Good day rj

I have have had a talk with Bruce Hodgson (investor relations director at KWG) and here are the highlights of what he told me:

1. KWG is not in a hurry because they have the railroad and are working on the development of it...this is an ace in the hole given that there are no other feasible options to transport the ore out (for all companies in that area). Noront proposed a road which would accomodate 1000 trucks per day, but the consensus on that, is that the environmentalists would never go for such an option. The cost of railroad will be capitalized with a non-dilutive issue (ie bonds, preferred shares etc) and is projected to be profitable right from the start with either one of, or both Black Thor or Big Daddy, at 5000 tonnes per day.

2. negotiations for purchase of the whole or parts of, are a possibility but KWG is not willing to lay down at the feet of Cliffs...they feel that they have options to spin off certain valuable assets (Canada Chrome, Debut Diamonds, the RR and / or the NSR, (notwithstanding any new discovery during the drilling program) as well as continuing to operate the RR with or without a partner.

3. an outside third party is not out of the question, even if it means the purchase of the RR as a spin off...Cliffs might be holding off on the bid in order to let KWG foot the bill for the cost of developping the RR

4. I mentionned the delay in drilling and he confirmed that the information wrt mid Nov was not obtained from his office ...that the more realistic expectation is late Oct to start drilling with official results from assays by Dec or Jan, but that they would not hold out if they found something...they would promulgate that information unofficially but immediately.

5. they are still dissenting and that will not change...the meeting on the 4th is to vote on the amalgamation, as well as the final chance for shareholders to officially advise Cliffs that they are dissenting...this also means that shareholders have to insure (with their broker) that they are the registered holder of the shares (certificates), so as to make their declaration of dissent to Cliffs on or before the 4th.

6. KWG is confident in the previous unofficial valuations and also confident in future ones given the identical percentage of ownership in Big Daddy between SPQ and KWG, plus the value of the other KWG assets which only increases with time.

7. he is confident that in spite of the downward pressure on the SP by "whomever?" that it will find its way back up based on real information coming out.

Hope this helps to clarify the current situation a little,

Good luck to all

LP