I was at the Conference yesterday(Saturday) and listened to the KWG presentation, and later spoke to Mo Lavigne, who is V.P. Exploration and Development for the company and its subsidiary, Canada Chrome. The presentation gave details of Cliffs as well as KWG and Canada Chrome, and emphasised the advanced stage of planning, the certainty of there being a economic deposit and its imminent development. Mo is a mine development guy, that is his speciality, not rail lines, smelters etc, but Cliffs is expert and very experienced in those. They look at a very long term picture, unlike the usual North American approach, concerned with only a few years horizon.

Later I also spoke with Frank Smeenk.

Both were excited and upbeat, fully confident that there will be a mine, a rail line and some on-site processing soon. Cliffs is a committed partner in this, and intend to build a smelter, possibly at Thunder Bay. This would have several advantages as a location -

Cheap power - this is a power- intense process and Thunder Bay has an available supply of electricity at low cost.

Ore could be delivered directly by rail from the ROF with minimal handling and transport costs. It costs to transport anything, so you are better moving less tonnage of a higher-value, like metal rather than ore.

Government funding and assistance from Ontario and perhaps Feds would be more readily available for a project with more prospect of jobs and development within one jurisdiction.

They have looked at several brown-field sites in Thunder Bay that might be suitable locations - permitting and tax breaks, a nodoubt keen local government, available labour force, existing roads, power and water, buildings, etc. are obvous advantages of a brown-field site (this means a former industrial site, now not operating).

Canada Chrome would remain a subsidiary of KWG, and be the finance and development arm for this whole thing. Frank Smeenk tried to explain how a company with 400million shares @ 5cents could do this. I am afraid I dont understand, however he talked about flow-through financing as opposed to an IPO and distribution of shares to KWG shareholders. He also does not intend to borrow money (debentures).

Canada Chrome, and so KWG, would get revenue from sales of ore and metal, and from the railway (used by any and all shippers in ROF and Nakina areas). KWG would get 1% Net Smelter Return also.

They are looking at supplying the North American market with chrome, chromite, etc, as well as shipping some overseas, perhaps to Japan and China. This would be greater than 2 million tons per year by rail from the ROF. (Don Hoy of Freewest gave a figure of 2.85 or perhaps 2.58 million tons a year, no longer remember clearly). Other ores could also be shipped by other companies.

In regard to a distribution to shareholders, the picture is different with Debut diamonds; Frank Smeenk said they had to first get de Beers involved(not specific how), wait for financial conditions generally and the diamond market particularly to recover, & get regulatory approvals (TSE?) before completing this. He spoke in the past tense.

As to PGMs, they are looking, and are sure they are there, but the geology is still being worked out, particularly the deposition process. Remember that SPQ originally found good concentrations of Palladium and Platinum together with Chromite way back at the beginning of the whole ROF adventure. In South Africa the PGMs are presnt in very narrow, very rich areas amongst wider chromite layers. Here they have not as yet located similar narrow layers, though they may be present. Don Hoy of FWR mentioned the footwall as a likely location. In South Africa the chrome is a by-product of PGM production, so this can be an exteremely valuable resource.

They staked the rail route in order to take advantage of the Mines Act, which will speed up permitting and the building in general. Any lawyers care to comment?

I am sure I have missed or misunderstood important points, but that is what i have taken away from what i heard. Any misrepresentation is unintentional.