GM

Your post says: "I am confused as to what their plan is". Rest assured, you are not the only one.

- CLF rail versus road (some history): While advocating a private road, at one time somebody at CLF (could be the point man VP Billy Boor) said CLF would "embrace" the RR as well if this becomes available (much cheaper than trucking). However, we all know this history chapter well with CLF asking for an easement over KWG/CCC claims along the NS esker corridor for its private road (rumours say it has a $600M matching fund commitment from a former Premier). CLF easement application was not granted by the Lands Commissioner. But, CLF appealed (with some intervention from the Prov AG office) and won...The Appeal Court set aside the ruling from the Lands Commissisioner, but indicated it would be up to the Crown to make the decision on the land use with public interest in mind (how can a private road for CLF would serve the public interest?), and that KWG is entitled to negotiate for a financial settlement with CLF. Of course, KWG/CCC appealed the Appeal Cour dicision. That is where we are at, and the details are in the fog...Perhaps, others could fill in the details of KWG/CCC appeal to the appeal.

In the legal front, CLF still enjoys the positive ruling by the Appeal Court, and presumably still has its legal right to bulldoze through KWG/CCC esker claims to make its own private road. But, with a few assumptions attached:

(a) the Prov will have to agree with CLF by providing matching funding of $600M for CLF to build the private road for CLF use only. To do so, the province will have to convince the public that this private road is built for serving the public interest.

(b) In addition, the Prov (and CLF) with its appropriation of the claims must be willing to pay KWG/CCC for the expenses already incurred for the corridor development which is intended its future RR plan, and loss of potential future earnings from its chromite assets (BD and BH).

- Goncalves said (paraphrased) : "We are waiting for the RR to be built to haul the chromite out of the RoF." This is the bit that is really confusing. From a legal point of view, CLF is setting itself up for a lawsuit by KWG, and perhaps others as well, e.g. ONTC, for obstructing business opportunities for others, while it is in no position the proceed with the $3.3B project which includes the private road (it's broke). The Prov may get itself on the hook as well.

In addition, Goncalves has been quite "emotional" about CLF investment in Canada, including remarks about REZO chance for RoF to be developed. Not sure what strategy he got in mind?

Speculation: Maybe, just may be, Goncalves want to paint a very bleak picture for its chromite assets. It might already talk to key players (KWG, a deep pocket on KWG side, and the Prov) for a solution.

Solution: CLF would give away all RoF asset for a consideration of some nice NSR (take your pick, 2-5%???). This would give Gonsalves an exit that he could convince CLF BoD and shareholders that this is the best deal for CLF, considering the situation they are in.

BTW, the Prov can always step in to say (paraphrased), "after an in-depth analysis, that it would now consider the RR option is the best for the area, and give that responsibility to a Fed Port Authority to sort out (pass the hot potato to someone else, while claiming the credit?), starting with its $600M contribution (plus matching funding from the Fed). The rest would come from the private sector and public funding (3% long-term bonds?)".

goldhunter