Hey F-16,

Interesting handle...you must be a hybrid LOL:) ( F16 Fighting Falcon & F18 Hornet)

I use to be in the AF... I also hold a good chunk of KWG and would like to contribute to this discussion. I understand your need for real accurate info, so I am going to pre-empt my post with the statement that this was confirmed to me by KWG IR. I have had many conversations with them.

The NSR is 1% on the McFaulds Chromite assets. The JV for McFaulds was originally between UC / KWG / SPQ. SPQ is now Cliffs and UC has earned-in 55% ownership of the McFaulds deposits not including BD, which Cliffs control by virtue of the purchase of Freewest and their larsony of SPQ.

The spin-out of DD and/or CCC would generate a stock issue for the KWG shareholders. The ratio would be determined by the comparative value of the two (DD vs KWG ...CCC vs KWG) At this time, DD would garner approx. 1 for 20 of KWG.

As for the NSR being paid if the ore is not smeltered...the answer is yes. The agreement provides for that possibility, given that the equivalent value of directly-shipped ore would provide the 1% royalty...there is an equation but I haven't been apprised of it.

I was also told that since Cliffs owns 19.3% of KWG, they are considered not only a major shareholder, but also an insider, which in fact obligates them to come in with a friendly following a valuation...Now we have had two valuation and a PEA...the valustion sat at around .27 to .33 and the PEA put it at $2.95 to $4.78 contingent upon the building of the RR, the smelter and the mine, as well as KWG assuming approx. 450 mil to 500 mil of the cost to build the RR.

The application for the PPP funding sets in motion the process through which these conditions can be met. IMHO if we egt an annoucement on the PPP from the Feds or the infrastructure/hydro from the prov. the stock will probably go into a range where the institutional buyers would have access to it ($1.00 +).

If we survicie past that stage and we make it to XMas, then we increase our chances of seeing a bidding war or even an auction. If we make it to April 2012, then the valuations quoted in the PEA would probably be reasonable, given that the RR would be well on its way into development, Cliffs would have had to describe a firm plan including the choice of mine to develop first and the location of the smelter would most likely have been announced because it is an essential component of the Cliff plan.

Addionally, the move that KWG made this week (appl. for PPP) will most likely pressure Cliffs into accelerating the pace of their moves given that the immanent approval of PPP would attract some big players to the table and swing even more control over to KWG notwithstanding the positive effect that it would have on the shareprice.

Best of luck to all KWG and ROF longs,

LP