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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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. In his most recent economics piece.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.1% 20.3% 106. Franco-Nevada Corporation Genworth MI Canada Inc. Price On 1/11/2010 $6. In both cases. economy for better job recovery in the back half of the year. as he downgraded the stock after a 33% gain through April 2010. 4 . it will not be aggressive and will likely revert to “stand-by” mode until the end of the year.71 $21.7% 23. Not Yet Heaven in Twenty Eleven.8%) 16.0%. (US$) Shaw Communications Inc.2% 4.Top Picks Of 2011 .19 $37.5% 12.16 $36.35 $38.82 $16. Pan American Silver Corp. but the recent efficiency push on the back of capital spending should position the U.99 13443 Full-year Price Return 12. although this year he didn’t recommend investors hold it for the full period.51% 32.0% 8.26 $27.17 $15.38 $15. Exhibit 2. H&R REIT March Networks Corp. Much of it is expected to be the same as 2010.20 $14.9% 20. 2011 The highest Sector Outperformer return achieved by our analyst team. Average Price Return For Holding Through 12/31/10 TSX Composite Return Source: Bloomberg and CIBC World Markets Inc. Canadian National Railway Company Eldorado Gold Corporation (US$) Empire Company Limited First Quantum Minerals Ltd.January 17.25% 1/26/2010 11/3/2010 4/15/2010 12/1/2010 $35.20%) 10.65 $66.4% (0.92% Price On 12/31/10 $7. 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. at just about 2. 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. SP rated).48 $58.S.4% 17.21 $21.S. This positioning should help to create an investment environment that continues to have more stability.58 $4.05 $47.0% 8.15 11947 Drop Coverage Or Changed Rating 4/9/2010 7/21/2010 $61.17 $3.55 $25.28 $5.93 $25. Taseko Mines Limited Total Energy Services TransCanada Corp. our total return for the portfolio of top picks drops to 14.57 $55.05 $38.59 $19. 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. which generated a 106% price return for the full holding period.47 $6. While the economics team believes the Fed may act early in the year.3% 60.25 $18.94 $9.00 $33.69 4.0% 14. held for the full year.6% – led by a slightly more confident consumer. Avery Shenfeld outlines what he thinks is in store for the coming year.43 $4.88 (9.35 $18.95% 4.75 $30. Suncor Energy Inc. generating slightly better GDP growth than previously forecast. This is a three-peat for Jeff in delivering the top-returning stock (full-year return).89 $35.82 $108. still 150 basis points (bps) better than the Composite Index price return.00 $21. If we use these returns (and pretend the investor simply put the cash raised from the sale under their pillow). was Jeff Fetterly’s pick of Total Energy Services (TOT–TSX.10 $41. but with the U.0% 17.03 $4.2% 13.78% 4.70 $94.9% 6.3% 1. Incorporated BPO Properties Ltd. Despite a more active M&A environment.

Rogers Communications Inc. and unemployment rate suggest. to provide us with a macro view on where he expects the markets to go in 2011.25 $24.B CZE CP CSH. Incorporated Angle Energy Inc.50 US$52. NAL Energy Corporation Onex Corporation Pacific Rubiales Energy Corp.S.50 $84.00 $7.month Price Target $8.Top Picks Of 2011 . EnCana Corporation Jean Coutu Group (PJC) Inc. On behalf of CIBC. Penn West Petroleum Ltd.00 Source: CIBC World Markets Inc. although there is some concern over the strength of the consumer and their ability to contribute to the economic expansion with the same vigor as they delivered in 2010.50 $44.To 18. consumption growth. 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. 2011 The backdrop in Canada remains better than we foresee globally. Quentin Broad Managing Director. the economic indicators like GDP growth. Pan American Silver Corp. Head of Portfolio Strategy.00 $16.50 $47.00 $25. Petrominerales Ltd. We asked Peter Gibson. 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. 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. Black Diamond Group Limited Bombardier Inc.A KGI NAE OCX PRE PAAS PWT PMG QUX RCI. C&C Energia Ltd. in composite.75 $13.00 $32. Exhibit 3. When we compare the outlooks for the economies of Canada and the U. Canadian Pacific Railway Limited Chartwell Seniors Housing REIT Daylight Energy Ltd.25 $43.75 $78.UN DAY ECA PJC.00 $15.00 $9.B SMF SU TD Company 5N Plus. Kirkland Lake Gold Inc. we wish all of our clients a healthy and prosperous new year.50 $9. Top Picks Of 2011 Ticker VNP NGL BDI BBD. Semafo Inc.00 $40. that Canada should fare better than our neighbors south of the border.50 $22.00 $42.January 17. Suncor Energy Inc. our technical analyst. Once again for 2011 there is a full tear sheet of key fundamentals for each of our top picks (these are found on an ongoing basis on the second page of our fundamental research reports) and a technical view.00 $11. Head of Equity Research 5 .50 US$36. Quadra FNX Mining Ltd..00 $18. 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.

3 3. Most strategists would say the same for 2011. Toronto (416) 594-7194 Jeff Evans.) C$/US$ Source: Bloomberg and CIBC World Markets Inc. the longer that the U. real estate market have resulted in a U. 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%. Relatively high structural unemployment in the U. Presumably.33 88 1. recovery that is approximately one-third to one-half the rate of growth we would like to see.272 0. Exhibit 4 is a summary of our forecasts for 2011. Toronto (416) 956-3250 We believe that by the end of 2011 the TSX will have recorded gains of approximately 11.January 17.00 Themes By traditional measures. North American equity markets. The benefits which Canada enjoys as an exporter of commodities while benefiting from sustainably low U.S.S. Coordinated global growth is clearly a leading cause of persistently higher average oil prices.369 1. in particular. 2011 Do You Believe In Magic? Peter Gibson. China and Japan have a vested interest in working with the U.95 3.S.44 1.28 3. combined with a dividend yield of approximately 1.8% ceiling is the key to appreciating how long gold and oil prices and the TSX can likely rise. Unfortunately.8%. Federal Reserve continues to rely on quantitative easing.S. begin to see self-sustaining economic growth in 2011 that resembles the early stages of recovery witnessed in 2004? 6 .46 93-103 1.16 3.580 0.5% with a dividend yield of over 2% for a total return of approximately 14% for the year.Top Picks Of 2011 . is on the path to recovery then the longer that BRIC nations will grow. S&P 500 T-Bills Bond Yields WTI Oil (US$/Bbl) Gold (US$/oz.34 1.S.S. relies on the U. the U.S. therefore. At the same time.S. Exhibit 4. The TSX should continue to outperform the S&P 500 as a result of continued growth in the emerging nations as the U.S.S. 2011 Forecasts Summary Recent Canada TSX T-Bills Bond Yields U. CFA.384 0. to help underpin their recovery while trying to stabilize the debt crisis in Europe. Federal Reserve's successful administration of quantitative easing through 2011. the outlook for the global economy and.S.271 0. albeit at much faster rates.97-1. Understanding the link between quantitative easing and preventing bond yields from reaching our estimated 3. Every year of economic growth is another year of growing global oil consumption.S. 2011E 14. quantitatively ease and can the U.03 13. and continued weakness in the U. rates is obvious – The question is simply one of how long can the U. economy is weak but should gain some momentum in 2011.800 1. So far it appears to be working.

If bond yields.S. gold is likely. due to the fact that low volatility often implies a sense of complacency. bond yields below the critical 3.S. recovery is taking hold. we still believe that. the fact that the U. We.January 17.5% level for as long as possible so that the U. therefore. Weak corporate profit growth makes North American stock markets very sensitive to the level of interest rates. The recently recorded record-low volatility is very unusual. preferably.S. Treasury Yield Below 3. As long as quantitative easing holds the bond yield below 3.S. Risks For The Fed The range of possible outcomes for North American stocks and bonds is perhaps greater than it has been in years. We believe that the safe haven. The Fed then could still.S. relatively. the ongoing risks in Europe. Yet. hence the US$1. 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. then more can be done which still pushes the U. we would expect continued but slower appreciation in gold prices owing to emerging economy growth. The Fed Is Trying To Hold The 10-year U.S. 2011 To do this. but it is an inherently risky strategy. that of food and energy inflation at a time when North America is not recording any wage inflation. economy can continue to recover at the current. We cannot over-emphasize the significance we attach to the Fed’s goal of holding 10-year U. dollar devaluation further.S. In 2004. 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. 7 .S. the U. however. markets have recorded very low volatility immediately before crisis. gold price target. Historically. the biggest risk that the North American economy faces. then the U.Top Picks Of 2011 .S.8% level.8%. raise short-term interest rates slightly in the hope that bond yields would then fall. government would still choose to push the U. which is indicated by our asset mix models. it is unlikely that we will witness secular profit growth driven by inflation in the way it was witnessed in the 1970s. ultimately. when the U. often in part. If the U. believe that the U.S. Nonetheless. housing market must stabilize. 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.580/oz. 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. below the 3.700/oz. it is impossible to pass price increases through to consumers and. gives it the room to continue relying on the use of quantitative easing. yield curve tilts. it is very favorable for equity markets as long as corporate profitability is stable or rising. Treasury bond yields below the 3. Emerging economy growth is underpinning commodity inflation while the West is not demonstrating any evidence of wage inflation. the implication would be that quantitative easing is losing its effectiveness. therefore. Fed strategy of quantitative easing is intended to hold U. if possible. the U.S.S. specifically. should rise above the 3. dollar should strengthen. in which case US$1. reluctantly. dollar devaluation below the recent lows. reserve currency. Biggest Risk Is Deflation Although deflation is. during the early stages of that five-year recovery.5% level. These risks include a number of geopolitical hotspots.8% In the absence of wage inflation. This fact underpins investors’ reliance on the Fed’s ability to continue administering quantitative easing.S. weak rate.S. the short-term cyclical risk is the growing fear of inflation. the Fed tilted the yield curve.8% level and. Historically. status of the U.

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

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.8% 4 3 3. albeit manipulated by the Fed. this would imply. is at very high levels and the U.S.5% Excess debt floor 1997 ceiling 2000 ceiling 2003 ceiling (5. corporate profitability is rising. On both of these occasions. the bid-to-cover ratio for U.S. Treasury bond yield below the critical 3. Both major market collapses were signaled by three critical observations. the recovery in 2009 coincided with bond yields at the low end of our estimated range and forward ROE was recovering. however. equity market.Top Picks Of 2011 .8% ceiling and U. 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. Treasuries was also at relatively low levels (see Exhibit 8). Since the year 2000. has recently been as high as 3.S.9%) 2002 ceiling 4.1 5. based on the fact that the bid-to-cover ratio. stock market. yield curve maintains a steep positive slope.0% Desired long term average 2 2. Third. The Fed had restored a steep positive slope to the yield curve. 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. 10-yr U. yield curve became inverted (see Exhibit 7). The second collapse occurred during the housing crisis of 2007 and the banking crisis of 2008. Treasury yield exceeded the then current bond yield ceiling. S&P 500 profitability had started to decline.5% and it is likely that quantitative easing has played a significant role in preventing yields from rising further. the 10-year U.S. 10-year U.8% ceiling. then we remain optimistic about the outlook for North American equities.S.S.0% Ultimate floor 1 S&P 500 Source: Bloomberg and CIBC World Markets Inc. First.S.2% ceiling 5 Bond Yield (%) 8 7 6 +57% -50% +94% -57% +85% 9 3. The 10-year U. Treasury bond yield.January 17. there have been two massive collapses in the U. Second.S. for now.S.S. the Fed can continue to quantitatively ease and hold the 10-year U. 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. 2011 Exhibit 5.S. 9 . We believe that. Treasury market demonstrated during the global banking crisis. this decline probably resulted from the fact that the Fed had tightened until the U.8% ceiling 4. To assess the ongoing potential for the U. the first critical step demands that we check Exhibits 5 to 8. The first collapse occurred from 2000 until October 2002. By contrast.S.

5 4 3.5 3 2. Exhibit 8.5 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: CIBC World Markets Inc. 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. 2011 Exhibit 6. 10 ROE (%) . Exhibit 7.5 2 1.January 17. Bid-to-Cover Ratio 5 4. 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 1 0.Top Picks Of 2011 .

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

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

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

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

to become an export-dependent country as a result of devaluing the dollar. The U. dollar as a result of monetizing debt and debasing the U. dollar in the process.S. in general. High Correlation Between TSX And CRB Returns Source: Bloomberg and CIBC World Markets Inc. 2011 Exhibit 14. Other Important Circular Implications Of Quantitative Easing Quantitative easing.S. Quantitative easing. is likely to pursue this strategy for as long as it possibly can. rather. therefore.8% but it also contributes to the devaluation of the U. The goal is not so much for the U. but. is intended to hold bond yields below the critical ceiling levels of 3. has a number of other important implications. for the world. 15 .S.January 17. This is likely to remain the case until countries like China face a serious threat from inflation.Top Picks Of 2011 . for example. Gold (rebased) Trade-weighted USD (RHS) Exhibit 15.S. it is a strategy that contributes to lower interest rates for export-dependent countries and. Cumulative Returns: US$ Trade Weighted. 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 devaluation also contributes to higher oil prices.S.S.Top Picks Of 2011 . In turn. monetary policy results in aggressive. a sustainably higher oil price places relatively more pressure on other economies and may.S. even inflationary growth in time. these sectors are supercritical to the outlook for the TSX.S.S. case can help hold bond yields down. the opportunity is for continued investment in these sectors. 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.S.S. 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. it is also relatively more efficient in its use of oil in generating GDP growth. as long as it tries to maintain its currency peg to the U. for investing opportunities in Canada. Higher Oil Prices Curiously. dollar. has enormous implications for the average level of oil prices longer term and. force its conversion to natural gas just as the British economy once converted from coal to oil dependence. perhaps. thereby making the U. to extend its quantitative easing strategy. perhaps. Higher oil prices can increase the risk of chaos elsewhere.S. monetary policy for China. ironically. Dollar Devaluation In the short term. allow the U. is the largest consumer of oil globally. Although the U. Sustainably high oil prices.S. therefore.January 17. In a sense. U. Sustainably high oil prices are crucial today if the U.S. and global recovery. to pursue energy substitutes and. It comes full circle then. and in the U.S. therefore. Yet. economy.S.. high oil prices are a growth tax.S. can get away with more quantitative easing. 16 . easy. which contributes to holding bond yields down at the same time. therefore. The U. This would imply that aggressive. This has important long-term potentially crisis implications for China. In effect.S. are a cause and effect of quantitative easing. as well as how significant. Therefore. therefore. Sustainably high oil prices also create economic incentive for the U. easy. ultimately. emerging economies but it also represents a growth tax on the U. The sheer potential size of the Chinese and Indian economies. the U.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. is to have the economic incentive to lessen its reliance on oil before the emerging economies become so large that oil prices are crippling. more of a safe haven and simultaneously increasing the likelihood that the U. higher oil prices create relatively more pressure for less energy efficient. which is relatively more punitive for other nations than the U. U. quantitative easing tends to contribute to rapid growth in emerging economies and. obviously.

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

Street forward ROE growth rates are still showing minimal growth. Given the recent significant run-up in oil prices.3 standard deviations or better. The median value for financial sector profit growth is 0. it should be noted that the energy. Trailing Now Leading Forward Earnings In general.22 standard deviations. Therefore. The energy sector return on equity is also largely unchanged on the trailing basis. however. 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. while forward earnings forecasts are falling.S. are the gains that were recorded by the small-cap TSX materials sector. This equally weighted small-cap index has soared in just two years. Even more dramatic.19 standard deviations. however. median 8%). is likely to record better growth but from lower levels (recently 12%. we anticipate stable to weaker ROE and earnings for 30% of the TSX. This underpins our outlook for $830 aggregate TSX earnings. 18 .Top Picks Of 2011 . improving earnings for the energy sector (26%) and much stronger earnings for the materials sector. 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. As indicated by the sector relative weights in the first column.January 17. In fact. recording ROE declines on a trailing basis. TSX ROE. In effect. At this point in the cycle and given pervasive concerns about the U. 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%). generally. it comes as little surprise that trailing earnings are now rising very slowly in the S&P 500. For example. 2011 TSX Earnings Forecasts. median TSX profit growth is a mere 0. The strongest profit growth is being recorded by the materials sector at 0. materials and financial sectors account for 78. In order. Median Values: Key Data Points For The TSX Exhibit 17 summarizes some of the key data points relating to the S&P/TSX Index. although the big five banks in Canada are. it would be expected that forward return on equity would rise. to minimize the impact of outliers. we prefer to see return on equity growth rates of 0.45% of TSX market capitalization. We would expect that to change as oil prices remain close to US$100/Bbl US for West Texas Intermediate.11 standard deviations.S. Key Is Stable S&P 500 ROE The North American equity market gains and concurrent U. the weighted average return on equity for the sector is unchanged. bond market losses since the summer of 2010 are both unusually large. the table summarizes the median values for each of the sectors. however. economy.

83 13.59 12.January 17.08 25. 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.03 0. It is also worth noting that the CIBC analyst median return is expected to be 15.03 13.Top Picks Of 2011 .98 15.56 -0. the median forward P/E ratios for the materials sector and the financial sector would be close to 13x one-year forward earnings. In fact.21 0. Very Large Cash Holdings On The Balance Sheet.67 5. more than 50% of their revenues come from international operations and emerging economies.09 11.29 12.06 13.29 12.61 13.08 21.57 4.03 20. 2011 Exhibit 17.55 15.72% and the Street median return is expected to be 11.89 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.00 5.95 13.84 12.64 16.09 -0.05 -0.36 -0. In Canada.19 0.34 -0. and Canadian information technology sectors. our TSX target of 14.80 21.41 9.03 10.38 24.21 0.17 0.07 0.S.85 7.80 19.42 1. 19 .54 3.03 0. it is recording a median dividend yield of 4.22 18.72 16.04 18.10 23.11 -0.44 11.80 18.38 2. Now Just Make Sure ROE Is Rising Although the financial sector is not demonstrating significant profit growth at present.02 7.54 0.00 26.47 13.16 Street Implied Total Return (%) 11.00 Dividend Yield (%) 1. That is.79 1.52 5.49 0.05 -0.57 1. Treasury bond yield remains below the ceiling. Especially In The U. This is especially true for the U.08 0.S.70 0.39 13.30 10.86 11.89 18.94 0.46 9. If the Street forward earnings forecast is correct. as long as the 10-year U.11 25.79 12.56 2.15 CIBC Analyst Implied Return (%) 15.56 41.80 9.99 11.32 -0.93 9.84%. in both the U. ROE (%) 8. Attractive Financial Sector Yield. Our global portfolio system indicates that the weighted average dividend yield for the financial sector is an impressive 3. In the U.58 21.40 22.08 -0. although this sector is 2.61 10.11 16.20 2. information technology sector companies are frequently what we also call value-added exporters.99 14. 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.69 16.92 11.72 Forward Roe (%) 11.34 10.59 13.21%.97 10.47 14..93 0.S.74 13.S.36 Cash As % Of Equity 13.02%.S. Both trailing and forward growth is being recorded by the information technology sector.15 5.07 17.76 12.44 4.42 15.76 10. Key Data Points For The TSX Median Sector Relative Weight (%) 100.53 Forward P/E (x) 14. materials and financial sectors.21 8.55 5.18 5.5% of the TSX market capitalization.23 13.55 12.42 All Sectors Energy Materials Industrial Consumer Discretionary Consumer Staples Healthcare Financials Info Tech Telecom Utilities Source: CIBC World Markets Inc.22 13.71 12.22 0.S.12 3. Nonetheless.53 -0. this would imply a current P/E on forward earnings of less than 15x for the TSX overall.84 Forward Roe Growth (stddev) 0.800 for year-end 2011 appears likely. companies have accumulated significant amounts of cash on their balance sheets as a percent of common equity. the two sectors with the most substantial amounts of cash on the balance sheets would be the materials sector and the information technology sector.82 7. case.00 1.89 11. and Canada but especially in the U.31 6.76 Trailing Roe Growth (stddev) 0.94 29. Finally.76 3.22 Trailing P/E (x) 17.

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

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

We have not yet changed our recommended asset allocation for the various investor profiles outlined in the top right-hand corner of Exhibit 20.January 17. a 20% U. If our year-end 2011 targets prove to be correct then. 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%. 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).Top Picks Of 2011 . 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. When we first introduced the growth investor profile at CIBC. 22 . equity exposure and a 35% Canadian bond exposure. 2011 Exhibit 20. In order to provide some indication of our current view with respect to North American stocks. we recommended a 45% Canadian equity exposure. as indicated in Exhibit 21. This is especially true if the 10-year U. 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.S. 20% U.S.8% ceiling. bonds and T-bills. This is shown just under the blue “optimistic” button allocation asset mix ranges. Within this allowable range we have remained at 40% Canadian equities.S.

Exhibit 21. 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. Growth – Optimistic (In Local Currency) Source: CIBC World Markets Inc. 23 . yet. It should be noted that we also choose to alter our asset mix exposure anytime we observe significant changes in U. for the S&P 500 since then) and. +94%. 2011 according to our Scenario Analysis System (SAS) for asset allocation. The Canadian equity component is expected to contribute 5. bond yield levels and North American corporate profitability. with the remainder of 35% invested in Canadian bonds.83% of the total portfolio returns of 9.. once a year or once every two years) is extremely dangerous in the current environment.S.25% standard deviation of returns.Top Picks Of 2011 . we would expect a portfolio with the growth-oriented investor profile to achieve a 9. –50%.S. –57% and +85% since 1998. long-term average equity returns were expected to collapse and did collapse starting in 1998 (3. Performance Attribution Exhibit 21 shows the 65% total allocation to U.26% but it also contributes a disproportionately larger portion of the volatility for the total portfolio at 7.26% total return with a 10. the S&P 500 recorded rallies and collapses of +57%.a. Our asset mix models play a very important role in determining the timing of our exposure to a variety of asset classes. Our floor and ceiling calculations in Exhibit 5 result from our asset mix modes.35%. 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. Understanding and adjusting to these market moves is crucial to investor success.e. and Canadian equities.January 17.67% p. As we have noted often in the last 15+ years. We steadfastly believe that making changes to asset allocation on an arbitrary and infrequent basis (i.

In our case. 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. currently. Exhibit 22. we might choose to maximize total portfolio variance in order to reduce the total perceived portfolio risk. We must stress that the recommended asset mix depends almost entirely on our forecasts.S. In every case. If we could simply set our asset allocation and leave it unchanged for an entire year and assuming that our year-end targets are all perfectly correct this would be the correct implied asset allocation for maximizing returns for the total portfolio. 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. we do this to see how much our short-term. The objective.S. Canadian bonds and U. Max Return For A 10% Maximum Total Portfolio Variance 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%.Top Picks Of 2011 . while calculating these returns in local currency terms. equities for our growth investor profile. In the last example. however. 24 . 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. Maximize Returns For example. assuming our optimistic set of targets for 2011.January 17. Exhibit 22 shows our currently recommended exposure to Canadian equities. recommended asset mix varies from the one-year mathematically optimized version based on our own targets and assumptions. 2011 Choice Of Optimization Using our SAS optimization techniques. equities instead of our currently recommended 20% and 50% Canadian equities instead of 45%. maximizing the Sharpe ratio (return to risk ratio) or maximizing the total portfolio variance. we can optimize the portfolio based on maximizing return.

however. 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.S.26% return with a total volatility of 10.Top Picks Of 2011 . as long as U. Maximize Return For An 8% Maximum Total Portfolio Variance Source: CIBC World Markets Inc. then the recommended weights are found under the column heading Sharpe Max in Exhibit 22. A more conservative asset allocation would resemble a constant 45% equities. We know from other analysis that that would result in a total portfolio variance of approximately 8%. this assumes that our targets for the various asset classes are correct. a large portion of our expected returns should result from Canadian equities. we want to consider what the recommended asset allocation would be if our goal were to limit the total portfolio variance.S. therefore. It appears that in order to reduce the variance of the total portfolio. 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. Using A Growth Profile Allowable Range. equity exposure to zero in favor of Canadian AA corporates. For the purpose of this article. of course. If we optimize. 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). bond yields remain below the critical ceiling.January 17. Nonetheless. the Canadian bond exposure would be reduced by 5% and AA Canadian corporate bond exposure would rise from 0% to 20%.25% standard deviation of returns. 25 . it supports our conclusion that. the Canadian equity allocation remains at 45%. In this case. 45% bonds and 15% T-bill mix. the optimization system chose to reduce the U. Exhibit 23.

generally. otherwise. Given that the U.04% to 3. 45% in bonds and 10% in T-bills. in fact. and especially given the significant incremental returns in a very short period of time. we generated a significant 434 bps of outperformance in just four months compared with a fixed 45% equities. Naturally. At the risk of being silly. the annualized return from U. usually requiring that we have some exposure in asset classes that we. bonds that resulted in just the last four months of 2010 by having no exposure to U. were more likely to rise significantly.January 17. to have some degree of prudent diversification. Our over-weighted equities exposure benefited the total portfolio return considerably and we managed to avoid. as long as the Fed can use the magic of quantitative easing to restrict the upward movement in the 10-year U. we published our Investment Strategy Committee Prequel asset mix document.Top Picks Of 2011 . From August 2010 until recently the TSX rose approximately 15% and the S&P 500 rose approximately 21%. equities between August 2010 and the present was approximately 61%.78% in a little over a four-month period. the annualized total growth portfolio returns from August to the present was roughly 27%. Treasury. We have a long list of concerns with respect to exogenous risk factors.92% compared with 5% loss from 10-year U. The combination of the rising bond yields in the U. while U.S. our relatively traditional growth portfolio held a 35% exposure to Canadian bonds for the purpose of improving diversification. 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. and rising stock prices in the U. 2011 Recent Performance Since August 2010 We are optimistic about the rate of return for U. in local currency terms. the 5% loss from U.S. would prefer to avoid. This is approximately 434 bps better than a portfolio with a fixed exposure of 45% in equities. The sheer magnitude of these gains relative to a very conservative asset allocation. 45% bonds and 10% cash asset mix. bonds would have lost over 20% on an annualized basis.S. In August 2010. and Canadian equities. Treasury bonds.S. and Canada resulted in massive outperformance from equities relative to bonds. our total portfolio returns for the growth investor profile amounted to 10. is enough to cause some concern in and of itself. By maintaining the correct overweight recommendation for stocks and correctly underweighting bonds. Such significant gains in such a short period of time are cause for concern. bonds in the growth portfolio.S.S. For example. Bond losses in the Canadian bond portfolio were very slight at –0. which could materially change our outlook for stocks and bonds in 2011.33% during the same timeframe. we 26 .S.S. 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.S. Fortunately. equity market has now risen 85% from the 2009 lows and bond yields have risen from 2. in which we indicated that bond yields were unlikely to fall any further near term and.S. In fact. 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. entirely. One of our near-term concerns stems from just how dramatic the recent gains were from our over-weighted equity exposure while the under-weighted bond portfolio recorded massive recent losses. The reason for doing so is.

It is our current view that the TSX aggregate earnings will reach $830 as a result of further earnings growth in the materials and energy sectors and a slight recovery in the financial sector during 2011.78 0. the resulting top-down P/E would be approximately 17.28 3.13 2.87 0.41 15.04 19.) C$/US$ GPS data calculated through our Global Portfolio System Source: Bloomberg and CIBC World Markets Inc. respectively.73 14.18 15.16 3.09 1271 79 16.02 0.369 1.11 0.272 676 19.33 88. 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. repeatedly.83 14. therefore. Exhibit 24.0065 0.580 0.1 16.01 14.January 17.6 17.98 12.92 14 17.02 0. Detailed Targets For 2011 Exhibit 24 provides more detail as to the basis for our 2011 targets.83 times. Based on a 14.800 TSX price target at year-end.3 3.03 1.01 2.12 0.01 - 12.S.95 14. 2011 are becoming increasingly concerned about how far the North American equity markets can go from here.14 20.97 0.44 1.68 19.89 8.34 1.800 / 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 (1.39 0. 2011 Forecasts TSX Earnings Top-down P/E (x) Bottom-up GPS P/E Median Weighted Average Street Fwd P/E (14.46 93-103 1.42 0.91 0.800 830 17.67 17.97-1.95 3.28 15. Recent 13.92x and 14x. our optimistic outlook for North American equities.34 1. 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 14.11 2011 14.01 1384 88 15.384 / 90. As we have stated.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.Top Picks Of 2011 . S&P 500 Yield (market cap weighted) T-Bills (%) 10-year Bond Yield (%) WTI Oil (US$/Bbl) Gold (US$/oz.03 27 .

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

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

50E 21.4x 14.3x 6. CIBC World Markets does and seeks to do business with companies covered in its research reports. 5N Plus is trading at an attractive valuation of 10.2M No Current $8. Canada M5J 2S8 (416) 594-7000 Ian Tharp. 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.09 in cash per share.0M Nil / Nil May $2. Investors should consider this report as only a single factor in making their investment decision. www.com and ResearchCentral. See "Important Disclosures" section at the end of this report for important required disclosures.7% $4. We expect the company to continue to use these resources to pursue greenfield expansion and further acquisitions. where applicable. Rate (E) 52-week Range Shares Outstanding Float Avg.O.6x F2012E FD EPS (ex. Full contribution from its Firebird expansion is expected in Q1/F12. which is at a significant discount to the peer solar group at 16. Incorporated Shining Bright In The Land Of Cloudy Sky Market Weight 12-18 mo. Reuters.cibcwm.5nplus.21 3-5-Yr.9x 9. Daily Trading Vol.7x 2012E FD EPS.8x 19.7 million in cash and cash equivalents ($1. the global low-cost producer of solar PV modules and 5N Plus' biggest customer.74 GW annually.50 $7. 2010 2011 2012 P/E 2010 2011 2012 Fully Diluted.ca Sumeet Mahesh 1 (416) 594-7293 Sumeet. including potential conflicts of interest. Excluding Unusuals EV/EBITDA $0. EPS Gr. First Solar.50 is based on 15. firstcall. Our price target of $8. Price Target VNP-TSX (1/12/11) Key Indices: S&P/TSX Smallcap 25.33A $0.4x Stock Price Performance 2010A 2011E 2012E 10.37E $0.8x Source: Reuters Company Description 5N Plus develops. Toronto. cash). investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. cash) and $1. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.999% purity of its products. unless otherwise stated. Box 500. 5N Plus draws its name from the 99.09 per share) on its balance sheet and generates $15 million-$20 million annually in operating cash flow.ca Find CIBC research on Bloomberg.85 per Shr 12.com .Institutional Equity Research Company Update January 17..77-$7.0x F2012E FD EPS (ex. produces and recycles high-purity metals and compounds for electronic and solar applications. 2011 Stock Rating: Clean Technology Sector Outperformer Sector Weighting: 5N Plus. 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. P. CFA 1 (416) 594-7296 Ian. expects to expand capacity by 92% by 2012 to 2. 161 Bay Street. As a result. Brookfield Place. CIBC World Markets Inc.35 45. 5N Plus is on an aggressive organic growth trajectory.Tharp@cibc.0M Shrs 89.com All figures in Canadian dollars.6M 27.653 $329.0% NA Nil $130.Mahesh@cibc. 5N Plus has $56.

5x 1.2x F2009A $69.2% 29.39) -2.tharp@cibc.8 $125.1 $ 0.1x 4.2% 50.9) $7.27 F2010A $68. 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.6 $143.33 45.7) ($1.1x 2.8x 17.6% 44.0x 20. CFA Sumeet Mahesh.6) ($8.9x $3.3 $2.4x F2012E $104.14) -2.0% F2011E 23.9% 31.7% 23.32) -2.50 17.0 $16.8 ($4.7 $0.7 $16.2 ($8.7 $0.6) ($3. Through the Firebird acquisition.35 $60.7x -2.0x 3.45 45.0% 22.0% 34.3 13.8x $339. 5N Plus continues to be well capitalized .0x F2011E 11.6x 10.1 $4.2 $0.9% F2009A 18.2 $2.2 ($16.7x F2010A 12.5x 38.7% F2011E 0.6x 21.9 F2009A $16.1 $1.1) $12. Diluted (Ex. 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.To 18-Month Price Target: $8. We estimate these markets to be in excess of $380 mln in size with prospects of substantial future growth.8 $20.8x F2010A $70.3x 12.7% 76.3x 4.2x 19.0 $4.00 0.8 $8.2% 45.3 9.6 $0.2x 13.3x 4.6x $329.21 Rating: $8.8 ($6.37 46.9 $0.ca LTM P/E 15.0 Revenues EBITDA EBITDA Margin Calculated as CFO divided by Net Income.50 All Figures in CAD$ millions.4 ($60. Sales to the solar industry represented 74.17 F2009A $65.2% 45.7% 41.3% 21.8 $31.1% 27.11 2011E EBITDA 9.1% SO $0. Management indicated that sales into these markets have the potential to double its current annual revenues within the next three years.9 $23.4% F2010A 1.8x $2.7) ($6.8% 18. The recent equity investment in Sylarus has further strengthens this effort.Its favorable cash position should allow for growth through Greenfield expansions or acquisitions.1x 27.2) ($1.2 $5.9 $ 0.4% 30.4% in Q1/F2011 but below 85.1 $4.7x -2.3 $2.1x 3.6 $8. EBITDA & EBITDA margin $120.0% 24.2x 2. 5N Plus products are utilized in a number of electronic applications including Thin-Film photovoltaics (PV) and the radiation detector market.5) Investment Thesis 5N Plus develops and produces high-purity metals and compounds for electronic applications and offers related recycling services.4x -37.2% F2012E 17.2 $28. Calculated as CFO less Capex Source: Bloomberg. 31 .3x F2012E 13.7 ($63.2 $28.1x 12.9 $ 0.0 $20.4 $4.9 $22.5) ($1. 5N Plus focuses on specialty metals such as Te.76 2011E P/E 14.8 $32. 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: $7.1 $15.6 $167.8) ($0.4% of total sales in Q2/F2011.1x $3.6x 3.2% Chart: Sales.6% 40.4 11.19) F2011E $57.3 $1.3% 29.9% 29.50 46. Company reports and CIBC World Markets Inc.1x $2.4x 4.1 F2012E $22. Cd and Se and on related compounds such as CdTe and CdSe. 2011 5N Plus Inc.0 50% 40% 30% 20% 10% 0% 2007A 2008A 2009A 2010A 2011E 2012E ($4.1x $324.7) $100.4 $0.9 $22.7x 15.2x F2011E $81.4% 29.5% 35.Shining Bright In The Land Of Cloudy Sky .0 $46.62 $40. Source: Company reports and CIBC World Markets Inc.5x 4.3 $80.21 12.0 F2012E $73.0% 32.4 $35.7% 30.5 ($52.5 $112.0% F2012E 1.2% in Q2/F2010.1% F2009A 0.6 F2010A $16.ca sumeet. ii) the semiconductor wafer market and iii) the germanium market. Management is targeting three main markets: i) the CIGSbased thin film solar market.8 $35.2 $3.6% 77.mahesh@cibc. the above 70.0) ($13.0 $0.0x 3.8% 27.7% 28. (VNP-TSX) Current Price: $7. MBA 416-594-7296 416-594-7293 ian.9 $7.2 ($68.1% 113.45 LTM EBITDA 10.7x 2.9% Dividend: Yield: F2010A 25.4x 10.January 17.0 $0.5) ($1.9x F2009A 18.2 14.4% 31.7x 3.4 $2.3 $2.0% 142.9x $323.1x 46.1 F2011E $7.3% 41.9 $25.5 $21.8x 43.7% 31.6 $36.9 $ 0.1x 18.0% 20.49) -1.

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

39E 8. Canada M5J 2S8 (416) 594-7000 Adam Gill. its valuation today is at 6. Brookfield Place. production from this play could reach 5. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. Looking Towards Continued Success In Emerging Central Alberta Viking Play $9. Results from the initial five wells have been impressive. which posted a marked increase in industry activity over 2010. including potential conflicts of interest.2x grp) and at 96% of our Risked NAV (vs. Reuters. Toronto.1X $167.angleenergy. Angle is also developing a Cardium light oil play (last well tested at over 1.cibcwm.20 71.4 $65. Daily Trading Vol.2x 7. CIBC World Markets Inc.7M Nil / Nil December 11. Box 500.1x Source: Reuters Company Description Angle Energy Inc.Institutional Equity Research Company Update January 17.0 $110.com/ All figures in Canadian dollars. 89% grp).7x 8. Price Target NGL-TSX (1/12/11) Key Indices: None 17. See "Important Disclosures" section at the end of this report for important required disclosures.71-$9.O.35 per Shr 1.5 7.Woodward@cibc.2 9. By 2012.ca Find CIBC research on Bloomberg.5x 5.87 Angle Energy is an intermediate-sized E&P company (~13. where applicable.500 Boe/d today). P. While Angle has better-than-average exposure to multiple high-impact developments. 2011 Stock Rating: Oil & Gas . The emerging focus for the company has been the Viking light oil play in Harmattan. Investors should consider this report as only a single factor in making their investment decision. with Angle having up to 195 potential new drilling locations..8x 2011E EV/DACF (vs. We believe Angle will start to trade at a premium over the year with continued success in the Viking.9x 11. www.Intermediate & Junior Producers Sector Outperformer Sector Weighting: Angle Energy Inc.ca Mike Woodward. As a result. unless otherwise stated.Gill@cibc.25 $7. CA 1 (403) 216-3404 Mike.000 Boe/d of light oil and liquids-rich gas.com and ResearchCentral.000 $562. 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. CFA 1 (403) 216-3405 Adam. providing the company with a number of light oil and gas targets to develop. Market Weight 12-18 mo. firstcall.com .90A $0. 7. as well as a solid ability to control cost.7x Stock Price Performance DACF ($ mlns.93E $1. 161 Bay Street.5% $6.) 2009A 2010E 2011E EV/DACF 2009 2010 2011 $40. including the Wilrich.4M Shrs 290.5X No Current Projected Total Return 52-week Range Shares Outstanding* Float Avg. The company's asset base is concentrated in the prolific west central Alberta area.0M $8. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. CIBC World Markets does and seeks to do business with companies covered in its research reports.200 Boe/d) and a number of gas resource plays.5M 60. 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.

25 Capitalization And Market Statistics Share Price Shares Outstanding 1.11 $85. including acquisitions). Relative Valuation: Angle is currently trading at a Price to Risked NAV ratio of 96% and a 2011E EV/DACF multiple of 6.085 Group 6.645A 7.com 2011E NGL 5.7 (41%) Production Production (Boe/d) Q1 Q2 Q3 Q4 FY Growth % Gas Per-Share Growth 2009A 7. and tight gas assets at Edson.Years 6.31) ($0. Encal Heather Post Controller PwC. Net debt includes convertibles and is based on most recent quarterly balance (adj.600E 28% 62% -11% 2010E $0.00 $20.9707 2010E $33. Sproule Graham Cormack VP.00) $20.24) ($4. Amoco Matthew Mazuryk VP. Penn West.04 1. CFA: (403)-216-3405 / adam. CA: (403)-216-3404 / mike.woodward@cibc. Penn West.TSX Only Relative Valuation $7.74 $14. 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.1x target multiple to our Risked NAV of $8.3x $75.Announced operational update and 13.05) ($1.P + P 3.54 $4.76 $0. Financial Flexibility ($MM) Bankers: CIBC.2x $74.48E 55% Commodity Assumptions WTI Oil (US$/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.Announced completion of $60 million public offering of convertible debt Dec 16/10 .0x) Group Average Total Credit Facility .27A $0.591 Investment Thesis. Market Capitalization Net Debt 2.Proven 3. Engineering Harvest.25/Boe vs. Source: Company reports and CIBC World Markets Inc.36 ($7.Month Price Target: C$9. Fekete Stuart Symon VP. Oil & Gas CEO.21) ($0.01) $14.TSX) Current Price: C$7.95E 6% 2011E 14. Brooklyn. Shares O/S based on most recent quarterly balance (adjusted for recent acquisitions and equity issues).55/Boe).73 ($2.22 96% 89% December Sector Outperformer Adam Gill. Avid Elizabeth More VP.000 2010E P/CF EV/DACF EV/Boe/d EV/Boe .24A $0.3 50.021A 13. Encal Glen Richardson VP. Canoe Capital Notes: 1.003A 7. Finance & C Lightning. Enterprise Value Distribution (Current) / Frequency / Yield Average Daily Trading Volume (50 Day) . incl.Released Q3/10 results Oct 21/10 .20A $0.24A $0.45 Recent News Jan 6/11 .49) ($6. ATB and BMO 2009A Cash Flow from Operations $40. group at ~$9. Key Assets: Key assets are the Viking drilling inventory of approximately 195 wells in the Harmattan area.25/share is based on a 1. Angle Energy President & CEO. * Reserves are updated for acquisitions/divestitures.28E $0. for recent acquisitions and equity issues). FD&A Cost .382 $36. and its asset portfolio has exposure to both high impact natural gas (Falher/Wilrich) and oil (Viking/Cardium) development opportunities.0x $106.37) ($1.P+P (incl. Operations E4 Energy.9700 2011E $39.0x Cash Flow Per Share CFPS (Diluted) Q1 Q2 Q3 Q4 Diluted Growth 2009A $0.8x (versus the group averages of 89% and 7. Core NAV Risked NAV P/Risked NAV P/Risked NAV (Group Average) Fiscal Year End NGL 8. Hoskin & Harcourt LLP CFO.0 $150.48) $0.2 Development Spending 5.90A $1.22/share versus the group average of 1.552A 7. 3. Exploration Flagship. FDC) Cash Basis Recycle Ratio (Incl FDC) 7.026E 9.2x. Our 12-18 month price target of $9.25/share as Angle has best in class operating costs (2011E $6.Announced completion of $25 million flow-through financing Nov 2/10 .500 Boe/d production goal Nov 10/10 .99 $66.Looking Towards Continued Success In Emerging Central Alberta Viking Play . Crossfield.2 27.18A $0.2 59% 54% 11.January 17.8x $54.To 18.08 $4.75 $0. 34 .250E 48% 58% 31% 2011E 16. Enterprise value to reserves (based on current reserves.87 71. 2010E 2011E $60.42 $3. TriGas Heather Christie-Burns President & COOCrossfield. 2011 Angle Energy Inc (NGL . respectively). FDC.20A $0.Announced operational and reserves update Management (Ownership: 9.0x. Key Stock Catalysts and Asset Overview Investment Thesis: We have a Sector Outperformer rating on Angle with a 12-18 month target price of $9.87 12.99 $0.662 $26.472A 7.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 .72 $0. $44.37 $3.00 $84.528A 58% 2010E 8.49) $17.53 Group 9.6%) Name Position Recent Positions Gregg Fischbuch CEO Brooklyn.0 $73.5x 11.75 $4.61 $79.Announced $25 million bough deal equity financing Oct 20/10 .290A 10.94 $3. Crossfield.com Mike Woodward. 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.37) ($6.3x 6. AGS Capital Management Partner.09) ($0. 2.99 $0. 7) Year operating netbacks divided by reported P+P FD&A cost.7x 1.446A 7. Osler.3 Total Net Debt at Year-end ($38.98 ($2. 6) Y/E P+P reserves divided by Q4 annualized production.35 $0.5 $563 $167 $729 n/a 290.5 $16. 5) Equals cash distributions/dividends divided by cash flow. 4) Excludes net acquisitions. E3 Energy.8768 2009A $28.55 $4.21A $0.4 $187.2x 11.0 $163.3) Total Debt / CF (Y/E Debt To Year CF) (1. EV/Boe .05) $17.8 $106. Encal. KPMG. Ret.) 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. Cardium and Ellerslie rights in Ferrier.gill@cibc.5x $180.5 $147.00 ($9.4x 1.7x 1.2x 7. Land Yangarra.76 $21.9 2.00 ($7.25) $23.Current Total Credit Facility Unutilized (% Of Capacity) .03 ($2.51 $77.06 $8.

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

.S.blackdiamondlimited. Brookfield Place.Morrison@cibc.cibcwm. 161 Bay Street. we would not be surprised to see Black Diamond secure additional oil sands awards in coming months and expand its 2011 capital program.66E $3. Price Target BDI-TSX (1/12/11) Key Indices: None NM $16. Reuters.com .com and ResearchCentral. In addition to the recent award of a long-term rental agreement for an 800person remote accommodation project with Suncor Energy.ca Jon Morrison 1 (403) 216-3402 Jon. www.com All figures in Canadian dollars. the company is well positioned to benefit from increased capital spending in the Canadian oil sands and from accelerating resource play development.3x 8.33A $2.4A $49.72 Black Diamond is a leading provider of remote workforce accommodation and workspace solutions in the WCSB and regionally in the U.) 2009 2010 2011 EV/EBITDA 2009 2010 2011 $35.45E 9.7M Nil $195.00 $21. P.9% December $11.0x Stock Price Performance Cash Flow Per Share 2009 2010 2011 P/CF 2009 2010 2011 $2.ca Find CIBC research on Bloomberg.4x 8. We expect oil sands capital investment to accelerate in the coming years. Canada M5J 2S8 (416) 594-7000 Jeff Fetterly. including potential conflicts of interest. 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. 2011 Stock Rating: Energy Equipment & Services Sector Outperformer Sector Weighting: Black Diamond Group Limited Accelerating Oil Sands Development Will Drive 2011 Performance $24. Rate (E) 52-week Range Shares Outstanding Float Avg. unless otherwise stated. We have a Sector Outperformer rating on the company. Market Weight 12-18 mo.3x Source: Reuters Company Description Black Diamond Group Limited is a provider of remote workforce accommodation services and work space solutions throughout the WCSB and regionally in the U. As a result.0M No Current 3-5-Yr.4M 10. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2009 ROE (E) Net Debt Preferred Common Equity Convertible Available EBITDA ($ mlns.08 / 4. In our view. EPS Gr.88 per Shr 9. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. In our view.1x 6.6M $1. firstcall.3x 2011E CFPS.7E $66.2x 6. 14.Fetterly@cibc. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. Black Diamond is trading at 6.Institutional Equity Research Company Update January 17.6M Shrs NM $356.4x 2011E EV/EBITDA. CFA 1 (403) 216-3400 Jeff.S.6% $49. 10-106661 © 2010 CIBC World Markets does and seeks to do business with companies covered in its research reports.2x 2011E EPS and 6. at a slight premium to the average for its peer group. Investors should consider this report as only a single factor in making their investment decision. CIBC World Markets Inc. Toronto.00-$22. Daily Trading Vol. See "Important Disclosures" section at the end of this report for important required disclosures.O. Box 500.02 16.9E 11. where applicable.

4 $2.fetterly@cibc.6 $170.9 $13.4 $10.8x 9.08 2.8 $2.1 ($4.6 $20.7 $49. Source: Company reports and CIBC World Markets Inc.51 $33.40 1.7 $21.23 2009 $0. The company has three business segments.4 $14.0 $40.3 $10.8 64% $7.2x 20.5 $2. and Energy Services. the company offers several key attributes for oilfield services investing.8 $18.2 $136.5 $17.72 $24.3402 | jon.0% 2009 9.4 $1.8x 13.7 $15.0) $30.43 $59.6 $0.63 $2.13 $46. Chart 1: Revenue By Geographic Segment (2010E) 2008 $73.8 $26.7 $73.0 2010E $79.8 ($1.ca Jon Morrison | (403) 216 .0) $42.8x $11.8 47% $7.8 $10.6 $34.3x 14.5) $31.3 $66. (2) a proven management team that has extensive experience operating within its business. including: (1) exposure to a business and competitive landscape with attractive fundamentals.8 $4.S.0% 2011E 6. 2011 Black Diamond Group (BDI-SO) Current Share Price: 12-18 Month Target Price: All figures in C$ 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.5 $9.6 ($0. Space Rentals.2x 20.6 $7.ca $21.morrison@cibc.9 $25.66 $2.1% 16.January 17.0 $1.Accelerating Oil Sands Development Will Drive 2011 Performance .7 $1.8x 8. 37 .1% 12.0 $24. Workforce Accommodations.7 $10. (2) Based on adjusted fully diluted figures.0) $54.9 ($3.0 $19.2x $10.00 Company Description 2008 $43.2x 9.3% 2010E 8.58 $0.33 $2.9 $18.37 2010E $136.6% Black Diamond has established itself as one of the leading remote accommodation providers.3 $1. and (3) a robust and visible pipeline of growth opportunities.7 57% $12.2x $12.0 $35.4 $2.4 $1.6 2009 $45.05 2011E $170.06 2011E $1. 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.4 40% $11.95 2010E $1.16 Gross Margin Gross Margin % EBITDA (1) EBITDA % Cash Flow From Operations (2) CFPS (fd) EPS (fd) (2) $31.6 $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.53 Key Operating Statistics (Current Quarter) Reported Q3/10 Total Revenue $32.25 1.7 2011E $101.4 $20.4 $0.4 $20.4 $75.8 $49.9x 15. CFA | (403) 216 .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 $1.6% 8.3 Investment Thesis 2008 8.4) $19.8 ($5.3400 | jeff.4x 6.7 $3.94 1.45 $3.3x 15.67 $0.6x 8.65 2009 $75.1% 10.1 $41.2 $28.1 $17.2 $17.26 Q3/09 $16.3x 13.8 $1. In our view.6x $11.9 $12.

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

com All figures in US dollars.728.29 per Shr 15.0M 1.00 C$5.10 / 1.446. investors should start to generate strong interest in the stock once again.Galison@cibc. including potential conflicts of interest. Continued strength in emerging market economies (particularly China and the Middle East) is resulting in strong international demand for long-range business jets.3x Stock Price Performance Source: Reuters Company Description Bombardier Inc.00M $3. Systems and Signaling for the rail public transit sector). Reuters.bombardier. So far in Q4/F11. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.674 $9.30 for BT.(C$0. Rate (E) 52-week Range Shares Outstanding Float Avg.00 price target is based on C$3. unless otherwise stated.25-C$6.991. 2011 Stock Rating: Aerospace & Defense Sector Outperformer Sector Weighting: Bombardier Inc.Willemse@cibc.459. www. As a result.0M Shrs 5. 161 Bay Street. Market Weight 12-18 mo. Order activity at BA has picked up in recent weeks. Commercial Aircraft.50 for BA and C$1. Specialized and Amphibious Aircraft. Bombardier Aircraft Orders Starting To Pick Up.B-TSX (1/12/11) Key Indices: Toronto 26. BA has received orders for 15 business jets and 15 commercial aircraft.cibcwm.0M $347. Price Target BBD. P. as the large business jet market represents approximately 80% of its business jet sales. C$2. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.41E 14. CIBC World Markets Inc.39A $0. firstcall.0M No Current 3-5-Yr. where applicable. 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 $0.2M C$0. Investors should consider this report as only a single factor in making their investment decision. Toronto.7% $1.24 1.0x 14.. is an internationally diversified manufacturer supplying aerospace and rail transportation equipment and services. EPS Gr.ca Find CIBC research on Bloomberg. CSeries Risk Well Priced In C$7.8x 13. CFA 1 (416) 594-7285 Michael.481. If the business jet operations can return to a book-to-bill ratio of 1:1 in Q1/F12. Services.986:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports. Our C$7. Daily Trading Vol.39 BBD has two reportable manufacturing segments: Aerospace (Business Aircraft.763. Industry surveys continue to suggest favorable demand for the CSeries over the next few years.20 for the CSeries. BBD remains optimistic about order activity and execution of the CSeries launch. Customer Services and Flexjet/Skyjet) and Transportation (Rolling Stock. Box 500. Brookfield Place.O.ca David Galison 1 (416) 956-3548 David.com .9% January $2.37E $0. BA is well positioned to benefit from this.com and ResearchCentral. See "Important Disclosures" section at the end of this report for important required disclosures.5% C$4.Institutional Equity Research Company Update January 17. Canada M5J 2S8 (416) 594-7000 Michael Willemse.

5 $3.2 $845.37 1.304.763.0 $176.7% 22.269.980.9% F2011 E 19.2 $8.8% 3. *Bombardier Fiscal Years Ending January 31.9x 5.5% 4.39 C$7.604.5 $0.9 $4.0 $347.1x 11.0% 5.6x 2.215.5% 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 $16.098.5 $8.09 F2012 E $3.0 $655.0x 1.2x 69.9 $66.08 F2011 E $3.171.8x $3.7x 9.4x 1.442 9. Bombardier is actively seeking to grow by providing new products in the 4.606. Aerospace (Business Aircraft.743 Commercial Aircraft Amphibious Aircraft * Current Backlog .3) $137.Aerospace *Current Backlog .2 $1.73 Sector Outperformer C$5.9 $1.3 $3.0 $5.175. However.4x 7. Systems and Signaling).653.0 $1.Consolidated Gross Profit EBITDA EBIT EBT Minority Interest Net Income .824.5x 12.0 $4.6% F2010 A 0.103.4% company’s traditional markets (North America and Europe) as well as through an increased focus on emerging markets such as Asia.5x 16.0 $346.0) ($671.336.39 Rating: C$7.7% 3.9% 28.20 P/BV: FCF Yield: $2.0 $3.1 $2.236. Oper.0 ($767.565.0 $1. 2011 Bombardier (BBD.0 $0.6x 1.054.0x 0.442 10.6) EV/Sales: $563.0 $712.366.7x F2012E P/E 13.037.020.8 ($1. Fiscal 2011 = Calendar 2010 for comparative purposes.1% F2012 E 17.8x 3.7% 4.6x Deliveries (units) F2013 E Business Aircraft $21. Growth for business jets beyond F2013 will likely benefit from the introduction of the F2013 E Learjet 85.3) ($42.1 $0.4x F2010 A 18.017.7% 17.8x 21.Transportation *US$ bln Valuation & Outlook Current Price: Price Target: 12-18 Mo Return: C$5.2 $9. FD EPS.2% 8.7% F2011 E 1.2 $66.1x 4.7 $1.0 $1. We expect that business jet demand will begin to recover in calendar 2011.8 $0.9 Enterprise Value: ($1.9 $1.4% 4.26 F2010 A $4.0 $1.00 29.7% 3.6 $5.0x 0.0 $4.0% 16.621.596.3x Bombardier has two reportable manufacturing segments.B-TSX) Current Price: 12.2x 17.663.5x 12.1 $1.3 $66.92 0. 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 0.0x F2011 E $17.6% 8.0 $0.666.442 7.To 18-Month Price Target: F2011E EBITDA 9. Company reports and CIBC World Markets Inc.751.9x F2010 A $19.4x C$13.7 F2012 E 152 94 5 Q3/F11 A Q3/F11 A F2013 E 183 105 5 SO Price Target Represents: F2013 E P/E: $1.8x 6.7) ($365.773.769.galison@cibc.2 $0.0 $3.304.223. MBA 416-594-7285 416-956-3548 michael.0 $68.2x 4.5x 12.ca david.Bombardier Aircraft Orders Starting To Pick Up.7% 8.8% 4.2% 5.4 $2.9x C$13.4 $0. EBITDA EBITDA Margin EBIT EBIT Margin 40 .7x 2.40 F2012 E 15. given that large-scale transit infrastructure is typically funded by the public sector.0 $1.02 1.0 $915.Cont.January 17.755 F2010 A $1.9852 F2012E EBITDA Investment Thesis 12-Jan-11 F2011E P/E 14.500 $2.3x F2012 E $19.5x 13. Services.5 $0. F2013 E 1.0x Aerospace: the major growth driver for regional jets beyond F2013 will be reflected by demand from the CSeries.71 0. albeit at a moderate rate.1% 5.1% 3.7% 27.000 $500 $0 F2013 E Consolidated Chart Calculated as CFO divided by Net Income.500 $1.9x $2.10 0.8x 57.ca All Figures in USD$ millions. Specialized and Amphibious Aircraft.380.0 $346.4% 21.8x 8.4% and demand profile.9 $5.7% Transportation has been somewhat sheltered from the economic downturn.0) $456.743 F2011 E $1.0% 5.743 F2012 E $1.570.4% the company to offset weakness in one area with other segments that have a more stable growth 6.5) $165. Bombardier's diversification strategy has allowed 7.3% 6.3x C$13.15 F2011 E 15.4 $0.0 $346.41 1.4% cyclical swings in the aerospace sector.7x 15.2 $32. 17. 2 Calculated as CFO less Capex Source: Bloomberg. 7.9 $1. Customer Services and Flexjet/Skyjet) and 8.162.3% F2013 E 12.0 $698. (Ex.3 $0. CFA David Galison.1x $2.0 $958.6) EV/EBITDA: ($216.55 1.7% F2012 E 1.460. CSeries Risk Well Priced In .842.0 $4.7x Transportation (Rolling Stock.0 $0.2 ($1.6x 9.2 $994.000 $1.405.32 $3. Management intends to maintain a diversified product strategy with a continued focus on the rail and aerospace markets.5 $1.2% 18.1x $2. 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 .175.39 1.willemse@cibc. Commercial 8.164.6x 1.0x Aircraft.574.5% 23.1x 0.0 $9. BA has been negatively impacted by 9.00 Michael Willemse.

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

P.ca Find CIBC research on Bloomberg.Institutional Equity Research Company Update January 17.985:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports. 1 (403) 260-8675 Ian.O.cibcwm.com and ResearchCentral.ca Paul Nielsen 1 (403) 216-3403 Paul.69E 7.(C$0. is an independent oil and gas company engaged in the exploration.300 Bbls/d from the Cravoviejo and Cachicamo blocks.75. It approved a 2011 capital investment budget of $130 million to $145 million.Geol. Price Target CZE-TSX (1/12/11) Key Indices: TSXOilGas NM C$6. Market Capitalization Dividend/Div Yield Fiscal Year Ends Net Asset Value 2011 ROE (E) Net Cash Preferred Common Equity Convertible Available Cash Flow Per Share We recently initiated coverage of C&C Energia with a Sector Outperformer rating and now have a 12.87E $1.com/ All figures in US dollars.ccenergialtd. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.000 Bbls/d-7. acquisition..85 per Shr NM $69. Middle Magdalena and Putumayo basins of Colombia. including potential conflicts of interest. Rate (E) 52-week Range Shares Outstanding Float Avg. Box 500.com . Daily Trading Vol.021 $656. CZE's operations are focused in the Llanos.5x 7.000 Bbls/d from two of its four Llanos Basin blocks. www. Brookfield Place.0M Nil / Nil December $15. which could be realized from 2011 exploration drilling.56E $1. Reuters. Canada M5J 2S8 (416) 594-7000 Ian Macqueen.7x 6. 2011 Stock Rating: Oil & Gas .75.70-C$12.to 18-month price target of C$15. The Right Ingredients For Success Market Weight 12-18 mo. is C$7. P.1x Stock Price Performance Source: Reuters Company Description C&C Energia Ltd. See "Important Disclosures" section at the end of this report for important required disclosures. CIBC World Markets Inc. Management expects that 2011 production will range from 7. where applicable. We have also included C$8.90 3-5-Yr.3M 29. As a result. firstcall. Investors should consider this report as only a single factor in making their investment decision. Our base NAV estimate for CZE. Toronto. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.68/FD share in risked upside (C$20.23/FD share unrisked). CZE is relatively undervalued considering the magnitude of its upcoming exploration program.73 54.Macqueen@cibc.Nielsen@cibc. 161 Bay Street.International E & P Sector Outperformer Sector Weighting: C&C Energia Ltd. 2010 2011 2012 P/CF 2010 2011 2012 $1. unless otherwise stated.53M Nil NM No Current C$15. development and production of oil resources in Colombia. bringing our price target to C$15.514 gross acres in nine E&P blocks and produces ~7. CZE has identified 30 prospects and leads and plans to drill 15 exploration wells in 2011.0M Shrs 65. In our view. EPS Gr.17/FD share. The company has a 77% average working interest in 766.75 C$11. including development of the producing assets.

56 $32 $0.The Right Ingredients For Success .4% Financial Statistics And Current Valuation Share Price ($) Weighted Average Diluted Shares O/S Market Capitalization .1x) (0.0% Associate: Paul Nielsen.69 $39 $0.87 $39 $0.51 $4.72 $150 163% ($58) 2012E $45 0.mm Average Trading Volume (50 Day) Annual Dividend / Yield Sector Outperformer Analyst: Ian Macqueen.97 2012E 6.Geol.5x 7.842 5.85 P/NAVPS (Risked) 75% Target P/NAVPS (Risked) 99% Total Unrisked Asset Value C$1.50 $0.0x 9.90 50 C$593 (C$57) C$536 29 65.$M Float .8 0% 117 nmf 130 2010E $81 $81 $78 $1. P.$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.5x 0.5x 8.1x 2012E 7.ca Net Asset Valuation .352 6.1x 9.00 / 0.97 2011E 7.37 $0.$M Net Debt .6x 9.$mm Enterprise Value .Debt Adjusted Financial Statistics .2009 Total Risked Asset Value C$936 Total Risked NAVPS .5 0% 151 29% 167 2011E $120 $120 $102 $1.00 $4.72 $145 143% ($43) 2011E ($13) (0.842 5.75 Target Return: 32.4x 6.% Production Per Share (boe/d per MM FD) .3x 8.$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 .1x) 2010E 7.0x) 2011E 6.10% C$15.90 Price Target: C$15. Ph: (403) 260-8675 E-mail: Ian.021 C$0.50 $0.4x 43 .ca 2010E C$11. (CZE-TSX-V) Current Price: C$11. 2011 C&C Energy Ltd.Nielsen@cibc. 2010E $79.10% C$27.541 7.618 Total Unrisked NAVPS .2x 2011E $85.7x) (0.4 0% 128 (16%) 141 2012E $111 $111 $92 $1.Macqueen@cibc.6x 2012E $85. Ph: (403) 216-3403 E-mail: Paul.9x 7.541 7.64 $83 107% ($5) 2010E ($56) (0.% Free Cash Flow Debt Analysis Net Debt .January 17.40 P/NAVPS (Unrisked) 43% Target P/NAVPS (UnRisked) 57% CIBC Deck NYMEX WTI (US$/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 .352 6.00 $4.97 2010E 5.7x 10.

As a result. we believe the company is well positioned to take advantage of the second legup in rail volumes as North American-centric cargo. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. 161 Bay Street. potash) and the option value associated with its operating ratio.com and ResearchCentral. CIBC World Markets Inc. Reuters.41E $5.ca Kevin Chiang 1 (416) 594-7198 Kevin.Chiang@cibc. forestry and automotive. It provides freight services across Canada from Montreal to Vancouver and into key centers in the US Midwest & Northeast.071. CP remains the railway with the best opportunity to improve its operating performance.6% December $30. continues to play catch-up. Brookfield Place. CIBC World Markets does and seeks to do business with companies covered in its research reports. 2010 2011 2012 P/E 2010 2011 2012 $3.00 $66..9M $1..Bout@cibc. We estimate that every 1-point change in operating ratio is equivalent to $0.e. See "Important Disclosures" section at the end of this report for important required disclosures. Investors should consider this report as only a single factor in making their investment decision.cpr. 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. Rate (E) 52-week Range Shares Outstanding Float Avg. CP is our top pick given its leverage to bulk commodities (i.0x 13. There were concerns in 2010 about increased regulatory oversight of the rail industry as shippers looked to reduce freight rates. www.81E $4.115 $11.O.184.20 in EPS. Price Target CP-TSX (1/12/11) Key Indices: Toronto 12.389.ca Find CIBC research on Bloomberg.7% $4. With ~20% of CP's 2011 capital program focused on growth initiatives. The diminishing risk of re-regulation in the rail industry bodes well for CP (and the railroad industry). including potential conflicts of interest. Daily Trading Vol. metallurgical coal.6M Shrs 661. Box 500. P. EPS Gr.58-$67.2x Stock Price Performance Source: Reuters Company Description CP is one of two Canadian Class 1 railways and has a bulk freight orientation. It is targeting an operating ratio in the low 70% range within the next three to five years (from high 70%s currently).cibcwm.03E 17.com . such as building materials. 2011 Stock Rating: Transportation Sector Outperformer Sector Weighting: Canadian Pacific Railway Limited Rail With Option Value Market Weight 12-18 mo.Institutional Equity Research Company Update January 17.ca All figures in Canadian dollars.0M Nil $5.04 per Shr 11. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.50 168.8M 168. CFA 1 (416) 956-6766 Jacob.5% $49.4x 15. Canada M5J 2S8 (416) 594-7000 Jacob Bout. unless otherwise stated.25 3-5-Yr.08 / 1. Toronto.15-$0.8M No Current $78. firstcall. where applicable.

957 13.800 miles of track.6x 7.0x 8.4x 8.768 746 $4.619 645 $3. Potash: Risk of Canpotex diversifying potash contract post-2012 (CP currently the exclusive shipper for Canpotex).2 Canadian Pacific Railway Company (CP) is one of seven Class 1 North American railroads and the second largest in Canada.0x 10.07 $2. 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 77.4x 2011E 15. Of the total mileage operated. 2011 Canadian Pacific (CP-TSX. Pension: Pension expense will be headwind over the next three to four years.3x CP’s railway feeds directly into the U.9x 7.7x 21. leased or operated under trackage rights.0x 17.15 -$1. An additional 4.080 4. Met Coal .084 11.61 34% 1.072 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.200 miles in Eastern Canada.bout@cibc.S. Northeast. Deregulation Of Canadian Grain: Ability to increase “turn” – grain handlers on side.200 miles in the U.2x 8. from the East and West Coasts.6x 10.58 169 $11.1x 2012E 13. 5. CP transports bulk commodities.1% 11% 1. Key Multiples CP P/E Peer P/E CP P/CF Peer P/CF CP EV/EBITDA Peer EV/EBITDA 2010E 17.21 1.314 1.01 37% 1.73 45% 1.S.10-year agreement with Teck provides increased stability in the coal division.2x 7. CP is targeting an operating ratio in the low 70% range.2% 12% 1.700 miles of track are owned jointly.459 5.389 8.25 12.50 $49.599 1.531 1.S.4% Coal Sulphur & Fertilizer 7% 10% Income Statement Sales EBITDA From Operations Earnings From Operations FD EPS From Operations 2010E 4. 2.92 0.4% 2012E 75. except per share data Sector Outperformer Jacob Bout (416) 956-6766 jacob.To 18-Month Price Target: C$78.4% 2011E 76.300 miles are located in Western Canada. through the U. Midwest and 1. DM&E: Expect EBITDA to double from $100 million to $200 million in five years.8x 9. merchandise freight and intermodal traffic.15-$0.26 2011E $8.ca Company Profile Share Price 52 Week High 52 Week Low Shares Outstanding (Mln) Market Capitalization ($ Bln) $66.80 $4. CP-NYSE) Current Price: C$66.5x 7.20 in EPS.00 All figures in $ millions.January 17.25 $67. approximately 6.41 2012E 5.07 Balance Sheet Cash + ST Investments Current Assets PP&E Total Assets Current Liabilities LT Debt Total Liabilities Shareholders' Equity Q3/10 268 1.S.81 2011E 5. 45 .16 2012E $8.800 miles in the U. We estimate that every 1-point improvement in CP's operating ratio adds ~$0. The company owns approximately 10.4% 12% 0.03 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). Cash Flow CFPS FCFPS 2010E $3.9x 8.4x 32.81 1.973 1. and into Mexico.882 852 $5.1x 14.Rail With Option Value . Agreements with other carriers extend its market reach east of Montreal in Canada.

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

3M Yes Current 3-5-Yr. Price Target CSH. As a result.75 or 13. unless otherwise stated.7% December $7.000 $1.09 Chartwell Seniors Housing REIT owns and operates almost 24.cibcwm. We rate Chartwell REIT Sector Outperformer. Canada M5J 2S8 (416) 594-7000 Troy MacLean.169. firstcall.com . 2011 Stock Rating: Real Estate Sector Outperformer Sector Weighting: Chartwell Seniors Housing REIT Leverage To Recovering Occupancy. CFA 1 (416) 956-3643 Troy.70E 11. Daily Trading Vol. AFFO Gr. CFA 1 (416) 594-7399 Brad.UN-TSX (1/12/11) Key Indices: None NA $6. www.50 per Unit $1. well below its large-cap Canadian REIT peer average of 14. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.chartwellreit.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.6M 140.8% cap rate on current (in our view depressed) NOI. Brad Sturges. We expect Chartwell could achieve a recovery of as much as 200 basis points of occupancy in 2011.75 $8.S.to 18-month price target is $9. implying a total return of 27%.730. following credit crisis-driven pressure on the lighter-care retirement operating fundamentals over the past few years. and trades at an implied 7. Overweight 12-18 mo. Chartwell trades at 11.74E 13.000 seniors housing suites across Canada (~69%) and the U. increased investor demand and declining cap rates for seniors housing property.3M Nil $605.3x 12. Market Capitalization Distribution/Distr. Rate 52-week Range Units Outstanding Float Avg. Chartwell's current occupancy and income generation are below historical rates.ca Chris Girard.ca Find CIBC research on Bloomberg.2M Units 250. CFA (416) 956-3807 Chris. where applicable.6x 2011E AFFO.5x 2011E FFO. Chartwell focuses primarily on the lighter-care formats of independent supportive living (57%) and assisted living (23%).7x 11.Institutional Equity Research Company Update January 17. and strong growth in FFO.Avery@cibc. We expect recovering occupancy (for CSH and the broader industry). (~31%).9x Stock Price Performance AFFO Per Share 2009 2010 2011 P/AFFO 2009 2010 2011 $0.ca CIBC World Markets does and seeks to do business with companies covered in its research reports.63E $0.Sturges@cibc.69A $0.com and ResearchCentral.S. Toronto.O.16-$9. 161 Bay Street.ca All figures in Canadian dollars.Maclean@cibc. Investors should consider this report as only a single factor in making their investment decision. CIBC World Markets Inc.0x-13. Box 500.8x 10..8M $0. Reuters.ca Alex Avery. 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. Discount Valuation Present Unique Appeal $9.65 144. AFFO and NAV could drive Chartwell units higher in 2011. including potential conflicts of interest. with the remainder nursing care.59E $0. MRICS 1 (416) 594-8179 Alex. P. Brookfield Place.61A $0.7x 13. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. Our 12. CFA.Girard@cibc. See "Important Disclosures" section at the end of this report for important required disclosures.54 / 6.6x.

S.70 18.6% FFO MULTIPLES Chartwell Seniors Housing REIT AFFO MULTIPLES Chartwell Seniors Housing REIT 2009A 13.2% 0.4%) 2009 30.Leverage To Recovering Occupancy. VALUATION MULTIPLES REIT MANAGEMENT W. CFA Brad Sturges. 57.74 13. 39. concentrating on Ontario.0% (52. fully-covered by 2011E AFFO of $0.0% 30. 23.1% n/a 15. Brent Binions .S.3x 2009A 11. where occupancy has eroded.2% 98.25 Maturity May 1/12 COMPOSITION OF PORTFOLIO OF OWNED & LEASED SUITES (at Q3/10) Same-property Net Operating Income (NOI) U.8 $0.S. 7.7% 97.0 Conversion $16.President and CEO Vlad Volodarski .0% 90.194 $39.498 $3. CFA Chris Girard. 25.7x 2010E 12. The REIT is also considering acquisition growth in Canada moreso than in the U.8x 54.74 17. Alberta and B.4% Lim it 60.4% 93.571 $25.744 Change (8.6x 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. and the REIT may sell retirement homes in non-core markets.000 suite) primarily retirement home focused seniors housing portfolio in both Canada (accounting for ~69% of suites) and the U.8%) $0.4%) 0.8x 2010E 13.2% Q4 n/a 91.9x 2011E 11.9% Q3/09 89.0% BC.4% 90. Future acquisitions are likely to be one-off.169.63 3.1% $0.3% Q3/09 1.5 LEVERAGE SUMMARY LEVERAGE SUMMARY EBITDA Interest Coverage: D/GBV (w/o convertible debt): D/GBV (with convertible debt): Q3/10 1.9 * $0.69 (4.3% $0.9% Am ount $75.9 $87.2% 61. 3.0 $0.1% 89. 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.0% Assisted Living.50 8% 8.0% OCCUPANCY HISTORY (SAME-PROPERTY) Year 2010 2009 2008 Q1 90.(1/12/2011): $8.7% Q2 90.0 2012 $175.75 27% $7.5 Alex Avery.2% 2010 YTD 15.0% SAME-PROPERTY OCCUPANCY Segment Canadian Retirement Canadian Long-Term Care U. INVESTMENT THESIS: SECTOR OUTPERFORMER ATTRACTIVE FULLY-COVERED YIELD: CSH yields 6.2% 93. Quebec.75 Per Unit Unit Price . 5.09 Per Unit Current Yield: 6.0 $250. Melior and others.3% 91.9% Series 2011 $115.ca EARNINGS SUMMARY Financial Metric Funds From Operations YoY Change Adjusted FFO YoY Change 2009A $0. Operations Q3/10 89.7x 55.0 $0. CFA Troy MacLean.7% 61.chartwellreit.0x-13. LTC NOI (US$) Cdn Retirement NOI (Cdn $) Cdn LTC NOI (Cdn $) Total NOI (Local $) Q3/10 $9.7% 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 (52.2%) 2010E $0.).61 (22.0% Ontario. STRATEGY Chartwell is focusing on maximizing returns from its existing portfolio. Noonan .409 Q3/09 $10.Chief Financial Officer Richard J. rather than large portfolios of properties.5% Issue $14.717 $26.9% (6.9 $72. RESOLUTION OF LEGACY STRUCTURES: The REIT has made considerable progress working through legacy partnerships.1% Change 50 bps -20 bps -20 bps USA.9% 88.00% COMPANY DESCRIPTION Chartwell Seniors Housing REIT owns and operates a large (~24.5% $0. Chartwell is winding down its joint-venture and mezzanine lending relationships with Spectrum.18 month Price Target: $9.8 5.5X $9.5 $75.0% CONVERTIBLE DEBENTURES (at Q3/10) Interest Rate 5.756 $3. (~31%). which should be substantially resolved in 2011. CFA 12 .1%) 2.8 * $124.C.1%) (0. 20.7%.401 $39.1% 93.4% Q3 90. Discount Valuation Present Unique Appeal .7x 2011E 10.8%) Level of Care Independent Supportive Living.1% 93.UN-TSX) Stock Rating: Sector Outperformer Sector Weighting: Overweight Market Capitalization ($ mlns): $1. in the future engaging in development activity for its own account.70.0% Source: Company reports. 26.9 million of the 2011 convertible debentures will be redeemed in December 2010.0 $64. ThomsonOne and CIBC World Markets Inc 48 .January 17.0% 65.5% ) 2011E $0.59 (14.1 $124.0% Geographic Location Alberta. 2011 Chartwell Seniors Housing REIT (CSH. in-fill purchases. which could drive considerable growth in FFO and AFFO into 2012 and beyond.0 $240.0% Quebec.3% Long-Term Care.S.S.Chief Operating Officer www.

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

50/sh is based on a 1.daylightenergy. 161 Bay Street. including potential conflicts of interest. See "Important Disclosures" section at the end of this report for important required disclosures.82E 5..1x). firstcall.5X Net Debt $665.shen@cibc.4x Stock Price Performance Cash Dividend Per Share 2009 2010 2011 Cash-on-Cash Yield 2009 2010 2011 Company Description Daylight Energy Ltd.95 per Shr Net Debt/CF 1.Institutional Equity Research Company Update January 17.3M Dividend/Div Yield $0. Daylight trades at a P/Risked NAV of 76% and a 2011E EV/DACF multiple of 6.com . Key assets include Daylight's Cardium tight oil at Pembina (AB) and its natural gas resource plays at Elmworth (AB).72E $0.cibcwm.0 2011 EV/DACF 6. 10-105922 © 2010 Diana Chaw 1 (403) 216-8518 Diana.7x 5.50 $9.8% 7.000 Market Capitalization $2. Canada M5J 2S8 (416) 594-7000 Jeff (Sizhuo) Shen 1 (403) 221-5047 jeff.46E $1. and Bluesky formations. Montney.1% Fiscal Year Ends December P+P RLI (years) 11. unless otherwise stated.1% yield (vs. Other notable assets include its Belly River light oil play at Pembina (AB).40-$11.1x target multiple to our Risked NAV (vs.7X Convertible Available Yes Cash Flow Per Share We believe shares of Daylight represent excellent value at current levels.O.96A $0. averages of 94% and 9.240.60 / 6. P.76A $1. CIBC World Markets Inc.60E 9.1% Source: Reuters All figures in Canadian dollars. which is prospective for the Nikanassin. 2011 Stock Rating: Oil & Gas Royalty Trusts/Dividend Corporations Sector Outperformer Sector Weighting: Daylight Energy Ltd. We would also highlight the possibility of Daylight striking a joint venture at Elmworth (AB) to develop its natural gas resource plays.ca Jeremy Kaliel 1 (403) 260-8657 Jeremy.68 Shares Outstanding 208. Price Target DAY-TSX (1/12/11) Key Indices: $13.Kaliel@cibc. Brookfield Place.ca $0. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.5x (vs. S&P/TSX Income Trust Composite Projected Total Return 36.6x 6. As a result. Daily Trading Vol. Our price target of $13. Frequency $0.9M Distr. the average of 1. www. Toronto.1x) with a 6. as we believe that investors are currently paying for little or none of Daylight's significant natural gas resource potential. A&D Execution Key To Refocused Asset Base Market Weight 12-18 mo. In addition.0% 52-week Range $8. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. Potential near-term catalysts include year-end results/reserve reporting (expected in early March). Cadomin.ca CIBC World Markets does and seeks to do business with companies covered in its research reports. Reuters. converted from a trust to a dividend-paying corporation on May 7.3%).3% 6. Box 500.com and ResearchCentral. the average of 5.1M Net Asset Value $12.ca Find CIBC research on Bloomberg. Investors should consider this report as only a single factor in making their investment decision. 1. where applicable. 2010.05 Monthly Avg.049. we would highlight Daylight as an excellent way to play natural gas defensively.Chaw@cibc.81 S&P/TSX Energy Trust. 2009 2010 2011 P/CF 2009 2010 2011 Current $1.

00/mcf Key Valuation Metrics vs.81 12 To 18 Month Price Target: C$13.17) ($9.7x 8.37A $0.050MM Average Trading Vol (50 day): 1.760A $0.1x.44) $23.50/share is based on a 1.5 1.5x 1 1.50 USD/Cdn (longterm).46E $1.1x 8. and its natural gas resource plays at Elmworth (AB) which is prospective for the Nikanassin.052A 40.3 Proved + Probable (2P) 119. US$$90. and Bluesky formations.25 25% 0 0% 200% 175% 150% 125% 100% 75% 50% 25% DAY Group 5 $45 $40 $35 $30 DAY Risked NAV (C$/Share) "Bluesky" NAV (unrisked) Risked NAV Core NAV 71% 87% 88% % Credit Facility Utilized % Credit Facility Utilized Total Debt Cash Flow Total Debt / /Cash Flow Crescent Point Progress Penn West PetroBakken Bonavista Perpetual Enerplus Group Group Avg.5x (versus the group averages of 94% and 9.1%) Position President & CEO VP.174 $22. / Yield: $0.68 Current Price PetroBakken Bonavista Vermilion Crescent Point Baytex Penn West CIBC Base Cmdty Prices US$50/bbl C$4.16) $0.1% (versus the group average of 5.25) ($2.5x 0 0. Montney. AET DAY Group 2011E DAY Group DAY Group DAY Group DAY Group DAY Group DAY Group DAY Group DAY Group DAY Group DAY Group $20 $15 $10 $5 $0 US$100/bbl C$7.78 94% $94.2x 11.3x 1. with FX of $4.4x11.7x $625 $280 (45%) Netback Analysis ($/Boe) Gross Revenue (net trans) Hedging Gains (Losses) Royalties Operating Costs Operating Netback G&A Interest Cap Tax/Other Cash Flow Netback Group avg Operating Netback Group avg Cash Flow Netback Name Randy Ford Steve Horner Pamela Kazeil Jerry Simpson 2010E $43.YOY) (Mmboe) (boe/d) 2006A 2007A 2008A Q1 Q2 Q3 Q4 FY % Gas Production (Boe/d) CFPS (Basic) 2010E 2010E 2011E 2011E 39.0x 1.0x Payout Ratios 4.9MM Market Cap.38A 42.1x 10.93 Daylight Group Average MANAGEMENT (Ownership: 3.97/mcf (long term) for AECO natural gas.1x P/Core NAV 158% 181% EV/ EV/2P P/Risked Production Reserves NAV ($/Boe/d) ($/Boe) 76% $64.83 ($12.00 $18.59 $32. C$$0. Potential Catalysts: Potential near term catalysts include year-end results/reserve reporting (expected in early March).00/mcf Risked NAV Price Target 2005 2006 2007 2008 2009 2010E 2005 2006 2007 2008 2009 2010E 2011E EV/DACF (2011E) 6. incl.87 $1.2P.5 Total Proved (1P) 77.January 17.5 50% 0. incl.1% Shares O/S(1): $208.50 Dividend (NTM) / Freq. 2) Y/E P+P reserves divided by Q4 annualized production (Q4 2010E Production for 2010E). Avg.04 ($13.85 $30. Production NOTES 1) Shares O/S based on most recent quarterly balance (adjusted for recent acquisitions and equity issues).Shen@cibc. and $$5.A&D Execution Key To Refocused Asset Base .00 ($2. 51 Pengrowth Progress Daylight Enerplus Average Trilogy Peyto ARC NAL Bonterra Trilogy Peyto ARC NAL $25 .9x 9.6 / mthly / 6. with a 12-18 month price target of $13. FDC on a cash basis. Relative Valuation: Daylight is currently trading at a Price to Risked NAV ratio of 76% and a 2011E EV/DACF multiple of 6. C$0.000 0 2007A 2008A 2009A 2010E 2011E 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% 135 120 105 90 75 60 45 30 15 0 2005A (% change .2x Reserve Engineers: GLJ Petroleum Consultants Ltd.82E 42. FDC $26. 2009A DEBT & OUTFLOWS VS.YOY) Reserves Growth (Per Share) 2P Reserves .75 75% 0.33A 42.60/share) versus the group average of 1.85 USD/Cdn (2012E). (DAY . and US$$95.000 15.5x 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.1x.Years 8.35 USD/Cdn (2011E).4x 6.00) ($2.000 20.1 162.3% 2011E P/CF 5. Business Services VP. 6) Based on net capex including the effect of Alberta royalty credits.1x 9.37 $25. Source: Company reports and CIBC World Markets Ltd.0 FD&A .150E $1.8x 8. We believe shares of Daylight represent excellent value at current levels.Chaw@cibc. PROPERTY OVERVIEW PRODUCTION & RESERVES GROWTH Production Growth (Per Share) Production (DAY) PPS Growth (DAY) PPS Growth (Avg) 45.16) $0.5 11.3x 9.0 91.ca SUMMARY & INVESTMENT THESIS Investment Thesis: We have a Sector Outperformer rating on Daylight Energy Ltd.5 3.13) ($10. as we believe that investors are currently paying for little or none of Daylight's significant natural gas resource potential.ca Diana Chaw (403-216-8518) Diana. Coverage Group (CIBC Estimates) Share Price $9. In addition we would highlight Daylight as excellent way to play natural gas defensively.38E 41.TSX) Current Price: C$9.95/share (less forecast dividends of $0.000 5. 5) Our base commodity price assumptions are US$$85. $$4.50/share.5 PDP % of Total Proved 56% 49% Total Proved % of P+P 65% 56% 2 2P Reserve Life .5x 7.4x Pengrowth Vermilion Perpetual Bonterra 2. Inflows4 200% 1.93 2011E $50.1% 5.500E $0. Reserves (MMBoe) Proved Developed Producing 43.000 30.0x 2011E EV/DACF 6. 2011 Daylight Energy Ltd.20 $27. 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 $651 2. 3) Year operating netbacks divided by reported P+P FD&A cost.230.000 Sector Outperformer Jeremy Kaliel.450E 57% 51% 5 2009A +Net Acq. total payout is calculated as total CAPEX and dividends (excluding the effect of DRIP) as a % of operating cash flow.0x 3 3.000 25. Operations VP.00/bbl (long term) for WTI crude oil.1x 9. We would also highlight the possibility of Daylight striking a joint venture at Elmworth (AB) to develop is natural gas resource plays. Exploitation Position VP.25 150% 1 125% 100% 0. INFLOWS D/CFDebt Metrics (DAY) D/CF (Group) VALUATION SUMMARY Outflows vs.0x 0.0x 2 2.0x 10.2x Financial Flexibility ($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.00 $24. Key Assets: Key assets include Daylight's Cardium tight oil at Pembina (AB).97/mcf (2011E).231 $16. Cadomin.00/bbl (2011E).00/bbl (2012E).4x 8.75 $1.MMboe (DAY) RPS Growth (DAY) RPS Growth (Avg) RELATIVE RISK & MAGNITUDE OF UNBOOKED PROSPECTS 30% 25% 20% 15% 10% 5% 0% -5% -10% (% change .0x 8. CFO Executive VP VP.3%). 4) Basic payout ratio is calculated total dividends (excluding the effect of DRIP) paid as a % of operating cash flow.5x 8.1x target multiple to our Risked NAV of $12.5 0.09 3 Cash Recycle Ratio 1.01 ($2.75) $29.81 Expected Return 44% 21% 2011E Yield 6.273A $0.: $2. respectively) while providing a current yield of 6.97/mcf (2012E).000 40. Finance VP.4 44. and inflows versus outflows is calculated as total CAPEX and dividends (including the effect of DRIP) as a % of operating cash flow. Other notable assets include its and Belly River light oil play at Pembina (AB).5x 9.000 35.ca Jeff Shen (403-221-5047) Jeff. MBA (403-260-8657) Jeremy.000 10.Kaliel@cibc.5x 2. Our 12-18 month price target of $13. Outflow s (incl DRIP) Basic Pay out Ratio 112% 108% 108%108% 76% 77% Daylight Baytex Average 12.5 175% 1. and C$$0.

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

See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.0% $7.6M $0. unless otherwise stated. Market Weight 12-18 mo.ca Find CIBC research on Bloomberg.Lupick@cibc.0M 735.064. we believe it is a good time to buy EnCana.02-$35.com and ResearchCentral.ca $9. Over the long term. Reuters.4x 30.624 $21.00 $29.98E $0.Potter@cibc. Price Target ECA-NYSE (1/12/11) Key Indices: Toronto.S. but given the still relatively weak outlook for natural gas in 2011 we expect growth to be more in the 7% range -. As the market regains confidence in ECA's strategy/asset quality. As a result. firstcall. See "Important Disclosures" section at the end of this report for important required disclosures. We believe all of these events are likely. Brookfield Place. 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. Toronto.ca CIBC World Markets does and seeks to do business with companies covered in its research reports. Box 500.63 740.8x 5.cibcwm.844.41 per Shr 4.Large Cap Sector Outperformer Sector Weighting: EnCana Corporation JV & More Restrained Spending Should See ECA Regain Lost Ground In 2011 $36. peers. Nick Lupick 1 (403) 221-5049 Nick. Daily Trading Vol. we believe there is substantial room for the valuation to re-rate to historical levels. we believe EnCana has the capability to grow 10%+ per year.933.2x 4.0M Shrs 2. EPS Gr. Canada M5J 2S8 (416) 594-7000 Kyle Balaux 1 (403) 216-3401 Kyle. where applicable. CIBC World Markets Inc. Investors should consider this report as only a single factor in making their investment decision. we need to see some combination of: 1) EnCana landing a large joint venture (reduces capex burden and depicts value).67E 3.O. including potential conflicts of interest. Rate (E) 52-week Range Shares Outstanding Float Avg. P.62A $0.0M No Current 3-5-Yr.2x Source: Reuters All figures in US dollars.4x 2011E EV/DACF.7% December $38. a significant discount to its peers.com . and/or.0M Nil $16. Given the weak performance in 2010 and the stock's near-record-low valuation. 2011 Stock Rating: Oil & Gas . For EnCana to outperform. 2) a growth strategy that balances capex and cash flow. ECA trades at only 77% of our risked NAV estimate and at 6.Institutional Equity Research Company Update January 17. www.2x 34.Balaux@cibc. 161 Bay Street. NYSE NM $26.encana.21E $5.still at the high end of Canadian comparables' growth rates and in line with U.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.29A $6. 3) a recovery in natural gas prices.com Andrew Potter.80 / 2.87E 6. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.64 EnCana was a big laggard in 2010 as weak gas fundamentals more than trumped the company's strong production growth. CFA 1 (403) 221-5700 Andrew.885..

97 2012E 1.$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.3x 2013E US$95.459 $4.983 686 84% 4% 2010E US$79.945 107.2x 2015E 3.8x 0.ca Nick Lupick.64 Price Target: $36.00 $94.303 2015E $5.42 $58.984 $9.360 $10.4x 2014E US$95.321 0.50 US$9.671 25.617 $2.695 $6.678 5.338 $4.428 $824 $36 ($49) ($3.4x 7.183 $4.bbl/d SAGD Oil & Liquids Production .50 US$9.00 $84.2x 2009 6.4x 7.010 28.2x 2014E 4.3x 36.479 1.00 $5.97 2015E 2.41 P/NAVPS (Risked) 77% 94% Target P/NAVPS (Risked) Total Unrisked Asset Value $51.bbl/d United States Oil & Liquids Production . Ph: (403) 221-5049 E-mail: Nick.30 US$4.bbl/d Oil & Liquids (bbl/d) Production .968 877 95% 0% 7% 2015E $4.805 0 41.22 US$6.US$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 .26 $1.64 740 $21.2x 31.405 735 2.060 3.0x 16.JV & More Restrained Spending Should See ECA Regain Lost Ground In 2011 .688 817 95% 0% 12% 2014E $4.172 13. NYD) Current Price: $29.604 $3.090 $1.January 17.7% Kyle Balaux.$M Net Debt .0x 4.00 $94.99 $66.187 22.MBoe/d Natural Gas % Oil Sands % Production Growth Per Share .2009 Total Risked Asset Value $28.720 11.Potter@cibc.97 2010E 1.882 $2.6x 6.98 $5.7x 0. Ph: (403) 216-3401 E-mail: Kyle.541 0 33.3x 0.88 2009 1.29 $3.00 $1.098 113% ($589) 2010E $6.921 12.1x 15.25 $4.00 $0. CFA Ph: (403) 221-5700 E-mail: Andrew.2x 12.408 1.621 0 29.00 $0.665 1.000 10.7x 2015E US$95.546 2009 $5.00 Target Return: 21.288 1.87 $4.56 $6.479 $28.97 2011E 1.2x 2012E 5.97 2013E 1.319 1.844.02 $75.99 US$8.35 US$9.436 $0 $42 ($3) ($576) $0 $8.22 US$6.464 $0 $42 ($3) ($403) $668 $4.959 $2.9x 2010E $2.$M Float .2x 2013E 4.1x 4.50 US$9.93 $1.% Free Cash Flow Debt Analysis Net Debt .40 US$4.163 13.6x 2012E US$90.611 90% $489 2012E $6.7x 4.239 4.% Financial Statistics .02 $75.53 P/NAVPS (Unrisked) 42% Target P/NAVPS (UnRisked) 51% 2009 US$61.842 9.713 2.172 10.332 2.614 $3.093) $0 $6.909 $6.5x 41. 2011 Encana (ECA-TSX.00 $94.838 0 23.2x 2010E 6.768 $0 $25 $1.178 $5.337 11.736 $2.00 $5.51 $77.ca 2010E $29.793 659 95% 0% 12% 2012E $2.00 $0.067 84% $966 2013E $6.607 0.767 0 38.471 66.00 $0.122 $0 $42 ($3) ($537) $0 $7.282 Total Risked NAVPS .0x 20.300 0 25.624 $0.237 $7.48 $4.22 US$6.9% $70.62 $5.4x 0.67 $0.057 82% $1.00 $0. Sector Outperformer Analyst: Andrew Potter.00 $89.07 $74.94 $3.746 $0 $42 ($3) ($481) $0 $6.0x 14.61 US$3.Balaux@cibc.3x 6.317 29.727 $4.264 92% $555 2014E $6.5% Financial Statistics And Current Valuation Share Price ($) Weighted Average Diluted Shares O/S Market Capitalization .100 $6.680 552 96% 0% 2011E US$85.6x 12.21 $725 $0.438 78% $1.477 4.67 $637 $0.820 $9.855 1.20 $5.927 $0 $42 ($3) ($434) $461 $5.55 $67.9% $38.75 $4.0x 0.37 $3.033 $8.99 US$9.070 $4.8x 0.805 $2.85 US$9.358 $6.80 / 2.854 3.300 590 96% 0% 7% 2011E $1.23 $0.97 2014E 2.159 100% $18 2011E $7.386 ($341) $332 $6.928 Total Unrisked NAVPS .194 2.mmcf/d Natural Gas (MMcf/d) Canadian Oil & Liquids Production (excluding FC & CL) .7x 24.774 19.5x 5.509 $6.878 732 95% 0% 11% 2013E $3.616 3.12 $69.Lupick@cibc.1x 2009 $4.23 US$5.978 3.7x 54 .2x 2011E 6.064 1.02 $75.19 $1.45 $6.5x 14.ca Net Asset Valuation .948 2.mm Average Trading Volume (50 Day) Annual Dividend / Yield Note: All company figures are in USD unless stated otherwise CIBC Deck NYMEX WTI (US$/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 .013 $2.9x 0.729 $5.2x 35.$mm Enterprise Value .386 15.313 0.926 $6.1x 14.00 $5.

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

com Perry Caicco 1 (416) 594-7279 Perry. CFA 1 (416) 956-3278 Mark. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Jean Coutu remains a relatively inexpensive.S.2x 12.170. Investors should consider this report as only a single factor in making their investment decision.22 / 2.1M Shrs 425. where applicable.A-TSX (1/12/11) Key Indices: None NM $7. Canada M5J 2S8 (416) 594-7000 Eric Balshin 1 (416) 956-6108 Eric.ca CIBC World Markets does and seeks to do business with companies covered in its research reports.ca All figures in Canadian dollars.6M $0. Mark Petrie. As a result. Its expertise in front-store merchandising. P.70A $0. Daily Trading Vol. and Quebec drug reforms will drag a bit on growth in the following year. See "Important Disclosures" section at the end of this report for important required disclosures. www.4% equity stake in Rite Aid. Toronto. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.Institutional Equity Research Company Update January 17.8M Nil $558. Rate (E) 52-week Range Shares Outstanding Float Avg. Price Target PJC.1M No Current $11. well-positioned drugstore chain with numerous opportunities for growth. Good Position Market Weight 12-18 mo. Reuters.com and ResearchCentral. However. its strong buying practices. including potential conflicts of interest. Brookfield Place.76E $0. Box 500.88-$10. and possibly a few Quebec deals as pharmacy economics make size and scale more critical attributes. its narrow focus and its good franchisee relations might make Coutu a welcome addition to the national scene.39 per Shr 31. CIBC World Markets Inc. Low Price.50 $9. Over the next 12 months. we expect at least one sizeable national transaction. 2011 Stock Rating: Merchandising Sector Outperformer Sector Weighting: Jean Coutu Group (PJC) Inc. We would be surprised if PJC was not an active participant.800 $2. Jean Coutu is also well positioned to participate in national drugstore consolidation.O.Balshin@cibc.cibcwm.4% February $2. unless otherwise stated. $0.4M 111. 161 Bay Street. firstcall. EPS Gr.9% $219. 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.Caicco@cibc.jeancoutu.30 3-5-Yr. paying reasonable prices.ca Find CIBC research on Bloomberg. one of the largest pharmacy chains in the U.Petrie@cibc.. 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.24 233. Earnings will be not much more than flat this year.com .76E 13. 2010 2011 2012 P/E 2010 2011 2012 Excludes Rite Aid.3x 12.2x Stock Price Performance Source: Reuters Company Description Jean Coutu is the largest drug retailer in Quebec and owns a 28.

4 Management Jean Coutu Francois J.4 3.282.5% 6.7 6.9 13.7x 8.4 111.5 66.014 1.85% 4.1 945.1 9.4 7.4 19.053. PJC is well-positioned to make sizable acquisitions outside of Quebec.3% 1.7 244.3% Valuation .19% 248.6) $ 2.3 PJC is the dominant drugstore chain in Quebec.9% $3.6 -4.Low Price. Y/Y Sq.8 76.33% 231.1 62.99 1. 57 Forward EV/EBITDA $15 .1 1. USD Current USD/CAD exchange rate Value of RAD per PJC share.6x -0.4% 23.76 228.16 $160.7 62.To 18-Month Price Target: C$11.a share price.2 Share price 4.ca Eric Balshin (416-956-6108) Eric.93 Multiple Value 9. Good Position .19 236.6x 12.76 $ 233.170. but the impact is one-time.0 0. CAD $ $ $ $ $ $ $ 9.01% 217.36 USD/CAD Coutu Calculator Next 12m PJC/A current share price.4x 7.1 5.2 0.370.0 0.0x $ # of Shares 252. Diluted $ 473. in CAD F2012E 9.390.05% 3.9 165.ca Investment Thesis Comparable Analysis LY P/E ratio Jean Coutu (ex . Ft Increase Avg Store Size (Thousands) 370 2.637.5% $2. CFA (416-956-3278) Mark. CAD RAD current share price.21 $ 233.2% 0.5x 0.5 614.49 $157.14% 14.A-TSX) Current Price: C$9.26% 7. Over the next few months.15 398 2.7% -1.892 9. in CAD EV/ Next 12m EBITDA.9% 17.5 173.6 1.99 $ 1.3x 14.14% 19.9 13.0 5.3x 14.08 8.1 8.647 6. CAD PJC shares o/s Net Debt (Cash) PJC Canada EV.3 -0.765.4 0.2 $ 2. PJC PJC. 2011 Jean Coutu Group Inc.5 7.8 2.70 $ 236.50 All figures in millions except per share data Sector Outperformer Perry Caicco (416-594-7279) Perry.014 1. RAD) Shoppers US peers 8.0% 0.98% 3.1 $ 2.4 128.3 2.355.6 74. and owns a growing generic drug manufacturing business.7x 26.8 $ 2.6 285.5% 1.8% 1.8% 15.9 179.2x 12.6 2.7 254.7x 0.9x Key Ratios TY NY ROE ROA After-Tax ROIC Current Ratio Net Debt/EBITDA Net Debt/Capital BV/Share FCF F2010 34.0% -3.8 0.6 75.7 2.30% 3.2 7.9 7.99 Value/Share CAD 10.0 0.7% 20.0% 1.7 3.7% 0.08 $ 8.025.8 7.112 7.22 $ 227.2 Price/Share Rite Aid stake Sub-Total Net (Debt) Cash Total Pre-Tax Realizable Value Note: Conversion to CAD$ at Current Spot Rate of: $ 0.592. Longer-term.7x 9.8 2.495.0 $ 246.4 348.4 123.014 1. Ft.8% 6.6x 15.05% 4.ca Mark Petrie. New Store Development F2010 F2011e F2012e Total Store Count Estimated Sq.6x 13x 11x 9x 7x 5x Rite Aid share price.8% 4.3 7.3 47.2 71.8 6.3 8.1% 3.6 6.22 228.1 277.22% 7.0 0.2 $ (149.7 F2012e 26.34 Market Information Shares Outstanding Float Market Capitalization Net Debt Enterprise Value $ 233.7x 28.389.7 3.01 (0.08 12.5 43.97% 12.6 677.7x 7.30 $ 0.6% 6.3 20.6 $10 $5 $- Source: Company reports.2 149.2% $2.30 12.337.6 2.6% 1.7 268.338.7 18.5 8.9 511.4x 8.Caicco@cibc.3% 16.2x 14.5x 8.880.0 0.0x 13. RAD Loss # of Shares O/S.4x 12.2 1.2 502.5x 17.95% 59.8% 579. Coutu Andrew Belzile Alain Lafortune Normand Messier Chairman President and CEO EVP.0 48.0 $ $ $ $ $ CAD 2.39% 17.5% 22.9 953.Petrie@cibc.27 424 3.3 6.395.3% 2. Purchasing and Marketing EVP.6 923.5x 14.F2012E NAV Q3/F11 Review Actual Estimate Q3/F10 CDN Operations $ EBITDA F2012E 277.RAD) Shoppers US peers EV/EBITDA Jean Coutu (ex.01 $155.74% PJC Canada price per share.0 177.741.543. 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.9% 2.583.3x 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.53% 57.30 0.2 1.38% 55.1 $ 2.6% 2.2 0.0x 8.2 616.66) 11.2 13.9 0.8% 611.41% 14.0 $ 269.January 17.61% 7.5x 8.490. Bloomberg and CIBC World Markets Inc. Pro Doc) Other Revenue Total Revenue 6.4% 0.1 3. CAD PJC Canada EBITDA estimate PJC Canada EV/EBITDA $20 Current EV/Next 12m EBITDA 7.6 219.Balshin@cibc.9 699.4 341.591.1% -3. Affairs EVP.298.58% 17.4 $ 7.6 $ 1.6 343.2 5. drug reimbursement policies in Quebec will trim the company's earnings.9 13.2 $ 131.1 62.1 5.4 F2011e 31.7% 2.20 $ 233.2 7. (PJC.5 13.2 0.9 277.0 678.4 -55.0% 0.4 636.8% 597.2% 2.3 2.1 13.2 74.9x 0.4 244. Drug reform in Quebec continually weakens independents and puts PJC into a stronger position for acquisitions.0 0. Finance and Corp.

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

Sultan@cibc. including potential conflicts of interest. given KGI's control of most of the key ground where it operates.0M Shrs 260. Daily Trading Vol.cibcwm. unless otherwise stated. is an operating gold mining company located in Canada. The company's shares offer good leverage to gold price movements.6x Source: Reuters Company Description Kirkland Lake Gold Inc. with results that are reminiscent of the Red Lake mine. Investors should consider this report as only a single factor in making their investment decision.72 3-5-Yr.25-$16.O. The company's flagship mine is the Macassa Mine located in Kirkland Lake. with the added prospect of finding high-grade mineralization where the hit ratio has been >80%. annual level within two years. See "Important Disclosures" section at the end of this report for important required disclosures.003.com All figures in Canadian dollars.Institutional Equity Research Company Update January 17.00 $14. 161 Bay Street. Toronto.ca Find CIBC research on Bloomberg.com and ResearchCentral.. including the high-grade South Mine Complex. Drilling continues to intersect mineralization that is among the highest concentrations in the world.klgold.000 $1. EPS Gr. As a result.ca Khaled Sultan 1 (416) 594-7297 Khaled. Long-term prospects for continued reserve growth are strong.com .1x 13. Box 500. Canada M5J 2S8 (416) 594-7000 Barry Cooper 1 (416) 956-6787 Barry.10E Current $22. 2010 2011 2012 P/E 2010 2011 2012 NM 49. Rebuilding In A Classic High-grade Camp Overweight 12-18 mo. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Brookfield Place.4M No ($0. Reuters.30E $1.53A $1. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. We think KGI trades at attractive multiples relative to its upside potential for growth in production as well as reserves. 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. which should vault KGI into intermediate producer status.30A) $0. Price Target KGI-TSX (1/12/11) Key Indices: None NM $6. firstcall.Cooper@cibc.000 oz. Production plans remain on track for growth to the 200. where applicable.53E NM 27.2M 67.21A) $0. With two sources of ore. www. 2011 Stock Rating: Precious Metals Sector Outperformer Sector Weighting: Kirkland Lake Gold Inc. We foresee prospects for expansion beyond these figures and delivery of production will be the key driver for share price performance.6M Nil / Nil April $2. CIBC World Markets does and seeks to do business with companies covered in its research reports. P. Ontario. the build-out of production won't be constrained by ore availability.19 68.34 per Shr NM NA Nil $159.8x 9.4x Stock Price Performance Cash Flow per Share 2010 2011 2012 P/CF 2010 2011 2012 ($0. Rate (E) 52-week Range Shares Outstanding Float Avg. CIBC World Markets Inc.

9 x 5% Discount P/NAV P/NAV $1.7 x 2.2 x 1.397 2.Rebuilding In A Classic High-grade Camp .G&A Exploration Total Expenses Income Before Tax Income Taxes Net Income EPS CFPS Shares Outstanding P/NAV $1.4 x 2.00 0.2 x 2.4 x 2.6 x 1.9 x build-out of production will not be constrained by stope availability once the expansions are complete Large Cap Average (>$10B) 1.53 68 F2013E $1.4 x 2. yr 2011@ US$1600.8 x 18.7 x 39.63 100% 100% 5% 577 50 671 8.269 146 $631 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 $6.05 9.73 9. P/NAV Sensitivity Avg.100 $1. We believe that as production is Large Cap Average > 1M oz 1.100 $1.7 x 18.6 x 13.6 x 19.5 x 1.8 x 109.085 ** Reserves and Resources F2010A $975 45 $1. KGI offers good leverage to gold price movements with Small Producers < 0.Khaled.916 $9.2-1 M oz 1.30 0.3 x 2.US$ 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. 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 1.2M oz 2.ca Khaled Sultan .3 x 49.8 x 3.8 x 19.5 x mineralization that is among the highest concentrations in the world. 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.0 x 2.600 146 $647 $32 $246 99 16 4 6 125 121 40 80 1.0 x 1.0 x 28.D&A.5 x 2.2 x 37.2 x 27.05 0.January 17.7 x 2.4 x 1.1 (416) 594-7297 .9 x 3.US$ 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 0.4 x 2.5 x 15.9 x the added prospect of finding high-grade mineralization.700 185 $625 $32 $332 122 20 5 6 153 178 60 118 1.6 x 4.4 x NEG 26.7 x 16.21 68 Production* Cash Costs** 2P M&I 146 631 1.0 x 21.Sultan@cibc.7 x 38.00 Source: Company reports and CIBC World Markets Inc.300 3.47 0.6 x 2.8 x 172. the North American Average 1.0 x 1.2 x 49.8 x 1. Gold price assumption in yr 2010 @ US$1225.9 x 2. Reclamation S.9 x 2.8 x 2.0 x 3. 2011 CAD 14.7 x 1.8 x 15.2 x 40.9 x 17.5 x 2.225 93 $720 $58 $121 71 8 3 6 87 34 11 23 0.2 x 1.53 68 F2012E $1.0 x 1. 60 . Barry Cooper .8 x prospects for grade enhancement at the mine.3 x realized the market will recognize that this camp is worthy of similar multiples afforded operations in Intermediate Producers 0.2 x 4.5 x 73.016 $9.0 x 9.83 0 3 3 667 0.000 $800 $600 $400 $200 $0 Production Production (2011E)/Resource Detail Asset Macassa and SMC Total * Gold (000s oz) ** Net of by product credits (if applicable) NAV Breakdown .6 x 33.30 -0.2 x 3.0 x 1.200 Ownership Discount Rate US$ Millions 43 Per Share 0.397 2.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 0.5 x 1.5 x 2.6 x 20. 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.4 x 2.7 x 26. unless otherwise stated. Gold Px .2 x EV/2P* $683 $834 $495 $652 $882 $525 $557 $1.ca All figures in C$ million.4 x 2.300 1.400 $1.9 x 501.72 Sector Outperformer CAD 22.64 2. The company continues to intersect gold Small Cap Average (<$2B) 1.344 $9.8 x NEG 54.9 x 2.2-1 M oz Small Producers < 0. The high-grade nature of the new South Mine Complex offers up some interesting Mid Cap Average ($2B-$10B) 1.134 $34 $52 57 4 3 5 68 -17 0 -17 -0.Barry.742 $8.6 x 2.7 x 14.79 Source: Company reports and CIBC World Markets Inc.2M oz EV Statistics .9 x 1.6 x 2.0 x 3.3 x 24.000 2.203 $5.5 x Red Lake where market multiples are high.3 x 1.1 x Risk Adjusted Discount P/NAV P/NAV P/NAV $1. 2011 Kirkland Lake Gold KGI-TSX Date Share Price Rating Target January 12. With two major source areas for gold.Cooper@cibc.5 x 2.21 63 $1.3 x 3.200 $1.541 $9.4 x 22.269 2P: Modeled Proven & Probable Reserves (000s oz) M & I: Modeled Measured + Indicated Resources (000s oz 1.5 x 2.9 x than when it operated for 65 years in the mid to late 1900s.2M oz * Proven & Probable Reserves Income Statement Gold Price Assumptions US$ Production (000s ounces) Cash Costs US$/oz Capital Expenditures Revenues Expenses Operating Expenses D.4 x 2.1 (416) 956-6787 .7 x 16.9 x 1.3 x 2.4 x 1.403 $8.10 1.000 $1.0 x 48.1 x in a few years.2-1 M oz Small Producers < 0.9 x 2.

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

87E $2. the average of 1.cibcwm.04 per Shr Net Debt/CF 1.6M Distr.1x 7.0x (vs. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.ca Jeremy Kaliel 1 (403) 260-8657 Jeremy. 2009 2010 2011 P/CF 2009 2010 2011 Current $2. See "Important Disclosures" section at the end of this report for important required disclosures.12A $1. S&P/TSX Income Trust Composite Projected Total Return 29. Box 500. Reuters.6% 8. Other notable assets include its Viking light oil play at Provost/Irricana (AB). the average of 5.Chaw@cibc.3% 6.1x). We believe NAL's track record of operational execution bodes well for the upcoming update. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.07 Monthly Avg. where applicable. the average of 5.3%). after mkt.84 / 6. Potential near-term catalysts include 2011 guidance and an operational update (expected January 25. and its Doig gas play (northeast BC).9M Net Asset Value $15. www.nal.5% yield (vs.0x 6. 161 Bay Street.84E 8. Supporting its yield is a total payout ratio of 107% (vs. NAL trades at discounted P/Risked NAV of 87% and a 2011E EV/DACF multiple of 7. Daily Trading Vol. CIBC World Markets Inc. Price Target NAE-TSX (1/12/11) Key Indices: $16. the average of 122%) and a 2011E D/CF ratio of 1.0X Net Debt $496.9x).08E $0. attractive Cardium acreage. as well as year-end results/reserve reporting (expected March 9.00/sh is based on a 1. 450.95 Shares Outstanding 146. the average of 1. As a result.).ca Find CIBC research on Bloomberg.02 S&P/TSX Energy Trust.Institutional Equity Research Company Update January 17.shen@cibc.15A $1. after mkt.00 $13.5x (vs.0 2011 EV/DACF 7.5% yield (vs.). averages of 94% and 9.3%). Frequency $0.O.5% Fiscal Year Ends December P+P RLI (years) 11. 2010. NAL is our top pick for yield-focused investors. Key assets include NAL's Cardium tight oil at Garrington & Cochrane (southern AB) and its conventional Mississippian light oil play (southeast SK).3% 52-week Range $9.000 Market Capitalization $1. Our price target of $16.7M Dividend/Div Yield $0. P.. including potential conflicts of interest.1x Stock Price Performance Cash Distribution Per Unit 2009 2010 2011 Cash-on-Cash Yield 2009 2010 2011 $1.5X Convertible Available Yes Cash Flow Per Unit With a 6. 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. Brookfield Place. Toronto. 10-105922 © 2010 Diana Chaw 1 (403) 216-8518 Diana. Investors should consider this report as only a single factor in making their investment decision.ca CIBC World Markets does and seeks to do business with companies covered in its research reports. unless otherwise stated.com and ResearchCentral.15E 6. firstcall. and a strong balance sheet.com .68-$14.1x) with a 6. its Wabamun oil asset (AB).ca All figures in Canadian dollars.Kaliel@cibc.5% Source: Reuters Company Description NAL Energy Corporation converted from a trust to a dividend-paying corporation on December 31.908.1x target multiple to our Risked NAV (vs. Canada M5J 2S8 (416) 594-7000 Jeff (Sizhuo) Shen 1 (403) 221-5047 jeff.

35 USD/Cdn (2011E).5x 2 2. Coverage Group (CIBC Estimates) Share Price $13. Steeves 2010E 2011E $269 $318 ($210) ($215) ($155) ($124) $23 $21 ($73) ($1) $38 $36 $234 $237 $195 $195 $467 $468 1.00) $28.00/bbl (long term) for WTI crude oil.1x.15E 31. incl. Potential Catalysts: Potential near term catalysts include 2011 guidance and an operational update (expected on Jan.02 12 To 18 Month Price Target: C$16.13 ($1. 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. 9th.31) $28.26 ($8.35) ($11.3%).120A $0.000 10.2x Progress Peyto ARC Bonterra NAL Group Group Avg.2 FD&A .Chaw@cibc.0 9.: $1.52) $24.28) ($11.93 2011E $51.000 Sector Outperformer Jeremy Kaliel. Our 12-18 month price target of $16. 4) Basic payout ratio is calculated total dividends (excluding the effect of DRIP) paid as a % of operating cash flow. total payout is calculated as total CAPEX and dividends (excluding the effect of DRIP) as a % of operating cash flow. incl.7x 1.473A 30.00/share is based on a 1.000 20.4x Financial Flexibility ($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.7x 8. NAL is our top pick for yield focused investors.0x 8.5 150% 1.1x 9. Reserves (MMBoe) Proved Developed Producing 60. FDC on a cash basis.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.Shen@cibc.1x P/Core NAV 183% 181% EV/ EV/2P P/Risked Production Reserves NAV ($/Boe/d) ($/Boe) 87% $77.796E $0. 25th.53A 29.5x 7. Business Dev NOTES 1) Shares O/S based on most recent quarterly balance (adjusted for recent acquisitions and equity issues). Avg.36 94% $94. Inflows4 175% 1. 63 Pengrowth Vermilion Crescent Point Baytex Daylight Enerplus Average Trilogy Peyto ARC NAL . C$$0.610A $0.2%) Position President & CEO VP Finance & CFO Position VP. Outflow s (incl DRIP) Basic Pay out Ratio 112% 105% 108% 108%108% 76% 77% 83% Risked NAV Price Target Crescent Point Progress Daylight Penn West PetroBakken Baytex Bonavista Perpetual Enerplus Average Pengrowth Vermilion Perpetual Bonterra Trilogy 12. its Wabamun oil asset (AB).1x 8.16 ($9.20 $27.YOY) Reserves Growth (Per Share) 2P Reserves .55 $30.86/share) versus the group average of 1. $$4. FDC $27.ca Jeff Shen (403-221-5047) Jeff.ca SUMMARY & INVESTMENT THESIS Investment Thesis: We have a Sector Outperformer rating on NAL Energy Corp. Relative Valuation: NAL is currently trading at a Price to Risked NAV ratio of 87% and a 2011E EV/DACF multiple of 7.5% (versus the group average of 5.4 Proved + Probable (2P) 103. Key Assets: Key assets include NAL’s Cardium tight oil at Garrington & Cochrane (southern AB).0x 9.).TSX) Current Price: C$13.97/mcf (2011E). after mkt.68 PetroBakken Bonavista Penn West US$100/bbl C$7. and its conventional Mississippian light oil play (southeast SK).).1x target multiple to our Risked NAV of $15.00/bbl (2012E). McDougall John C. With a 7% yield (vs.January 17. US$$90. and $$5.1x 8.87 3 Cash Recycle Ratio 1.37 $25.50) ($2.5% Shares O/S(1): 146.Cardium First Mover Our Top Higher-yielding Pick . attractive Cardium acreage.5 1. 2) Y/E P+P reserves divided by Q4 annualized production (Q4 2010E Production for 2010E). 2011 NAL Energy Corp.3%).26) ($0.6MM Market Cap.ca Diana Chaw (403-216-8518) Diana.5x 0 0.5 50% 0.C.YOY) RELATIVE RISK & MAGNITUDE OF UNBOOKED PROSPECTS Q1 Q2 Q3 Q4 FY % Gas Production (Boe/d) CFPS (Basic) 2010E 2010E 2011E 2011E 30.97/mcf (long term) for AECO natural gas. the average of 5.4x 6.0x 2011E EV/DACF 7. Source: Company reports and CIBC World Markets Ltd. Wiswell Keith A. We believe NAL’s track record of operational execution bodes well for the upcoming update.5% 5.2x Reserve Engineers: McDaniel & Associates Consultants (MMboe (boe/d) DEBT & OUTFLOWS VS.4x11.0x 10. and inflows versus outflows is calculated as total CAPEX and dividends (including the effect of DRIP) as a % of operating cash flow. Koyanagi 2010E $45.000 5.25 $1.3x 9. and C$$0. 3) Year operating netbacks divided by reported P+P FD&A cost.0 PDP % of Total Proved 85% 85% Total Proved % of P+P 69% 69% 2 2P Reserve Life . Operations & COO VP.41A 29.97/mcf (2012E). after mkt.8x 8.2P. 5) Our base commodity price assumptions are US$$85.0x 1.1x 10.84 / mthly / 6. INFLOWS D/CF (NAE) VALUATION SUMMARY Outflows vs.4 71. respectively) while providing a current yield of 6.Years 11. Year CF) Total Credit Facility (Current) Facility Utilized (Current) Name Andrew B.000E 52% 50% 5 2009A +Net Acq.1x.02 Expected Return 29% 21% 2011E Yield 6.00/bbl (2011E).2x 11.5 60. and a strong balance sheet. and its Doig gas play (northeast B.07 $32.5 Total Proved (1P) 71.5x 1 1.000 25.3% 2011E P/CF 6.48E 30.0x (versus the group averages of 94% and 9. 6) Based on net capex including the effect of Alberta royalty credits.Kaliel@cibc.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.87E $2. with a 12-18 month price target of $16.000 30.5x 3 3.00/mcf Key Valuation Metrics vs. MBA (403-260-8657) Jeremy. C$0.5x 8.00) $32.5x $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.0x 2. / Yield: $0.). PROPERTY OVERVIEW PRODUCTION & RESERVES GROWTH Production Growth (Per Share) Production (NAE) PPS Growth (NAE) PPS Growth (Avg) 35.000E $1.00/share.9x 9. (NAE .0 103.93 NAL Group Average MANAGEMENT (Ownership: 0.MMboe (NAE) RPS Growth (NAE) RPS Growth (Avg) 25% 20% 15% 10% 5% 0% -5% -10% -15% (% change .75 75% 0. with FX of $4.1x 9. Other notable assets include its Viking light oil play at Provost/Irricana (AB).92 $2.000 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 . and US$$95. as well as year-end results/reserve reporting (expected on Mar.50 USD/Cdn (longterm).174 $22.00 Dividend (NTM) / Freq.27) ($0.25 125% 1 100% 0.909MM Average Trading Vol (50 day): 450.000 15.04/share (less forecast dividends of $0.0x 0.611 $23.85 USD/Cdn (2012E).00/mcf CIBC Base Cmdty Prices US$50/bbl C$4.43A $0.84 ($1.5 0.5 2. and evidences its high-quality asset base.50) ($2.

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

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.onex. 4) recently invested cash starts to earn a return.65 118. Daily Trading Vol.cibcwm. Our $40.O.Holden@cibc. CFA 1 (416) 594-8417 Paul. Market Weight 12-18 mo. 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. EPS Gr. Onex Corporation is one of North America's oldest and most successful private equity and alternative asset managers. See "Important Disclosures" section at the end of this report for important required disclosures. CIBC World Markets does and seeks to do business with companies covered in its research reports. As a result.com All figures in Canadian dollars.4x Stock Price Performance Source: Reuters Company Description Founded in 1984.4%.03E Current 3-5-Yr.59 per Shr NM $513. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. www.00M Nil $1.Institutional Equity Research Company Update January 17.000 $3. CFA 1 (416) 956-6676 Kevin. Box 500. Price Target OCX-TSX (1/12/11) Key Indices: Toronto NM $24. P. firstcall. Reuters.ca Kevin Cheng.0M No $0. We are of the opinion that the discount to NAV should narrow as well. the highest in our coverage universe.4% December $35.com and ResearchCentral.540.7M $0. Investors should consider this report as only a single factor in making their investment decision. Canada M5J 2S8 (416) 594-7000 Paul Holden. Brookfield Place.. Toronto.ca Find CIBC research on Bloomberg.com .25 $31. 3) additional fees are earned from new funds.02-$31.35 We believe that Onex's NAV growth will accelerate in 2011 as: 1) conditions for monetization opportunities become more attractive. 2) the rebound in manufacturing activity takes hold. Rate (E) 52-week Range Shares Outstanding Float Avg. including potential conflicts of interest. CIBC World Markets Inc.708.Cheng@cibc. 161 Bay Street. 2011 Stock Rating: Multi-Industry Sector Outperformer Sector Weighting: Onex Corporation Expecting NAV Growth To Accelerate And NAV Discount To Narrow $40.1x NM 30. unless otherwise stated.17E) $1. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.11 / 0. 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 2010.25 price target implies a return to target of 28.3M 89.92A ($0. The greatest risks to our call are a collapse in manufacturing activity and a lack of appetite for IPOs. 34. and. where applicable.3M Shrs 230. Current trends suggest that those two factors are heading in the right direction for Onex. Onex trades at a 12% discount to NAV. IPO conditions are improving with rising equity markets and there are many corporations and private equity firms flush with cash.

25 Sector Outperformer Paul Holden.0 8. The company was founded in 1984 and has produced a 29% annual rate of return on its investments.67 2.9% Capital na 1655 3450 4300 574 318 875 Market Price Value (C$) 67.42 190 170 39 48 765 Value at Owned 4.61 1.0 na na na 38.3 na na 5.42 9.0 96. The management of third-party capital also produces management fees and the potential for carried interest.47 NAV / share 2.3 4.12 318 22.8x 10.7x 5. Onex Partners III.TSX) Current Price : 12.99 2.61 2. 2011 Onex Corp.1 3.9x 8.92 6.6 250 191 244 191 175 133 109 113 59 354 267 21 2.January 17.59 Committed Investment Structure (US$) 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.68 1. There is ample capital available for management to create value with 58% of NAV in private companies and another 12% in cash & equivalents.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.To 18.ca Kevin Cheng.8 3.77 3.44 0.59 31.2% C$31.54 1. are better today than at any time in the past due to the growing stream of management fees and its share of carried interest in the company's largest fund to date.0 na na 115. having produced a 29% IRR since 1984.41 6.Expecting NAV Growth To Accelerate And NAV Discount To Narrow .70 0.12 0.5 na na na 3. Onex Corp is currently trading at a discount to NAV of 11.92 0.2% 2011E 38.26 0.210 5.0 8.48 1.948 749 513 4.87 2.61 1.5 Type Of Industry Manufacturing Healthcare Aerospace Customer Support Services Other Industries Financial Services Mid-cap Opportunities Credit Securities Real Estate Other Cash And Near-Cash items Total Assets % of Total 15% 16% 10% 8% 7% 4% 5% 2% 2% 70% 18% 12% 100% EV EBITDA / EBITDA Cost (C$) 114.210 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 .11 1.69 0.6x 3. The economics for Onex Corp.0 197.87 2. CFA (416-594-8417) Paul.48 1.6 17.82 0.9% .34 $35.78 0.78 0. CFA (416-956-6676) Kevin.447 97 97 211 80 513 4.0 470.50 2.82 0.cheng@cibc.34 35.55 11.97 0.Month Price Target: All figures in millions except per share data Net Asset Value NAV P/NAV Y/Y chg in NAV 2008A 31.5 340 619. Tropicana Las Vegas Tomkins Markup For Private Investments Center for Diagnostic Imaging Total Private Companies Onex Real Estate Partners Onex Credit Partners ONCAP II Other Investments Cash and Near-Cash Total NAV Current Price Premium / Discount to NAV Source: Company reports and CIBC World Markets Inc 2 Onex' Share 423 400 1400 800 252 277 255 NAV / share 2.18 20. This ability to create value and grow NAV warrants a valuation that is at a premium to NAV. Celestica Skilled Healthcare Group Inc. Summary NAV By Industry Net Asset Value ($mlns) Per Share 611 682 434 340 301 175 211 97 97 2. Investment Thesis Management has a long history of creating value.68 4.holden@cibc.2% 2010A 35.35 C$40.37 0.96 0. (OCX .82 24.17 5.06 1. 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.7% 2009A 32.82 1.8 8.10 0.9 31.33 4.33 0.

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

See "Important Disclosures" section at the end of this report for important required disclosures.5x Stock Price Performance Source: Reuters Company Description Pacific Rubiales Energy Corp. CIBC World Markets Inc. Brookfield Place.to 18-month price target of C$43.985:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports.1% December $43. P. Canada M5J 2S8 (416) 594-7000 Ian Macqueen. P. CPE-6 and La Creciente to fuel future growth.5M 249.42E $4.880.67 266.0x 6. Since inception. Investors should consider this report as only a single factor in making their investment decision.82 3-5-Yr.0M Nil NM Yes Current C$43. Our C$43. We forecast 57 MBoe/d (after royalty) in 2010.Institutional Equity Research Company Update January 17. CPE-6 & Topoyaco that will be drilled in 2011.International E & P Sector Outperformer Sector Weighting: Pacific Rubiales Energy Corp. As a result..7M Shrs 1.(C$0. Toronto. including potential conflicts of interest.2 BBbls OOIP Rubiales field and will have increased gross production almost 12-fold to 170 MBbls/d by YE 2010. www. 2011 Stock Rating: Oil & Gas . liabilities and dilutive proceeds and C$20. Additional discoveries on the offsetting Quifa block should provide another 30 MBbls/d of production by YE 2010.Macqueen@cibc.6M C$0.903 $9.Geol.38 / 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. Reuters. 161 Bay Street.cibcwm. Rate (E) 52-week Range Shares Outstanding Float Avg.pacificrubiales.2x 8. We expect the company's 2011 exploration drilling at Quifa. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.com and ResearchCentral. management has focused on developing the 4.60/FD share for the producing assets plus cash. Daily Trading Vol.50 C$33. Strong Growth Continues Market Weight 12-18 mo. where applicable. growing to 92 MBoe/d in 2011 and 104 MBoe/d in 2012 based only on development of Rubiales and Quifa. 1 (403) 260-8675 Ian. firstcall.31-C$35. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.29E $5.02/FD share in risked upside (C$38.50. is a Canadian-based company and producer of heavy oil and natural gas with producing assets in Colombia and exploration assets in Peru. Box 500. 2010 2011 2012 P/CF 2010 2011 2012 $2.62 per Shr NM $168.com . PRE has a series of upcoming catalysts that should continue to drive the stock to new highs. EPS Gr.Nielsen@cibc.27E 14.46/FD share unrisked) for prospects in Quifa.ca Paul Nielsen 1 (403) 216-3403 Paul.ca Find CIBC research on Bloomberg.50 price target includes a base NAV estimate of C$23.O. In our view. Price Target PRE-TSX (1/12/11) Key Indices: TSXOilGas NM C$13.com All figures in US dollars.151. unless otherwise stated.

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

Gold Zinc Lead Copper Total Cash Costs Per Silver Per Silver Eq.600 7.41 $3.73 $9.64 87 $316 $15 $95 $34 -$5 $456 $190 $76 $3 $114 $1.19) $26.5x 1.80 $1.842 1. (416) 956-3725 brian.230 6.482 82.55 $3.282 1. and provides investors leverage to silver prices.0x 0.164 1.00 $10.096 21.09 $2.00 107 $388 $18 $83 $40 $0 $529 $449 $157 $4 $292 $2.132 9.371 30. except per share amounts) 2009A Revenues Expenses Operating Expenditures S.00 2010E 2011E 2012E 2013E Silver Eq.70 $974 $0.372 10. The company is also well positioned to make future acquisitions.65 $2. $12.669 36.995 Brian Quast.200 10. Oz. 5% Discount Rate) PRODUCTION AND COSTS Production Silver Silver Eq.315 30.00 $6.976 14.468 41.0x 2.78 $2.895 7. Source: Company reports and CIBC World Markets Inc 72 (US$/oz) $8.0x 3.000 18.41 $5.20 $4.96 $11. (ounces) 128.00 $1.35 $6.765 30.600 $0. (416) 956-6787 barry. 2011 Precious Metals PAN AMERICAN SILVER Stock Rating: Sector Outperformer Sector Weighting: Overweight 12-18 mo.55 $2. 2009A 23 38 101 98 31 14 2010E 25 37 91 99 31 11 2011E 24 36 104 103 33 16 2012E 25 35 90 105 34 17 2013E 31 43 76 111 50 19 INCOME STATEMENT (in US$ millions.388 8. Peru.926 14.678 1.G&A D.0x 1.90 $0.484 12.69 Fiscal Year End December 31 COMPANY DESCRIPTION Pan American Silver Corp.35 Silvercorp Pan American Fortuna Silver Endeavour Silver Coeur d'Alene Hecla First Majestic 2010E $20. (416) 594-7261 robert.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 0.76 $6.836 39.969 2.700 $0.69 $3.18 $2.457 11.697 7.585 $288 ($21) $2.17 $0.83 $0.00 PAAS-NASDAQ (01/12/11): $37.ca Robert Hales.5x 3.75 $3.12 $5.551 17.341 2.Navidad Permitting Is Key Catalyst In 2011 .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) 64.009 77.254 1.68 RESERVES AND RESOURCES (in thousands unless otherwise indicated) Tonnes 10.70 ($0.225 $0.678 12.817 37.687 Silver Wheaton Cash Debt Total PRICE ASSUMPTIONS 2009A Silver Gold Zinc Lead Copper US$/oz US$/oz US$/lb US$/lb US$/lb $14.340 6. 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.75 $3.935 799.94 $0.quast@cibc.cooper@cibc.34 $0.00 $0.660 3.786 2.89 $4.25 2.027 48.014 'mln oz 'mln oz '000 oz 'mln lbs 'mln lbs 'mln lbs ('mln ounces) $246 $13 $78 $10 $12 $359 $91 $28 $1 $70 $0.76 $0. NET ASSET VALUE (in US$ millions. is a primary silver producer with operating assets in Mexico. and Bolivia.January 17.00 $1.00 $1.045 13.284 33.717 28.168 60.44 $2.363 0 6.37 2011E $28.87 50 40 30 20 10 0 2009A Silver Production Total Cash Cost Per Silver Oz.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 $1.94 107 $395 $18 $78 $40 $0 $531 $483 $169 $5 $314 $2.5x P/NAV ($20/oz Silver.08 $0.935 632.01 $10.hales@cibc.00 .617 189 155.388 770 3.00 $4.12 107 US$/oz US$/oz $5. 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. Production Total Cash Cost Per Silver Eq.ca Barry Cooper.90 $0.47 $24.75 $3. except per share amounts.606 Silver Eq.853 NAV/sh $1.75 2012E $30. Price Target: $52. Argentina.10 $8.500 2.00 $2.146 3.435 9.

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.January 17. 76 .Tight Oil Resource Plays Underpin Impressive Asset Base . Bloomberg.

161 Bay Street.to 18-month price target of C$42. PMG has a 45+ well exploration program in 2011 that is focused in some very prospective areas.O.cibcwm. Sixteen of the best prospects will be drilled in 2011 (roughly 38% of the company's 2011 exploration program). Rate (E) 52-week Range Shares Outstanding Float Avg. including producing assets plus cash.00. Market Weight 12-18 mo.4x 10. 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. See "Important Disclosures" section at the end of this report for important required disclosures. Newer areas of exploration for 2011 include the deep foothills (two 25MMBbls+ prospects) and a burgeoning heavy oil trend (50 MMBbls+ prospects).6x Stock Price Performance Source: Reuters Company Description Petrominerales Ltd.070 $3.02 per Shr NM $517.ca Paul Nielsen 1 (403) 216-3403 Paul.com and ResearchCentral. bringing our PT to C$42.Macqueen@cibc. liabilities and dilutive proceeds.0x 7.Geol.0M Shrs 601. which could drive the stock to new highs. 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.39E $5. Price Target PMG-TSX (1/12/11) Key Indices: TSXOilGas NM C$19. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.com . Investors should consider this report as only a single factor in making their investment decision. Expecting Follow-up Success In A Big Exploration Year C$42. 1 (403) 260-8675 Ian. P.(C$0. firstcall. which could be realized from 2011 exploration drilling.57 102.00.Institutional Equity Research Company Update January 17.877. We have also included C$18. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. management has identified another 55 exploration prospects for future drilling. Brookfield Place. 2011 Stock Rating: Oil & Gas .70/FD share in risked upside (C$54. Canada M5J 2S8 (416) 594-7000 Ian Macqueen.3% December $42. is C$23. Our base NAV estimate for PMG.9M 100.85-C$37. www. unless otherwise stated. EPS Gr.67/FD share unrisked).ca Find CIBC research on Bloomberg.32/FD share. Both of these areas afford the company an opportunity to make a material discovery that could reshape its future.1M C$0. Daily Trading Vol.petrominerales. After shooting extensive high-quality 3D seismic data on the surrounding lands. P. As a result..com All figures in US dollars.Nielsen@cibc.12 We recently initiated coverage of Petrominerales with a Sector Outperformer rating and now have a 12.56E 7. Box 500.50 / 1.985:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports.06E $3. where applicable.00 C$37.43M Nil NM Yes Current 3-5-Yr.International E & P Sector Outperformer Sector Weighting: Petrominerales Ltd. Reuters. Toronto. including potential conflicts of interest. CIBC World Markets Inc.

84 $100 $1.$mm Enterprise Value .8x 13.3x 15.0x) (0.0x 7.ca Net Asset Valuation .9x 2011E $85.00 $298 $298 105% ($15) 2009 $63 0.8x) (0.64 $550 $550 147% ($176) 2012E ($193) (0.50 $0.97 2012E 26.5x 10.39 $240 $2.668 Total Risked NAVPS .273 26.3x 7.2 0% 375 1% 441 2011E $720 $720 $532 $5.4x 7.2009 Total Risked Asset Value C$4.Expecting Follow-up Success In A Big Exploration Year .98 P/NAVPS (Unrisked) 48% Target P/NAVPS (UnRisked) 54% CIBC Deck NYMEX WTI (US$/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 .Debt Adjusted Financial Statistics .50 / 1. Ph: (403) 216-3403 E-mail: Paul.12 Price Target: C$42.969 38.490 22.January 17.Macqueen@cibc.10% C$77.$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. P.4x 2012E $85.969 39.10% C$42.490 22.12 104 C$3.56 $173 $1.6x 12.3 0% 252 (33%) 295 2012E $526 $526 $374 $3.5% Financial Statistics And Current Valuation Share Price ($) Weighted Average Diluted Shares O/S Market Capitalization .50 $0.4x 8.1x) 2012E 9.99 $3.$mm (except per share values) Colombia .00 $4.Geol.EBITDA Total EBITDA Total Company Operating Cash Flow (US$mm) CFPS (Diluted) Operating Income Operating EPS (Diluted) Capital Expenditures Net Capex Net Capex/Cash Flow .$M Float .Nielsen@cibc.00 $4.0x 2009 13.199 39.25 $630 $630 118% ($98) 2011E ($421) (0.ca Associate: Paul Nielsen. 2009 $61.7x 7.2x) 2010E 5.070 C$0.$M Net Debt .0x 2010E $79.0x 78 .877 (C$577) C$3.273 26.% Free Cash Flow Debt Analysis Net Debt .8x 6.88 2009 22.1x 14.00 Target Return: 14.5 0% 215 nmf 253 2009 $297 $297 $284 $2.663 Total Unrisked NAVPS .% Production Per Share (boe/d per MM FD) .97 2010E 38. Ph: (403) 260-8675 E-mail: Ian.mm Average Trading Volume (50 Day) Annual Dividend / Yield 2010E C$37.51 $4.301 100 601. 2011 Petrominerales Ltd.0 0% 373 73% 438 2010E $704 $704 $563 $5.94 $0.30 $482 $511 91% $52 2010E ($570) (1. (PMG-TSX) Current Price: C$37.97 2011E 39.199 39.5x) (0.1x) 2011E 6.2x 0.02 88% P/NAVPS (Risked) Target P/NAVPS (Risked) 100% Total Unrisked Asset Value C$8.3% Sector Outperformer Analyst: Ian Macqueen.37 $0.8x 10.06 $236 $2.

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

com All figures in US dollars. The Victoria project should continue to advance. We expect QUX's copper production to increase ~40% Y/Y. 161 Bay Street. EPS Gr.Kodatsky@cibc.989:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports. albeit with above-average.0M Nil $2. where applicable. near-term operational risk. firstcall.024 $3.50 C$16. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. with copper output set to more than double by 2015 as Sierra Gorda enters production. 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.3M No Current 3-5-Yr.. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.7x P/NAV.05E $4. As a result.330. www.Tsui@cibc.com .3x Stock Price Performance Cash Flow Per Share 2009 2010 2011 P/CF 2009 2010 2011 $1. Box 500. Canada M5J 2S8 (416) 594-7000 Alec Kodatsky 1 (416) 594-7284 Alec. Strong Copper Production Growth To Overcome Weak 2010 Operating Performance C$25.05E 13. Market Weight 12-18 mo.Institutional Equity Research Company Update January 17.cibcwm.ca Terry K. Management has delivered on promised production growth.9M 186.4M Nil / Nil December $11. The company also holds the highest earnings and NAV leverage to copper. Reuters. including potential conflicts of interest.31E $3.128.com and ResearchCentral. Price Target QUX-TSX (1/12/11) Key Indices: None NM C$8. P.4x 4.98-C$18.25A $2. CIBC World Markets Inc.(C$0.21E 24.97 Quadra FNX is an operationally diverse large-cap copper miner with an attractive growth pipeline.1x 5. CFA 1 (416) 956-3287 Terry. and strong balance sheet.7x 8.ca Find CIBC research on Bloomberg.H. has quickly emerged as an Americas-focused developer and producer of copper. Toronto. due mainly to the addition of Morrison. Investors should consider this report as only a single factor in making their investment decision. Tsui. 2011 Stock Rating: Metals & Minerals Sector Outperformer Sector Weighting: Quadra FNX Mining Ltd. Market Capitalization Dividend/Div Yield Fiscal Year Ends Book Value 2011 ROE (E) LT Debt Preferred Common Equity Convertible Available Earnings Per Share 2009 2010 2011 P/E 2009 2010 2011 $0. Rate (E) 52-week Range Shares Outstanding Float Avg. which has future potential to add significant value. 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.27 per Shr NM $0. See "Important Disclosures" section at the end of this report for important required disclosures. our favored commodity exposure. Brookfield Place. unless otherwise stated.240. Daily Trading Vol.quadramining. in our coverage universe.2x Source: Reuters Company Description Quadra Mining Ltd.71A $1. low political risk profile.O. QUX is trading at about 0.8M Shrs 1.57 188.2x 13.

will likely represent the medium-term catalysts.54 0.31 2011E 10.62 2010E 942 378 267 202 205 1. In our view.2 0.97 12-18 Months Target Price: C$25.9 ($3.902 2.005 1.42% 0.419 2.8 3.94 3. as well as water rights acquisitions and permitting.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 ## 1.7 1.00 0.30 2. a robust balance sheet and the potential to add low-risk incremental growth at below-average capital costs.7 0.990 ## 1.0 66.99 3.38 2012E 2.Strong Copper Production Growth To Overcome Weak 2010 Operating Performance .8 1.21 2012E 9.00 -$0.99 100% 2.50 $2. Cu) Cash operating cost Royalties Total cash cost Non-cash cost (DDA) Total production cost G&A Interest cost Total cost MANAGEMENT Terry MacGibbon.98 1. Outlook .5 10.82 ## 51 113 486 344 20 2009A 2010E 2011E 2012E ## 133 346 832 1. Investment Summary Quadra FNX has a strong metals production growth profile. 31 EPS ($) CFPS ($) Book value ($) NPV per share ($) P/E (x) P/CF (x) P/book value (x) P/NPV (x) EV/EBITDA (x) EV/EBIT (x) EV/OpFCF (x) ROE ROCE Dividend/share ($) 2009A 0. which has the potential to double its current copper production once in operation in 2014.205 3.71% 1.57 Profile Quadra FNX is a growing copper producer with a significant nickel and precious metals production profile.11 0.6) nm nm 0.99 2011E 4.65 0.50 -$1.36 1.2 1.9 35.904 Tonnes (mm) Grade Cu (%) Ni (%) Mo (%) 652.9 13. Cu) "Total" Cost (US$/lb.9 $4.50 $1.43 3.131 581 345 598 903 3.25 2.0 13.801 965 840 591 591 2.05 3.Development milestones of the Sierra Gorda project prefeasibility study. 81 .Debt repayment Free cash flow Free CFPS Operating free cash flow Balance Sheet Cash Other current assets Other assets Capital assets Total assets Current liabilities Debt (LT & current) Other liabilities Preferred equity Common equity Total liabilities and equity Net debt (cash) Enterprise Value Market capitalization Net debt .2 65.12 0.085 4.09% 188.4 22% 37% 0.225) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ## 1.6 0.090 3.0 5.61 6. Cu) Franke Copper Production (mlbs) Cash cost (US$/lb.00 0.tsui@cibc.11 0.9 45.05 2222 13.00 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.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 1.96 $1.980 2.952 200 200 (221) 270 567 4.57 $1. the company possesses advanced development project Sierra Gorda.500 0.02) ($0. . Cu) Levack Copper Production (mlbs) Cash cost (US$/lb.24 0.12 $0.54 100% 7.0 0.92% 8.43 100% 25.12 0.2 10.17 1.67% 6.16 4.00 0.02) 2009A 2010E 2011E 2012E 1.83 3.247 (133) 161 43 546 0 2.06 (1.128 n/a 2010E 1.07 1.4 (13.Maintenance capex .Capital expenditures .average Preferred equity .21 4.00 High: 18.73) ($3.8 13. mining-friendly jurisdictions in North and South America. which we expect to emerge as the company's highest operating margin asset as it ramps up to full production 2011.4 5.ca Key Data 52-week trading range ($) Average daily trading volume (000) TSX index weight Shares outstanding (mm) Basic Fully diluted Public float Market capitalization .41 1.129. The company's assets are located in politically stable. Cu) McCreedy Copper Production (mlbs) Cash cost (US$/lb.09 0.0 1.76 1.50 Reserves & Resources At Dec.62 5.38 2. (QUX) Current Price: $16.average Minority interest / other Other non-core Enterprise value 20 2009A ## ## ## 0.9 $2. unless otherwise stated) Sector Outperformer Alec Kodatsky (416-594-7284) alec.205 ## (133) (303) (789) (1.0 7.05 ($0.4 5.00 Ni 0.23 $1.04 0.26 0.34 $1.225) 20 2009A 2010E 2011E 2012E ## 1.50 $0.5 0.com Source: Company reports and CIBC World Markets Inc. we expect the company to continue to focus on exploration that can yield new discoveries while maintaining its current strong production growth profile.3 4.06 (789) (1.23 $0.7 56.4 142.11 $0.33 0.54% 111.25 25.09% 1.1 54.31 2.59 $1.50 0.00 ($4.15 0.quadramining.93 E Cu production (000 tonnes) 200 175 150 125 100 75 50 25 0 2009A 2010E 2011E Operating Metrics Ni production (000 tonnes) Cu production (000 tonnes) Cash cost (US$/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) .ca Terry Tsui (416-956-3287) terry. except for Sierra Gorda (at 10%).6 1.4 4.016 911 646 646 3.January 17.00 2.26% 2009A 2010E 2011E 2012E 100% 122.71 1.268 ## 247 425 425 425 ## 86 221 221 221 ## 781 1.3 0.10 1.05 3090 5.00 $0.5 24.2 1.3 1.8 8.08% 2.77 1.kodatsky@cibc.93 1.5 116.73 23.48 100% 13. CIBC Forecast Ni price (US$/lb) Cu price (US$/lb) C$ exchange rate (US$) 20 2009A ## ## ## 6.62 2.0 2.904 ## 0 ## 0 ## ## ## 163 0 79 0 1. basic 0.00 Low: 8.78 20.0 15% 32% 0.1 55.7 155.98 1.00 $1.42 0.25 4. www.14 0. 2009 Robinson Carlota Franke Sierra Gorda McCreedy Podolsky Levack Levack Footwall Operating Summary Robinson Copper Production (mlbs) Cash cost (US$/lb.19 0.39% 65.8 4.03% 0.00 $0.09% 0.808 1.2 0.62 1.basic ($mm) Cash ($mm) Working capital ($mm) Total debt ($mm) Common equity ($mm) Net debt/common equity (x) Year-end Dec.27 $1.6 188. the market is not fully pricing in the start-up of the Morrison project.5 40.88 2010E 9.00 25.19 100% 28.8 10% 11% 0.02 1.57 1. Cu) Carlota Copper Production (mlbs) Cash cost (US$/lb.32 $0.5 32.0 30.86 $1.8 141.97 2010E 2.0 8.00 Cu 0. Chairman Paul Blythe.17 $1.416 1.8 2. CEO Web Site 20 2009A ## ## ## ## ## ## 460 174 89 80 80 0. .53 1.00 0.27 0.7 104.02% 4.7 0.50 (All figures in US$.17) 1.4 $0.54 ## 2012E 1.41 2011E 1.25 1005 27.29 2. Cu) Morrison Copper Production (mlbs) Cash cost (US$/lb.95 0.66 4085 5.The start-up of Morrison and the ramp-up at Carlota and Franke should drive the company’s near-term metals production growth.2 ## 1.972 (303) 161 43 603 0 3.0 2.05 4.7 ## 169.205 3. 8% real discount rate on assets. 2011 Quadra FNX Mining Ltd. In addition.381 3.8 $2.247 2.82 2011E 3. CIBC price forecasts and after tax.08) $0.897 4.7 142.980 C$ 1.With a strong financial position.222 2.66 ## 10 10 29 42 ## 80 205 301 351 0 0 0 0 0 ## 51 113 486 344 ## 0.0 $2.9 60.31 2. Cu) Podolsky Copper Production (mlbs) Cash cost (US$/lb.80 $1.1 2.12 0.11 2.972 3.39) 100% 0. a coppermolybdenum project in Chile. 31.50 4.205 Q3 2010A 323 545 0 2.94 Cash cost (US$/lb Cu) $2.897 161 43 615 0 4.88 2.0 55.84% 0.90 3.8 1.43 $2.9 0.60 2.08 $0.98 2012E 2E 6.06 1.247 2.5 1.1 $0.

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

as there remains little need for capital in the medium term. either by way of traditional incumbents through IPTV offerings or over-the-top Internet offerings. at least in the short term.176.7% December $7. cable & telecom space.com and ResearchCentral. Valuation Too Attractive.6x 11.B-TSX (1/12/11) Key Indices: S&P/TSX 60 16.0 $4. CFA 1 (416) 594-7454 1 (416) 594-7907 Bob.0M Nil $4. with a history of strong shareholder-friendly policies. Canada M5J 2S8 (416) 594-7000 Tony Rizzi 1 (416) 594-7299 Tony. Given our confidence in Rogers' execution.3x 6. While we expect wireless competitive worries and pricing pressure to persist.Lee@cibc.O.7 6. and expect to see continued growth in data in future quarters. Box 500. www.ca Robert Bek. unless otherwise stated.1M $1. EPS Gr. 161 Bay Street. and owns the Toronto Blue Jays of MLB.ca Find CIBC research on Bloomberg.10E 14.64-$41.0M Yes Current 3-5-Yr.715.1x Source: Reuters Company Description Rogers Communications Inc.546 $20. The company also has an extensive portfolio of media assets. including potential conflicts of interest. Shareholder gains will come from solid free cash flow generation. See "Important Disclosures" section at the end of this report for important required disclosures.) 2009A 2010E 2011E EV/EBITDA 2009A 2010E 2011E $4.15 Rogers is our top pick for 2011 in the media.7x 6.0% $9. Price Target RCI. we remain bullish on the long-term fundamentals of wireless.Bek@cibc. Rate (E) 52-week Range Shares Outstanding Float Avg. Rogers is well positioned to take on any TV competition. We rate Rogers Sector Outperformer with a $44 price target.04E $3.ca All figures in Canadian dollars.850.com .125.524. P.00 $35. Investors should consider this report as only a single factor in making their investment decision. As a result. 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.cibcwm. Reuters.ca Michaelc.5M Shrs 1. a focus on cost cutting should result in EBITDA growth. Market Weight 12-18 mo.101. CIBC World Markets Inc.2x 11. We continue to believe that wireless offers strong growth ahead despite competitive pressure. 2011 Stock Rating: Telecommunications & Cable Services Sector Outperformer Sector Weighting: Rogers Communications Inc. where applicable. Toronto.2 $4.64 574.. Daily Trading Vol. owns the largest wireless operator and cable operator in Canada.19 per Shr 38. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. we continue to believe Rogers represents good value for investors. Brookfield Place.0M 484.3x Stock Price Performance EBITDA ($ mlns.48A $3. ensuring ARPU remains flat to slightly up by year-end.rogers. with current valuations well below historical levels. CFA Michael Lee. firstcall. While Rogers' cable segment continues to show signs of maturity.28 / 3.Rizzi@cibc.1% $30. Even With Wireless Concerns $44. CIBC World Markets does and seeks to do business with companies covered in its research reports. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.415.Institutional Equity Research Company Update January 17.

21% 28.060.2 671.98 1.5% 3.0 $74.0 2.2 1.035.0 1.002. CFA (416-594-7907) Michaelc.747.0 909.0 1.15 12.4x 2010E 11.0 4.4% 2009A 11.48 2009A 4.605.8% 2.0 575.0 3.0 9.TSX) Sector Outperformer Robert Bek.309.8% 4.300.157.73 Company Profile Rogers is a diversified Canadian communications company.5% 55. RCI shares are trading at a material discount to our NAV.9% 1. Rogers also has a broad portfolio of media assets (radio.06% 22.9x 6.623.0x 18.Month Price Target: C$44. Chart 1: Revenues & EBITDA By Segment (2010E) 100% 75% 50% 25% 0% Revenues Wireless Cable 11.0 647.0 1. providing an attractive entry point for investors looking to benefit from RCI's strong growth potential for both wireless and cable assets. we expect both free cash flow and dividends to grow at a healthy clip.0 125.0% EBITDA Media Key Operating Statistics (Last Reported Qtr.7 655. leading to improving ARPU trends in future quarters.756. as well as a provider of cable television services.6x 16.8 3.760.7x 2011E 10.) 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 8.6% 35.060. FD EPS Free Cash Flow EBITDA Less: Capex Cash Taxes Cash Interest Operating Free Cash Flow (FCF) Operating FCF Per Share 2008A 2008A 2008A 7.4% Source: Thomson.673.685. Given the heightened focus on cost efficiencies and margin expansion.8 748.6 3.8% 2010E 12.6 2.8x 5. (RCI. 84 .0 647.597.0 4.980.Valuation Too Attractive.0 424.756.0 3.0 995. TV and publishing) and owns the Toronto Blue Jays MLB franchise.9x 6.461.0% 2.0 9.8% 13.1x 6.6 2.9x 19.January 17.0 Q3/10 8.3x 17.2x 6.0 1.0x 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.8% 9.0x 27.415.0 1.0 575.29 2009A 6.Lee@cibc.150.021.4x 18.415.0 2.2x 16.2% y/y Growth 6.2x 2010E 9.6 624.426.335.731.850.8% 14.0 6.0 0.0% 2011E 12.0 1.779.ca Michael Lee.0 1.0 502.247.7x 2009A 14.7 1.9% 15.9x 15.B .79 1.0 1.786.0 228.495.0 1.8 671.625.1x 2011E 11.1x 25.0 3. Investment Thesis While there remains concern over the effects of industry pricing pressure on wireless ARPU.2% -25.3x 7.719.625.ca Tony Rizzi (416-594-7299) Tony Rizzi@cibc.8% 2.0 6.7% 2008A 11.7% 5.91 Rogers Communications Inc.1x 29.478.5% 3.5 251.1x 2009A 8.5x 14.3% 2.0 1.292.98 2008A 4. internet broadband and telephony products.6% 2.0 2.366.881.855. With current concerns over competition and AWS entrant risks overblown.850.0 2.04 2010E 4.Bek@cibc.6 4.046.5% 29.0 1.250. we believe the prospects of attracting higher value subs will continue to drive strong data adoption capable of moderating the effect of voice erosion.715.700.809.058.56 2011E 6.0 4.0 2.090.6 1. CFA (416-594-7454) Bob. and with the implementation of a sizeable share buyback program.4 9.ca 2010E 6.0 3.To 18.6% 38.730. 2011 Current Price : C$35.7 655.0 1.0 1.3% 17.0 1.0 $76.7 1.7 1.160.0 167.0 2.2 9.7x 9.6x 6.0 2.8% 32. engaged in wireless voice and data services.715.10 2011E 4.2 1.0 104.1% -2. we believe Rogers will continue to deliver strong value to its shareholders.0 2.566.7x 30.0% 38.2x 12. Company reports and CIBC World Markets Inc. Even With Wireless Concerns .8% 35.0 3.7% 67.

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

161 Bay Street. Overweight 12-18 mo. With growth upside at Mana and torque to higher gold prices at Samira Hill and Kiniero.Cooper@cibc. increasing throughput to 6.11E 19. Operational Consistency Combined With Growth Upside C$18. Kona.Chiu@cibc. It has also delivered on expansion plans at its Mana plant. www.3x Stock Price Performance Cash Flow Per Share 2010 2011 2012 P/CF 2010 2011 2012 $0. Price Target SMF-TSX (1/12/11) Key Indices: None NM C$4.com and ResearchCentral. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.2x 12.989:US$1) CIBC World Markets does and seeks to do business with companies covered in its research reports. where applicable. In 2010.7x 10. See "Important Disclosures" section at the end of this report for important required disclosures. CIBC World Markets Inc.50 C$11.O.8M Nil / Nil December $1. is a Canadian-based mining company with gold production and exploration activities in West Africa.ca Find CIBC research on Bloomberg.(C$0.5M Shrs 2. 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.6x 11. P.com .300.2x Source: Reuters Company Description Semafo Inc. Management will continue to focus on creating additional value with the development of the Mana underground.ca All figures in US dollars. Operating in French West Africa. Box 500.11-C$14.com Cosmos Chiu. Canada M5J 2S8 (416) 594-7000 Kevin Chiew 1 (416) 594-7457 Kevin.71 per Shr NM $19. A feasibility study is scheduled for release Q1/11. 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 $0.6M No Current 3-5-Yr. we believe management's French-Canadian background will remain an advantage for the company. Semafo currently operates three gold mines in Burkina Faso.6M 269. with a 10% increase in gold price generating an approximately 23% increase in CFPS. exploration activities at Mana yielded several new discoveries such as Wona SW. Reuters. As a result.. Investors should consider this report as only a single factor in making their investment decision.58E $0. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. unless otherwise stated. 2011 Stock Rating: Precious Metals Sector Outperformer Sector Weighting: Semafo Inc. Niger and Guinea. Brookfield Place.000 $3. Daily Trading Vol.92E 27.083.000 tpd (bedrock).23 Semafo has been a model of operational consistency. Semafo benefits from a complementary portfolio of assets.semafo.0x 14.44 271. Fofina and Fobiri.Institutional Equity Research Company Update January 17. firstcall. with Phase III completed ahead of schedule and under budget.Chiew@cibc. meeting production/cost expectations the past three years.42E $0. CFA Barry Cooper 1 (416) 594-7106 1 (416) 956-6787 Cosmos. Rate (E) 52-week Range Shares Outstanding Float Avg.ca Barry.80E $0. including potential conflicts of interest. EPS Gr.97E $1. The company has one of the highest leverages to gold.cibcwm. Toronto.3M Nil $465.

3x 1.00 $0. Company reports and CIBC World Markets Inc.31 $0. is a Canadian-based mining company with gold production and exploration activities in West Africa. (416) 594-7106 cosmos.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 $0.11 272 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. INVESTMENT THESIS Semafo has successfully commissioned three mines in West Africa.ca Tonnes Grade (g/t) Au Ounces Au 18.200 gold) Mining Assets Mana .600 $0.92 1.ca Kevin Chiew.86 2.01 3.07 $0.8x 2. Semafo has one of the highest lev erages to gold for both its cash flow and NAV.377 1. Niger and Guinea.276 596 187 643 159 PRICE ASSUMPTIONS Gold Exchange Rate US$/oz US/CAD 2009A $974 $0.42 $0.5x 0. RESERVES & RESOURCES (in thousands unless otherwise indicated) Mana (Burkina Faso) Proven & Probable Measured & Indicated Inferred Samira Hill (Niger) Proven & Probable Measured & Indicated Inferred Kiniero (Guinea) Proven & Probable Measured & Indicated Inferred 18x Cosmos Chiu.188 $2.38 242 $132 $40 $13 $7 $192 $124 $11 $113 $0. Currently Semafo operates three gold mines in Burkina Faso.57 $0.71 $0. Price Target: C$18.95 2012E INCOME STATEMENT 2009A (in US$ millions.689 1. in addition to its expansion of Mana.665 687 909 530 1.90 $0.50 SMF-TSX (1/12/11): C$11.8x 1.95 2010E 2011E $1.5x 2.0x 1.UG Samira Hill Kiniero 2013E $193 $19 $0 $174 $0.chiew@cibc.80 1.485 12.201 18. We believe Semafo is in a position to grow through acquisition in a West African region that remains highly fragmented. (416) 594-7457 kevin.770 2. based on $1.cooper@cibc. except per share and indicated amounts) Production (000s ounces) Cash Operating Costs (US$/oz) Cash Costs (US$/oz) Revenues Expenses Operating Expenses D.592 9.3x 2.8x Cash Adjusted NAV Multiples PRODUCTION AND COSTS Production Mana Samira Hill Kiniero Total Cash Costs Mana Samira Hill Kiniero 2009A 2010E 2011E 2012E 2013E '000 oz '000 oz '000 oz US$/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.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 0.700 $0. except per share amounts.18 $0. Reclamation S.January 17.20 1.65 2.23 Fiscal Year End December 31 COMPANY DESCRIPTION Semafo Inc.437 11.95 2011E 2012E $1.OP Mana .D&A. Stock Rating: Sector Outperformer Sector Weighting: Overweight 12-18 mo.362 $5.chiu@cibc.20 1.38 400 350 300 250 $550 .58 272 $147 $48 $13 $5 $214 $235 $19 $216 $0.80 1. 2011 Precious Metals SEMAFO INC.Operational Consistency Combined With Growth Upside . 87 Cash Costs ($/oz) 5% 5% 5% 5% 90% 90% 80% 85% $565 $245 $156 $85 $137 $1.08 $0.64 200 150 100 50 0 $450 $400 Total Cash Costs Source: Thomson. With 100% of its revenue generated from gold and 100% of its production unhedged.06 2.97 272 NAV $157 $52 $13 $5 $226 $288 $38 $249 $0.UG Samira Hill Kiniero Exploration Potential Subtotal Balance Sheet Cash LT Debt Reclamation Subtotal Net Asset Value Gold Output (000s oz) $500 2009A 2010E 2011E 2012E $1.88 2010E $1.02 Mana .ca Barry Cooper.225 $0. (416) 956-6787 barry.745 8.80 $0.569 33.50 $4.5x 1.OP Mana .92 $1.

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

See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report.68 3-5-Yr.43E $2.com Andrew Potter.37A $3. NYSE NM $29.com .7x Source: Reuters Company Description Suncor is an integrated oil company approximately 85% levered to oil.0M 1.3x 17.Large Cap Sector Outperformer Sector Weighting: Suncor Energy Inc. 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. Price Target SU-TSX (1/12/11) Key Indices: Toronto.Institutional Equity Research Company Update January 17.60A $1. There are no major shareholders.9x 9.ca All figures in Canadian dollars. Investors should consider this report as only a single factor in making their investment decision. As a result.105. Box 500. See "Important Disclosures" section at the end of this report for important required disclosures.337. www. 2011 Stock Rating: Oil & Gas .91-$39.0M Nil $37.O. 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 Is Still King Of The Oil Sands Market Weight 12-18 mo. P. CIBC World Markets does and seeks to do business with companies covered in its research reports.45 1. its strong balance sheet and the outlook for significant free cash generation – all while the company continues to increase oil sands output. CFA Nick Lupick 1 (403) 221-5700 1 (403) 221-5049 Andrew.8x 26. 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. Brookfield Place.Lupick@cibc.318. Daily Trading Vol.cibcwm. EPS Gr. where applicable. We believe investor interest in oil sands continues to increase and that Suncor will re-emerge as a "go-to" oil sands investment. With defined growth through 2020 and another 15 billion barrels to develop beyond that.0% $8.000 Bbls/d of oil sands capacity that it will continue to grow through 2015.562..527 $59. CIBC World Markets Inc. respectively – its closest peers.6x 7.40 / 1. the stock should be a strong performer.1% December $47. unless otherwise stated.91E $4.Balaux@cibc. Toronto.92E 15.573. Suncor remains the king of the oil sands. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.6M $0. Suncor has 392. Furthermore.com and ResearchCentral. 2009 2010 2011 P/E 2009 2010 2011 $0.18E 62.suncor.ca Find CIBC research on Bloomberg. We believe that as Suncor continues to demonstrate improved reliability. 161 Bay Street.270.19 per Shr 9. firstcall. Suncor should be able to deliver this growth while generating $1 billion-$4 billion per year of free cash flow.3x Stock Price Performance Cash Flow per Share 2009 2010 2011 P/CF 2009 2010 2011 $2. Canada M5J 2S8 (416) 594-7000 Kyle Balaux 1 (403) 216-3401 Kyle.0M Shrs 5.0M No Current $47.Potter@cibc. Rate (E) 52-week Range Shares Outstanding Float Avg.50 $37. Reuters.ca Nick. including potential conflicts of interest.

340 0.19 P/NAVPS (Risked) 80% 101% Target P/NAVPS (Risked) Total Unrisked Asset Value $88.288 $6.860 497.1x 2010E 10.318 1.736 0.342 $1.560 $3.22 US$6.00 $5.1% Sector Outperformer Analyst: Andrew Potter.00 $84.bbl/d Oil & Liquids (bbl/d) Production .23 US$5.8x 0.500 295.99 US$8.2x 10.22 US$6.0x 2014E 5.ca Nick Lupick.498 ($272) $14.989 $361 $4.976 700 11% 64% 445 9% 379 2013E $7.800 57.728 $7.97 2011E 380 90 470 5. 2010E US$61.337.3x 0.875 59.12 $69.2x 6.053 2016E ($4.68 Price Target: $47.365 643 12% 62% 409 12% 349 2012E $6.5x 11.30 $7.874 $11.75 $4.00 $94.000 706.256 $69.207 2012E $7.2009 Total Risked Asset Value $77.513 ($277) $14.1x 2013E 5.Balaux@cibc.300 35.8x 2016E US$95.ca Net Asset Valuation .02 $75.40 $5.00 $0.071 575 14% 57% 366 2% 312 2011E $4.638 76% $2.129 $6.569 68.198 $13.906 50.097 $1.881 59% $2.282 408.07 $74.552 40.3x 2014E US$95.868 76% $2.5x 21.41 $6.41 $6.61 US$3.50 US$9.1x 5.073 502.7x 2012E US$85.9% $53.0x 0.758 783 10% 68% 498 12% 424 2014E $8.99 $66.ca Kyle Balaux.054 ($256) $9.951 $308 $3.40 US$4.mmcf/d Syria Natural Gas Production .224 $1.5x 0.724 $7.4x 11.523 1. 2011 Suncor Energy Inc.00 $0.109) nm nm 2016E 4.423 $7.151 $393 $3.37 $3.754 $361 $4. CFA Ph: (403) 221-5700 E-mail: Andrew.116 $350 $4.255 $1.059 774.1% Financial Statistics And Current Valuation Share Price ($) Weighted Average Diluted Shares O/S Market Capitalization .500 59.42 $58.6x 0.800 62.000 52.Potter@cibc.954 ($283) $16.00 $89.Lupick@cibc.211 482.511 Total Unrisked NAVPS .112 $3.1x 10.40 / 1.50 US$9.141 $8.044 50.141 ($413) $8.00 $5. NYD) Current Price: $37.55 $67.201 792 9% 69% 504 1% 429 2015E $8.562 5.267 $10.07 $8.678 $11.874 849 9% 72% 540 7% 460 2016E $10.bbl/d Libya Oil Production .1x 90 .02 $75.679 2010E $10.94 $3.850 566.692 2011E $8.7x 11.27 $8.22 US$6.97 2013E 365 90 455 5.22 $6. (SU-TSX.9% $47.318 $10.234 564 15% 56% 359 306 2010E $4.575 0.922 88% $1.256 1.1x 2012E 6.875 59.860 2014E $3.000 38.000 42.2x 26.00 $94.% Free Cash Flow Debt Analysis Net Debt .200 40.00 $0.1x 2011E US$79.$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 .546 $11.390 358.97 2012E 372 90 462 5.23 $0.3x 33.469 $1.800 50.313 283.25 $4.5x 6.2x 8.000 59.000 34.573 $59.650 62.50 Target Return: 26.800 65.35 US$9.80 P/NAVPS (Unrisked) 70% Target P/NAVPS (UnRisked) 88% CIBC Deck NYMEX WTI (US$/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 .426 $1.0x 2015E 4.97 2016E 343 100 443 4.$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.02 $75.585 35.645 2015E $320 0.91 $2.50 US$9.MBoe/d Natural Gas % Oil Sands % Production Per Share (Boe/d per MM FD) Production Growth Per Share .0x 17.177 486.boe/d East Coast Oil Production .000 39.9x 6.1x 0.779 $4.January 17.484 ($266) $13.800 52.075 69% $3.764 $1.382 $4.97 2015E 350 100 450 5.1x 9.5x 2013E US$90.00 $5.7x 2015E US$95.751 $373 $4.Suncor Is Still King Of The Oil Sands .527 $0.800 64.mmcf/d Natural Gas (MMcf/d) Western Canada Oil & Liquids Production .900 623.509 58.4x 9.92 $3.627 Total Risked NAVPS .51 $77.00 $0.86 $8.7x 14.Debt Adjsuted Financial Statistics .$M Net Debt .125 59.00 $94.85 US$9.167 $3.bbl/d North Sea Oil Production .97 2014E 358 100 458 5.mm Average Trading Volume (50 Day) Annual Dividend / Yield 2010E $37.$mm Enterprise Value .$M Float .4x 7.7x 9.99 US$9.456 $2.972 556.429 $4.087 65% $2.% Production Per Share (Boe/d per MM FD) .028 717.69 $8.67 $0.bbl/d Oil Sands Production .18 $5.786 2013E $5.000 42.1x 2011E 8.43 $3.442 $4.257 53.00 $0.985 $332 $4.270 ($261) $12.119 45. Ph: (403) 216-3401 E-mail: Kyle.bbl/d Synthetic Crude Oilsands Production .03 $8.30 US$4.159 $1. Ph: (403) 221-5049 E-mail: Nick.720 $7.9x 13.9x 12.88 2010E 429 64 493 6.68 1.087 62% $5.

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

. deposit base.394.000 $65.44 / 3.3% October $44. Investors should consider this report as only a single factor in making their investment decision. Given its strategic potential and tolerable financial implications.00 $74. as we expect strength from its Canadian and U.com and ResearchCentral.3 billion acquisition of auto lender Chrysler Financial. unless otherwise stated.Sedran@cibc. firstcall. Toronto.S. 161 Bay Street.36E $7.5M 878. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report. While TD left its dividend unchanged in Q4/F10. we view the deal favorably. implying an increase could be feasible in the near term.0M $3.77A $6.Grauman@cibc. TD's payout ratio currently falls in the middle of its target range (based on our F2011 estimates). Canada M5J 2S8 (416) 594-7000 Meny Grauman. Price Target TD-TSX (1/12/11) Key Indices: TSXFinSv 10.00M $38.Institutional Equity Research Company Update January 17.tdbank. where applicable. As a result. Daily Trading Vol. 2011 Stock Rating: Banks Sector Outperformer Sector Weighting: Toronto-Dominion Bank Revenue Growth To Drive Outperformance In F2011 $84.25-$77.9x 11. retail franchises will help drive outperformance in F2011. We rate TD SO.14E 12. we believe revenue growth will be a key success factor for the Canadian banks.S.com . 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.7M $2. CIBC World Markets Inc. including potential conflicts of interest.29 per Shr 13. On a P/B basis. The purchase complements TD's existing U.121. platform by creating a vehicle to deploy its large U. management noted it will be providing guidance on the dividend in the upcoming quarter. Valuation also supports a positive view on the shares.20 In what is expected to remain a challenging economic environment. CFA 1 (416) 594-7874 Robert. and offers a full array of financial products and services to over 18 million customers worldwide.ca CIBC World Markets does and seeks to do business with companies covered in its research reports.Rizvanovic@cibc. See "Important Disclosures" section at the end of this report for important required disclosures. Mehmed Rizvanovic.ca All figures in Canadian dollars.cibcwm. investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.O.ca Find CIBC research on Bloomberg. Our top pick in the sector is TD Bank.S.7x 10. P. www. TD recently announced the US$6.37 878. CFA (416) 594-7283 Mike.184. compared with a historical average discount of 5%. Brookfield Place.908. EPS Gr.4x Stock Price Performance Source: Reuters Company Description TD Bank is one of Canada's leading financial institutions. $5.5M Shrs 2.0% $61. Rate (E) 52-week Range Shares Outstanding Float Avg. Box 500.ca Robert Sedran. TD trades at a 2% premium on F11 earnings relative to peers compared with an 8% pre-crisis 10-yr average premium. CFA 1 (416) 956-3723 Meny. Reuters. it trades at a 21% discount to its peers.0M No Current 3-5-Yr. Market Weight 12-18 mo.506.8% $12.

ca Mike Rizvanovic.3% F2009A 0.056 3.857 94. 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.932 309.63% Q4-10 3.509 87.159 F2012E 79.77 4.200 (9%) 12.946 265.3% 9.ca Meny Grauman.4% 3.669 18.962 8.757 280.50 1.78% F2009A 10.233 299.8% 1.36 10.072 272.20 12.612 7.7x 2.6% 3. CFA (416-594-7283) Mike.665 102.8% 12.086 F2011E $6.037 8.320 (22%) 12.6% 4.249 129.456 677 2.3% 229.Sedran@cibc. 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. 2011 Toronto-Dominion Bank (TD-TSX) Current Price: C$74.910 F2010A 71.248 (15.Grauman@cibc.4% 3.6x Q4-10 1.5x 12.5% ) F2010A 0.287 1.6% 2.155 3.410 121.14 12.4x 10.00 All Figures in $ millions.3% F2010A 12.254 23.1% F2011E 0.738 318.685 (16%) 12.3% F2012E 0.9% 3.833 88.5% 13.3% F2009A 11.7% 199.7%) 1.1x F2009A $5.3%) 1. TD remains rated Sector Outperformer.1% 13.1% 9.9x 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.To 18-Month Price Target: C$84.39% 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% 0.329 7. except per share data (excl.7x 11. 93 .168 F2011E 74.9% 13.2% 11. CFA (416-594-7874) Robert. (2) Total ACLs as a % of GILs.9% F2011E 12.4% 3.311 558 2.7% 61.2% 2.808 5.6x F2012E 10.507 109.3% F2012E 13.8% 11.322 255.496 9.016 93% 11.270 F2012E 12.2% 3.Revenue Growth To Drive Outperformance In F2011 .4% 58.S.46% F2012E $7.3% 189.699 3.770 291.442 F2009A Wealth Management F2010A Wholesale Banking Q4-10 Corporate U.416 6.750 91.3% 14.8% 59.7% 60. repos).0% 1. P&C Banking F2011E 11.587 75% 20% 0.781 100.3% (1.063 (5. one-time items) KEY MULTIPLES F2009A F2010A P/E Multiple 13.701 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.Rizvanovic@cibc.January 17.83% F2009A 2.0% 215. (3) Ex cludes gains/(losses) on inv estment securities. 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 $5.639 (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.68% F2010A 10. CFA (416-594-3723) Meny.ca F2011E 11.585 F2009A 65.8% 4.

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

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

January 17. 2011 96 .Top Picks Of 2011 .

Top Picks Of 2011 .January 17. 2011 97 .

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

26. 2g. 7) (CGA-TSX. C$42. 2g. 2g. Sector Performer) H&R REIT (2a. Sector Outperformer) Coeur d'Alene Mines Corp. Sector Performer) Aurizon Mines Ltd. 2g) (FVI-TSX. (2g.42. 4a. (2g. 7) (FNV-TSX.05. Sector Outperformer) Canadian National Railway Co.04. Sector Outperformer) Eldorado Gold Corporation (2g) (EGO-NYSE. 7) (GG-NYSE. US$40.A-TSX.UN-TSX. 2011 Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered by CIBC World Markets Inc.UN-TSX. (2g) (GAM-TSX. Sector Outperformer) Gammon Gold Inc. (2g. 2c.22.77. (2a. 2c.05. 13) (EMP. C$6. 6a. 3c. 7) (ERF-TSX. 9) (CVE-TSX. 7. C$21. 4b. (AGI-TSX. 2e.85. Sector Outperformer) Angle Energy Inc. 3a. US$9. (2a. C$21. C$28. Sector Performer) Centerra Gold Inc. (2g) (GSS-AMEX. C$9.08.97. Sector Underperformer) Genworth MI Canada Inc.14. 2c. Incorporated (2g) (VNP-TSX. C$7.January 17. Sector Performer) Black Diamond Group Limited (2g) (BDI-TSX.27. C$42.21. Sector Outperformer) Daylight Energy Ltd. US$9. 2e. US$31.19. Sector Outperformer) Hecla Mining Company (2g) (HL-NYSE. C$32. (2g) (CDE-NYSE. 3a. C$8. 7. Sector Outperformer) Empire Company Limited (2g. 7) (MIC-TSX. 2g. Sector Performer) Enerplus Corporation (2g. 2c.43. 7.69. Sector Performer) First Quantum Minerals Ltd. C$20. 7) (CPG-TSX. (FM-TSX. Sector Outperformer) Bombardier Inc. C$4.14. 4b. 7) (HR. (2a. 2e.53. Sector Outperformer) C&C Energia Ltd.45. US$69. Sector Outperformer) Golden Star Resources Ltd.02. 2e. 2e. 2e.24. (2g) (BNE-TSX. C$9. Sector Outperformer) Gold Wheaton Gold Corp. US$16. Sector Performer) Alamos Gold Inc. 7. Sector Underperformer) IAMGOLD Corporation (2g) (IAG-NYSE.38. 9) (CGT-NYSE. 2g) (CSH.64.Top Picks Of 2011 .B-TSX. US$24. 2e.84. Sector Outperformer) Kinross Gold Corporation (2g) (KGC-NYSE. 2e.59. Sector Outperformer) ARC Resources Ltd. C$48. C$119. C$68. (2g.90. US$47. 2e. 7) (AEM-NYSE.75. 7) (BNP-TSX. 12) (CLS-NYSE.86. (2g) (CG-TSX. 2c. Sector Outperformer) Bonavista Energy Corporation (2a. 2e. (2a. C$17. (2g. (2g) (CZE-TSX. US$17. C$2. Sector Underperformer) Jean Coutu Group (PJC) Inc. 2e.67. 7.17. 9) (ECA-NYSE.07. (2g) (KGI-TSX. C$4. Sector Outperformer) EnCana Corporation (2g. Sector Outperformer) Franco-Nevada Corporation (2g. 2e. 2e. Sector Outperformer) Cenovus Energy Inc. 2c. 2g) (NGL-TSX. C$53. Sector Outperformer) 99 .88. Sector Outperformer) Allied Nevada Gold Corp.23.51. Sector Performer) Bonterra Energy Corp. (2a. 4a. C$16. 7. 2c. Sector Outperformer) Imperial Oil Limited (2g) (IMO-TSX.23. C$6. (2g) (FR-TSX. C$12. Sector Outperformer) Fortuna Silver Mines Inc. 2d.42. 2f. 2g. 2g) (DAY-TSX. C$12. (2g) (ANV-AMEX. US$5. 7. C$25. C$32. C$6. 12) (PJC. 7) (ABX-NYSE.58.12. 2g. C$52. 2c.72. Sector Outperformer) Agnico-Eagle Mines Limited (2f. Sector Outperformer) Chartwell Seniors Housing REIT (2a. Sector Outperformer) Celestica Inc. (2g. (2a. (2g) (ARZ-TSX. 2c.87. 2g. 7) (ARX-TSX. Sector Outperformer) Canadian Pacific Railway Ltd. US$3.80. Sector Outperformer) Barrick Gold Corporation (2f.30. Sector Performer) Crescent Point Energy Corp.: Stock Prices as of 01/17/2011: 5N Plus. US$17. C$14. 12) (BBD. Sector Performer) Kirkland Lake Gold Inc. Sector Outperformer) CAE Inc. (2g) (BTE-TSX. (GLW-TSX. (2a. 2g) (EDR-TSX. C$66. 3c.UN-TSX. US$24.A-TSX. (2a. Sector Outperformer) Endeavour Silver Corp. C$27. 2f. 9) (CNR-TSX. 2g) (BOX.92.68. (2a. 9) (CP-TSX.99. C$7. Sector Performer) Goldcorp Inc. C$5. C$30. Sector Performer) First Majestic Silver Corp. Sector Outperformer) Baytex Energy Corp.27. Sector Performer) Brookfield Office Properties Canada REIT (2a. 7. 2g. 2c. Sector Underperformer) CGA Mining Limited (2g.66.

2g. 2g) (PAAS-NASDAQ.07. Sector Performer) Yamana Gold Inc. C$10. 2g) (SSRI-NASDAQ. 2d. (2g) (PRE-TSX.08. 2c.70. Sector Outperformer) Peyto Exploration & Development Corp. Sector Performer) Trilogy Energy Corp. Sector Outperformer) Quadra FNX Mining Ltd.20. Inc.00. 3c. C$5. 2c.B-TSX. 2g) (NAE-TSX. C$35. C$7. C$76. C$13. C$17. 2c. C$32.90. C$12. 2011 Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered by CIBC World Markets Inc. 2e.07. Sector Outperformer) Teck Resources Limited (2a. 2c. US$140. (SPR-NYSE. Sector Outperformer) Total Energy Services (2g) (TOT-TSX. 2c. 2c. 2c. 2c. 9. Sector Outperformer) Rogers Communications Inc.00. US$31. C$4. Sector Outperformer) NAL Energy Corporation (2a. Not Rated) 100 . C$32. US$35.72. C$18. 2g. 2c. Sector Outperformer) Pengrowth Energy Corporation (2g. C$39. (2g) (PBN-TSX. (2g) (PMG-TSX.20. Not Rated) Spirit AeroSystems.84. 2e.52. Not Rated) Emergency Medical Services Corporation (EMS-NYSE. 2g.Top Picks Of 2011 . Inc.10. (2g) (NGD-TSX.50. 7.89. C$37. 2e. 2e. Sector Underperformer) Companies Mentioned in this Report that Are Not Covered by CIBC World Markets Inc. (2g) (SLW-NYSE. 3a.30. Sector Performer) Northgate Minerals Corporation (2a. 2e. Sector Outperformer) Silvercorp Metals Inc.39.06.07. (2g. (2a.35. Sector Performer) Semafo Inc. C$61. 2e.01. Not Rated) Skilled Healthcare Group Inc. (2a. US$2. 2c.B-TSX. (SKH-NYSE. 2f. Sector Performer) TD Bank (2a.95. 2e. Sector Outperformer) Medusa Mining Limited (2g) (MLL-TSX. 7) (TD-TSX. 9) (SU-TSX. (PWT-TSX. 2e.: Stock Prices as of 01/17/2011: Comcast (CMCSA-NASDAQ. C$38. 2e.23. US$11. Sector Outperformer) Pan American Silver Corp. C$13. Sector Outperformer) Onex Corporation (2g. C$8. C$45.70. 7) (PGF-TSX.98. (2a. Sector Outperformer) Pacific Rubiales Energy Corp. (2a. 2e. Sector Performer) Newmont Mining Corporation (2g.81.15. Sector Underperformer) Silver Wheaton Corp. Sector Performer) Silver Standard Resources Inc. 3c. 3a. US$11. C$13. Not Rated) First Solar.: (Continued) Stock Prices as of 01/17/2011: March Networks Corp. 2e. Sector Performer) Vermilion Energy Inc. 2d. Sector Outperformer) Royal Gold. Inc. (2a. C$4. 7. 12) (TCK.99. Sector Outperformer) Perpetual Energy Inc. 2g) (SMF-TSX.19. 3a. (2a. C$25. Sector Outperformer) Taseko Mines Limited (2g) (TKO-TSX. 2g. C$10. (2a. (2g) (MN-TSX. US$55. 3a. US$23. 2e. 2g) (NXG-AMEX. (2a. US$66. C$13. Sector Underperformer) PetroBakken Energy Ltd. Sector Performer) Suncor Energy Inc.96.73. US$22. 2c. Sector Outperformer) Petrominerales Ltd. 3c. 2g) (QUX-TSX. (2a. 7. Sector Performer) Penn West Petroleum Ltd. 2g) (PMT-TSX. 3c. US$47. 2g) (AUY-NYSE. (2a. 2b. (2a.B-TSX.64. 2g) (PEY-TSX. 3a. 13) (RCI. (FSLR-NASDAQ. 13) (SJR. Sector Outperformer) Shaw Communications Inc.30.January 17. 12) (OCX-TSX. 7) (VET-TSX. Sector Outperformer) Shoppers Drug Mart Corporation (2g) (SC-TSX. 2e.78. 2c. 2f.10.39. Sector Performer) Progress Energy Resources Corp. US$23.72. 3b) (NEM-NYSE. 2g) (PRQ-TSX.44. 2e. 3c. (2a. (2g) (TET-TSX. C$20. (2g. 3a. Sector Outperformer) New Gold Inc. 2c. 2e. C$21. 2g) (RGLD-NASDAQ. 2e. 2g) (SVM-TSX.

: (Continued) Stock Prices as of 01/17/2011: Time Warner Cable (TWC-NYSE. US$65. (TRP-TSX. 101 .January 17. C$37.Top Picks Of 2011 .61.15. 2011 Companies Mentioned in this Report that Are Not Covered by CIBC World Markets Inc. Not Rated) TransCanada Corp. 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.

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

com/sec2711 or write to CIBC World Markets Inc. has assigned buy ratings to securities rated Sector Outperformer. Important disclosures required by IIROC Rule 3400. Ratings Distribution*: CIBC World Markets Inc. CIBC World Markets Inc. Toronto.0% Inv. 161 Bay Street.. for the purposes of complying with NYSE and NASD rules..cibcwm. "Speculative" indicates that an investment in this security involves a high amount of risk due to volatility and/or liquidity issues.4% 93. Rating Description Sector Weightings** **Broader market averages refer to the S&P 500 in the U. Stock is expected to underperform the sector during the next 12-18 months.com under 'Quick Links' or by writing to CIBC World Markets Inc. 2011 CIBC World Markets Inc. 103 . Toronto. including potential conflicts of interest information. Price Chart For price and performance information charts required under NYSE and NASD rules.January 17.S. hold ratings to securities rated Sector Performer. hold and sell recommendations. 4th Floor. Sector rating is not applicable.7% 92. Sector is expected to outperform the broader market averages. CIBC World Markets does not maintain an investment recommendation on the stock. Banking Relationships Sector Outperformer (Buy) Sector Performer (Hold/Neutral) Sector Underperformer (Sell) Restricted Count 135 119 26 6 Percent 96. Stock is expected to perform in line with the sector during the next 12-18 months.Top Picks Of 2011 . 4th Floor. Attention: Research Disclosures Request.cibcwm. Sector is expected to equal the performance of the broader market averages.0% *Although the investment recommendations within the three-tiered. 161 Bay Street. Brookfield Place. CIBC World Markets Inc. and sell ratings to securities rated Sector Underperformer without taking into consideration the analyst's sector weighting.4% 42. Ontario M5J 2S8. our system for rating investment opportunities and our dissemination policy can be obtained by visiting CIBC World Markets on the web at http://researchcentral. CIBC World Markets is restricted*** from rating the stock. relative stock rating system utilized by CIBC World Markets Inc. ***Restricted due to a potential conflict of interest. Sector is expected to underperform the broader market averages. please visit CIBC on the web at http://apps. and the S&P/TSX Composite in Canada.1% 9. Attn: Research Disclosure Chart Request. Ontario M5J 2S8. Brookfield Place. 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. 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.9% 100. do not correlate to buy.3% 2.

Such investors will not be able to enter into agreements or purchase products mentioned herein from CIBC World Markets plc. and no representation or warranty. including possible loss of the principal invested. Major Institutional Investors (“MII”) (as such term is defined in SEC Rule 15a-6) or (ii) CIBC World Markets Corp. and investors may realize losses on investments in such securities. distribution. objectives and financial circumstances.S. opinion or statistical data is accurate or complete (with the exception of information contained in the Important Disclosures section of this report provided by CIBC World Markets or individual research analysts). Non-client recipients of this report who are not institutional investor clients of CIBC World Markets should consult with an independent financial advisor prior to making any investment decision based on this report or for any necessary explanation of its contents. Nothing in this report constitutes legal. The price of the securities mentioned in this report and the income they produce may fluctuate and/or be adversely affected by exchange rates. 2011 Legal Disclaimer This report is issued and approved for distribution by (a) in Canada. for informational purposes only. (iii) will not be endorsed or guaranteed by CIBC. and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited.Top Picks Of 2011 .. U. is made regarding future performance of any security mentioned in this report. Before making an investment decision with respect to any security recommended in this report. 104 . Since the levels and bases of taxation can change. Unauthorized use. This report is provided. clients should consult with their own independent tax adviser.S. prior to acting on any of the recommendations herein. the TSX Venture Exchange and CIPF.January 17. 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