Hello Mike

Your post says: "Let's get one thing straight- Cliffs talks about walking away from a $3.3 billion project that they claim is very profitable, and is good for the Province because they won't spend let's say $350 mil (about $0.40/share per KWG share) acquiring KWG. This equates to 10% of the project cost. But the $350mil is not a" cost" but it is an "investment"- they would get this back and earn a great ROI on the investment because they would own the rights to the railway lands and be able to charge others just like Kwg can do today, as well they would get 80% of BH and the remaining 30% of BD.-which could be huge." (underlined mine).

The "hidden" gain, as indicated in the last part of your paragraph, would be substantial.

To this I would add: Potential contributions from both government. The contribution from the Fed alone could be something north of $0.5B, and the Province...? We can only count in fractions of a $, say another $0.5B for the single lane (in each direction) service road to paint a politically correct picture of development of the north, etc...Also, KWG has developed a good relationship with the FNs (except one current Chief) and the Northland employees. I would bet that if CLF decided to have a run at KWG then it would keep KWG as a Canadian subsidiary. They are not dumb in this game.

Here come my comments on the price of $350M (and $0.40/s). This is where my numbers are different from yours (kindly point out if there is something wrong with my math).

First, $350M would translate in $350/(700MsOS x 0.83) = $350M/580M = $0.60/s. If all wts and opts were exercised the on a FD basis it would be $350M/845MsFD x 0.83) = $0.50/s. (Note: CLF aready has 17% of KWG).

Second, if one takes into account the hidden gains as discusssed above, the cost of $350M to acquire KWG is way below the potential gains, hence I would add a few more cents to bring it to the $1.00 level. Then, we'll talk about the "premium" over 1 dollar to make it attractive to KWG longs (and Frank). Name your premium, 40%?

Perhaps, I should send PM Harper another letter suggesting that this is the time to show people what nation building is about (only less than 2 years before the next election). A couple of $B is nothing for building the backbone to the North, up to James Bay in an infrastructure called the RoR (Ring of Rail) from Toronto to Moosonee, Attawapskat (remember the problem of transporting 1 refab house to there not too long ago?), De Beers mine, RoF and looping toward the West to connect other FN communities as well. In the south, the RoR will connect to the CN E-W TransCanada RR. It would help if you send your letter too. I would deal with the top, and your voice will be forwarded to the responsible Minister.

During the meantime I am sitting tight and not going anywhere.

Take your own stand (against this CLF bulldozer).

goldhunter