Good Afternoon

Following a week that saw the major North American markets report their first weekly gain in the last four, as investors once again gave priority to improving domestic economics over the tireless European rhetoric, that also saw the over hyped launch an subsequent flameout of social media giant Facebook (FB-Q), as commodity prices retreated in the wake of a strengthening U.S. dollar, the weekend media reported that –

As the brokers and traders made their way to the exits to enjoy the last weekend of May, they felt that perhaps the excessive weight of Europe had finally been lifted off of their backs in that for the 21st week of 2012, the Dow Jones Industrial Average had managed a gain of 0.69%, with the S&P 500 Index up on the week by 1.74% and the NASDAQ Exchange ahead on the week by 2.11%. To there‟s no joy in Hockeyville north, The TSX Composite Index had a weekly gain of 2.62% while even the free falling TSX Venture Exchange returned an impressive weekly gain of 6.19%.

Nine of the notable new TSX 52-week trading highs established last Friday were Allied Properties REIT (AP.UN-T) at $28.66, The Brick Ltd. (BRK-T) at $3.97, Cipher Pharmaceuticals (DND-T) at $1.58, Hardwoods Distribution (HWD-T) at $4.35, Intertape Polymer Group (ITP-T) at $6.85, Mainstreet Equity (MEQ-T) at $26.49, Northland Power (NPI-T) at $18.23, Tuscows Inc. (TC-T) at $1.59, and WestJet Airlines (WJA-T) at $15.90, while twelve of the 23 new 52-week trading lows include AGF Management (AGF.B-T) at $11.54, Bankers Petroleum (BNK-T) at $1.85, Entree Gold (ETG-T) at $0.74, Fortress Paper (FTP-T) at $17.40, Guide Exploration (GO-T) at $1.61, HudBay Minerals (HBM-T) at $7.72, Klondex Mines (KDX-T) at $1.67, Loblaw Companies (L-T) at $31.75, Niocan Inc. (NIO-T) at $0.45, Stonegate Agricom (ST-T) at $0.37, Thallion Pharmaceuticals (TLN-T) at $0.08 and WGI Heavy Metals (WG-T) at $0.23.

Much of last Week’s early weakness cam after Spain’s Bankia SA announced that the amount of state funding needed to salvage had more than doubled in the last week to €19-billion.

While much of the late week market rally came following the Thomson Reuters/University of Michigan figures that showed their Index of American Consumer Confidence rose by a better than expected 2.9-points in May to a 5½-year high of 79.3.

Canadian Wealth Management – “The U.S. economy is on a self-sustaining recovery path and these recent numbers just ahead of summer and the holiday season bode well.”

Attorney Andrew Stoltmann – “Facebook (FB-Q) is clearly the latest in a long string of events that is eviscerating the confidence investors have in the market. The perception is Wall Street jiggered this IPO so the underwriters made money, Facebook executives made money, and the small investor got left holding the bag.”

GF futures Co. – “Gold has been hurt by the strength of the U.S. dollar as investors turn their focus once again to Europe.”

FuturePath Trading – “There are a lot of gold bulls remaining out there, and they‟re coming in and buying against the lows we’ve seen. We’re near a bottom of the recent trading range, and the price may be attractive.”

The share price of Africa Oil (AOI-V) continues their impressive march as they gained another $1.00 or 11.34% to $9.82 last Friday after the company reported that the drilling of its highly anticipated Ngamia-1 oil well in Kenya had intersected its primary pay zone target as well as further targets beyond.

The shares of Quest Software (QSFT-Q) rose by $1.51 or 6.00% to US $12.48 on word they were in discussions about a possible takeover from industry giant Dell (DELL-Q) Talbots (TLB-N) shareholders’ were shocked to see their investment plunge by $1.06 or 41.21% to US $1.51 when the American retailer reported it had failed to consummate on a buyout offer from private equity group Sycamore Partners.

Richard Branson – “Every single person can make a difference to one person in their lifetime. Tiny amounts of money can absolutely transform one persons life.”

And then on Monday, May 28th –

With the American markets closed for their Memorial Day holiday the Canadian markets were forced to go it alone and they opened to the upside after weekend poles in Greece showed that pro-eurozone political parties were gaining ground ahead of their June 17th general election.

While it may not have felt like it, last week, the TSX Venture Index rallied 6.6%. This is the first weekly gain that we have seen in the TSX Venture since the last week of April, and it is the largest percentage weekly gain since early October 2011. While we saw a glimmer of life in the juniors, average daily volumes of only 143 million in our view continues to demonstrate a lack of speculative capital flowing into the junior miners.

CGX Energy (OYL-V) shares’ rise by $0.10 or 29.60% to $0.42 when the junior petroleum explorer announces a sizable $25-million, $0.35 financing with senior producer Pacific Rubiales Energy (PRE-T).

Under the heading of ‘Size Does Matter’ – The shares’ of Selwyn Resources (SWN-V) droop by $0.03 or 25.0% to $0.09 when the mineral developer announces a significant downsizing to the proposed production rate for its Selwyn lead/zinc project in eastern Yukon.

John Maxwell – “None of us achieve anything without the help of somebody else. In fact, some of the greatest discoveries and achievements in history happened because these people were encouraged by others.”

Tuesday, May, 29th –

Monday‟s very quiet and mixed start to the week leaves Canaccords Morning Coffee to report 19 new 52-week trading highs to go along with 26 new 52-week trading lows. A few of the new highs of note were Alaris Royalty (AD-T) at $20.90, Black Diamond Group (BDI-T) at $23.54, Huntingdon Capital (HNT-T) at $11.92, Liquor Stores N.A. (LIQ-T) at $18.05, Premium Brands (PBH-T) at $18.51 and Rogers Sugar (RSI-T) at $5.79, while a mix of the new lows of interest includes Acadian Mining (ADA-T) at $0.08, Bank of Montreal (BMO-T) at $54.20, Canadian Banc (BK-T) at $7.86, Electrovaya Inc. (EFL-T) at $0.52, George Weston (WN-T) at $58.15, HAP Gartman ETF (HAG-T) at $7.56, NovaCopper (NCQ-T) at $2.55 and SMART Technologies (SMA-T) at $1.40.

Morgan, Meighen & Associates – “People are still worried about what the knock-on effects are in the eurozone.”

The shareholders‟ of Interline Brands (IBI-N) are pleased to see their investment surge up by $7.14 or 39.80% to US $25.08 when the janitorial distributor reports it had agreed to a US $812-million leveraged buyout from private equity groups GS Capital Partners and P2 Capital Partners.

Similarly, the shareholders’ of Lecroy (LCRY-Q) watch their investment surge up by $5.05 or 55.36% to US $14.20 when the electronic company agrees to a US $240.6-million buyout from defense equipment manufacturer Teledyne Technologies (TDY-N).

Ithaca Energy (IAE-T) shares’ plunge by $1.00 or 35.34% to $1.83 when the company reports it has cut off any discussions with all parties regarding the company being a takeover target.

The shares’ of Oromin Explorations (OLE-T) rise by $0.12 or 21.82% to $0.67 on reports the Government of Senegal had approve the Miners Environmental and Social Impact Assessment for its gold project in that country.

Wednesday, May 30th –

Yesterday‟s maybe Europe‟s going to make it across the board market optimism leaves the TSX to report 13 new 52-week trading highs and 23 new lows. Six of the interesting new highs include Corvus Gold (KOR-T) at $1.01, DirectCash Payments (DCI-T) at $25.05, Hardwoods Distribution (HWD-T) at $4.46, McGraw-Hill Ryerson (MHR-T) at $43.07 and Wajax Corp.(WJX-T) at $53.43, while six of the new lows of interest were BELLUS Health – (BLU-T) at $0.61, Centric Health (CHH-T) at $0.72, Isotechnika Pharmaceuticals (ISA-T) at $0.07, Nevada Copper (NCU-T) at $2.02, Second Wave Petroleum (SCS-T) at $1.22 and Wesdome Gold Mines (WDO-T) at $0.92.

The U.S. Labor Department reports their unemployment rate has dropped from 9.1% last August to a much improved level of 8.1% in April.

The National Association of Realtors reports that pending U.S. home sales unexpectedly fell in April by 5.5%.

Eastern Platinum (ELR-T) shares’ fall by $0.04 or 14.59% to $0.24 when the company reports it will stop funding its Mareesburg platinum mine in South Africa.

The shareholders’ of Pep Boys (PBY-N) are disappointed to watch their investment plunge by $2.20 or 19.84% to US $8.89 when the automotive parts retailer reports that its US $791-million proposed private equity buyout by Gores Group had fallen through.

Research In Motion (RIM-T) shares‟ drop by $0.88 or 7.83% to $10.30 when the BlackBerry smartphone company issues an advance warning of an operation loss for the current quarter.

In response to many unauthorized comments regarding the state of the China‟s economy, the New China News Agency states – “The Chinese government‘s intention is very clear; it will not issue another large scale stimulus plan to boost robust growth.”

And with that –

Crude oil plunges by $3.15 to fall below $90 and close at US $87.61 a barrel.

The TSX falls by 176-points to drop below 11,500 to end the day at 11,433.

The Dow drops by 161-points to fall below 12,500 and close at 12,420.

John Wooden – “Promise yourself that you will talk health, happiness and prosperity a soften as possible.”

Thursday, May 31st –

Wednesday’s China induced triple digit market losses leaves the TSX with only 11 new 52-week trading highs to go along with an increased 44 new 52-week lows. Four of the new highs of note were Avigilon Corp.(AVO-T) at $5.10, CAP REIT (CAR.UN-T) at $24.10, Huntington Capital (HNT-T) at $12.00 and ShawCor Ltd.

(SCL.A-T) at $33.85, while some of the new low of interest include American Bonanza Gold Mining (BZA-T) at $0.29, Baja Mining (BAJ-T) at $0.21, Canadian Lithium (CLQ-T) at $0.34, Guide Exploration (GO-T) at $1.60, Intact Financial (IFC.N-T) at $62.26, Labrador Iron Mines (LIM-T) at $3.02, Meadow Bay Gold (MAY-T) at $0.52, NAL Energy (NAE-T) at $6.17, Orbit Garant Drilling (OGD-T) at $3.50, Research In Motion (RIM-T) at $10.30, Transat A.T. (TRZ.B-T) at $4.59 and Yorbeau Resources (YRB.A-T) at $0.14.

The World Nuclear News reports that post tsunami Japan now uses fossil fuels for some 90% of its electricity needs, as opposed to just 64% from fossil fuels before the tsunami hit the island nation.

CE Franklin (CFT-T) shares’ rise by $3.30 or 35.29% to $12.65 when the oil services company agrees to a $240-million takeover offer from National Oilwell Varco (NOV-N).

The shares’ of Mawson Resources (MAW-T) surge up by $0.36 or 33.33% to $1.44 when the mineral explorer reports encouraging drill hole gold assays from its Rompos gold project in Finland.

The shareholders’ of Talbots (TLB-N) are relieved to see their investment jump up by $1.14 or 87.88% to US $2.43 when the long beleaguered retailer finally agrees to a US $193.3-million takeover proposal by private equity group Sycamore Partners.

Les Brown – “My advice to all is to shoot for the moon, because even if you miss, you’ll land among the stars.”

Friday, June 1st, Short Strokes –

Yesterday‟s China express induced mixed day of trading leaves the TSX to report 18 new 52-week trading highs and 50 new trading lows. Some of the notable new highs include Alaris Royalty (AD-T) at $20.93, Canexus Corp. (CUS-T) at $8.57and Jean Coutu Group (PJC.A-T) at $15.74, while some of the notable new lows were AltaGas Ltd. (ALA.R-T) at $28.63, Chinook Energy (CKE-T) at $1.01, Jaguar mining (JAG-T) at $1.20, Lone Pine Res. (LPR-T) at $3.10, Moly Mines (MOL-T) at $0.13, Pengrowth Energy (PGF-T) at $7.10, Strathmore Minerals (STM-T) at $0.31, Thompson Creek Metals (TCM-T) at $3.52, Western Copper and Gold (WRN-T) at $0.85 and Zargon Oil & Gas (ZAR-T) at $9.71.

Scotia Capital – “The resource sector is awful. Like the rest of the world, China has slowed down…and that doesn’t enthuse anybody because here we were led to believe earlier in the year that China was the area that was going to save the world because of all this demand. You put all that stuff which is showing no growth basically in the U.S. and then you have all the worries, either real or imagined in Europe, and everything keeps playing against you here. And until we get over this, I guess we’re going to have to put up with it.”

Under the heading of ‘This Just In, And It’s Not Pretty’ – For the month of May, the DJIA lost a 2-year high 6,2%, while the S&P 500 fell by 6.3% and the NASDAQ dropped by 7.2%. On the Canadian side, the TSX fell in May by 6.7% and the TSX Venture Exchange tumbled by 10.39%.

The U.S. Labor Department reports their economy created a much less than expected 69,000 new jobs in May.

Statistics Canada reports that the number of international business trips taken by Canadian business people rose by 4.0% in the 4th quarter of 2011 to 807,000 trips.

Saudi Arabia’s state owned Saudi Aramco reports it increased its crude oil production by 1.2-million barrels a day (bbl/d) in 2011 to 9.1-million bbls/d.

Under the heading of ‘Good News – Bad News’ – The bad news is that 72% of respondents to a CIBC study still carried some sort of debt. The good news is that 49% of them are making those all important extra lump sum payments in order to pay their debts down faster.

The Brussels Nickel Institute informs us that 2012 marks the 100th anniversary for stainless steel.

Under the heading of “Shaky Start” – BMO Harris Bank reports that Facebook (FB-Q) CEO Mark Zuckerberg‟s net worth has dropped by US $5-billion since his social networking company went public just 2-weeks ago as the price of the underlying stock has fallen from the IPO price of $38 to today’s $28 a share.

Crude oil falls by another $3.34 to drop below $85 and close at US $83.19

Gold bullion surges up by $60.10 to once again rise above $1,600 to close at US$1,624.30

The S&P 500 Index drops by 33.29-points to fall below 1,300 and end the day at 1,278.04

The closely watched CBOE Volatility Index or VIX advances by 2.48-points to once again climb above 25 to close the day at a very nervous level of 26.54

Canaccord‟s Debbie Lewis – “My neighbours listen to the best music…whether they like it or not.”

For the Week-

The DJIA lost 338-points to 12,119, the S&P 500 lost 40-points to 1,278, the TSX lost 215-points to 11,361, the NASDAQ lost 91-points at 2,747 and the JVX lost 17-points to 1,292.

Gold up $53.10 to $1,624.30, Silver gained $0.06 to $28.44, Crude Oil down $7.67 to $83.19, Natural Gas down $0.31 to $2.32 and Copper lost $0.13 at $3.32.

The CRB Commodities Index followed base metals, crude oil, natural gas and soft commodities lower to lose 13.64-points to end the week at 268.31. The Canadian dollar lost 0.99-cents against its American counterpart to close the week at US $0.9614 and the Euro lost 0.85-cents against the greenback to end the week at US $1.2430.

And finally –

With an excellent example of how climbing the corporate ladder is good for your wealth, the Associated Press reports that the average salary of a CEO of an American public company rose by 6% last year to a record US $9.6-million, while the wage of an average rank and file worker rose by only 1% to …..US $39,300.

Rod Blake, AScT Jason Tomkinson, BA (Econ)

Investment Advisor Senior Investment Advisor

rod.blake@canaccord.com jason.tomkinson@canaccord.com

T: 604.643.7567 T: 604.661.7845

Evan Davies

Investment Advisor Assistant

evan.davies@canaccord.com

T: 604.643.7065

Looking for investment or trading ideas? Give us a call, we can help. Toll free 1-800-663-1899.

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Sources: Bloomberg, Thomson Reuters, MarketWatch, Globe & Mail, Wall Street Journal, Dow Jones, Financial Times, National Post, Briefing.com, Credit Suisse, and StreetAccount.

Disclaimer: This publication is a general market commentary and for informational purposes only, it does not constitute a research report and does not contain investment advice. This commentary has been prepared using sources believed to be accurate and true. This material is not complete information respecting any security and therefore is not a sufficient basis on which to base an investment decision.

The information contained in this commentary is drawn from sources believed to be reliable, but the accuracy and completeness of the information is not guaranteed, nor in providing it does Rod Blake, Jason Tomkinson, Canaccord Genuity Corp. or its subsidiaries, or affiliated companies, assume any liability. This information is current as of the date appearing in this commentary, and neither Canaccord Genuity Corp. nor Rod Blake nor Jason Tomkinson assume any obligation to update the information or advise on further developments relating to these securities. This commentary is intended for distribution in those jurisdictions where Canaccord Genuity Corp. Rod Blake and Jason Tomkinson are registered as advisors or dealers in securities. Any distribution or dissemination of this commentary in any other jurisdiction is strictly prohibited. The information does not constitute an offer or solicitation in any jurisdiction in which such an offer or solicitation is not authorized, or to any person to whom it is unlawful to make such an offer or solicitation. Canaccord Genuity Corp. and holdings of its respective directors, officers and employees and their associations, from time to time may buy or sell any securities mentioned herein. This message is intended only for the use of the individual or entity to which it is addressed and may contain information which is privileged, confidential or subject to copyright. Internet communications cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, arrive late or contain viruses. Canaccord Wealth Management is a division of Canaccord Genuity Corp., a Member of the Canadian Investor Protection Fund.