartwell Seniors Housing REIT owns and operates a large primarily retirement home focused seniors housing portfolio in both Canada and the U. We expect recovering occupancy (for CSH and the broader industry).ca CIBC World Markets does and seeks to do business with companies covered in its research reports.cibcwm.6x 2011E AFFO.Institutional Equity Research Company Update January 17. and strong growth in FFO. 161 Bay Street. where applicable. unless otherwise stated. and trades at an implied 7.ca Find CIBC research on Bloomberg.8% cap rate on current (in our view depressed) NOI.3M Nil $605.UN-TSX (1/12/11) Key Indices: None NA $6. 2011 Stock Rating: Real Estate Sector Outperformer Sector Weighting: Chartwell Seniors Housing REIT Leverage To Recovering Occupancy. P.65 144. Chartwell trades at 11. implying a total return of 27%. Toronto. Box 500. CIBC World Markets Inc.7x 13. increased investor demand and declining cap rates for seniors housing property.chartwellreit. Yield Fiscal Year Ends Net Asset Value 2011 RETURNS LT Debt Preferred Common Equity Convertible Available FFO Per Share 2009 2010 2011 P/FFO 2009 2010 2011 $0. Price Target CSH.2M Units 250. We rate Chartwell REIT Sector Outperformer.com .S.Girard@cibc.63E $0.O.8M $0.70E 11. AFFO Gr. Discount Valuation Present Unique Appeal $9. AFFO and NAV could drive Chartwell units higher in 2011. Market Capitalization Distribution/Distr. Our 12.to 18-month price target is $9. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Maclean@cibc.ca All figures in Canadian dollars.0x-13. following credit crisis-driven pressure on the lighter-care retirement operating fundamentals over the past few years. Rate 52-week Range Units Outstanding Float Avg. See "Important Disclosures" section at the end of this report for important required disclosures.9x Stock Price Performance AFFO Per Share 2009 2010 2011 P/AFFO 2009 2010 2011 $0. Reuters. MRICS 1 (416) 594-8179 Alex.169.ca Alex Avery.3x 12. well below its large-cap Canadian REIT peer average of 14. CFA 1 (416) 594-7399 Brad.7% December $7. www.6x. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.730.3M Yes Current 3-5-Yr.09 Chartwell Seniors Housing REIT owns and operates almost 24.75 or 13. (~31%).5x 2011E FFO. Chartwell focuses primarily on the lighter-care formats of independent supportive living (57%) and assisted living (23%). Brad Sturges. We expect Chartwell could achieve a recovery of as much as 200 basis points of occupancy in 2011.Avery@cibc. Investors should consider this report as only a single factor in making their investment decision.69A $0.59E $0. Overweight 12-18 mo.16-$9.50 per Unit $1. CFA (416) 956-3807 Chris.ca Chris Girard. Daily Trading Vol.. Brookfield Place.75 $8. CFA.000 seniors housing suites across Canada (~69%) and the U. with the remainder nursing care.74E 13.54 / 6.61A $0.com and ResearchCentral. including potential conflicts of interest.7x 11. Canada M5J 2S8 (416) 594-7000 Troy MacLean.Sturges@cibc.000 $1. Chartwell's current occupancy and income generation are below historical rates.S.6M 140. As a result. firstcall. CFA 1 (416) 956-3643 Troy.8x 10.

2% 61.6% FFO MULTIPLES Chartwell Seniors Housing REIT AFFO MULTIPLES Chartwell Seniors Housing REIT 2009A 13.1% $0.75 Per Unit Unit Price . fully-covered by 2011E AFFO of $0. Brent Binions .571 $25.January 17.25 Maturity May 1/12 COMPOSITION OF PORTFOLIO OF OWNED & LEASED SUITES (at Q3/10) Same-property Net Operating Income (NOI) U.C.0% Quebec.3x 2009A 11.5 LEVERAGE SUMMARY LEVERAGE SUMMARY EBITDA Interest Coverage: D/GBV (w/o convertible debt): D/GBV (with convertible debt): Q3/10 1.0% SAME-PROPERTY OCCUPANCY Segment Canadian Retirement Canadian Long-Term Care U.2% 98. Alberta and B.1% 89.ca EARNINGS SUMMARY Financial Metric Funds From Operations YoY Change Adjusted FFO YoY Change 2009A $0.4% 90. rather than large portfolios of properties. 7.1% 93. VALUATION MULTIPLES REIT MANAGEMENT W. The REIT is also considering acquisition growth in Canada moreso than in the U.0% Source: Company reports. Chartwell is winding down its joint-venture and mezzanine lending relationships with Spectrum. Melior and others.8 5.7% Q2 90.4% Q3 90.169. 20.5 Alex Avery. concentrating on Ontario.75 27% $7. CFA Brad Sturges.0% BC.2% 2010 YTD 15.70.1%) (0.7x 2011E 10. 3.744 Change (8.3% 91.5 $75.70 18.0% 65.9x 2011E 11.8%) $0.S.1% Change 50 bps -20 bps -20 bps USA. Discount Valuation Present Unique Appeal . Operations Q3/10 89.9 * $0.2%) 2010E $0.9% (6.President and CEO Vlad Volodarski .7% PRICE TARGET CALCULATION & NAV CIBC 2011E FFO: Target Multiple (2011E FFO): CIBC Price Target: Implied 12-18 Month Total Return: CIBC NAV(E): Premium/(Discount) To NAV: Cap Rate: TOTAL RETURN Price Return Yield Total 2008 (52.0 $240. 23. LTC NOI (US$) Cdn Retirement NOI (Cdn $) Cdn LTC NOI (Cdn $) Total NOI (Local $) Q3/10 $9.9 $72.69 (4.Leverage To Recovering Occupancy. ThomsonOne and CIBC World Markets Inc 48 .1% n/a 15.Chief Financial Officer Richard J. CFA Troy MacLean.9% 88.8 $0. INVESTMENT THESIS: SECTOR OUTPERFORMER ATTRACTIVE FULLY-COVERED YIELD: CSH yields 6. 25.7% 97.3% $0. 2011 Chartwell Seniors Housing REIT (CSH.8x 2010E 13.61 (22.717 $26. 57.7x 55.7x 2010E 12.09 Per Unit Current Yield: 6.63 3. and the REIT may sell retirement homes in non-core markets.). which could drive considerable growth in FFO and AFFO into 2012 and beyond. in the future engaging in development activity for its own account.0 Conversion $16.000 suite) primarily retirement home focused seniors housing portfolio in both Canada (accounting for ~69% of suites) and the U.9% Am ount $75.8x 54.1%) 2.UN-TSX) Stock Rating: Sector Outperformer Sector Weighting: Overweight Market Capitalization ($ mlns): $1.0 $0. in-fill purchases.8%) Level of Care Independent Supportive Living.9 million of the 2011 convertible debentures will be redeemed in December 2010. 39.0% Assisted Living.0% 90. Future acquisitions are likely to be one-off.S. Noonan .4%) 2009 30. OCCUPANCY RECOVERY POTENTIAL: A partial recovery in overall same-property occupancies (towards historical 93% range) in 2010 & 2011 is expected (mainly in Cdn retirement and the U.2% Q4 n/a 91. RESOLUTION OF LEGACY STRUCTURES: The REIT has made considerable progress working through legacy partnerships.5% ) 2011E $0. STRATEGY Chartwell is focusing on maximizing returns from its existing portfolio.4% 93.1 $124.5X $9.9% Series 2011 $115.0% OCCUPANCY HISTORY (SAME-PROPERTY) Year 2010 2009 2008 Q1 90.18 month Price Target: $9. (~31%).4% Lim it 60.756 $3. CFA 12 .0% Geographic Location Alberta. Quebec.0% CONVERTIBLE DEBENTURES (at Q3/10) Interest Rate 5.50 8% 8.9% Q3/09 89.194 $39.6x DEBT MATURITY & LIQUIDITY PROFILE (at Q3/10) Mlns Mortgages Convertible Debentures Credit Facilities Total Weighted Avg Interest Rate: Cash & Equivalents Undrawn Credit Facilities Total 2010 $64.0% (52.S. 5.0% 30.5% Issue $14.74 13.7% 61. CFA Chris Girard.0 $0.8 * $124. where occupancy has eroded.1% 93.409 Q3/09 $10. 26.chartwellreit.0x-13.3% Long-Term Care.59 (14.S.2% 93.00% COMPANY DESCRIPTION Chartwell Seniors Housing REIT owns and operates a large (~24.0 2012 $175.7%.0 $250.74 17.(1/12/2011): $8.S.401 $39.0% Ontario.9 $87.2% 0.5% $0.498 $3.3% Q3/09 1.Chief Operating Officer www.4%) 0.0 $64. which should be substantially resolved in 2011.

January 17. Discount Valuation Present Unique Appeal . 49 . 2011 Source: CIBC Trendspotting Matrix. Bloomberg.Leverage To Recovering Occupancy.

000 Market Capitalization $2.1x) with a 6.46E $1. unless otherwise stated. the average of 1.. Frequency $0.81 S&P/TSX Energy Trust.1% yield (vs. 2011 Stock Rating: Oil & Gas Royalty Trusts/Dividend Corporations Sector Outperformer Sector Weighting: Daylight Energy Ltd.7x 5.3%).50 $9. as we believe that investors are currently paying for little or none of Daylight's significant natural gas resource potential.049.1% Source: Reuters All figures in Canadian dollars.ca Find CIBC research on Bloomberg. converted from a trust to a dividend-paying corporation on May 7. 2010.3% 6.82E 5. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. we would highlight Daylight as an excellent way to play natural gas defensively.40-$11.Chaw@cibc.60E 9. Our price target of $13. and Bluesky formations. Other notable assets include its Belly River light oil play at Pembina (AB).1x target multiple to our Risked NAV (vs.ca CIBC World Markets does and seeks to do business with companies covered in its research reports. Daily Trading Vol. firstcall.0% 52-week Range $8. Key assets include Daylight's Cardium tight oil at Pembina (AB) and its natural gas resource plays at Elmworth (AB).4x Stock Price Performance Cash Dividend Per Share 2009 2010 2011 Cash-on-Cash Yield 2009 2010 2011 Company Description Daylight Energy Ltd. As a result.8% 7.60 / 6.6x 6.cibcwm. including potential conflicts of interest.96A $0.Kaliel@cibc. Daylight trades at a P/Risked NAV of 76% and a 2011E EV/DACF multiple of 6.7X Convertible Available Yes Cash Flow Per Share We believe shares of Daylight represent excellent value at current levels.5x (vs.95 per Shr Net Debt/CF 1. P. www. We would also highlight the possibility of Daylight striking a joint venture at Elmworth (AB) to develop its natural gas resource plays.1% Fiscal Year Ends December P+P RLI (years) 11.68 Shares Outstanding 208. Cadomin. 1.0 2011 EV/DACF 6. averages of 94% and 9. Montney. where applicable.com and ResearchCentral. In addition.76A $1.9M Distr. Toronto. which is prospective for the Nikanassin. 161 Bay Street. 2009 2010 2011 P/CF 2009 2010 2011 Current $1. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. A&D Execution Key To Refocused Asset Base Market Weight 12-18 mo. Brookfield Place. Potential near-term catalysts include year-end results/reserve reporting (expected in early March).240. Canada M5J 2S8 (416) 594-7000 Jeff (Sizhuo) Shen 1 (403) 221-5047 jeff.ca $0.Institutional Equity Research Company Update January 17. S&P/TSX Income Trust Composite Projected Total Return 36. the average of 5.ca Jeremy Kaliel 1 (403) 260-8657 Jeremy. CIBC World Markets Inc.50/sh is based on a 1.1M Net Asset Value $12.05 Monthly Avg.com . Reuters. Investors should consider this report as only a single factor in making their investment decision.shen@cibc. Box 500. 10-105922 © 2010 Diana Chaw 1 (403) 216-8518 Diana.daylightenergy.5X Net Debt $665.3M Dividend/Div Yield $0. Price Target DAY-TSX (1/12/11) Key Indices: $13. See "Important Disclosures" section at the end of this report for important required disclosures.O.1x).72E $0.

0 91.5 PDP % of Total Proved 56% 49% Total Proved % of P+P 65% 56% 2 2P Reserve Life .75 $1.0x 10.ca Diana Chaw (403-216-8518) Diana.1% (versus the group average of 5.Chaw@cibc.5 50% 0.000 5.00/bbl (2011E).5x 2.13) ($10.00 ($2.January 17.09 3 Cash Recycle Ratio 1. / Yield: $0.00/mcf Key Valuation Metrics vs.000 30.85 $30. Source: Company reports and CIBC World Markets Ltd.5x 1 1.04 ($13.3%).81 Expected Return 44% 21% 2011E Yield 6.3x 9.7x $625 $280 (45%) Netback Analysis ($/Boe) Gross Revenue (net trans) Hedging Gains (Losses) Royalties Operating Costs Operating Netback G&A Interest Cap Tax/Other Cash Flow Netback Group avg Operating Netback Group avg Cash Flow Netback Name Randy Ford Steve Horner Pamela Kazeil Jerry Simpson 2010E $43.1x target multiple to our Risked NAV of $12.97/mcf (long term) for AECO natural gas. AET DAY Group 2011E DAY Group DAY Group DAY Group DAY Group DAY Group DAY Group DAY Group DAY Group DAY Group DAY Group $20 $15 $10 $5 $0 US$100/bbl C$7.38A 42.0x 8.01 ($2.37 $25.37A $0.A&D Execution Key To Refocused Asset Base .0x Payout Ratios 4.97/mcf (2012E). incl. $$4.81 12 To 18 Month Price Target: C$13. 2) Y/E P+P reserves divided by Q4 annualized production (Q4 2010E Production for 2010E).2x Reserve Engineers: GLJ Petroleum Consultants Ltd.0x 1. with FX of $4.4x11. Coverage Group (CIBC Estimates) Share Price $9.1% Shares O/S(1): $208. and inflows versus outflows is calculated as total CAPEX and dividends (including the effect of DRIP) as a % of operating cash flow.4x Pengrowth Vermilion Perpetual Bonterra 2.1x P/Core NAV 158% 181% EV/ EV/2P P/Risked Production Reserves NAV ($/Boe/d) ($/Boe) 76% $64. Other notable assets include its and Belly River light oil play at Pembina (AB).3x 1.0x 3 3.85 USD/Cdn (2012E).50/share is based on a 1. and its natural gas resource plays at Elmworth (AB) which is prospective for the Nikanassin.82E 42.46E $1.75 75% 0.4x 6.YOY) Reserves Growth (Per Share) 2P Reserves .760A $0.3 Proved + Probable (2P) 119. and $$5. 5) Our base commodity price assumptions are US$$85.1% 5. 6) Based on net capex including the effect of Alberta royalty credits. FDC on a cash basis.33A 42.000 10.75) $29.00 $24.2x Financial Flexibility ($MM) Cash Flow from Operations 6 Capital Spending Dividends DRIP Surplus (Deficit) Working Capital Deficit Bank Debt Senior Notes/Other Debt Net Debt at Year-end Debt / CF (Y/E Debt. Business Services VP. Reserves (MMBoe) Proved Developed Producing 43.1%) Position President & CEO VP.1x 8. Potential Catalysts: Potential near term catalysts include year-end results/reserve reporting (expected in early March). PROPERTY OVERVIEW PRODUCTION & RESERVES GROWTH Production Growth (Per Share) Production (DAY) PPS Growth (DAY) PPS Growth (Avg) 45.68 Current Price PetroBakken Bonavista Vermilion Crescent Point Baytex Penn West CIBC Base Cmdty Prices US$50/bbl C$4.1x 9. respectively) while providing a current yield of 6.174 $22. Inflows4 200% 1.97/mcf (2011E). 4) Basic payout ratio is calculated total dividends (excluding the effect of DRIP) paid as a % of operating cash flow.000 0 2007A 2008A 2009A 2010E 2011E 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% 135 120 105 90 75 60 45 30 15 0 2005A (% change .00/mcf Risked NAV Price Target 2005 2006 2007 2008 2009 2010E 2005 2006 2007 2008 2009 2010E 2011E EV/DACF (2011E) 6. Production NOTES 1) Shares O/S based on most recent quarterly balance (adjusted for recent acquisitions and equity issues).17) ($9. 3) Year operating netbacks divided by reported P+P FD&A cost.5x (versus the group averages of 94% and 9.000 25.MMboe (DAY) RPS Growth (DAY) RPS Growth (Avg) RELATIVE RISK & MAGNITUDE OF UNBOOKED PROSPECTS 30% 25% 20% 15% 10% 5% 0% -5% -10% (% change .1x 9. Operations VP.50/share.83 ($12.0x 2011E EV/DACF 6.273A $0. We would also highlight the possibility of Daylight striking a joint venture at Elmworth (AB) to develop is natural gas resource plays.78 94% $94. Exploitation Position VP.5 Total Proved (1P) 77.000 20. 51 Pengrowth Progress Daylight Enerplus Average Trilogy Peyto ARC NAL Bonterra Trilogy Peyto ARC NAL $25 .000 Sector Outperformer Jeremy Kaliel.5 11.9x 9.450E 57% 51% 5 2009A +Net Acq.38E 41.6 / mthly / 6.5x 0 0.3% 2011E P/CF 5.25 150% 1 125% 100% 0.1x 10. Year CF) Total Credit Facility (Current) Facility Utilized (Current) Name Anthony Lambert Steve Nielsen Ted Hanbury Brent Eshleman 2010E 2011E $283 $381 ($325) ($250) ($139) ($126) $0 $0 ($181) $5 $100 $98 $303 $305 $247 $247 $650 $651 2. INFLOWS D/CFDebt Metrics (DAY) D/CF (Group) VALUATION SUMMARY Outflows vs.7x 8.1x.93 2011E $50.00) ($2.YOY) (Mmboe) (boe/d) 2006A 2007A 2008A Q1 Q2 Q3 Q4 FY % Gas Production (Boe/d) CFPS (Basic) 2010E 2010E 2011E 2011E 39.00/bbl (2012E).5x 7.93 Daylight Group Average MANAGEMENT (Ownership: 3.25 25% 0 0% 200% 175% 150% 125% 100% 75% 50% 25% DAY Group 5 $45 $40 $35 $30 DAY Risked NAV (C$/Share) "Bluesky" NAV (unrisked) Risked NAV Core NAV 71% 87% 88% % Credit Facility Utilized % Credit Facility Utilized Total Debt Cash Flow Total Debt / /Cash Flow Crescent Point Progress Penn West PetroBakken Bonavista Perpetual Enerplus Group Group Avg.20 $27.0x 0.50 USD/Cdn (longterm).Kaliel@cibc. 2009A DEBT & OUTFLOWS VS.35 USD/Cdn (2011E). MBA (403-260-8657) Jeremy. We believe shares of Daylight represent excellent value at current levels. incl.25) ($2. Cadomin.0 FD&A . Relative Valuation: Daylight is currently trading at a Price to Risked NAV ratio of 76% and a 2011E EV/DACF multiple of 6.5 0. as we believe that investors are currently paying for little or none of Daylight's significant natural gas resource potential. and US$$95.ca SUMMARY & INVESTMENT THESIS Investment Thesis: We have a Sector Outperformer rating on Daylight Energy Ltd.000 35. Avg.: $2.150E $1.230.5x D/CF (DAY) Drawn (DAY) (AET) Credit Line D/CF (Group) Credit Line Drawn (Group) Credit Line Draw n (DAY) (AET) Credit Line Draw n (Group) Price to Risked NAV 97% 93% 94% 94% 101% 104%105% 83% Total Pay out Ratio Inflow s v s. Key Assets: Key assets include Daylight's Cardium tight oil at Pembina (AB).2P. C$0.5 175% 1.231 $16.1 162.9MM Market Cap. and C$$0.000 40.052A 40. total payout is calculated as total CAPEX and dividends (excluding the effect of DRIP) as a % of operating cash flow.1x.95/share (less forecast dividends of $0. In addition we would highlight Daylight as excellent way to play natural gas defensively.000 15. C$$0.5x 9.5 1.0x 2 2.TSX) Current Price: C$9.60/share) versus the group average of 1.ca Jeff Shen (403-221-5047) Jeff. FDC $26.59 $32. with a 12-18 month price target of $13.4 44.Shen@cibc.2x 11.16) $0.87 $1.00/bbl (long term) for WTI crude oil. Our 12-18 month price target of $13.44) $23.500E $0.00 $18.16) $0. US$$90.4x 8.Years 8. Finance VP. and Bluesky formations.050MM Average Trading Vol (50 day): 1. CFO Executive VP VP.5 3. (DAY .8x 8. Outflow s (incl DRIP) Basic Pay out Ratio 112% 108% 108%108% 76% 77% Daylight Baytex Average 12.5x 8. 2011 Daylight Energy Ltd. Montney.50 Dividend (NTM) / Freq.

Bloomberg.A&D Execution Key To Refocused Asset Base . 2011 Source: CIBC Trendspotting Matrix.January 17. 52 .

including potential conflicts of interest.6M $0. Brookfield Place. Given the weak performance in 2010 and the stock's near-record-low valuation. and/or. CFA 1 (403) 221-5700 Andrew.0M No Current 3-5-Yr.21E $5. Box 500. Market Weight 12-18 mo.com .2x 4. NYSE NM $26.2x 34.624 $21. Canada M5J 2S8 (416) 594-7000 Kyle Balaux 1 (403) 216-3401 Kyle. 3) a recovery in natural gas prices. unless otherwise stated. a significant discount to its peers.Balaux@cibc.1x Stock Price Performance Cash Flow per Share 2009 2010 2011 P/CF 2009 2010 2011 Company Description EnCana is a leading North American natural gas producer.cibcwm.80 / 2. we believe there is substantial room for the valuation to re-rate to historical levels.64 EnCana was a big laggard in 2010 as weak gas fundamentals more than trumped the company's strong production growth.2x Source: Reuters All figures in US dollars.7% December $38. firstcall. We believe all of these events are likely.62A $0.00 $29. For EnCana to outperform.885.41 per Shr 4. Reuters. As the market regains confidence in ECA's strategy/asset quality. peers.O.Institutional Equity Research Company Update January 17.encana. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. we believe EnCana has the capability to grow 10%+ per year.0% $7. ECA trades at only 77% of our risked NAV estimate and at 6.Potter@cibc. Nick Lupick 1 (403) 221-5049 Nick.98E $0.ca $9.67E 3.87E 6. Daily Trading Vol.com and ResearchCentral.4x 2011E EV/DACF. Investors should consider this report as only a single factor in making their investment decision. we need to see some combination of: 1) EnCana landing a large joint venture (reduces capex burden and depicts value). where applicable.064.63 740. EPS Gr. www. See "Important Disclosures" section at the end of this report for important required disclosures. CIBC World Markets Inc. but given the still relatively weak outlook for natural gas in 2011 we expect growth to be more in the 7% range -.Large Cap Sector Outperformer Sector Weighting: EnCana Corporation JV & More Restrained Spending Should See ECA Regain Lost Ground In 2011 $36.02-$35. P.0M 735. Toronto.Lupick@cibc.4x 30. we believe it is a good time to buy EnCana.933.0M Nil $16. Rate (E) 52-week Range Shares Outstanding Float Avg. 2) a growth strategy that balances capex and cash flow..S. As a result.ca Find CIBC research on Bloomberg. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. 161 Bay Street. 2011 Stock Rating: Oil & Gas .com Andrew Potter.0M Shrs 2.844. Market Capitalization Dividend/Div Yield Fiscal Year Ends Net Asset Value 2011 ROE (E) Net Debt Preferred Common Equity Convertible Available Earnings per Share 2009 2010 2011 P/E 2009 2010 2011 $4.29A $6.8x 5.still at the high end of Canadian comparables' growth rates and in line with U. Price Target ECA-NYSE (1/12/11) Key Indices: Toronto.ca CIBC World Markets does and seeks to do business with companies covered in its research reports. Over the long term.

00 $5.727 $4.40 US$4.5x 41.30 US$4.6x 12.02 $75.$mm Net Debt/Cash Flow Net Debt/EV Valuation EV / DACF Target EV / DACF P/EPS Target P / EPS Source: Company reports and CIBC World Markets Inc.805 0 41.057 82% $1.820 $9.7x 4.23 US$5.4x 7.0x 14.614 $3.1x 2009 $4.MBoe/d Natural Gas % Oil Sands % Production Growth Per Share .9% $38.94 $3.695 $6.January 17.060 3.479 1.21 $725 $0.617 $2.50 US$9.5% Financial Statistics And Current Valuation Share Price ($) Weighted Average Diluted Shares O/S Market Capitalization .187 22.616 3.624 $0.12 $69.8x 0.000 10.23 $0. NYD) Current Price: $29.99 $66.55 $67.300 590 96% 0% 7% 2011E $1.067 84% $966 2013E $6.00 $5.26 $1.183 $4.338 $4.50 US$9.00 $89.2009 Total Risked Asset Value $28.00 $94. CFA Ph: (403) 221-5700 E-mail: Andrew.844.720 11.97 2010E 1.mmcf/d Natural Gas (MMcf/d) Canadian Oil & Liquids Production (excluding FC & CL) .2x 12.282 Total Risked NAVPS .959 $2.25 $4.090 $1.604 $3.80 / 2.97 2015E 2.671 25.239 4.ca 2010E $29.665 1.713 2.48 $4.0x 4.ca Net Asset Valuation .3x 6.9x 2010E $2.00 $0.3x 2013E US$95.20 $5.% Financial Statistics .337 11.541 0 33.300 0 25.303 2015E $5.3x 36.479 $28.459 $4.42 $58.927 $0 $42 ($3) ($434) $461 $5.098 113% ($589) 2010E $6.2x 2014E 4.97 2013E 1.67 $637 $0.319 1.64 Price Target: $36.729 $5.Potter@cibc.85 US$9.93 $1.854 3.22 US$6.$M Net Debt .98 $5.921 12.97 2012E 1.237 $7.855 1.100 $6.1x 14.926 $6.9x 0.013 $2.288 1.67 $0.99 US$9.680 552 96% 0% 2011E US$85.88 2009 1.Balaux@cibc.767 0 38.3x 0.Lupick@cibc.mm Average Trading Volume (50 Day) Annual Dividend / Yield Note: All company figures are in USD unless stated otherwise CIBC Deck NYMEX WTI (US$/Bbl) Edmonton Par (C$/Bbl) Western Canadian Select (C$/Bbl) NYMEX Gas (US$/Mcf) AECO (C$/Mcf) CRCK321 (US$/Bbl) FX (US$/C$) Operating Statistics Canadian Natural Gas Production -mmcf/d United States Natural Gas Production .US$mm (except per share values) Canada EBITDA US Net EBITDA Integrated EBITDA Marketing EBITDA Other & International EBITDA Corporate & Other EBITDA Hedging (Forecasted) Total EBITDA Total Company Operating Cash Flow CFPS (Diluted) Operating Income Operating EPS (Diluted) Net Capex Net Capex/Cash Flow .464 $0 $42 ($3) ($403) $668 $4.386 15.$mm Enterprise Value .2x 2013E 4.805 $2.264 92% $555 2014E $6.5x 5.97 2011E 1.2x 2015E 3.51 $77.62 $5.2x 2009 6.736 $2.0x 20.313 0.7x 0.909 $6.00 Target Return: 21.438 78% $1.317 29.97 2014E 2.bbl/d SAGD Oil & Liquids Production .29 $3.678 5.2x 2010E 6.2x 2012E 5.00 $94.321 0.19 $1.122 $0 $42 ($3) ($537) $0 $7.9% $70.611 90% $489 2012E $6.37 $3.61 US$3.00 $0.159 100% $18 2011E $7.1x 15.607 0.194 2.878 732 95% 0% 11% 2013E $3.7% Kyle Balaux.546 2009 $5.358 $6.408 1.010 28.948 2.5x 14.436 $0 $42 ($3) ($576) $0 $8.746 $0 $42 ($3) ($481) $0 $6.793 659 95% 0% 12% 2012E $2.00 $0.% Free Cash Flow Debt Analysis Net Debt .45 $6.22 US$6.983 686 84% 4% 2010E US$79.332 2.928 Total Unrisked NAVPS .945 107.033 $8.00 $84.621 0 29.471 66.53 P/NAVPS (Unrisked) 42% Target P/NAVPS (UnRisked) 51% 2009 US$61.4x 2014E US$95.JV & More Restrained Spending Should See ECA Regain Lost Ground In 2011 .22 US$6.688 817 95% 0% 12% 2014E $4.978 3.7x 24.7x 54 .7x 2015E US$95.00 $94.477 4.842 9. Ph: (403) 216-3401 E-mail: Kyle.774 19.882 $2.360 $10. Ph: (403) 221-5049 E-mail: Nick.768 $0 $25 $1.8x 0.0x 16.07 $74.968 877 95% 0% 7% 2015E $4.56 $6.02 $75.0x 0.2x 35.428 $824 $36 ($49) ($3.093) $0 $6.00 $1.02 $75.172 13.064 1.386 ($341) $332 $6.6x 6.1x 4.2x 31.41 P/NAVPS (Risked) 77% 94% Target P/NAVPS (Risked) Total Unrisked Asset Value $51.838 0 23.50 US$9.070 $4.$M Float .00 $0.984 $9.35 US$9.bbl/d United States Oil & Liquids Production .00 $0.75 $4.4x 0.178 $5. 2011 Encana (ECA-TSX.64 740 $21.163 13.bbl/d Oil & Liquids (bbl/d) Production .6x 2012E US$90.ca Nick Lupick.172 10.99 US$8.2x 2011E 6.00 $5.4x 7.509 $6. Sector Outperformer Analyst: Andrew Potter.405 735 2.87 $4.

January 17. 55 . Bloomberg. 2011 Source: CIBC Trendspotting Matrix.JV & More Restrained Spending Should See ECA Regain Lost Ground In 2011 .

.4M 111. Toronto.6M $0. its narrow focus and its good franchisee relations might make Coutu a welcome addition to the national scene.76E $0. CFA 1 (416) 956-3278 Mark. $0. However. and Quebec drug reforms will drag a bit on growth in the following year.jeancoutu.A-TSX (1/12/11) Key Indices: None NM $7. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. Its expertise in front-store merchandising. well-positioned drugstore chain with numerous opportunities for growth.com and ResearchCentral.Caicco@cibc.4% February $2. Price Target PJC. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.com . its strong buying practices.ca All figures in Canadian dollars. Over the next 12 months. Rate (E) 52-week Range Shares Outstanding Float Avg. Jean Coutu is also well positioned to participate in national drugstore consolidation. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2011 ROE (E) Net Debt Preferred Common Equity Convertible Available Earnings Per Share Despite its earnings forecasts being significantly impacted by recent Quebec drug reforms.2x Stock Price Performance Source: Reuters Company Description Jean Coutu is the largest drug retailer in Quebec and owns a 28. CIBC World Markets Inc. Box 500. 2010 2011 2012 P/E 2010 2011 2012 Excludes Rite Aid.30 3-5-Yr. See "Important Disclosures" section at the end of this report for important required disclosures.22 / 2.50 $9.170. Reuters.1M No Current $11. including potential conflicts of interest. Canada M5J 2S8 (416) 594-7000 Eric Balshin 1 (416) 956-6108 Eric.ca CIBC World Markets does and seeks to do business with companies covered in its research reports.9% $219. Earnings will be not much more than flat this year. Investors should consider this report as only a single factor in making their investment decision.800 $2. Mark Petrie.4% equity stake in Rite Aid.Institutional Equity Research Company Update January 17. P. where applicable.O. www.ca Find CIBC research on Bloomberg.70A $0. Good Position Market Weight 12-18 mo. paying reasonable prices. Brookfield Place.Balshin@cibc.com Perry Caicco 1 (416) 594-7279 Perry. and possibly a few Quebec deals as pharmacy economics make size and scale more critical attributes.39 per Shr 31.Petrie@cibc.1M Shrs 425. firstcall. 161 Bay Street.8M Nil $558.2x 12.24 233.cibcwm. unless otherwise stated. Jean Coutu remains a relatively inexpensive. the strong position of Pro Doc and the company's potential to add stores in Quebec as independents further place Jean Coutu at the top of our radar screen. We would be surprised if PJC was not an active participant.88-$10.3x 12. Daily Trading Vol. we expect at least one sizeable national transaction. EPS Gr.S. As a result. 2011 Stock Rating: Merchandising Sector Outperformer Sector Weighting: Jean Coutu Group (PJC) Inc.76E 13. Low Price. one of the largest pharmacy chains in the U.

January 17.8% 597.2 $ 131.5 614.892 9.6 2.4x 7.7 254. (PJC.22 $ 227.9 7.8% 4.647 6.1 1.2 $ 2.8% 6.99 1. Longer-term.4 7.3 6.A-TSX) Current Price: C$9.9 13.3% Valuation .4 341.3% 1.0 0.0x 8.2 0.2 502.5 66.2 7.4 0. in CAD EV/ Next 12m EBITDA.8 2. CAD PJC shares o/s Net Debt (Cash) PJC Canada EV.6 74.3 PJC is the dominant drugstore chain in Quebec. Network Operations Performance Summary Anuual Review F2010 F2011e F2012e Same-Store Sales Growth Prescriptions Front-Store Total Square Footage Growth Total Prescriptions Front-store Total Retail Sales Distribution Sales (Inc.49 $157.08 $ 8.7x 8.390.5% 6. CFA (416-956-3278) Mark.2 Price/Share Rite Aid stake Sub-Total Net (Debt) Cash Total Pre-Tax Realizable Value Note: Conversion to CAD$ at Current Spot Rate of: $ 0.7% 2.66) 11.14% 19.0% -3.1% 3.7% 20.41% 14.7x 7.8 2.8 7.ca Mark Petrie.Low Price. 2011 Jean Coutu Group Inc.6) $ 2.9 13.2 $ (149.6 6.2 0. Affairs EVP.30 $ 0. Finance and Corp.338.99 $ 1.0 5.9 165.16 $160.To 18-Month Price Target: C$11.170.8% 15.7 18.1 5.6% 1.2% 0.337.6 343.08 8. in CAD F2012E 9. RAD) Shoppers US peers 8.RAD) Shoppers US peers EV/EBITDA Jean Coutu (ex.58% 17. Drug reform in Quebec continually weakens independents and puts PJC into a stronger position for acquisitions.3% 16.0x 13.5 13.014 1.2 74.6 923.0% 0. CAD PJC Canada EBITDA estimate PJC Canada EV/EBITDA $20 Current EV/Next 12m EBITDA 7. RAD Loss # of Shares O/S.39% 17.2 616.9 13.05% 4.2 0.0 $ $ $ $ $ CAD 2.9 277. Ft Increase Avg Store Size (Thousands) 370 2.4 -55.5x 8.5 8.50 All figures in millions except per share data Sector Outperformer Perry Caicco (416-594-7279) Perry.4% 23.5x 14.765.9 511.0 177.08 12. Over the next few months.1 $ 2.8% 611.6x 13x 11x 9x 7x 5x Rite Aid share price.01% 217.22% 7.1 62.3 47.26% 7.ca Eric Balshin (416-956-6108) Eric.8 $ 2.9x 0.2 13.6 285.Caicco@cibc.741.2x 12.282. Purchasing and Marketing EVP.8% 579.2x 14.5x 0.0 $ 246.2% 2.4 $ 7.6 -4. Bloomberg and CIBC World Markets Inc.6x -0.4 123.495.7% -1.490.3x 14.9% $3. Ft.a share price.1 62.2 7.76 $ 233.9 953.61% 7.70 $ 236.1 9.0 0. and owns a growing generic drug manufacturing business.9x Key Ratios TY NY ROE ROA After-Tax ROIC Current Ratio Net Debt/EBITDA Net Debt/Capital BV/Share FCF F2010 34.6 2.01 (0.Petrie@cibc.543.20 $ 233. PJC is well-positioned to make sizable acquisitions outside of Quebec.9 0.7x 9.0 48.6x 12.592.15 398 2.4 3.1 13.370.0 0.880.2 Share price 4.0 0.5% 22.5x 17.0 0.8% 1.19% 248.6% 2.19 236.4 128.1 $ 2.298.3% 2.99 Value/Share CAD 10.5 173.5x 8.0% 0.14% 14.9 699.53% 57.395.8 6. Coutu Andrew Belzile Alain Lafortune Normand Messier Chairman President and CEO EVP.014 1.1 945. but the impact is one-time.98% 3.93 Multiple Value 9.6 $ 1.389.112 7.8 0.6 677.2 71. CAD RAD current share price.3 2.F2012E NAV Q3/F11 Review Actual Estimate Q3/F10 CDN Operations $ EBITDA F2012E 277.5% $2.76 228.591.1 5.4 19.7x 26. Pro Doc) Other Revenue Total Revenue 6.38% 55.85% 4.7 244. PJC PJC.637. Good Position .2 1.74% PJC Canada price per share.05% 3.21 $ 233.4 348.4 111.1 277.4x 8.053.3 8. CAD $ $ $ $ $ $ $ 9.0 678.6x 15. drug reimbursement policies in Quebec will trim the company's earnings.1 3.30 0.34 Market Information Shares Outstanding Float Market Capitalization Net Debt Enterprise Value $ 233.025.1 8.22 228.355. New Store Development F2010 F2011e F2012e Total Store Count Estimated Sq.95% 59.4 F2011e 31.1% -3. Diluted $ 473.7 F2012e 26.3x 14.7x 28. USD Current USD/CAD exchange rate Value of RAD per PJC share.583.7 62.7 6.4 244.4 636.30% 3.4% 0.7x 0.9% 2.5% 1.0% 1.7 3.3 7.0 0.2 1.ca Investment Thesis Comparable Analysis LY P/E ratio Jean Coutu (ex .0x $ # of Shares 252.2% $2.97% 12.9 179.0 $ 269. 57 Forward EV/EBITDA $15 .6 $10 $5 $- Source: Company reports.6% 6.6 219.01 $155.014 1.3x Gross Margin % of Sales SG&A Expenses % of Sales Amort of Fran Incentives EBITDA % of Sales D&A Interest Expense Tax Expense Net Earnings Loss From Rite Aid EPS Excl.30 12.7 3.5 7.3 20. Y/Y Sq.7% 0.Balshin@cibc.33% 231.8 76.2 5.6 75.3 2.7 268.7 2.4 Management Jean Coutu Francois J.5 43.9% 17.4x 12.27 424 3.36 USD/CAD Coutu Calculator Next 12m PJC/A current share price.3 -0.2 149.6 1.

2011 Source: CIBC TrendSpotting Matrix. Bloomberg. Good Position .Low Price.January 17. 58 .

Rebuilding In A Classic High-grade Camp Overweight 12-18 mo. See "Important Disclosures" section at the end of this report for important required disclosures. with the added prospect of finding high-grade mineralization where the hit ratio has been >80%.30A) $0. We think KGI trades at attractive multiples relative to its upside potential for growth in production as well as reserves. CIBC World Markets Inc.34 per Shr NM NA Nil $159.30E $1.ca Find CIBC research on Bloomberg.25-$16.6M Nil / Nil April $2. where applicable.003. Price Target KGI-TSX (1/12/11) Key Indices: None NM $6..Institutional Equity Research Company Update January 17. CIBC World Markets does and seeks to do business with companies covered in its research reports. the build-out of production won't be constrained by ore availability. Ontario. 161 Bay Street.53E NM 27. P.21A) $0. Long-term prospects for continued reserve growth are strong.000 oz.19 68.O.ca Khaled Sultan 1 (416) 594-7297 Khaled. including the high-grade South Mine Complex.000 $1. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2010 ROE (E) LT Debt Preferred Common Equity Convertible Available Earnings per Share Kirkland Lake is re-developing the Macassa mine in Kirkland Lake into a better operation than when it ran for 65 years in the mid to late 1900s.2M 67.cibcwm.4x Stock Price Performance Cash Flow per Share 2010 2011 2012 P/CF 2010 2011 2012 ($0. annual level within two years. unless otherwise stated. Daily Trading Vol. EPS Gr.com and ResearchCentral. With two sources of ore. 2011 Stock Rating: Precious Metals Sector Outperformer Sector Weighting: Kirkland Lake Gold Inc.10E Current $22. Toronto.8x 9. The company's shares offer good leverage to gold price movements. Investors should consider this report as only a single factor in making their investment decision.klgold. Canada M5J 2S8 (416) 594-7000 Barry Cooper 1 (416) 956-6787 Barry. is an operating gold mining company located in Canada. given KGI's control of most of the key ground where it operates. including potential conflicts of interest. Production plans remain on track for growth to the 200.com All figures in Canadian dollars. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. with results that are reminiscent of the Red Lake mine. Box 500. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. www. Brookfield Place. Reuters.Sultan@cibc.1x 13.72 3-5-Yr. Rate (E) 52-week Range Shares Outstanding Float Avg. 2010 2011 2012 P/E 2010 2011 2012 NM 49. We foresee prospects for expansion beyond these figures and delivery of production will be the key driver for share price performance.Cooper@cibc. The company's flagship mine is the Macassa Mine located in Kirkland Lake. which should vault KGI into intermediate producer status.0M Shrs 260.00 $14. Drilling continues to intersect mineralization that is among the highest concentrations in the world.53A $1.6x Source: Reuters Company Description Kirkland Lake Gold Inc.com .4M No ($0. firstcall. As a result.

3 x 1.5 x 2.5 x 2.000 $800 $600 $400 $200 $0 Production Production (2011E)/Resource Detail Asset Macassa and SMC Total * Gold (000s oz) ** Net of by product credits (if applicable) NAV Breakdown .2 x 1.2M oz * Proven & Probable Reserves Income Statement Gold Price Assumptions US$ Production (000s ounces) Cash Costs US$/oz Capital Expenditures Revenues Expenses Operating Expenses D.200 Ownership Discount Rate US$ Millions 43 Per Share 0.221 EV/R&R** $400 $491 $360 $349 $524 $296 $348 $277 Production Profile Production 000s Ounces 250 200 150 100 50 0 F2010E F2011E F2012E F2013E F2014E F2015E EV ($mln) EV/Prod $953 $6.2 x EV/2P* $683 $834 $495 $652 $882 $525 $557 $1.7 x 14.400 $1.9 x 2.8 x 18.269 146 $631 1.0 x 3.21 68 Production* Cash Costs** 2P M&I 146 631 1.G&A Exploration Total Expenses Income Before Tax Income Taxes Net Income EPS CFPS Shares Outstanding P/NAV $1.6 x 1.0 x 1. 60 .9 x 2.2M oz 2.300 3.4 x 1.4 x 2.3 x 24.2 x 4.73 9.21 63 $1.7 x 38.7 x 2.6 x 33. Gold Px .5 x Red Lake where market multiples are high.6 x 2.30 0.2-1 M oz Small Producers < 0.Barry.ca Khaled Sultan .64 2.2 x 37. 2011 Kirkland Lake Gold KGI-TSX Date Share Price Rating Target January 12.0 x 21. With two major source areas for gold.7 x 2.4 x 2. yr 2011@ US$1600.6 x 2.9 x than when it operated for 65 years in the mid to late 1900s.9 x 1.9 x 2.8 x 1.5 x mineralization that is among the highest concentrations in the world.4 x NEG 26. Gold price assumption in yr 2010 @ US$1225. The company continues to intersect gold Small Cap Average (<$2B) 1. We believe that as production is Large Cap Average > 1M oz 1.4 x 2.100 $1.ca All figures in C$ million.9 x 3.0 x 3.2M oz EV Statistics .3 x 2.30 -0.8 x 109.742 $8.2 x 40.6 x 4. and yr 2012 @ US$1700 Risk adjusted discount rates vary from 8% to 15% depending on the location of the asset and its technical challenges Multiples P/NAV* P/NAV** 2010 PE 2011 PE 2010 PCF 2011 PCF Investment Thesis KGI is re-developing the Macassa mine in Kirkland Lake into an operation that will likely be better Kirkland Lake 1.6 x 19.5 x 2. 2011 CAD 14.916 $9.1 (416) 956-6787 .Cooper@cibc.8 x 3.085 ** Reserves and Resources F2010A $975 45 $1. A low float in shares makes it particularly vulnerable to high volatility for good news flow which we expect will be coming as ** Using: US$1200/oz @ Risk Adjusted Discount Rates plans and actions take place.300 1.05 9.0 x 1.4 x 22.00 0.7 x 16.0 x 1.5 x 2.225 93 $720 $58 $121 71 8 3 6 87 34 11 23 0.US$ Kirkland Lake North American Average Large Cap Average (>$10B) Mid Cap Average ($2B-$10B) Small Cap Average (<$2B) Large Cap Average > 1M oz Intermediate Producers 0.6 x 13. We believe that its operations have a higher* Cash Adjusted NAV Multiples Using: US$1200/oz Gold Pricing And 5% Discount Rates than-normal degree of delivery on forecast projections made by the company.D&A.9 x 1.200 $1.2 x 2.7 x 1.8 x 15. Barry Cooper .0 x 28.2-1 M oz Small Producers < 0.397 2. unless otherwise stated.269 2P: Modeled Proven & Probable Reserves (000s oz) M & I: Modeled Measured + Indicated Resources (000s oz 1.72 Sector Outperformer CAD 22.3 x 49.700 185 $625 $32 $332 122 20 5 6 153 178 60 118 1.5 x 1.1 x in a few years. P/NAV Sensitivity Avg.541 $9.0 x 2.9 x 501.US$ Gold Price of: Current Assets Cash Mining Assets Macassa and SMC Kirkland Lake Land Total Assets Liabilities LT Debt Reclamation Total Liabilities Net Asset Value Asset Locations Total Cash Costs F2011E $1.6 x 2.397 2.7 x 18.134 $34 $52 57 4 3 5 68 -17 0 -17 -0.US$ Kirkland Lake North American Average Large Cap Average (>$10B) Mid Cap Average ($2B-$10B) Small Cap Average (<$2B) Large Cap Average > 1M oz Intermediate Producers 0.9 x 2.8 x 19.4 x 2.9 x 17.0 x 9.3 x realized the market will recognize that this camp is worthy of similar multiples afforded operations in Intermediate Producers 0.100 $1.2 x 49.3 x 3.5 x 73.403 $8.Sultan@cibc.83 0 3 3 667 0.2 x 1.344 $9.0 x 48.53 68 F2012E $1.0 x 1.8 x NEG 54.8 x 172.4 x 2. the North American Average 1.203 $5.016 $9.8 x prospects for grade enhancement at the mine.00 Source: Company reports and CIBC World Markets Inc.000 $1.9 x 5% Discount P/NAV P/NAV $1.2 x 27. The high-grade nature of the new South Mine Complex offers up some interesting Mid Cap Average ($2B-$10B) 1.5 x 1.4 x 1.7 x 16.000 2.79 Source: Company reports and CIBC World Markets Inc.2-1 M oz 1.Rebuilding In A Classic High-grade Camp .63 100% 100% 5% 577 50 671 8.7 x 26.53 68 F2013E $1.5 x 2.2 x 3.4 x 2.10 1.7 x 39. Reclamation S.9 x the added prospect of finding high-grade mineralization.5 x 15.1 (416) 594-7297 .9 x build-out of production will not be constrained by stope availability once the expansions are complete Large Cap Average (>$10B) 1.3 x 2.600 146 $647 $32 $246 99 16 4 6 125 121 40 80 1.4 x 2.8 x 2.Khaled.47 0.6 x 20.1 x Risk Adjusted Discount P/NAV P/NAV P/NAV $1.January 17. KGI offers good leverage to gold price movements with Small Producers < 0.05 0.

Rebuilding In A Classic High-grade Camp . 61 .January 17. Bloomberg. 2011 Source: CIBC Trendspotting Matrix.

the average of 1. the average of 5.08E $0.ca Find CIBC research on Bloomberg.O.Institutional Equity Research Company Update January 17.Kaliel@cibc.Chaw@cibc. averages of 94% and 9. after mkt.3% 52-week Range $9.0 2011 EV/DACF 7. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.0X Net Debt $496. Box 500.1x Stock Price Performance Cash Distribution Per Unit 2009 2010 2011 Cash-on-Cash Yield 2009 2010 2011 $1. Brookfield Place.5% yield (vs. 2010. Potential near-term catalysts include 2011 guidance and an operational update (expected January 25.0x (vs.7M Dividend/Div Yield $0. Reuters. Other notable assets include its Viking light oil play at Provost/Irricana (AB). firstcall.68-$14. www.3% 6. as well as year-end results/reserve reporting (expected March 9.). 10-105922 © 2010 Diana Chaw 1 (403) 216-8518 Diana. Toronto. Frequency $0.nal.). Canada M5J 2S8 (416) 594-7000 Jeff (Sizhuo) Shen 1 (403) 221-5047 jeff. P.. 2009 2010 2011 P/CF 2009 2010 2011 Current $2.04 per Shr Net Debt/CF 1.0x 6. 450.95 Shares Outstanding 146.87E $2.5% Source: Reuters Company Description NAL Energy Corporation converted from a trust to a dividend-paying corporation on December 31. Supporting its yield is a total payout ratio of 107% (vs.3%).84E 8. and its Doig gas play (northeast BC).1x) with a 6.3%).1x target multiple to our Risked NAV (vs.6M Distr.ca Jeremy Kaliel 1 (403) 260-8657 Jeremy. after mkt.07 Monthly Avg. S&P/TSX Income Trust Composite Projected Total Return 29.com . CIBC World Markets Inc. the average of 122%) and a 2011E D/CF ratio of 1.5X Convertible Available Yes Cash Flow Per Unit With a 6.5x (vs. Our price target of $16. 161 Bay Street. Daily Trading Vol.ca All figures in Canadian dollars. Key assets include NAL's Cardium tight oil at Garrington & Cochrane (southern AB) and its conventional Mississippian light oil play (southeast SK).9M Net Asset Value $15. where applicable.cibcwm.5% Fiscal Year Ends December P+P RLI (years) 11. attractive Cardium acreage.00/sh is based on a 1. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. 2011 Stock Rating: Oil & Gas Royalty Trusts/Dividend Corporations Sector Outperformer Sector Weighting: NAL Energy Corporation Cardium First Mover Our Top Higher-yielding Pick Market Weight 12-18 mo.02 S&P/TSX Energy Trust.908. NAL trades at discounted P/Risked NAV of 87% and a 2011E EV/DACF multiple of 7. We believe NAL's track record of operational execution bodes well for the upcoming update.1x 7.15E 6.84 / 6.5% yield (vs. and a strong balance sheet. the average of 1.12A $1. Price Target NAE-TSX (1/12/11) Key Indices: $16. including potential conflicts of interest.ca CIBC World Markets does and seeks to do business with companies covered in its research reports. its Wabamun oil asset (AB). unless otherwise stated.000 Market Capitalization $1. As a result.00 $13. See "Important Disclosures" section at the end of this report for important required disclosures. the average of 5.com and ResearchCentral.15A $1.1x).shen@cibc.9x). Investors should consider this report as only a single factor in making their investment decision.6% 8. NAL is our top pick for yield-focused investors.

20 $27. C$$0. and C$$0. Reserves (MMBoe) Proved Developed Producing 60.31) $28. 3) Year operating netbacks divided by reported P+P FD&A cost.3% 2011E P/CF 6.5% 5.5 1.000 10. attractive Cardium acreage.ca Jeff Shen (403-221-5047) Jeff.86/share) versus the group average of 1.97/mcf (2012E).7x 1.84 / mthly / 6.97/mcf (long term) for AECO natural gas.0x 8. with a 12-18 month price target of $16.C.2 FD&A . and US$$95.5% (versus the group average of 5. 6) Based on net capex including the effect of Alberta royalty credits. 63 Pengrowth Vermilion Crescent Point Baytex Daylight Enerplus Average Trilogy Peyto ARC NAL .97/mcf (2011E).1x.0x 1.00/mcf CIBC Base Cmdty Prices US$50/bbl C$4.Years 11.02 12 To 18 Month Price Target: C$16. 25th.000E 52% 50% 5 2009A +Net Acq.35 USD/Cdn (2011E).0x 2.25 25% 0 0% 150% Payout Ratios 125% 100% 75% 50% 25% NAE Group NAE Group NAE Group NAE Group NAE Group NAE Group NAE Group 5 Debt Metrics $35 $30 $25 $20 $15 $10 $5 $0 NAE Risked NAV (C$/Share) "Bluesky" NAV (unrisked) Risked NAV Core NAV 71% 87% 88% % Credit Facility Utilized % Credit Facility Utilized Total Debt Cash Flow Total Debt / /Cash Flow 3. Year CF) Total Credit Facility (Current) Facility Utilized (Current) Name Andrew B.2x Progress Peyto ARC Bonterra NAL Group Group Avg. and inflows versus outflows is calculated as total CAPEX and dividends (including the effect of DRIP) as a % of operating cash flow.00/bbl (long term) for WTI crude oil. Wiswell Keith A.4 71.28) ($11. Koyanagi 2010E $45.0x D/CF (Group) D/CF (NAE) (AET) Credit Line Drawn (NAE) D/CF (Group) Credit Line Drawn Credit Line Draw n(Group) (AET) (NAE) Credit Line Draw n (Group) Price to Risked NAV 97% 93% 94% 94% 101% 104% Total Pay out Ratio Inflow s v s. $$4. incl.YOY) RELATIVE RISK & MAGNITUDE OF UNBOOKED PROSPECTS Q1 Q2 Q3 Q4 FY % Gas Production (Boe/d) CFPS (Basic) 2010E 2010E 2011E 2011E 30.00/share is based on a 1.00) $32.36 94% $94.0x 2011E EV/DACF 7.5x 2 2.1x 10.50) ($2.75 75% 0.92 $2.610A $0.000 Sector Outperformer Jeremy Kaliel.611 $23.000E $1.000 25.473A 30.50 USD/Cdn (longterm). Business Dev NOTES 1) Shares O/S based on most recent quarterly balance (adjusted for recent acquisitions and equity issues).000 30.909MM Average Trading Vol (50 day): 450.87E $2.). US$$90.00/share.1x P/Core NAV 183% 181% EV/ EV/2P P/Risked Production Reserves NAV ($/Boe/d) ($/Boe) 87% $77.00 Dividend (NTM) / Freq. with FX of $4.Shen@cibc. 2011 NAL Energy Corp.87 3 Cash Recycle Ratio 1.00/mcf Key Valuation Metrics vs.6MM Market Cap.50) ($2.37 $25.).48E 30.: $1. FDC $27. INFLOWS D/CF (NAE) VALUATION SUMMARY Outflows vs.85 USD/Cdn (2012E).3x 9.120A $0. and its Doig gas play (northeast B.5 0.3%).3%).7x 8. after mkt.04/share (less forecast dividends of $0.68 PetroBakken Bonavista Penn West US$100/bbl C$7.174 $22. / Yield: $0.4 Proved + Probable (2P) 103.TSX) Current Price: C$13.5 150% 1.1x. total payout is calculated as total CAPEX and dividends (excluding the effect of DRIP) as a % of operating cash flow. FDC on a cash basis.41A 29.000 15.15E 31.1x 8.0 9. McDougall John C. Other notable assets include its Viking light oil play at Provost/Irricana (AB). With a 7% yield (vs.93 NAL Group Average MANAGEMENT (Ownership: 0.5x $550 $235 (43%) Netback Analysis ($/Boe) Gross Revenue (net trans) Hedging Gains (Losses) Royalties Operating Costs Operating Netback G&A Interest Cap Tax/Other Cash Flow Netback Group avg Operating Netback Group avg Cash Flow Netback Name Marlon J.ca SUMMARY & INVESTMENT THESIS Investment Thesis: We have a Sector Outperformer rating on NAL Energy Corp.0 PDP % of Total Proved 85% 85% Total Proved % of P+P 69% 69% 2 2P Reserve Life . the average of 5.MMboe (NAE) RPS Growth (NAE) RPS Growth (Avg) 25% 20% 15% 10% 5% 0% -5% -10% -15% (% change .35) ($11. 9th. 4) Basic payout ratio is calculated total dividends (excluding the effect of DRIP) paid as a % of operating cash flow. 2) Y/E P+P reserves divided by Q4 annualized production (Q4 2010E Production for 2010E). Relative Valuation: NAL is currently trading at a Price to Risked NAV ratio of 87% and a 2011E EV/DACF multiple of 7.26 ($8.07 $32.26) ($0.January 17.5x 3 3.13 ($1.8x 8. PROPERTY OVERVIEW PRODUCTION & RESERVES GROWTH Production Growth (Per Share) Production (NAE) PPS Growth (NAE) PPS Growth (Avg) 35.0x 10.52) $24.00) $28. C$0.9x 9. We believe NAL’s track record of operational execution bodes well for the upcoming update.0x 9. AET NAE Group 2011E NAE Group NAE Group NAE Group NAE Group 2005 2006 2007 2008 2009 2010E 2005 2006 2007 2008 2009 2010E 2011E EV/DACF (2011E) Current Price 6.2%) Position President & CEO VP Finance & CFO Position VP.1x 8.4x Financial Flexibility ($MM) Cash Flow from Operations 6 Capital Spending Dividends DRIP Surplus (Deficit) Working Capital Deficit Bank Debt Senior Notes/Other Debt Net Debt at Year-end Debt / CF (Y/E Debt.ca Diana Chaw (403-216-8518) Diana. Our 12-18 month price target of $16. Coverage Group (CIBC Estimates) Share Price $13. NAL is our top pick for yield focused investors. after mkt.5x 1 1.Chaw@cibc.2P.YOY) Reserves Growth (Per Share) 2P Reserves . 5) Our base commodity price assumptions are US$$85. as well as year-end results/reserve reporting (expected on Mar.000 20. MBA (403-260-8657) Jeremy.5 50% 0.5 2.000 5. Outflow s (incl DRIP) Basic Pay out Ratio 112% 105% 108% 108%108% 76% 77% 83% Risked NAV Price Target Crescent Point Progress Daylight Penn West PetroBakken Baytex Bonavista Perpetual Enerplus Average Pengrowth Vermilion Perpetual Bonterra Trilogy 12.2x Reserve Engineers: McDaniel & Associates Consultants (MMboe (boe/d) DEBT & OUTFLOWS VS.Cardium First Mover Our Top Higher-yielding Pick . and its conventional Mississippian light oil play (southeast SK). Potential Catalysts: Potential near term catalysts include 2011 guidance and an operational update (expected on Jan.55 $30. and a strong balance sheet.00/bbl (2012E). (NAE .0x 0.25 125% 1 100% 0. and $$5.53A 29. Inflows4 175% 1. Steeves 2010E 2011E $269 $318 ($210) ($215) ($155) ($124) $23 $21 ($73) ($1) $38 $36 $234 $237 $195 $195 $467 $468 1. Operations & COO VP.4x11.5x 0 0. Avg.).0 103. respectively) while providing a current yield of 6.02 Expected Return 29% 21% 2011E Yield 6. its Wabamun oil asset (AB).0x (versus the group averages of 94% and 9.27) ($0.5% Shares O/S(1): 146.1x 9.00/bbl (2011E).16 ($9. Key Assets: Key assets include NAL’s Cardium tight oil at Garrington & Cochrane (southern AB).1x 9.5 Total Proved (1P) 71.4x 6.5 60.1x target multiple to our Risked NAV of $15.25 $1.796E $0.43A $0.2x 11.5x 8.93 2011E $51.000 0 2007A 2008A 2009A 2010E 2011E 20% 15% 10% 5% 0% -5% -10% -15% 120 105 90 75 60 45 30 15 0 2005A 2006A 2007A 2008A 2009A (% change .Kaliel@cibc. and evidences its high-quality asset base.84 ($1.5x 7. incl. Source: Company reports and CIBC World Markets Ltd.

Bloomberg.January 17. 2011 Source: CIBC Trendspotting Matrix. 64 .Cardium First Mover Our Top Higher-yielding Pick .

www. P.com . 161 Bay Street. 3) additional fees are earned from new funds. but there is no longer a cost of carry for shareholders and the stock has actually traded at a premium to NAV in the past when disposition activity is robust. Market Capitalization Dividend/Div Yield Fiscal Year Ends Net Asset Value 2011 ROE (E) Net Cash Preferred Common Equity Convertible Available Earnings Per Share* 2009 2010 2011 P/E 2009 2010 2011 * From continuing operations. CFA 1 (416) 956-6676 Kevin.92A ($0.000 $3.65 118.540. Our $40. 2011 Stock Rating: Multi-Industry Sector Outperformer Sector Weighting: Onex Corporation Expecting NAV Growth To Accelerate And NAV Discount To Narrow $40.com All figures in Canadian dollars.7M $0.708. where applicable.25 $31. EPS Gr.35 We believe that Onex's NAV growth will accelerate in 2011 as: 1) conditions for monetization opportunities become more attractive. IPO conditions are improving with rising equity markets and there are many corporations and private equity firms flush with cash. Asset dispositions have been a major driver of share price performance in the past and we think 2011 could be a big year for dispositions following a slow 2010. Brookfield Place. CIBC World Markets Inc. Onex Corporation is one of North America's oldest and most successful private equity and alternative asset managers.com and ResearchCentral. 34.02-$31.17E) $1. 2) the rebound in manufacturing activity takes hold. Toronto. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.03E Current 3-5-Yr. Current trends suggest that those two factors are heading in the right direction for Onex. Price Target OCX-TSX (1/12/11) Key Indices: Toronto NM $24. Daily Trading Vol. The greatest risks to our call are a collapse in manufacturing activity and a lack of appetite for IPOs. including potential conflicts of interest. Box 500.4% December $35.25 price target implies a return to target of 28.ca Find CIBC research on Bloomberg. Rate (E) 52-week Range Shares Outstanding Float Avg.Holden@cibc.4%. Reuters. Onex trades at a 12% discount to NAV. Canada M5J 2S8 (416) 594-7000 Paul Holden.O.1x NM 30. Market Weight 12-18 mo. unless otherwise stated.Cheng@cibc. As a result.ca Kevin Cheng.4x Stock Price Performance Source: Reuters Company Description Founded in 1984.Institutional Equity Research Company Update January 17. We are of the opinion that the discount to NAV should narrow as well.11 / 0. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.00M Nil $1.3M 89.0M No $0. 4) recently invested cash starts to earn a return..cibcwm. See "Important Disclosures" section at the end of this report for important required disclosures.onex.59 per Shr NM $513. CFA 1 (416) 594-8417 Paul. the highest in our coverage universe. firstcall. and. CIBC World Markets does and seeks to do business with companies covered in its research reports.3M Shrs 230.

97 0. The management of third-party capital also produces management fees and the potential for carried interest. The economics for Onex Corp.67 2.61 1.18 20.Expecting NAV Growth To Accelerate And NAV Discount To Narrow .25 Sector Outperformer Paul Holden.87 2. The company was founded in 1984 and has produced a 29% annual rate of return on its investments.68 4.34 $35.ca Kevin Cheng. having produced a 29% IRR since 1984.70 0. Summary NAV By Industry Net Asset Value ($mlns) Per Share 611 682 434 340 301 175 211 97 97 2.55 11.33 0.9% . (OCX .77 3.61 1.2% 2010A 35.0 8.6 17.holden@cibc.948 749 513 4.2% C$31.82 0.9x 8. CFA (416-956-6676) Kevin.7x 5.10 0.82 0.3 na na 5. are better today than at any time in the past due to the growing stream of management fees and its share of carried interest in the company's largest fund to date.12 0. Investment Thesis Management has a long history of creating value.17 5.0 470.0 197.26 0.TSX) Current Price : 12.92 6.To 18.1 3.35 C$40.8 8.54 1.Month Price Target: All figures in millions except per share data Net Asset Value NAV P/NAV Y/Y chg in NAV 2008A 31.5 340 619.9% Capital na 1655 3450 4300 574 318 875 Market Price Value (C$) 67.96 0.8x 10.44 0.78 0. Unrealized carried interest Total Public Companies LTM NAV: Private Companies & Other Sitel Worldwide Allison Transmission Husky Injection Molding Systems Hawker Beechcraft Carestream Health The Warranty Group RSI Home Products TMS International ResCare Inc. CFA (416-594-8417) Paul.January 17.82 1.41 6.69 0.0 96.9 31.11 1.cheng@cibc.61 2.06 1.210 Historical Premium / Discount To NAV 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% -60% Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 -1 std dev Av erage +1 std dev 66 .82 24.7% 2009A 32.12 318 22.35 -11.78 0.50 2.87 2. Onex Partners III. Tropicana Las Vegas Tomkins Markup For Private Investments Center for Diagnostic Imaging Total Private Companies Onex Real Estate Partners Onex Credit Partners ONCAP II Other Investments Cash and Near-Cash Total NAV Current Price Premium / Discount to NAV Source: Company reports and CIBC World Markets Inc 2 Onex' Share 423 400 1400 800 252 277 255 NAV / share 2.0 na na na 38.92 0.59 Committed Investment Structure (US$) Direct Investments Onex Partners I Onex Partners II Onex Partners III ONCAP II Onex Real Estate Partners Onex Credit Partners Shares NAV: Public Companies Emergency Medical Services Spirit Aerosystems Inc.34 35.42 9.2% 2011E 38.5 na na na 3.8 3. 2011 Onex Corp.42 190 170 39 48 765 Value at Owned 4.47 NAV / share 2.59 31.3 4. Onex Corp is currently trading at a discount to NAV of 11.0 na na 115. There is ample capital available for management to create value with 58% of NAV in private companies and another 12% in cash & equivalents.68 1.48 1.48 1.6 250 191 244 191 175 133 109 113 59 354 267 21 2.37 0.5 Type Of Industry Manufacturing Healthcare Aerospace Customer Support Services Other Industries Financial Services Mid-cap Opportunities Credit Securities Real Estate Other Cash And Near-Cash items Total Assets % of Total 15% 16% 10% 8% 7% 4% 5% 2% 2% 70% 18% 12% 100% EV EBITDA / EBITDA Cost (C$) 114.0 8.447 97 97 211 80 513 4.33 4. This ability to create value and grow NAV warrants a valuation that is at a premium to NAV. Celestica Skilled Healthcare Group Inc.6x 3.210 5.99 2.ca Company Profile Onex is a private equity firm that invests its own capital alongside third-party capital raised through its Onex Partners and ONCAP fund families.

Expecting NAV Growth To Accelerate And NAV Discount To Narrow . Bloomberg. 67 . 2011 Source: CIBC Trendspotting Matrix.January 17.

82 3-5-Yr.1% December $43.com All figures in US dollars.50 C$33. firstcall.cibcwm. We expect the company's 2011 exploration drilling at Quifa.Geol.5x Stock Price Performance Source: Reuters Company Description Pacific Rubiales Energy Corp. CPE-6 & Topoyaco that will be drilled in 2011. 161 Bay Street. where applicable. Price Target PRE-TSX (1/12/11) Key Indices: TSXOilGas NM C$13.151.38 / 1. Brookfield Place.880. P..29E $5.com . PRE has a series of upcoming catalysts that should continue to drive the stock to new highs.31-C$35.67 266.27E 14. www. Box 500.to 18-month price target of C$43.62 per Shr NM $168. 2011 Stock Rating: Oil & Gas .46/FD share unrisked) for prospects in Quifa.7M Shrs 1.42E $4. Reuters.O.2x 8.02/FD share in risked upside (C$38.0M Nil NM Yes Current C$43.60/FD share for the producing assets plus cash.5M 249. Market Capitalization Dividend/Div Yield Fiscal Year Ends Net Asset Value 2011 ROE (E) Net Debt Preferred Common Equity Convertible Available Cash Flow Per Share We recently initiated coverage of Pacific Rubiales Energy with a Sector Outperformer rating and now have a 12. Strong Growth Continues Market Weight 12-18 mo. We forecast 57 MBoe/d (after royalty) in 2010.ca Find CIBC research on Bloomberg.50. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.985:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports.ca Paul Nielsen 1 (403) 216-3403 Paul.(C$0.International E & P Sector Outperformer Sector Weighting: Pacific Rubiales Energy Corp. unless otherwise stated. Our C$43.2 BBbls OOIP Rubiales field and will have increased gross production almost 12-fold to 170 MBbls/d by YE 2010. liabilities and dilutive proceeds and C$20. Toronto. Canada M5J 2S8 (416) 594-7000 Ian Macqueen.Nielsen@cibc.903 $9. growing to 92 MBoe/d in 2011 and 104 MBoe/d in 2012 based only on development of Rubiales and Quifa. CPE-6 and La Creciente to fuel future growth.pacificrubiales. As a result. P. 2010 2011 2012 P/CF 2010 2011 2012 $2.com and ResearchCentral. Rate (E) 52-week Range Shares Outstanding Float Avg. Since inception. See "Important Disclosures" section at the end of this report for important required disclosures.Institutional Equity Research Company Update January 17. 1 (403) 260-8675 Ian. management has focused on developing the 4. including potential conflicts of interest.0x 6. Daily Trading Vol. is a Canadian-based company and producer of heavy oil and natural gas with producing assets in Colombia and exploration assets in Peru. CIBC World Markets Inc.6M C$0. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. In our view. Additional discoveries on the offsetting Quifa block should provide another 30 MBbls/d of production by YE 2010. EPS Gr.50 price target includes a base NAV estimate of C$23.Macqueen@cibc.

Strong Growth Continues - January 17, 2011

Pacific Rubiales Energy Corp. (PRE-TSX, PREC-BVC) Sector Outperformer Current Price: C$33.82 Analyst: Ian Macqueen, P.Geol. Ph: (403) 260-8675 E-mail: Ian.Macqueen@cibc.ca Price Target: C$43.50 Associate: Paul Nielsen, Ph: (403) 216-3403 E-mail: Paul.Nielsen@cibc.ca Target Return: 29.7%
Financial Statistics And Current Valuation Share Price ($) Weighted Average Diluted Shares O/S Market Capitalization - $M Net Debt - $mm Enterprise Value - $M Float - mm Average Trading Volume (50 Day) Annual Dividend / Yield 2010E C$33.82 285 C$9,624 C$240 C$9,863.9 250 1,880,903 C$0.38 / 1.1% Net Asset Valuation - 2009 Total Risked Asset Value Total Risked NAVPS - 10% P/NAVPS (Risked) Target P/NAVPS (Risked) Total Unrisked Asset Value Total Unrisked NAVPS - 10% P/NAVPS (Unrisked) Target P/NAVPS (UnRisked) C$13,040 C$43.62 78% 100% C$18,553 C$62.06 54% 70%

Note: All company figures are in USD unless stated otherwise CIBC Deck NYMEX WTI (US$/bbl) NYMEX Gas (US$/mcf) FX (US$/C$) Operating Statistics Colombian Natural Gas Production Natural Gas (mmcf/d after royalties) Colombian Oil Production Oil (bbl/d after royalties) Production (mboe/d after royalties) Natural Gas % Production Per Share (boe/d per MM FD) Production Growth Per Share - % Production Per Share (boe/d per MM FD) - Debt Adjusted Financial Statistics - US$mm (except per share values) Colombia EBITDA Total EBITDA Total Company Operating Cash Flow (US$mm) CFPS (Diluted) Operating Income Operating EPS (Diluted) Net Capex Net Capex/Cash Flow - % Free Cash Flow Debt Analysis Net Debt - $mm Net Debt/Cash Flow Net Debt/EV Valuation EV / DACF Target EV / DACF P/CFPS Target P / CFPS
Source: Company reports and CIBC World Markets Inc.

2009 $61.99 $3.94 $0.88 2009 44 44 28,026 28,026 35.4 21% 124 57% 121 2009 $247 $247 $196 $0.93 ($154) ($0.72) $350 178% ($154) 2009 $236 1.2x 0.0x 2009 38.5x 49.2x 36.9x 47.5x

2010E $79.51 $4.37 $0.97 2010E 58 58 47,525 47,525 57.2 17% 201 62% 196 2010E $871 $871 $689 $2.42 $236 $0.83 $858 124% ($169) 2010E $237 0.3x 0.0x 2010E 13.6x 17.4x 14.2x 18.2x

2011E $85.00 $4.50 $0.97 2011E 56 56 82,950 82,950 92.3 10% 324 61% 316 2011E $1,675 $1,675 $1,268 $4.29 $639 $2.16 $1,120 88% $148 2011E $189 0.1x 0.0x 2011E 7.8x 10.0x 8.0x 10.3x

2012E $85.00 $4.50 $0.97 2012E 56 56 94,222 94,222 103.5 9% 364 12% 355 2012E $2,072 $2,072 $1,559 $5.27 $851 $2.88 $900 58% $659 2012E ($370) (0.2x) (0.0x) 2012E 6.1x 7.9x 6.5x 8.4x

69

Strong Growth Continues - January 17, 2011

Source: CIBC Trendspotting Matrix, Bloomberg.

70

Institutional Equity Research Company Update
January 17, 2011
Stock Rating:

Precious Metals

Sector Outperformer
Sector Weighting:

Pan American Silver Corp.
Navidad Permitting Is Key Catalyst In 2011

Overweight
12-18 mo. Price Target PAAS-NASDAQ (1/12/11) Key Indices: $52.00 $37.69 Gold/Sil, TSX/SP - Canadian Gold NM $20.00-$42.33 106.9M 106.9M Shrs 1,400,000 $4,029.8M $0.10 / 0.3% December $13.66 per Shr NM $0.0M Nil $1,460.6M No
Current

3-5-Yr. EPS Gr. Rate (E) 52-week Range Shares Outstanding Float Avg. Daily Trading Vol. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2011 ROE (E) LT Debt Preferred Common Equity Convertible Available
Earnings Per Share

We believe Pan American deserves to trade at a premium relative to its peers based on a track record of accretive acquisitions and a mine-building team that is second to none in the industry. PAAS has a strong balance sheet with ~$290MM in cash and short-term investments and no debt. PAAS has reduced reliance on base metals credits with operations like Alamo Dorado and Manantial Espejo, which have no exposure to base metals and, conversely, have a significant amount of gold production. Ramp-ups at Manantial Espejo and San Vicente are now complete. While the production profile is expected to remain flat over the next few years, the company's Navidad Project, one of the largest undeveloped silver properties in the Americas, has the potential to double current production levels in 2014. Navidad has considerable permitting risk, as open-pit mining is currently banned in Chubut, Argentina. We believe PAAS will be successful in lifting the ban (expected Q2/11), which should result in an immediate increase in the share price given PAAS' mine-building track record.

2010 2011 2012 P/E 2010 2011 2012

$1.09E $2.69E $2.89E 34.6x 14.0x 13.0x

Stock Price Performance

Cash Flow Per Share 2010 2011 2012 P/CF 2010 2011 2012

$2.00E $3.94E $4.12E 18.8x 9.6x 9.1x
Source: Reuters

Company Description Pan American Silver Corp. is a primary silver producer offering investors considerable production growth and leverage to silver prices. www.panamericansilver.com

All figures in US dollars, unless otherwise stated.

CIBC World Markets does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. See "Important Disclosures" section at the end of this report for important required disclosures, including potential conflicts of interest. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report, where applicable.
CIBC World Markets Inc., P.O. Box 500, 161 Bay Street, Brookfield Place, Toronto, Canada M5J 2S8 (416) 594-7000

Brian Quast 1 (416) 956-3725
Brian.Quast@cibc.ca

Robert Hales, CFA 1 (416) 594-7261
Robert.Hales@cibc.ca

Find CIBC research on Bloomberg, Reuters, firstcall.com and ResearchCentral.cibcwm.com

ca Barry Cooper.585 $288 ($21) $2.70 ($0.75 2012E $30.75 $3.254 1.168 60. (ounces) 128.hales@cibc.ca Robert Hales.70 $974 $0. 2009A 23 38 101 98 31 14 2010E 25 37 91 99 31 11 2011E 24 36 104 103 33 16 2012E 25 35 90 105 34 17 2013E 31 43 76 111 50 19 INCOME STATEMENT (in US$ millions.372 10.687 Silver Wheaton Cash Debt Total PRICE ASSUMPTIONS 2009A Silver Gold Zinc Lead Copper US$/oz US$/oz US$/lb US$/lb US$/lb $14.697 7.282 1.842 1.5x 1.94 107 $395 $18 $78 $40 $0 $531 $483 $169 $5 $314 $2.44 $2.836 39.65 $2.00 $6.00 PAAS-NASDAQ (01/12/11): $37.340 6. except per share amounts) 2009A Revenues Expenses Operating Expenditures S. and Bolivia. Price Target: $52.457 11.0x 1.660 3. except per share amounts.00 2010E 2011E 2012E 2013E Silver Eq.96 $11.00 $4.786 2.669 36.995 Brian Quast.500 2.ca Proven & Probable Measured & Indicated Morococha Proven & Probable Measured & Indicated La Colorada Proven & Probable Measured & Indicated Quiruvilca Proven & Probable Measured & Indicated Alamo Dorado Proven & Probable Measured & Indicated Manantial Espejo Proven & Probable Measured & Indicated San Vicente Proven & Probable Measured & Indicated Silver Stockpile Probable Navidad Measured & Indicated Pico Machay Measured & Indicated Calcatreu Indicated 20x 18x P/2012E CF ($30/oz Silver) 16x 14x 12x 10x 8x 6x 4x 2x 0.0x 2.76 $6.388 8.19) $26.200 10.25 2.34 $0.551 17.976 14. Oz. (416) 956-6787 barry. Production Total Cash Cost Per Silver Eq. Gold Zinc Lead Copper Total Cash Costs Per Silver Per Silver Eq.00 $1.78 $2.284 33.600 $0.435 9.69 $3.17 $0.895 7.12 $5.90 $0.935 799.5x Gammon Gold Silver Standard Huaron Grade Ag (g/t) 184 158 174 184 415 216 159 132 95 65 153 102 392 167 318 127 0 26 Silver (ounces) 64. Source: Company reports and CIBC World Markets Inc 72 (US$/oz) $8.89 $4.617 189 155.G&A D. (416) 956-3725 brian.371 30. (416) 594-7261 robert.68 RESERVES AND RESOURCES (in thousands unless otherwise indicated) Tonnes 10.Navidad Permitting Is Key Catalyst In 2011 .37 2011E $28.606 Silver Eq.64 87 $316 $15 $95 $34 -$5 $456 $190 $76 $3 $114 $1.0x 0. Argentina.678 12.00 $1.5x 3.00 107 $388 $18 $83 $40 $0 $529 $449 $157 $4 $292 $2.014 'mln oz 'mln oz '000 oz 'mln lbs 'mln lbs 'mln lbs ('mln ounces) $246 $13 $78 $10 $12 $359 $91 $28 $1 $70 $0. Peru.817 37.55 $2.00 $2.41 $3.484 12.000 18.853 NAV/sh $1.90 $0.146 3.87 50 40 30 20 10 0 2009A Silver Production Total Cash Cost Per Silver Oz.47 $24.045 13.341 2.55 $3.00 $1.10 $8.926 14.230 6.315 30.765 30. $12. INVESTMENT THESIS Pan American is our top pick in our silver coverage universe with a proven record of operational expertise and a strong balance sheet.468 41.35 Silvercorp Pan American Fortuna Silver Endeavour Silver Coeur d'Alene Hecla First Majestic 2010E $20.D&A Exploration Other Expenses Total Expenses Income Before Taxes Income/Mining Tax Non-controlling Interest Net Income EPS CFPS Shares Outstanding $455 2010E $645 2011E $978 2012E $1.132 9.225 $0.00 $10.363 0 6.969 2.76 $0. 2011 Precious Metals PAN AMERICAN SILVER Stock Rating: Sector Outperformer Sector Weighting: Overweight 12-18 mo.January 17.482 82. based on $20 silver) Discount Rate: Properties Huaron Quiruvilca La Colorada Morococha Alamo Dorado Stockpiles Manantial Espejo San Vicente Loma de la Plata Other 5% Ownership 100% 100% 100% 92% 100% 100% 100% 95% 100% NAV $196 $44 $368 $272 $329 $13 $553 $82 $678 $50 $2.08 $0.388 770 3.009 77.600 7.35 $6.80 $1. and provides investors leverage to silver prices.027 48.678 1. 5% Discount Rate) PRODUCTION AND COSTS Production Silver Silver Eq.20 $4.717 28.94 $0.18 $2.75 $3.83 $0.cooper@cibc.00 .0x 3. The company is also well positioned to make future acquisitions.01 $10.41 $5. is a primary silver producer with operating assets in Mexico.73 $9.75 $3.700 $0.69 Fiscal Year End December 31 COMPANY DESCRIPTION Pan American Silver Corp.164 1.12 107 US$/oz US$/oz $5.935 632.096 21.00 $0.quast@cibc.09 $2. NET ASSET VALUE (in US$ millions.5x P/NAV ($20/oz Silver.

Navidad Permitting Is Key Catalyst In 2011 - January 17, 2011

Source: CIBC Trendspotting Matrix, Bloomberg.

73

Institutional Equity Research Company Update
January 17, 2011
Stock Rating:

Oil & Gas Royalty Trusts/Dividend Corporations

Sector Outperformer
Sector Weighting:

Penn West Petroleum Ltd.
Tight Oil Resource Plays Underpin Impressive Asset Base
$32.00 $25.14 At current levels, we believe Penn West's compelling resource potential justifies its place as one of our top "value picks" today. We expect Penn West will begin to translate its resource potential into production growth early in 2011, potentially unlocking a step change in valuation for the stock. Potential near-term catalysts include year-end results/reserve reporting (expected on February 17). Key to executing on production growth will be Penn West's ability to tie-in its target of 160 wells in Q4/10 (which compares to 110 wells tied in during the first three quarters of the year). Key assets include Penn West's tight oil plays in the Cardium (AB), the Amaranth (MB), the Viking (SK & AB), and the tight Carbonates (AB). Other notable assets include its heavy oil resource play at Seal (AB) and its emerging shale gas play in the Cordova Embayment (northeast BC). Our price target of $32.00/sh is based on a 1.0x target multiple to our Risked NAV (vs. the average of 1.1x). Penn West trades at a P/Risked NAV of 77% and a 2011E EV/DACF multiple of 8.8x (vs. averages of 94% and 9.1x) with a 4.3% yield (vs. the average of 5.3%).

Market Weight
12-18 mo. Price Target PWT-TSX (1/12/11) Key Indices: S&P/TSX Energy Trust, S&P/TSX Income Trust Composite Projected Total Return 27.3% 52-week Range $17.09-$25.14 Units Outstanding 454.7M Distr. Frequency $0.09 Monthly Avg. Daily Trading Vol. 910,000 Market Capitalization $11,431.2M Dividend/Div Yield $1.08 / 4.3% Fiscal Year Ends December P+P RLI (years) 11.0 2011 EV/DACF 8.8X Net Debt $2,832.0M Net Asset Value $32.58 per Unit Net Debt/CF 2.0X Convertible Available Yes
Cash Flow per Share

2009 2010 2011 P/CF 2009 2010 2011

Current

$3.62A $2.66E $3.24E 6.9x 9.5x 7.8x

Stock Price Performance

Cash Distribution Per Unit 2009 2010 2011 Cash-on-Cash Yield 2009 2010 2011

$2.04A $1.56E $1.08E 8.1% 6.2% 4.3%
Source: Reuters

Company Description Penn West Exploration converted from a trust to a dividend-paying corporation on January 3, 2011. www.pennwest.com Jeremy Kaliel 1 (403) 260-8657
Jeremy.Kaliel@cibc.ca

All figures in Canadian dollars, unless otherwise stated.

10-105922 © 2010

Diana Chaw 1 (403) 216-8518
Diana.Chaw@cibc.ca

CIBC World Markets does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. See "Important Disclosures" section at the end of this report for important required disclosures, including potential conflicts of interest. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report, where applicable.
CIBC World Markets Inc., P.O. Box 500, 161 Bay Street, Brookfield Place, Toronto, Canada M5J 2S8 (416) 594-7000

Jeff (Sizhuo) Shen 1 (403) 221-5047
jeff.shen@cibc.ca

Find CIBC research on Bloomberg, Reuters, firstcall.com and ResearchCentral.cibcwm.com

Tight Oil Resource Plays Underpin Impressive Asset Base - January 17, 2011

Penn West Exploration (PWT - TSX)
Current Price: C$25.14 12 To 18 Month Price Target: C$32.00 Dividend (NTM) / Freq. / Yield: $1.08 / mthly / 4.3% Shares O/S(1): 454.7MM Market Cap.: $11,431MM Average Trading Vol (50 day): 930,000

Sector Outperformer
Jeremy Kaliel, MBA (403-260-8657) Jeremy.Kaliel@cibc.ca Diana Chaw (403-216-8518) Diana.Chaw@cibc.ca Jeff Shen (403-221-5047) Jeff.Shen@cibc.ca

SUMMARY & INVESTMENT THESIS
Investment Thesis: We have a Sector Outperformer rating on Penn West Exploration with a 12-18 month price target of $32.00/share. At current levels, we believe Penn West’s compelling resource potential justifies its place as one of our top ‘value picks’ today. We expect Penn West will begin to translate its resource potential into production growth early in 2011, potentially unlocking a step change in valuation for the stock. Potential Catalysts: Potential near term catalysts include year-end results/reserve reporting (expected on Feb. 17th). Key to executing on production growth will be Penn West’s ability to tie-in its target of 160 wells in Q4/10 (which compares to 110 wells tied in during the first 3 quarters of the year). Key Assets: Key assets include Penn West’s tight oil plays in the Cardium (AB), the Amaranth (MB), the Viking (SK & AB), and the tight Carbonates (AB). Other notable assets include its heavy oil resource play at Seal (AB) and its emerging shale gas play in the Cordova Embayment (northeast BC). Relative Valuation: Penn West is currently trading at a Price to Risked NAV ratio of 77% and a 2011E EV/DACF multiple of 8.8x (versus the group averages of 94% and 9.1x, respectively) while providing a current yield of 4.3% (versus the group average of 5.3%). Our 12-18 month price target of $32.00/share is based on a 1.0x target multiple to our Risked NAV of $32.58/share (less forecast dividends of $1.08/share) versus the group average of 1.1x.

PROPERTY OVERVIEW

PRODUCTION & RESERVES GROWTH Production Growth (Per Share)
Production (PWT) PPS Growth (PWT) PPS Growth (Avg)

Reserves Growth (Per Share)
2P Reserves - MMboe (PWT) RPS Growth (PWT) RPS Growth (Avg) 800 700 600 500 400 300 200 100 0 2005A 2006A 2007A 2008A 2009A 25% 20% 15% 10% 5% 0% -5% -10% -15%
(% change - YOY)

RELATIVE RISK & MAGNITUDE OF UNBOOKED PROSPECTS

225,000 200,000 175,000 150,000 125,000 100,000 75,000 50,000 25,000 0 2007A 2008A

25% 20% 15% 10% 5% 0% -5% -10% -15% -20%

(% change - YOY)

2009A

2010E

2011E

Q1 Q2 Q3 Q4 FY % Gas

Production (Boe/d) CFPS (Basic) 2010E 2010E 2011E 2011E 164,650A $0.81A 163,700A $0.62A 164,087A $0.59A 166,549E $0.64E 164,750E 173,000E $2.66E $3.24E 41% 40%

2009A +Net Acq. Reserves (MMBoe) Proved Developed Producing 424.0 411.6 Total Proved (1P) 497.0 482.5 Proved + Probable (2P) 686.8 666.0 PDP % of Total Proved 85% 85% Total Proved % of P+P 72% 72% 2 2P Reserve Life - Years 11.1 11.0 FD&A - 2P, incl. FDC $9.51 3 Cash Recycle Ratio 0.5x Reserve Engineers: Gilbert Laustsen Jung Associates Ltd.

(Mmboe)

(boe/d)

DEBT & OUTFLOWS VS. INFLOWS
D/CF (Group) D/CF (PWT) Drawn (PWT) (AET) Credit Line D/CF (Group)Drawn (Group) Credit Line Credit Line Draw n (PWT) (AET) Credit Line Draw n (Group)

VALUATION SUMMARY Outflows vs. Inflows4
200% 1.5 175% 1.25 150% 1 125% 100% 0.75 75% 0.5 50% 0.25 25% 0 0% 150% Payout Ratios 125% 100% 75% 50% 25% PWT Group PWT Group PWT Group PWT Group PWT Group PWT Group PWT Group

5

Debt D/CF (PWT)

Metrics

$90 $80 $70 $60 $50 $40 $30 $20 $10 $0

PWT Risked NAV (C$/Share)
"Bluesky" NAV (unrisked) Risked NAV Core NAV
87% 88%

% Credit Facility Utilized % Credit Facility Utilized

Total Debt Cash Flow Total Debt //Cash Flow

4.0x 3 3.5x 2.5 3.0x 2 2.5x 2.0x 1.5 1.5x 1 1.0x 0.5 0.5x 0 0.0x PWT Group

Total Pay out Ratio Inflow s v s. Outflow s (incl DRIP) Basic Pay out Ratio

Price to Risked NAV
97% 93% 94% 94% 101% 104%105% 83%

112% 108%108%108%

Risked NAV Price Target

71%

76% 77%

Crescent Point

Progress

Daylight

PetroBakken

Penn West

Baytex

Bonavista

Perpetual

Enerplus

Average

Group Group Avg. Avg. PWT Group

PWT AET Group

PWT Group

PWT Group

2005

2006

2011E 2007 2008

2009 2010E

2005

2006

2007

2008

2009 2010E 2011E

EV/DACF (2011E)
6.4x 6.5x 7.0x 10.1x 10.7x 8.8x 8.9x 9.1x 9.1x 9.3x 9.5x 8.0x 8.1x 8.2x

Pengrowth

Vermilion Bonterra

Bonterra

Financial Flexibility ($MM) Cash Flow from Operations 6 Capital Spending Dividends DRIP Surplus (Deficit) Working Capital Deficit Bank Debt Senior Notes/Other Debt Net Debt at Year-end Debt / CF (Y/E Debt, Year CF) Total Credit Facility (Current) Facility Utilized (Current) Name William Andrew Murray Nunns Todd Takeyasu David Middleton Thane Jensen 2010E 2011E $1,173 $1,492 ($1,000) ($1,100) ($688) ($498) $121 $100 ($394) ($6) $195 $178 $887 $913 $1,907 $1,904 $2,989 $2,995 2.5x 2.0x $2,250 $639 (28%)

Netback Analysis ($/Boe) Gross Revenue (net trans) Hedging Gains (Losses) Royalties Operating Costs Operating Netback G&A Interest Cap Tax/Other Cash Flow Netback Group avg Operating Netback Group avg Cash Flow Netback Name Mark Fitzgerald Hilary Foulkes Keith Luft Bob Shepherd 2010E $49.74 ($0.37) ($9.12) ($15.52) $24.74 ($2.27) ($2.87) $0.00 $19.60 $30.40 $25.96 2011E $54.25 ($0.19) ($10.18) ($15.50) $28.37 ($2.25) ($2.49) $0.00 $23.63 $32.22 $27.69

11.1x 11.4x

12.2x

Current Price

PetroBakken

Bonavista

Vermilion Crescent Point Baytex

Penn West

US$100/bbl C$7.00/mcf

CIBC Base Cmdty Prices

US$50/bbl C$4.00/mcf

Key Valuation Metrics vs. Coverage Group (CIBC Estimates) Share Price $25.14 Expected Return 32% 21% 2011E Yield 4.3% 5.3% 2011E P/CF 7.8x 8.0x 2011E EV/DACF 8.8x 9.1x P/Core NAV 152% 181% EV/ EV/2P P/Risked Production Reserves NAV ($/Boe/d) ($/Boe) 77% $82,448 $21.42 94% $94,174 $22.93

Penn West Group Average

MANAGEMENT (Ownership: 0.2%)
Position CEO President & COO EVP & CFO EVP, Eng. & Cop. Dev. SVP, Operations Eng. Position SVP, Production SVP, Business Dev. General Counsel SVP, Expl. & Dev.

NOTES
1) Shares O/S based on most recent quarterly balance (adjusted for recent acquisitions and equity issues). 2) Y/E P+P reserves divided by Q4 annualized production (Q4 2010E Production for 2010E). 3) Year operating netbacks divided by reported P+P FD&A cost, incl. FDC on a cash basis. 4) Basic payout ratio is calculated total dividends (excluding the effect of DRIP) paid as a % of operating cash flow, total payout is calculated as total CAPEX and dividends (excluding the effect of DRIP) as a % of operating cash flow. and inflows versus outflows is calculated as total CAPEX and dividends (including the effect of DRIP) as a % of operating cash flow. 5) Our base commodity price assumptions are US$$85.00/bbl (2011E), US$$90.00/bbl (2012E), and US$$95.00/bbl (long term) for WTI crude oil, C$0.97/mcf (2011E), C$$0.97/mcf (2012E), and C$$0.97/mcf (long term) for AECO natural gas, with FX of $4.35 USD/Cdn (2011E), $$4.85 USD/Cdn (2012E), and $$5.50 USD/Cdn (longterm). 6) Based on net capex including the effect of Alberta royalty credits.

Source: Company reports and CIBC World Markets Ltd.

75

Pengrowth

Perpetual

Progress

Daylight

Enerplus

Average

Trilogy

Peyto

ARC

NAL

Trilogy

Peyto

ARC

NAL

Tight Oil Resource Plays Underpin Impressive Asset Base . 2011 Source: CIBC Trendspotting Matrix. 76 . Bloomberg.January 17.

Geol.57 102. liabilities and dilutive proceeds.67/FD share unrisked). Canada M5J 2S8 (416) 594-7000 Ian Macqueen.Macqueen@cibc. including potential conflicts of interest.56E 7.petrominerales. EPS Gr.4x 10. where applicable.International E & P Sector Outperformer Sector Weighting: Petrominerales Ltd.070 $3. Market Weight 12-18 mo. Daily Trading Vol. P.1M C$0.985:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports. Newer areas of exploration for 2011 include the deep foothills (two 25MMBbls+ prospects) and a burgeoning heavy oil trend (50 MMBbls+ prospects). As a result. management has identified another 55 exploration prospects for future drilling.Nielsen@cibc.32/FD share.50 / 1.0M Shrs 601. P. Toronto. Reuters. 1 (403) 260-8675 Ian. Rate (E) 52-week Range Shares Outstanding Float Avg.0x 7. 2011 Stock Rating: Oil & Gas .9M 100.43M Nil NM Yes Current 3-5-Yr. CIBC World Markets Inc. Investors should consider this report as only a single factor in making their investment decision. is a Latin America-based E&P company producing oil in Colombia with 17 exploration blocks in the Llanos and Putumayo Basins and five exploration blocks in Peru. 161 Bay Street. Box 500.com .00 C$37. Both of these areas afford the company an opportunity to make a material discovery that could reshape its future. We have also included C$18. including producing assets plus cash.06E $3.. PMG has a 45+ well exploration program in 2011 that is focused in some very prospective areas. which could be realized from 2011 exploration drilling.Institutional Equity Research Company Update January 17.85-C$37.877. is C$23. Price Target PMG-TSX (1/12/11) Key Indices: TSXOilGas NM C$19. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Brookfield Place.00.00.12 We recently initiated coverage of Petrominerales with a Sector Outperformer rating and now have a 12.02 per Shr NM $517. bringing our PT to C$42. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.com and ResearchCentral. unless otherwise stated.cibcwm. Our base NAV estimate for PMG.ca Paul Nielsen 1 (403) 216-3403 Paul.com All figures in US dollars. Expecting Follow-up Success In A Big Exploration Year C$42. Market Capitalization Dividend/Div Yield Fiscal Year Ends Net Asset Value 2011 ROE (E) Net Cash Preferred Common Equity Convertible Available Cash Flow Per Share 2010 2011 2012 P/CF 2010 2011 2012 $5. firstcall. After shooting extensive high-quality 3D seismic data on the surrounding lands. which could drive the stock to new highs. See "Important Disclosures" section at the end of this report for important required disclosures. Sixteen of the best prospects will be drilled in 2011 (roughly 38% of the company's 2011 exploration program).(C$0.39E $5.70/FD share in risked upside (C$54.ca Find CIBC research on Bloomberg. www.6x Stock Price Performance Source: Reuters Company Description Petrominerales Ltd.3% December $42.to 18-month price target of C$42.O.

199 39.88 2009 22. 2011 Petrominerales Ltd.12 Price Target: C$42.97 2012E 26. Ph: (403) 260-8675 E-mail: Ian.$mm Enterprise Value .10% C$77.5x) (0. (PMG-TSX) Current Price: C$37.668 Total Risked NAVPS .969 39. Ph: (403) 216-3403 E-mail: Paul.8x 13.51 $4.$M Net Debt .0x 78 .877 (C$577) C$3.ca Associate: Paul Nielsen.Debt Adjusted Financial Statistics . P.84 $100 $1.0x 7.199 39.2x) 2010E 5.1x 14.4x 8.5% Financial Statistics And Current Valuation Share Price ($) Weighted Average Diluted Shares O/S Market Capitalization .97 2010E 38.2x 0.969 38.25 $630 $630 118% ($98) 2011E ($421) (0.6x 12.273 26.0x 2009 13.39 $240 $2.1x) 2012E 9. 2009 $61.97 2011E 39.0 0% 373 73% 438 2010E $704 $704 $563 $5.64 $550 $550 147% ($176) 2012E ($193) (0.98 P/NAVPS (Unrisked) 48% Target P/NAVPS (UnRisked) 54% CIBC Deck NYMEX WTI (US$/bbl) NYMEX Gas (US$/mcf) FX (US$/C$) Operating Statistics Colombian Natural Gas Production Natural Gas (mmcf/d before royalties) Colombian Oil Production Oil & Liquids (bbl/d before royalties) Production (mboe/d before royalties) Natural Gas % Production Per Share (boe/d per MM FD) Production Growth Per Share .2009 Total Risked Asset Value C$4.% Free Cash Flow Debt Analysis Net Debt .0x 2010E $79.12 104 C$3.37 $0.070 C$0.50 $0.99 $3.490 22.490 22.56 $173 $1.2 0% 375 1% 441 2011E $720 $720 $532 $5.663 Total Unrisked NAVPS .00 $298 $298 105% ($15) 2009 $63 0.9x 2011E $85.0x) (0.5x 10.% Production Per Share (boe/d per MM FD) .10% C$42.00 Target Return: 14.ca Net Asset Valuation .8x 10.3x 15.30 $482 $511 91% $52 2010E ($570) (1.Macqueen@cibc.$mm Net Debt/Cash Flow Net Debt/EV Valuation EV / DACF Target EV / DACF P/CFPS Target P / CFPS Source: Company reports and CIBC World Markets Inc.$mm (except per share values) Colombia .3 0% 252 (33%) 295 2012E $526 $526 $374 $3.mm Average Trading Volume (50 Day) Annual Dividend / Yield 2010E C$37.02 88% P/NAVPS (Risked) Target P/NAVPS (Risked) 100% Total Unrisked Asset Value C$8.06 $236 $2.301 100 601.1x) 2011E 6.4x 2012E $85.Geol.Expecting Follow-up Success In A Big Exploration Year .7x 7.January 17.94 $0.50 $0.00 $4.50 / 1.5 0% 215 nmf 253 2009 $297 $297 $284 $2.4x 7.Nielsen@cibc.EBITDA Total EBITDA Total Company Operating Cash Flow (US$mm) CFPS (Diluted) Operating Income Operating EPS (Diluted) Capital Expenditures Net Capex Net Capex/Cash Flow .273 26.00 $4.$M Float .3% Sector Outperformer Analyst: Ian Macqueen.8x) (0.8x 6.3x 7.

January 17. Bloomberg.Expecting Follow-up Success In A Big Exploration Year . 79 . 2011 Source: CIBC Trendspotting Matrix.

which has future potential to add significant value.3M No Current 3-5-Yr.27 per Shr NM $0.cibcwm. Reuters. Market Weight 12-18 mo.8M Shrs 1.4M Nil / Nil December $11. Daily Trading Vol.ca Find CIBC research on Bloomberg. CFA 1 (416) 956-3287 Terry. where applicable.57 188.50 C$16. We believe QUX shares already reflect the potential downside associated with recent operational issues and are attractively priced given the company's strong leverage to copper prices and its potential to benefit from the Morrison production ramp-up and the advancement of Sierra Gorda.2x 13. Strong Copper Production Growth To Overcome Weak 2010 Operating Performance C$25.H.. near-term operational risk. Box 500. Brookfield Place.7x 8. Price Target QUX-TSX (1/12/11) Key Indices: None NM C$8. including potential conflicts of interest. QUX is trading at about 0.O.128.024 $3.com All figures in US dollars.quadramining.31E $3.330.Tsui@cibc. The company also holds the highest earnings and NAV leverage to copper.3x Stock Price Performance Cash Flow Per Share 2009 2010 2011 P/CF 2009 2010 2011 $1.1x 5.05E $4. Management has delivered on promised production growth. Investors should consider this report as only a single factor in making their investment decision. EPS Gr. See "Important Disclosures" section at the end of this report for important required disclosures.(C$0. Canada M5J 2S8 (416) 594-7000 Alec Kodatsky 1 (416) 594-7284 Alec. unless otherwise stated. P. 2011 Stock Rating: Metals & Minerals Sector Outperformer Sector Weighting: Quadra FNX Mining Ltd. Toronto.989:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports.com and ResearchCentral. As a result.71A $1.240. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. albeit with above-average.7x P/NAV.Kodatsky@cibc. CIBC World Markets Inc.98-C$18. Rate (E) 52-week Range Shares Outstanding Float Avg.4x 4.97 Quadra FNX is an operationally diverse large-cap copper miner with an attractive growth pipeline.05E 13. and strong balance sheet. We expect QUX's copper production to increase ~40% Y/Y.Institutional Equity Research Company Update January 17. which is at a substantial discount to other copper-producing peers and represents a strong buying opportunity for investors seeking exposure to strong copper leverage and long-term production growth. Tsui.ca Terry K. due mainly to the addition of Morrison. with copper output set to more than double by 2015 as Sierra Gorda enters production.21E 24. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. firstcall. The Victoria project should continue to advance.9M 186. has quickly emerged as an Americas-focused developer and producer of copper. 161 Bay Street.0M Nil $2.25A $2.2x Source: Reuters Company Description Quadra Mining Ltd. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2011 ROE (E) LT Debt Preferred Common Equity Convertible Available Earnings Per Share 2009 2010 2011 P/E 2009 2010 2011 $0. in our coverage universe. low political risk profile. our favored commodity exposure.com . www.

04 0.90 3.97 12-18 Months Target Price: C$25.8 13. a robust balance sheet and the potential to add low-risk incremental growth at below-average capital costs.7 0.83 3.9 $2.82 2011E 3.500 0. basic 0.66 4085 5.0 2.9 45.8 8. Cu) Franke Copper Production (mlbs) Cash cost (US$/lb.17 $1.9 35.00 Low: 8.66 ## 10 10 29 42 ## 80 205 301 351 0 0 0 0 0 ## 51 113 486 344 ## 0.419 2. Cu) McCreedy Copper Production (mlbs) Cash cost (US$/lb.6) nm nm 0.4 5.6 188.14 0.99 3.00 High: 18.62 2010E 942 378 267 202 205 1.50 $0.05 2222 13.05 3.76 1.05 3090 5.00 $1.43 3. Cu) Morrison Copper Production (mlbs) Cash cost (US$/lb.86 $1.31 2.2 10.1 54.02 1.com Source: Company reports and CIBC World Markets Inc.Development milestones of the Sierra Gorda project prefeasibility study.00 2012E Sensitivity to ±10% Change in Forecast Price EPS ($) 2011E NAVPS ($) 2012E -5% -8% -8% -29% 3% 133% 46% 34% 54% 47% 33% 33% $/Shr.31 2011E 10.131 581 345 598 903 3. a coppermolybdenum project in Chile.00 0.0 8.50 (All figures in US$. CIBC price forecasts and after tax.50 4.71% 1.25 2.980 C$ 1.5 116.09 0.54 100% 7.61 6. (QUX) Current Price: $16.225) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ## 1.00 0.205 3. www.5 10.1 2.9 $4.268 ## 247 425 425 425 ## 86 221 221 221 ## 781 1.50 $1.88 2.42% 0.8 $2.381 3.0 30.98 1.090 3.8 10% 11% 0.43 $2.41 1. Outlook .972 (303) 161 43 603 0 3.82 ## 51 113 486 344 20 2009A 2010E 2011E 2012E ## 133 346 832 1.98 1.97 2010E 2.05 ($0.0 13.96 $1.73) ($3. as well as water rights acquisitions and permitting.99 100% 2.10 1.06 1.62 1.0 2.1 $0.26% 2009A 2010E 2011E 2012E 100% 122.average Preferred equity .73 23.9 13.06 (1.11 0.4 142.50 0.41 2011E 1.0 66.08 $0.00 Ni 0.205 ## (133) (303) (789) (1.19 0.9 ($3.57 Profile Quadra FNX is a growing copper producer with a significant nickel and precious metals production profile.29 2.205 3.65 0.09% 0.2 0.00 2.6 0.25 1005 27. the company possesses advanced development project Sierra Gorda.08% 2.98 2012E 2E 6.kodatsky@cibc.57 $1.12 0.00 0.7 142.31 2. CEO Web Site 20 2009A ## ## ## ## ## ## 460 174 89 80 80 0.Strong Copper Production Growth To Overcome Weak 2010 Operating Performance .00 $0. which we expect to emerge as the company's highest operating margin asset as it ramps up to full production 2011. 31.With a strong financial position.247 (133) 161 43 546 0 2.17 1. Cu) Levack Copper Production (mlbs) Cash cost (US$/lb.4 $0.50 $2.0 7.3 1.Maintenance capex .8 2.00 $0.6 1.25 25.00 -$0.30 2.02) 2009A 2010E 2011E 2012E 1. .5 40. .09% 188. we expect the company to continue to focus on exploration that can yield new discoveries while maintaining its current strong production growth profile.24 0.16 4.quadramining.4 4.1 55. The company's assets are located in politically stable.016 911 646 646 3.808 1.12 0.ca Key Data 52-week trading range ($) Average daily trading volume (000) TSX index weight Shares outstanding (mm) Basic Fully diluted Public float Market capitalization .93 1.25 4.53 1.2 1. Cu) Cash operating cost Royalties Total cash cost Non-cash cost (DDA) Total production cost G&A Interest cost Total cost MANAGEMENT Terry MacGibbon. 8% real discount rate on assets.94 3.71 1.5 24.00 ($4.95 0.7 ## 169.205 Q3 2010A 323 545 0 2.005 1.3 4.80 $1. 2009 Robinson Carlota Franke Sierra Gorda McCreedy Podolsky Levack Levack Footwall Operating Summary Robinson Copper Production (mlbs) Cash cost (US$/lb.8 1.17) 1.The start-up of Morrison and the ramp-up at Carlota and Franke should drive the company’s near-term metals production growth.26 0.basic ($mm) Cash ($mm) Working capital ($mm) Total debt ($mm) Common equity ($mm) Net debt/common equity (x) Year-end Dec.2 65.92% 8.January 17.59 $1.Capital expenditures .0 55. except for Sierra Gorda (at 10%).62 2.225) 20 2009A 2010E 2011E 2012E ## 1.54% 111.0 0.50 Reserves & Resources At Dec. Chairman Paul Blythe.62 5.00 25.904 ## 0 ## 0 ## ## ## 163 0 79 0 1.12 $0.38 2012E 2.0 1. 2011 Quadra FNX Mining Ltd.11 0.38 2.71 Key Ratios Growth EBITDA YoY EBIT YoY EBT YoY OpFCF YoY 3-Yr CAGR EPS 3-Yr CAGR CFPS 3-Yr CAGR EBITDA 3-Yr CAGR EBIT Profitability EBITDA margin EBIT margin EBT margin Net margin Coverage Dividend cover (x) Interest cover (x) NAV Valuation (1) Mining assets McCreedy (100%) Podolsky (100%) Levack (100%) Morrison (100%) Robinson (100%) Carlota (100%) Franke (100%) Sierra Gorda (50%) Total NPV of mining assets Other assets/exploration Exploration/other assets Total other assets Corporate Equity investments Working capital Long-term debt Net asset value 2009A 6% 72% 108% -16% 302% 97% 276% 341% 38% 19% 18% 18% - 2010E 117% 202% 151% 122% 228% 709% 185% 89% 40% 28% 21% 22% $mm 67 210 117 1.904 Tonnes (mm) Grade Cu (%) Ni (%) Mo (%) 652.67% 6.00 Cu 0.416 1.09% 1.2 0. Cu) Carlota Copper Production (mlbs) Cash cost (US$/lb.4 (13.57 1.9 60.84% 0.897 4. Cu) "Total" Cost (US$/lb.03% 0.11 $0.0 $2.801 965 840 591 591 2.07 1.2 1.0 5.222 2.02% 4. CIBC Forecast Ni price (US$/lb) Cu price (US$/lb) C$ exchange rate (US$) 20 2009A ## ## ## 6.2 ## 1.54 0.23 $0.15 0.12 0.48 100% 13. will likely represent the medium-term catalysts.5 32. which has the potential to double its current copper production once in operation in 2014.11 2.5 1.19 100% 28. 81 . the market is not fully pricing in the start-up of the Morrison project. Cu) Podolsky Copper Production (mlbs) Cash cost (US$/lb.27 0.7 0.27 $1.08) $0.43 100% 25.8 3.8 1.05 4.34 $1.02) ($0.54 ## 2012E 1.39) 100% 0. unless otherwise stated) Sector Outperformer Alec Kodatsky (416-594-7284) alec.085 4.7 56.7 155.972 3.tsui@cibc.897 161 43 615 0 4.4 5.94 Cash cost (US$/lb Cu) $2.990 ## 1.60 2.36 1.77 1.Debt repayment Free cash flow Free CFPS Operating free cash flow Balance Sheet Cash Other current assets Other assets Capital assets Total assets Current liabilities Debt (LT & current) Other liabilities Preferred equity Common equity Total liabilities and equity Net debt (cash) Enterprise Value Market capitalization Net debt .23 $1.247 2.50 -$1.21 2012E 9.7 1.902 2.00 0. mining-friendly jurisdictions in North and South America.980 2.78 20.768 2011E 169% 241% 219% 330% 6% 109% 27% 3% 56% 50% 36% 36% - 20 2009A 2010E 2011E 2012E ## 80 205 646 591 ## 32 88 101 121 (16) 22 57 12 ## ## 46 13 12 12 ## 142 328 816 736 ## 1.247 2.06 (789) (1.0 15% 32% 0.21 4.3 0. Investment Summary Quadra FNX has a strong metals production growth profile. 31 EPS ($) CFPS ($) Book value ($) NPV per share ($) P/E (x) P/CF (x) P/book value (x) P/NPV (x) EV/EBITDA (x) EV/EBIT (x) EV/OpFCF (x) ROE ROCE Dividend/share ($) 2009A 0.128 n/a 2010E 1.8 4.42 0.93 E Cu production (000 tonnes) 200 175 150 125 100 75 50 25 0 2009A 2010E 2011E Operating Metrics Ni production (000 tonnes) Cu production (000 tonnes) Cash cost (US$/lb Cu) Income Statement Revenue EBITDA EBIT EBT Reported income EPS ($) Cash Flow Earnings after tax + Depreciation & amortization + Deferred tax + Other Funds from operations Operating CFPS (ex minority) . In addition.7 104.99 2011E 4.9 0.129.39% 65.4 22% 37% 0.33 0.ca Terry Tsui (416-956-3287) terry.32 $0. In our view.average Minority interest / other Other non-core Enterprise value 20 2009A ## ## ## 0.952 200 200 (221) 270 567 4.8 141.5 0.88 2010E 9.

Bloomberg.January 17. 82 .Strong Copper Production Growth To Overcome Weak 2010 Operating Performance . 2011 Source: CIBC Trendspotting Matrix.

Rizzi@cibc. and owns the Toronto Blue Jays of MLB.48A $3.19 per Shr 38. Price Target RCI. www.850. EPS Gr.cibcwm. As a result.00 $35.415.Bek@cibc. We rate Rogers Sector Outperformer with a $44 price target.7 6.0M 484. we continue to believe Rogers represents good value for investors.10E 14. cable & telecom space. Investors should consider this report as only a single factor in making their investment decision. We continue to believe that wireless offers strong growth ahead despite competitive pressure.1% $30.101. See "Important Disclosures" section at the end of this report for important required disclosures. Reuters. with current valuations well below historical levels.125. The company also has an extensive portfolio of media assets. firstcall. 2011 Stock Rating: Telecommunications & Cable Services Sector Outperformer Sector Weighting: Rogers Communications Inc. While we expect wireless competitive worries and pricing pressure to persist.524.7x 6.ca Find CIBC research on Bloomberg. Box 500. Shareholder gains will come from solid free cash flow generation.6x 11. owns the largest wireless operator and cable operator in Canada. Toronto.28 / 3.546 $20. ensuring ARPU remains flat to slightly up by year-end. either by way of traditional incumbents through IPTV offerings or over-the-top Internet offerings. Even With Wireless Concerns $44.5M Shrs 1.com .O.3x Stock Price Performance EBITDA ($ mlns. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2011 ROE (E) Net Debt Preferred Common Equity Convertible Available Earnings Per Share 2009 2010 2011 P/E 2009 2010 2011 $2. Rogers is well positioned to take on any TV competition.ca All figures in Canadian dollars.0M Yes Current 3-5-Yr.B-TSX (1/12/11) Key Indices: S&P/TSX 60 16. Daily Trading Vol. a focus on cost cutting should result in EBITDA growth.2x 11. 161 Bay Street. CIBC World Markets does and seeks to do business with companies covered in its research reports.04E $3. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.1M $1. Market Weight 12-18 mo. where applicable. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. at least in the short term. Rate (E) 52-week Range Shares Outstanding Float Avg. P. CFA 1 (416) 594-7454 1 (416) 594-7907 Bob. with a history of strong shareholder-friendly policies. CIBC World Markets Inc.176.64-$41.. Brookfield Place.2 $4.Lee@cibc.) 2009A 2010E 2011E EV/EBITDA 2009A 2010E 2011E $4. Valuation Too Attractive.com and ResearchCentral. as there remains little need for capital in the medium term. and expect to see continued growth in data in future quarters.rogers.ca Michaelc. While Rogers' cable segment continues to show signs of maturity. Canada M5J 2S8 (416) 594-7000 Tony Rizzi 1 (416) 594-7299 Tony.15 Rogers is our top pick for 2011 in the media.Institutional Equity Research Company Update January 17.715. including potential conflicts of interest.1x Source: Reuters Company Description Rogers Communications Inc.0% $9.0M Nil $4. we remain bullish on the long-term fundamentals of wireless.ca Robert Bek.3x 6. Given our confidence in Rogers' execution.7% December $7.0 $4. CFA Michael Lee. unless otherwise stated.64 574.

292.0 647.2x 12.ca Tony Rizzi (416-594-7299) Tony Rizzi@cibc.0 3.2 671.7x 2009A 14.4x 2010E 11. Even With Wireless Concerns .1x 29.91 Rogers Communications Inc. CFA (416-594-7907) Michaelc. Chart 1: Revenues & EBITDA By Segment (2010E) 100% 75% 50% 25% 0% Revenues Wireless Cable 11.0 502.1x 25.673.3x 7.7% 2008A 11.15 12.0 9.0 909.48 2009A 4.9% 15.5% 29.719.7 1.3% 17. (RCI.881.7x 2011E 10.150.0x 6.0 125.0% 38.56 2011E 6.7 1.Valuation Too Attractive.0 4.2% -25.731.73 Company Profile Rogers is a diversified Canadian communications company.0 1. Investment Thesis While there remains concern over the effects of industry pricing pressure on wireless ARPU.0 1. engaged in wireless voice and data services.0 3.0 2.160.809.625.0 575.786. RCI shares are trading at a material discount to our NAV.060.9x 6.8 3.00 All figures in millions except per share data EV / EBITDA Multiples Rogers Communications Shaw Communications Comcast Time Warner Cable P / E Multiples Rogers Communications Shaw Communications Comcast Time Warner Cable Key Financial Metrics Free Cash Flow Yield Payout Ratio Consolidated Capex Intensity Net Debt / EBITDA Tax Rate Income Statement Revenue OpEx EBITDA Depreciation & Amortization EBIT Interest Expense EBT Tax Expense (Recovery) Net Income Adj.8 748.January 17.6% 2.8% 14.0x 18.760.2x 16.2x 6.ca Michael Lee.8% 13.250.0 1.2% y/y Growth 6.0 1.8% 35.8% 32.002.980.478.0 228.605. CFA (416-594-7454) Bob.To 18.0 647.2 9. With current concerns over competition and AWS entrant risks overblown.1x 6.4x 18.21% 28.0 4.6x 6. TV and publishing) and owns the Toronto Blue Jays MLB franchise.4% 2009A 11. Rogers also has a broad portfolio of media assets (radio.2x 2010E 9.06% 22.850.415.850.) Q3/09 Wireless ('000): Total Subs Postpaid Net Adds Postpaid ARPU Postpaid Churn Data % of Network Revenues Cable ('000): Basic Subs Digital Subs Internet Subs Telephony Subs Total RGUs 8.300.747.0 1.247.3% 2.0 424.0 2.6x 16.0 1.ca 2010E 6. and with the implementation of a sizeable share buyback program.6 3.2 1.0% 2.058.6% 38.7x 30.0 6.566.98 1.10 2011E 4.3x 17. internet broadband and telephony products. providing an attractive entry point for investors looking to benefit from RCI's strong growth potential for both wireless and cable assets.9% 1.0 1.461. Given the heightened focus on cost efficiencies and margin expansion.5% 3.623.0 3.0 1.1x 2009A 8.090.6 2.157.Month Price Target: C$44.625.035.7 1.8x 5.0 2.98 2008A 4. we expect both free cash flow and dividends to grow at a healthy clip.715.0 1.4% Source: Thomson.0 167.415.855.04 2010E 4.309.5% 55.5x 14.0 995.9x 15.6 2. Company reports and CIBC World Markets Inc.0 575. 84 .6 4.0 1.0 3.0 1.5% 3.Bek@cibc.Lee@cibc. we believe Rogers will continue to deliver strong value to its shareholders.TSX) Sector Outperformer Robert Bek.4 9.7% 67.8% 9.6 624.0 1.685.021.B .0 3.7x 9.0% EBITDA Media Key Operating Statistics (Last Reported Qtr.756. we believe the prospects of attracting higher value subs will continue to drive strong data adoption capable of moderating the effect of voice erosion.9x 6.597.495.426.6% 35.046.5 251.1x 2011E 11.0 0.0 1.7 655.0 2.060.8% 2.0 9.0 Q3/10 8.0% 2011E 12.0 2.8 671.0 $74.6 1.730.8% 2010E 12.0 4. as well as a provider of cable television services.8% 2.9x 19. leading to improving ARPU trends in future quarters.2 1.0 6.0 $76. FD EPS Free Cash Flow EBITDA Less: Capex Cash Taxes Cash Interest Operating Free Cash Flow (FCF) Operating FCF Per Share 2008A 2008A 2008A 7.715.8% 4.366.29 2009A 6.0 1.0 2.335.7 655.79 1.0 104.700.779.0 2.7% 5.1% -2.756.0 2. 2011 Current Price : C$35.0x 27.

Valuation Too Attractive. 2011 Source: CIBC Trendspotting Matrix. Even With Wireless Concerns . 85 . Bloomberg.January 17.

In 2010.11E 19. 161 Bay Street. Kona. A healthy exploration program is being planned for 2011 and we expect ongoing exploration news flow will continue to be a positive catalyst for Semafo shares. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.11-C$14. Semafo currently operates three gold mines in Burkina Faso.6M 269. P.50 C$11. Daily Trading Vol.semafo. Semafo benefits from a complementary portfolio of assets.Cooper@cibc. CIBC World Markets Inc.44 271.cibcwm. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Chiu@cibc.5M Shrs 2. with a 10% increase in gold price generating an approximately 23% increase in CFPS.989:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports.2x Source: Reuters Company Description Semafo Inc. we believe management's French-Canadian background will remain an advantage for the company. As a result.6x 11. Niger and Guinea..23 Semafo has been a model of operational consistency.ca All figures in US dollars. It has also delivered on expansion plans at its Mana plant.com .6M No Current 3-5-Yr.Chiew@cibc. A feasibility study is scheduled for release Q1/11. Operating in French West Africa.(C$0. Brookfield Place. Fofina and Fobiri.ca Find CIBC research on Bloomberg.42E $0. EPS Gr. Price Target SMF-TSX (1/12/11) Key Indices: None NM C$4. 2011 Stock Rating: Precious Metals Sector Outperformer Sector Weighting: Semafo Inc.3x Stock Price Performance Cash Flow Per Share 2010 2011 2012 P/CF 2010 2011 2012 $0.97E $1.80E $0.0x 14. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2010 ROE (E) LT Debt Preferred Common Equity Convertible Available Earnings Per Share 2010 2011 2012 P/E 2010 2011 2012 $0. where applicable. Operational Consistency Combined With Growth Upside C$18. with Phase III completed ahead of schedule and under budget. With growth upside at Mana and torque to higher gold prices at Samira Hill and Kiniero. Toronto. unless otherwise stated. exploration activities at Mana yielded several new discoveries such as Wona SW. www.ca Barry. is a Canadian-based mining company with gold production and exploration activities in West Africa.2x 12. Reuters. Investors should consider this report as only a single factor in making their investment decision. See "Important Disclosures" section at the end of this report for important required disclosures.71 per Shr NM $19.000 tpd (bedrock).083. CFA Barry Cooper 1 (416) 594-7106 1 (416) 956-6787 Cosmos. meeting production/cost expectations the past three years.com Cosmos Chiu. firstcall. Box 500.000 $3.8M Nil / Nil December $1. increasing throughput to 6. Management will continue to focus on creating additional value with the development of the Mana underground.58E $0.com and ResearchCentral. Canada M5J 2S8 (416) 594-7000 Kevin Chiew 1 (416) 594-7457 Kevin.92E 27.O.Institutional Equity Research Company Update January 17. Overweight 12-18 mo. The company has one of the highest leverages to gold.7x 10. Rate (E) 52-week Range Shares Outstanding Float Avg.300.3M Nil $465. including potential conflicts of interest.

58 272 $147 $48 $13 $5 $214 $235 $19 $216 $0.700 $0.11 272 NAV/sh Cash A djusted NA V multiples calculated using go ld price o f $ US1 200 per o unce and 5% disco unt rate except fo r CG that is disco unted at 1 due to additio nal risk 2% 2.689 1.ca Kevin Chiew.97 272 NAV $157 $52 $13 $5 $226 $288 $38 $249 $0. Currently Semafo operates three gold mines in Burkina Faso.770 2.95 2012E INCOME STATEMENT 2009A (in US$ millions.592 9.225 $0.chiu@cibc.chiew@cibc.00 $0.201 18.06 2.5x 2.UG Samira Hill Kiniero 2013E $193 $19 $0 $174 $0.80 $0.95 2011E 2012E $1. Reclamation S. (416) 594-7457 kevin.71 $0.95 2010E 2011E $1.600 $0.cooper@cibc. INVESTMENT THESIS Semafo has successfully commissioned three mines in West Africa.92 $1. Niger and Guinea.50 SMF-TSX (1/12/11): C$11. With 100% of its revenue generated from gold and 100% of its production unhedged.02 Mana .5x 0.8x 2.5x 1.January 17. Company reports and CIBC World Markets Inc.188 $2.88 2010E $1.OP Mana .31 $0.57 $0. RESERVES & RESOURCES (in thousands unless otherwise indicated) Mana (Burkina Faso) Proven & Probable Measured & Indicated Inferred Samira Hill (Niger) Proven & Probable Measured & Indicated Inferred Kiniero (Guinea) Proven & Probable Measured & Indicated Inferred 18x Cosmos Chiu.80 1. Semafo has one of the highest lev erages to gold for both its cash flow and NAV. (416) 956-6787 barry.90 $0.437 11.665 687 909 530 1.Operational Consistency Combined With Growth Upside .377 1.50 $4.OP Mana .200 gold) Mining Assets Mana .80 1.20 1. based on $1. in addition to its expansion of Mana.745 8.86 2.01 3. except per share and indicated amounts) Production (000s ounces) Cash Operating Costs (US$/oz) Cash Costs (US$/oz) Revenues Expenses Operating Expenses D.485 12.20 1.07 $0.18 $0.3x 2.3x 1. Stock Rating: Sector Outperformer Sector Weighting: Overweight 12-18 mo.38 400 350 300 250 $550 .38 242 $132 $40 $13 $7 $192 $124 $11 $113 $0. 87 Cash Costs ($/oz) 5% 5% 5% 5% 90% 90% 80% 85% $565 $245 $156 $85 $137 $1.23 Fiscal Year End December 31 COMPANY DESCRIPTION Semafo Inc.276 596 187 643 159 PRICE ASSUMPTIONS Gold Exchange Rate US$/oz US/CAD 2009A $974 $0.362 $5. except per share amounts.08 $0.92 1.ca Tonnes Grade (g/t) Au Ounces Au 18.ca Barry Cooper. 2011 Precious Metals SEMAFO INC.0x CGA IAG GLW ARZ GAM NXG KGC FNV AGI GG ABX EGO AUY NEM CG (5%) MLL SMF CG $124 $41 $14 $7 $187 $54 $10 $44 $0.UG Samira Hill Kiniero Exploration Potential Subtotal Balance Sheet Cash LT Debt Reclamation Subtotal Net Asset Value Gold Output (000s oz) $500 2009A 2010E 2011E 2012E $1.569 33.65 2. is a Canadian-based mining company with gold production and exploration activities in West Africa.8x 1. We believe Semafo is in a position to grow through acquisition in a West African region that remains highly fragmented.D&A.8x Cash Adjusted NAV Multiples PRODUCTION AND COSTS Production Mana Samira Hill Kiniero Total Cash Costs Mana Samira Hill Kiniero 2009A 2010E 2011E 2012E 2013E '000 oz '000 oz '000 oz US$/oz US$/oz US$/oz 154 57 32 $398 $724 $642 178 53 30 $399 $772 $690 190 56 35 $437 $761 $629 200 62 40 $442 $680 $593 245 62 40 $482 $606 $568 NET ASSET VALUE Discount Ownership (in US$ millions. Price Target: C$18. (416) 594-7106 cosmos.0x 1.42 $0.64 200 150 100 50 0 $450 $400 Total Cash Costs Source: Thomson.G&A Other Expenses Total Ex penses Income Before Tax Income Taxes Net Income EPS CFPS Shares Outstanding 242 $463 $510 $241 Cash flo w multiples calculated at $ US1 700 go ld price fo r 201 estimates 2 15x ANV RGLD AEM CF Multiples 261 $462 $508 $316 280 $466 $526 $449 302 $454 $517 $514 13x NGD 10x 8x MFL 5x GSS 3x 0x 0.

88 .Operational Consistency Combined With Growth Upside .January 17. 2011 Source: CIBC Trendspotting. Bloomberg.

Market Capitalization Dividend/Div Yield Fiscal Year Ends Net Asset Value 2011 ROE (E) Net Debt Preferred Common Equity Convertible Available Earnings per Share We consider Suncor Energy to be a relatively low-risk oil sands investment given the high contribution of on-stream assets. We expect Suncor to deliver over a 7% CAGR through 2016 as growth in oil sands of 12% per year more than trumps other declines. CIBC World Markets Inc. Suncor Is Still King Of The Oil Sands Market Weight 12-18 mo. Suncor remains the king of the oil sands.000 Bbls/d of oil sands capacity that it will continue to grow through 2015.Institutional Equity Research Company Update January 17. Toronto.com Andrew Potter. unless otherwise stated. CFA Nick Lupick 1 (403) 221-5700 1 (403) 221-5049 Andrew. Suncor should be able to deliver this growth while generating $1 billion-$4 billion per year of free cash flow.0M Shrs 5. Daily Trading Vol.60A $1.com .com and ResearchCentral. With defined growth through 2020 and another 15 billion barrels to develop beyond that. P..68 3-5-Yr.6M $0. Suncor has 392.19 per Shr 9.7x Source: Reuters Company Description Suncor is an integrated oil company approximately 85% levered to oil. Furthermore.9x 9.ca Find CIBC research on Bloomberg. firstcall.92E 15.527 $59.ca All figures in Canadian dollars. 2011 Stock Rating: Oil & Gas . EPS Gr. 161 Bay Street.91E $4.40 / 1. There are no major shareholders. Rate (E) 52-week Range Shares Outstanding Float Avg.0M No Current $47. We believe that as Suncor continues to demonstrate improved reliability. We believe investor interest in oil sands continues to increase and that Suncor will re-emerge as a "go-to" oil sands investment. Reuters.6x 7.Potter@cibc.105.1% December $47.337. CIBC World Markets does and seeks to do business with companies covered in its research reports.573.0M Nil $37.O.37A $3.Large Cap Sector Outperformer Sector Weighting: Suncor Energy Inc.0% $8. As a result. Canada M5J 2S8 (416) 594-7000 Kyle Balaux 1 (403) 216-3401 Kyle. its strong balance sheet and the outlook for significant free cash generation – all while the company continues to increase oil sands output.45 1. Price Target SU-TSX (1/12/11) Key Indices: Toronto.3x Stock Price Performance Cash Flow per Share 2009 2010 2011 P/CF 2009 2010 2011 $2. including potential conflicts of interest. 2009 2010 2011 P/E 2009 2010 2011 $0.43E $2.cibcwm. respectively – its closest peers.318. Suncor is trading at only 80% of our risked NAV estimate versus 92% for the Integrated group average and 91% and 107% for CVE and IMO.ca Nick. the stock should be a strong performer. Investors should consider this report as only a single factor in making their investment decision.50 $37.Balaux@cibc.562. Brookfield Place. Box 500.8x 26. www.18E 62. NYSE NM $29.3x 17.91-$39. where applicable. See "Important Disclosures" section at the end of this report for important required disclosures. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.suncor.Lupick@cibc.270.0M 1. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.

224 $1.552 40.850 566. (SU-TSX.951 $308 $3.500 295.mm Average Trading Volume (50 Day) Annual Dividend / Yield 2010E $37.575 0.087 65% $2.9x 12.800 57.1x 2012E 6.mmcf/d Syria Natural Gas Production .88 2010E 429 64 493 6.22 US$6. Ph: (403) 221-5049 E-mail: Nick.94 $3.972 556.211 482.900 623.02 $75.68 Price Target: $47.$mm (except per share values) Oil Sands EBITDA Natural Gas EBITDA East Coast & International EBITDA Downstream EBITDA Corporate EBITDA Total EBITDA Total Company Operating Cash Flow CFPS (Diluted) Operating Income Operating EPS (Diluted) Net Capex Net Capex/Cash Flow .875 59.00 $84.562 5.12 $69.989 $361 $4.97 2013E 365 90 455 5.50 US$9.3x 2014E US$95.30 $7.509 58.000 38.071 575 14% 57% 366 2% 312 2011E $4.99 $66.37 $3.2x 26.318 $10.27 $8.Balaux@cibc.22 $6.9x 6.$mm Enterprise Value . CFA Ph: (403) 221-5700 E-mail: Andrew.000 34.044 50.50 US$9.342 $1.1% Sector Outperformer Analyst: Andrew Potter.786 2013E $5.724 $7.67 $0.% Free Cash Flow Debt Analysis Net Debt .177 486.23 US$5.5x 2013E US$90.18 $5.23 $0.50 Target Return: 26.% Production Per Share (Boe/d per MM FD) .97 2012E 372 90 462 5.875 59.800 64.720 $7.382 $4.365 643 12% 62% 409 12% 349 2012E $6.69 $8.764 $1.054 ($256) $9.201 792 9% 69% 504 1% 429 2015E $8.7x 2012E US$85.256 1.9% $53.860 497.4x 7.41 $6.5x 0.7x 2015E US$95.97 2011E 380 90 470 5.234 564 15% 56% 359 306 2010E $4.868 76% $2.99 US$8.$M Float .874 849 9% 72% 540 7% 460 2016E $10.119 45.129 $6.3x 0.25 $4.087 62% $5.1x 2010E 10.0x 17.679 2010E $10.80 P/NAVPS (Unrisked) 70% Target P/NAVPS (UnRisked) 88% CIBC Deck NYMEX WTI (US$/Bbl) Edmonton Par (C$/Bbl) Western Canadian Select (C$/Bbl) NYMEX Gas (US$/Mcf) AECO (C$/Mcf) CRCK321 (US$/Bbl) FX (US$/C$) Operating Statistics Western Canada Natural Gas Production .02 $75.35 US$9.000 39.91 $2.4x 9.40 $5.Debt Adjsuted Financial Statistics .00 $94.426 $1.86 $8.650 62.03 $8.881 59% $2.bbl/d Synthetic Crude Oilsands Production .6x 0.484 ($266) $13.40 / 1.00 $94.5x 11.151 $393 $3.8x 2016E US$95.1x 90 .313 283.754 $361 $4.560 $3.30 US$4.256 $69.390 358.1x 10.300 35.1x 2011E US$79. 2011 Suncor Energy Inc.906 50.00 $5.200 40.43 $3.99 US$9.267 $10.3x 33.ca Net Asset Valuation .7x 11.0x 2014E 5.9% $47.498 ($272) $14.5x 6.340 0.2x 8.January 17.874 $11.282 408.1% Financial Statistics And Current Valuation Share Price ($) Weighted Average Diluted Shares O/S Market Capitalization .523 1.800 62.125 59.728 $7.627 Total Risked NAVPS .546 $11.751 $373 $4.00 $94.55 $67.68 1.5x 21.779 $4.000 52.141 ($413) $8.000 42.mmcf/d Natural Gas (MMcf/d) Western Canada Oil & Liquids Production .19 P/NAVPS (Risked) 80% 101% Target P/NAVPS (Risked) Total Unrisked Asset Value $88.198 $13.000 42.00 $0.638 76% $2.954 ($283) $16.97 2014E 358 100 458 5.boe/d East Coast Oil Production .8x 0.$mm Net Debt/Cash Flow Net Debt/EV Valuation EV / DACF Target EV / DACF P/EPS Target P / EPS Source: Company reports and CIBC World Markets Inc.860 2014E $3.645 2015E $320 0.456 $2.073 502.9x 13.028 717.288 $6.442 $4.42 $58.00 $5.00 $5.1x 5.511 Total Unrisked NAVPS .22 US$6.109) nm nm 2016E 4.469 $1.678 $11.800 65.053 2016E ($4.51 $77.1x 2011E 8.500 59.337.bbl/d Libya Oil Production .573 $59.1x 9.07 $8.1x 2013E 5.429 $4.059 774.0x 0.97 2016E 343 100 443 4.527 $0.92 $3.758 783 10% 68% 498 12% 424 2014E $8.075 69% $3.40 US$4.Suncor Is Still King Of The Oil Sands .2009 Total Risked Asset Value $77.00 $0.75 $4.MBoe/d Natural Gas % Oil Sands % Production Per Share (Boe/d per MM FD) Production Growth Per Share .ca Kyle Balaux.7x 9.02 $75.976 700 11% 64% 445 9% 379 2013E $7.Lupick@cibc.bbl/d Oil & Liquids (bbl/d) Production .07 $74.61 US$3.bbl/d North Sea Oil Production .736 0.00 $0.167 $3. NYD) Current Price: $37.112 $3.000 59.513 ($277) $14.bbl/d Oil Sands Production .569 68.585 35.22 US$6.7x 14.50 US$9.270 ($261) $12.116 $350 $4. 2010E US$61.257 53.318 1.922 88% $1.985 $332 $4.159 $1.41 $6.Potter@cibc. Ph: (403) 216-3401 E-mail: Kyle.000 706.0x 2015E 4.ca Nick Lupick.2x 10.97 2015E 350 100 450 5.4x 11.1x 0.800 52.800 50.00 $0.00 $89.255 $1.692 2011E $8.141 $8.85 US$9.2x 6.423 $7.207 2012E $7.$M Net Debt .097 $1.00 $0.

January 17.Suncor Is Still King Of The Oil Sands . Bloomberg. 2011 Source: CIBC Trendspotting Matrix. 91 .

00M $38.908.184. The purchase complements TD's existing U.S. as we expect strength from its Canadian and U.Institutional Equity Research Company Update January 17. 161 Bay Street.3 billion acquisition of auto lender Chrysler Financial.7x 10. it trades at a 21% discount to its peers.0M $3.25-$77.ca All figures in Canadian dollars. TD trades at a 2% premium on F11 earnings relative to peers compared with an 8% pre-crisis 10-yr average premium.S.4x Stock Price Performance Source: Reuters Company Description TD Bank is one of Canada's leading financial institutions. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. Price Target TD-TSX (1/12/11) Key Indices: TSXFinSv 10.ca Robert Sedran.20 In what is expected to remain a challenging economic environment.Sedran@cibc.506. $5. 2011 Stock Rating: Banks Sector Outperformer Sector Weighting: Toronto-Dominion Bank Revenue Growth To Drive Outperformance In F2011 $84.000 $65.ca Find CIBC research on Bloomberg.29 per Shr 13. Given its strategic potential and tolerable financial implications.7M $2. firstcall.9x 11. including potential conflicts of interest. compared with a historical average discount of 5%. EPS Gr. CFA (416) 594-7283 Mike.121.5M 878. Rate (E) 52-week Range Shares Outstanding Float Avg. implying an increase could be feasible in the near term. On a P/B basis..00 $74. P.tdbank. Mehmed Rizvanovic.394.Rizvanovic@cibc. Box 500. platform by creating a vehicle to deploy its large U. www.37 878. Canada M5J 2S8 (416) 594-7000 Meny Grauman. Valuation also supports a positive view on the shares. Reuters.0M No Current 3-5-Yr. where applicable.O. Toronto. deposit base.S. we view the deal favorably. and offers a full array of financial products and services to over 18 million customers worldwide. Market Weight 12-18 mo. management noted it will be providing guidance on the dividend in the upcoming quarter. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.com . we believe revenue growth will be a key success factor for the Canadian banks. CFA 1 (416) 956-3723 Meny. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2011 ROE (E) LT Debt Preferred Common Equity Convertible Available Earnings Per Share 2010 2011 2012 P/E 2010 2011 2012 Cash EPS excluding one-time items.com and ResearchCentral. unless otherwise stated. CFA 1 (416) 594-7874 Robert.0% $61. TD's payout ratio currently falls in the middle of its target range (based on our F2011 estimates).8% $12. Our top pick in the sector is TD Bank.44 / 3. Brookfield Place. While TD left its dividend unchanged in Q4/F10.Grauman@cibc.77A $6.14E 12. Investors should consider this report as only a single factor in making their investment decision.36E $7. Daily Trading Vol.cibcwm. retail franchises will help drive outperformance in F2011.5M Shrs 2. CIBC World Markets Inc. TD recently announced the US$6. We rate TD SO. As a result.ca CIBC World Markets does and seeks to do business with companies covered in its research reports.3% October $44. See "Important Disclosures" section at the end of this report for important required disclosures.

ca Meny Grauman.1% 9.456 677 2.442 F2009A Wealth Management F2010A Wholesale Banking Q4-10 Corporate U.320 (22%) 12.808 5.248 (15.To 18-Month Price Target: C$84.0% 215.757 280.46% F2012E $7.639 (2) OUR THESIS Our positive bias on this name has been based on our belief that the combination of its strong personal and commercial banking businesses – on both sides of the border – should position it well relative to its peers in a slower growing environment.585 F2009A 65.056 3.155 3.072 272.8% 59.Revenue Growth To Drive Outperformance In F2011 . CFA (416-594-7283) Mike.8% 12.781 100.910 F2010A 71.4% 3.270 F2012E 12.Grauman@cibc.016 93% 11.9% 13.322 255.9% F2011E 12.8% 4.4% 3.83% F2009A 2.ca Mike Rizvanovic.5% ) F2010A 0.7%) 1.168 F2011E 74.249 129.507 109.6% 2. Performance in the most recent quarter supports our thesis with solid revenue growth in most businesses and the fact that unusually high expenses should settle down in the coming quarters.14 12.857 94.50 1.699 3.January 17.6x F2012E 10.701 FORWARD P/E MULTIPLE RELATIVE TO PEER GROUP (based on consensus estimates) 150% 10-y ear Av erage Relativ e Fw d P/E: 101% 130% Current Relativ e Fw d P/E: 102% 110% 90% CAPITAL MEASURES Tier 1 capital ratio Tangible common equity to RWA Tangible common equity to tangible assets Risk Weighted Assets LOAN BOOK Residential mortgages Personal and credit cards Business and government Gross Loans Acceptances Total Gross Loans & Acceptances 70% Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Current Relativ e P/E Plus 1 Standard Dev iation 6-month Mov ing Av erage Minus 1 standard Dev iation P/BVPS MULTIPLE RELATIVE TO PEER GROUP 160% 10-y ear Av erage Relativ e P/B = 95% 140% 120% 100% 80% Current Relativ e P/B = 79% Notes: (1) PCLs as a % of av erage net loans and acceptances (ex cl.3% (1.77 4.587 75% 20% 0.20 12.946 265.68% F2010A 10.7x 11.1x F2009A $5.1% F2011E 0. CFA (416-594-3723) Meny.Sedran@cibc. except per share data (excl.78% F2009A 10.4% 58. (2) Total ACLs as a % of GILs.5x 12.3% F2009A 11.39% 61% Gross impaired loans Specific ACLs Total ACLs Classical Coverage ratio Specific ACLs to GILs General ACLs as % of Gross Loans & BAs KEY EARNINGS DRIVERS Core net interest income % change Total capital markets related revenue % change Provision for credit losses % change Non-interest expenses % change (3) -6% -8% -10% -13% 114% 24% 0.Rizvanovic@cibc.612 7.962 8.4x 10.2% 11.685 (16%) 12.159 F2012E 79.3% 229.200 (9%) 12.7% 60. (3) Ex cludes gains/(losses) on inv estment securities.6x Q4-10 1. 93 . repos).254 23.7% 199.2% 3. 60% Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Source: Company reports and CIBC World Markets Inc.287 1.669 18.416 6.750 91.086 F2011E $6.496 9.410 121.3% 14.738 318.3% 189. SEGMENTED EARNINGS CONTRIBUTION 120% 100% 80% 60% 40% 20% 0% -20% F2008A Canadian P&C Banking 57% 51% 59% 19% 11% 18% 21% 23% 12% 20% 19% 12% 22% 17% 12% F2010A $5.7x 2. P&C Banking F2011E 11.3% F2009A 0.8% 1. TD remains rated Sector Outperformer.329 7.509 87.3%) 1.S.3% F2012E 13. 2011 Toronto-Dominion Bank (TD-TSX) Current Price: C$74.1% 13.00 All Figures in $ millions.4% 3.665 102.3% F2012E 0.037 8.3% F2010A 12.36 10.063 (5.5% 13.9x Peer average P/BVPS Peer average OPERATING PERFORMANCE Core cash EPS Annual EPS growth Core cash ROE Efficiency ratio Operating leverage (YoY) CREDIT METRICS Loan loss rate (1) Sector Outperformer Robert Sedran.770 291. CFA (416-594-7874) Robert.833 88.7% 61.233 299.311 558 2. one-time items) KEY MULTIPLES F2009A F2010A P/E Multiple 13.6% 3.8% 11.ca F2011E 11.0% 1.932 309.9% 3.2% 2.63% Q4-10 3.6% 4.3% 9.

2011 Source: CIBC Trendspotting Matrix.Revenue Growth To Drive Outperformance In F2011 .January 17. Bloomberg. 94 .

the opinions expressed herein. CIBC World Markets Inc. However. 95 . may engage in trading strategies or hold positions in the security(ies) discussed in this report and may abandon such trading strategies or unwind such positions at any time without notice. and are not responsible for errors or omissions. thoroughness or quality of the information presented. CIBC World Markets Inc.Top Picks Of 2011 . 2011 Technical Analysis Disclaimer – For security-specific analysis: The opinions expressed in the technical analysis sections of this report are based upon a methodology that examines the past trading patterns and trends of a security for various technical indicators in an effort to forecast future price movements. We recommend that clients contact their CIBC World Markets Inc. The technical analyst may not file updates in the event that the facts. Technical analysis is one of many analytical tools that may be useful in making an informed investment decision. Investors should not expect continuing analysis or additional reports from the technical analyst relating to the securities discussed in this report. trends or opinions expressed in this report change. recommendations and price targets based upon a “fundamental” analysis of their businesses.January 17. price resistance and/or support. The issuers or securities discussed in these sections are not continuously followed by the technical analyst. are not intended to serve as precise “fundamental price targets” and should not be relied upon as such. We make no guarantees as to the accuracy. representative to request copies of relevant equity research reports published by fundamental analysts for further information. The comments and views expressed in the technical analysis sections are those of the technical analyst. may also publish research reports on the issuers discussed herein that may communicate different or contradictory opinions. including technical levels of trading trends.

January 17. 2011 96 .Top Picks Of 2011 .

January 17. 2011 97 .Top Picks Of 2011 .

Top Picks Of 2011 . related to the specific recommendations or views expressed by such research analyst in this report. including the CIBC World Markets Investment Banking Department. CIBC World Markets generally prohibits any research analyst from serving as an officer. futures or other derivative instruments based thereon. Additionally. CIBC World Markets may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein. 2011 IMPORTANT DISCLOSURES: Analyst Certification: Each CIBC World Markets research analyst named on the front page of this research report. related securities or in options. CIBC World Markets generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. director or advisory board member of a company that such analyst covers. directly or indirectly. 98 . is. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such research analyst's personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst's compensation was. may at times give rise to potential conflicts of interest. Potential Conflicts of Interest: Equity research analysts employed by CIBC World Markets are compensated from revenues generated by various CIBC World Markets businesses. In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report. as well as more specific disclosures set forth below. or at the beginning of any subsection hereof. Recipients of this report are advised that any or all of the foregoing arrangements. or will be.January 17.

7) (CGA-TSX.UN-TSX. US$24.04. 7. C$66. (FM-TSX. Sector Performer) Crescent Point Energy Corp. 2g. C$14. Sector Performer) H&R REIT (2a. (GLW-TSX. (2a. Sector Outperformer) CAE Inc.Top Picks Of 2011 . Sector Outperformer) Empire Company Limited (2g. Sector Performer) Kirkland Lake Gold Inc.24. 12) (CLS-NYSE.88. 2c. Sector Outperformer) Coeur d'Alene Mines Corp. C$7. US$24. Sector Underperformer) Genworth MI Canada Inc.77. 2c. 2g) (CSH. 2c. 3c. 7) (BNP-TSX.38. C$30. US$31. (2a. C$21. C$52. (2g) (KGI-TSX.67. US$5. (AGI-TSX. Sector Outperformer) Kinross Gold Corporation (2g) (KGC-NYSE.19. US$17.21. 2e. C$8. Sector Outperformer) Hecla Mining Company (2g) (HL-NYSE.08. Sector Outperformer) Endeavour Silver Corp. (2a. Sector Outperformer) Barrick Gold Corporation (2f. US$9. 2g) (BOX. 2c.45. C$32.64. C$9. (2a. (2g. C$6.27. C$20. 2e. 2g) (EDR-TSX.05. 9) (ECA-NYSE. (2g) (GSS-AMEX. 2c. Sector Outperformer) Imperial Oil Limited (2g) (IMO-TSX. Sector Performer) Enerplus Corporation (2g.05. 2e.75. C$6. 2d.66. (2g. Sector Underperformer) Jean Coutu Group (PJC) Inc. Sector Outperformer) 99 . 9) (CNR-TSX.51. Sector Outperformer) Celestica Inc.86. Sector Outperformer) Chartwell Seniors Housing REIT (2a. 6a.99. 4b. 3a.42. (2g) (GAM-TSX. C$53.72.69.22. US$17. Sector Performer) Centerra Gold Inc.23. C$119.58. Sector Outperformer) Baytex Energy Corp. 12) (BBD. Sector Outperformer) Golden Star Resources Ltd.A-TSX.43. Sector Outperformer) Bombardier Inc. (2a. (2g) (BTE-TSX.02.27. US$40.97. Sector Outperformer) EnCana Corporation (2g. (2g) (ARZ-TSX. C$4. C$17.14.14. 7. US$3. Sector Outperformer) ARC Resources Ltd. (2g) (CG-TSX.87.84. 2c. Sector Outperformer) Allied Nevada Gold Corp. C$2. 2e. 2e.26. 2g.80. Sector Underperformer) IAMGOLD Corporation (2g) (IAG-NYSE.85. 7. Sector Outperformer) Daylight Energy Ltd. Sector Underperformer) CGA Mining Limited (2g. 2g) (DAY-TSX. Sector Outperformer) Canadian National Railway Co. C$6. Sector Performer) Bonterra Energy Corp. C$21. Sector Performer) Brookfield Office Properties Canada REIT (2a.12. (2g. 2g. C$5.68. 2e. C$12.B-TSX. 7. 7) (CPG-TSX. Incorporated (2g) (VNP-TSX. Sector Performer) Black Diamond Group Limited (2g) (BDI-TSX. Sector Performer) First Majestic Silver Corp.92. 2g. (2a. 2g) (NGL-TSX. 2e. (2g) (CZE-TSX. 2g.90. 2e. 7) (ARX-TSX. Sector Outperformer) Canadian Pacific Railway Ltd. C$9. (2a. 9) (CGT-NYSE. 7. 2e. C$42. Sector Performer) Alamos Gold Inc.53. C$42. 3c. C$68. US$69.17. (2a. Sector Performer) First Quantum Minerals Ltd. Sector Outperformer) Bonavista Energy Corporation (2a. 3a. 2e. 12) (PJC. Sector Outperformer) Angle Energy Inc. US$47. (2g) (FR-TSX. Sector Outperformer) Gold Wheaton Gold Corp. (2g) (BNE-TSX. Sector Performer) Aurizon Mines Ltd. C$7. 2g.42. Sector Outperformer) C&C Energia Ltd.30. 2c. C$27. 4b. 7. C$12. 2g) (FVI-TSX. Sector Outperformer) Gammon Gold Inc. (2g) (ANV-AMEX. US$9. 7. 2f. 7) (GG-NYSE.A-TSX.: Stock Prices as of 01/17/2011: 5N Plus.23. Sector Outperformer) Franco-Nevada Corporation (2g. 2c. C$28. 9) (CVE-TSX. C$48. C$16. 2e. C$4. 13) (EMP. C$25. 7) (HR. 7) (ERF-TSX. 2g.07. 7) (AEM-NYSE. 2e. 2c. 4a.UN-TSX. (2g. 7) (MIC-TSX. 2f. 9) (CP-TSX. 2e. (2a. Sector Outperformer) Agnico-Eagle Mines Limited (2f. Sector Outperformer) Fortuna Silver Mines Inc. 7) (FNV-TSX.January 17. US$16. 2011 Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered by CIBC World Markets Inc. Sector Outperformer) Cenovus Energy Inc. C$32. (2g) (CDE-NYSE.59. (2g. (2g. 7) (ABX-NYSE. 2c. 2g. Sector Performer) Goldcorp Inc. Sector Outperformer) Eldorado Gold Corporation (2g) (EGO-NYSE. 7.UN-TSX. 4a.

(2a. 2e.January 17. 7) (VET-TSX. C$76.39. Sector Outperformer) Pengrowth Energy Corporation (2g. C$25. US$22. (2g) (TET-TSX. Sector Outperformer) Perpetual Energy Inc. US$55. 2g) (PEY-TSX. 2e.10. 2g) (SSRI-NASDAQ. US$11.00.07. (2a. (2a. 2g) (PAAS-NASDAQ. 2g) (PRQ-TSX.78. 2e. 2c. Sector Underperformer) PetroBakken Energy Ltd. 2g) (NXG-AMEX.: (Continued) Stock Prices as of 01/17/2011: March Networks Corp. (2a. C$32. Sector Outperformer) Silvercorp Metals Inc. 2g. 3a.96.08. C$32. C$10. 2c.72. Sector Performer) Semafo Inc. (2a. Sector Performer) Suncor Energy Inc. C$13. Sector Outperformer) Peyto Exploration & Development Corp.50. Sector Performer) Vermilion Energy Inc. 2c. 2f.30. US$31. 2c. C$21. 3a. (2a. Sector Performer) Newmont Mining Corporation (2g. 2g) (AUY-NYSE. Sector Outperformer) Pan American Silver Corp. (2g. 2b. 3a.35. (2g) (PBN-TSX. C$8. 2c. US$140. Not Rated) Skilled Healthcare Group Inc.52.Top Picks Of 2011 . 7) (PGF-TSX. 2g. Sector Outperformer) Petrominerales Ltd. Sector Outperformer) Shoppers Drug Mart Corporation (2g) (SC-TSX. (SKH-NYSE. US$66. (SPR-NYSE. 2e. 2c. 2d. Sector Outperformer) New Gold Inc. 13) (SJR. 2e. Sector Outperformer) Taseko Mines Limited (2g) (TKO-TSX. Sector Outperformer) Royal Gold.10.73. Sector Outperformer) Pacific Rubiales Energy Corp. Sector Outperformer) Total Energy Services (2g) (TOT-TSX.64. 2c. US$23. C$37. C$4. (2a. C$13.20. 2g. C$10. 3a. Sector Outperformer) Teck Resources Limited (2a. 12) (TCK.44. Sector Performer) Trilogy Energy Corp. 3c.23. 2e. Sector Outperformer) Rogers Communications Inc. (2g.99.95.98. 3b) (NEM-NYSE. 2011 Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered by CIBC World Markets Inc. 2c. 7. Inc. Sector Outperformer) Medusa Mining Limited (2g) (MLL-TSX. 3a. 2g) (RGLD-NASDAQ. Not Rated) First Solar. Inc. US$35. Sector Performer) Progress Energy Resources Corp. (2a. 2g) (SVM-TSX. C$7. 2c. Sector Outperformer) Onex Corporation (2g.06. 2g) (PMT-TSX. Sector Outperformer) Shaw Communications Inc.B-TSX. 2e. C$39. 2e. 2e. Not Rated) Spirit AeroSystems. C$12.84. 2d. (FSLR-NASDAQ. (2a. Sector Underperformer) Companies Mentioned in this Report that Are Not Covered by CIBC World Markets Inc.15. C$5. 7. C$35. 12) (OCX-TSX.30. 2c. US$11. 2c. (2g) (NGD-TSX. Not Rated) Emergency Medical Services Corporation (EMS-NYSE. C$4. C$45. 3c. 7) (TD-TSX. Sector Performer) Yamana Gold Inc. Sector Performer) Silver Standard Resources Inc. 2c. 2f. 3c. (2g) (PMG-TSX. 9.B-TSX. 3c. (2g) (SLW-NYSE. (2a.39. (2g) (MN-TSX. Sector Outperformer) NAL Energy Corporation (2a. Sector Outperformer) Quadra FNX Mining Ltd. 13) (RCI.81. Sector Performer) TD Bank (2a. 2e. C$13. C$17. 2e. US$23. C$18. 2e. C$13. (2a. Inc. 2g) (QUX-TSX.70. C$61. 3c. (2g) (PRE-TSX. 2g. 2e. 2e. 7.72. 2e. 3a.: Stock Prices as of 01/17/2011: Comcast (CMCSA-NASDAQ.89. 2g) (NAE-TSX. (2a.70. C$20. Sector Performer) Northgate Minerals Corporation (2a.B-TSX. C$38. Not Rated) 100 .20.00. US$2.19. (PWT-TSX. 9) (SU-TSX. Sector Underperformer) Silver Wheaton Corp.07. 2e.01. Sector Performer) Penn West Petroleum Ltd. US$47.07. 2g) (SMF-TSX. 2c.90.

61.15.January 17. 2011 Companies Mentioned in this Report that Are Not Covered by CIBC World Markets Inc. US$65. Not Rated) TransCanada Corp. (TRP-TSX. 101 .Top Picks Of 2011 .: (Continued) Stock Prices as of 01/17/2011: Time Warner Cable (TWC-NYSE. Not Rated) Important disclosure footnotes that correspond to the footnotes in this table may be found in the "Key to Important Disclosure Footnotes" section of this report. C$37.

The equity securities of this company are limited voting shares. or a member of his/her household is an officer. A member of the household of a CIBC World Markets Inc. securities-related services from this company in the past 12 months. non-securities-related services from this company in the past 12 months.Top Picks Of 2011 . CIBC World Markets Corp. in the aggregate. has managed or co-managed a public offering of securities for this company in the past 12 months. has managed or co-managed a public offering of securities for this company in the past 12 months. the parent company to CIBC World Markets Inc.. expects to receive or intends to seek compensation for investment banking services from this company in the next 3 months. and CIBC World Markets Corp. 10 11 12 13 14 102 . expects to receive or intends to seek compensation for investment banking services from this company in the next 3 months.. CIBC World Markets Inc. securities-related services from this company in the past 12 months. CIBC World Markets Corp. CIBC World Markets Inc. The equity securities of this company are restricted voting shares. has received compensation for non-investment banking. A member of the household of a CIBC World Markets Corp. CIBC World Markets Inc. 2011 Key to Important Disclosure Footnotes: 1 2a 2b 2c 2d 2e 2f 2g 3a 3b 3c 4a 4b 4c 5a 5b 6a 6b 7 8 9 CIBC World Markets Corp. fundamental research analyst who covers this company has a long position in the common equity securities of this company. the parent company to CIBC World Markets Inc. has received compensation for non-investment banking. non-securities-related services from this company in the past 12 months. has received compensation for non-investment banking. non-securities-related services in the past 12 months. and their affiliates. CIBC World Markets Inc. and CIBC World Markets Corp.. makes a market in the securities of this company. This company is a client for which a CIBC World Markets company has performed investment banking services in the past 12 months. The equity securities of this company are non-voting shares. has received compensation for non-investment banking. CIBC World Markets Inc. CIBC World Markets Inc. CIBC World Markets Corp. The CIBC World Markets Inc. CIBC World Markets Corp. has received compensation for investment banking services from this company in the past 12 months. research analyst who covers this company has a long position in the common equity securities of this company. The CIBC World Markets Corp. This company is a client for which a CIBC World Markets company has performed non-investment banking. director or advisory board member of this company or one of its subsidiaries. has received compensation for investment banking services from this company in the past 12 months. The equity securities of this company are subordinate voting shares. analyst(s) who covers this company also has a long position in its common equity securities. securities-related services in the past 12 months. fundamental analyst(s) who covers this company also has a long position in its common equity securities. beneficially own 1% or more of a class of equity securities issued by this company.January 17. This company is a client for which a CIBC World Markets company has performed non-investment banking. or any analyst involved in the preparation of this research report has provided services to this company for remuneration in the past 12 months. Canadian Imperial Bank of Commerce ("CIBC"). A senior executive member or director of Canadian Imperial Bank of Commerce ("CIBC"). An executive of CIBC World Markets Inc. CIBC World Markets Corp. has a significant credit relationship with this company.. CIBC World Markets Corp.

Sector is expected to outperform the broader market averages.1% 9.cibcwm. ***Restricted due to a potential conflict of interest. Price Chart For price and performance information charts required under NYSE and NASD rules. Toronto.0% Inv. CIBC World Markets is restricted*** from rating the stock. Stock Rating System Abbreviation Stock Ratings SO SP SU NR R O M U NA Sector Outperformer Sector Performer Sector Underperformer Not Rated Restricted Overweight Market Weight Underweight None Stock is expected to outperform the sector during the next 12-18 months. 2011 CIBC World Markets Inc. 161 Bay Street. Sector rating is not applicable. has assigned buy ratings to securities rated Sector Outperformer. hold and sell recommendations. relative stock rating system utilized by CIBC World Markets Inc. Ontario M5J 2S8. CIBC World Markets does not maintain an investment recommendation on the stock.com under 'Quick Links' or by writing to CIBC World Markets Inc. 103 .7% 92. do not correlate to buy.S.January 17. Attn: Research Disclosure Chart Request.4% 93. Toronto.cibcwm.com/sec2711 or write to CIBC World Markets Inc. 161 Bay Street. please visit CIBC on the web at http://apps. Banking Relationships Sector Outperformer (Buy) Sector Performer (Hold/Neutral) Sector Underperformer (Sell) Restricted Count 135 119 26 6 Percent 96. Attention: Research Disclosures Request. Stock is expected to underperform the sector during the next 12-18 months. Important disclosures required by IIROC Rule 3400. 4th Floor. 4th Floor. "Speculative" indicates that an investment in this security involves a high amount of risk due to volatility and/or liquidity issues.4% 42. Ratings Distribution*: CIBC World Markets Inc. Sector is expected to underperform the broader market averages.3% 2.0% *Although the investment recommendations within the three-tiered. and the S&P/TSX Composite in Canada. Brookfield Place. CIBC World Markets Inc. CIBC World Markets Inc. Coverage Universe (as of 17 Jan 2011) Sector Outperformer (Buy) Sector Performer (Hold/Neutral) Sector Underperformer (Sell) Restricted Count 140 127 28 6 Percent 46. our system for rating investment opportunities and our dissemination policy can be obtained by visiting CIBC World Markets on the web at http://researchcentral.Top Picks Of 2011 .. and sell ratings to securities rated Sector Underperformer without taking into consideration the analyst's sector weighting.. Sector is expected to equal the performance of the broader market averages. Ontario M5J 2S8. including potential conflicts of interest information. Rating Description Sector Weightings** **Broader market averages refer to the S&P 500 in the U. for the purposes of complying with NYSE and NASD rules. Brookfield Place.9% 100. Stock is expected to perform in line with the sector during the next 12-18 months. hold ratings to securities rated Sector Performer.

prior to acting on any of the recommendations herein. (ii) will not be deposits or other obligations of CIBC. "CIBC World Markets") and (d) in the United States either by (i) CIBC World Markets Inc. and they should not be relied upon as such. a member of the Australian Stock Exchange and regulated by the ASIC (collectively. (iii) will not be endorsed or guaranteed by CIBC.January 17. Before making an investment decision with respect to any security recommended in this report. Information. As with any investment having potential tax implications. any reference in this report to the impact of taxation should not be construed as offering tax advice on the tax consequences of investments. objectives and financial circumstances. opinions and statistical data contained in this report were obtained or derived from sources believed to be reliable. and (c) in Australia. CIBC World Markets has not reviewed the linked Internet web site of any third party and takes no responsibility for the contents thereof. including possible loss of the principal invested. Nothing in this report constitutes legal.. the Canada Deposit Insurance Corporation or other similar deposit insurance. (the Canadian broker-dealer) are required to effect transactions (other than negotiating their terms) in securities discussed in the report through CIBC World Markets Corp.S.. Unauthorized use. © 2011 CIBC World Markets Inc. as a substitution for the exercise of independent judgment of the merits and risks of investments. This report may provide addresses of. financial situation or specific needs of any particular client of CIBC World Markets. CIBC World Markets suggests that. 2011 Legal Disclaimer This report is issued and approved for distribution by (a) in Canada. the Toronto Stock Exchange. Major Institutional Investors (“MII”) (as such term is defined in SEC Rule 15a-6) or (ii) CIBC World Markets Corp. Such investors will not be able to enter into agreements or purchase products mentioned herein from CIBC World Markets plc. Internet web sites. The CIBC trademark is used under license. but CIBC World Markets does not represent that any such information. Recipients who choose to access such third-party web sites or follow such hyperlinks do so at their own risk. Although each company issuing this report is a wholly owned subsidiary of Canadian Imperial Bank of Commerce ("CIBC"). except to the extent that liability may arise under specific statutes or regulations applicable to CIBC World Markets. distribution. express or implied. MIIs receiving this report from CIBC World Markets Inc. This report does not take into account the investment objectives. each is solely responsible for its contractual obligations and commitments. for distribution only to U. for informational purposes only. implied or apparent authority to act on behalf of any issuer mentioned in the report. CIBC World Markets accepts no liability for any loss arising from the use of information contained in this report.Top Picks Of 2011 . The price of the securities mentioned in this report and the income they produce may fluctuate and/or be adversely affected by exchange rates. This document and any of the products and information contained herein are not intended for the use of private investors in the United Kingdom. if any. CIBC World Markets Inc. All rights reserved.S. Non-client recipients of this report who are not institutional investor clients of CIBC World Markets should consult with an independent financial advisor prior to making any investment decision based on this report or for any necessary explanation of its contents. opinions and recommendations expressed herein constitute judgments as of the date of this report and are subject to change without notice. a member of the Financial Industry Regulatory Authority (“FINRA”). Past performance is not a guarantee of future results. CIBC World Markets will not treat non-client recipients as its clients solely by virtue of their receiving this report. All estimates. clients should consult with their own independent tax adviser. to institutional investor and retail clients of CIBC World Markets in Canada. Each such address or hyperlink is provided solely for the recipient's convenience and information. broker-dealer). accounting or tax advice. Canadian retail clients of CIBC World Markets contact one of our client advisers in your jurisdiction to discuss your particular circumstances. is made regarding future performance of any security mentioned in this report. (b) in the United Kingdom. The comments and views expressed in this document are meant for the general interests of wholesale clients of CIBC Australia Limited. opinion or statistical data is accurate or complete (with the exception of information contained in the Important Disclosures section of this report provided by CIBC World Markets or individual research analysts). Recipients should consider this report as only a single factor in making an investment decision and should not rely solely on investment recommendations contained herein. and no representation or warranty. CIBC World Markets plc. and investors may realize losses on investments in such securities. and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited. (the U. The securities mentioned in this report may not be suitable for all types of investors. The analyst writing the report is not a person or company with actual.S. and the content of linked third-party web sites is not in any way incorporated into this document. This report is provided. the TSX Venture Exchange and CIPF. Since the levels and bases of taxation can change. or contain hyperlinks to. U. and (iv) will be subject to investment risks. duplication or disclosure without the prior written permission of CIBC World Markets is prohibited by law and may result in prosecution. the recipient should consider whether such recommendation is appropriate given the recipient's particular investment needs. which is regulated by the Financial Services Authority ("FSA"). 104 . CIBC Australia Limited. and any securities products offered or recommended to or purchased or sold in any client accounts (i) will not be insured by the Federal Deposit Insurance Corporation ("FDIC"). including the loss of investment principal. a member of the Investment Industry Regulatory Organization of Canada (“IIROC”).

Sign up to vote on this title
UsefulNot useful