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
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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.
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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

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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.

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Price On 1/11/2010 $6.9% 6.69 4.0% 8.95% 4. Avery Shenfeld outlines what he thinks is in store for the coming year.99 13443 Full-year Price Return 12.3% 106.51% 32. Despite a more active M&A environment.17 $15.28 $5.55 $25. (US$) Shaw Communications Inc.75 $30. but the recent efficiency push on the back of capital spending should position the U.20%) 10. Top Pick Performance For 2010 Return To Change Of Rating Or Dropped Price On Date Of Change Coverage Date Top Picks For 2010 5N Plus. Canadian National Railway Company Eldorado Gold Corporation (US$) Empire Company Limited First Quantum Minerals Ltd.43 $4. In both cases.59 $19.3% 60. it will not be aggressive and will likely revert to “stand-by” mode until the end of the year. held for the full year. Pan American Silver Corp. While the economics team believes the Fed may act early in the year. H&R REIT March Networks Corp.20 $14. although this year he didn’t recommend investors hold it for the full period.65 $66.94 $9. still 150 basis points (bps) better than the Composite Index price return. In his most recent economics piece.January 17.35 $38.47 $6.17 $3.21 $21.35 $18. 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.26 $27. our total return for the portfolio of top picks drops to 14.0% 17.S.7% 23.10 $41. at just about 2. SP rated).3% 1.5% 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. This positioning should help to create an investment environment that continues to have more stability. which generated a 106% price return for the full holding period. 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.00 $21.2% 13.Top Picks Of 2011 .57 $55. 2011 The highest Sector Outperformer return achieved by our analyst team. 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 2008.25% 1/26/2010 11/3/2010 4/15/2010 12/1/2010 $35.6% – led by a slightly more confident consumer. was Jeff Fetterly’s pick of Total Energy Services (TOT–TSX. but with the U. generating slightly better GDP growth than previously forecast.2% 4. 4 .82 $16. This is a three-peat for Jeff in delivering the top-returning stock (full-year return). If we use these returns (and pretend the investor simply put the cash raised from the sale under their pillow).82 $108.00 $33.88 (9.58 $4.19 $37. Exhibit 2.78% 4.16 $36. economy for better job recovery in the back half of the year.4% (0. Incorporated BPO Properties Ltd.0% 8.38 $15.8%) 16. Much of it is expected to be the same as 2010.5% 12. Taseko Mines Limited Total Energy Services TransCanada Corp.03 $4.93 $25.9% 20. Suncor Energy Inc.92% Price On 12/31/10 $7.48 $58. Not Yet Heaven in Twenty Eleven.4% 17.71 $21.05 $47.89 $35. Average Price Return For Holding Through 12/31/10 TSX Composite Return Source: Bloomberg and CIBC World Markets Inc.25 $18.15 11947 Drop Coverage Or Changed Rating 4/9/2010 7/21/2010 $61.0%.05 $38.70 $94. Franco-Nevada Corporation Genworth MI Canada Inc. as he downgraded the stock after a 33% gain through April 2010.0% 14.S.1% 20.

00 $16. consumption growth.50 $9. Canadian Pacific Railway Limited Chartwell Seniors Housing REIT Daylight Energy Ltd.UN DAY ECA PJC. Suncor Energy Inc.00 Source: CIBC World Markets Inc. 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. that Canada should fare better than our neighbors south of the border.S. Top Picks Of 2011 Ticker VNP NGL BDI BBD. Rogers Communications Inc.25 $43. Petrominerales Ltd. Kirkland Lake Gold Inc. On behalf of CIBC.50 $47.75 $78. C&C Energia Ltd. When we compare the outlooks for the economies of Canada and the U. Incorporated Angle Energy Inc.. 2011 The backdrop in Canada remains better than we foresee globally. Pan American Silver Corp. in composite. NAL Energy Corporation Onex Corporation Pacific Rubiales Energy Corp. 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. the economic indicators like GDP growth.50 US$52. Quentin Broad Managing Director.00 $11. EnCana Corporation Jean Coutu Group (PJC) Inc. our technical analyst.A KGI NAE OCX PRE PAAS PWT PMG QUX RCI. 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. we wish all of our clients a healthy and prosperous new year. and unemployment rate suggest.00 $15. Quadra FNX Mining Ltd. 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. 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.00 $18.00 $40. Head of Equity Research 5 . We asked Peter Gibson. Head of Portfolio Strategy.50 $22.00 $9.month Price Target $8.00 $32.B CZE CP CSH.25 $24.50 US$36. Black Diamond Group Limited Bombardier Inc.Top Picks Of 2011 . 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 2010.00 $7.00 $25. Semafo Inc. Penn West Petroleum Ltd.B SMF SU TD Company 5N Plus. Exhibit 3.50 $44. to provide us with a macro view on where he expects the markets to go in 2011.75 $13.January 17.00 $42.To 18.50 $84.

S. Unfortunately. 2011 Do You Believe In Magic? Peter Gibson. begin to see self-sustaining economic growth in 2011 that resembles the early stages of recovery witnessed in 2004? 6 .S.00 Themes By traditional measures. Exhibit 4.272 0.28 3. Toronto (416) 956-3250 We believe that by the end of 2011 the TSX will have recorded gains of approximately 11.16 3.S. Federal Reserve continues to rely on quantitative easing.S. North American equity markets.44 1.) C$/US$ Source: Bloomberg and CIBC World Markets Inc.S. China and Japan have a vested interest in working with the U.5% with a dividend yield of over 2% for a total return of approximately 14% for the year. Coordinated global growth is clearly a leading cause of persistently higher average oil prices.46 93-103 1. albeit at much faster rates. Presumably. Understanding the link between quantitative easing and preventing bond yields from reaching our estimated 3. Most strategists would say the same for 2011. real estate market have resulted in a U. CFA.369 1.800 1. quantitatively ease and can the U. to help underpin their recovery while trying to stabilize the debt crisis in Europe.S. rates is obvious – The question is simply one of how long can the U.8% ceiling is the key to appreciating how long gold and oil prices and the TSX can likely rise.S. combined with a dividend yield of approximately 1. So far it appears to be working. therefore.S. is on the path to recovery then the longer that BRIC nations will grow. Relatively high structural unemployment in the U.271 0. Toronto (416) 594-7194 Jeff Evans.S.03 13.95 3.34 1. the U.384 0. and continued weakness in the U. the longer that the U. Federal Reserve's successful administration of quantitative easing through 2011. the outlook for the global economy and.Top Picks Of 2011 .January 17. At the same time.8%. in particular.97-1. 2011E 14. S&P 500 T-Bills Bond Yields WTI Oil (US$/Bbl) Gold (US$/oz.33 88 1.S. relies on the U. economy is weak but should gain some momentum in 2011. The TSX should continue to outperform the S&P 500 as a result of continued growth in the emerging nations as the U. recovery that is approximately one-third to one-half the rate of growth we would like to see. Exhibit 4 is a summary of our forecasts for 2011.S.580 0.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%. Every year of economic growth is another year of growing global oil consumption. The benefits which Canada enjoys as an exporter of commodities while benefiting from sustainably low U. 2011 Forecasts Summary Recent Canada TSX T-Bills Bond Yields U.3 3.

S. gold is likely. when the U. We. but it is an inherently risky strategy. however. government would still choose to push the U. The recently recorded record-low volatility is very unusual. the short-term cyclical risk is the growing fear of inflation. due to the fact that low volatility often implies a sense of complacency. preferably. then the U.5% level for as long as possible so that the U. markets have recorded very low volatility immediately before crisis. economy can continue to recover at the current. hence the US$1.S. 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.S.Top Picks Of 2011 . if possible. housing market must stabilize.8% level and. it is unlikely that we will witness secular profit growth driven by inflation in the way it was witnessed in the 1970s. the fact that the U. Historically. therefore. The Fed Is Trying To Hold The 10-year U.S. Treasury bond yields below the 3. As long as quantitative easing holds the bond yield below 3. Fed strategy of quantitative easing is intended to hold U. reluctantly. status of the U. which is indicated by our asset mix models. in which case US$1.S. 2011 To do this. bond yields below the critical 3. We cannot over-emphasize the significance we attach to the Fed’s goal of holding 10-year U. 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. Biggest Risk Is Deflation Although deflation is. specifically.S. we still believe that.S. 7 . it is impossible to pass price increases through to consumers and.S. often in part.8% In the absence of wage inflation. should rise above the 3. believe that the U. dollar devaluation below the recent lows. the ongoing risks in Europe. it is very favorable for equity markets as long as corporate profitability is stable or rising.580/oz. Treasury Yield Below 3.5% level. the U. 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. dollar should strengthen. relatively. The Fed then could still. the Fed tilted the yield curve.S. ultimately.8%. therefore. We believe that the safe haven. gold price target. weak rate. that of food and energy inflation at a time when North America is not recording any wage inflation. the implication would be that quantitative easing is losing its effectiveness.8% level.S.700/oz. 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.S.S.S.January 17. Weak corporate profit growth makes North American stock markets very sensitive to the level of interest rates. Nonetheless. yield curve tilts. recovery is taking hold. during the early stages of that five-year recovery. If the U. we would expect continued but slower appreciation in gold prices owing to emerging economy growth. raise short-term interest rates slightly in the hope that bond yields would then fall. If bond yields. These risks include a number of geopolitical hotspots. gives it the room to continue relying on the use of quantitative easing. then more can be done which still pushes the U. the biggest risk that the North American economy faces. This fact underpins investors’ reliance on the Fed’s ability to continue administering quantitative easing. reserve currency.S. dollar devaluation further. Risks For The Fed The range of possible outcomes for North American stocks and bonds is perhaps greater than it has been in years. Historically. Yet. the U. In 2004. below the 3.

Treasury market. although even moderate tightening by the U. 2011 The Circular Irony Of Quantitative Easing. Exhibit 5 illustrates that the implied ceiling for bond yields has been falling steadily for many years.S.January 17. This is the dilemma the Fed faces and it is the direct result of too much government and consumer debt. the 3.1%. Eventually. the greater the likelihood that U. Should the Fed be forced to tighten because the bond yields reaches the 3.S.e. would probably be perceived as a greater risk for Europe.. if bond yields rise too much then the risk of a panic in debt markets also exists. it is like trying to stop the water flowing from a garden hose by holding your thumb over the end.S. given the sheer potential size of emerging economies. it is a race against time to see which nation is more energy efficient.S.8% ceiling too quickly while the U. we would also anticipate significant new pressure for U. A sudden significant upward move in bond yields and.Top Picks Of 2011 . desperately needs a faster rate of economic recovery and. then the risk of another U.S. From time to time.S. 8 . Treasury bond yield level represents the level of yields that causes the S&P 500 to appear significantly overvalued. economy is still relatively weak. 3%–3.3%). the 10-year Treasury would naturally be at 4. Higher Oil Prices And Stable Bond Yields In a sense. and act as a growth tax rather than a cause of secular inflation at first.. our view is a little different. economic growth gains momentum and that growth becomes self-sustaining. real estate prices. can adapt faster. In fact.S.S. On the one hand. high oil prices should underscore the safe haven status of the U. i.S. the U. therefore. recession still exists.3% when. We would think that sustainably high oil prices actually contribute to weaker U.S. yet. growth relative to their historical experience and contribute to holding bond yield in the desired rate (i. The irony being that this level of bond yields increases the likelihood of more quantitative easing. resulting in capital flow back into the U.8% 10-year U. develop energy substitutes faster and withstand sustainably higher oil prices longer than others. perhaps. the goal would be to hold bond yields at 3. however. 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. Implications At present.e. The risk is that inflation gains momentum and when the Fed no longer has the resources to fight the upward tendency in yields. The longer that the Fed can do this. they skyrocket. At these levels and above.

S.8% 4 3 3. 10-yr U. this would imply. First. Treasuries was also at relatively low levels (see Exhibit 8). 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. for now.2% ceiling 5 Bond Yield (%) 8 7 6 +57% -50% +94% -57% +85% 9 3. 2011 Exhibit 5. Both major market collapses were signaled by three critical observations. Second. Treasury market demonstrated during the global banking crisis.0% Ultimate floor 1 S&P 500 Source: Bloomberg and CIBC World Markets Inc.S. 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 10-year U. 9 . has recently been as high as 3.8% ceiling 4.S. The 10-year U. By contrast. 10-year U. Since the year 2000.S. the bid-to-cover ratio for U. however.January 17. then we remain optimistic about the outlook for North American equities. The second collapse occurred during the housing crisis of 2007 and the banking crisis of 2008. corporate profitability is rising. yield curve maintains a steep positive slope. stock market.S.5% Excess debt floor 1997 ceiling 2000 ceiling 2003 ceiling (5. based on the fact that the bid-to-cover ratio.S. equity market. Treasury yield exceeded the then current bond yield ceiling. We believe that. the recovery in 2009 coincided with bond yields at the low end of our estimated range and forward ROE was recovering.S.S. there have been two massive collapses in the U. The first collapse occurred from 2000 until October 2002.0% Desired long term average 2 2. The Fed had restored a steep positive slope to the yield curve.S. Treasury bond yield.1 5. Third.9%) 2002 ceiling 4. To assess the ongoing potential for the U.8% ceiling.S. yield curve became inverted (see Exhibit 7). is at very high levels and the U. the first critical step demands that we check Exhibits 5 to 8. 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. On both of these occasions.S. this decline probably resulted from the fact that the Fed had tightened until the U. the Fed can continue to quantitatively ease and hold the 10-year U.S. Treasury bond yield below the critical 3. S&P 500 profitability had started to decline.Top Picks Of 2011 . 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.5% and it is likely that quantitative easing has played a significant role in preventing yields from rising further.8% ceiling and U. albeit manipulated by the Fed.

10 ROE (%) . 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.5 3 2. 2011 Exhibit 6. Bid-to-Cover Ratio 5 4.5 2 1. 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 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: CIBC World Markets Inc. Exhibit 7.5 1 0. Exhibit 8.Top Picks Of 2011 .January 17.5 4 3.

equity market began to recover in October 2002 from the recession witnessed during that period. Quantitative easing. Cash S&P 500 U. Exhibit 9. economic recovery. gold prices and the Canadian dollar. quantitative easing is underpinned by a significant rally in the S&P 500. whereas other late-cycle crises do not. at the present time.S. Commercial Source: Bloomberg and CIBC World Markets Inc.January 17. 3 and the bond yield ceiling. The U. residential and commercial real estate prices remain weak. 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. 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.S. Economic Recovery Still Depends On Quantitative Easing In fact. Residential U. 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. Usually after the late-cycle crises. in reality. 2011 Self-sustaining U.S. typically. however. Economy (Equities. result in technical recessions. as in 2004. we are trying to emerge from a recession. is directly impacted by the Fed’s ability to quantitatively ease and hold bond yields below the critical level. U. recession. in fact. oil prices. they all turn on QE 2. we are optimistic about the Fed’s chances of success in eventually establishing a self-sustaining U.S.8% level. but we know full well that this view depends entirely on quantitative easing.S. Given these facts.S. If the Fed fails. 11 . The 2007/2008 crisis.S. dollar and. impacts our outlook for the U.S. Could This Be 2004 Because We Are Recovering From Recession? Exhibit 9 further underscores the fine line that the Federal Reserve is walking. At the same time that bond yields are a mere 50 bps from the ceiling. The U. then we would expect forecasting chaos. Fortunately.S. the market rebounds for about two years before higher rates lead to another recession.S. therefore. thereby holding 10-year U. in turn. Virtually every forecast.S. Treasury bond yields below the critical 3. resulted in a very significant U. Cash And Real Estate) U.Top Picks Of 2011 . emerging economy growth. but.

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

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

S. bond yields and the ability of the U. 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. Not surprisingly. the TSX has also demonstrated both a small-cap effect and a significant. 14 .8% ceiling.S.3% then the Fed is able to continue quantitatively easing.S. The CIBC small-cap universe started from lower levels in 2008 and. therefore. Preference For TSX Over S&P 500 But Only If Bond Yield Stays Below The 3. yet. 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. related. has completely overtaken the S&P 500 and the TSX. To the extent that this contributes to a further devaluation of the U.8% Ceiling In The U. rally in the shares of commodity sectors. dollar and gold and oil prices.S. to continue quantitative easing is a major driver of potential returns for the TSX. Since the lows of 2009. Since approximately 50% of the TSX is comprised of the energy and materials sectors. If bond yields are held in the range of 3% to 3. 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. Exhibit 13.Top Picks Of 2011 . and Exhibit 15 illustrates the very high correlation between TSX total returns and the commodity Index.S. dollar then this implies generally higher gold and oil prices. the level of U.January 17.

Cumulative Returns: US$ Trade Weighted. dollar in the process. to become an export-dependent country as a result of devaluing the dollar. Gold (rebased) Trade-weighted USD (RHS) Exhibit 15. rather. The goal is not so much for the U.S.S. 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. dollar as a result of monetizing debt and debasing the U. is intended to hold bond yields below the critical ceiling levels of 3. for example. for the world. This is likely to remain the case until countries like China face a serious threat from inflation. is likely to pursue this strategy for as long as it possibly can. 15 . Other Important Circular Implications Of Quantitative Easing Quantitative easing. 2011 Exhibit 14. therefore. The U.January 17.S.S.8% but it also contributes to the devaluation of the U.Top Picks Of 2011 . but. High Correlation Between TSX And CRB Returns Source: Bloomberg and CIBC World Markets Inc. Quantitative easing. has a number of other important implications. in general. it is a strategy that contributes to lower interest rates for export-dependent countries and.

In effect. high oil prices are a growth tax.Top Picks Of 2011 . these sectors are supercritical to the outlook for the TSX. Sustainably high oil prices are crucial today if the U. quantitative easing tends to contribute to rapid growth in emerging economies and.S. 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. allow the U. This has important long-term potentially crisis implications for China.S. Although the U. as long as it tries to maintain its currency peg to the U. are a cause and effect of quantitative easing. In turn.S. the U. monetary policy results in aggressive. which is relatively more punitive for other nations than the U. has enormous implications for the average level of oil prices longer term and. 16 . to pursue energy substitutes and. The sheer potential size of the Chinese and Indian economies. Sustainably high oil prices. therefore. Higher oil prices can increase the risk of chaos elsewhere. ultimately.S.S. for investing opportunities in Canada. force its conversion to natural gas just as the British economy once converted from coal to oil dependence. emerging economies but it also represents a growth tax on the U. and global recovery. is to have the economic incentive to lessen its reliance on oil before the emerging economies become so large that oil prices are crippling.S. U.S.S. 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. higher oil prices create relatively more pressure for less energy efficient.S. obviously. case can help hold bond yields down. even inflationary growth in time.January 17. and in the U. therefore. easy. perhaps. This would imply that aggressive. It comes full circle then. Yet. the opportunity is for continued investment in these sectors. perhaps.. Therefore. U. Higher Oil Prices Curiously. can get away with more quantitative easing. to extend its quantitative easing strategy. Dollar Devaluation In the short term.S. more of a safe haven and simultaneously increasing the likelihood that the U. The U. ironically. therefore. dollar devaluation also contributes to higher oil prices. a sustainably higher oil price places relatively more pressure on other economies and may. which contributes to holding bond yields down at the same time.S. easy. dollar. therefore.S. monetary policy for China.S. In a sense. as well as how significant. is the largest consumer of oil globally.S. it is also relatively more efficient in its use of oil in generating GDP growth. Sustainably high oil prices also create economic incentive for the U.S. economy. thereby making the U. 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.

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

This underpins our outlook for $830 aggregate TSX earnings. As indicated by the sector relative weights in the first column. Therefore. to minimize the impact of outliers. we prefer to see return on equity growth rates of 0. although the big five banks in Canada are. recording ROE declines on a trailing basis. We would expect that to change as oil prices remain close to US$100/Bbl US for West Texas Intermediate. it comes as little surprise that trailing earnings are now rising very slowly in the S&P 500.11 standard deviations. while forward earnings forecasts are falling. are the gains that were recorded by the small-cap TSX materials sector. Even more dramatic.19 standard deviations.Top Picks Of 2011 . Given the recent significant run-up in oil prices. Trailing Now Leading Forward Earnings In general. Median Values: Key Data Points For The TSX Exhibit 17 summarizes some of the key data points relating to the S&P/TSX Index. it should be noted that the energy. materials and financial sectors account for 78. In order.S. 2011 TSX Earnings Forecasts. 18 . 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. Key Is Stable S&P 500 ROE The North American equity market gains and concurrent U. is likely to record better growth but from lower levels (recently 12%. Street forward ROE growth rates are still showing minimal growth. In effect. median 8%). it would be expected that forward return on equity would rise.3 standard deviations or better. economy.45% of TSX market capitalization. This equally weighted small-cap index has soared in just two years. the weighted average return on equity for the sector is unchanged. For example.S.January 17. The median value for financial sector profit growth is 0. however. The strongest profit growth is being recorded by the materials sector at 0.22 standard deviations. 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. 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%). improving earnings for the energy sector (26%) and much stronger earnings for the materials sector. The energy sector return on equity is also largely unchanged on the trailing basis. In fact. however. median TSX profit growth is a mere 0. the table summarizes the median values for each of the sectors. bond market losses since the summer of 2010 are both unusually large. however. At this point in the cycle and given pervasive concerns about the U. generally. TSX ROE. we anticipate stable to weaker ROE and earnings for 30% of the TSX.

case. In the U. Especially In The U.70 0.S.15 CIBC Analyst Implied Return (%) 15. it is recording a median dividend yield of 4.84 Forward Roe Growth (stddev) 0.53 -0. companies have accumulated significant amounts of cash on their balance sheets as a percent of common equity.16 Street Implied Total Return (%) 11.57 4.03 13.44 11. If the Street forward earnings forecast is correct.22 13.36 -0.21 8. this would imply a current P/E on forward earnings of less than 15x for the TSX overall.98 15.94 29. It is also worth noting that the CIBC analyst median return is expected to be 15.80 9.S.03 10.76 10.40 22.55 12.22 0.85 7.80 18.05 -0.21 0. This is especially true for the U.38 2. Now Just Make Sure ROE Is Rising Although the financial sector is not demonstrating significant profit growth at present.57 1. 19 . materials and financial sectors. In Canada.61 13.42 All Sectors Energy Materials Industrial Consumer Discretionary Consumer Staples Healthcare Financials Info Tech Telecom Utilities Source: CIBC World Markets Inc.59 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.38 24.18 5.67 5. Both trailing and forward growth is being recorded by the information technology sector.09 -0. the median forward P/E ratios for the materials sector and the financial sector would be close to 13x one-year forward earnings.80 19.31 6.January 17. Nonetheless.22 Trailing P/E (x) 17.00 5.09 11.30 10. In fact.99 14.20 2.08 0. and Canadian information technology sectors.41 9.61 10.11 25.12 3.S.23 13.52 5.21 0.44 4. information technology sector companies are frequently what we also call value-added exporters.21%.42 1.53 Forward P/E (x) 14.94 0.15 5.S.03 0. Very Large Cash Holdings On The Balance Sheet.54 3.06 13.79 12.00 Dividend Yield (%) 1.05 -0. Our global portfolio system indicates that the weighted average dividend yield for the financial sector is an impressive 3.89 11.54 0.Top Picks Of 2011 .10 23.03 20.72 16.19 0.89 18.83 13.08 -0. ROE (%) 8.55 5. our TSX target of 14.56 2.93 9.82 7.02 7. and Canada but especially in the U.5% of the TSX market capitalization.29 12.72 Forward Roe (%) 11.76 Trailing Roe Growth (stddev) 0.74 13.72% and the Street median return is expected to be 11.84%.22 18. 2011 Exhibit 17.07 17.S.95 13. as long as the 10-year U. in both the U.S. although this sector is 2.64 16.02%.86 11.34 10.08 25..58 21.47 13. Treasury bond yield remains below the ceiling.03 0.79 1.39 13.17 0.99 11. Attractive Financial Sector Yield. 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.93 0.36 Cash As % Of Equity 13. That is.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.32 -0. Finally. Key Data Points For The TSX Median Sector Relative Weight (%) 100.46 9.76 12.76 3.00 1.08 21.47 14.71 12.92 11.97 10.84 12.11 16.55 15. more than 50% of their revenues come from international operations and emerging economies.07 0.34 -0.42 15.04 18. the two sectors with the most substantial amounts of cash on the balance sheets would be the materials sector and the information technology sector.69 16.80 21.11 -0.800 for year-end 2011 appears likely.49 0.56 41.29 12.56 -0.59 12.00 26.

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

We will look seriously at 2012 targets later in 2011 but for now our concern is with getting this year’s levels correct. at least. namely the bond yield ceiling. however. 21 . For the purpose of this article.e.S. should mark time. outlook. however. that we may be required to change our asset allocation in the next couple of months. bond yields and the need for continued profit growth. far more significant. Our long-term. 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 Exhibit 19. 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. i. We have indicated target levels for 2012 but these targets are highly dependent on a number of things as we go through 2011. It is true. Exhibit 20 illustrates the standard format for our basic scenario analysis for asset allocation. our recommended asset allocation and the implied total portfolio returns.January 17. depends on all the issues this publication addresses..Top Picks Of 2011 . ROE growth and quantitative easing. 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. North American equity markets are overdue for a correction now or. we are focused on our 2011 forecasts. 2011. Gold And Materials Sector Performance Small Cap Materials Gold TSX Materials S&P 500 Materials Source: Bloomberg and CIBC World Markets Inc. Our recommended asset mix is shown for our various investor profiles in the top right-hand corner of Exhibit 20.

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%. 20% U. This is shown just under the blue “optimistic” button allocation asset mix ranges.S. Within this allowable range we have remained at 40% Canadian equities.Top Picks Of 2011 .8% ceiling. 2011 Exhibit 20.S. If our year-end 2011 targets prove to be correct then. Basic SAS Source: CIBC World Markets Inc. Treasury bond yield level gets any closer to the 3. we have decided to focus on only one of the several investor profiles. we recommended a 45% Canadian equity exposure. bonds and T-bills. This is especially true if the 10-year U. It is extremely likely that we will change our recommended asset allocation over the course of the next two to three months. equities and 35% Canadian bonds. as indicated in Exhibit 21. We have not yet changed our recommended asset allocation for the various investor profiles outlined in the top right-hand corner of Exhibit 20. 22 .January 17. In order to provide some indication of our current view with respect to North American stocks. a 20% U. equity exposure and a 35% Canadian bond exposure. When we first introduced the growth investor profile at CIBC.S. 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).

e. once a year or once every two years) is extremely dangerous in the current environment.S. As we have noted often in the last 15+ years.Top Picks Of 2011 .83% of the total portfolio returns of 9. Our asset mix models play a very important role in determining the timing of our exposure to a variety of asset classes.25% standard deviation of returns. and Canadian equities. –57% and +85% since 1998.26% total return with a 10. for the S&P 500 since then) and. we would expect a portfolio with the growth-oriented investor profile to achieve a 9. Performance Attribution Exhibit 21 shows the 65% total allocation to U. Understanding and adjusting to these market moves is crucial to investor success. 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. 23 .S.67% p. long-term average equity returns were expected to collapse and did collapse starting in 1998 (3..a. 2011 according to our Scenario Analysis System (SAS) for asset allocation. We steadfastly believe that making changes to asset allocation on an arbitrary and infrequent basis (i. Exhibit 21. bond yield levels and North American corporate profitability.January 17.26% but it also contributes a disproportionately larger portion of the volatility for the total portfolio at 7. –50%. The Canadian equity component is expected to contribute 5. +94%. 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. It should be noted that we also choose to alter our asset mix exposure anytime we observe significant changes in U. with the remainder of 35% invested in Canadian bonds.35%. Our floor and ceiling calculations in Exhibit 5 result from our asset mix modes. the S&P 500 recorded rallies and collapses of +57%. yet. Growth – Optimistic (In Local Currency) Source: CIBC World Markets Inc.

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%. assuming our optimistic set of targets for 2011. Exhibit 22. Maximize Returns For example. 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. In our case. Max Return For A 10% Maximum Total Portfolio Variance Source: CIBC World Markets Inc. 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. Our likely changes in the next few months should be guided by these optimized results. In the last example. we might choose to maximize total portfolio variance in order to reduce the total perceived portfolio risk. however. 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. The objective.Top Picks Of 2011 . currently. We must stress that the recommended asset mix depends almost entirely on our forecasts. equities for our growth investor profile.January 17. maximizing the Sharpe ratio (return to risk ratio) or maximizing the total portfolio variance. 2011 Choice Of Optimization Using our SAS optimization techniques.S. 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. recommended asset mix varies from the one-year mathematically optimized version based on our own targets and assumptions. 24 . while calculating these returns in local currency terms. Exhibit 22 shows our currently recommended exposure to Canadian equities. we do this to see how much our short-term. In every case. Canadian bonds and U.S. equities instead of our currently recommended 20% and 50% Canadian equities instead of 45%. we can optimize the portfolio based on maximizing return.

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). For the purpose of this article. Exhibit 23. Using A Growth Profile Allowable Range. 25 . however. In this case. bond yields remain below the critical ceiling. the Canadian equity allocation remains at 45%. we want to consider what the recommended asset allocation would be if our goal were to limit the total portfolio variance.January 17. We know from other analysis that that would result in a total portfolio variance of approximately 8%. A more conservative asset allocation would resemble a constant 45% equities.25% standard deviation of returns. it supports our conclusion that. equity exposure to zero in favor of Canadian AA corporates. Nonetheless. 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%. Maximize Return For An 8% Maximum Total Portfolio Variance Source: CIBC World Markets Inc. 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. 45% bonds and 15% T-bill mix. then the recommended weights are found under the column heading Sharpe Max in Exhibit 22. this assumes that our targets for the various asset classes are correct.S. It appears that in order to reduce the variance of the total portfolio.S. of course.26% return with a total volatility of 10. the optimization system chose to reduce the U. 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. therefore. If we optimize. a large portion of our expected returns should result from Canadian equities.Top Picks Of 2011 .

2011 Recent Performance Since August 2010 We are optimistic about the rate of return for U. bonds in the growth portfolio. The combination of the rising bond yields in the U. in which we indicated that bond yields were unlikely to fall any further near term and. in fact. 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. In fact. Such significant gains in such a short period of time are cause for concern. In August 2010. while U. Naturally. Fortunately.S. The sheer magnitude of these gains relative to a very conservative asset allocation.S.S. 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. From August 2010 until recently the TSX rose approximately 15% and the S&P 500 rose approximately 21%.33% during the same timeframe. For example. the 5% loss from U. usually requiring that we have some exposure in asset classes that we. The reason for doing so is.S. bonds would have lost over 20% on an annualized basis. as long as the Fed can use the magic of quantitative easing to restrict the upward movement in the 10-year U. We have a long list of concerns with respect to exogenous risk factors. and especially given the significant incremental returns in a very short period of time. and rising stock prices in the U. would prefer to avoid. the annualized return from U. our relatively traditional growth portfolio held a 35% exposure to Canadian bonds for the purpose of improving diversification. is enough to cause some concern in and of itself. Our over-weighted equities exposure benefited the total portfolio return considerably and we managed to avoid. equities between August 2010 and the present was approximately 61%. in local currency terms.S. equity market has now risen 85% from the 2009 lows and bond yields have risen from 2. were more likely to rise significantly.January 17.92% compared with 5% loss from 10-year U.S. 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. to have some degree of prudent diversification. Treasury bonds. we generated a significant 434 bps of outperformance in just four months compared with a fixed 45% equities. and Canadian equities. At the risk of being silly.S. 45% bonds and 10% cash asset mix. and Canada resulted in massive outperformance from equities relative to bonds.78% in a little over a four-month period. our total portfolio returns for the growth investor profile amounted to 10.Top Picks Of 2011 .S. otherwise. Treasury.S. entirely. generally. Bond losses in the Canadian bond portfolio were very slight at –0. bonds that resulted in just the last four months of 2010 by having no exposure to U.04% to 3. 45% in bonds and 10% in T-bills. we published our Investment Strategy Committee Prequel asset mix document. the annualized total growth portfolio returns from August to the present was roughly 27%. This is approximately 434 bps better than a portfolio with a fixed exposure of 45% in equities. we 26 . By maintaining the correct overweight recommendation for stocks and correctly underweighting bonds. which could materially change our outlook for stocks and bonds in 2011. 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.S.

01 - 12.03 1.34 1.97-1.03 27 . Recent 13.1 16.01 2. 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 14.39 0. therefore.369 1.800 830 17.92 14 17.January 17. It is our current view that the TSX aggregate earnings will reach $830 as a result of further earnings growth in the materials and energy sectors and a slight recovery in the financial sector during 2011.97 0.42 0.272 676 19. respectively.68 19.55) Trailing ROE Median Weighted Average Street Fwd ROE Median Weighted Average Trailing ROE Growth Rate & Fwd (GPS) Median Weighted Average Canada TSX Yield (market cap weighted) T-Bills (%) 10-year Bond Yield (%) U. repeatedly.6 17.44 1.01 14.04 19.S.11 2011 14. S&P 500 Yield (market cap weighted) T-Bills (%) 10-year Bond Yield (%) WTI Oil (US$/Bbl) Gold (US$/oz.91 0. the resulting top-down P/E would be approximately 17. our optimistic outlook for North American equities.0065 0. as well as our gold and oil price targets and our Canadian dollar outlook are extremely dependent on the Fed’s ability to continue to successfully administer quantitative easing such that it can keep this stock market recovery intact.02 0.92x and 14x.16 3.09 1271 79 16.34 1.Top Picks Of 2011 .98 12.41 15.13 2.) C$/US$ GPS data calculated through our Global Portfolio System Source: Bloomberg and CIBC World Markets Inc.83 times. 2011 Forecasts TSX Earnings Top-down P/E (x) Bottom-up GPS P/E Median Weighted Average Street Fwd P/E (14.18 15.67 17. Based on a 14.384 / 90.95 3.800 / 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 (1.89 8. Detailed Targets For 2011 Exhibit 24 provides more detail as to the basis for our 2011 targets.87 0.83 14.11 0.28 3.01 1384 88 15.46 93-103 1.580 0.95 14.78 0.3 3.14 20.12 0.33 88. Exhibit 24. As we have stated.73 14.800 TSX price target at year-end. 2011 are becoming increasingly concerned about how far the North American equity markets can go from here.28 15.02 0.

Federal Reserve faces. this is not the case for the S&P 500 where the ROE levels are considerably higher than the TSX levels at present. The current rally is now about 85% since the market low of 2009. Although S&P 500 aggregate earnings are expected to rise from $79 recently to $88 by year-end 2011. and the Fed must find a way of sustaining the economic expansion and stock market rally for. Treasury remains below the 3. as now. another two to three years. however. the resulting implied rise in the S&P 500 Index level should be on the order of 8% or 9%. is emerging from recession. This could change if the U. but. two years ago. if we drew parallels with the equity cycle which spanned the period from October 2002 to mid-2007. If. We believe. If P/BV ratios were constant. but there is no evidence that the S&P 500 ROE is expected to grow significantly from here.Top Picks Of 2011 .384 S&P 500 target divided by $88 of earnings results in a top-down price earnings ratio of 15. we would expect the S&P 500 is capable of posting a 9% to 10% total return for the year. our 1. dollar devaluation further if it can. Conclusion To summarize.8% level. Since we anticipate some compression in multiple levels. S&P 500 ROE can simply maintain the current 20% level then this would imply. Admittedly. This is really the test that the U. but it is hard to imagine a time when our view has turned so significantly on just one factor. at least. therefore. ending in 2007. our market should continue to trade at approximately 2 P/E multiple points higher than the S&P 500. For example. is a cause for concern. the market tended to rise and fall over timeframes of about one-and-a-half to three-year intervals. The one-year forward ROE levels are roughly 200 bps to 300 bps higher than the current trailing ROE for the TSX.S. economy begins to demonstrate evidence of self-sustaining growth and companies also begin to deploy the massive quantities of cash on their balance sheets. and given also that the U. its actions are unprecedented. this would imply a 12% rise in the S&P 500 Index price. however. After adding in an S&P 500 dividend yield of approximately 2%. the key to sustaining the equity cycle was the fact that bond yield stayed in the desired range. 28 . however. Other than 1998 and the stock market low of 2009. 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. namely quantitative easing. Crucially. The S&P 500 was recording stronger ROE growth at that time and profitability was at relatively higher levels. we remain optimistic about the outlook for North American equities.January 17. government is still determined to push the U. The equity cycle which began in October 2002 extended through the next five years. This.S.S. 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. that we begin during 2011 to see selfsustaining growth with stable interest rates similar to 2004. 2011 could resemble 2004.S. It would appear. too.S. that during the next 12 months. a 12% internal growth rate in book value. at least. We believe that the U. As long as S&P 500 ROE is stable and bond yields remain at satisfactory levels then a respectable rate of return is implied. but then. the magic of quantitative easing is working. All things considered. but it can only do this as long as the 10-year U. 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%.73 times. We hope. 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. there is little or no evidence of ROE growth. We would also expect that given the structural characteristics of the TSX and a number of more favorable economic fundamentals in Canada. so far.S. just as the Fed probably does.

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

161 Bay Street. As a result. P. Box 500. cash). See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.0% NA Nil $130.6M 27.37E $0.7 million in cash and cash equivalents ($1.8x Source: Reuters Company Description 5N Plus develops. which is at a significant discount to the peer solar group at 16.ca Sumeet Mahesh 1 (416) 594-7293 Sumeet. 5N Plus is trading at an attractive valuation of 10. 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.8x 19. 2011 Stock Rating: Clean Technology Sector Outperformer Sector Weighting: 5N Plus. Full contribution from its Firebird expansion is expected in Q1/F12.7x 2012E FD EPS. Rate (E) 52-week Range Shares Outstanding Float Avg. www. EPS Gr.4x 14.74 GW annually.2M No Current $8. including potential conflicts of interest. See "Important Disclosures" section at the end of this report for important required disclosures.6x F2012E FD EPS (ex.33A $0.4x Stock Price Performance 2010A 2011E 2012E 10. Price Target VNP-TSX (1/12/11) Key Indices: S&P/TSX Smallcap 25.77-$7.35 45.3x 6. where applicable. CFA 1 (416) 594-7296 Ian. CIBC World Markets does and seeks to do business with companies covered in its research reports. 5N Plus draws its name from the 99.50 is based on 15. Reuters.cibcwm.7% $4.0x F2012E FD EPS (ex.0M Shrs 89. First Solar. firstcall.Tharp@cibc. Daily Trading Vol. 5N Plus is on an aggressive organic growth trajectory. 2010 2011 2012 P/E 2010 2011 2012 Fully Diluted. expects to expand capacity by 92% by 2012 to 2.Mahesh@cibc.999% purity of its products.5nplus. 5N Plus has $56. Canada M5J 2S8 (416) 594-7000 Ian Tharp. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.ca Find CIBC research on Bloomberg. 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. unless otherwise stated. Excluding Unusuals EV/EBITDA $0..Institutional Equity Research Company Update January 17. Investors should consider this report as only a single factor in making their investment decision. cash) and $1.653 $329.50E 21.50 $7. produces and recycles high-purity metals and compounds for electronic and solar applications. Our price target of $8. the global low-cost producer of solar PV modules and 5N Plus' biggest customer.0M Nil / Nil May $2. We expect the company to continue to use these resources to pursue greenfield expansion and further acquisitions.09 in cash per share.9x 9. Toronto.O.com .21 3-5-Yr. Incorporated Shining Bright In The Land Of Cloudy Sky Market Weight 12-18 mo. CIBC World Markets Inc.com and ResearchCentral.com All figures in Canadian dollars.85 per Shr 12. Brookfield Place.09 per share) on its balance sheet and generates $15 million-$20 million annually in operating cash flow.

4 $2.2 ($8.1x $2.9x $323.0% 34.6x 21.9% 31.1x 18.6% 77.4 ($60.2x 13. ii) the semiconductor wafer market and iii) the germanium market.5x 1.4x 10.6x 10.1 $ 0.7) $100.1 $15.3% 21. Cd and Se and on related compounds such as CdTe and CdSe.9x $3.1 $4.8% 18.1% 27.6 $143.3 13.21 12.1x 2.8 $20.33 45. the above 70.3x 4.0% F2011E 23.9 $22.9x F2009A 18.5) ($1.1 $4.9 $7.49) -1.7 $0.9 F2009A $16.6% 44.45 45. 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: $7.9 $0.0 50% 40% 30% 20% 10% 0% 2007A 2008A 2009A 2010A 2011E 2012E ($4.19) F2011E $57.4 $35.2x F2009A $69.2 $28.5 ($52.3x F2012E 13.6% 40. The recent equity investment in Sylarus has further strengthens this effort. 5N Plus continues to be well capitalized .6) ($3.8 ($4.9) $7.ca sumeet.1% 113. Company reports and CIBC World Markets Inc.45 LTM EBITDA 10.5) Investment Thesis 5N Plus develops and produces high-purity metals and compounds for electronic applications and offers related recycling services.8x $339. Calculated as CFO less Capex Source: Bloomberg.0) ($13.1x 3. Source: Company reports and CIBC World Markets Inc. EBITDA & EBITDA margin $120.9 $ 0.0% 24.9 $25.8 $125.8 $31.1% SO $0.8) ($0.January 17.76 2011E P/E 14.3 9. 5N Plus products are utilized in a number of electronic applications including Thin-Film photovoltaics (PV) and the radiation detector market.4 11.1x 12.0x 3.4% 31.0% 142.0 F2012E $73. (VNP-TSX) Current Price: $7.7% 30.37 46.2 $28.1 $1. Management indicated that sales into these markets have the potential to double its current annual revenues within the next three years.8x 43.5 $21.6 $0.4% of total sales in Q2/F2011.11 2011E EBITDA 9.1% F2009A 0.0 $16. 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.7 ($63.4x F2012E $104.Its favorable cash position should allow for growth through Greenfield expansions or acquisitions.2% 50.2% 45.5x 38.00 0.3 $1.7% 76.4% in Q1/F2011 but below 85.2 $5.0% 20.0x 20.8 $35.7x -2.3 $2.17 F2009A $65.Shining Bright In The Land Of Cloudy Sky .7x 3.9 $23.7% 28.4x -37. We estimate these markets to be in excess of $380 mln in size with prospects of substantial future growth.0 $4.5 $112.4% 29.2 $0.3% 41.2 14.7x 2. 5N Plus focuses on specialty metals such as Te.0 $20. 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.0% 22.8 $8.3 $80.2 $2.mahesh@cibc.21 Rating: $8.9% 29.2% F2012E 17. Through the Firebird acquisition.5% 35.32) -2.0 $0.3x 12.6) ($8. Diluted (Ex.tharp@cibc.6 $167.9% F2009A 18.3 $2.2% Chart: Sales.1x 46.7x -2.14) -2.6 $8.7) ($6.2 ($16.27 F2010A $68.1x $3.2x 19.50 All Figures in CAD$ millions.ca LTM P/E 15.4 $0.3% 29.39) -2.1x 27.9% Dividend: Yield: F2010A 25.8x 17.2% in Q2/F2010.7% F2011E 0.3 $2.2x 2.3x 4.8x F2010A $70.7 $16.7x 15.1x $324.7% 23.0x 3.5) ($1.0 $0. Management is targeting three main markets: i) the CIGSbased thin film solar market.35 $60.1 F2011E $7.50 17.1) $12.0% 32. 31 . Sales to the solar industry represented 74.2x F2011E $81.6 F2010A $16.62 $40.6x $329.8 $32.5x 4.2% 45.4x 4.4 $4.6 $36.7% 31.0 Revenues EBITDA EBITDA Margin Calculated as CFO divided by Net Income. MBA 416-594-7296 416-594-7293 ian.To 18-Month Price Target: $8.9 $ 0.8% 27.7) ($1.0 $46.7x F2010A 12.9 $22.6x 3.2 ($68.8x $2. 2011 5N Plus Inc.2% 29.4% 30.1 F2012E $22.4% F2010A 1.8 ($6.7% 41.2) ($1.50 46.1x 4.0% F2012E 1.2 $3.0x F2011E 11.9 $ 0. CFA Sumeet Mahesh.7 $0.

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

While Angle has better-than-average exposure to multiple high-impact developments.ca Find CIBC research on Bloomberg. its valuation today is at 6.0 $110.0M $8.) 2009A 2010E 2011E EV/DACF 2009 2010 2011 $40.1X $167. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. 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 2008.4 $65. By 2012. with Angle having up to 195 potential new drilling locations.20 71.com and ResearchCentral.2x 7. Daily Trading Vol. 7. including potential conflicts of interest. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.5% $6.5M 60.ca Mike Woodward.Institutional Equity Research Company Update January 17. The emerging focus for the company has been the Viking light oil play in Harmattan. Canada M5J 2S8 (416) 594-7000 Adam Gill. The company's asset base is concentrated in the prolific west central Alberta area.25 $7.. 89% grp). We believe Angle will start to trade at a premium over the year with continued success in the Viking.2x grp) and at 96% of our Risked NAV (vs. CFA 1 (403) 216-3405 Adam. firstcall.9x 11. P. providing the company with a number of light oil and gas targets to develop. www. Box 500.90A $0.5x 5. CA 1 (403) 216-3404 Mike. Price Target NGL-TSX (1/12/11) Key Indices: None 17. 161 Bay Street.500 Boe/d today). production from this play could reach 5. 2011 Stock Rating: Oil & Gas .Woodward@cibc. Brookfield Place. including the Wilrich.200 Boe/d) and a number of gas resource plays. Toronto.93E $1.4M Shrs 290.71-$9.000 Boe/d of light oil and liquids-rich gas. CIBC World Markets does and seeks to do business with companies covered in its research reports.5X No Current Projected Total Return 52-week Range Shares Outstanding* Float Avg. As a result.1x Source: Reuters Company Description Angle Energy Inc.87 Angle Energy is an intermediate-sized E&P company (~13. as well as a solid ability to control cost. CIBC World Markets Inc.com . Market Weight 12-18 mo. Angle is also developing a Cardium light oil play (last well tested at over 1.2 9. Results from the initial five wells have been impressive.39E 8. which posted a marked increase in industry activity over 2010.angleenergy.7M Nil / Nil December 11.7x 8.35 per Shr 1. Looking Towards Continued Success In Emerging Central Alberta Viking Play $9. See "Important Disclosures" section at the end of this report for important required disclosures. where applicable.8x 2011E EV/DACF (vs.Intermediate & Junior Producers Sector Outperformer Sector Weighting: Angle Energy Inc.O.com/ All figures in Canadian dollars.cibcwm.000 $562. unless otherwise stated.5 7.7x Stock Price Performance DACF ($ mlns. Reuters.Gill@cibc. 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. Investors should consider this report as only a single factor in making their investment decision.

Source: Company reports and CIBC World Markets Inc.552A 7. 2010E 2011E $60.662 $26. Penn West. for recent acquisitions and equity issues).gill@cibc.5 $147.18A $0. EV/Boe . Exploration Flagship.2 59% 54% 11.290A 10. Encal.0x $106. Angle Energy President & CEO.528A 58% 2010E 8.2x $74. Encal Glen Richardson VP.95E 6% 2011E 14.P + P 3. 4) Excludes net acquisitions.24A $0.0x) Group Average Total Credit Facility .94 $3.3 Total Net Debt at Year-end ($38. 3. group at ~$9.472A 7.3) Total Debt / CF (Y/E Debt To Year CF) (1. Enterprise value to reserves (based on current reserves.0x Cash Flow Per Share CFPS (Diluted) Q1 Q2 Q3 Q4 Diluted Growth 2009A $0.P+P (incl.Announced completion of $60 million public offering of convertible debt Dec 16/10 . * Reserves are updated for acquisitions/divestitures. KPMG.Announced $25 million bough deal equity financing Oct 20/10 .3x 6. Key Assets: Key assets are the Viking drilling inventory of approximately 195 wells in the Harmattan area.87 12. Finance & C Lightning.645A 7. Crossfield.) Hedging Gains / (Losses) Royalties Operating Costs Operating Netback G&A Interest Cap Tax/Other Cash Flow Netback $61. 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. Amoco Matthew Mazuryk VP.99 $0.42 $3.25/Boe vs.08 $4.90A $1.87 71.0 $163.021A 13.55 $4. Our 12-18 month price target of $9. Enterprise Value Distribution (Current) / Frequency / Yield Average Daily Trading Volume (50 Day) .446A 7.600E 28% 62% -11% 2010E $0. AGS Capital Management Partner.55/Boe). 5) Equals cash distributions/dividends divided by cash flow.72 $0.25 Capitalization And Market Statistics Share Price Shares Outstanding 1.06 $8.2x.Announced operational and reserves update Management (Ownership: 9.8768 2009A $28.21) ($0.49) ($6. Penn West. FDC) Cash Basis Recycle Ratio (Incl FDC) 7.9 2.25) $23. Osler.1x target multiple to our Risked NAV of $8.4x 1. respectively). $44.09) ($0.2 Development Spending 5.31) ($0.48) $0.05) ($1.Looking Towards Continued Success In Emerging Central Alberta Viking Play .98 ($2.22 96% 89% December Sector Outperformer Adam Gill.026E 9.3x $75.25/share is based on a 1.Announced completion of $25 million flow-through financing Nov 2/10 . Avid Elizabeth More VP.4 $187. 7) Year operating netbacks divided by reported P+P FD&A cost.3 50. Crossfield. Land Yangarra.250E 48% 58% 31% 2011E 16.00 $20.003A 7.11 $85.Proven 3. Oil & Gas CEO.75 $0. 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.com Mike Woodward.61 $79.51 $77.00 ($7. 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.28E $0.04 1.20A $0.76 $0.Announced operational update and 13.49) $17.5 $563 $167 $729 n/a 290.25/share as Angle has best in class operating costs (2011E $6. Sproule Graham Cormack VP.TSX Only Relative Valuation $7.37 $3.20A $0.To 18. Market Capitalization Net Debt 2.9707 2010E $33.Released Q3/10 results Oct 21/10 . 6) Y/E P+P reserves divided by Q4 annualized production.5x 11. Shares O/S based on most recent quarterly balance (adjusted for recent acquisitions and equity issues).05) $17.48E 55% Commodity Assumptions WTI Oil (US$/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. Fekete Stuart Symon VP. FD&A Cost .00) $20. ATB and BMO 2009A Cash Flow from Operations $40.22/share versus the group average of 1. TriGas Heather Christie-Burns President & COOCrossfield. Net debt includes convertibles and is based on most recent quarterly balance (adj. CA: (403)-216-3404 / mike.24) ($4. Canoe Capital Notes: 1.7 (41%) Production Production (Boe/d) Q1 Q2 Q3 Q4 FY Growth % Gas Per-Share Growth 2009A 7. incl.Month Price Target: C$9. Engineering Harvest.591 Investment Thesis. E3 Energy.00 ($9.73 ($2. 2011 Angle Energy Inc (NGL .54 $4. Hoskin & Harcourt LLP CFO.76 $21.TSX) Current Price: C$7.5 $16.8x $54.085 Group 6.9700 2011E $39.2 27. Cardium and Ellerslie rights in Ferrier.2x 7. Relative Valuation: Angle is currently trading at a Price to Risked NAV ratio of 96% and a 2011E EV/DACF multiple of 6.8 $106.21A $0. Encal Heather Post Controller PwC. and its asset portfolio has exposure to both high impact natural gas (Falher/Wilrich) and oil (Viking/Cardium) development opportunities.37) ($6.00 $84.8x (versus the group averages of 89% and 7.7x 1.January 17. Ret.35 $0.0x. Core NAV Risked NAV P/Risked NAV P/Risked NAV (Group Average) Fiscal Year End NGL 8.com 2011E NGL 5.woodward@cibc. CFA: (403)-216-3405 / adam. 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. 34 .382 $36.000 2010E P/CF EV/DACF EV/Boe/d EV/Boe . FDC.37) ($1. including acquisitions).74 $14.27A $0. Brooklyn.36 ($7.24A $0.0 $150.99 $0. and tight gas assets at Edson.53 Group 9. Financial Flexibility ($MM) Bankers: CIBC. 2.5x $180.75 $4.2x 11.0 $73.03 ($2.Years 6. Operations E4 Energy.99 $66.45 Recent News Jan 6/11 .6%) Name Position Recent Positions Gregg Fischbuch CEO Brooklyn.Current Total Credit Facility Unutilized (% Of Capacity) .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 .7x 1.01) $14.500 Boe/d production goal Nov 10/10 .

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

4x 8. 2011 Stock Rating: Energy Equipment & Services Sector Outperformer Sector Weighting: Black Diamond Group Limited Accelerating Oil Sands Development Will Drive 2011 Performance $24. Toronto.3x 8. Brookfield Place. P.1x 6.cibcwm. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. In our view. at a slight premium to the average for its peer group. firstcall.08 / 4. CIBC World Markets Inc.blackdiamondlimited.72 Black Diamond is a leading provider of remote workforce accommodation and workspace solutions in the WCSB and regionally in the U. www.4A $49.33A $2. Market Weight 12-18 mo.6M Shrs NM $356. 14..Institutional Equity Research Company Update January 17. CFA 1 (403) 216-3400 Jeff.Morrison@cibc. where applicable.9E 11. See "Important Disclosures" section at the end of this report for important required disclosures. We have a Sector Outperformer rating on the company.4M 10. including potential conflicts of interest.66E $3.00 $21. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.com and ResearchCentral. unless otherwise stated. the company is well positioned to benefit from increased capital spending in the Canadian oil sands and from accelerating resource play development.com .S.O.Fetterly@cibc.ca Jon Morrison 1 (403) 216-3402 Jon. EPS Gr.) 2009 2010 2011 EV/EBITDA 2009 2010 2011 $35.6% $49.88 per Shr 9. Box 500.02 16.2x 2011E EPS and 6. In our view.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. 161 Bay Street. As a result.7E $66. In addition to the recent award of a long-term rental agreement for an 800person remote accommodation project with Suncor Energy. Canada M5J 2S8 (416) 594-7000 Jeff Fetterly.45E 9.3x 2011E CFPS.9% December $11. 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.0x Stock Price Performance Cash Flow Per Share 2009 2010 2011 P/CF 2009 2010 2011 $2. We expect oil sands capital investment to accelerate in the coming years.00-$22.S. Price Target BDI-TSX (1/12/11) Key Indices: None NM $16.com All figures in Canadian dollars. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2009 ROE (E) Net Debt Preferred Common Equity Convertible Available EBITDA ($ mlns.4x 2011E EV/EBITDA. we would not be surprised to see Black Diamond secure additional oil sands awards in coming months and expand its 2011 capital program. 10-106661 © 2010 CIBC World Markets does and seeks to do business with companies covered in its research reports. Reuters. Black Diamond is trading at 6.2x 6. Investors should consider this report as only a single factor in making their investment decision.7M Nil $195. Rate (E) 52-week Range Shares Outstanding Float Avg. Daily Trading Vol.0M No Current 3-5-Yr.ca Find CIBC research on Bloomberg.6M $1.

ca Jon Morrison | (403) 216 .2x 20.8x 9.3 $1.9 $25.8 $1.1 ($4.7 57% $12.4 $20. 37 .fetterly@cibc.6x 8. 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.8 47% $7.2x $10. 2011 Black Diamond Group (BDI-SO) Current Share Price: 12-18 Month Target Price: All figures in C$ 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.3 $66.4x 6. In our view.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 $1.06 2011E $1.6 $2.4 $10.2 $136.8 $2.26 Q3/09 $16. Workforce Accommodations.53 Key Operating Statistics (Current Quarter) Reported Q3/10 Total Revenue $32.25 1.4 $1. (2) Based on adjusted fully diluted figures.0 $40.05 2011E $170.66 $2.3% 2010E 8.1% 16.51 $33.94 1.5 $2.4 $1.morrison@cibc. CFA | (403) 216 .8 $18.3x 15.ca $21. The company has three business segments.4 $75.4 $0.8 $10.7 $10.0) $54.16 Gross Margin Gross Margin % EBITDA (1) EBITDA % Cash Flow From Operations (2) CFPS (fd) EPS (fd) (2) $31.40 1.7 2011E $101. the company offers several key attributes for oilfield services investing. Chart 1: Revenue By Geographic Segment (2010E) 2008 $73.8x $11.4 $20.Accelerating Oil Sands Development Will Drive 2011 Performance .1% 12.3x 14.4 $2.5 $9.9 $18.3 Investment Thesis 2008 8.8 $49.4 40% $11.72 $24. (2) a proven management team that has extensive experience operating within its business.58 $0.3x 13.6% 8.0) $30.2 $17.5 $17.1 $17.0 $35.0 $1.0 2010E $79.4 $14.1% 10.95 2010E $1.0 $19.5) $31.7 $49.0% 2009 9.37 2010E $136.7 $1.6 $20.8 64% $7. and Energy Services.8 ($1.67 $0.8x 13.0) $42. and (3) a robust and visible pipeline of growth opportunities.8 ($5.9 $12.8x 8.3 $10.1 $41.33 $2.14 % 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.8 $26.4) $19.08 2.7 $21.4 $2.2x 20.9x 15.6% Black Diamond has established itself as one of the leading remote accommodation providers.8 $4.6 ($0.0 $24.6 $170.23 2009 $0.7 $15. including: (1) exposure to a business and competitive landscape with attractive fundamentals.January 17. Space Rentals.2 $28.3400 | jeff.13 $46.6 $0.7 $3.45 $3.7 $73.6 $34.63 $2.43 $59.2x $12.0% 2011E 6.65 2009 $75.9 $13. Source: Company reports and CIBC World Markets Inc.6 $7.6 2009 $45.9 ($3.2x 9.6x $11.3402 | jon.00 Company Description 2008 $43.S.

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

Industry surveys continue to suggest favorable demand for the CSeries over the next few years. So far in Q4/F11.29 per Shr 15. BA has received orders for 15 business jets and 15 commercial aircraft.674 $9.5% C$4.. 2011 Stock Rating: Aerospace & Defense Sector Outperformer Sector Weighting: Bombardier Inc. BA is well positioned to benefit from this. is an internationally diversified manufacturer supplying aerospace and rail transportation equipment and services.763. Price Target BBD.com and ResearchCentral.446. Reuters. www.cibcwm. Specialized and Amphibious Aircraft. 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. CIBC World Markets Inc.50 for BA and C$1.Institutional Equity Research Company Update January 17. Brookfield Place. See "Important Disclosures" section at the end of this report for important required disclosures. CFA 1 (416) 594-7285 Michael. Services.0M Shrs 5. Toronto.com All figures in US dollars.00 C$5.0M 1.0M $347. Order activity at BA has picked up in recent weeks. BBD remains optimistic about order activity and execution of the CSeries launch.986:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports.37E $0. where applicable.991. As a result. Box 500. unless otherwise stated.481.459. Continued strength in emerging market economies (particularly China and the Middle East) is resulting in strong international demand for long-range business jets.ca Find CIBC research on Bloomberg.7% $1.9% January $2. EPS Gr. Customer Services and Flexjet/Skyjet) and Transportation (Rolling Stock.Willemse@cibc. C$2.41E 14.ca David Galison 1 (416) 956-3548 David.00 price target is based on C$3.00M $3.0M No Current 3-5-Yr. If the business jet operations can return to a book-to-bill ratio of 1:1 in Q1/F12. as the large business jet market represents approximately 80% of its business jet sales.O.39A $0.3x Stock Price Performance Source: Reuters Company Description Bombardier Inc.Galison@cibc.(C$0. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Bombardier Aircraft Orders Starting To Pick Up. Daily Trading Vol.2M C$0. Our C$7. Market Weight 12-18 mo.8x 13. firstcall.30 for BT.0x 14.bombardier. Commercial Aircraft. 161 Bay Street.25-C$6. investors should start to generate strong interest in the stock once again.39 BBD has two reportable manufacturing segments: Aerospace (Business Aircraft. including potential conflicts of interest.com .20 for the CSeries. Canada M5J 2S8 (416) 594-7000 Michael Willemse.728.B-TSX (1/12/11) Key Indices: Toronto 26. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. P. CSeries Risk Well Priced In C$7. Rate (E) 52-week Range Shares Outstanding Float Avg.10 / 1.24 1. Investors should consider this report as only a single factor in making their investment decision. Systems and Signaling for the rail public transit sector).

442 7.9 $4.0 $1.3% F2013 E 12.2 $0.8x 21.0% 5.00 Michael Willemse.41 1.2 ($1.2 $66.71 0.2x 69.2% 5.0x F2011 E $17.663.B-TSX) Current Price: 12.4% cyclical swings in the aerospace sector.73 Sector Outperformer C$5.0x 1. Systems and Signaling).7% 3. Customer Services and Flexjet/Skyjet) and 8.Consolidated Gross Profit EBITDA EBIT EBT Minority Interest Net Income . 17.269.4% 4.164.8% 3.8% 4.0 $1. 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 0.7x Transportation (Rolling Stock.0 $4.8x 57. EBITDA EBITDA Margin EBIT EBIT Margin 40 .2x 4.37 1. FD EPS.4 $0.9% 28.02 1.1 $2.39 1.8 ($1.92 0.2 $32.0 $346.020.7% 27.8x $3.0 $3.3) $137.26 F2010 A $4.4x F2010 A 18. albeit at a moderate rate.9 Enterprise Value: ($1. 2 Calculated as CFO less Capex Source: Bloomberg.5x 12.2 $845.9x $2.4% company’s traditional markets (North America and Europe) as well as through an increased focus on emerging markets such as Asia.098. CSeries Risk Well Priced In .2 $1.32 $3.7% 8.5x 13.171.1x 11.1x $2. Company reports and CIBC World Markets Inc.9 $5.5% 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 $16.7% Transportation has been somewhat sheltered from the economic downturn.175. *Bombardier Fiscal Years Ending January 31.773.0 ($767.162.405.00 29.5x 16.0) ($671. Aerospace (Business Aircraft.0 $1.743 F2011 E $1.0x Aircraft.5% 4. Services.743 F2012 E $1.460.9x F2010 A $19. Commercial 8.0x Aerospace: the major growth driver for regional jets beyond F2013 will be reflected by demand from the CSeries.8x 3.6x Deliveries (units) F2013 E Business Aircraft $21.galison@cibc.6% F2010 A 0.8 $0. 7.500 $1.442 9.7% 22.7% 4.5 $0.0 $346. Oper.054.9x 5. However.9x C$13.20 P/BV: FCF Yield: $2.Bombardier Aircraft Orders Starting To Pick Up.09 F2012 E $3.236.500 $2.January 17. Specialized and Amphibious Aircraft.2% 18.0 $347.621.7x 2.2 $8.2x 17.4x 1.175.6) EV/EBITDA: ($216.4% and demand profile.570.017.380.037.5% 23.ca david.3x C$13.0 $1.4 $2.9 $66.39 Rating: C$7.0x 0.0 $4.0 $346.0 $5.366.9 $1.7% 3.103.3x Bombardier has two reportable manufacturing segments.0 $9.7% 17.1% 5.2% 8. F2013 E 1.Aerospace *Current Backlog . Bombardier is actively seeking to grow by providing new products in the 4.4 $0. Fiscal 2011 = Calendar 2010 for comparative purposes.5 $0. 2011 Bombardier (BBD.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: $1.5 $3.15 F2011 E 15.To 18-Month Price Target: F2011E EBITDA 9. (Ex.3 $3.8x 8.7x 15.0 $176.9 $1.215.Cont. Growth for business jets beyond F2013 will likely benefit from the introduction of the F2013 E Learjet 85.336.1 $1.666.9 $1.2 $9.763.7% F2011 E 1.604.3% 6.842.8x 6.1% 3.6x 1.7 $1.304.304.7) ($365.0 $4.824.000 $500 $0 F2013 E Consolidated Chart Calculated as CFO divided by Net Income.442 10.565.596.willemse@cibc.6x 9. MBA 416-594-7285 416-956-3548 michael.5 $8.6% 8.3 $66.9852 F2012E EBITDA Investment Thesis 12-Jan-11 F2011E P/E 14.606.0 $712.6x 2. BA has been negatively impacted by 9.574.4x 7.0) $456.6x 1.5) $165.000 $1.1x 4.6 $5.0x 0.0% 5.7% F2012 E 1.5x 12.755 F2010 A $1. CFA David Galison.1 $0.751.1% F2012 E 17.0 $0.39 C$7.3) ($42. Management intends to maintain a diversified product strategy with a continued focus on the rail and aerospace markets.3x F2012 E $19.0 $655.0 $68.9% F2011 E 19.55 1. We expect that business jet demand will begin to recover in calendar 2011.ca All Figures in USD$ millions.7x F2012E P/E 13.5 $1.2 $994.5x 12.Transportation *US$ bln Valuation & Outlook Current Price: Price Target: 12-18 Mo Return: C$5.0% 16. Bombardier's diversification strategy has allowed 7.4% the company to offset weakness in one area with other segments that have a more stable growth 6. given that large-scale transit infrastructure is typically funded by the public sector.743 Commercial Aircraft Amphibious Aircraft * Current Backlog .0 $0.08 F2011 E $3.1x 0. 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 .0 $915.0 $0.1x $2.769.0 $698.0 $958.4% 21.4x C$13.10 0.0 $1.223.0 $3.40 F2012 E 15.7x 9.6) EV/Sales: $563.653.3 $0.980.

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

P.68/FD share in risked upside (C$20. including potential conflicts of interest.73 54. P. The Right Ingredients For Success Market Weight 12-18 mo.56E $1.021 $656.Geol. See "Important Disclosures" section at the end of this report for important required disclosures.ca Find CIBC research on Bloomberg. unless otherwise stated.(C$0.985:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports. Price Target CZE-TSX (1/12/11) Key Indices: TSXOilGas NM C$6..17/FD share.cibcwm.Institutional Equity Research Company Update January 17.70-C$12. which could be realized from 2011 exploration drilling.3M 29. CIBC World Markets Inc. EPS Gr.Macqueen@cibc.to 18-month price target of C$15.75 C$11.75.000 Bbls/d from two of its four Llanos Basin blocks.com and ResearchCentral.69E 7.300 Bbls/d from the Cravoviejo and Cachicamo blocks.Nielsen@cibc. Brookfield Place.85 per Shr NM $69. Middle Magdalena and Putumayo basins of Colombia.5x 7.90 3-5-Yr. Management expects that 2011 production will range from 7. Rate (E) 52-week Range Shares Outstanding Float Avg. Daily Trading Vol. is an independent oil and gas company engaged in the exploration. Canada M5J 2S8 (416) 594-7000 Ian Macqueen. Our base NAV estimate for CZE. 1 (403) 260-8675 Ian. CZE's operations are focused in the Llanos. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.0M Shrs 65.com . The company has a 77% average working interest in 766. Investors should consider this report as only a single factor in making their investment decision. is C$7.23/FD share unrisked).7x 6.ca Paul Nielsen 1 (403) 216-3403 Paul. It approved a 2011 capital investment budget of $130 million to $145 million. where applicable. including development of the producing assets. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Box 500.000 Bbls/d-7.1x Stock Price Performance Source: Reuters Company Description C&C Energia Ltd. development and production of oil resources in Colombia. 2010 2011 2012 P/CF 2010 2011 2012 $1. 2011 Stock Rating: Oil & Gas . Toronto.75. CZE has identified 30 prospects and leads and plans to drill 15 exploration wells in 2011. 161 Bay Street.53M Nil NM No Current C$15.ccenergialtd. CZE is relatively undervalued considering the magnitude of its upcoming exploration program.International E & P Sector Outperformer Sector Weighting: C&C Energia Ltd.0M Nil / Nil December $15.514 gross acres in nine E&P blocks and produces ~7. We have also included C$8.O. 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.com/ All figures in US dollars. www. Reuters. acquisition. bringing our price target to C$15. As a result. firstcall. In our view.87E $1.

51 $4.97 2011E 7.5x 0.021 C$0.6x 9.1x 2012E 7.5 0% 151 29% 167 2011E $120 $120 $102 $1.97 2012E 6.4x 43 .352 6.56 $32 $0.ca Net Asset Valuation . P. 2010E $79.9x 7.8 0% 117 nmf 130 2010E $81 $81 $78 $1.$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.10% C$15.50 $0.1x) (0.January 17.90 Price Target: C$15.Debt Adjusted Financial Statistics .40 P/NAVPS (Unrisked) 43% Target P/NAVPS (UnRisked) 57% CIBC Deck NYMEX WTI (US$/bbl) NYMEX Gas (US$/mcf) FX (US$/C$) Operating Statistics Colombian Natural Gas Production Natural Gas (mmcf/d before royalties) Colombian Oil Production Oil & Liquids (bbl/d before royalties) Production (mboe/d before royalties) Natural Gas % Production Per Share (boe/d per MM FD) Production Growth Per Share .$M Float .1x) 2010E 7.$mm Enterprise Value .87 $39 $0.50 $0.4% Financial Statistics And Current Valuation Share Price ($) Weighted Average Diluted Shares O/S Market Capitalization .% Free Cash Flow Debt Analysis Net Debt .Macqueen@cibc.90 50 C$593 (C$57) C$536 29 65.00 $4.97 2010E 5.$M Net Debt . (CZE-TSX-V) Current Price: C$11.842 5. Ph: (403) 216-3403 E-mail: Paul.64 $83 107% ($5) 2010E ($56) (0.2009 Total Risked Asset Value C$936 Total Risked NAVPS .4 0% 128 (16%) 141 2012E $111 $111 $92 $1.00 / 0.842 5. Ph: (403) 260-8675 E-mail: Ian.00 $4.Nielsen@cibc.2x 2011E $85.1x 9. 2011 C&C Energy Ltd.4x 6.0x) 2011E 6.The Right Ingredients For Success .7x) (0.Geol.541 7.541 7.0x 9.6x 2012E $85.352 6.10% C$27.3x 8.85 P/NAVPS (Risked) 75% Target P/NAVPS (Risked) 99% Total Unrisked Asset Value C$1.72 $145 143% ($43) 2011E ($13) (0.0% Associate: Paul Nielsen.ca 2010E C$11.7x 10.618 Total Unrisked NAVPS .69 $39 $0.37 $0.% Production Per Share (boe/d per MM FD) .5x 7.$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 .75 Target Return: 32.mm Average Trading Volume (50 Day) Annual Dividend / Yield Sector Outperformer Analyst: Ian Macqueen.72 $150 163% ($58) 2012E $45 0.5x 8.

0M Nil $5.15-$0.4x 15. Price Target CP-TSX (1/12/11) Key Indices: Toronto 12.cpr. Box 500. Daily Trading Vol.com . There were concerns in 2010 about increased regulatory oversight of the rail industry as shippers looked to reduce freight rates.81E $4. www. We estimate that every 1-point change in operating ratio is equivalent to $0.03E 17.7% $4.8M No Current $78.8M 168..04 per Shr 11. Rate (E) 52-week Range Shares Outstanding Float Avg.ca Kevin Chiang 1 (416) 594-7198 Kevin. CIBC World Markets does and seeks to do business with companies covered in its research reports.O.00 $66.6M Shrs 661. including potential conflicts of interest.2x Stock Price Performance Source: Reuters Company Description CP is one of two Canadian Class 1 railways and has a bulk freight orientation. 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.08 / 1. 2010 2011 2012 P/E 2010 2011 2012 $3.115 $11.Chiang@cibc.071. unless otherwise stated.20 in EPS.6% December $30.. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. CFA 1 (416) 956-6766 Jacob. we believe the company is well positioned to take advantage of the second legup in rail volumes as North American-centric cargo.Bout@cibc.58-$67. metallurgical coal.Institutional Equity Research Company Update January 17. EPS Gr. As a result. 161 Bay Street. forestry and automotive. Canada M5J 2S8 (416) 594-7000 Jacob Bout. such as building materials. Reuters.25 3-5-Yr.e. It is targeting an operating ratio in the low 70% range within the next three to five years (from high 70%s currently). potash) and the option value associated with its operating ratio.cibcwm. CP remains the railway with the best opportunity to improve its operating performance.41E $5. The diminishing risk of re-regulation in the rail industry bodes well for CP (and the railroad industry). P.ca All figures in Canadian dollars. It provides freight services across Canada from Montreal to Vancouver and into key centers in the US Midwest & Northeast. Investors should consider this report as only a single factor in making their investment decision.9M $1. CIBC World Markets Inc.0x 13.com and ResearchCentral. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.389.184. With ~20% of CP's 2011 capital program focused on growth initiatives. Brookfield Place. 2011 Stock Rating: Transportation Sector Outperformer Sector Weighting: Canadian Pacific Railway Limited Rail With Option Value Market Weight 12-18 mo. where applicable. continues to play catch-up. CP is our top pick given its leverage to bulk commodities (i.50 168. firstcall.ca Find CIBC research on Bloomberg.5% $49. See "Important Disclosures" section at the end of this report for important required disclosures. Toronto.

0x 17. and into Mexico.To 18-Month Price Target: C$78. CP transports bulk commodities.4% 12% 0.0x 10.4% 2012E 75.16 2012E $8. The company owns approximately 10.973 1.58 169 $11.25 $67.3x CP’s railway feeds directly into the U. An additional 4.2x 8.389 8. Northeast.0x 8.2% 12% 1. 2.459 5. CP-NYSE) Current Price: C$66. Pension: Pension expense will be headwind over the next three to four years.4% Coal Sulphur & Fertilizer 7% 10% Income Statement Sales EBITDA From Operations Earnings From Operations FD EPS From Operations 2010E 4. CP is targeting an operating ratio in the low 70% range. leased or operated under trackage rights.200 miles in the U. Potash: Risk of Canpotex diversifying potash contract post-2012 (CP currently the exclusive shipper for Canpotex).599 1. Agreements with other carriers extend its market reach east of Montreal in Canada.81 1. 2011 Canadian Pacific (CP-TSX.4x 32.92 0.bout@cibc. Deregulation Of Canadian Grain: Ability to increase “turn” – grain handlers on side.700 miles of track are owned jointly.21 1.S.882 852 $5.4x 2011E 15.15 -$1.800 miles of track.80 $4. Key Multiples CP P/E Peer P/E CP P/CF Peer P/CF CP EV/EBITDA Peer EV/EBITDA 2010E 17.January 17.ca Company Profile Share Price 52 Week High 52 Week Low Shares Outstanding (Mln) Market Capitalization ($ Bln) $66. through the U.6x 10.8x 9.73 45% 1.07 $2.41 2012E 5.300 miles are located in Western Canada.800 miles in the U.20 in EPS.S.01 37% 1.2x 7. 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 77.81 2011E 5.531 1. merchandise freight and intermodal traffic.25 12.9x 8. approximately 6.084 11.61 34% 1.03 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).1x 2012E 13.4% 2011E 76.9x 7.10-year agreement with Teck provides increased stability in the coal division. Midwest and 1.S.15-$0.072 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. Cash Flow CFPS FCFPS 2010E $3. 45 . 5. except per share data Sector Outperformer Jacob Bout (416) 956-6766 jacob. We estimate that every 1-point improvement in CP's operating ratio adds ~$0. Met Coal .50 $49.1x 14. DM&E: Expect EBITDA to double from $100 million to $200 million in five years.2 Canadian Pacific Railway Company (CP) is one of seven Class 1 North American railroads and the second largest in Canada.S.6x 7.00 All figures in $ millions.4x 8.619 645 $3.957 13.5x 7.26 2011E $8.314 1.Rail With Option Value .768 746 $4.07 Balance Sheet Cash + ST Investments Current Assets PP&E Total Assets Current Liabilities LT Debt Total Liabilities Shareholders' Equity Q3/10 268 1.200 miles in Eastern Canada.7x 21. Of the total mileage operated. from the East and West Coasts.080 4.1% 11% 1.

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

Institutional Equity Research Company Update January 17.7% December $7. Market Capitalization Distribution/Distr. P.Girard@cibc.6x 2011E AFFO.169. Rate 52-week Range Units Outstanding Float Avg. 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. Chartwell trades at 11. Box 500.5x 2011E FFO.59E $0.O. www.ca All figures in Canadian dollars. We expect Chartwell could achieve a recovery of as much as 200 basis points of occupancy in 2011. CFA 1 (416) 594-7399 Brad.3M Nil $605.6x.com .cibcwm. Overweight 12-18 mo. Toronto.50 per Unit $1. Reuters.0x-13. CIBC World Markets Inc.63E $0.ca Find CIBC research on Bloomberg. CFA 1 (416) 956-3643 Troy.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.S. and strong growth in FFO.UN-TSX (1/12/11) Key Indices: None NA $6. See "Important Disclosures" section at the end of this report for important required disclosures. CFA.S.61A $0.to 18-month price target is $9. Our 12. unless otherwise stated. Brookfield Place. with the remainder nursing care.8% cap rate on current (in our view depressed) NOI.6M 140. AFFO Gr.69A $0.Maclean@cibc.70E 11.730. following credit crisis-driven pressure on the lighter-care retirement operating fundamentals over the past few years. Canada M5J 2S8 (416) 594-7000 Troy MacLean.. Price Target CSH.ca Chris Girard. firstcall. increased investor demand and declining cap rates for seniors housing property. including potential conflicts of interest.com and ResearchCentral. As a result. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. CFA (416) 956-3807 Chris.09 Chartwell Seniors Housing REIT owns and operates almost 24. We rate Chartwell REIT Sector Outperformer.7x 13. implying a total return of 27%.Avery@cibc.000 $1. Brad Sturges. MRICS 1 (416) 594-8179 Alex. (~31%). Chartwell focuses primarily on the lighter-care formats of independent supportive living (57%) and assisted living (23%).3x 12. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Sturges@cibc.75 $8.54 / 6.65 144.chartwellreit. We expect recovering occupancy (for CSH and the broader industry).ca Alex Avery. Chartwell's current occupancy and income generation are below historical rates. Investors should consider this report as only a single factor in making their investment decision.2M Units 250. where applicable.16-$9.000 seniors housing suites across Canada (~69%) and the U. and trades at an implied 7.75 or 13. Daily Trading Vol. well below its large-cap Canadian REIT peer average of 14. 2011 Stock Rating: Real Estate Sector Outperformer Sector Weighting: Chartwell Seniors Housing REIT Leverage To Recovering Occupancy.7x 11.ca CIBC World Markets does and seeks to do business with companies covered in its research reports.9x Stock Price Performance AFFO Per Share 2009 2010 2011 P/AFFO 2009 2010 2011 $0.8x 10.74E 13. 161 Bay Street.3M Yes Current 3-5-Yr.8M $0. Discount Valuation Present Unique Appeal $9. AFFO and NAV could drive Chartwell units higher in 2011.

(1/12/2011): $8. concentrating on Ontario.756 $3.0% 65.0 $0.2% 93.0% Source: Company reports. The REIT is also considering acquisition growth in Canada moreso than in the U.8 * $124. 7. which should be substantially resolved in 2011. (~31%). CFA Brad Sturges.8 $0. Brent Binions . Future acquisitions are likely to be one-off.0 $0. VALUATION MULTIPLES REIT MANAGEMENT W. Discount Valuation Present Unique Appeal .717 $26.1%) (0. in-fill purchases. where occupancy has eroded.0% Quebec.00% COMPANY DESCRIPTION Chartwell Seniors Housing REIT owns and operates a large (~24.70 18. INVESTMENT THESIS: SECTOR OUTPERFORMER ATTRACTIVE FULLY-COVERED YIELD: CSH yields 6. 2011 Chartwell Seniors Housing REIT (CSH.69 (4.8x 2010E 13.S. ThomsonOne and CIBC World Markets Inc 48 . 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.chartwellreit.4% 93.74 17. 25. RESOLUTION OF LEGACY STRUCTURES: The REIT has made considerable progress working through legacy partnerships.0% BC.4%) 2009 30.7% 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 (52.09 Per Unit Current Yield: 6.6% FFO MULTIPLES Chartwell Seniors Housing REIT AFFO MULTIPLES Chartwell Seniors Housing REIT 2009A 13. Chartwell is winding down its joint-venture and mezzanine lending relationships with Spectrum.7x 2011E 10.7% 97.0 $64.9% Am ount $75.Leverage To Recovering Occupancy.3% Q3/09 1.3% Long-Term Care.194 $39.Chief Financial Officer Richard J.S. fully-covered by 2011E AFFO of $0.8%) Level of Care Independent Supportive Living.7x 55. which could drive considerable growth in FFO and AFFO into 2012 and beyond.25 Maturity May 1/12 COMPOSITION OF PORTFOLIO OF OWNED & LEASED SUITES (at Q3/10) Same-property Net Operating Income (NOI) U. Melior and others.UN-TSX) Stock Rating: Sector Outperformer Sector Weighting: Overweight Market Capitalization ($ mlns): $1. Quebec.7x 2010E 12.7% Q2 90.63 3.9% (6.6x 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 $64.1 $124.0 Conversion $16.498 $3.S.2% 2010 YTD 15.0% (52.5% ) 2011E $0.C.5% $0.9 $72.59 (14.2% 61.0% 90.5 LEVERAGE SUMMARY LEVERAGE SUMMARY EBITDA Interest Coverage: D/GBV (w/o convertible debt): D/GBV (with convertible debt): Q3/10 1.0% CONVERTIBLE DEBENTURES (at Q3/10) Interest Rate 5.8%) $0. 23.0x-13.9 $87. and the REIT may sell retirement homes in non-core markets. STRATEGY Chartwell is focusing on maximizing returns from its existing portfolio.000 suite) primarily retirement home focused seniors housing portfolio in both Canada (accounting for ~69% of suites) and the U. CFA Chris Girard. Noonan .2% 98.1% $0.0% Geographic Location Alberta.S. LTC NOI (US$) Cdn Retirement NOI (Cdn $) Cdn LTC NOI (Cdn $) Total NOI (Local $) Q3/10 $9.President and CEO Vlad Volodarski . 20.409 Q3/09 $10.).1% Change 50 bps -20 bps -20 bps USA. 39.2%) 2010E $0.61 (22. CFA Troy MacLean.3% 91.1% 93.7% 61.75 27% $7.0 2012 $175. rather than large portfolios of properties.5 Alex Avery.January 17.1%) 2.Chief Operating Officer www.0% SAME-PROPERTY OCCUPANCY Segment Canadian Retirement Canadian Long-Term Care U.9% 88. 5.75 Per Unit Unit Price .1% 89.ca EARNINGS SUMMARY Financial Metric Funds From Operations YoY Change Adjusted FFO YoY Change 2009A $0.5% Issue $14.18 month Price Target: $9.50 8% 8.744 Change (8.5X $9.0% 30. Operations Q3/10 89.1% 93.9x 2011E 11.401 $39.9 million of the 2011 convertible debentures will be redeemed in December 2010.4% Q3 90. 57.0 $250. 3.8 5.4%) 0.S.169. in the future engaging in development activity for its own account.9 * $0.3% $0.0% OCCUPANCY HISTORY (SAME-PROPERTY) Year 2010 2009 2008 Q1 90.3x 2009A 11.2% Q4 n/a 91.0% Assisted Living.0 $240.2% 0.1% n/a 15.74 13.9% Q3/09 89.4% 90.9% Series 2011 $115.0% Ontario.5 $75.70.571 $25. Alberta and B.4% Lim it 60.8x 54.7%. 26. CFA 12 .

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

where applicable.40-$11. Potential near-term catalysts include year-end results/reserve reporting (expected in early March). and Bluesky formations. Our price target of $13. www.Chaw@cibc. Montney. S&P/TSX Income Trust Composite Projected Total Return 36.cibcwm.7X Convertible Available Yes Cash Flow Per Share We believe shares of Daylight represent excellent value at current levels.ca $0. We would also highlight the possibility of Daylight striking a joint venture at Elmworth (AB) to develop its natural gas resource plays. the average of 1. Toronto.Kaliel@cibc.1x target multiple to our Risked NAV (vs. 2009 2010 2011 P/CF 2009 2010 2011 Current $1. Reuters. we would highlight Daylight as an excellent way to play natural gas defensively.0 2011 EV/DACF 6. See "Important Disclosures" section at the end of this report for important required disclosures. As a result.3%).1x).60E 9.ca Find CIBC research on Bloomberg.4x Stock Price Performance Cash Dividend Per Share 2009 2010 2011 Cash-on-Cash Yield 2009 2010 2011 Company Description Daylight Energy Ltd.1% Fiscal Year Ends December P+P RLI (years) 11. Canada M5J 2S8 (416) 594-7000 Jeff (Sizhuo) Shen 1 (403) 221-5047 jeff.ca Jeremy Kaliel 1 (403) 260-8657 Jeremy.com .68 Shares Outstanding 208.7x 5. unless otherwise stated.8% 7. Key assets include Daylight's Cardium tight oil at Pembina (AB) and its natural gas resource plays at Elmworth (AB). A&D Execution Key To Refocused Asset Base Market Weight 12-18 mo.5X Net Debt $665.3% 6. Price Target DAY-TSX (1/12/11) Key Indices: $13. P.50 $9.ca CIBC World Markets does and seeks to do business with companies covered in its research reports.46E $1. 2010. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. 10-105922 © 2010 Diana Chaw 1 (403) 216-8518 Diana.0% 52-week Range $8.Institutional Equity Research Company Update January 17.com and ResearchCentral.05 Monthly Avg. Cadomin.1% yield (vs.049. Investors should consider this report as only a single factor in making their investment decision.shen@cibc.O. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. firstcall.60 / 6.50/sh is based on a 1. which is prospective for the Nikanassin.000 Market Capitalization $2. 1.72E $0. Brookfield Place. converted from a trust to a dividend-paying corporation on May 7.9M Distr. averages of 94% and 9. Other notable assets include its Belly River light oil play at Pembina (AB).76A $1. Box 500.1x) with a 6. Frequency $0.1% Source: Reuters All figures in Canadian dollars. including potential conflicts of interest. In addition.240.82E 5. 161 Bay Street. Daily Trading Vol.1M Net Asset Value $12.96A $0.6x 6. 2011 Stock Rating: Oil & Gas Royalty Trusts/Dividend Corporations Sector Outperformer Sector Weighting: Daylight Energy Ltd. CIBC World Markets Inc.3M Dividend/Div Yield $0.daylightenergy. the average of 5. Daylight trades at a P/Risked NAV of 76% and a 2011E EV/DACF multiple of 6.95 per Shr Net Debt/CF 1.81 S&P/TSX Energy Trust.5x (vs.. as we believe that investors are currently paying for little or none of Daylight's significant natural gas resource potential.

9MM Market Cap.2P. Potential Catalysts: Potential near term catalysts include year-end results/reserve reporting (expected in early March).38E 41.000 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 .83 ($12.0 FD&A .1%) Position President & CEO VP.1x 8.500E $0.0x 1.4x11. 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$7.2x Financial Flexibility ($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.4 44.3% 2011E P/CF 5.37 $25.1x 10.052A 40. Relative Valuation: Daylight is currently trading at a Price to Risked NAV ratio of 76% and a 2011E EV/DACF multiple of 6. 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 2.4x 8.Chaw@cibc.04 ($13. Inflows4 200% 1. FDC on a cash basis.150E $1.ca SUMMARY & INVESTMENT THESIS Investment Thesis: We have a Sector Outperformer rating on Daylight Energy Ltd.68 Current Price PetroBakken Bonavista Vermilion Crescent Point Baytex Penn West CIBC Base Cmdty Prices US$50/bbl C$4.75 $1. We would also highlight the possibility of Daylight striking a joint venture at Elmworth (AB) to develop is natural gas resource plays.93 Daylight Group Average MANAGEMENT (Ownership: 3.37A $0.000 25. US$$90.2x 11. Cadomin.16) $0.38A 42.95/share (less forecast dividends of $0.3x 1.75 75% 0.000 30.5 175% 1.1 162. and C$$0.50 USD/Cdn (longterm).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.00/bbl (2011E). / Yield: $0. Key Assets: Key assets include Daylight's Cardium tight oil at Pembina (AB).Shen@cibc. and inflows versus outflows is calculated as total CAPEX and dividends (including the effect of DRIP) as a % of operating cash flow.01 ($2.1% (versus the group average of 5.0 91.75) $29.44) $23.000 15.6 / mthly / 6.1x 9.1x target multiple to our Risked NAV of $12. Source: Company reports and CIBC World Markets Ltd.2x Reserve Engineers: GLJ Petroleum Consultants Ltd.000 20.00) ($2. Operations VP.9x 9.20 $27. CFO Executive VP VP.1x P/Core NAV 158% 181% EV/ EV/2P P/Risked Production Reserves NAV ($/Boe/d) ($/Boe) 76% $64.85 $30. 3) Year operating netbacks divided by reported P+P FD&A cost.25) ($2. 2009A DEBT & OUTFLOWS VS. 2011 Daylight Energy Ltd.3%).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 $43.0x 0.Years 8.13) ($10.00/mcf Key Valuation Metrics vs. (DAY . Avg.50/share is based on a 1.78 94% $94.46E $1. Coverage Group (CIBC Estimates) Share Price $9.8x 8.33A 42.7x 8.4x 6. and its natural gas resource plays at Elmworth (AB) which is prospective for the Nikanassin. 6) Based on net capex including the effect of Alberta royalty credits. We believe shares of Daylight represent excellent value at current levels. PROPERTY OVERVIEW PRODUCTION & RESERVES GROWTH Production Growth (Per Share) Production (DAY) PPS Growth (DAY) PPS Growth (Avg) 45. Reserves (MMBoe) Proved Developed Producing 43.09 3 Cash Recycle Ratio 1.5x 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.A&D Execution Key To Refocused Asset Base .81 12 To 18 Month Price Target: C$13.5x 1 1.YOY) Reserves Growth (Per Share) 2P Reserves . Other notable assets include its and Belly River light oil play at Pembina (AB).35 USD/Cdn (2011E).97/mcf (long term) for AECO natural gas.273A $0.82E 42.5x 8.230.00/bbl (long term) for WTI crude oil. as we believe that investors are currently paying for little or none of Daylight's significant natural gas resource potential.59 $32.0x 8.00 $24.1% 5.000 40.000 10.5 Total Proved (1P) 77.17) ($9. incl.000 5. $$4.0x 10.93 2011E $50.MMboe (DAY) RPS Growth (DAY) RPS Growth (Avg) RELATIVE RISK & MAGNITUDE OF UNBOOKED PROSPECTS 30% 25% 20% 15% 10% 5% 0% -5% -10% (% change .60/share) versus the group average of 1. C$$0. INFLOWS D/CFDebt Metrics (DAY) D/CF (Group) VALUATION SUMMARY Outflows vs.85 USD/Cdn (2012E).760A $0.50/share.231 $16.1x. total payout is calculated as total CAPEX and dividends (excluding the effect of DRIP) as a % of operating cash flow.1x 9. incl. with a 12-18 month price target of $13. In addition we would highlight Daylight as excellent way to play natural gas defensively. 5) Our base commodity price assumptions are US$$85.ca Diana Chaw (403-216-8518) Diana.1x. Production NOTES 1) Shares O/S based on most recent quarterly balance (adjusted for recent acquisitions and equity issues). C$0.January 17. Montney.5 50% 0.50 Dividend (NTM) / Freq.0x Payout Ratios 4.97/mcf (2012E).174 $22.3 Proved + Probable (2P) 119. with FX of $4. Exploitation Position VP.Kaliel@cibc.: $2.00 ($2. Finance VP.5 1.050MM Average Trading Vol (50 day): 1. 2) Y/E P+P reserves divided by Q4 annualized production (Q4 2010E Production for 2010E).1% Shares O/S(1): $208.81 Expected Return 44% 21% 2011E Yield 6. Our 12-18 month price target of $13.5 0.00 $18.4x Pengrowth Vermilion Perpetual Bonterra 2.5 3.5x 9. MBA (403-260-8657) Jeremy. and US$$95.000 Sector Outperformer Jeremy Kaliel.5x 0 0.ca Jeff Shen (403-221-5047) Jeff.87 $1. Outflow s (incl DRIP) Basic Pay out Ratio 112% 108% 108%108% 76% 77% Daylight Baytex Average 12.0x 2 2.16) $0.0x 3 3.00/mcf Risked NAV Price Target 2005 2006 2007 2008 2009 2010E 2005 2006 2007 2008 2009 2010E 2011E EV/DACF (2011E) 6. respectively) while providing a current yield of 6.00/bbl (2012E). FDC $26.0x 2011E EV/DACF 6.450E 57% 51% 5 2009A +Net Acq.YOY) (Mmboe) (boe/d) 2006A 2007A 2008A Q1 Q2 Q3 Q4 FY % Gas Production (Boe/d) CFPS (Basic) 2010E 2010E 2011E 2011E 39. 51 Pengrowth Progress Daylight Enerplus Average Trilogy Peyto ARC NAL Bonterra Trilogy Peyto ARC NAL $25 .97/mcf (2011E).TSX) Current Price: C$9. and Bluesky formations.5 11.5 PDP % of Total Proved 56% 49% Total Proved % of P+P 65% 56% 2 2P Reserve Life .5x 2.25 150% 1 125% 100% 0. Business Services VP. 4) Basic payout ratio is calculated total dividends (excluding the effect of DRIP) paid as a % of operating cash flow.5x 7.5x (versus the group averages of 94% and 9. and $$5.3x 9.000 35.

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

6M $0. we believe it is a good time to buy EnCana. We believe all of these events are likely.ca Find CIBC research on Bloomberg.41 per Shr 4.00 $29.63 740.ca CIBC World Markets does and seeks to do business with companies covered in its research reports. Brookfield Place. Daily Trading Vol. 2) a growth strategy that balances capex and cash flow. 161 Bay Street. As the market regains confidence in ECA's strategy/asset quality. we believe EnCana has the capability to grow 10%+ per year.O. As a result. 3) a recovery in natural gas prices. where applicable.Lupick@cibc. EPS Gr.02-$35. NYSE NM $26.87E 6.cibcwm.still at the high end of Canadian comparables' growth rates and in line with U.0M No Current 3-5-Yr.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. Over the long term. and/or.ca $9.encana. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.4x 2011E EV/DACF. Canada M5J 2S8 (416) 594-7000 Kyle Balaux 1 (403) 216-3401 Kyle.80 / 2. Given the weak performance in 2010 and the stock's near-record-low valuation. Box 500.064. but given the still relatively weak outlook for natural gas in 2011 we expect growth to be more in the 7% range -. Reuters. Rate (E) 52-week Range Shares Outstanding Float Avg.Institutional Equity Research Company Update January 17. we need to see some combination of: 1) EnCana landing a large joint venture (reduces capex burden and depicts value).2x 4.67E 3.7% December $38.8x 5.2x Source: Reuters All figures in US dollars. Market Weight 12-18 mo. www. P. Investors should consider this report as only a single factor in making their investment decision. including potential conflicts of interest.885.2x 34. CFA 1 (403) 221-5700 Andrew. See "Important Disclosures" section at the end of this report for important required disclosures.21E $5. Toronto.844. ECA trades at only 77% of our risked NAV estimate and at 6.98E $0.933.0M Shrs 2.S. peers. For EnCana to outperform.com . a significant discount to its peers.com Andrew Potter. Nick Lupick 1 (403) 221-5049 Nick.Potter@cibc.64 EnCana was a big laggard in 2010 as weak gas fundamentals more than trumped the company's strong production growth.29A $6.0% $7.624 $21. Price Target ECA-NYSE (1/12/11) Key Indices: Toronto. 2011 Stock Rating: Oil & Gas . we believe there is substantial room for the valuation to re-rate to historical levels.62A $0.com and ResearchCentral.Large Cap Sector Outperformer Sector Weighting: EnCana Corporation JV & More Restrained Spending Should See ECA Regain Lost Ground In 2011 $36.4x 30.Balaux@cibc. 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. firstcall. CIBC World Markets Inc.0M 735.0M Nil $16.. unless otherwise stated.

793 659 95% 0% 12% 2012E $2.6x 6.983 686 84% 4% 2010E US$79.680 552 96% 0% 2011E US$85.5x 41.0x 14.9% $70.720 11.405 735 2.546 2009 $5.22 US$6.7x 4.88 2009 1.22 US$6.805 $2.22 US$6.736 $2.00 $0.00 $89.479 1.93 $1.99 $66.7x 54 .ca Nick Lupick.842 9.bbl/d SAGD Oil & Liquids Production .010 28.0x 16.00 $5.1x 14.00 $94.2x 2011E 6.3x 0.02 $75.844.January 17.300 0 25.5% Financial Statistics And Current Valuation Share Price ($) Weighted Average Diluted Shares O/S Market Capitalization .163 13.2x 2009 6.926 $6.$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.093) $0 $6.Lupick@cibc.6x 12.19 $1.459 $4.12 $69.288 1.4x 0.64 Price Target: $36.87 $4. NYD) Current Price: $29.42 $58.85 US$9.23 $0.21 $725 $0.99 US$8.Potter@cibc.805 0 41.02 $75.00 $84.878 732 95% 0% 11% 2013E $3.064 1.5x 5.bbl/d Oil & Liquids (bbl/d) Production .122 $0 $42 ($3) ($537) $0 $7.678 5.187 22.7x 24.55 $67.509 $6.057 82% $1. CFA Ph: (403) 221-5700 E-mail: Andrew.00 $0.611 90% $489 2012E $6.1x 15.2x 2014E 4.50 US$9.317 29.098 113% ($589) 2010E $6.97 2015E 2.50 US$9.4x 7.945 107.604 $3.97 2013E 1.5x 14.29 $3.JV & More Restrained Spending Should See ECA Regain Lost Ground In 2011 .37 $3.000 10.727 $4.23 US$5.607 0.99 US$9.729 $5.25 $4.2x 35.688 817 95% 0% 12% 2014E $4.67 $637 $0.820 $9. Sector Outperformer Analyst: Andrew Potter.% Financial Statistics .$M Float .$mm Enterprise Value .332 2.358 $6.2x 2013E 4.26 $1.2x 2010E 6.768 $0 $25 $1.00 Target Return: 21.774 19.921 12.97 2010E 1.3x 36.97 2014E 2.% Free Cash Flow Debt Analysis Net Debt .7% Kyle Balaux.00 $0.671 25.8x 0.62 $5.30 US$4. 2011 Encana (ECA-TSX.8x 0.94 $3.1x 2009 $4.75 $4.616 3.665 1.013 $2.237 $7.838 0 23.100 $6.00 $1.50 US$9. Ph: (403) 216-3401 E-mail: Kyle.40 US$4.471 66.303 2015E $5.9% $38.97 2011E 1.408 1.172 13.882 $2.695 $6.56 $6.67 $0.172 10.978 3.64 740 $21.178 $5.ca Net Asset Valuation .6x 2012E US$90.337 11.264 92% $555 2014E $6.00 $5.mmcf/d Natural Gas (MMcf/d) Canadian Oil & Liquids Production (excluding FC & CL) .2x 12. Ph: (403) 221-5049 E-mail: Nick.282 Total Risked NAVPS .319 1.428 $824 $36 ($49) ($3.51 $77.321 0.959 $2.386 15.624 $0.060 3.300 590 96% 0% 7% 2011E $1.07 $74.033 $8.$M Net Debt .0x 0.02 $75.746 $0 $42 ($3) ($481) $0 $6.53 P/NAVPS (Unrisked) 42% Target P/NAVPS (UnRisked) 51% 2009 US$61.9x 2010E $2.767 0 38.2x 31.20 $5.479 $28.US$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 .984 $9.97 2012E 1.98 $5.80 / 2.mm Average Trading Volume (50 Day) Annual Dividend / Yield Note: All company figures are in USD unless stated otherwise CIBC Deck NYMEX WTI (US$/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 .948 2.1x 4.070 $4.0x 4.7x 2015E US$95.7x 0.35 US$9.617 $2.45 $6.41 P/NAVPS (Risked) 77% 94% Target P/NAVPS (Risked) Total Unrisked Asset Value $51.927 $0 $42 ($3) ($434) $461 $5.541 0 33.9x 0.194 2.00 $94.2009 Total Risked Asset Value $28.bbl/d United States Oil & Liquids Production .067 84% $966 2013E $6.386 ($341) $332 $6.614 $3.0x 20.968 877 95% 0% 7% 2015E $4.61 US$3.909 $6.239 4.00 $94.4x 2014E US$95.4x 7.855 1.00 $0.854 3.360 $10.Balaux@cibc.183 $4.48 $4.338 $4.3x 2013E US$95.464 $0 $42 ($3) ($403) $668 $4.2x 2012E 5.438 78% $1.313 0.477 4.928 Total Unrisked NAVPS .3x 6.713 2.090 $1.MBoe/d Natural Gas % Oil Sands % Production Growth Per Share .00 $5.436 $0 $42 ($3) ($576) $0 $8.2x 2015E 3.ca 2010E $29.159 100% $18 2011E $7.00 $0.621 0 29.

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

Petrie@cibc. 161 Bay Street. Its expertise in front-store merchandising. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. P. we expect at least one sizeable national transaction. EPS Gr.9% $219.50 $9. Box 500.800 $2. Jean Coutu is also well positioned to participate in national drugstore consolidation. www.1M Shrs 425. We would be surprised if PJC was not an active participant.22 / 2. unless otherwise stated. 2011 Stock Rating: Merchandising Sector Outperformer Sector Weighting: Jean Coutu Group (PJC) Inc.com and ResearchCentral. Brookfield Place.4% equity stake in Rite Aid. and possibly a few Quebec deals as pharmacy economics make size and scale more critical attributes.O. 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. one of the largest pharmacy chains in the U.1M No Current $11.76E $0. its strong buying practices.A-TSX (1/12/11) Key Indices: None NM $7.30 3-5-Yr.4M 111.3x 12. Daily Trading Vol.88-$10. See "Important Disclosures" section at the end of this report for important required disclosures.Caicco@cibc. 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.6M $0. Investors should consider this report as only a single factor in making their investment decision.70A $0.ca Find CIBC research on Bloomberg. As a result. However. Rate (E) 52-week Range Shares Outstanding Float Avg. $0. and Quebec drug reforms will drag a bit on growth in the following year.jeancoutu.Balshin@cibc. Toronto.cibcwm.S. well-positioned drugstore chain with numerous opportunities for growth.com .com Perry Caicco 1 (416) 594-7279 Perry.24 233.2x Stock Price Performance Source: Reuters Company Description Jean Coutu is the largest drug retailer in Quebec and owns a 28. Canada M5J 2S8 (416) 594-7000 Eric Balshin 1 (416) 956-6108 Eric. where applicable. CFA 1 (416) 956-3278 Mark. CIBC World Markets Inc.2x 12. Earnings will be not much more than flat this year.8M Nil $558. Good Position Market Weight 12-18 mo. Over the next 12 months. Jean Coutu remains a relatively inexpensive.ca CIBC World Markets does and seeks to do business with companies covered in its research reports. Reuters. its narrow focus and its good franchisee relations might make Coutu a welcome addition to the national scene.ca All figures in Canadian dollars. Price Target PJC.4% February $2. 2010 2011 2012 P/E 2010 2011 2012 Excludes Rite Aid. Low Price. paying reasonable prices. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.170. Mark Petrie.76E 13.Institutional Equity Research Company Update January 17.. firstcall.39 per Shr 31. including potential conflicts of interest.

76 $ 233.637. Finance and Corp.15 398 2.0x 8.RAD) Shoppers US peers EV/EBITDA Jean Coutu (ex. PJC PJC.4x 7.2 0.0 $ 246.6% 2.1 62.70 $ 236.7x 0.3 8. CAD $ $ $ $ $ $ $ 9. CAD PJC shares o/s Net Debt (Cash) PJC Canada EV.9% $3.3 2.6 285. 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.5x 17.495.50 All figures in millions except per share data Sector Outperformer Perry Caicco (416-594-7279) Perry.33% 231.112 7.2 502. PJC is well-positioned to make sizable acquisitions outside of Quebec.4% 23.01 $155. CFA (416-956-3278) Mark.61% 7.647 6.6 1.3 6. Purchasing and Marketing EVP.337.6 343.22 228.4 19.9 277.14% 19.2 $ 131.9 165.5x 0.7x 9.08 $ 8.5x 14.3% 1.0 0.3 47.a share price.5% 1.4 111.2 13.7 2.2% 2.97% 12.0 0.2x 14.2 616.5 614.22 $ 227.6x -0.1 13.30 0.9x 0.2% 0.9 13. but the impact is one-time.395.08 8.30% 3.2 0.1 $ 2.8 $ 2.014 1.7 18.19% 248.9 13.20 $ 233.338.592.6% 1.01 (0.5 173.2x 12.8 2.765.4 348.370.30 12.1 277.99 Value/Share CAD 10.3x 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.4x 12.6 923.8% 1.34 Market Information Shares Outstanding Float Market Capitalization Net Debt Enterprise Value $ 233.7x 26.1 1.7% 0.6 74.53% 57. Over the next few months.3 7.38% 55.2 71.3 PJC is the dominant drugstore chain in Quebec.39% 17.6) $ 2.591.880.7% -1.1 5.0 177.2 0.2 7.6% 6. 2011 Jean Coutu Group Inc.95% 59. drug reimbursement policies in Quebec will trim the company's earnings.9 0.6 2.7 6.0 0.1 3.4x 8.1 62.93 Multiple Value 9.01% 217.6 $ 1.16 $160.99 $ 1.025.0% -3.26% 7.6 75.170.8% 579. Drug reform in Quebec continually weakens independents and puts PJC into a stronger position for acquisitions.892 9.F2012E NAV Q3/F11 Review Actual Estimate Q3/F10 CDN Operations $ EBITDA F2012E 277.4 341.282.27 424 3.7 244.6x 13x 11x 9x 7x 5x Rite Aid share price.05% 3.4 Management Jean Coutu Francois J.22% 7.9 953.390.8 76.7x 8.9% 17.355.January 17.5 66.2 $ 2.3x 14. Diluted $ 473. CAD PJC Canada EBITDA estimate PJC Canada EV/EBITDA $20 Current EV/Next 12m EBITDA 7.4 128. USD Current USD/CAD exchange rate Value of RAD per PJC share.6 219.298.8 0.99 1. RAD Loss # of Shares O/S. (PJC.9x Key Ratios TY NY ROE ROA After-Tax ROIC Current Ratio Net Debt/EBITDA Net Debt/Capital BV/Share FCF F2010 34.5x 8.6 $10 $5 $- Source: Company reports.9 7.58% 17. Coutu Andrew Belzile Alain Lafortune Normand Messier Chairman President and CEO EVP.9 179.8 7.7 3. New Store Development F2010 F2011e F2012e Total Store Count Estimated Sq.2% $2.74% PJC Canada price per share.76 228.30 $ 0.Balshin@cibc. Ft.7% 2.7 F2012e 26.7 268. in CAD F2012E 9.0x 13.0 $ $ $ $ $ CAD 2.0 0.3 2.A-TSX) Current Price: C$9.7 254.6 2.3% 2.490.4 636.0 0.ca Investment Thesis Comparable Analysis LY P/E ratio Jean Coutu (ex .85% 4.014 1.3 20.1 945.36 USD/CAD Coutu Calculator Next 12m PJC/A current share price.9% 2.8% 4.8% 15.583.9 699.053.543.1 5.2 1.9 13. in CAD EV/ Next 12m EBITDA.ca Mark Petrie.0% 0.2 74.2 5.08 12.8 2.4 123.2 $ (149.14% 14.4 244.9 511.6x 15.7x 7.8 6.0% 0.4 0.66) 11.5 8.4 F2011e 31.0x $ # of Shares 252.5 13.1 9.21 $ 233.41% 14.0 48.3x 14.389.2 7.3% Valuation .8% 6.5x 8.6 -4.0 678.8% 597.4 $ 7. Good Position .4% 0.5 7. CAD RAD current share price.0 5.5 43.0% 1.4 7.014 1.To 18-Month Price Target: C$11.6 677. Y/Y Sq.ca Eric Balshin (416-956-6108) Eric.05% 4.2 Share price 4.3% 16.1 8.2 1.1% -3.19 236.7 3.Petrie@cibc. RAD) Shoppers US peers 8.4 3.Low Price.2 149.4 -55.2 Price/Share Rite Aid stake Sub-Total Net (Debt) Cash Total Pre-Tax Realizable Value Note: Conversion to CAD$ at Current Spot Rate of: $ 0. Longer-term.0 0.Caicco@cibc.49 $157.6 6. Bloomberg and CIBC World Markets Inc.5% 22. 57 Forward EV/EBITDA $15 .6x 12. Ft Increase Avg Store Size (Thousands) 370 2.8% 611.7% 20.5% 6. Affairs EVP.5% $2.98% 3.7 62.7x 28.0 $ 269.741. Pro Doc) Other Revenue Total Revenue 6. and owns a growing generic drug manufacturing business.1 $ 2.1% 3.3 -0.

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

2M 67. The company's shares offer good leverage to gold price movements.1x 13. given KGI's control of most of the key ground where it operates.21A) $0.O.25-$16.000 oz. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. where applicable. annual level within two years.000 $1. including the high-grade South Mine Complex.53E NM 27. Long-term prospects for continued reserve growth are strong. We foresee prospects for expansion beyond these figures and delivery of production will be the key driver for share price performance.72 3-5-Yr. Toronto.Sultan@cibc.10E Current $22.klgold.com All figures in Canadian dollars. the build-out of production won't be constrained by ore availability. Rebuilding In A Classic High-grade Camp Overweight 12-18 mo.cibcwm. Canada M5J 2S8 (416) 594-7000 Barry Cooper 1 (416) 956-6787 Barry.4x Stock Price Performance Cash Flow per Share 2010 2011 2012 P/CF 2010 2011 2012 ($0.6M Nil / Nil April $2. with results that are reminiscent of the Red Lake mine. firstcall.003. 2011 Stock Rating: Precious Metals Sector Outperformer Sector Weighting: Kirkland Lake Gold Inc.ca Khaled Sultan 1 (416) 594-7297 Khaled. Drilling continues to intersect mineralization that is among the highest concentrations in the world. Daily Trading Vol. Production plans remain on track for growth to the 200. P.00 $14. which should vault KGI into intermediate producer status. With two sources of ore..ca Find CIBC research on Bloomberg. EPS Gr.com . Investors should consider this report as only a single factor in making their investment decision. unless otherwise stated.6x Source: Reuters Company Description Kirkland Lake Gold Inc. The company's flagship mine is the Macassa Mine located in Kirkland Lake. 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.30E $1.19 68. is an operating gold mining company located in Canada. See "Important Disclosures" section at the end of this report for important required disclosures.com and ResearchCentral. Brookfield Place. with the added prospect of finding high-grade mineralization where the hit ratio has been >80%.53A $1.4M No ($0.Cooper@cibc. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.Institutional Equity Research Company Update January 17. As a result.34 per Shr NM NA Nil $159. We think KGI trades at attractive multiples relative to its upside potential for growth in production as well as reserves. including potential conflicts of interest.8x 9. Price Target KGI-TSX (1/12/11) Key Indices: None NM $6.30A) $0. CIBC World Markets does and seeks to do business with companies covered in its research reports. CIBC World Markets Inc. Ontario. Box 500. Rate (E) 52-week Range Shares Outstanding Float Avg. www. 161 Bay Street. Reuters. 2010 2011 2012 P/E 2010 2011 2012 NM 49.0M Shrs 260.

2 x 4.6 x 1. We believe that its operations have a higher* Cash Adjusted NAV Multiples Using: US$1200/oz Gold Pricing And 5% Discount Rates than-normal degree of delivery on forecast projections made by the company.8 x NEG 54.8 x 172.US$ 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 0.2 x 40.1 x Risk Adjusted Discount P/NAV P/NAV P/NAV $1.4 x 1.00 Source: Company reports and CIBC World Markets Inc.2M oz * Proven & Probable Reserves Income Statement Gold Price Assumptions US$ Production (000s ounces) Cash Costs US$/oz Capital Expenditures Revenues Expenses Operating Expenses D.ca All figures in C$ million.8 x 19.2-1 M oz Small Producers < 0.7 x 16.0 x 2.53 68 F2012E $1.7 x 1. 60 .2 x 3.4 x 2.0 x 3. unless otherwise stated.1 (416) 956-6787 .6 x 4.64 2. Barry Cooper .05 0.2 x 37.397 2.2 x 2.3 x 24.300 3.0 x 48.53 68 F2013E $1.7 x 2.269 146 $631 1.7 x 18.0 x 1.0 x 1.3 x 49.000 $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 .9 x 2.3 x 3.225 93 $720 $58 $121 71 8 3 6 87 34 11 23 0.63 100% 100% 5% 577 50 671 8.4 x 2.6 x 2. The high-grade nature of the new South Mine Complex offers up some interesting Mid Cap Average ($2B-$10B) 1.6 x 2.5 x 2.30 -0.6 x 33.916 $9.5 x 1.0 x 21.US$ 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 0.83 0 3 3 667 0.7 x 14.0 x 1.9 x 3.5 x 2.4 x 2.2 x EV/2P* $683 $834 $495 $652 $882 $525 $557 $1.2 x 49.US$ 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 $1.221 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.Khaled.9 x 5% Discount P/NAV P/NAV $1.00 0.4 x 22. 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.Cooper@cibc.73 9.5 x 2.344 $9.7 x 2. Gold Px .7 x 16.200 Ownership Discount Rate US$ Millions 43 Per Share 0.016 $9.1 x in a few years.541 $9.0 x 28.Barry.300 1.7 x 26.6 x 20.1 (416) 594-7297 .000 $1.4 x 2.9 x 2. the North American Average 1.2-1 M oz Small Producers < 0.3 x 2.2M oz EV Statistics .Rebuilding In A Classic High-grade Camp .3 x realized the market will recognize that this camp is worthy of similar multiples afforded operations in Intermediate Producers 0.600 146 $647 $32 $246 99 16 4 6 125 121 40 80 1. We believe that as production is Large Cap Average > 1M oz 1.397 2.21 68 Production* Cash Costs** 2P M&I 146 631 1.000 2.2 x 1. 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 1.0 x 1.4 x 2.January 17.5 x 2. 2011 Kirkland Lake Gold KGI-TSX Date Share Price Rating Target January 12. With two major source areas for gold.5 x 1.5 x 15.2-1 M oz 1.6 x 13.6 x 2.8 x prospects for grade enhancement at the mine.9 x than when it operated for 65 years in the mid to late 1900s.ca Khaled Sultan .9 x 1.9 x 2.7 x 39.5 x mineralization that is among the highest concentrations in the world.742 $8. Gold price assumption in yr 2010 @ US$1225.72 Sector Outperformer CAD 22.4 x NEG 26. Reclamation S. KGI offers good leverage to gold price movements with Small Producers < 0. P/NAV Sensitivity Avg.2 x 1.100 $1.4 x 1.9 x the added prospect of finding high-grade mineralization.4 x 2. 2011 CAD 14.8 x 1.7 x 38.0 x 3.203 $5. The company continues to intersect gold Small Cap Average (<$2B) 1.10 1.D&A.200 $1.9 x build-out of production will not be constrained by stope availability once the expansions are complete Large Cap Average (>$10B) 1.085 ** Reserves and Resources F2010A $975 45 $1.8 x 109.0 x 9.2M oz 2.403 $8.5 x 73.Sultan@cibc.8 x 15.30 0.700 185 $625 $32 $332 122 20 5 6 153 178 60 118 1.5 x Red Lake where market multiples are high.2 x 27.5 x 2.9 x 2.8 x 3. yr 2011@ US$1600.47 0.8 x 18.269 2P: Modeled Proven & Probable Reserves (000s oz) M & I: Modeled Measured + Indicated Resources (000s oz 1.6 x 19.9 x 17.3 x 1.100 $1.9 x 1.9 x 501.400 $1.G&A Exploration Total Expenses Income Before Tax Income Taxes Net Income EPS CFPS Shares Outstanding P/NAV $1.8 x 2.3 x 2.05 9.21 63 $1.79 Source: Company reports and CIBC World Markets Inc.134 $34 $52 57 4 3 5 68 -17 0 -17 -0.4 x 2.

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

).1x).ca CIBC World Markets does and seeks to do business with companies covered in its research reports.0x 6.3%). the average of 5. and a strong balance sheet.7M Dividend/Div Yield $0.3% 52-week Range $9. the average of 1.12A $1.000 Market Capitalization $1. Investors should consider this report as only a single factor in making their investment decision. Potential near-term catalysts include 2011 guidance and an operational update (expected January 25. Key assets include NAL's Cardium tight oil at Garrington & Cochrane (southern AB) and its conventional Mississippian light oil play (southeast SK).15A $1.Kaliel@cibc. CIBC World Markets Inc. the average of 5.3%).1x target multiple to our Risked NAV (vs.0X Net Debt $496.5% yield (vs. P. its Wabamun oil asset (AB). the average of 1. Canada M5J 2S8 (416) 594-7000 Jeff (Sizhuo) Shen 1 (403) 221-5047 jeff.9M Net Asset Value $15.).1x 7. Supporting its yield is a total payout ratio of 107% (vs. Toronto.com and ResearchCentral.00/sh is based on a 1.nal. 450.Chaw@cibc. NAL is our top pick for yield-focused investors.04 per Shr Net Debt/CF 1. as well as year-end results/reserve reporting (expected March 9. where applicable. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.5% yield (vs. S&P/TSX Income Trust Composite Projected Total Return 29.. Other notable assets include its Viking light oil play at Provost/Irricana (AB).com . Daily Trading Vol. after mkt.0x (vs. Price Target NAE-TSX (1/12/11) Key Indices: $16. attractive Cardium acreage. As a result.ca Find CIBC research on Bloomberg.84 / 6. www. 2010. averages of 94% and 9. Box 500.15E 6.Institutional Equity Research Company Update January 17. 10-105922 © 2010 Diana Chaw 1 (403) 216-8518 Diana. 161 Bay Street.68-$14.5% Fiscal Year Ends December P+P RLI (years) 11. unless otherwise stated. 2009 2010 2011 P/CF 2009 2010 2011 Current $2. Reuters. We believe NAL's track record of operational execution bodes well for the upcoming update.5% Source: Reuters Company Description NAL Energy Corporation converted from a trust to a dividend-paying corporation on December 31.O.shen@cibc. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.ca All figures in Canadian dollars. firstcall.6% 8.87E $2.cibcwm. Frequency $0.6M Distr. and its Doig gas play (northeast BC).84E 8.0 2011 EV/DACF 7.9x). 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. NAL trades at discounted P/Risked NAV of 87% and a 2011E EV/DACF multiple of 7.95 Shares Outstanding 146. the average of 122%) and a 2011E D/CF ratio of 1. including potential conflicts of interest.1x Stock Price Performance Cash Distribution Per Unit 2009 2010 2011 Cash-on-Cash Yield 2009 2010 2011 $1. See "Important Disclosures" section at the end of this report for important required disclosures.00 $13.5x (vs.02 S&P/TSX Energy Trust.ca Jeremy Kaliel 1 (403) 260-8657 Jeremy.07 Monthly Avg.3% 6.08E $0. Brookfield Place.1x) with a 6.5X Convertible Available Yes Cash Flow Per Unit With a 6. after mkt.908. Our price target of $16.

and C$$0.4 Proved + Probable (2P) 103.00/bbl (2012E).7x 8. its Wabamun oil asset (AB). Steeves 2010E 2011E $269 $318 ($210) ($215) ($155) ($124) $23 $21 ($73) ($1) $38 $36 $234 $237 $195 $195 $467 $468 1. $$4.27) ($0. after mkt.41A 29.5 50% 0.5x 1 1.174 $22.9x 9.1x target multiple to our Risked NAV of $15.MMboe (NAE) RPS Growth (NAE) RPS Growth (Avg) 25% 20% 15% 10% 5% 0% -5% -10% -15% (% change . incl.2%) Position President & CEO VP Finance & CFO Position VP.5% 5.0 103.36 94% $94.86/share) versus the group average of 1.1x 9. Inflows4 175% 1.1x 8. Our 12-18 month price target of $16. and evidences its high-quality asset base.0x 1.00/share. and a strong balance sheet.75 75% 0.15E 31. with FX of $4. attractive Cardium acreage.000E $1.Kaliel@cibc.00/share is based on a 1. incl. C$0.2x Progress Peyto ARC Bonterra NAL Group Group Avg.January 17.20 $27.YOY) RELATIVE RISK & MAGNITUDE OF UNBOOKED PROSPECTS Q1 Q2 Q3 Q4 FY % Gas Production (Boe/d) CFPS (Basic) 2010E 2010E 2011E 2011E 30.ca Jeff Shen (403-221-5047) Jeff.00/bbl (long term) for WTI crude oil.0x 0.5x 3 3.84 / mthly / 6. C$$0.796E $0.). after mkt.473A 30.97/mcf (long term) for AECO natural gas. Coverage Group (CIBC Estimates) Share Price $13.000 0 2007A 2008A 2009A 2010E 2011E 20% 15% 10% 5% 0% -5% -10% -15% 120 105 90 75 60 45 30 15 0 2005A 2006A 2007A 2008A 2009A (% change .Cardium First Mover Our Top Higher-yielding Pick . US$$90.000E 52% 50% 5 2009A +Net Acq.35 USD/Cdn (2011E).Chaw@cibc.4 71.1x P/Core NAV 183% 181% EV/ EV/2P P/Risked Production Reserves NAV ($/Boe/d) ($/Boe) 87% $77.04/share (less forecast dividends of $0. McDougall John C.5% Shares O/S(1): 146.TSX) Current Price: C$13.68 PetroBakken Bonavista Penn West US$100/bbl C$7.120A $0. 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 12.00/mcf Key Valuation Metrics vs.50) ($2.2x 11. 3) Year operating netbacks divided by reported P+P FD&A cost. Source: Company reports and CIBC World Markets Ltd.).25 125% 1 100% 0.5 2. 5) Our base commodity price assumptions are US$$85. INFLOWS D/CF (NAE) VALUATION SUMMARY Outflows vs. Business Dev NOTES 1) Shares O/S based on most recent quarterly balance (adjusted for recent acquisitions and equity issues).5x $550 $235 (43%) Netback Analysis ($/Boe) Gross Revenue (net trans) Hedging Gains (Losses) Royalties Operating Costs Operating Netback G&A Interest Cap Tax/Other Cash Flow Netback Group avg Operating Netback Group avg Cash Flow Netback Name Marlon J.4x Financial Flexibility ($MM) Cash Flow from Operations 6 Capital Spending Dividends DRIP Surplus (Deficit) Working Capital Deficit Bank Debt Senior Notes/Other Debt Net Debt at Year-end Debt / CF (Y/E Debt.53A 29. and $$5.85 USD/Cdn (2012E).000 5.4x 6.0x 9. Reserves (MMBoe) Proved Developed Producing 60. 2011 NAL Energy Corp.YOY) Reserves Growth (Per Share) 2P Reserves .5 1. Operations & COO VP.00/bbl (2011E).8x 8.6MM Market Cap.0x 2. the average of 5.: $1.50 USD/Cdn (longterm).0x 2011E EV/DACF 7. Avg.16 ($9.5 150% 1. and its Doig gas play (northeast B.5x 7. with a 12-18 month price target of $16.00) $32. 6) Based on net capex including the effect of Alberta royalty credits.1x 8.610A $0.87 3 Cash Recycle Ratio 1. and inflows versus outflows is calculated as total CAPEX and dividends (including the effect of DRIP) as a % of operating cash flow. Key Assets: Key assets include NAL’s Cardium tight oil at Garrington & Cochrane (southern AB). MBA (403-260-8657) Jeremy.).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. (NAE .26) ($0.31) $28.1x 10.5x 8.000 25.Shen@cibc.000 10.28) ($11.13 ($1.5% (versus the group average of 5.00/mcf CIBC Base Cmdty Prices US$50/bbl C$4.48E 30. FDC $27. Koyanagi 2010E $45.000 Sector Outperformer Jeremy Kaliel.1x.0x 8.87E $2.43A $0. 4) Basic payout ratio is calculated total dividends (excluding the effect of DRIP) paid as a % of operating cash flow.ca Diana Chaw (403-216-8518) Diana. total payout is calculated as total CAPEX and dividends (excluding the effect of DRIP) as a % of operating cash flow.25 $1.00 Dividend (NTM) / Freq.5x 2 2.37 $25.3%).5 60.4x11.2 FD&A .1x 9.909MM Average Trading Vol (50 day): 450. FDC on a cash basis.000 30. as well as year-end results/reserve reporting (expected on Mar. Wiswell Keith A. We believe NAL’s track record of operational execution bodes well for the upcoming update. Potential Catalysts: Potential near term catalysts include 2011 guidance and an operational update (expected on Jan.93 NAL Group Average MANAGEMENT (Ownership: 0.02 12 To 18 Month Price Target: C$16. 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 6.000 15.5 Total Proved (1P) 71.0x (versus the group averages of 94% and 9. Relative Valuation: NAL is currently trading at a Price to Risked NAV ratio of 87% and a 2011E EV/DACF multiple of 7.3% 2011E P/CF 6.2x Reserve Engineers: McDaniel & Associates Consultants (MMboe (boe/d) DEBT & OUTFLOWS VS.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 3.93 2011E $51.52) $24.2P. respectively) while providing a current yield of 6. NAL is our top pick for yield focused investors. Other notable assets include its Viking light oil play at Provost/Irricana (AB).35) ($11.92 $2.0x 10.Years 11. PROPERTY OVERVIEW PRODUCTION & RESERVES GROWTH Production Growth (Per Share) Production (NAE) PPS Growth (NAE) PPS Growth (Avg) 35. With a 7% yield (vs.26 ($8.07 $32.C. 25th.5x 0 0.0 PDP % of Total Proved 85% 85% Total Proved % of P+P 69% 69% 2 2P Reserve Life .ca SUMMARY & INVESTMENT THESIS Investment Thesis: We have a Sector Outperformer rating on NAL Energy Corp.50) ($2.97/mcf (2012E).02 Expected Return 29% 21% 2011E Yield 6.97/mcf (2011E).3x 9.3%). 2) Y/E P+P reserves divided by Q4 annualized production (Q4 2010E Production for 2010E). / Yield: $0.55 $30. 9th.84 ($1.1x. and US$$95. Year CF) Total Credit Facility (Current) Facility Utilized (Current) Name Andrew B.000 20. 63 Pengrowth Vermilion Crescent Point Baytex Daylight Enerplus Average Trilogy Peyto ARC NAL . and its conventional Mississippian light oil play (southeast SK).5 0.611 $23.0 9.7x 1.00) $28.

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

11 / 0. Brookfield Place. 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. IPO conditions are improving with rising equity markets and there are many corporations and private equity firms flush with cash. the highest in our coverage universe.Holden@cibc. Toronto.708. firstcall.03E Current 3-5-Yr.com and ResearchCentral. www.4x Stock Price Performance Source: Reuters Company Description Founded in 1984.1x NM 30. unless otherwise stated. 2) the rebound in manufacturing activity takes hold. CIBC World Markets Inc. EPS Gr.25 price target implies a return to target of 28.0M No $0. CFA 1 (416) 956-6676 Kevin. The greatest risks to our call are a collapse in manufacturing activity and a lack of appetite for IPOs.ca Find CIBC research on Bloomberg.7M $0..02-$31. We are of the opinion that the discount to NAV should narrow as well. including potential conflicts of interest.cibcwm.onex.00M Nil $1.Cheng@cibc. Canada M5J 2S8 (416) 594-7000 Paul Holden.com . 2011 Stock Rating: Multi-Industry Sector Outperformer Sector Weighting: Onex Corporation Expecting NAV Growth To Accelerate And NAV Discount To Narrow $40.000 $3. where applicable.17E) $1. Reuters. Onex trades at a 12% discount to NAV. 3) additional fees are earned from new funds. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. Price Target OCX-TSX (1/12/11) Key Indices: Toronto NM $24. and. 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. Investors should consider this report as only a single factor in making their investment decision. 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 2010.4% December $35. Onex Corporation is one of North America's oldest and most successful private equity and alternative asset managers.4%. 34. Current trends suggest that those two factors are heading in the right direction for Onex. CIBC World Markets does and seeks to do business with companies covered in its research reports.3M Shrs 230. Daily Trading Vol. Market Weight 12-18 mo.540.O.92A ($0. See "Important Disclosures" section at the end of this report for important required disclosures. P.35 We believe that Onex's NAV growth will accelerate in 2011 as: 1) conditions for monetization opportunities become more attractive.65 118. As a result. 161 Bay Street.com All figures in Canadian dollars. Rate (E) 52-week Range Shares Outstanding Float Avg. CFA 1 (416) 594-8417 Paul.Institutional Equity Research Company Update January 17.ca Kevin Cheng.25 $31.59 per Shr NM $513.3M 89. 4) recently invested cash starts to earn a return. Box 500. Our $40. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.

2011 Onex Corp.35 C$40.97 0.87 2.0 470.70 0.9% Capital na 1655 3450 4300 574 318 875 Market Price Value (C$) 67.42 9. CFA (416-956-6676) Kevin.78 0.87 2. 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.447 97 97 211 80 513 4.2% C$31.59 31.25 Sector Outperformer Paul Holden.33 4.82 0.3 na na 5.67 2.68 4.61 2.0 8.61 1. Onex Corp is currently trading at a discount to NAV of 11.0 96.55 11.5 Type Of Industry Manufacturing Healthcare Aerospace Customer Support Services Other Industries Financial Services Mid-cap Opportunities Credit Securities Real Estate Other Cash And Near-Cash items Total Assets % of Total 15% 16% 10% 8% 7% 4% 5% 2% 2% 70% 18% 12% 100% EV EBITDA / EBITDA Cost (C$) 114.210 5.6 17.210 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 .34 $35.17 5.10 0. (OCX . Celestica Skilled Healthcare Group Inc.50 2.34 35.92 0.8 3.To 18.48 1.ca Kevin Cheng.77 3.69 0.44 0.January 17.948 749 513 4. having produced a 29% IRR since 1984.1 3.2% 2011E 38.6x 3.6 250 191 244 191 175 133 109 113 59 354 267 21 2.0 na na na 38.2% 2010A 35.41 6.78 0.0 na na 115. are better today than at any time in the past due to the growing stream of management fees and its share of carried interest in the company's largest fund to date.33 0. This ability to create value and grow NAV warrants a valuation that is at a premium to NAV.92 6.0 197.48 1. Onex Partners III.99 2.11 1. The management of third-party capital also produces management fees and the potential for carried interest.5 na na na 3. There is ample capital available for management to create value with 58% of NAV in private companies and another 12% in cash & equivalents.7x 5.Expecting NAV Growth To Accelerate And NAV Discount To Narrow .68 1. CFA (416-594-8417) Paul.5 340 619. Tropicana Las Vegas Tomkins Markup For Private Investments Center for Diagnostic Imaging Total Private Companies Onex Real Estate Partners Onex Credit Partners ONCAP II Other Investments Cash and Near-Cash Total NAV Current Price Premium / Discount to NAV Source: Company reports and CIBC World Markets Inc 2 Onex' Share 423 400 1400 800 252 277 255 NAV / share 2.8x 10. Investment Thesis Management has a long history of creating value. The company was founded in 1984 and has produced a 29% annual rate of return on its investments.47 NAV / share 2.26 0.82 0.82 24.42 190 170 39 48 765 Value at Owned 4.82 1.7% 2009A 32. Summary NAV By Industry Net Asset Value ($mlns) Per Share 611 682 434 340 301 175 211 97 97 2.9x 8.61 1.06 1.12 0.18 20.TSX) Current Price : 12.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.35 -11.59 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.8 8.0 8.Month Price Target: All figures in millions except per share data Net Asset Value NAV P/NAV Y/Y chg in NAV 2008A 31.3 4.37 0.12 318 22.54 1.holden@cibc.9% . The economics for Onex Corp.96 0.9 31.cheng@cibc.

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

investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Institutional Equity Research Company Update January 17.Geol.com and ResearchCentral.2x 8.60/FD share for the producing assets plus cash. 161 Bay Street. management has focused on developing the 4.7M Shrs 1. 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. Daily Trading Vol. Rate (E) 52-week Range Shares Outstanding Float Avg.1% December $43. EPS Gr. liabilities and dilutive proceeds and C$20.46/FD share unrisked) for prospects in Quifa.2 BBbls OOIP Rubiales field and will have increased gross production almost 12-fold to 170 MBbls/d by YE 2010.International E & P Sector Outperformer Sector Weighting: Pacific Rubiales Energy Corp.27E 14. www.02/FD share in risked upside (C$38.ca Paul Nielsen 1 (403) 216-3403 Paul. Additional discoveries on the offsetting Quifa block should provide another 30 MBbls/d of production by YE 2010.903 $9. is a Canadian-based company and producer of heavy oil and natural gas with producing assets in Colombia and exploration assets in Peru.Macqueen@cibc. We forecast 57 MBoe/d (after royalty) in 2010. Brookfield Place.com All figures in US dollars.5M 249.31-C$35. 2011 Stock Rating: Oil & Gas . In our view.151. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.pacificrubiales.(C$0.ca Find CIBC research on Bloomberg. 2010 2011 2012 P/CF 2010 2011 2012 $2. 1 (403) 260-8675 Ian.50 price target includes a base NAV estimate of C$23. growing to 92 MBoe/d in 2011 and 104 MBoe/d in 2012 based only on development of Rubiales and Quifa.5x Stock Price Performance Source: Reuters Company Description Pacific Rubiales Energy Corp.880.to 18-month price target of C$43. Canada M5J 2S8 (416) 594-7000 Ian Macqueen. where applicable.67 266. See "Important Disclosures" section at the end of this report for important required disclosures.O. Strong Growth Continues Market Weight 12-18 mo.38 / 1.62 per Shr NM $168.0M Nil NM Yes Current C$43. We expect the company's 2011 exploration drilling at Quifa. Price Target PRE-TSX (1/12/11) Key Indices: TSXOilGas NM C$13.Nielsen@cibc. firstcall.com . Investors should consider this report as only a single factor in making their investment decision. CPE-6 and La Creciente to fuel future growth.82 3-5-Yr.50. Reuters. P. Our C$43.cibcwm. As a result.0x 6.50 C$33. Toronto.29E $5. CIBC World Markets Inc. CPE-6 & Topoyaco that will be drilled in 2011..985:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports.6M C$0. including potential conflicts of interest. Since inception. PRE has a series of upcoming catalysts that should continue to drive the stock to new highs.42E $4. unless otherwise stated. Box 500. P.

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

935 799.76 $0.25 2.926 14.75 2012E $30.00 $2.282 1.678 12.0x 3.717 28.5x 1. and provides investors leverage to silver prices.55 $3.89 $4.600 7.69 Fiscal Year End December 31 COMPANY DESCRIPTION Pan American Silver Corp.995 Brian Quast.65 $2.cooper@cibc.12 $5.340 6.132 9.372 10.ca Barry Cooper.17 $0.01 $10. Production Total Cash Cost Per Silver Eq.164 1.00 $0.669 36. (416) 594-7261 robert.853 NAV/sh $1.35 Silvercorp Pan American Fortuna Silver Endeavour Silver Coeur d'Alene Hecla First Majestic 2010E $20.quast@cibc.00 $1.435 9.68 RESERVES AND RESOURCES (in thousands unless otherwise indicated) Tonnes 10.78 $2.687 Silver Wheaton Cash Debt Total PRICE ASSUMPTIONS 2009A Silver Gold Zinc Lead Copper US$/oz US$/oz US$/lb US$/lb US$/lb $14.94 $0.00 $1.00 $6.00 .20 $4.00 107 $388 $18 $83 $40 $0 $529 $449 $157 $4 $292 $2.585 $288 ($21) $2.47 $24.55 $2.315 30.hales@cibc. Gold Zinc Lead Copper Total Cash Costs Per Silver Per Silver Eq.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 $1.12 107 US$/oz US$/oz $5.90 $0.00 2010E 2011E 2012E 2013E Silver Eq.00 $1.146 3. Argentina.18 $2.678 1.551 17. (416) 956-6787 barry.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 0.5x 3.75 $3.41 $3.Navidad Permitting Is Key Catalyst In 2011 .969 2.5x 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) 64.96 $11.19) $26. The company is also well positioned to make future acquisitions.00 $4.80 $1.606 Silver Eq. 2011 Precious Metals PAN AMERICAN SILVER Stock Rating: Sector Outperformer Sector Weighting: Overweight 12-18 mo.69 $3.230 6. 2009A 23 38 101 98 31 14 2010E 25 37 91 99 31 11 2011E 24 36 104 103 33 16 2012E 25 35 90 105 34 17 2013E 31 43 76 111 50 19 INCOME STATEMENT (in US$ millions.388 770 3. and Bolivia.73 $9. (416) 956-3725 brian.817 37.457 11.75 $3.000 18.10 $8.935 632.75 $3.500 2.697 7.168 60.00 PAAS-NASDAQ (01/12/11): $37.35 $6.94 107 $395 $18 $78 $40 $0 $531 $483 $169 $5 $314 $2.76 $6.70 $974 $0. NET ASSET VALUE (in US$ millions. $12.976 14.842 1. 5% Discount Rate) PRODUCTION AND COSTS Production Silver Silver Eq. (ounces) 128.341 2. is a primary silver producer with operating assets in Mexico.64 87 $316 $15 $95 $34 -$5 $456 $190 $76 $3 $114 $1.87 50 40 30 20 10 0 2009A Silver Production Total Cash Cost Per Silver Oz.371 30.0x 2.0x 1. 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 $2.225 $0.009 77.700 $0.00 $10.70 ($0.08 $0.09 $2. Price Target: $52.G&A D.83 $0.ca Robert Hales. Source: Company reports and CIBC World Markets Inc 72 (US$/oz) $8.600 $0.836 39.388 8.765 30. Oz.200 10.786 2.34 $0.617 189 155.014 'mln oz 'mln oz '000 oz 'mln lbs 'mln lbs 'mln lbs ('mln ounces) $246 $13 $78 $10 $12 $359 $91 $28 $1 $70 $0.468 41.37 2011E $28. 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. Peru.045 13.44 $2.484 12.027 48.41 $5.January 17. except per share amounts.254 1.363 0 6.895 7.482 82.5x P/NAV ($20/oz Silver.90 $0.0x 0.096 21.284 33.660 3. except per share amounts) 2009A Revenues Expenses Operating Expenditures S.

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

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

Institutional Equity Research Company Update January 17. We have also included C$18.85-C$37. P. 161 Bay Street. where applicable.12 We recently initiated coverage of Petrominerales with a Sector Outperformer rating and now have a 12. Market Weight 12-18 mo. CIBC World Markets Inc. including potential conflicts of interest. 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.4x 10.50 / 1. 2011 Stock Rating: Oil & Gas .9M 100.00. 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 $5.43M Nil NM Yes Current 3-5-Yr.32/FD share. is C$23.cibcwm.com All figures in US dollars.International E & P Sector Outperformer Sector Weighting: Petrominerales Ltd.0M Shrs 601. which could drive the stock to new highs. Our base NAV estimate for PMG. www.. Canada M5J 2S8 (416) 594-7000 Ian Macqueen. After shooting extensive high-quality 3D seismic data on the surrounding lands. firstcall. PMG has a 45+ well exploration program in 2011 that is focused in some very prospective areas.O.57 102.Macqueen@cibc.com .06E $3.56E 7.Nielsen@cibc. Toronto.67/FD share unrisked).ca Paul Nielsen 1 (403) 216-3403 Paul. unless otherwise stated. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.com and ResearchCentral.6x Stock Price Performance Source: Reuters Company Description Petrominerales Ltd.70/FD share in risked upside (C$54. management has identified another 55 exploration prospects for future drilling.00. Investors should consider this report as only a single factor in making their investment decision.to 18-month price target of C$42. Sixteen of the best prospects will be drilled in 2011 (roughly 38% of the company's 2011 exploration program). Brookfield Place. P.ca Find CIBC research on Bloomberg. EPS Gr. Expecting Follow-up Success In A Big Exploration Year C$42. Both of these areas afford the company an opportunity to make a material discovery that could reshape its future.02 per Shr NM $517. Newer areas of exploration for 2011 include the deep foothills (two 25MMBbls+ prospects) and a burgeoning heavy oil trend (50 MMBbls+ prospects).070 $3. Reuters. which could be realized from 2011 exploration drilling.3% December $42. liabilities and dilutive proceeds. 1 (403) 260-8675 Ian. bringing our PT to C$42. As a result.1M C$0. Daily Trading Vol. 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. including producing assets plus cash.00 C$37.petrominerales. Price Target PMG-TSX (1/12/11) Key Indices: TSXOilGas NM C$19.0x 7. Rate (E) 52-week Range Shares Outstanding Float Avg.39E $5. Box 500.(C$0.985:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports.Geol.877.

273 26.4x 8.$M Net Debt .9x 2011E $85.EBITDA Total EBITDA Total Company Operating Cash Flow (US$mm) CFPS (Diluted) Operating Income Operating EPS (Diluted) Capital Expenditures Net Capex Net Capex/Cash Flow .Macqueen@cibc.3x 7.25 $630 $630 118% ($98) 2011E ($421) (0.02 88% P/NAVPS (Risked) Target P/NAVPS (Risked) 100% Total Unrisked Asset Value C$8.8x 6.2x) 2010E 5.$M Float .97 2010E 38.070 C$0.490 22.00 $4.98 P/NAVPS (Unrisked) 48% Target P/NAVPS (UnRisked) 54% CIBC Deck NYMEX WTI (US$/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 .12 Price Target: C$42. Ph: (403) 260-8675 E-mail: Ian.663 Total Unrisked NAVPS .Expecting Follow-up Success In A Big Exploration Year .00 Target Return: 14.877 (C$577) C$3.668 Total Risked NAVPS .Nielsen@cibc.12 104 C$3.0x) (0.6x 12.8x 13.0x 2009 13.4x 2012E $85.2009 Total Risked Asset Value C$4.64 $550 $550 147% ($176) 2012E ($193) (0.4x 7.% Free Cash Flow Debt Analysis Net Debt .301 100 601.490 22.99 $3.97 2011E 39.50 $0.3% Sector Outperformer Analyst: Ian Macqueen.199 39.7x 7.0 0% 373 73% 438 2010E $704 $704 $563 $5.37 $0.30 $482 $511 91% $52 2010E ($570) (1.00 $4.969 38.00 $298 $298 105% ($15) 2009 $63 0.ca Net Asset Valuation .1x 14. 2011 Petrominerales Ltd.88 2009 22.8x) (0.ca Associate: Paul Nielsen.$mm (except per share values) Colombia .Geol.Debt Adjusted Financial Statistics . 2009 $61.50 $0. P.5% Financial Statistics And Current Valuation Share Price ($) Weighted Average Diluted Shares O/S Market Capitalization .969 39.0x 78 . Ph: (403) 216-3403 E-mail: Paul.56 $173 $1.84 $100 $1.mm Average Trading Volume (50 Day) Annual Dividend / Yield 2010E C$37.% Production Per Share (boe/d per MM FD) .2x 0.8x 10.10% C$42.10% C$77.5x) (0.3 0% 252 (33%) 295 2012E $526 $526 $374 $3.3x 15.39 $240 $2.273 26.January 17.$mm Enterprise Value .94 $0.1x) 2011E 6.50 / 1.97 2012E 26.199 39.5x 10.0x 2010E $79.1x) 2012E 9.51 $4.0x 7. (PMG-TSX) Current Price: C$37.$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.06 $236 $2.2 0% 375 1% 441 2011E $720 $720 $532 $5.5 0% 215 nmf 253 2009 $297 $297 $284 $2.

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

27 per Shr NM $0. has quickly emerged as an Americas-focused developer and producer of copper. The company also holds the highest earnings and NAV leverage to copper.21E 24. Rate (E) 52-week Range Shares Outstanding Float Avg.8M Shrs 1.05E $4.com All figures in US dollars.240.O.9M 186.7x P/NAV. Reuters.05E 13.97 Quadra FNX is an operationally diverse large-cap copper miner with an attractive growth pipeline.989:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports.57 188. Canada M5J 2S8 (416) 594-7000 Alec Kodatsky 1 (416) 594-7284 Alec. Box 500. www.ca Terry K. which has future potential to add significant value. See "Important Disclosures" section at the end of this report for important required disclosures.1x 5.4M Nil / Nil December $11.3x Stock Price Performance Cash Flow Per Share 2009 2010 2011 P/CF 2009 2010 2011 $1. We expect QUX's copper production to increase ~40% Y/Y. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. including potential conflicts of interest.71A $1.128. with copper output set to more than double by 2015 as Sierra Gorda enters production.4x 4. 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 $0.330.quadramining. low political risk profile. in our coverage universe. As a result. EPS Gr. Price Target QUX-TSX (1/12/11) Key Indices: None NM C$8.Kodatsky@cibc.H. and strong balance sheet. our favored commodity exposure.024 $3. CFA 1 (416) 956-3287 Terry. firstcall. near-term operational risk. Market Weight 12-18 mo. where applicable. Strong Copper Production Growth To Overcome Weak 2010 Operating Performance C$25. P.0M Nil $2.Institutional Equity Research Company Update January 17. unless otherwise stated.98-C$18.7x 8. Toronto.2x Source: Reuters Company Description Quadra Mining Ltd. Brookfield Place. Daily Trading Vol..3M No Current 3-5-Yr. The Victoria project should continue to advance. Management has delivered on promised production growth.cibcwm.ca Find CIBC research on Bloomberg. Tsui.2x 13. 2011 Stock Rating: Metals & Minerals Sector Outperformer Sector Weighting: Quadra FNX Mining Ltd.com and ResearchCentral.com . 161 Bay Street.31E $3. 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. 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.(C$0. Investors should consider this report as only a single factor in making their investment decision. CIBC World Markets Inc.Tsui@cibc.25A $2. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. QUX is trading at about 0.50 C$16. albeit with above-average. due mainly to the addition of Morrison.

897 161 43 615 0 4.07 1.222 2.00 2.57 $1.99 2011E 4.02) 2009A 2010E 2011E 2012E 1.08) $0.4 $0.The start-up of Morrison and the ramp-up at Carlota and Franke should drive the company’s near-term metals production growth.16 4.Capital expenditures .9 35.12 0.basic ($mm) Cash ($mm) Working capital ($mm) Total debt ($mm) Common equity ($mm) Net debt/common equity (x) Year-end Dec.50 $2.25 2.1 2. 2009 Robinson Carlota Franke Sierra Gorda McCreedy Podolsky Levack Levack Footwall Operating Summary Robinson Copper Production (mlbs) Cash cost (US$/lb.tsui@cibc.4 22% 37% 0.768 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. we expect the company to continue to focus on exploration that can yield new discoveries while maintaining its current strong production growth profile.3 4.January 17.0 7.8 2.2 1.73 23.average Preferred equity .80 $1.94 3.4 4. The company's assets are located in politically stable. 81 .With a strong financial position.59 $1.5 32.06 (789) (1.419 2.500 0.05 4.0 13.8 13.090 3.12 0.ca Terry Tsui (416-956-3287) terry. Outlook .50 $1.71 1.904 ## 0 ## 0 ## ## ## 163 0 79 0 1.09 0.27 $1.39) 100% 0. 2011 Quadra FNX Mining Ltd.8 1.38 2012E 2.5 0.15 0.21 4.128 n/a 2010E 1.005 1.42% 0.05 3.7 56. Cu) Podolsky Copper Production (mlbs) Cash cost (US$/lb.60 2.62 2010E 942 378 267 202 205 1. Cu) Franke Copper Production (mlbs) Cash cost (US$/lb. a coppermolybdenum project in Chile.02) ($0.225) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ## 1.50 $0.50 -$1.00 Low: 8.11 $0.6) nm nm 0.5 1.4 142. Chairman Paul Blythe.0 15% 32% 0.82 ## 51 113 486 344 20 2009A 2010E 2011E 2012E ## 133 346 832 1.08% 2.205 3.62 1.1 55.9 $4.08 $0. (QUX) Current Price: $16.36 1.71% 1.3 1.980 C$ 1.9 60.66 4085 5. Cu) Levack Copper Production (mlbs) Cash cost (US$/lb.90 3.980 2.9 45.4 5.0 1.4 5.05 2222 13.17 $1.8 8.27 0.9 ($3.7 0.43 3.11 0.54 ## 2012E 1.17) 1.50 Reserves & Resources At Dec.0 $2.31 2.02 1.54 100% 7.23 $1.016 911 646 646 3.6 1.31 2. www.8 4.00 $1.25 25. CIBC Forecast Ni price (US$/lb) Cu price (US$/lb) C$ exchange rate (US$) 20 2009A ## ## ## 6.085 4.43 $2.24 0.57 1.268 ## 247 425 425 425 ## 86 221 221 221 ## 781 1. CEO Web Site 20 2009A ## ## ## ## ## ## 460 174 89 80 80 0. Investment Summary Quadra FNX has a strong metals production growth profile. a robust balance sheet and the potential to add low-risk incremental growth at below-average capital costs.42 0. 31.6 188.62 2.205 3.0 8.Strong Copper Production Growth To Overcome Weak 2010 Operating Performance .17 1.26% 2009A 2010E 2011E 2012E 100% 122.99 100% 2.972 3.66 ## 10 10 29 42 ## 80 205 301 351 0 0 0 0 0 ## 51 113 486 344 ## 0.ca Key Data 52-week trading range ($) Average daily trading volume (000) TSX index weight Shares outstanding (mm) Basic Fully diluted Public float Market capitalization .61 6.2 10.Development milestones of the Sierra Gorda project prefeasibility study.381 3.34 $1.23 $0.98 1.06 (1.902 2.53 1. In addition. as well as water rights acquisitions and permitting. Cu) Morrison Copper Production (mlbs) Cash cost (US$/lb.32 $0.0 66.7 1.33 0.30 2.897 4.9 $2.2 ## 1.54% 111.990 ## 1.808 1.84% 0.average Minority interest / other Other non-core Enterprise value 20 2009A ## ## ## 0.205 Q3 2010A 323 545 0 2.5 10.247 (133) 161 43 546 0 2.205 ## (133) (303) (789) (1.7 142.86 $1.26 0.02% 4.7 ## 169.96 $1.48 100% 13.31 2011E 10.38 2.904 Tonnes (mm) Grade Cu (%) Ni (%) Mo (%) 652. unless otherwise stated) Sector Outperformer Alec Kodatsky (416-594-7284) alec.131 581 345 598 903 3.247 2. except for Sierra Gorda (at 10%).97 2010E 2.kodatsky@cibc.00 ($4.00 $0.09% 188.00 0. .73) ($3.50 (All figures in US$.3 0.82 2011E 3.92% 8. Cu) Carlota Copper Production (mlbs) Cash cost (US$/lb.50 4.972 (303) 161 43 603 0 3.50 0.00 High: 18.801 965 840 591 591 2.05 ($0.00 $0.0 55.com Source: Company reports and CIBC World Markets Inc.00 -$0.06 1.54 0.952 200 200 (221) 270 567 4.2 0.0 2.2 65.19 0.9 13.247 2.416 1.1 54. Cu) "Total" Cost (US$/lb.83 3.98 1.09% 0. which we expect to emerge as the company's highest operating margin asset as it ramps up to full production 2011.00 25.00 Ni 0.0 0. which has the potential to double its current copper production once in operation in 2014.78 20.7 0.71 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. basic 0.14 0.62 5. Cu) Cash operating cost Royalties Total cash cost Non-cash cost (DDA) Total production cost G&A Interest cost Total cost MANAGEMENT Terry MacGibbon.88 2.29 2.00 0.93 1.225) 20 2009A 2010E 2011E 2012E ## 1.76 1.1 $0.7 155.2 0.05 3090 5.0 30.5 40.quadramining.00 Cu 0.8 141.39% 65.67% 6.9 0.8 1.12 0.129.25 1005 27.25 4.6 0.7 104.10 1.97 12-18 Months Target Price: C$25.0 2. 31 EPS ($) 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 0.95 0.57 Profile Quadra FNX is a growing copper producer with a significant nickel and precious metals production profile. 8% real discount rate on assets.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 .5 24.88 2010E 9.00 0.2 1.09% 1.98 2012E 2E 6.8 10% 11% 0.99 3. will likely represent the medium-term catalysts.41 2011E 1.00 0.11 0.65 0.19 100% 28.00 2012E Sensitivity to ±10% Change in Forecast Price EPS ($) 2011E NAVPS ($) 2012E -5% -8% -8% -29% 3% 133% 46% 34% 54% 47% 33% 33% $/Shr.0 5.8 3.5 116. the market is not fully pricing in the start-up of the Morrison project. CIBC price forecasts and after tax. .21 2012E 9.77 1.93 E Cu production (000 tonnes) 200 175 150 125 100 75 50 25 0 2009A 2010E 2011E Operating Metrics Ni production (000 tonnes) Cu production (000 tonnes) Cash cost (US$/lb Cu) Income Statement Revenue EBITDA EBIT EBT Reported income EPS ($) Cash Flow Earnings after tax + Depreciation & amortization + Deferred tax + Other Funds from operations Operating CFPS (ex minority) .04 0.94 Cash cost (US$/lb Cu) $2.8 $2. mining-friendly jurisdictions in North and South America.12 $0. the company possesses advanced development project Sierra Gorda.4 (13. Cu) McCreedy Copper Production (mlbs) Cash cost (US$/lb. In our view.Maintenance capex .03% 0.11 2.41 1.43 100% 25.

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

Market Weight 12-18 mo. including potential conflicts of interest. CIBC World Markets Inc.546 $20.B-TSX (1/12/11) Key Indices: S&P/TSX 60 16.1M $1. As a result. P.415. EPS Gr. Reuters.ca All figures in Canadian dollars.0M 484. and owns the Toronto Blue Jays of MLB.Lee@cibc.1% $30. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.0% $9.0M Yes Current 3-5-Yr..176.04E $3. cable & telecom space. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. We rate Rogers Sector Outperformer with a $44 price target. While Rogers' cable segment continues to show signs of maturity.ca Michaelc. Investors should consider this report as only a single factor in making their investment decision. at least in the short term. with a history of strong shareholder-friendly policies. either by way of traditional incumbents through IPTV offerings or over-the-top Internet offerings.715. See "Important Disclosures" section at the end of this report for important required disclosures.3x Stock Price Performance EBITDA ($ mlns. we continue to believe Rogers represents good value for investors.0M Nil $4.Rizzi@cibc.rogers.2 $4. firstcall.0 $4. Toronto. CFA 1 (416) 594-7454 1 (416) 594-7907 Bob.850. Rogers is well positioned to take on any TV competition. ensuring ARPU remains flat to slightly up by year-end. unless otherwise stated.3x 6.10E 14. a focus on cost cutting should result in EBITDA growth.00 $35. 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 $2.7% December $7.com .7 6. Price Target RCI.com and ResearchCentral. The company also has an extensive portfolio of media assets.5M Shrs 1. CFA Michael Lee.ca Robert Bek.19 per Shr 38. Box 500. CIBC World Markets does and seeks to do business with companies covered in its research reports. Daily Trading Vol. and expect to see continued growth in data in future quarters.Bek@cibc. 161 Bay Street.7x 6.64-$41.101. We continue to believe that wireless offers strong growth ahead despite competitive pressure. Valuation Too Attractive. 2011 Stock Rating: Telecommunications & Cable Services Sector Outperformer Sector Weighting: Rogers Communications Inc.ca Find CIBC research on Bloomberg.Institutional Equity Research Company Update January 17.6x 11. with current valuations well below historical levels. While we expect wireless competitive worries and pricing pressure to persist. Shareholder gains will come from solid free cash flow generation.1x Source: Reuters Company Description Rogers Communications Inc. Canada M5J 2S8 (416) 594-7000 Tony Rizzi 1 (416) 594-7299 Tony.15 Rogers is our top pick for 2011 in the media.64 574.cibcwm. Given our confidence in Rogers' execution.28 / 3. where applicable. Brookfield Place.O. Even With Wireless Concerns $44.) 2009A 2010E 2011E EV/EBITDA 2009A 2010E 2011E $4.2x 11.524. www.48A $3. as there remains little need for capital in the medium term. we remain bullish on the long-term fundamentals of wireless. Rate (E) 52-week Range Shares Outstanding Float Avg.125. owns the largest wireless operator and cable operator in Canada.

3% 17.0 909.0 1.8 671. 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. CFA (416-594-7907) Michaelc.6 2. we believe the prospects of attracting higher value subs will continue to drive strong data adoption capable of moderating the effect of voice erosion.0 2.2 671.5 251.046.7x 2011E 10.9% 15.0 4.Month Price Target: C$44. we expect both free cash flow and dividends to grow at a healthy clip.0 575.719.0 104.7 1. Rogers also has a broad portfolio of media assets (radio.5% 3.5% 29.0 0.150.0 6.2 9.160.6 3.597. providing an attractive entry point for investors looking to benefit from RCI's strong growth potential for both wireless and cable assets.2% y/y Growth 6.00 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.2x 6.0 4. we believe Rogers will continue to deliver strong value to its shareholders.0 1.0 1.0% EBITDA Media Key Operating Statistics (Last Reported Qtr.623.0% 2011E 12.ca 2010E 6.7x 2009A 14.B .0 1.Lee@cibc.5% 55.98 2008A 4.6% 35.0 $76.0 2.9x 6.2x 2010E 9.06% 22.6 4.035.9% 1.426.6% 38.250.495.247.335.786.0% 2. as well as a provider of cable television services.4x 2010E 11.ca Tony Rizzi (416-594-7299) Tony Rizzi@cibc.0 2.8% 35.8x 5.756.0 3. CFA (416-594-7454) Bob.0 995.0 4.292.0 647.415.730.756.Bek@cibc.8 748. internet broadband and telephony products.060.309.0x 6. engaged in wireless voice and data services.7% 67.6 624.48 2009A 4.56 2011E 6.461.0 6.9x 15. TV and publishing) and owns the Toronto Blue Jays MLB franchise.0 167.6 2.0 2.0 1.0 502.715.747.0 2.2 1.2 1.1x 6.850.980.8% 4.0 1.0 647.6x 6. (RCI.760.7x 9.0 1.8% 13.715.3x 17.0 3.9x 6. Chart 1: Revenues & EBITDA By Segment (2010E) 100% 75% 50% 25% 0% Revenues Wireless Cable 11.8 3.7 655.04 2010E 4.1x 29.To 18. RCI shares are trading at a material discount to our NAV.415.058. With current concerns over competition and AWS entrant risks overblown.0 3.6% 2.ca Michael Lee.79 1.850.7% 5. Investment Thesis While there remains concern over the effects of industry pricing pressure on wireless ARPU.7 1.300.29 2009A 6.0 1.15 12.5x 14.0 1.3x 7.7% 2008A 11.0 3.7 655.TSX) Sector Outperformer Robert Bek.0 1.0 Q3/10 8.0 2.157.4 9.060.Valuation Too Attractive.0 $74.0 125.8% 2.0 9.0 2.5% 3.8% 2010E 12.10 2011E 4. and with the implementation of a sizeable share buyback program.0 1.0 424.4x 18.7x 30.7 1.8% 32.73 Company Profile Rogers is a diversified Canadian communications company.January 17.366.566.0 575.6x 16.0% 38.625.8% 14.8% 2. 2011 Current Price : C$35.090.4% Source: Thomson.0x 18.4% 2009A 11.0 228.478.21% 28. Company reports and CIBC World Markets Inc.685.3% 2.002.2x 12.809.0 9. Given the heightened focus on cost efficiencies and margin expansion.0 2.0 1. Even With Wireless Concerns .2x 16. leading to improving ARPU trends in future quarters.673.8% 9.2% -25.0 1.881.1x 2011E 11.9x 19.0x 27.6 1.855.1x 25.731.0 1.605.625. 84 .021.779.700.) 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 8.0 3.98 1.91 Rogers Communications Inc.1% -2.1x 2009A 8.

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

unless otherwise stated. EPS Gr. meeting production/cost expectations the past three years. exploration activities at Mana yielded several new discoveries such as Wona SW.Chiu@cibc.300.ca All figures in US dollars. The company has one of the highest leverages to gold.6M 269. Semafo currently operates three gold mines in Burkina Faso. It has also delivered on expansion plans at its Mana plant.com .92E 27.com and ResearchCentral. firstcall. Brookfield Place.6x 11.(C$0.O.6M No Current 3-5-Yr.cibcwm. 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.50 C$11. 161 Bay Street.11E 19.23 Semafo has been a model of operational consistency. 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. Operating in French West Africa. Canada M5J 2S8 (416) 594-7000 Kevin Chiew 1 (416) 594-7457 Kevin. we believe management's French-Canadian background will remain an advantage for the company. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Operational Consistency Combined With Growth Upside C$18. Investors should consider this report as only a single factor in making their investment decision. Niger and Guinea.2x Source: Reuters Company Description Semafo Inc.semafo.ca Barry.000 $3. with Phase III completed ahead of schedule and under budget. including potential conflicts of interest.com Cosmos Chiu.2x 12. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.989:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports.083.3M Nil $465. Kona. Box 500. Daily Trading Vol.7x 10. Fofina and Fobiri.58E $0. Management will continue to focus on creating additional value with the development of the Mana underground. Overweight 12-18 mo. Price Target SMF-TSX (1/12/11) Key Indices: None NM C$4.Chiew@cibc.97E $1. In 2010.11-C$14.3x Stock Price Performance Cash Flow Per Share 2010 2011 2012 P/CF 2010 2011 2012 $0. P. 2011 Stock Rating: Precious Metals Sector Outperformer Sector Weighting: Semafo Inc.Institutional Equity Research Company Update January 17. As a result.42E $0.Cooper@cibc.5M Shrs 2.80E $0. Reuters. See "Important Disclosures" section at the end of this report for important required disclosures. Rate (E) 52-week Range Shares Outstanding Float Avg.000 tpd (bedrock). increasing throughput to 6. CIBC World Markets Inc.0x 14. Toronto. With growth upside at Mana and torque to higher gold prices at Samira Hill and Kiniero.8M Nil / Nil December $1.71 per Shr NM $19. where applicable. CFA Barry Cooper 1 (416) 594-7106 1 (416) 956-6787 Cosmos. www.. A feasibility study is scheduled for release Q1/11.44 271. is a Canadian-based mining company with gold production and exploration activities in West Africa. with a 10% increase in gold price generating an approximately 23% increase in CFPS.ca Find CIBC research on Bloomberg. Semafo benefits from a complementary portfolio of assets.

based on $1.OP Mana .20 1.201 18.11 272 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% 2.90 $0.31 $0.700 $0.20 1.5x 2.ca Barry Cooper.689 1.5x 0.600 $0.437 11.592 9.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 $1.80 1.95 2011E 2012E $1.0x 1. is a Canadian-based mining company with gold production and exploration activities in West Africa.200 gold) Mining Assets Mana .Operational Consistency Combined With Growth Upside .57 $0.18 $0.42 $0.ca Kevin Chiew. in addition to its expansion of Mana. 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. Reclamation S.745 8.0x 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 $0. 2011 Precious Metals SEMAFO INC.95 2012E INCOME STATEMENT 2009A (in US$ millions.97 272 NAV $157 $52 $13 $5 $226 $288 $38 $249 $0.D&A.07 $0. (416) 956-6787 barry.January 17.92 $1. Company reports and CIBC World Markets Inc.50 SMF-TSX (1/12/11): C$11.225 $0.23 Fiscal Year End December 31 COMPANY DESCRIPTION Semafo Inc.64 200 150 100 50 0 $450 $400 Total Cash Costs Source: Thomson. except per share amounts.chiu@cibc.86 2.50 $4. Stock Rating: Sector Outperformer Sector Weighting: Overweight 12-18 mo.362 $5. We believe Semafo is in a position to grow through acquisition in a West African region that remains highly fragmented.8x 2.665 687 909 530 1.02 Mana . Currently Semafo operates three gold mines in Burkina Faso.OP Mana . (416) 594-7457 kevin.485 12.8x Cash Adjusted NAV Multiples PRODUCTION AND COSTS Production Mana Samira Hill Kiniero Total Cash Costs Mana Samira Hill Kiniero 2009A 2010E 2011E 2012E 2013E '000 oz '000 oz '000 oz US$/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.00 $0.188 $2.3x 1.92 1.71 $0.chiew@cibc.88 2010E $1.80 $0. except per share and indicated amounts) Production (000s ounces) Cash Operating Costs (US$/oz) Cash Costs (US$/oz) Revenues Expenses Operating Expenses D.cooper@cibc. Price Target: C$18. Niger and Guinea.38 242 $132 $40 $13 $7 $192 $124 $11 $113 $0.80 1.65 2. With 100% of its revenue generated from gold and 100% of its production unhedged.58 272 $147 $48 $13 $5 $214 $235 $19 $216 $0.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. INVESTMENT THESIS Semafo has successfully commissioned three mines in West Africa.38 400 350 300 250 $550 .ca Tonnes Grade (g/t) Au Ounces Au 18.06 2.276 596 187 643 159 PRICE ASSUMPTIONS Gold Exchange Rate US$/oz US/CAD 2009A $974 $0. (416) 594-7106 cosmos.5x 1.377 1.08 $0.3x 2.01 3.569 33.95 2010E 2011E $1. 87 Cash Costs ($/oz) 5% 5% 5% 5% 90% 90% 80% 85% $565 $245 $156 $85 $137 $1.UG Samira Hill Kiniero 2013E $193 $19 $0 $174 $0.770 2. Semafo has one of the highest lev erages to gold for both its cash flow and NAV.8x 1.

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

com Andrew Potter.Institutional Equity Research Company Update January 17.318. Daily Trading Vol. See "Important Disclosures" section at the end of this report for important required disclosures. 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 . Price Target SU-TSX (1/12/11) Key Indices: Toronto. As a result. 2009 2010 2011 P/E 2009 2010 2011 $0.000 Bbls/d of oil sands capacity that it will continue to grow through 2015.45 1. where applicable.0M No Current $47.0% $8.9x 9. including potential conflicts of interest.270.50 $37.337. 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.91E $4.0M 1.7x Source: Reuters Company Description Suncor is an integrated oil company approximately 85% levered to oil. Investors should consider this report as only a single factor in making their investment decision. Suncor remains the king of the oil sands.573. CIBC World Markets Inc.ca Nick.562. EPS Gr.Lupick@cibc.cibcwm.0M Nil $37.43E $2. There are no major shareholders.0M Shrs 5.40 / 1. Rate (E) 52-week Range Shares Outstanding Float Avg. Suncor Is Still King Of The Oil Sands Market Weight 12-18 mo. Reuters.ca Find CIBC research on Bloomberg. respectively – its closest peers.8x 26.527 $59.60A $1.6M $0. We believe investor interest in oil sands continues to increase and that Suncor will re-emerge as a "go-to" oil sands investment. CFA Nick Lupick 1 (403) 221-5700 1 (403) 221-5049 Andrew. Toronto.37A $3.suncor. Suncor has 392..19 per Shr 9. P. 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. Suncor should be able to deliver this growth while generating $1 billion-$4 billion per year of free cash flow.6x 7.Balaux@cibc. Canada M5J 2S8 (416) 594-7000 Kyle Balaux 1 (403) 216-3401 Kyle. We believe that as Suncor continues to demonstrate improved reliability.O. Furthermore. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. www.92E 15.91-$39. unless otherwise stated. 161 Bay Street. With defined growth through 2020 and another 15 billion barrels to develop beyond that.Potter@cibc.3x 17.18E 62. CIBC World Markets does and seeks to do business with companies covered in its research reports.1% December $47.com and ResearchCentral. firstcall.com . Brookfield Place.Large Cap Sector Outperformer Sector Weighting: Suncor Energy Inc.105. its strong balance sheet and the outlook for significant free cash generation – all while the company continues to increase oil sands output. NYSE NM $29.3x Stock Price Performance Cash Flow per Share 2009 2010 2011 P/CF 2009 2010 2011 $2.68 3-5-Yr.ca All figures in Canadian dollars. the stock should be a strong performer. 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. Box 500.

00 $0.575 0.679 2010E $10.22 US$6.028 717. 2011 Suncor Energy Inc.2x 26.800 52.754 $361 $4.$M Net Debt .5x 11.8x 2016E US$95.523 1.27 $8.109) nm nm 2016E 4.270 ($261) $12.88 2010E 429 64 493 6.224 $1.257 53.bbl/d Libya Oil Production .% Production Per Share (Boe/d per MM FD) .boe/d East Coast Oil Production .5x 0.167 $3.80 P/NAVPS (Unrisked) 70% Target P/NAVPS (UnRisked) 88% CIBC Deck NYMEX WTI (US$/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 .875 59.116 $350 $4.23 $0.8x 0.1x 0.159 $1.875 59.mmcf/d Syria Natural Gas Production .00 $5.40 / 1.906 50.627 Total Risked NAVPS .423 $7. Ph: (403) 221-5049 E-mail: Nick.86 $8.3x 0.0x 17.256 1.751 $373 $4.764 $1.800 65.97 2015E 350 100 450 5.234 564 15% 56% 359 306 2010E $4.00 $5.$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.42 $58.650 62.054 ($256) $9.850 566.087 62% $5.7x 14.67 $0.000 42.868 76% $2.97 2014E 358 100 458 5.7x 11.$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 .728 $7.50 US$9.692 2011E $8.1x 5.985 $332 $4.4x 7.94 $3.758 783 10% 68% 498 12% 424 2014E $8.Lupick@cibc.9% $53.99 US$8.9x 13.bbl/d Oil & Liquids (bbl/d) Production .087 65% $2.92 $3.ca Nick Lupick.40 $5.141 $8.426 $1.00 $0.000 42.25 $4.00 $0.500 295.61 US$3.527 $0.07 $8.786 2013E $5.860 497.141 ($413) $8.00 $0.2x 6.073 502.50 US$9.560 $3.569 68.800 50.201 792 9% 69% 504 1% 429 2015E $8.97 2011E 380 90 470 5.546 $11.469 $1.800 64.000 52.3x 33.41 $6.Debt Adjsuted Financial Statistics .954 ($283) $16.976 700 11% 64% 445 9% 379 2013E $7.874 849 9% 72% 540 7% 460 2016E $10.256 $69.40 US$4.484 ($266) $13.4x 9.51 $77.$mm Enterprise Value .7x 2015E US$95. NYD) Current Price: $37.9x 6.0x 2014E 5.07 $74.02 $75.00 $94.5x 21.5x 6.18 $5.1x 2010E 10.198 $13.75 $4.mm Average Trading Volume (50 Day) Annual Dividend / Yield 2010E $37.00 $84.9% $47.000 39.900 623.23 US$5.390 358.000 59. (SU-TSX.000 38.337.881 59% $2.075 69% $3.03 $8.00 $94.200 40.Potter@cibc.585 35. Ph: (403) 216-3401 E-mail: Kyle.318 $10.779 $4.300 35.053 2016E ($4.22 US$6.500 59.% Free Cash Flow Debt Analysis Net Debt .125 59.1x 90 . CFA Ph: (403) 221-5700 E-mail: Andrew.860 2014E $3.922 88% $1.382 $4.00 $89.Balaux@cibc.7x 2012E US$85.638 76% $2.678 $11.736 0.282 408.43 $3.129 $6.MBoe/d Natural Gas % Oil Sands % Production Per Share (Boe/d per MM FD) Production Growth Per Share .340 0.511 Total Unrisked NAVPS .68 Price Target: $47.99 $66.513 ($277) $14.177 486.00 $5.99 US$9.bbl/d North Sea Oil Production .$M Float .19 P/NAVPS (Risked) 80% 101% Target P/NAVPS (Risked) Total Unrisked Asset Value $88.342 $1.91 $2.800 62.3x 2014E US$95.456 $2.9x 12.724 $7.7x 9.207 2012E $7.573 $59.02 $75.2009 Total Risked Asset Value $77.1x 9.000 706.85 US$9.1x 10.442 $4.50 US$9.429 $4.00 $94. 2010E US$61.41 $6.ca Net Asset Valuation .059 774.989 $361 $4.365 643 12% 62% 409 12% 349 2012E $6.1% Financial Statistics And Current Valuation Share Price ($) Weighted Average Diluted Shares O/S Market Capitalization .267 $10.2x 10.1x 2012E 6.972 556.37 $3.119 45.151 $393 $3.Suncor Is Still King Of The Oil Sands .509 58.562 5.313 283.22 US$6.January 17.071 575 14% 57% 366 2% 312 2011E $4.552 40.30 $7.4x 11.720 $7.1x 2011E 8.211 482.498 ($272) $14.800 57.12 $69.mmcf/d Natural Gas (MMcf/d) Western Canada Oil & Liquids Production .645 2015E $320 0.1% Sector Outperformer Analyst: Andrew Potter.000 34.874 $11.5x 2013E US$90.318 1.2x 8.97 2012E 372 90 462 5.02 $75.00 $0.50 Target Return: 26.ca Kyle Balaux.30 US$4.951 $308 $3.255 $1.0x 2015E 4.6x 0.69 $8.112 $3.55 $67.044 50.288 $6.1x 2011E US$79.22 $6.bbl/d Oil Sands Production .1x 2013E 5.97 2013E 365 90 455 5.35 US$9.97 2016E 343 100 443 4.097 $1.68 1.bbl/d Synthetic Crude Oilsands Production .0x 0.

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

O.. including potential conflicts of interest. 161 Bay Street.184.cibcwm.Rizvanovic@cibc.ca All figures in Canadian dollars. We rate TD SO.com and ResearchCentral. Box 500. P.14E 12.Institutional Equity Research Company Update January 17. deposit base.506.908.44 / 3. TD trades at a 2% premium on F11 earnings relative to peers compared with an 8% pre-crisis 10-yr average premium. $5.8% $12.9x 11. See "Important Disclosures" section at the end of this report for important required disclosures. Toronto. retail franchises will help drive outperformance in F2011. TD recently announced the US$6. firstcall.00 $74.S. Reuters. management noted it will be providing guidance on the dividend in the upcoming quarter. EPS Gr.5M 878. CIBC World Markets Inc. where applicable. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.ca CIBC World Markets does and seeks to do business with companies covered in its research reports. TD's payout ratio currently falls in the middle of its target range (based on our F2011 estimates). 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. The purchase complements TD's existing U.tdbank. platform by creating a vehicle to deploy its large U.00M $38.3% October $44.com .7M $2.0M $3. Given its strategic potential and tolerable financial implications.20 In what is expected to remain a challenging economic environment. and offers a full array of financial products and services to over 18 million customers worldwide.Grauman@cibc.ca Robert Sedran. it trades at a 21% discount to its peers. Price Target TD-TSX (1/12/11) Key Indices: TSXFinSv 10.Sedran@cibc.ca Find CIBC research on Bloomberg.77A $6. Our top pick in the sector is TD Bank. Daily Trading Vol. CFA (416) 594-7283 Mike. While TD left its dividend unchanged in Q4/F10. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. Brookfield Place. As a result.000 $65. On a P/B basis.25-$77.121.0M No Current 3-5-Yr.36E $7. Market Weight 12-18 mo.0% $61. Investors should consider this report as only a single factor in making their investment decision. CFA 1 (416) 956-3723 Meny. Mehmed Rizvanovic. Canada M5J 2S8 (416) 594-7000 Meny Grauman.29 per Shr 13. www. 2011 Stock Rating: Banks Sector Outperformer Sector Weighting: Toronto-Dominion Bank Revenue Growth To Drive Outperformance In F2011 $84.394.S.5M Shrs 2. we believe revenue growth will be a key success factor for the Canadian banks. compared with a historical average discount of 5%. implying an increase could be feasible in the near term.7x 10.3 billion acquisition of auto lender Chrysler Financial. Rate (E) 52-week Range Shares Outstanding Float Avg. unless otherwise stated. as we expect strength from its Canadian and U. we view the deal favorably. CFA 1 (416) 594-7874 Robert. Valuation also supports a positive view on the shares.4x Stock Price Performance Source: Reuters Company Description TD Bank is one of Canada's leading financial institutions.S.37 878.

P&C Banking F2011E 11.83% F2009A 2.233 299.2% 2.39% 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% 0.808 5.509 87. CFA (416-594-7874) Robert.46% F2012E $7.4x 10.3% F2012E 13.To 18-Month Price Target: C$84.155 3.200 (9%) 12.4% 3. (3) Ex cludes gains/(losses) on inv estment securities.7x 2.7x 11.ca Meny Grauman.6x Q4-10 1.3% (1.168 F2011E 74.8% 59.2% 11.833 88.6% 4.781 100.056 3.738 318. repos).3%) 1.612 7.7% 61.36 10.063 (5.750 91.January 17.4% 3.072 272.1% 9.5% ) F2010A 0.3% 189.962 8.322 255.1% F2011E 0.Sedran@cibc.016 93% 11.2% 3.Rizvanovic@cibc.9% 13.456 677 2.311 558 2. 93 .248 (15.416 6. CFA (416-594-7283) Mike.14 12.8% 1.3% F2012E 0.1% 13.685 (16%) 12.3% F2009A 0.086 F2011E $6.9% F2011E 12.037 8.50 1.159 F2012E 79.7%) 1.249 129.770 291. TD remains rated Sector Outperformer.320 (22%) 12. one-time items) KEY MULTIPLES F2009A F2010A P/E Multiple 13.669 18.329 7.507 109.857 94.7% 60.78% F2009A 10.3% 14.699 3.4% 58.S.00 All Figures in $ millions. CFA (416-594-3723) Meny.Revenue Growth To Drive Outperformance In F2011 .ca Mike Rizvanovic.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.0% 1.757 280. 2011 Toronto-Dominion Bank (TD-TSX) Current Price: C$74.932 309.8% 4.585 F2009A 65.442 F2009A Wealth Management F2010A Wholesale Banking Q4-10 Corporate U.254 23.270 F2012E 12.496 9.77 4.6% 2.587 75% 20% 0.3% 9.4% 3.287 1.68% F2010A 10. 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.3% 229.6x F2012E 10.639 (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.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.1x F2009A $5.63% Q4-10 3.665 102. (2) Total ACLs as a % of GILs.3% F2010A 12.0% 215.ca F2011E 11.20 12.8% 11. 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 $5.7% 199.5x 12.5% 13.6% 3. except per share data (excl.9% 3. 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.Grauman@cibc.410 121.8% 12.910 F2010A 71.3% F2009A 11.946 265.

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

CIBC World Markets Inc. may also publish research reports on the issuers discussed herein that may communicate different or contradictory opinions. The issuers or securities discussed in these sections are not continuously followed by the technical analyst. 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. representative to request copies of relevant equity research reports published by fundamental analysts for further information. the opinions expressed herein. 95 . Investors should not expect continuing analysis or additional reports from the technical analyst relating to the securities discussed in this report. However. price resistance and/or support. We make no guarantees as to the accuracy. CIBC World Markets Inc. 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.January 17. thoroughness or quality of the information presented. Technical analysis is one of many analytical tools that may be useful in making an informed investment decision. We recommend that clients contact their CIBC World Markets Inc. are not intended to serve as precise “fundamental price targets” and should not be relied upon as such. The technical analyst may not file updates in the event that the facts. and are not responsible for errors or omissions. including technical levels of trading trends.Top Picks Of 2011 . The comments and views expressed in the technical analysis sections are those of the technical analyst. recommendations and price targets based upon a “fundamental” analysis of their businesses. trends or opinions expressed in this report change.

Top Picks Of 2011 .January 17. 2011 96 .

Top Picks Of 2011 . 2011 97 .January 17.

In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report. 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. CIBC World Markets generally prohibits any research analyst from serving as an officer. 98 . may at times give rise to potential conflicts of interest. director or advisory board member of a company that such analyst covers. as well as more specific disclosures set forth below. 2011 IMPORTANT DISCLOSURES: Analyst Certification: Each CIBC World Markets research analyst named on the front page of this research report.Top Picks Of 2011 . Additionally.January 17. 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. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. is. including the CIBC World Markets Investment Banking Department. futures or other derivative instruments based thereon. 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. Potential Conflicts of Interest: Equity research analysts employed by CIBC World Markets are compensated from revenues generated by various CIBC World Markets businesses. related to the specific recommendations or views expressed by such research analyst in this report. Recipients of this report are advised that any or all of the foregoing arrangements. related securities or in options. directly or indirectly. or at the beginning of any subsection hereof. or will be.

42. 2g. C$119. Sector Outperformer) Daylight Energy Ltd. Sector Underperformer) Genworth MI Canada Inc.27. C$53.A-TSX.26. 3c. C$20. 12) (PJC. C$9. C$6. 4a. 7. C$21.99. Sector Outperformer) Chartwell Seniors Housing REIT (2a. Sector Outperformer) Hecla Mining Company (2g) (HL-NYSE. US$9. 3c. 2g. 2c. (AGI-TSX. 2c. 2e. Sector Outperformer) Endeavour Silver Corp. Sector Outperformer) Kinross Gold Corporation (2g) (KGC-NYSE. 13) (EMP. Incorporated (2g) (VNP-TSX.17. 7) (ARX-TSX. C$8. 7) (CGA-TSX. Sector Outperformer) ARC Resources Ltd. Sector Outperformer) Cenovus Energy Inc. C$32. US$3. Sector Performer) Brookfield Office Properties Canada REIT (2a. 7. Sector Performer) Bonterra Energy Corp. Sector Outperformer) Coeur d'Alene Mines Corp.02. 2e. US$17. Sector Underperformer) Jean Coutu Group (PJC) Inc. 7) (AEM-NYSE. (2g) (CDE-NYSE. US$47. (FM-TSX. Sector Performer) First Quantum Minerals Ltd. (2a. Sector Performer) Centerra Gold Inc. Sector Outperformer) Franco-Nevada Corporation (2g. (2g) (ANV-AMEX. 3a. Sector Performer) Alamos Gold Inc.Top Picks Of 2011 .23.14.86.85. 7. (2a. C$27.B-TSX. Sector Underperformer) CGA Mining Limited (2g. (2g.67. 6a. Sector Outperformer) 99 .45.84. C$7. 2g) (BOX. 2g) (NGL-TSX. (2a. (2g) (FR-TSX. C$4. Sector Outperformer) Baytex Energy Corp. 7) (GG-NYSE. 2011 Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered by CIBC World Markets Inc. 2d. Sector Outperformer) Gold Wheaton Gold Corp. US$24. 2g. 2e. 4a. 9) (CP-TSX. (2a.77. Sector Outperformer) Canadian Pacific Railway Ltd.UN-TSX. US$40.22. 7. Sector Outperformer) Angle Energy Inc. 7) (BNP-TSX.A-TSX. Sector Outperformer) Agnico-Eagle Mines Limited (2f. 7. 7) (ABX-NYSE. (2g) (GAM-TSX.07.04.53. (2g) (BTE-TSX. C$68. Sector Outperformer) Imperial Oil Limited (2g) (IMO-TSX. Sector Outperformer) Gammon Gold Inc. Sector Performer) First Majestic Silver Corp.42. C$42. 12) (CLS-NYSE. Sector Performer) Goldcorp Inc. 2c. Sector Outperformer) Barrick Gold Corporation (2f. 2g.87. Sector Outperformer) Empire Company Limited (2g. 9) (CGT-NYSE. (2g) (BNE-TSX. (2g) (GSS-AMEX. (2a.January 17.05. Sector Outperformer) Bonavista Energy Corporation (2a. Sector Outperformer) Golden Star Resources Ltd. 7. 3a.12. C$32. C$30. 7) (FNV-TSX. 7. C$66. US$9. 2e. C$12. C$6. US$31. (2g.38. 9) (ECA-NYSE. C$14. 2c.58. 2g) (FVI-TSX. Sector Outperformer) Bombardier Inc.90. C$4. Sector Performer) Black Diamond Group Limited (2g) (BDI-TSX. C$21. (2g. 2f. (2a. Sector Outperformer) Eldorado Gold Corporation (2g) (EGO-NYSE. 9) (CNR-TSX. (2g) (CZE-TSX. C$28. US$69.27. 2c. C$25. Sector Outperformer) EnCana Corporation (2g. US$17. 2e.43. Sector Outperformer) Allied Nevada Gold Corp. C$52. US$5. Sector Performer) Enerplus Corporation (2g. US$16. C$42. Sector Performer) Kirkland Lake Gold Inc. 2c. C$5.92. C$2.08. 7) (MIC-TSX.66. 4b. 2g) (EDR-TSX. Sector Underperformer) IAMGOLD Corporation (2g) (IAG-NYSE.21. (2g) (KGI-TSX. 2c. (2g. 2e. (2a. (2g. Sector Performer) H&R REIT (2a. C$16.75. Sector Performer) Aurizon Mines Ltd.05. C$17. C$12.69.68. 2g. 2c.: Stock Prices as of 01/17/2011: 5N Plus. 2g.88.72.64.30. US$24. 2c. C$7.19. Sector Outperformer) C&C Energia Ltd.UN-TSX. Sector Outperformer) Canadian National Railway Co. (2g. 7. 2g. 2e. 2g. 12) (BBD.24. (GLW-TSX.51.80. Sector Outperformer) Fortuna Silver Mines Inc. C$9. 2e. 7) (ERF-TSX. 2f. Sector Outperformer) Celestica Inc. 2e. 7) (HR. 2e. C$6.14. 4b. 2e. 7) (CPG-TSX. 2e. 2g) (DAY-TSX. C$48.UN-TSX. (2g) (CG-TSX. 2e. 2g) (CSH.59. 9) (CVE-TSX. Sector Outperformer) CAE Inc.97. (2a. 2c. Sector Performer) Crescent Point Energy Corp. (2g) (ARZ-TSX. (2a.23.

Sector Performer) Penn West Petroleum Ltd. 3a. (2a.20. (2g.06. 2g) (AUY-NYSE. (2a. C$25. US$23.39.81. Sector Outperformer) Shoppers Drug Mart Corporation (2g) (SC-TSX. 2c. 7. Sector Outperformer) Perpetual Energy Inc. (2g) (PBN-TSX.96. Sector Performer) Suncor Energy Inc. C$13. 3a. 2e. Sector Outperformer) Pacific Rubiales Energy Corp. 2c. Sector Performer) Newmont Mining Corporation (2g. C$5. (2a.B-TSX.23.73.19. 2g) (SSRI-NASDAQ. C$4. 2e.78. US$55. Sector Performer) Trilogy Energy Corp. C$10. 2g) (PAAS-NASDAQ. 2011 Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered by CIBC World Markets Inc.30. 3a. Sector Outperformer) Onex Corporation (2g. 2g) (NAE-TSX. 2e. C$32. 2c. C$7. Sector Outperformer) Silvercorp Metals Inc. Sector Outperformer) Teck Resources Limited (2a. US$47. 3a. Sector Outperformer) New Gold Inc. (2g) (TET-TSX. (2a.98. Not Rated) First Solar. 2c. 2g) (RGLD-NASDAQ. (2g.72.B-TSX. Sector Outperformer) Total Energy Services (2g) (TOT-TSX. US$140. 2c. US$2.39. C$45. US$22. (2a. Sector Outperformer) Shaw Communications Inc. 2g) (PRQ-TSX.44. 3c. (2a. 2e. Sector Outperformer) Royal Gold.01. 2c. 2g) (PEY-TSX. 2e. US$35. 2e. 3a. Sector Outperformer) Quadra FNX Mining Ltd. Sector Performer) Yamana Gold Inc. C$13. Sector Outperformer) Pengrowth Energy Corporation (2g. C$39. 2e. US$66. C$38. (2g) (PRE-TSX. 2g) (NXG-AMEX.95.January 17. C$21. (2a. 2c. 2g. 2b. Sector Outperformer) Petrominerales Ltd. (SKH-NYSE. (2a. 2d. Sector Performer) Semafo Inc. (2a. (2a. 2e.30. US$23. Sector Outperformer) Peyto Exploration & Development Corp. 3c. US$11. Inc.10. (2g) (PMG-TSX. Not Rated) Emergency Medical Services Corporation (EMS-NYSE. 2g.90. 7) (PGF-TSX. Sector Performer) Progress Energy Resources Corp. Not Rated) 100 . 2e. C$32. 2e. (2g) (MN-TSX. Sector Outperformer) Taseko Mines Limited (2g) (TKO-TSX. (2g) (SLW-NYSE.B-TSX. 2e.07. C$35. C$13. C$20. 2c. 2c. (2a. C$37.70. Sector Performer) Silver Standard Resources Inc. 2g) (PMT-TSX. 13) (RCI.70. 3c.: Stock Prices as of 01/17/2011: Comcast (CMCSA-NASDAQ. C$8.00. 2e. (PWT-TSX. 2c. (2g) (NGD-TSX. 9) (SU-TSX. 7.84. (FSLR-NASDAQ. 2e. 12) (OCX-TSX. 12) (TCK. 2f. Inc. 13) (SJR. 7) (VET-TSX. 2c. US$11. 2g. 2f.15. (SPR-NYSE.00. 7) (TD-TSX.08.52.10. 3c. Sector Outperformer) NAL Energy Corporation (2a. 2c. 2g. C$4.72. Not Rated) Spirit AeroSystems. 2c. Sector Underperformer) Silver Wheaton Corp. Not Rated) Skilled Healthcare Group Inc. C$61. Sector Outperformer) Medusa Mining Limited (2g) (MLL-TSX. C$17.07. C$12. 2g) (QUX-TSX. C$10.89. C$18. US$31. Sector Performer) TD Bank (2a. 3c.Top Picks Of 2011 . Sector Underperformer) Companies Mentioned in this Report that Are Not Covered by CIBC World Markets Inc. 3b) (NEM-NYSE. (2a. 2e. 9. 3a.64. 2g) (SVM-TSX. Sector Performer) Northgate Minerals Corporation (2a. C$76. 7. Sector Outperformer) Pan American Silver Corp. 2g) (SMF-TSX.: (Continued) Stock Prices as of 01/17/2011: March Networks Corp.99. Inc.07. 2d. 2e.35.50. C$13.20. Sector Underperformer) PetroBakken Energy Ltd. Sector Performer) Vermilion Energy Inc. 2e. Sector Outperformer) Rogers Communications Inc.

: (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.15.61. 2011 Companies Mentioned in this Report that Are Not Covered by CIBC World Markets Inc.January 17. Not Rated) TransCanada Corp.Top Picks Of 2011 . 101 . (TRP-TSX. US$65. C$37.

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

CIBC World Markets is restricted*** from rating the stock.cibcwm. CIBC World Markets Inc. 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. Attn: Research Disclosure Chart Request.com/sec2711 or write to CIBC World Markets Inc.0% *Although the investment recommendations within the three-tiered.. ***Restricted due to a potential conflict of interest.4% 93. Important disclosures required by IIROC Rule 3400. CIBC World Markets does not maintain an investment recommendation on the stock. Sector is expected to equal the performance of the broader market averages. hold ratings to securities rated Sector Performer. Stock is expected to perform in line with the sector during the next 12-18 months. has assigned buy ratings to securities rated Sector Outperformer.9% 100. relative stock rating system utilized by CIBC World Markets Inc. 103 . Sector is expected to outperform the broader market averages.com under 'Quick Links' or by writing to CIBC World Markets Inc. Price Chart For price and performance information charts required under NYSE and NASD rules.4% 42.3% 2. 4th Floor. Stock is expected to underperform the sector during the next 12-18 months. Brookfield Place. 161 Bay Street. please visit CIBC on the web at http://apps.S.. do not correlate to buy. 2011 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. for the purposes of complying with NYSE and NASD rules. including potential conflicts of interest information. and sell ratings to securities rated Sector Underperformer without taking into consideration the analyst's sector weighting. Rating Description Sector Weightings** **Broader market averages refer to the S&P 500 in the U. "Speculative" indicates that an investment in this security involves a high amount of risk due to volatility and/or liquidity issues.1% 9. and the S&P/TSX Composite in Canada.cibcwm. Sector rating is not applicable. 161 Bay Street. Ontario M5J 2S8.0% Inv. Brookfield Place.7% 92. Ratings Distribution*: CIBC World Markets Inc.January 17. Sector is expected to underperform the broader market averages. CIBC World Markets Inc. 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 . Banking Relationships Sector Outperformer (Buy) Sector Performer (Hold/Neutral) Sector Underperformer (Sell) Restricted Count 135 119 26 6 Percent 96. Toronto. Attention: Research Disclosures Request. hold and sell recommendations. Toronto. 4th Floor. Ontario M5J 2S8.

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