goodheart

Your post says: "If a bigger fish wanted us they would not hold back waiting for a super share. Frank has close to 200,000,000 million shares held in reserve. WHY. He wants to sell them preferably in super shares. That will put us at a billion for sure. Monitizing the ore body like noront did brings deep pockets into the play that will make sure the ore comes to market and that is why the share price will rise. Selling more shares under the guise of super shares only keeps the control in frank's hands and not the big boys who if the ore was monitized would insure deep pockets to mining raising the share price."

There are a few interesting points in there that I would like to comment:

- Big fish: We both are in agreement on this. As I have indicated, the big fish, the one that really want to gooble us up in one gulp, would not care if we have supershares or not. The reason for it not to strike now is that it is waiting for the right political wind to come along. It (and everyone else) would want some kind of green light from both the Prov and the Feds before doing any serious commitment to KWG (or any other company in the RoF). Not too long ago CLF already gave several key reasons for scrapping of its $3.3 B proposal for BT. The blame list included government for not acting fast enough, the subsidies, the EA process, the FNs,...I would suggest that CLF can now add another item on its blame list: It's broke and sinking fast (Market Cap of the entire company is ~$2.5B, how can it finance an $3.3B project which would require all kinds of subsidies from the governments...Plus, it is stuck in its own swamp (not the RoF, lol) and surrounded with snapping alligators: Casablanca, class-action suits for blowing $9B in a few short years,...).

So, big fish is lurking in the weed and just wait for the righ signal. Even big fish need to show its shareholders that it's doing appropriate DD to derisk a potential investment (in KWG). My crystal ball says big fish will strike.

- 200M shares Frank held in reserve: Are we talking about the authorized number of shared that KWG can issue (in a financing for cash) without having to come to shareholders for permission for lifting this limit? I may be wrong, but I thought the BoD can authorize a much large number. But anyhow, your main point was that Frank wants control and want to be able to sell the supershares to people with deep pockets (200M/50 = 4M supershares, which are not too many...say 4M x $3.5 = $14M, not too much cash really, and not that much of a dilution).

Currently, with some 110M shares, CLF is in control. I would rather have the control in Frank's hands and in a few friendly institutional investors than CLF which had/has the intention to let KWG twist in the winds.

- 750M shares in reserve: If it is possible I would prefer to have more shares in reserve, e.g. some number around the current OS, as indicated in my previous post. Doubling the OS would bring in some $50M with (significant) dilution (factor of 2). But we are exchanging dilution for cash, a significant amount of cash, in the company treasury. This would bring in a few influential friends, and at the same time "dilute" CLF influence by a factor of 2, so that CLF cannot control the outcome of any resolution. If it wants the shares bought back by KWG then the FMV of the shares during the last few months would be ~$0.07/s (or $3.5/supershare). So kwg CAN offer CLF $0.07/s ($0.07 x 110M = $7.7M plus some premium = $8M, take it or leave it). KWG treasury, with more than $50M, should be able to handle a $8M buy-back. This buy-back amount could be offset significantly if CLF lost the Appeal and ordered to pay all court costs to KWG (for both the Appeal and the Commissioner's Hearing).

- Potential hostile TO: In my views, having a few friendly allies with deep pockets (but they would need supershares to fork over the money) would not be a bad idea in order to fend off a potential hostile TO, especially with a low-ball offer. I would suggest that KWG revisit the poison-pill provision. As I recall, it has expired, but could be brought back quickly.

Bottom line, having the control in Frank's hand (and a few other friendly allies) is much safer than in CLF's. After all, Frank and his team with quite a KWG few million shares in their hands, would be expected to do their best to protect their investment. On the other hand, what could we be expect from CLF, beside getting twisted in the wind?

Fingers crossed for a new CLF management after their AGM meeting on 29 July. If they have a fire-sale of chromite then KWG can probably scoop up the other 70% of BD cheap, may be even BT with the help of some friendly hands, and then we can start talking about a JV with a potential major.

goldhunter