Report back from the show...

The CUU booth was constantly busy for the 2 hours I was at the show. I had a good (but not entirely revealing) conversation with Mike summarized as follows:

CAPEX: no clear direction on whether it went up or down but Mike had concerns regarding Iron Ore prices going up. Thus increasing costs from that end. All other costs: there were no major changes. But he said it was difficult for him to comment on overall Capex numbers due to the extensive amount of detail which is an ongoing study via the BFS. Therefore, no unpleasant surprises expected.

TPD: Still expected to be minimum 120,000 or greater.

Drilling 2012: Mike laughed and said there will be a drill program for 2012, if we are still around. He was almost uninterested in even talking about a 2012 drill program. Hinting that he really expects a total buyout.

NTL: In constant talks with Hydro, there really isn’t a priority order for power. Really depends how involved you are with Hydro outlining your goals/intentions etc. So looks like we are keeping Hydro in the loop about our needs. No concerns here.

SILVER: It will be “referred” to in the BFS in a limited fashion but should be fully included in the reRE.

BFS: They are obliged to release the BFS ASAP to the public once CUU & Teck have read the report. We should not expect a prolonged delay in the release. Elmer still heavily emphasizing a Q1 release. The BFS NR should be a complete detailed “summary”. Based on the description Mike gave it may be very similar to today’s NCU report.

Basically CUU & Teck share an ftp server where all reports, documents are shared for both companies to review constantly. He’ also’ told me about 40 technical people are on the BFS project currently.

MINE PLAN: definitely comes after the BFS, and similar to the BFS NR this won’t be extremely detailed with every calculation outlined because in Mike’s words: then every guy with a geology background will call him to pick apart the numbers and analysis.

BIDDING, SPINCO etc: All depends on BFS, the main goal is to deliver the BFS right now then start the clock. Earn Back In etc: Mike said was all speculation right now until BFS is released and Teck could opt either way. But based on the hinting of a total buyout.... he would not give me an indication on 40% or 75% back in but based on the buyout scenario being their main focus I’m guessing they will go 75%. I kept trying to pick at Mike to get more info on Spinco. He said all other properties are to add value to the shareholder and are in addition to the Schaft Creek deposit and are included under the term of the Area of Interest provisions of the Teck Option Agreement.

OTHERS: Any other company Xstrata, Freeport etc would not be as intimately informed about the potential of our deposit as Teck is. So they are focusing on working with Teck right now and considering other options once the BFS is out.

OFFERS: Mike wouldn’t speculate on bid values, kept steering me towards the BFS. So far we received no bid from Teck. If there was a bid we would’ve been notified.

During the presentation and at the booth, Elmer focused on the every expanding resource to the north of and including (Paramount). I read this as the crux of a negotiation with Teck going forward. The BFS will be for Schaft Creek, negotiation for a buyout will all depend on future value of the remaining properties NOT DRILLED. It’s like he knows the BFS will be done and the new reRE will come in but the Real bonus is in the potential of the additional properties and convincing Teck to pay a premium for it. (Just my interpretation.)

I may have missed some Q’s... When I first approached Mike he seemed a little apprehensive with me holding a list of Q’s in front of him so instead I put them away and had a conversation about the above issues and it became more of a friendly conversation.