If the option were not extended and allowed to lapse then KWG would lose all the money it has invested (a few $M) so far, I presume. But the date of 30 Oct has not been cast in stone if both sides are still in negotiation, and some kind of announcement should come sooner or later to let us know the status.

Of course with enough financial backing, KWG could go for the entire package including BH, but there are two things that come along with this strategy:

- KWG would need to spend a lot more money for drilling for a PEA suitable for submission, plus others expenses.

- If getting BH would give them the monopoly for the entire chromite finds in the area (so far) then it may be worth it. However, NOT has BB deposits which are being guarded by Baosteel. I don't think that Baosteel would let BB go to a competitor. Hence, it would be better for KWG to focus the effort on the front running package (BD, BT and perhaps BC) and treat them as one single project and fast track it with the bessing from both Ontario and the Fed.

NOT can have a jump start with its Ni project. But, KWG can focus on the chromite, starting with the best deposits (BD and BC, 40+10M tonnes, without spending the $0.8B for the upgrader/concentrator) then moving on with BT (would need a concentrator by then), or BH depending on the future outcome.

The above discussion was based on the assumption that DSO and ore for feeding the smelter would be shipped out by train (or by road in CLF historical plan for BT). But if slurry pipe, gas line, gas-powered smelter near Nakina are the way to go, then the above discussion would need to be modified somewhat.

What about a partnership between Baosteel and another deep pocket, with NOT and KWG in there somewhere? Keeping in mind that Baosteel does not want to rock any boat. It does not want to be the controlling shareholder, it just wants to secure a long-term supply of the Ni, chromite, and value-added products from the gas-powered smelter as well. It can probably help in the building the RR with Chinese technology and the $.

Let Frank (or our fearless Minister in charge, heaven forbid) come up with a grand proposal.

goldhunter