There are a few very good land packages being explored in Alaska, some pulling out excellent cores and grades. Some even have proven reserves in the millions of ounces, however most of these company's shares are selling at extreme discounts. Why?

For the most part, the capital costs. In our environment of bank collapses, government bailouts, sinking reserves and depreciating assets, cash is KING! Not just for the exploration company but for the majors producers as well. This means securing long term loans via any means will cost an extra premium whether it is selling bonds, issuing new shares, trading depreciated stock, banks, etc. which is what it would cost to acquire and move forward any projects. The major producers are not going to take on this kind of capital risk in this environment.

The question then becomes, where will the majors be looking to invest when the time is right? In my opinion, they will look for the safest of all safe bets with their capital. They will look for not just proven resources to acquire at these rock bottom prices, but land packages with the lowest cost to get to production. This may be different then the lowest cost of production. Also extremely important will be the potential timeline from acquisition to production. What hurdles will need to be overcome such as environmental studies, to governmental permits, to deals and blessings from first nations and other groups?

Comparing KXL to just about any Alaskan project KXL has:

1. Better infrastructure - from a major highway to a major railway, to towns with schools, shopping and other supplies.
2. A provincial government which is now considered a 'have not' province. They will be most willing and compromising to companies creating new jobs.
3. An ex mining town thirsty for these new jobs.
4. Incredible First Nations relationships - just review the Christmas videos.
5. Less environmental hurdles as this immediate area has previously been allocated mining permits and other such blessings.

If KXL does prove up a minable resource, they will look awfully attractive as a take-over project.