HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"

NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)

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Message: If FWR sells the chromite what might Cliffs do?
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If FWR sells the chromite what might Cliffs do?

posted on Oct 09, 2009 03:44PM

dor brought up an interesting scenario in the Pandora's Box post.

If FWR elects to sell the ring of fire interests Cliffs will loose their chromite stake unless they react by purchasing enough FWR shares to ensure that NOT does not get two-thirds agreement with the shareholders. Cliffs would have to purchase another 23.3 million shares (with the warrants they will own ~10%) of FWR to guarantee their interest in the chromite with FWR. This number of shares would be required if Cliffs fail to convince other FWR shareholders to join them in opposition to NOT's offer.

The alternative is to write the investment off (sell it?) and pick up a similar 10% interest in NOT.

At to-day's share values the FWR hold would cost ~$104m; the NOT purchase would cost ~$35m. These numbers say invest in NOT.

Declaration: I own shares in both NOT and FWR.

AFS

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