Shumi,
Cliff's has some very smart people working for it. They have great business savy. They are looking to diversify their business and chromite is just what they need to do it. The last thing they need is to have various partners who own rights to land where the railyway to the mine is located, royalties, etc, in this project.
They pulled off an incredible deal buying Freewest. You could say they were at a garage sale and found the Mona Lisa.
Shumi, I was there, I owned FWR. I took a big risk and invested my hard earned income and held for the long term in this very small company on the slim chance that they might hit a motherlode. That risk should have translated into at least 10X my investment. Freewest's chromite alone (forget the $50M in it's other properties) was worth much more than $1.
Cliff's was very smart. They compared the increased value of their offer to FWR at a suppressed share price, rather than the value of the property. It worked before so they are trying it again! It won't work this time.
We know that around 2015 Cliff's will increase their sales by about $1.5 billion due to the chromite. I respect that they are taking a risk bringing this project to production, however, they will have to make an offer for SPQ and KWG based on the value of the property, and $5 a share is not that unreasonable when you look at the whole picture. Cliff's wanted to diversify and they stumbled into the Ring of fire. This might eventually make Cliff's into a mega giant resource company.
