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Goodheart,

The cash and cash equivalents, receivables, and marketable securities are defined in KWG financial statement. The relevant parts are pasted below. From that definition, the cash and cash equivalents looks pretty solid and it's the real money KWG can lay its hands on.

You could throw away the $3.8M receivables if you want to be conservative, but the real cash is NOT $1M, as you have, presumably, backed out from the interest rate of about 2.6% (26k over 1M). If the interest rate were 1.3%, 0.6%, etc...then the principal amount could be $2M, $4M, etc?

I would suggest that you check with the company on the cash and cash equivalents to see if the green stuff they could lay their hands on would amount to only $1M. If this were true then I would agree with you that the amount would not last for a year or 2, and we would be at the mercy of CLF.

Confirmation anyones who have talked to Bruce lately on this topic?

goldhunter

----from financial statement as of 31 March 2013, link in previous message----------------

Credit Risk

Credit risk is the risk of an unexpected financial loss to the Company if a customer or third party to a financial instrument fails to meet its contractual obligations, and arises principally from the

Company’s cash and cash equivalents, receivables and marketable securities.

Cash and Cash Equivalents

The Company’s cash and cash equivalents are held through large Canadian financial institutions. The Company has a corporate policy of investing its available cash in Canadian government instruments and certificates of deposit or other direct obligations of major Canadian banks, unless otherwise specifically approved by the Board. The Company does not own asset-backed commercial paper.

Receivables

The Company’s receivables consist primarily of trade receivables, which are settled on a regular

Basis and amounts due from related and unrelated parties.

When necessary, the Company establishes an allowance for impairment that represents its

estimate of incurred losses in respect of receivables.

Furthermore, when the Company engages in corporate transactions it seeks to manage its

exposure by ensuring that appropriate recourse is included in such agreements upon the

counterparty’s failure to meet contractual obligations.

Marketable Securities

The Company invests only in securities of companies listed on public stock exchanges and warrants of those companies. There is no active market for these warrants. Such strategic investments are approved by the Board of Directors of the Company. Management actively monitors changes in the markets and management does not expect any counterparty to fail to meet its obligations. The Company’s investments are generally in the junior natural resources sector and these companies are subject to similar areas of risk as the Company itself.

As of 31 March 2013

- Cash and cash equivalents $6,544,144

- Receivables: $3,853,686