Massive Black Horse Chromite Discovery

Black Horse deposit has an Inferred Resource Now 85.9 Million Tonnes @ 34.5%

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KWG Longs,

I see on this site and Stockhouse that there is considerable discussion about a takeover.

I'm not sure where this started but I'm not convinced that it's coming soon or even at all. Please let me know if I'm missing something. If there was ever a time that Cliffs was on the ropes, this is it...and they are going to take on an acquisition? At this stage, I'm not sure they can even afford the legal bills associated with an acquisition.

However, in the spirit of valuation exercises and discussion, recall the Expected Project Returns taken from the 2011 PEA of mining Big Daddy provided below.

This assessment relied upon utilizing aggregate material from the surrounding area for construction of the railway. This PEA DOES NOT INCLUDE the updated value of Big Daddy which is open at depth, the value associated with an owned transportation route and the value associate with the newly optioned Black Horse.

Some big numbers here...not sure I'd accept a $1 per share.

Table 1-5. Expected Project Returns (pretax on the left and aftertax on the right).

Undiscounted Gross Revenue

$12.64 billion

$12.64 billion

Undiscounted Cashflow

$ 6.30 billion

$ 4.30 billion

NPV (8%)

$ 2.48 billion

$ 1.58 billion

NPV (10%)

$ 2.01 billion

$ 1.25 billion

IRR

42.0%

31.8%

Payback Period

2.5 years

2.5 years

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