Since we have so many intelligent minds working overtime today, perhaps someone could clarify the following situation for me:

Firstly, I believe Teck and its partners will take us out completely. But in trying to eliminate the other available alternatives, and looking at it from a potential challenge buy-out of CUU by another Company, my question has to do with the 40% option.

If you take the January 1, 2002 Teck Option Agreement, it appears to say that Teck can elect to acquire up to a 75% interest in CUU's direct and indirect interest in the Property (7.1) on terms set out in section 8 of the Agreement. This we all know. However in 8.3, the back in right can also be either 20% or 40%. If Teck controls 40% or more, it may remain the operator as long as it retains at least a 40% interest, and for management decision making purposes will be deemed to have a 50% interest (9.3). This is a very valuable position to be in. My question is, if Teck elects to acquire CUU's 40% interest in its direct (70%) interest in Schaft Creek, which would be 28%, and a 40% interest through Liard of CUU's indirect interest which would 9.36% (can't count the direct Liard shares CUU purchased last year), the the total interest Teck would have would be 37.36%, and not 40% and therefore would not nescessarily be the operator and would not have a 50% say in decisions. If this is the true situation, it would for all practical purposes eliminate this as an attractive option. If a Company is looking at offering a buy-out of CUU, this would ensure that Teck would either take the 75% route, or want to competitively challenge any 100% buy-out option.

I apologize if this has been dealt with before but I haven't seen the answer. I put it to Mike and he has not gotten back to me, either because he is busy, or the question is silly.