Last updated: November 18, 2009

Kingsway Financial Services Inc. (KFS)	Target: $2.00
Recommendation: Sector Underperform	Risk: Medium
Pennsylvania Department of Insurance (DOI) announced last night its intention to take legal action to unwind KFS's disposal of its troubled Lincoln General subsidiary to 20 different charitable organizations. As a rebuttal, KFS announced last night its intention to vigorously defend its position, if required to do so, that the disposition was legal. The DOI hopes to resolve the issue by the end of the year. If the DOI reverses the disposition, KFS could be on the hook for additional adverse reserve development at Lincoln (on the Q3/09 call KFS suggested outside experts quantified additional areas of exposure at Lincoln), which could trigger direct supervision or possibly receivership for Lincoln, not to mention default of KFS's public debt. KFS claims it has the lawful right to dispose of Lincoln and that the DOI has not disclosed the basis upon which it intends to seek legal action to unwind the disposal. KFS has not filed a change in control - the DOI claims another entity is needed as the controlling shareholder. Downgrading to 3-SU - becoming really messy and fighting a regulator can be difficult.
Uranium One Inc. * (UUU)	Target: $3.75
Recommendation: Sector Perform	Risk: Caution Warranted
Uranium One has reported Q3/09 adjusted EPS of a loss of $0.02, in line with our estimate, and slightly below consensus at a loss of $0.01. Production guidance for 2010 has been lowered to 6.8 Mlb down from 7.5 Mlb (including 2.3 Mlb from Karatau) due to underperformance at Kharasan and a revised ramp up profile at South Inkai. Uranium production in the quarter was 883,000 lb, in line with our expectations. Sales of 423,000 lb were below our expectation of 693,000 lb, although this was offset by lower-than-expected costs of $14/lb compared to our estimate of $19/lb. The company has been granted approval for the Karatau transaction from the Kazakh Ministry of Energy and Mineral Resources, with all final regulatory approvals for both the Karatau and TEPCO transactions expected by mid-December of this year. Including both the Karatau and TEPCO transactions in our model, our 2010 EPS estimate increases to $0.14 (prev. $0.13), while our NAVPS declines to $2.47 (prev. $2.89). Our one-year target price increases to C$3.75 (prev. C$3.70) using a 1.5x NAV multiple, as opposed to our previous weighted-average target price calculation. We maintain our 2-SP rating. * Please note, Uranium One Inc. comments were written on November 17, 2009.
Goldcorp Inc. * (GG)	Target: U$49.00
Recommendation: Sector Perform	Risk: Medium
Goldcorp announced the acquisition of the Canplats Resources Corp. (CPQ-TSX-V). Goldcorp is to pay C$238 million through issuance of 4.3 million shares, a non-material event for the company to acquire Canplats. The acquisition of Canplat's biggest asset, Camino Rojo, located close to the Penasquito project, makes strategic sense and will likely offer cost-saving opportunities. Goldcorp's offer, calculated at US$52.17 per resource ounces is in line with the current trading values of pre-production companies (including capex and cash cost the offer is approximately US$469/ounce of gold). While the accretive production will be negligible for Goldcorp, with a total of more than 4,600 square kilometres of land in the area, the company has increased its exploration potential. Our NAVPS has increased to $23.72 from $23.59; however our oneyear target remained unchanged at $49.00. We believe that not only the Penasquito project is becoming less and less risky, but Goldcorp is adding value to the project by adding strategic deposits in the area. * Please note, Goldcorp Inc. comments were written on November 17, 2009.

Ratings are: 1-Sector Outperform, 2-Sector Perform, 3-Sector Underperform

1-Sector Outperform: The stock is expected to outperform the average total return of the analyst's coverage universe over the next 12 months. 2-Sector Perform: The stock is expected to perform approximately in line with the average total return of the analyst's coverage universe over the next 12 months. 3-Sector Underperform: The stock is expected to underperform the average total return of the analyst's coverage universe over the next 12 months. Other Ratings: Tender: Investors are guided to tender to the terms of the takeover offer. Under Review: The rating has been temporarily placed under review, until sufficient information has been received and assessed by the analyst. Risk Rankings Low: Low financial and operational risk, high predictability of financial results, low stock volatility. Medium: Moderate financial and operational risk, moderate predictability of financial results, moderate stock volatility. High: High financial and/or operational risk, low predictability of financial results, high stock volatility. Caution Warranted: Exceptionally high financial and/or operational risk, exceptionally low predictability of financial results, exceptionally high stock volatility. For risk-tolerant investors only.

Click here for Definition of Scotia Capital Equity Research Ratings & Risk Rankings and Scotia Capital Legal Notice