Northern bounty: Ken Kammal of BASE Investment Management says companies in Canada are expanding.

When Ken Kammal, founder, chief executive, and chief investment officer of BASE Investment Management Co., looks at Canada, he sees a strong economy and undervalued gold and energy companies. Kammal has placed great faith in the Canadian market, making significant investments through the BASE Aggressive Growth Hedge Fund. He boldly projects that the fund will see a 52% gain by the end of 2005, "its first year of the gate."

Kammal says he and his business partners created the firm in August 2004 after working at two other Fortune 500 firms--National City Corp. and KeyCorp--both in Cleveland, where BASE is headquartered. The Canadian market intrigued him because of its strength, he says, pointing out that Canada reached a $1 trillion gross domestic product in 2004--economic growth that is partly due to a bustling population attracted to the country's reputation as a great place to live and work Canada has also benefited from trade with China, says Kammal. Low-cost imports from the Asia superpower are keeping prices down on clothing, furniture, and other goods, which has had the effect of raising the real wages of Canadian residents. And China supplies Canadian producers with lower-cost computer hard drives and plastic moldings, increasing their overall productivity.

When selecting Canadian stocks, Kammal says he looks for undervalued companies with the "potential for substantial upside." Two such names are Bema Gold Corp. (AMEX: BGA) and Rio Narcea Gold Hines Ltd. (AMEX: RNO). "What I like about them both is that most of their income comes from outside North America, which illustrates the international demand for gold," says Kammal. "Banks and institutional investors are buying gold and gold companies as a hedge against the weak dollar."

Bema's holdings include the Juliette Mine in Russia and the Petrex Mines in South Africa. Rio Narcea has gold mines and also extracts nickel, the price of which is at an "all-time high because it's not easily mined and demand is increasing from emerging markets that need it as an industrial metal," Kammal explains.

Another Canadian company that counts on international demand is oil and natural gas exploration firm Canadian Superior Energy Inc. (AMEX: SNG) The company, which has offshore drilling operations as close as Nova Scotia and as far away as Trinidad, is benefiting from rising oil prices as well as the demand for gas for home heating, says Kammal.

Resin Systems Inc. (OTC BB: RSSYF.OB)has been doing a Johnny-Appleseed-like job of replacing wooden electric utility and telephone poles with poles it manufactures made of composite materials in Canada; the U.S.; and most recently, Sydney, Australia. "The secret to this company is that it has patents on its system for producing polyurethane resin," Kammal says. That makes Resin Systems the only supplier of its plastic, which is used to make a host of other plastic parts.

His final pick, Clearly Canadian Beverage Corp. (OTC BB: CCBEF.OB), should be able to use the equity financing it received after completing its restructuring earlier this year to fund sales and marketing initiatives. Kammal says the company was "spread too thin" because it was shipping its soft drinks into markets where it didn't have consumer demand. Clearly Canadian is currently working to consolidate its widespread distribution network, improve its field sales force, and concentrate on markets that will drive sales. Kammal believes each of these stocks could see a 50% gain or better in the next 12 to 18 months.

                                                    12- to
Company                                            18-Month
(Exchange: Symbol)                  Price *      Price Target

Bema Gold Corp.                     $2.86           $4.29
(AMEX: BGA)

Rio Narcea Gold Mines Ltd.           1.35            2.03
(AMEX: RNO)

Canadian Superior Energy Inc.        2.33            3.50
(AMEX: SNG)

Resin Systems Inc.                   2.12            3.18
(OTC BB: RSSYF.OB)

Clearly Canadian Beverage            1.20            1.80
Corp. (OTC BB: CCBEF.OB)

                                    P/E on        Est. 5-Yr.
Company                            Projected      Annual EPS
(Exchange: Symbol)               2005 Earnings   Growth Rate

Bema Gold Corp.                       NA               1%
(AMEX: BGA)

Rio Narcea Gold Mines Ltd.            NA              22
(AMEX: RNO)

Canadian Superior Energy Inc.         NA              -5
(AMEX: SNG)

Resin Systems Inc.                    NA               2
(OTC BB: RSSYF.OB)

Clearly Canadian Beverage             NA              10
Corp. (OTC BB: CCBEF.OB)

Company
(Exchange: Symbol)               Why Stock Will Outperform

Bema Gold Corp.                  Company will benefit from the
(AMEX: BGA)                      increasing international demand
                                 for gold.

Rio Narcea Gold Mines Ltd.       Company will benefit from mining
(AMEX: RNO)                      nickel, which is in high demand
                                 in emerging markets.

Canadian Superior Energy Inc.    Company will benefit from rising
(AMEX: SNG)                      oil and natural gas prices.

Resin Systems Inc.               Company is the only supplier of the
(OTC BB: RSSYF.OB)               material used in the replacement of
                                 wooden utility poles.

Clearly Canadian Beverage        Company will benefit from
Corp. (OTC BB: CCBEF.OB)         restructuring and improving its
                                 focus on markets that drive sales.

SOURCE: KEN KAMMAL, BASE INVESTMENT MANAGEMENT CO.

* AS OF SEPT. 26, 2005.