To all KWG Longs,

Is it just me or are the stars really aligning for KWG? Much has happened and there is surely more to come.

The recent announcement on April 4, 2014 from Gravelle is quite telling: he has chosen to keep the ONTC in public hands. For years, the ONTC has been losing money on passenger service. Seems to me that Deloitte or someone else told him (and he listened) that ONTC should be hauling something else from Northern Ontario. Must mean that the ONTC will be expanded and likely to include the New Deal proposal – there is no other reason that I can think of to keep the ONTC rail in public hands. My guess is that the upcoming ROF infrastructure announcement will be the East-West road which will get Noront into nickel production and then a subsequent announcement about the rail deal using the CCC corridor so that chromite can go into production. Regardless it shows government commitment to infrastructure in the region following their commitment to First Nations agreements and those two taken together represent less risk for a ROF player and will attract entrants. In my mind, it’s falling into place. In the KWG press release of the same day - Frank applauded Gravelle’s move because it was Frank’s idea.

The April 2, 2014 release from KWG is a game changer: we are no longer a mining and exploration company folks. Using natural gas (cheap and plentiful in Canada and the US) to reduce Back Horse chromite is brilliance. I do hope that the full report from XPS is released as I am very interested in the metallurgists’’ language and observations. Converting oxide ore into alloy in less than 1 hour? That is less than half the time of current processing methods and is cheaper and better for the environment. I mean, if a large Chinese, US or Indian steel company bought KWG for a $1 a share, they would make an ROI with the productivity gains alone from this method in just a matter of months! And if you act now you also get the richest chromite deposit in North America.

The appointment of Donald Sheldon is curious. He is a non practicing lawyer with speciality in securities and engineering. Perhaps a good resource for building and financing the construction of the railway? Partnering with the government to develop a funding mechanism for the railway with flow-thru or perhaps long term bonds? Someone to oversee the Development Corporation? I don’t think this appointment was to fill a chair. Frank’s puchaseof the options is also a good move in my mind. Keep in mind they are not voting shares until he exercises them and the other options that were granted to management and directors likely vest over the next 3-5 years in my estimation. These would likely vest if a change in control occurred. To me, the more granted to this mgmt team the better. Frank, Moe and Bruce and have done a superb job of guiding and adding value to this company and I suspect they will likely vest sooner than the 3-5 year normal vesting period.

Perhaps the appointment and Mr. Sheldon and Frank’s recent acquisition of warrants means that they may take another run at the share restructure proposal in the upcoming AGM? I sure hope so and I do hope that shareholders and including those on this board give it more serious thought and support. I mean, if we had a parallel security on the TSX, I can’t help but think what more attention this company would have received. Last week, Air Canada shares jumped 30% on news that they THINK they may have a good summer. We are in pursuit of a patent that could change the worldwide production of steel making! In my mind, this would allow for share price appreciation and could also allow access to capital to build a railway, a natural gas processing plant, etc.

Anyway...sorry for the long message. Just lots going on and I sense it is just the start.

All the best o all KWG Longs,

Keep Digging