October 15, 1995

Chai-Na-Ta Corp ( CC on the TSE and CCCF on NASDAQ) Langley, BC (604)533-8883 mentioned in our Aug 28/95 newsletter is now rolling out across North American markets ginseng and echinacea value-added product lines. The number of retail outlets served by the three Canadian distributors is expected to reach 2000 up from the current 65. The US launch for the new Unique line is set for Nov. 7. The share price for this vertical ginseng producer remains reasonably priced at $2.85 on the TSE and is waiting to be discovered.

American Power Conversion ( APCC on the NASDAQ) has seen its stock price battered down from $25 to $12 as a result of competition from Hewlett Packard in marketing uninteruptable power supply (UPS) technology. At current prices, the shares offer good value in relation to expected earnings of 85 cents in 1995 and $1.05 per share in 1996. This is a well managed company whose stock deserves a p/e multiple of at least 20 times.

BioChem Pharma Inc ( BCH on ME and TSE, BCHXF on NASDAQ) at $45 Cdn. is an overpriced stock. Earnings won't be around for a while. A more appropriate trading level is 33. Phase 3 trials for their Hepatites B won't produce real news for another year, although their AIDS - HIV drug 3TC may get approved by year-end. A switch to Hyal Pharmaceutical Corp ( HPC on the TSE trading at $7.75) Mississauga ON (905)625-8181 may be timely. This company is close to bringing to market on a commercial basis their two most advanced products, one treating skin cancer and the other dealing with pain relief.

Cinram Ltd (CRW on the ME and TSE) Scarborough ON tel:(416)298-8190 trading at $19 Cdn is one of the world's largest multimedia manufacturers of audio CD's, CD-ROM and pre-recorded audio and video cassettes. Earnings this year should be $0.85/sh, $1.15 in '96 and over $1.50 in '97. A leader in technology, look for their launching of their CD-Video for Xmas '96 and for a US stock market listing before then.

Freeport McMoran Copper & Gold ( FCX.A on NYSE) announced that its unit Freeport Copper & Gold will expand its copper, gold, silver mining operation in Indonesia from 125,000 tpd to 230,000 tpd in 1996. This comes on top of the expansion that took it from 62,000 tonnes per day to 115,000 expected for the 1995 third quarter. The companys' reserves of 1.1 billion tonnes grading 1.3% copper and 1.4 gpt gold translate into 28 billion lbs. of copper and 40 million oz. of gold. This is probably the largest gold reserve for any single operating mine in the world ( with the possible exception of the Ashanti Gold mine in Ghana). The stock trading at $25 US is of interest also in terms of its 90 cents dividend which should increase again next year.

Nobility Homes Inc (NOBH on NASDAQ) Ocala FL, tel:1-800-476-6624 has only 1.3 million shares outstanding and its stock trades at $14.75 US. Thus, this is a small-cap. This vertically integrated manufactured-home company has built over 40,000 homes in its 28 years of operation. Revenues and earnings have been on the rise over the last 3 years and 1995 should be another record year, possibly $2.00/share in earnings.

Royal Plastics Group Ltd (RYG on ME and TSE) Weston ON (416) 749-5131. manufactures plastic building products mainly for the housing market, such as PVC windows, vertical blinds. Big consumer of PVC and therefore subject to price changes in resin. Lately lower resin prices are benefiting the company. RYG'S plastic housing system has ventured well in recent Carribean storms. Earnings should rise from 75 cents/sh in 1995 to $1.00 in'96 and $1.35 in '97. With a current price of $18 Cdn, a target of 22-25 over the next year is realistic.

In the gold mining and exploration sector, Cambior

Inc.( CBJ on ME, TSE and Amex) has added to reserves in

Mexico and Peru. Its stock, trading at $13.75 Cdn, continues to suffer from the Omai spill in Guyana this summer. The same can be said of Denver-based Golden Star Resources at $7 Cdn (GSC on ME and TSE, GSR on Amex) although this company may have too much on its plate.

Amongst the juniors, Birim Goldfields Inc.(BIRM on CDN-OTC) Montreal Que.(514)393-8611 announced that it has increased its gold resource on the Ashanti Gold Belt in Ghana. This is part of a joint venture program with partner Hemlo Gold Mines Inc. Further results from a reverse circulation drill program should be forthcoming by the end of October at which time a diamond drill program kicks in. Franc-Or Resources Corporation (FOR on TSE) Montreal (514)861-5323 has made another gold discovery on its large (about 700 sq.km.)property holdings in French Guiana, South America, this time with considerably higher assay results. Over the next few months reserve estimates should be published. In the meantime, the shares at 35 cents Cdn appear to be trading at greatly undervalued levels. Procoloro Resources Inc ( PCH on ME) Val D'or, Que (819)738-5435 keeps seeing its stock trading at new highs, now at $1.45 Cdn. In a systematic approach to exploring and developing gold reserves, the company expects to be producing soon in the Segovia-Remedios gold mining camp of Columbia, South America. Virgiana-based Sharpe Energy & Resources Ltd.(SHGP on CDN-OTC and SHGPF on US OTC-BB) tel (804)580-7517 announced very good gold results from a trenching program in Nye County, Nevada. Its acquisition of an important oil and gas producing revenue base in the western US has not yet been completed. In the meanwhile, Sharpe shares trade hands at the 30 cents Cdn level.