Great post Goodheart...not sure if the order will actually pan out that way, but there are good possibilities...safe to say that timing a puchase of the other companies with profits from KWG will be key but very tricky.

Crucial point and what might take the decision out of Cliffs' hands (date for the take-over of KWG), is the date when approval is received for the PPP from 3P Canada. If it comes early (next four months) then I think the rush will be on for Cliffs to put in a bid before XMas and watch the outsiders (Xtrada, BHP, China, India...) re-organize to counterbid before the New Year...

If on the other hand, the PPP approval is "long" in coming (6 to 8 months) Cliffs may not be able to execute the take-over prior tot he April 2012 deadline (partnership kicks in) given that the PPP agreement has to be signed by a Canadian company in partnership with a municipal, provincial or First Nations governing body. Countdown to partnership = approx 172 days or 8.5 months)

That would bring us into a partnership with Cliffs on BD and the PEA (Priliminery Economic Assessment) would be front and center in the valuation process of KWG. (assuming that the rail operators' license has been received by then, which is likely). Let's remember that with RR, the mine and the processor/smelter at least agreed to in principle, the PEA has set the value of KWG at $2.95 to $4.78 per share with conservative numbers.

The only card that Cliffs holds is the selection of the location for the smelter and it would be counter-productive for them to delay the progress past April 2012 for obvious reasons 3P aproved or not.

They could also avoid the deadline by playing the end around, and finding the funding by themselves...all $2Bil of it, with partners, given that this option would allow them to take-over KWG before the deadline, and save mega dollars in future years, but then again...would the Canadian gov. re-issue a rail operators permit to an american company, just so they can avoid paying the real value for the puchase of a canadian company....HMMM, don't think so. Somehow I think the approval process might encounter some unforeseen delays...LOL :)

Wouldn't it be ironic if it were our Govs approval (due process) and regulations (3P Rules) that would carry us over the deadline and and force the upper valuations onto Cliffs books...poetic justice I would call that! I say, I say poetic justice boy!!!

Good luck to all KWG longs

LP