Fossil,

Interesting that you mentioned FNC which was one of my favourite as well. It was considered as a good candidate for taking off at some point, but management did not appear to have the knack for unlocking the intrinsic value of the company, and the market has not really give the company a fair valuation (market cap: ~$9M while the cash and negotiable security in 3 partner companies amount to some $18M). On top of that, no value has been given to its 47% of Magpie, one of the world's largest underdeveloped titaniferrous magnetite deposits. This is a good example of how the market assigns a valuation for a company. In my opinion, FNC would be considered way undervalued, but the market has its own way of doing thing, including price manipulation.

The same thing can be said about NOT and KWG, hence it would be futile trying to compare companies using the market share prices.

Companies are valuated based on their holdings and potential values to be unlocked by potential suitors. KWG may not be around to be a mine operator. Ditto for NOT. The most likely scenario would be getting into some kind of partnership with a senior for the development of its resources and holdings, including patents and its share in the transportation corridor. NOT is in a better short-term position with the Ni deposit which can be developed first (it's less bulky hence the concentrates could be trucked out, but rail would be cheaper), but the lucrative business would be in the mining of chromite (excellent profit margin over many years... see CLF proposal for BT).

NOT also has chromite. Its BB deposit and KWG BH deposit may be close enough to be mined jointly. The two companies may stay separate (that would avoid the debate about conversion of the share price of one company to the other) and operate independently. However they can become good neighbours and have a JV to share the development costs.

It would be always difficult to predict the future. But, a couple of things might happen:

- a major would come in an gobble up both companies, and the value of each company will be determined by the suitor. Of course, shareholders will decide if the offers are good enough.

- Richard Nemis is still looking for the body of the elephant nextdoor to Eagle Nest. What would happen if BOL hit the jackpot (Ni and PGM, etc...)? For sure, BOL would rocket, but KWG would be expected to benefit as well, even with a smaller percentage (FNC would get some good royalty).

I don't plan to do any fancy math to compare the values of NOT and KWG. Just trying to understand the key parameters NOT and KWG are facing, including surprises (political or otherwise). The saga will unfold sooner or later.

goldhunter