If Cliffs has control by owning 73%, can they do anything underhanded such as "selling the deposit for $1" to another company, and shutting the 27% owner out completely?

Actually... no. In your scenario Cliffs could only sell their percentage of the deposit (73%) The remaining partner with 27% would still maintain that % ownership with the new partner. What they could do is not develop the Big Daddy deposit and essentialy shut out the remaining partner in that manner. They have in fact stated they would develop Black Thor first, but I don't believe they would.(who knows what's in their minds)

IF Cliffs were to buy one of KWG or SPQ and not the other, and proceeded to turn BD into a mine, what happens to the remaining company?

If Cliffs moves forward and develops the Big Daddy deposit after buying out one or the other, the remaining partner will be required to share in their percentage of the costs in the development, (which will be in the hundreds of millions of dollars), in order to maintain their current % ownership. Once the Option Agreement is fulfilled in 2012 or the 30% interest is gained, the partners enter into a JV Agreement (the details of which haven't been revealed) I would assume it would state something to the effect that if any partner is unable to fulfill their portion of development their ownership percentage would be reduced accordingly, possibly down to just a NSR percentage.

My opinion

SRV