Without rendering judgement, here is how I see it.

CURRENT CASH ON HAND-

NOT is in a very difficult situation if its current creditors choose not to RENEGOTIATE their credit facilities.

KWG owes nothing but has no cash at the present time (this doesn't seem to phase Frank given that he chose to lay-off all the staff instead of a new stock offering, a private placement or a reverse split)

POTENTIAL ASSET DEVELOPMENT -

NOT are land locked with there assets given that the nickel mine does not support the E W road option and shipping chromite is a non starter on that route. NOT has lots of chromite but no financial backing to develop and no prospects given the dilution and the heavy debt load; no other entity will touch them.

KWG has the N S esker claims which can support a rail option whether they win the appeal or not. KWG also has an independent source of chromite (BH) and potential willing partners to finance both the RR and the mine. (Chinese)

FUTURE CAPITAL RAISING & ASSET VALUES -

NOT has been forced to return to the exploration phase (presumably to increase asset value) when the next step seemed to have pointed in the direction of EA or PEA). All their deposits are worthless if they do not negotiate a FINANCIALLY FAVORABLE transport agreement for the long term. Nickel prices are down and show no reasonable prospect of changing the trend any time soon; chromite prices are steady and demand is rising, but they need to bring the profitability up significantly in order to make their deposits viable.

KWG has on top of its chromite, a number of assets that have yet to be valued, monetized and traded against near time services: 1. the RR which can bring a long term royalty (NSR) on total future shipments both mineral and freight; 2. the patent can generate significant revenue (if granted) but WILL IN ANY CASE lower KWG's production costs to an unparalleled level in world markets. A small portion of it can also be traded against the cost of patent confirmation with bulk sampling. 3. total tons of Ferrochrome or chromite can also produce an NSR due to its projected low production costs.

I am not going to call the prospects of either company but I will add the following facts/speculation:

1. the two companies depend on each other to a certain extent, but I think NOT needs KWG more than the reverse wrt presenting a viable course of action to their investors, for the development of their respective assets.

2. both need approvals from the Govs, but NOT has an edge in advancement, and KWG seems to have an edge with probability of profitability.

3. NOT has more volume of chromite but is faced with open pit mining (in marsh land; cost of processing will be higher because of hydro cost and quality of grade); KWG has lower volumes but the possibility of shaft mining and higher levels of concentration or grades. This fact alone opens the possibility of shipping both ferrochrome and ore worldwide, depending on what the market needs, at any specific time AND lowers processing costs.

4. If the Fed Gov gets involved and contributes a billion or more, they will examine the whole area, its history (including lawsuits and solvency of companies involved) and will have to go with the most attractive and potentially profitable from a global perspective.

It is my opinion that the Feds want to create a world leading industry (ferrochrome or stainless) for the next century, not just a couple of holes in the ground, and then brag about it in the commons. I am not sure that they will want to hand over the reigns to the Prov. Libs given their past record of fiscal incompetence.

For the Feds it's also an opportunity to reverse the poor quality of life that the FNs have endured since the signing of their treaties which in itself has raised eyebrows internationally.

Sorry for the length of this post...

GLTA Pear3 out
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