Goodheart,

There is something strange about this NR. It does not really spell out the results in a crystal clear fashion.

As you have indicated, this drilling was to define the edge and hence the size of the deposit. A am no geo, but usually the "edge" means grade is fading and would be expected to be lower than the main body.

One thing that may help solving this puzzle would be to throw BC of PRB in. It's just next door of BD, and the grade there is pretty decent as well, just like that of the main body of BD. PRB could be part of BD and the 2 of them could be connected down below. It's also on high ground. The question I have is where was the KWG drilling, was it near the boundary with PRB or somewhere else.

One issue we should not forget is the buffer zones between BD and BC. The extra piece of real estate from BC would help whoever (say CLF) get around the buffer zone (60m from both size?, and that could mean a lot of ore). In addition, the extra real estate would help the pit design. Normally, a slope of an open pit of about 45 deg would be used for slope stability and this would require additional land (again, this could be translated to a lot of ore, lost or found).

If I were CLF, I would lump BD and BC together and mine the whole bit, high ground high grades first and BT later, if required. With this strategy, the concentrator would not be required during the initial period when CLF can mine the DSO stuff at BD and BC. Not having to cough up $800M right away would be a good thing from the cash flow and payback consideration. They can use the profits to build the concentrator if they need to.

The PSU folks over at PRB board (similar to our KSU) would be satisfied with a $120M min., for BC. Not too much to ask, eh?

goldhunter (playing arm-chair analyst)