"So my conclusion, with most majors in a cash strapped position, it would be difficult for any company to take over this playand no major can afford another to take this extremely rich resource."
Xstrata was in a cash strapped position but raised money in London. Now they have enough $$ to make an offer to Anglo-American. Now I hear CVRD is interested in Anglo-American. All the majors have plenty of $$$ and would have more than enough to buy RoF.
"The first major to make a move could cause a bidding war that no major can afford at this time.IMHO"
IMHO this is a high stakes poker game. No one wants to make the first move. They all learned from the Voisey's deal not to play your hand too soon. They can afford it but don't want to pay more than they have to.
Protecting market share is the name of the game. Don't let the competetor get the new resource. Cliffs is way to small to compete with BHP, CVRD or Xstrata when the serious bidding begins.
NOT may want to hold and make noise about starting a mine at RoF but they are too small and don't have the expertise. They are Geologists and explorers. You need mining engineers with mining experience to build a mine and run it.....that's fot the bigger boys.
I don't blame NOT for resisting Cliffs etc because they have some $$$ and some reserves. Cliffs is just praying on companies that can't afford to drill.
But looking down the road what happens when NOT gets short of cash? They need to find more Nickel soon or they will be in the same position as FWR, Probe, Spider and UC.
At RoF everything depends on 3 things. First the economy needs to recover and commodity prices need to firm up. This will take another year.
Second someone need to find another E1. This is very probable but when?
The final thing is infrastructure. The Gov't is making noises about helping out but they will not foot the bill all by themselves. For this you need a major to pitch in. Cliffs is doing a lot of sniffing around but they are reallly just sniffing around. They may want to be the long term winners but only if they can steal it. Infrastructure costs real money.
IMHO if Cliffs was really interested they would be making more serious offers and stepping up to the plate. At the moment they are just in triple A not in the majors.
SN
