Pend - I don't think Chavez would have a problem with KRY going to the Chinese. I just think he wants Crystallex the North Americans out. He's not however going to pay anything if he can wait us out like he did with GRZ.

The problem is whether any suitor is going to PAY for KRY if they too think they just can wait us out. I remember a similar situation in my last company where we had two dealer partners in a market and one was struggling. We went to the other and encouraged him to buy out the other guy. His response was "why should I pay for his market when I can see his sales are dropping and his cash is gone. I can have that market for free if I just wait." That may be how some of the potential suitors may feel.

Personally I have always though that KRY should have focused on finding a partner to fund arbitration first regardless of whether they planned to file. I feel this would have unlocked the other options:

1. VZ would realize the arbitration threat was real and funded. This might make them more eager to settle.

2. If any suitor was looking at us they would realize they have to make a good offer or KRY would simply take the arbitration path.

Quite frankly right now we are negotiating out of desperation and that rarely leads to profit. Can you imagine what leverage we would gain if Fung annouced that he had secured financing to see us through arbitration but reiterating his desire not to go that route? I think we'd see a much different environment.

That has always been my belief as the best way to unlock value. It has never been that I wanted to wait out arbitration. I just want to see KRY deal from strength instead of weakness for a change. And I'm not real comfortable having faith in Fung to make a miracle happen when every logical and financial indicator I can see points to the opposite.