I'm no expert either. The R/S is usually a negative for shareholders. As you could see from the timing of our release it was not what the market wanted to hear. On the pro side of the argument if a company is in need of fresh capital there are only so many options. With no track record we would have a hard time raising money through a debt issue and if we did the terms would likely not be in our favor. Also issuing Bonds etc usually requires regular int payment that are hard for a company several years away from positive cash flow. This brings us to the reason for a R/S. It made sense if we new the plans moving forward and what our share of the capital cost were going to be. The thing here is that no information was presented to us. The news of the R/S was a complete surprise to the market. In my own view it was ill timed and I could say more but will refrain at this time. Here is a scenario to illustrate what Snug was talking about. Say the jv partners decided to move forward with the railroad and some engineering work. Total costs of $ 1 biilion. Well say our share of this is 300 million. Well we can't raise this at 5 cents a share. So the plan here is to reduce the number of shares to say 50 million or 1/10 and then do a placement of 350 million more shares at $1. This gives us a company with 400 million shares outstanding and a book value of $350 million plus the NPV of the deposit. To the market it looks like we are financed with capital to meet our comitments and that we are not making interest payments. Hopefully as time passes and production nears the market will put more value in the company and any future capital requirements can either be met through a debt placement to preserve the share structure or through futher issuance of shares.

Neil might of thought it would be easier to stomach a R/S at the .10 mark than if the shares went up to say 50 cents. The problem was that he failed to share any of his logic with the shareholders and sprung the news when he new very well the market was anticipating the release of the 43-101 with a positive resource estimate. The company should have released a discussion paper asking for input some months in advance of this kind of decision.

As to your question of how our ownership could change if we can't finance our share of the JV. It is hard to say since I've never seen the agreement. Furthermore we don't know what may have been agreed between the parties since the agreement was originaly concieved. Cliffs could raise the capital and charge the other two partners a fee for doing this. But this scenario would assume that Cliffs is happy with the partnership and see value in maintening it. The other side of the coin is that if that were not the case they could pressure us to sell part of our stake in return for funding our share. The posibilities on this issue of funding are endless and not being privy to the discussions we are only guessing.

This is like playing commodities. As you get closer to settlement day the speculative nature changes and so does the margin requirement. We are close here to taking delivery so to speak and will soon have to pay up or jump ship. Many shareholders here are looking for a quick 2000 % gain and as time passes this becomes more and more unrealistic. We either sell and take our proffit or it will be a long process over a number of years to realize a good proffit. The type of investor that will hold this investment if we carry on to production is going to change in nature. This accounts for a great deal of the friction or difference of opinion on the boards.

I'm as I say not an expert and these are only my thoughts on the issues. I hope it was some help.

JMHO

A