Hi All,

Something good is about to take place. Not sure exactly what it will be but all of the events of the past month have the markings of a title fight and we all hold ringside seats.

Mustangman was right when his middle of the night posting stated that something is in the air. The air must have drifted from BC to Alberta as I woke up with one thought - Sell stock and Buy Noront. No lie. No pump. Just fact.

So I dumped some of my long term bets with nothing more than an instinct. This was before I read that Noront had upped their bid for FreeWest. Normally I check the news first but was so focussed on freeing up funds to purchase NOT that I missed this step of the process. That and the fact that I was still thinking about the debacle I had personally witnessed in Calgary yesterday. If Mac from FreeWest ever needs a job after all this is done, I am sure there will be a special teams coaching position open with the Riders next month.

So Noront has upped their bid. At first it looks expensive, and probably is. But there is more to this bid then meets the eye. Fortunately for Noront, we are only trading about 40 cents or 30% higher today then in the days leading up to the Noront takeover bid for Freewest on October 5. And this variance is nothing new when one looks to the charts. Since coming off the lows for 2009, we have hit $2+ on many different occasions, regardless of news. I say fortunate as we have nowhere to go but up from here, regardless of outcome. That said, the FWR price is pretty well set.

FWR has traded for the better part of two years between 20 and 30 cents. That is with the exception of March 2008 where it hit the .40 cent mark for a couple of weeks. (Noront was trading at between $6 and $7 during this time).

Since the Noront takeover bid, Freewest gone from .23 cents to today's historical high of .78 cents. My quick math tells me that is over 300%.

Given that I have many friends who are FWR shareholders, I am happy that they have hit this opportunity. But I question whether the shareprice is realistic, and if it is, then why is Noront's stock valued so low in comparison.

Why?

I always considered FreeWest to be a multihorse wagon, as they are also involved in many other projects outside of the Ring of Fire. Kind of what Noront used to be before they became exclusively focussed on the ROF. The Cliff acquisition agreement values this non-ROF portion of the company (called New FreeWest) at .15 cents. In Noront terms, a rounding error as both companies have similar share counts.

So now if we keep our focus on the ROF only, are the FreeWest holdings worth what Cliff is willing to offer (.55 cents towards a Cliff share after the new freewest share is issued), or what Noront is willing to currently offer (direct 7 to 2 ownership in Noront) which today is worth about 63 cents plus the value of a warrant thrown in for good measure.

What I have a hard time getting my head around is what the true value of FWR's ROF holdings truly are. The reason for this is that they have yet to issue a reserve estimate. They are quick to issue statements like "world class" and "potential" but I heard that every week regarding Windfall when it came to the "bonanza" and "open at length" words being thrown about. In the end there were no reserves proven up.

Now what FWR has at the ROF is no Windfall (excuse the pun). There is definitely Chrome there. But how much. And more importantly, how much in comparison with what is held at the Blackbirds and other yet to be drilled locations on Noront's vast holdings in the area. Too much of a good thing could be a problem should both Thunderbird and Blackbird prove to be massive. Why? supply and demand. There is only so much demand for chromium in N.A. Should there be two large suppliers under two different roofs, these two could end up like the price slashers at Zellers and Walmart.

I believe that the area is best held under the control of one company. And I just have a feeling that what we are seeing as a bid from Noront is coming from more than just Noront. Cliff came in through the front door, probably more at the begging of the FWR BOD than anything else. In the Cliff system, they give up the ROF and they get to play with all things non-ROF that they have collected over the years.

Wes is correct that this arrangement came at the price of the FWR shareholders. Not only did they golden parachute out of the ROF with direct cash option payouts, but they also keep their jobs keeping the New FWR going. While shareholders get .55 cents for the ROF holdings and .15 cents for the new FWR, Mac and co. get .70 for every option they hold. With the price sucking at .20 to 25 cents for most of the past two years, that is a good return for being able to keep your office. Why not keep FWR intact and divest the ROF holdings to Cliff in return for shares? Same result in the end for the shareholder. But that would leave Mac having to cash in his options on the market, likely triggering a fall in SP.

What better way to lock in this deal then offering to pay a bidder $6 million if they fail to win the bid. I work for a company that bids on 100 million dollar contracts every couple of months. If I were to come up with a way to have, say, Syncrude pay my company 6M dollars if my competitor was more successful in their bid against my bid, then two things would happen. 1) I would be promoted and given a huge raise. 2) The guy at Syncrude who signed this deal would be fired in an instant.

But we do things a little different in the larger Oil and Construction industries. Small time miners seem to be able to get away with near murder these days.

To bring this back around, Wes played a brilliant chess move today. He made Mac look like an idiot. After selling his soul to Cliff in exchange for sheckels of silver for his options and his guaranteed continued use of his office chair, he backed himself into a corner as soon as Noront upped their bid. The $6M termination clause and the .60 cent PP has already made Cliff millions. They are ahead regardless of the outcome, yes at the price of shareholders as Wes aluded to in the NR. Noront has submitted a final bid, and if this NOT's bid is rejected then it only cost the price of a few sheets of paper and a couple of lawyers.

Unless there is a large major currently on side with Noront asking Wes to follow their playbook, I do not believe you will see another offer from Noront. We just do not have the deep pockets for this, and I do not believe the large institutional holders desire to see their share base diluted much more on what is essentially unproven assets. There are other ways to force the new owner (Cliffs) to play ball, and that is where my friends at the First Nations come in. Look at the Noront web site for the work Noront has been doing with the locals at the ROF in the past few months and picture what might happen if Cliffs is less skilled in building these relationships. Their Thunderbird claims could get tied up in treaty hell for years to come. It has happened before in Ontario.

In the end Noront will benefit from this chess game. We either end up with FWR brothers (and sisters) joining us to form a large asset to be sold at a later date to a major, or we watch Cliff up their bid, which in the end legitmizes the value of the "known" assets we have at the Blackbirds and Eagles. If FWR is worth .86 cents or more, then Noront itself is extremely undervalued and the market will soon learn this in the coming weeks.

Hang on to your seats. This is heating up!

M1.