From_Sudbury,

So, you have been busy digging up facts and posing relevant questions. I did the same thing last night. Just adding to your collection, I have the following comments.

1. It looks like CLF lawyers have set up a convoluted scheme in their set-up of various subsidiaries in Canada. The subsidiaries seem to be independent from one another with connections, like tentacles of an octpus, to mother company CLF with HQs in Cleveland, Ohio. There may be sub-connections among the subsidiaries, but for simplicity let's leave that possibility aside.

An example is the Fe subsidiary in Quebec, currently under the bankrupcy protection which is an independent subsidiary... and mother company, CLF Cleveland, has cut that tentacle to protect mother company from liabilities (ring-fenced) from the Quebec subsidiary. For a company/subsidiary to declared bankrupt, it's quite obvious that the liabilities of the subsidiary are considered (by mother company) exceeding the perceived value of the total assets of the subsidiary. The court in Quebec has accepted the bankrupcy status and put the subsidiary under the administration of a trustee who is responsible for the liquidation of the assets for paying the liabilities. Quite often, the proceeds of the asset sale (fire sale usually) would be less than the liabilities, hence the the creditors would not be expected to receive 100% of the amount claimed. In some extreme situations, creditors would receive a few cents for their dollar.

The above is a quick summary of the Fe bankrupt subsidiary which may have a bearing on CLF chromite subsidiary below.

2. CLF Chromite Ontario Inc.: This is most likely the same as the number company 2274659 Ontario Inc. Below is a simple interpretation.

- Assets of this subsidiary include BT, BL, 70% BD, proceeds from selling the exploration camp to NOT? From the remarks made by Goncalves, there is not much of a chance for the chromite assets to be developed during the next 50 years, hence the perceived value of its chromite assets would be almost ZERO to him, and potential buyers (maintenance of the deposits could be a financial burden, even if the price is $1.00)

- Liabilities: (i) Paying general expenditures, including staffing and keeping the heat and lights on for that subsidiary, and its own legal costs for the ongoing litigation; (ii) maintenance of claims for the above deposits to keep them in good standing; (iii) claims against the subsidiary, e.g. legal fees and damage to future business opportunity with respect to the NS corridor court case (claimed by KWG); (iv) any loans to pay for the acquisition of the above deposits; (v) any current or future debt and obligation, e.g. contractors for doing any work for the above deposits; (vi) and site clean up for the case CLF walking away from the RoF, etc...

If the perceived liabilities are greater than assets for CLF Chromite Ontario, then CLF mother company may decide to cut that tentacle as well and walk away. In other word, this subsidiary bankrupcy is a real possibility. Any significant expenditures from the above list would trigger the bankrupcy decision.

One example is the potential of paying a huge sum of money for KWG claim for loss of future business opportunity (CLF has denied KWG the opportunity...just wondering if Frank has files this claim in the current Appeal).

The other situation would be related to the maintenance of the claims. The costs could be quite significant (Question: Does CLF pays 100% licence fees for the claim, including the 30% BD which belongs to KWG?). There is a potential for the government (provincial or fed) to step in to appropriate the chromite assets (for national purposes), based on Goncalves vision for the deposits (not to develop them for 50 years). The government may decide not to renew the licence for exploration and not to give permits for mining development, and this is equivalent to an appropiation.

It looks like there are many options for the Prov and Fed if they want to make a move. The government may put a lien on CLF for any current or future obligations (e.g. site clean up, or whatever as specified in the EA book). Questions: (i) Is there a time limit on exploration and mining development permits (common sense says, the company cannot just sit on a deposit forever without a solid plan for its development)? (ii) given CLF intention, can the government serve notice that if there is no plan to develop a mineral deposit from the company within (say 90 days) then the mineral rights would revert back to the Crown?

- An aside: Bill Boor, the pointman for CLF Chromite Ont. Inc., is no longer a VP with CLF, as of Oct 2014 (Linkedin has some info). I have not seen an announcement wrt his departure, but his name is not on the executies list, and apparently his position as Exec VP Business Development has been taken up by Kelly Tompkins (CLF website). Bill is a hard-nosed fellow (only love for CLF, but not much love for Canada). He seemed to be in good term with Minister Gravelle, but not a friend of KWG. Hope that the new fellow is easier to deal with. However, the buck stops with Goncalves.

So many questions waiting for answers.

goldhunter