The S&P/TSX Composite Index pared early losses in Canada, as gains in gold and base metals miners offset energy sector losses from weak U.S. retail data and concerns about Europe's debt crisis ahead of the Greek elections. In the U.S., stocks were lower as investors awaited news from Europe, while retail sales declined for the second straight month in May. Air Canada is shifting its strategy to launch a discount airline by locating it in Vancouver to tap into Asian destinations.

1. Thursday June 14, 2012
S&P/TSX Composite +0.57 11497.87 CANADA
Dow Jones -77.42 12496.38
S&P 500 -9.30 1314.88 The S&P/TSX Composite pared early losses on Wednesday, as gains from
NASDAQ -24.46 2818.61 gold and base metals miners offset energy losses spurred by soft U.S. retail
S&P/TSX Venture -25.82 1243.88 data and worries about Europe’s debt crisis ahead of this weekend’s critical
Philadelphia SOX -3.95 369.79 Greek elections.
Crude Oil (US$/brrl) -0.75 82.57
Discount retailer Dollarama (DOL) announced a better-than-expected
Gas (US$/mmbtu) -0.04 2.20
profit, along with plans to gradually introduce higher-priced items this
Copper (US$/lb) -0.02 3.32
summer including some as high as $3!
Gold (US$/oz) +5.20 1619.00
Nickel (US$/lb) -0.06 7.76 According to the Globe and Mail, Air Canada (AC.B) is shifting its
Palladium (US$/oz) -6.50 618.50 strategy for launching a discount operation, focusing on locating a new
Platinum (US$/oz) +13.88 1468.63 low-cost international carrier in Vancouver in a bid to tap into the potential
Silver (US$/oz) -0.07 28.90 of Asian destinations.
Uranium (US$/lb) +0.50 51.00
Canadian Dollar -0.0026 0.9716 Torex Gold (TXG) announced a new gold discovery south of the Balsas
30 Year Canada -0.02 2.351 River at its Media Luna target on its Morelos gold project in Mexico. Gold
30 Year U.S. -0.05 2.719 Reach Resources (GRV) was up sharply after the company announced
Volatility Index (VIX) +2.180 24.27 that it had completed drilling on two holes at their Ootsa property located
near the Huckleberry Mine in central B.C. Urastar Gold (URS) rallied on
drilling results for its reverse circulation drill program on the El Jabali
This Week in Bacon… property in Mexico, including several intercepts of near surface high-grade
gold.
Just when we thought fast food
news could not get any more Late Tuesday, Enerplus (ERF) announced it will cut its monthly dividend
exciting, Burger King announced in half, noting that despite its operational success year-to-date, commodity
that it will be offering a bacon prices have weakened and resulted in lower forecast cash flows.
sundae throughout the U.S. this summer.
The dessert — a 510-calorie monstrosity UNITED STATES
featuring both a whole strip of bacon and
Stocks were slightly lower on Wednesday, as investors braced for news out
bacon crumbles atop a fudge and caramel
of Europe, while domestic retail sales slipped for the second consecutive
sundae — was released in April in Nashville
month in May, the first string of declines in nearly two years.
to reasonable fanfare, but will now receive a
wide release as part of Burger King’s JP Morgan (JPM) sparked a rally in financials, as CEO Jamie Dimon said
expanded summer menu. This move the bank will probably seek to claw back pay from executives responsible
coincides with the world’s second-largest for $2 billion in trading losses.
hamburger chain’s new strategy to rebrand
Dell (DELL) boosted tech stocks after the personal-computer maker’s
itself, changing its tagline from “Have It
CEO told analysts the company would look to reduce expenses by more
Your Way” to “Taste Is King.”
than $2 billion during the next three years.
The cold treat, which boasts 8 grams of fat
Scotts Miracle-Gro (SMG) declined after saying it will come up short of
and 61 grams of sugar, is described in the
its prior fiscal-year forecast as sales growth momentum at its biggest U.S.
release as a “sweet and savoury dessert
retail partners has fallen off.
featuring rich and creamy vanilla soft serve,
drizzled with chocolate fudge, caramel and A123 Systems (AONE) gave back sharp gains made on Tuesday, when the
topped with bacon crumbles, complete with a maker of batteries for electric cars said it’s introducing a “breakthrough”
thick-cut, hardwood smoked bacon garnish.” lithium ion power cell, dubbed Nanophosphate EXT.
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

2. – Canadian and U.S. Comments for Thursday June 14, 2012 2
ECON 101
CANADIAN Data Today: This morning, Capacity Utilization Rate (Q1) is expected to remain at 80.5%, while the New
Housing Price Index (Apr) should rise by 0.3%, steady with the previous month.
U.S. Data Today: This morning, the Current Account Balance (Q1) is expected to fall to -$132.1 billion from -$124.1
billion the previous month. The Consumer Price Index (May) is expected to fall by 0.2%, after coming in flat the previous
month, while CPI Ex-Food & Energy (May) should rise by 0.2%, after also gaining 0.2% previously. Initial Jobless Claims
(Jun 9) are expected to fall to 375K from 377K the previous week, while Continuing Claims (Jun 2) should fall to 3,270K
from 3,293K before that.
ECON 201
In the U.S., the Producer Price Index (May) fell by 1.0%, after losing 0.2% the previous month, while PPI Ex-Food &
Energy (May) increased by 0.2%, after also gaining 0.2% previously.
Advance Retail Sales (May) fell by 0.2%, after gaining 0.1% the previous month, while Retail Sales Less Autos (May) fell by
0.4%, after gaining 0.1% previously. Finally, Business Inventories (Apr) increased by 0.4%, after gaining 0.3% previously.
MARKET MOVERS
Technical Indicators:
TSX TSX VENTURE NYSE AMEX NASDAQ
Advancing Issues 472 (34%) 314 (28%) 987 (31%) 559 (39%) 753 (30%)
Declining Issues 719 (52%) 414 (36%) 2,142 (67%) 813 (57%) 1,693 (67%)
Unchanged Issues 192 (14%) 410 (36%) 69 (2%) 44 (3%) 97 (4%)
Total Issues 1,383 1,138 3,198 1,416 2,543
New Highs 26 6 44 6 36
New Lows 168 67 50 23 61
Up Volume (000s) 87,418 30,697 638,373 207,710 341,907
Down Volume (000s) 123,833 49,857 2,102,915 164,105 932,438
Unchanged Volume (000s) 13,177 30,674 24,596 2,891 11,175
Total Volume (000s) 2,244,284 1,112,278 27,658,838 3,747,061 12,855,200
Source: Yahoo! Finance
Notable 52-Week Highs:
C.A. Bancorp Inc. BKP $ 2.97 Intertape Polymer Group ITP $ 7.30
Crombie REIT CRR.UN $ 14.70 Corvus Gold Inc. KOR $ 1.08
Dollarama Inc. DOL $ 61.23 Opta Minerals Inc OPM $ 2.72
Emera Inc. EMA.PR.C $ 24.98 Primaris Retail REIT PMZ.UN $ 23.48
Franco-Nevada Corp. FNV $ 49.02 SIR Royalty Income Fund SRV.UN $ 12.15
HSE Integrated HSL $ 1.80 Valener Inc. VNR.PR.A $ 25.35
Notable 52-Week Lows:
Arsenal Energy AEI $ 0.48 Bellatrix Exploration BXE $ 2.96
AEterna Zentaris (D) AEZ $ 0.40 American Bonanza Gold Mining BZA $ 0.27
Diversified Alpha Fund II AFT.UN $ 8.86 Celtic Exploration CLT $ 11.02
Bell Aliant BA $ 25.01 Canadian Natural Resources CNQ $ 27.16
Canadian Banc BK.WT $ 0.02 Cequence Energy CQE $ 0.92
Bioniche Life Sciences BNC $ 0.32 Curis Resources Ltd. CUV $ 0.59
Bonavista Energy Corp. BNP $ 14.23 Canadian World Fund CWF $ 3.05
BioteQ Environmental Techn. BQE $ 0.13 Dundee Energy DEN $ 0.35
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

3. – Canadian and U.S. Comments for Thursday June 14, 2012 3
Duluth Metals DM $ 1.75 Open Range Energy ONR $ 0.97
EMC Metals EMC $ 0.06 Pace Oil and Gas Ltd. PCE $ 2.82
Equal Energy Ltd. EQU $ 2.68 Precision Drilling PD $ 7.25
Enerplus Corp. ERF $ 12.90 Paramount Resources POU $ 23.81
Guide Exploration GO $ 1.45 Quest Rare Minerals Ltd. QRM $ 1.49
Argosy Energy GSY $ 0.33 Reitmans (Canada) RET.A $ 12.76
Horizons GMP Jr. Oil & Gas ETF HJE $ 2.70 Shoreline Energy Corp. SEQ $ 3.93
Legacy Oil + Gas LEG $ 6.29 Shaw Communications SJR.B $ 18.93
Marret High Yield Strategies MHY.UN $ 9.61 Thompson Creek Metals Co. TCM $ 3.27
NovaCopper Inc. NCQ $ 2.05 Trilogy Energy Corp. TET $ 22.35
Angle Energy NGL $ 3.57 Transat A.T. TRZ.A $ 3.70
NGEx Resources NGQ $ 1.85 Western Lithium USA WLC $ 0.17
Norsat International NII $ 0.41 Zargon Oil & Gas Ltd. ZAR $ 8.87
Niko Resources NKO $ 21.38 Zincore Metals ZNC $ 0.13
NexJ Systems NXJ $ 6.25
CANADIAN EQUITIES OF INTEREST
Listed Alphabetically by Symbol
China Trade Surplus
Dirt cheap. China’s trade surplus surprisingly widened in May with much stronger exports than expected (15.3% YoY). That
said, Canaccord Genuity Portfolio Strategist Martin Roberge believes the areas of interest are imports (which also bounced back
12.7% YoY) because Roberge wants to see if there is a shift towards industrial commodities. Any recovery would signal that
China’s industrial sector is stabilizing/recovering, thus allowing Canadian equities to play catch-up to their U.S. counterparts.
The good news is that imports of industrial metals such as copper recovered last month. As a result, Roberge’s data shows that
total imports of industrial commodities seem to be turning YoY. However, imports of consumer commodities such as fertilizers
and forest products continue to climb. As he said several times in past publications, only when the ratio of industrial-to-
consumer commodity imports decisively start rising does he believe that one should favour the S&P/TSX vs. the S&P 500. Last
month was encouraging but more is needed. Sticking to the Asia theme, Roberge points to U.S. communication equipment
(CEM) stocks as net beneficiaries of strong Asian currencies. Earlier this month he raised the CEM group to overweight based
on his conclusion that the price rout in industry giants Cisco Systems (CSCO) and Qualcomm (QCOM) was a classic case of
investors overreacting to lower-than-expected results. Contrary to companies’ lukewarm guidance, his domestic and foreign
demand indicators for telecom equipment paint a positive outlook for H2/12 and this at a time when the group has become dirt
cheap.
Portfolio Strategy
No way I am going to be left holding the bag! Canaccord Genuity Portfolio Strategist Martin Roberge speculates that this is
probably how private holders of Spanish bonds reacted when they learned Monday that they could be subordinated to the new
debt used for the bailout of Spanish banks. It did not take long for bond yields to spike up with the Greek saga on “fake” CDSs
still fresh in the memory of bond investors. Therefore, the rise in sovereign bond yields this week may have more to do with a
debt seniority issue than rising financial stress in the euro zone. This could explain the strong equity market comeback on
Tuesday. Otherwise, next week’s events and ensuing decisions could have a profound impact on the global economy and
financial markets over the near and long term. Following the outcome of the elections in Greece, European policymakers will be
cleared to propose contingency plans to solve the sovereign debt crisis. With this week’s rejection by market participants of the
bailout sketch for Spanish banks, authorities are aware that delivering the bare minimum won’t cut it. With Spanish and Italian
bond yields north of 6%, the timing could not be better for European policymakers to show the world that they can be proactive
and contain the crisis. Roberge believes a forceful response could then open the door for the ECB to cut rates in July.
Air Canada* (AC.B : TSX : $0.99), Net Change: 0.01, % Change: 1.02%, Volume: 551,384
Welcome aboard? Air Canada has a new vision for raising Vancouver's profile as an international aviation hub. According to
The Globe and Mail, AC is shifting its strategy for launching a discount operation, focusing on locating a new low-cost
international carrier in Vancouver in a bid to tap into the potential of Asian destinations. AC is planning to start the discount
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

4. – Canadian and U.S. Comments for Thursday June 14, 2012 4
carrier by the spring of 2013, the Air Canada Pilots Association possesses veto power over any new venture but, AC envisages
an ownership structure that would keep its stake at less than 50%, while giving minority stakes to a foreign airline and a
financial player yet to be confirmed. AC would have signed a code-sharing pact with its planned low-cost division to co-operate
on flight reservations and baggage handling, but a revised proposal calls for the entity to be effectively independent and have
the flexibility to align with a partner that doesn't necessarily belong to the Star Alliance. Reports say AC has spoken with
Cathay Pacific, Air China, and International Consolidated Airlines. AC will remain a member of the Star Alliance of airlines
and still handle domestic flights in and out of Vancouver, as well as provide service between Vancouver and the United States,
Mexico and the Caribbean.
Dollarama* (DOL : TSX : $60.61), Net Change: 3.74, % Change: 6.58%, Volume: 455,390
Two-to-threefitty-rama? Dollarama reported another solid quarterly beat on Wednesday, with EPS of $0.56 well ahead of
consensus of $0.50 and Canaccord Genuity Consumer & Retail Analyst Derek Dley's $0.53 estimate. Same-store sales
improved 8.1%, with both transaction size growth of 3.5% and transaction number growth of 4.5%. Gross margins as a
percentage of revenue increased to 36.3%, up 60 bps YoY, while SG&A as a percentage of revenue declined materially to
18.5% from 19.7% last year, driven by store labour productivity improvements and top line leverage. The company also
announced it will be introducing two new higher price points for non-consumable items of $2.50 and $3.00 in August 2012,
although the majority of merchandise will remain priced below $1.00. Dley expects this to be positive for comparable sales and
gross margins going forward, noting that when Dollarama first introduced its multiple price point strategy in Q1F10, same-store
sales averaged a robust 7.8% over the next 12 months. Dollarama also announced an NCIB authorizing the company to
repurchase up to 2.6 million shares or 3.5% of its total outstanding share count. Overall, this was yet another strong quarter for
Dollarama, the 11th beat in a row, and given Dley's positive view of the new price point introductions, he expects shares to
continue to perform strongly.
Enerplus* (ERF : TSX : $13.01), Net Change: -0.51, % Change: -3.77%, Volume: 1,445,703
Could this be the first of many? Shares of Enerplus were soft after the company announced that they would be cutting their
monthly dividend in half to $0.09. The market was anticipating a cut; however, a 50% cut was much deeper than expected. The
company noted that despite their operational success year-to-date, commodity prices have weakened and resulted in lower
forecast cash flows. Their balance sheet is currently strong and they have significant liquidity. The company believes this
reduction will strike a better balance between yield and growth, allowing continued investment into their asset base in a more
sustainable manner. The company also reiterated its production growth targets for 2012. The company noted that approximately
70% of their forecasted $800-million capital spending in 2012 is weighted to crude oil and natural gas liquids projects.
Approximately 40% of this capital is being directed at light crude oil assets in the North Dakota region where production is
expected to double by year end. The company will continue to invest with their partners in the Marcellus shale gas play, which
they believe is one of the best natural gas plays in North America.
Gold Reach Resources* (GRV : TSX-V : $1.19), Net Change: 0.32, % Change: 36.78%, Volume: 689,592
Reach for the top. Shares of Gold Reach Resources were up sharply after the company announced that it had completed drilling
on two holes at their Ootsa property located near the Huckleberry Mine in central B.C. Hole S12-101 was drilled to a depth of
1079 m and hole S12-102 was drilled to a depth of 951 m. Hole S12-101 was drilled 100 metres back from hole S11-100, which
back on Dec 5, 2011 intersected 566.7 metres grading 0.51% copper equivalent back and hole S12-102 stepped out 100 metres
in front of hole S11-98 which intersected 571.9 metres grading 0.38% Cu Eq also back on December 5, 2011. GRV president
Dr. Shane Ebert noted, "The Company is extremely pleased with the drilling progress made to date at the Ootsa Project. The
planned 20,000 metre drill program will continue to step out in several directions and will attempt to outline the extent of the
new West Seel discovery. Holes 101 and 102 both ended in strong alteration containing visible copper and molybdenum
sulfides, indicating the zone still remains open at depth. Two drills are currently operating at the project and surface exploration
and trenching will commence in a few weeks." Assay results from holes S12-101 and 102 are expected in about three weeks.
Guyana Goldfields* (GUY : TSX : $2.36), Net Change: 0.19, % Change: 8.76%, Volume: 894,051
Positive update. Investors were jumping into shares of Guyana Goldfields after the company announced that it is on schedule to
deliver a revised resource estimate for the Aurora Gold Project by the end of June 2012 and has also made additions to the
Aurora Bankable Feasibility Study (BFS) Project Team. GUY stated that it is on-track to publish an updated resource
estimate by the end of this month for the Aurora Gold Project, located in Guyana, South America, which will include an
additional 171 drill holes totalling 56,336.52 m completed from May 31, 2011 up to the end of April 30, 2012. Management
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

5. – Canadian and U.S. Comments for Thursday June 14, 2012 5
said the revised estimate will update and improve the geological model, upgrade inferred ounces to the measured & indicated
categories, and provide guidance on depth extensions from previously defined mineralized structures. The Aurora Gold Project
currently has 5.71 million ounces in the measured & indicated categories (47.040 million tonnes at a grade of 3.83 g/t) and 1.17
million ounces in the inferred category (9.97 million tonnes at a grade of 3.63 g/t). GUY also stated Wednesday that it intends to
issue a revised BFS by the end of this year. The revised BFS will eliminate the vertical shaft component of the initial Feasibility
Study issued earlier this year and will concentrate on mining the deposit from surface to approximately 750 m vertical depth
utilizing a ramp. Management believes that the Aurora production timeline can also be significantly shortened.
lululemon athletica* (LLL : TSX : $63.69), Net Change: -2.18, % Change: -3.31%, Volume: 120,916
lululemon athletica* (LULU : NASDAQ : US$61.92), Net Change: -2.29, % Change: -3.57%, Volume: 3,240,741
We Didn't Make Too Much. In a proprietary survey of lululemon.com, Credit Suisse notes that online stock-out rates of the
yogawear maker's gear highlights demand is still running ahead of supply. Online lululemon is currently out of stock in 970
colour/size combinations out of a total of 2,900. Women’s has a 33% stock-out rate compared to men’s 35%. Discounted
merchandise only accounts for 6% of total online apparel offering, 4% in women’s and 13% in men’s. Availability is highly
limited across sale items. The average discount is 32%, 35% in women’s and 25% in men’s. Given the high levels of sell-
through, Credit Suisse continues to expect upside to what looks like overly cautious Q2/12 guidance. Recall just last week,
lululemon sold off after providing cautious outlook for decelerating comps in Q2/12. Credit Suisse forecast 14%, $285.4
million, $0.32 EPS vs. guidance for low double digit comps, $273-278 million sales, $0.28-0.30. Recent inventory build
(lululemon’s inventory rose 67.1% Y/Y to $107.7 million in Q1/12 and forward days inventory rose 11 days Y/Y to 75)
suggests improving order fill rates is a strategic priority. lululemon's Q1/12 earnings climbed 40%, beating analyst and company
expectations, due to increased inventory levels that helped bolster revenue.
Patheon* (PTI : TSX : $2.11), Net Change: 0.23, % Change: 12.23%, Volume: 233,090
What's wrong with being generic? Shares of Patheon jumped after the generic drug maker reported an increase in revenue and
gross profit for Q2/12. For the quarter revenue increased to $181.5 million from $170 million in the previous quarter.
Commercial manufacturing revenues for the second quarter increased $8.5 million, or 6.1%, to $147 million from $138.5
million in the same period last year. The company did report net loss of $0.61 per share; however, the loss was due to a one-
time charge related to the company’s decision to close a production facility in Britain. Patheon said it expected to take a $50- to
$60-million impairment on the long-term assets in England. Excluding the benefit from a prior-year contract cancellation, gross
profit in the second quarter would have increased by $21 million. The company reported that the increase in gross profit was
primarily due to higher volumes, lower depreciation expense and lower inventory write-offs, partially offset by the unfavourable
impact associated with replacing the cancelled contract with other production.
Red Eagle Mining* (RD : TSX-V : $0.37), Net Change: 0.02, % Change: 5.71%, Volume: 298,700
Flying high. Shares of Red Eagle Mining took flight after the junior gold explorer announced an impressive high-grade
intersection of 6.0 m at 31.85 g/t gold (hole SR-042), from the first set of assay results received to date from the phase two drill
program at the company's San Ramon deposit in the Santa Rosa gold project in Colombia. Management highlighted that the new
results included strong gold mineralization in both core drill holes SR-041 and SR-042. Red Eagle's CEO, Ian Slater, stated,
"Our drilling at San Ramon continues to deliver high grade intercepts, with today's results confirming the robustness of the
deposit." He added, "Both holes also significantly increased the width of the known gold mineralization and this was just the
first two holes back out of sixty being drilled this summer." The company's phase two drill program consists of 24 core drill
holes of which 19 holes totalling 3,995 m have been completed to date with assays pending on 17 holes. Santa Rosa is located
50 km west of AngloGold Ashanti's (AU) Gramalote gold deposit (2.5 million ounce M&I resource grading 0.8 g/t gold) and
60 km east of Continental Gold's (CNL) Buritica gold deposit (630,000 ounce M&I resource grading 17.8 g/t gold).
Talison Lithium* (TLH : TSX : $3.34), Net Change: -0.03, % Change: -0.89%, Volume: 33,870
Signs of strength. One Bay Street brokerage highlighted Wednesday that multiple recent data points from the lithium industry’s
largest producers, and certain important end-consumers, suggest underlying strength in the sector. These data points included:
i) Results from SQM (SQM), the world’s largest producer, that reflect a tight supply/demand environment; ii) Price increases
by Rockwood Lithium (ROC), also one of the world’s largest producers, suggest market price for lithium carbonate now
approximately $7,000/tonne; and iii) Statistics that suggest hybrid electric vehicles continue to gain share in the global
automotive market. Also on Wednesday, Talison Lithium, the world’s largest pure-play lithium producer, said it’s studying debt
funding for a proposed plant in Western Australia that may cost as much $250 million. Talison's CEO, Peter Oliver, stated that
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

6. – Canadian and U.S. Comments for Thursday June 14, 2012 6
the proposed plant would produce 20,000 metric tonnes of lithium carbonate a year, allowing Talison to widen its customer
base. “We have quite a substantial cash balance at the moment, we’re generating good cash and we’re out at the moment
looking at debt to fund the rest,” Oliver said. Talison, which produces 32% of the world’s supply of lithium, announced last
week that it has completed an expansion at its flagship Greenbushes mining operation that has doubled its output
capacity. Analysts at U.S.-based brokerage Dahlman Rose & Co. recently stated that demand for lithium may double by 2020 to
300,000 tonnes a year largely because of increasing use in hybrid-electric vehicles and consumer electronics.
Torex Gold Resources* (TXG : TSX : $1.95), Net Change: -0.04, % Change: -2.01%, Volume: 2,827,803
Take me to the river. Torex Gold announced a new gold discovery south of the Balsas River at its Media Luna target on its
Morelos gold project in Mexico. The first five holes drilled into the Media Luna target were reported, with intervals that include
6.13 g/t gold, 58.7 g/t silver, and 2.40% copper over 4.8 m in hole ML-01, and 4.27 g/t gold, 9.0 g/t silver and 0.78% copper
over 4.4 m in hole ML-02, along with 6.56 g/t gold, 10 g/t silver and 1.15% copper over 7.1 m in hole ML-08. The company’s
Media Luna target, located adjacent to regional faults, was identified using aeromagnetics, surface geochemistry and geological
mapping. The area is characterized by a structurally complex sequence of Morelos Formation (marble and limestone) and
Mezcala Formation (shale and sandstone) within a geological setting broadly similar to the Guajes-El Limon deposit, located to
the north of the Balsas River. The El Limon stock borders the sedimentary package at the north end of the Media Luna prospect
and dips to the south-southwest beneath the sedimentary rocks. As presently modeled, the prospect area is defined by a sharp
and intense magnetic high with dimensions of approximately 3 km x 1 km. Fred Stanford, President & CEO of Torex stated “To
date we have only tested 900 meters of the strike length of this three km long by one km wide magnetic anomaly. At this early
stage of the discovery, it is very encouraging to see the consistency of the gold mineralization, and the high silver and copper
values over a significant strike length and thickness.”
Urastar Gold* (URS : TSX-V : $0.25), Net Change: 0.02, % Change: 6.52%, Volume: 361,977
YOU’RE A STAR? Urastar Gold released results for its reverse circulation (RC) drill program on the El Jabali property in
Mexico, including several intercepts of near surface high-grade gold. The highlight holes include: LJB-12-03: 59 m grading
1.462 g/t Au from 7.6 to 67.1 m, including 24 m at 3.324 g/t Au from 13.7 to 38.1 m and 112.8 m grading 0.432 g/t Au and
from 0 to 112.8 m; and LJB-12-04: 13.7 m grading 1.173 g/t Au from 19.8 to 33.5 m and 53.3 m grading 0.396 g/t Au and from
4.6 to 57.9 m. The program was designed to test for extension of the La Dura gold mineralization, north of the open pit (LJB-
12-03) and south on the El Jabali Mine Trend (LJB-12-04). The El Jabali Gold project is located in the prolific Sierra Madre
Gold Belt approximately 7 km from Alamos Gold's (AGI) flagship Mulatos Gold Mine and only 1.5 km from Urastar's La
Juliana project. Urastar completed an 805 m reverse circulation drill program in May 2012 with a total of 10 drill holes, two of
which were abandoned and twinned in order to reach the target depth. According to the press release, difficult ground conditions
prevented half of the drill holes from reaching their target depth, however only two of the eight holes failed to intersect
significant gold mineralization. President Adrian Robertson commented, “The results we've had in the Mulatos area, both at El
Jabali and La Juliana, demonstrate the presence of high grade, near surface gold mineralization at both of these properties. I
believe these results coupled with our close proximity to both Alamos Gold and Agnico-Eagle's (AEM) Mulatos operations
present an excellent opportunity for Urastar shareholders.”
U.S. EQUITIES OF INTEREST
Listed Alphabetically by Symbol
Caseys General (CASY : NASDAQ : US$52.18), Net Change: -7.73, % Change: -12.90%, Volume: 2,236,668
Yee-hawwww! Shares of Casey's General Stores plunged after it posted fourth-quarter earnings that missed expectations as
margins on gasoline sales narrowed. The convenience store operator said that it earned $23.1 million, or $0.60 per share, for the
quarter that ended April 30. That's up from $22.8 million, or $0.60 per share, last year. Revenue increased 13% to $1.75 billion.
Analysts on average were expecting $0.67 per share on revenue of $1.74 billion. For the fiscal year, Casey's earned $116.8
million, or $3.04 per share, versus $94.6 million, or $2.22 per share, in the prior. Its annual revenue increased to $7.00 billion
from $5.64 billion. Commenting on the results, CEO Robert Myers said, "In the fourth quarter, the gas margin was down nearly
$0.02 per gallon from the same period a year ago, which reduced basic earnings per share by approximately $0.12." The decline
was partially offset with strong sales and margin gains inside its stores. Grocery and other merchandise sales at stores open at
least a year rose 8.5% during the quarter, while prepared food and fountain same-store sales jumped 16.8%. Meanwhile, Casey's
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

7. – Canadian and U.S. Comments for Thursday June 14, 2012 7
has converted approximately 175 stores to 24-hour operations and another 100 are slated to go to around-the-clock operations
by October 31 of this year. The retailer has seen 20-30% sales lifts in locations with extended hours.
CBS (CBS : NYSE : US$31.41), Net Change: -1.05, % Change: -3.23%, Volume: 8,530,492
Walt Disney (DIS : NYSE : US$46.23), Net Change: -0.15, % Change: -0.32%, Volume: 6,919,633
Commercial break. CBS’s namesake network and Walt Disney’s ABC on Tuesday completed their ad-sales negotiations for the
coming TV season, winning higher ad rates in what is proving to be a lacklustre market. CBS wrapped up roughly $2.70 billion
in ad commitments, only slightly above last year's $2.65 billion haul, according to the Wall Street Journal. The top-rated
network sold less of its ad inventory in the upfront, but at higher prices with increases of around 10%. The broadcaster sold 2 to
3% less primetime inventory at the upfronts than it did last year, in line with analyst predictions for all broadcasters, the source
said. Disney’s ABC hiked rates from 6% to 8%, reaching about $2.5 billion in upfront commitments (virtually unchanged from
last year). CBS has been ranked as the no.1 network for years, with hits including “NCIS” and “The Big Bang Theory,” and has
less work to do than other networks to freshen its lineup. This season, ABC rolled out two new dramas, while CBS added four
more.
Dell (DELL : NASDAQ : US$12.28), Net Change: 0.31, % Change: 2.55%, Volume: 41,141,486
Cash is king...Shares of Dell popped after the company initiated a $0.08/share quarterly dividend with payout to begin
in Q3F13. This amounts to $0.32/share annually (or $568 million) and implies a 2.7% dividend yield based on Tuesday’s close.
Dell’s move comes as the company has been attempting to remake its business model in the face of soft sales of personal
computers. It has attempted to boost both revenue and profits by acquiring higher-margin businesses, including data storage,
security and networking technologies. Given that Dell has generated over $2.9 billion in free cash flow over the last 12 months
and ended Q1F13 with $17.2 billion in cash and investments, Credit Suisse believes the company has more than sufficient
means to fund the dividend. Dell also noted plans to increase its target range for capital distributions to shareholders to 20-35%
of free cash flow (27.5% at the midpoint) from 10-30% (20% at the midpoint). Credit Suisse expects the market to view this
move favorably in the near-term as it reduces the risk of a large M&A transaction.
Global Payments (GPN : NYSE : US$40.48), Net Change: -1.71, % Change: -4.05%, Volume: 1,892,670
Too l33t to b34t. Global Payments said a recent data breach put no more than 1.5 million credit card numbers at risk, and that
the incident is now “contained.” It's not clear whether the attackers actually accessed or copied the merchant data stored on the
server, CEO Paul Garcia said. In a statement updating its investigation of the breach first reported in March, the payments
processing company said that the compromised card data was limited to “Track 2” data, which includes account numbers and
card expiration dates, not names and social insurance numbers. Affected individuals will be offered free credit monitoring
services and identity protection insurance of $1 million. The three U.S. major credit reporting agencies have also been advised
about the incident. Following the incident, some of the credit card brands removed Global Payments from their lists of service
providers compliant with the payment card industry data security standard. The company has hired an independent security
assessor to review its security procedures and plans to reapply for certification once that audit is complete. It expects to provide
more information about the financial impact of the data breach and the status of the investigation on its year-end earnings call
on July 26.
Johnson & Johnson (JNJ : NYSE : US$64.45), Net Change: 1.37, % Change: 2.17%, Volume: 97,916,453
Good for the bones, ja! Johnson & Johnson expects to complete its $19.7-billion purchase of Swiss medical device maker
Synthes today and says the deal will slightly boost company profit this year, rather than being a moderate drag on earnings as
previously expected. Synthes makes a wide variety of medical devices, from metal disks that fit into spinal cords to plates used
to fuse broken bones together. For J&J, the orthopaedic market has been called an important growth driver and Synthes already
does a substantial business in key emerging markets like Russia, China and India. To receive approval from both U.S. and
European regulators, J&J agreed to divest its DePuy Orthopaedics subsidiary to Biomet. The company said that the largest in
the company’s history and will give it a line of profitable tools and materials used in trauma surgery and should boost 2012
earnings by $0.03-0.05 a share. Industry analysts, on average, had expected J&J's full-year earnings to rise about 2% this year to
$5.12 per share. The company expects the acquisition to boost 2013 earnings, excluding special items, by $0.10-0.15 cents per
share.
JPMorgan Chase (JPM : NYSE : US$34.28), Net Change: 0.51, % Change: 1.50%, Volume: 70,336,417
Please speak into the recorder. JPMorgan Chase CEO testified before a U.S. Senate Banking Committee regarding the recent
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

8. – Canadian and U.S. Comments for Thursday June 14, 2012 8
trading losses of the company’s Chief Investment Office (CIO). Dimon said he was “dead wrong” when he dismissed media
reports regarding potential losses at the office as a “tempest in a teapot” several months ago. Dimon called the losses an isolated
issue, admitting that the bank took on too much risk, although the trades were put in place to reduce the bank’s overall risk.
Losses were originally speculated to be in the $2-billion range initially, a number that has since climbed to $3 billion (or more).
In his testimony, Dimon said that he still expects the bank’s current quarter to be profitable and that the losses are under control.
When asked if the bank’s compensation created incentive for traders to take on additional risk, Dimon said he did not believe
the compensation model posed that risk and suggested that there will be clawbacks on some of the traders’ compensation. He
believes, “Traders did not have the requisite understanding of the risks they took,” and that they thought, “Losses were the result
of anomalous and temporary market movements, and therefore were likely to reverse themselves.”
Regeneron (REGN : NASDAQ : US$111.88), Net Change: -15.97, % Change: -12.49%, Volume: 4,353,254
Eye spy competition. Shares of Regeneron Pharmaceuticals slumped after a smaller rival company reported positive clinical
trial results for an eye drug that might eventually compete with Regeneron's Eylea. Privately-held Ophthotech is studying its
drug Fovista as a treatment for "wet" age-related macular degeneration (AMD), a common cause of blindness among the
elderly. Regeneron's drug Eylea and Swiss drugmaker Roche's Lucentis drug are used to treat the same condition. Ophthotech
said Wednesday that in a mid-stage clinical trial, patients who were treated with a combination of Fovista and Lucentis had a
greater improvement in their vision than patients who were injected with Lucentis alone. As a result, it plans to speed up late-
stage development of Fovista, but the drug must go through larger and longer trials before it is approved. There is a question of
how the company will finance its next step. Roche, Regeneron, or another company can help pay for further study. If Regeneron
steps in, Ophthotech would likely test its drug in combination with Eylea, an analyst speculates. Eylea is the first drug approved
for "wet" AMD since Lucentis in 2006. Annual sales of Eylea have been surprisingly strong after its approval by the Food and
Drug Administration in November, leading investors to believe that the drug is on its way to becoming a blockbuster product.
Regeneron says it expects $500-550 million in revenue from the drug in 2012.
Scotts Miracle-Gro (SMG : NYSE : US$40.21), Net Change: -2.84, % Change: -6.60%, Volume: 8,713,829
Wilting. Shares of Scotts Miracle-Gro got pummelled after the company said it would fall short of its full-year outlook, as
demand for its potting soil and plant seeds failed to take off during the peak gardening season. Sales at its largest retail partners
in the U.S. grew 3% year to date, down from an 8% growth recorded entering May. The lawn and garden products maker, which
traditionally benefits from the gardening season in mid- to late-May, said sales did not meet expectations. It had earlier forecast
sales to grow 6-8% and adjusted earnings of $2.65-2.85 per share for fiscal 2012. The company attributed the recent challenges
to a slowing of consumer demand following a strong and early start to the lawn care season in its fiscal second quarter, when
consumer purchases were up 20%. Additionally, Scotts indicated poor weather and challenging economic conditions to have an
impact on its European business. The company expects gross margins to be lower than estimates, hurt by unfavorable product
mix, unplanned distribution costs and reduced leverage of fixed costs. That said, Scotts said it plans to update its full-year
forecast when it reports its third-quarter results in August.
Verizon Communications (VZ : NYSE : US$42.99), Net Change: 0.05, % Change: 0.12%, Volume: 10,995,242
What’s on the horizon? Verizon has launched its long-awaited family share plans that Canaccord Genuity Telecommunications
Analyst Greg Miller believes appear to be designed to help consumers optimize their purchasing of wireless services in addition
to an attempt to minimize pressures on voice average revenues per user (ARPU) that remain in the state of decline. Although
Miller says that it is still too early to assess the ultimate impact to postpaid ARPU from the newly launched family data share
plans, he would be not surprised to see some level of negative repricing, at least initially. With lower incremental monthly
billing than existing plans, the new family data share plans will likely increase the take-rate on smartphone and tablet devices.
Miller believes benefits from higher adoption will more than offset any adverse reprice effect in this category over time. While
families save some money when upgrading, Verizon will also realize higher revenue with the smartphone, a clear win-win for
both. In certain cases, the total monthly charge would even be lower with an upgrade to a smartphone when converted to the
new family data share plan.
Wal-Mart (WMT : NYSE : US$67.07), Net Change: -0.65, % Change: -0.96%, Volume: 9,969,729
Vite Vite! Wal-Mart’s efforts to acquire Latin American assets from Carrefour are slowing as the French retailer focuses on
turning around its European business, said people familiar with the matter. Wal-Mart has pressed Carrefour to sell stores in
Colombia and Brazil, said the source. Carrefour’s Colombian unit generated 1.69 billion euros ($2.11 billion) in sales last year.
Wal-Mart is targeting stores overseas as revenue abroad climbs at 10 times the pace of U.S. sales. Doug McMillon, head of
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

9. – Canadian and U.S. Comments for Thursday June 14, 2012 9
Wal-Mart’s international business, said last month the retailer is open to purchases in Japan and Latin America, and signalled
that Colombia could be a possible site of expansion. Wal-Mart and Carrefour have held on-and-off negotiations for more than
two years, with U.S. retailer initiating many of the talks, said one of the people. After some conversations this year, Carrefour
has slowed the pace of talks as it deals with deteriorating conditions in Europe, according to the source. While Wal-Mart
remains interested in the operations, no deal is imminent, said two of these people.
COFFEE BEANS
– A typical lunch at a high-end New York steakhouse for nine people might run $1,000 or so, but when Warren Buffett is the
guest of honour the price can rise to $3.46 million. That is how much an as-yet unknown bidder paid in the annual online
charity auction for the right to lunch with the “Oracle of Omaha” and seven friends at the Smith & Wollensky steakhouse in
Manhattan. (Reuters)
– A Ku Klux Klan chapter’s request to “adopt” a stretch of road in Georgia was rejected by state authorities on Tuesday, setting
up a possible court fight over the right of the white supremacist group to participate in the highway clean-up program. Under
adopt-a-highway initiatives in Georgia and other U.S. states, groups volunteer to pick up trash and plant trees along the
highway. Road signs are typically installed to recognize the organizations’ efforts. Georgia cited public safety concerns in
denying the Union County Klan’s application to participate in the program. (Reuters)
– Lobbing F-bombs and other curses across the leafy streets of Middleborough, Massachusetts is now an offense punishable by
a $20 ticket. The ordinance does not specify which curses are banned, and police can decide whether to ticket offenders.
(Reuters)
THE LAST DROP: In Greece, the unemployment rate has risen to 22%. The solution to the problem was to raise taxes on the
rich, according to the Greek President Barack Obamopolis.
– Jay Leno
* Canaccord Genuity and its affiliated companies may have a Corporate Finance or other relationship with the company and
may trade in any of the Designated Investments mentioned herein either for their own account or the accounts of their
customers, in good faith and in the normal course of market making. The authors have not received, and will not receive,
compensation that is directly based upon or linked to one or more specific Corporate Finance activities, or to coverage
contained in the Morning Coffee.
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.