Excellent. The posturing has begun on both sides today.

Cliffs, as expected, is trying to sweat KWG by suggesting that first, Big Daddy won't be developed due to the preferred development of Big Thor, and second, that the railway is unimportant because an all-weather road makes more sense.

Pay special attention to this line: "These 'base case' project components do not necessarily represent the ... location ..."

KWG, on the other hand, has released today's news which confirms the high grade of the Big Daddy ore.

In terms of the ore, this is a no-brainer. Cliffs would be insane to develop Big Thor ahead of Big Daddy, based upon the relative ore values. It is the marginal or incremental quality that matters the most. 40% (rough number) is not 1.25 times as good as 32%. You need to think of a cut-off number, and focus on on the percentage above that (very, very rough explanation). So in other words, let's say that 28% was a cut-off, then 32% (4% higher) versus 40% (12% higher) means that the 40% deposit is ultimately 3x as profitable as the 32% deposit. The company needs to get their return on investment as quickly as possible, therefore, the higher grade deposit needs to be targeted first. It only makes economic sense. They may be pissed off at KWG and want to hurt them, but in the end, the accountants will rule the day and BD will be developed first, IMO. Perhaps someone more familiar with the exact geological percentages can sketch out a better comparison of the two deposits in terms of economic viability and contribution margins per ton.

In terms of the access, true, the all-weather road appears to be a viable and effective end-run around KWG's ownership of the railway claim. But ultimately, rail is significantly more cost-effective than trucking ore. Cliffs might be willing to start with a road, but I think that in the end, ultimately, rail will prove to be cheaper even if they don't control it. So Cliffs has a slightly stronger hand on this issue, IMO, but even so, KWG is sitting pretty.

I believe that this is all just posturing in preparation for another take-over offer. And who can blame them, when every cent per share means $85 million on the table? Come out with both guns blazing, in order to justify a low-ball initial offer, then come back with a slightly higher offer.

Cliffs will win in the end, but current KWG shareholders will also win. The only thing that could prevent Cliffs from winning is if another company, possibly Xstrata, steps in.

The next several months are going to be interesting.