Someone posted that the only options now are for Cliffs to either fight by appealing in court, or to make up with KWG. And of course, the third option of just selling their interests.

My guess is that they will launch an appeal. This is simply because it clouds the issues of what's really happening. If they work quietly on a deal with KWG or try to sell their interests behind the scenes, they can always just pull their appeal whenever they want. Alternatively, they can appeal simply on the premise that if they can't have what they want, neither should anyone else.

If they attempt to bargain with KWG, one logical premise would be that they would trade access to surface rights in exchange for mining BD before BT. That makes sense. But I see a sticking point there that nobody else has mentioned. If they agree to mine BD first, which is a simple concession since it is much richer than BT, they will also want to be in a monopoly position (notwithstanding KWG's share of BD). This means that they will also want, as part of the deal, to try to apply pressure to limit development of other mines such as Black Horse. That won't sit well. Therefore, I believe that they will be at a stalemate in negotiations.

Ultimately then, I think they're faced with two options:

1. Start an appeal and try to sell their interests quietly in the background; or

2. Start an appeal and get ready to buy out KWG. That's the only way they can be in control, and that's the way they operate.

Using Spider ($125m) and adding several other assets to the pot, they'd be looking at about $200m+ to buy out KWG. They would want to minimize that, so their smart move would be to start buying as many shares as they can now, at current prices, in advance of a buyout offer.

I would expect a moderately decent chance of eventually seeing a low offer (similar to a couple years ago with SPQ) that slowly ramps up over a period of a few months. That way they could scoop some shares at lower prices, and only a smaller portion at the eventual buyout price. The difference is that they want to get this project going, so it wouldn't be dragged out over the same length of time as the SPQ buyout UNLESS they knew they were also being bottlenecked by fed negotiations with FN, or something to that effect.

The only question in my mind is, in the hypothetical case of a buyout, how their current position in KWG would affect them in having to make an offer at Fair Market Value based upon a third-party valuation. If they put in a low-ball offer and ramp up to a higher number, would there be the possibility of a legal challenge from shareholders who sold out at the lower numbers, not knowing that Cliffs was obligated to purchase at the independent valuation price? Does the independent valuation price still apply right now? I remember this being talked about frequently in the past, but I've never done any real research into it.