Hello Bluebird.

The Cliffs/Noront/Franco-Nevada Deal highlights what can be achieved, after mineral resource companies reach out to the Franco-Nevadas of the world. Of course, as we all know, there are many Royalty Company Investors out there. Of course, whether or not you’re right about Noront taking over KWG, the Cliffs/Noront/Franco-Nevada Deal will not escape the notice of KWG or (for that matter) the other players in the mineral resources industries.

Once all the collective brain cells start working and become sensitized and stimulated, the tendency is for the deal-makers and investment banks, each, to try to outdo the competition down the street. Then, many tricky things—before considered unthinkable—coalesce to become the new everyday reality.

At the moment, the liquidity in the market is not there. Tomorrow (in the proverbial blink-of-an-eye), the reverse could easily become the case. When first it was opportunity seeking money—as the financial cycle turns—the new reality becomes money seeking opportunity.

Presently reverse-mergers are not in vogue, I predict and propose that that will not remain the case indefinitely. Instead of the likelihood being Noront acquiring KWG—with the help of a small dose of financial wizardry—there’s nothing stopping an ambitious CFO from putting the pieces together for the reverse, that is for KWG (with the backing of an covetous Royalty Company) to acquire Noront.

Start with one of the many funds designed with the same frame-of-mind as behind Franco-Nevada’s operations. It’s only natural for the money in that fund to follow its purpose. The profit motive here is predicated on the long-term-predictable cash flows from hard assets (such as from what Noront has).

You and I well know, the financial gurus of Wall Street (and Bay Street and elsewhere) are not about to kill the goose that lays the golden eggs. Their business-combination deals are their bread-and-butter. To mix metaphors, I don’t think we’ll need to wait long for the other shoe to drop.