CHAPPY S PICKS FOR APRIL 9, 2007

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1 CHAPPY S PICKS FOR APRIL 9, 2007 Charts and technical commentary by David Chapman Union Securities Ltd, 33 Yonge Street, Suite 901, Toronto, Ontario, M5E 1G4 fax (416) , (416) , phone (toll free) david@davidchapman.com LONG PICKS (JUNIOR MINING STOCKS) at purchase current CGP/V * 1/30/06 $0.48 $ EOX/V * 3/13/06 $0.41 $ EXM/V * 8/28/06 $0.27 $ VML/V * 8/28/06 $0.24 $ MAD/V 10/16/06 $1.50 $1.38 (8) CCE/V * 11/13/06 $0.355 $ SLT/V * 11/13/06 $0.16 $ ORA/V * 11/13/06 $0.49 $ GOG/V * 12/11/06 $0.60 $0.52 (13) Stock Picks, April 9, 2007 page 1 of 11

2 LONG PICKS (JUNIOR MINING STOCKS) (continued) at purchase current CBE/V * 12/11/06 $0.375 $ PMM/V * 12/11/06 $0.12 $ ESO/V * 1/8/07 $0.95 $0.79 (17) THV/V * 2/26/07 $0.295 $0.275 (7) RPT/V * 2/26/07 $0.49 $0.43 (12) DIT/V * 2/26/07 $1.40 $ We saw some action this week in the penny s. Unfortunately not in the uranium junior exploration plays, as most of them came off a little. They all still look okay, as do the others. ORA/T became another play that has now gone up at least 100 per cent. Our picks this week add to our juniors, although one of them is technically more advanced and will become a major producer. * Clients or I own these s. Stock Picks, April 9, 2007 page 2 of 11

3 LONG PICKS (ENERGY & OTHER STOCKS) Our oil s were all up this past week despite a resolution to the capture by Iran of the British sailors. Our other s were mixed. We were stopped on MAL, but profitably. We will take our profits on BBD.B/T and BCE/T on Monday at the open. BBD.B is making a secondary top and BCE looks like it has no real further up movement given the attempt to take it over. After the volume on the day of the announcement, the volume collapsed and we are failing below the top of the takeover day. We could be wrong but we had other times when volume was bigger than it was on the prior week s announcement. at purchase current ENERGY STOCKS GZM.UN/T 6/12/06 $16.86 $ $14.35 KWK/NY 10/23/06 $34.22 $ $29.00 ECA/T 10/23/06 $53.18 $ $45.00 CNQ/T 10/23/06 $54.99 $ $50.00 KHD/T 10/30/06 $5.84 $ $5.00 CU/T 10/30/06 $41.86 $ $38.00 PCA/T 3/12/07 $42.00 $ $40.00 PD.UN/T 3/12/07 $25.55 $ $24.00 HSE/T 3/12/07 $75.21 $ $67.00 OTHER STOCKS BCE/T 6/12/06 $27.56 $ $30.00 MAL/T 8/14/06 $2.47 stopped $ profit $0.33 AIN.UN/T 8/21/06 $5.00 $ $4.00 SAP/T 10/16/06 $37.60 $ $34.50 L/T * 11/20/06 $46.60 $46.32 (1) $44.90 BDB.B/TSX 12/18/06 $3.70 $ $4.40 WN/TSX 12/18/06 $73.24 $70.63 (4) $70.00 BLD/TSX 2/12/07 $6.61 $6.49 (2) $5.50 Stock Picks, April 9, 2007 page 3 of 11

4 at purchase current OTHER STOCKS (continued) CMH/TSX 2/12/07 $3.30 $2.91 (12) $2.50 XTX/TSX 2/12/07 $10.94 $10.00 (9) $9.00 XSB/TSX 4/2/07 $28.10 $ HXD/TSX 4/2/07 $23.34 $22.39 (4) $21.00 SWP/TSX 4/2/07 $8.28 $ $7.50 Stock Picks, April 9, 2007 page 4 of 11

5 SHORT PICKS Our short portfolio went against us (for the most part very slightly) this past week as the market was up. We got stopped out on RIM/T. Guess we can t fight the crackberry. Obviously we should give up trying to call the top on that one. for sale at sale current WMT/NY 2/6/06 $48.19 $48.27 (0) $51.19 CAT/NY 10/2/06 $65.45 $67.63 (3) $72.00 GOOG/Q 11/20/06 $ $ $ QQQQ/Q 12/4/06 $43.79 $44.56 (2) $46.00 RIM/TSX 1/15/07 $ stopped $165 (7) loss $10.20 GS/NY 2/20/07 $ $ $ INTC/Q 2/20/07 $21.06 $ $22.50 MMM/NY 2/20/07 $76.50 $76.75 (0) $80.00 LEH/NY 3/19/07 $72.15 $ $80.00 BHS/NY 3/19/07 $33.40 $ $40.00 EBAY/Q 3/19/07 $32.05 $33.71 (5) $34.00 Stock Picks, April 9, 2007 page 5 of 11

6 GOLD PORTFOLIO at purchase current MBF * 11/20/06 $8.34 $ $7.50 YRI/T * 12/4/06 $14.95 $ $12.00 K/T * 12/4/06 $14.24 $ $12.50 IMN/T * 11/27/06 $58.49 $ $49.00 ABX/T * 3/26/07 $34.05 $33.71 (1) $31.00 G/T * 3/26/07 $29.15 $ $25.00 IMG/T * 3/26/07 $9.12 $ $8.00 A reasonably good week for our gold s. We are seeing signs that we may have been premature in exiting some of our junior positions. But we still have a position and they were all up this past week. We will re-enter the more junior positions if we confirm break outs. We will be happy to be wrong on another pullback on the gold s. * Clients or I own positions. Stock Picks, April 9, 2007 page 6 of 11

7 STOCK PICKS We couldn t help but notice in this past week considerable activity among the junior mining exploration s. Those who love to play the pennies may soon be rewarded with another move to the upside. As we always say, these plays are high risk and sudden movements of 25 per cent or more in either direction are not unusual. So you should always do your checking into the penny plays. After all, we are for the most part merely picking up on these s because of an interesting looking chart and some volume coming into the. NEW GUINEA GOLD (NGG-TSXV) is a junior exploration company with twelve advanced gold and copper gold projects in Papua New Guinea. Over 63,000 metres of drilling has been completed on all properties and they have located extensive mineralization on 11 of the 12, while the final project contains widespread alluvial gold. Three gold projects, Sinivit, Normanby, and Mt. Penck, are regarded as key. The company is focused on defining resources in Sinivit mine is scheduled for start-up early in the second quarter of NGG recently completed an issue of 12 million shares at $0.42 to raise $5.04 million. The chart is characterized by a good secondary higher base being formed following the move in late 2005 from around 20 cents to 60 cents. Recent volume is suggesting that NGG may be poised to break out once again and indeed Thursday s action did just that. We have formed a great-looking symmetrical triangle pattern which, coupled with the rising volume, suggests targets up to the 80 to 90 cents zone. Just keep an eye on the 35 to 38 cents area, because if we broke down under that level all bets for an up ward move would definitely be on hold for awhile. Stock Picks, April 9, 2007 page 7 of 11

8 TERRANE METALS Corp (TRX-TSXV) is a Canadian mineral exploration and development company. Terrane plans to develop large-scale mineral deposits with defined resources into operating mines. On July 24, 2006 the company closed its acquisition of the Mt. Milligan and Berg properties in British Columbia, Maze Lake in Nunavut, and Howard s Pass in the Yukon, from Goldcorp Canada Ltd. Goldcorp (G-TSX) has a significant stake in Terrane. Two of these projects have development-stage copper and gold-copper resources. According to previous reports, Terrane s resource holdings are 3.7 million ounces of gold and 1.12 billion pounds of copper. The Berg property abuts the Huckleberry copper-moly-silver mine operated by Imperial Metals (III-TSX). Bob Moriarty of also recently highlighted the company. We are being further supportive because of the interesting chart. After falling back on the rapid move to $1.60 in April 2006, Terrane fell all the way back to the cent level. Recently we formed a nice triangle pattern and we leaped out of it this past week, probably as a result of the Moriarty article. We are supportive because the chart pattern is positive and we believe there is still plenty of time to get in on this one. As Moriarty pointed out, he doesn t expect Terrane to become an instant 5 to 10 bagger but then investors should never expect that kind of performance. In fact a slow, steady rise is much more preferable as it indicates good strength. We would certainly be buyers back towards 70 cents but would exercise caution if we went under that level. If the read on this company is correct then we should not fall under 65 cents. Stock Picks, April 9, 2007 page 8 of 11

9 The third pick this week is a break out play on a company that is much further advanced then the two above. EQUINOX MINERALS Ltd. (EQN-TSX) is an international exploration and mining company actively exploring for base metals and gold in Zambia, and with interests in Australia and Peru. The company is focused on the development of its 100% owned Lumwana Project in Zambia. The Lumwana mine will produce an average of 169,000 tonnes per year of copper contained in concentrates for the first six years of its 37-year mine life. Construction is well underway and scheduled for commissioning in Q2 of 2008, at which point Lumwana will become Africa s largest copper mine. Equinox rose in a nice steady fashion from lows of 35 cents in May 2005 to levels of $2.35 in May Since then it has traced out an excellent ascending triangle and we are now in the process of breaking out on high volume with measuring implications of at least $3.50. This could be an interesting play, considering other metals projects such as Lion Ore became billion-dollar companies. Okay, not a penny play, but a potentially interesting one none the less, even if now more advanced. Stock Picks, April 9, 2007 page 9 of 11

10 CLOSED POSITIONS at purchase current GSL/T 9/5/06 $11.13 stopped $9.00 (19) SLW/T 12/4/06 $13.45 stopped $11.00 (18) DSG/T 9/18/06 $4.50 closed $4.10 (9) RMX/V - Note 12/4/06 $1.19 closed $ HAL/NY 5/15/06 $38.00 closed $ CLS/TSX 1/15/07 $9.21 closed $7.76 (16) UTX/NY 12/4/06 $64.22 stopped $67.00 (4) RUP/V * 12/4/06 $0.60 closed $0.405 (33) BMO/TSX 12/4/06 $69.00 stopped $72 (4) IMG/T * 11/27/06 $10.85 stopped $9.00 (17) AGI/T * 2/5/07 $8.54 stopped $7.75 (9) ECU/V * 2/5/07 $3.25 stopped $2.50 (25) NT/TSX 12/18/06 $26.70 sold $ WDO/T * 12/4/06 $2.40 sold $1.65 (31) APF.UN/T 6/12/06 $9.95 stopped $8.45 (15) NUC/V * 1/8/07 $0.91 closed $0.68 (25) RM/V * 1/8/07 $1.29 closed $0.88 (32) GBU/T * 9/5/06 $4.43 closed $4.42 (0) ARZ/T * 11/27/06 $3.95 closed $ GSC/T * 1/29/07 $3.77 closed $ PDL/T * 1/29/07 $9.30 closed $8.96 (4) LSG/T * 2/5/07 $1.70 closed $ Note: RMX recently restructured and investors received for every share of RMX, 1 share of RMX,.0925 share of ARL/V and share of PGR/V. The combined structure reflects a price of $1.22 which means we actually had a profit of 2.5%. Stock Picks, April 9, 2007 page 10 of 11

11 Note: The opinions, estimates and projections stated are those of David Chapman as of the date hereof and are subject to change without notice. David Chapman, as a registered representative of Union Securities Ltd. makes every effort to ensure that the contents have been compiled or derived from sources believed reliable and contain information and opinions, which are accurate and complete. The information in this report is drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed, nor in providing it does Union Securities Ltd. assume any responsibility or liability. Estimates and projections contained herein are Union s own or obtained from our consultants. This report is not to be construed as an offer to sell or the solicitation of an offer to buy any securities and is intended for distribution only in those jurisdictions where Union Securities Ltd. is registered as an advisor or a dealer in securities. This research material is approved by Union Securities (International) Ltd. which is authorized and regulated by the Financial Services Authority for the conduct of investment business in the U.K. The investments or investment services, which are the subject of this research material are not available for private customers as defined by the Financial Services Authority. Union Securities Ltd. is a controlling shareholder of Union Securities (International) Ltd. and the latter acts as an introducing broker to the former. This report is not intended for, nor should it be distributed to, any persons residing in the USA. The inventories of Union Securities Ltd., Union Securities (International) Ltd. their affiliated companies and the holdings of their respective directors and officers and companies with which they are associated have, or may have, a position or holding in, or may affect transactions in the investments concerned, or related investments. Union Securities Ltd. is a member of the Canadian Investment Protection Fund and the Investment Dealers Association of Canada. Union Securities (International) Ltd. is authorized and regulated by the Financial Services Authority of the U.K. Stock Picks, April 9, 2007 page 11 of 11