Riskit,

You commented on the raising of $70K and the concerns that it raises for you about KWG's financial health...don't forget that the last two PPs were flow-through shares and as such must be expended for exploration purposes only. These funds cannot be used for keeping the company afloat in terms of admin or management. Consequently we cannot conclude from this anything about their financial status only that they are engaging in exploration and drilling withing a short period of time...that'a a good thing.

If the BH resources can be confirmed through this process, then that is a great thing. It will position us well for when the Ont gov applies for and gets approval for the infrastructure funds. Any possible outsider (possible buyer) who has been following the ROF will find KWG assets more attractive and valuable. Add up 30% of BD + 80% of BH + 2% royalty on tonnage transported on the RR + 100% rotalties on Nat Gas processing of ore and you are probably in the ballpark of $1.00 to $2.00 dollars per KWG share. (discounted considering the longevity of both mines' output).

Here is a calculation that I posted a couple of years ago on average Ferrochrome prices which ranged from High Carbon 1.70 per pound to Low Carbon 2.55 per pound in North America. Prices have gone down since then and HC chromium is approx. $1.05 / pnd and LC Chromium is currently priced at approx.. $2.20 / pnd.

For every 1 million tons of ore = 400,000 tons of ferrochrome at 40% recovery which is the reported recovery rate for Big Daddy

400,000 tons = 280,000 tons (70% net profit estimate: adjustment for production cost)

280,000 tons x 2000 = 560 million pounds (conversion tons to pounds)

560 mil pounds @ 1.70 per pound for HC = $952 mil. @ 30% share = $317 mil.

560 million pounds @ 2.20 per pound for LC = $1.232 bil. @ 30% share = $369 mil. (KWG’s annual revenue share of BD output)

Since our carbon content at BD is optimal for the production of stainless steel (1:3 ratio) I chose to retain an earnings level closer to the LC price rather than the HC price, which represents an annual earnings per share for every million tons of ore, of approx. $0.42 per share...just from Big Daddy. It has also been unofficially reported that Cliffs intended to mine more than 1 million tons per year (possibly two to three million tons), which only grows the numbers in our favour. Obviously many variances can come into play but I think that this calculation gives us a good idea of the value in ferrochrome. This is the calculation that would have to be made in pricing a T.O. bid for either Cliff's or KWG's share of BD chromium. Why do you think Cliff's wanted to own it all by themselves and have never proposed to mine BD first...because they would have had to share too much of it with KWG.

Flash forward...the total current compensation for all KWG assets could come from one source (T.O.) or from many in combination from the following list: 1. Ont Gov for control of N/S corridor, 2. T.O. of BD asset, 3. T.O. of BH asset, 4. T.O. of Debut Diamond's assets 5. purchase of Nat Gas processing patent. If levied in an "all in one" form then we would eventually sell our shares as a whole, but if these various assets are purchased seperately by different entities, then the shareholder compensation could potentially come in the form of a special dividend and or royalty in perpetuity, which would exempt us from selling our shares, and produce an income instead.

I don't know how this will all play out, but I know that having a CEO who is fully invested and has quite a lot of skin in the game, definitely reassures me of his intentions as well as where his efforts will be directed.

Best of luck to all KWG longs

Le Penseur