At this point, there is no ressource estimate for either property. Noront is close to having a 43-101 resource estimate for the chromite. I am not sure where FWR is on this. Mac has been saying since before the PDAC that they had 100M tons of high grade chromite with good Fe/Cr ratios. Noront was talking more about 30-40M tons of comparable ore. The Chromite market is very different than any other market and that is why the market has yawned at every NR concerning Chromite whether it be put out by NOT, FWR, KWG, SPQ or UC.
Like I said, Mac has been saying he had 100M tons of quality chromite and I believe it is a good ball park figure by the thickness intercepted and the length and width of the deposit. However, the market has given Mac no respect for this. Even though he could be sitting on 30-50B dollars or Chromite, the market kept giving him about a 45M dollar market cap.
To be fair, Noront never got much market cap from their chromite NR either.
What I find funny is that Noront makes a play for FWR now and shareholders are saying we are worth 400-600M dollars in market cap. Really??? What has changed to make the company worth 10x more all of a sudden except that Noront wants to acquire them?
Another topic I have read where I believe people have it wrong is that NOT should of waited till they had their assays, get the price to $3 and then make a 5-1 offer. This is not how the game is played...
Let me try to explain how I believe this was planned and executed to a T!
You make your offer when your price is as undervalued as it is going to get-as opposed to over valued. With this strategy, the take over target, FWR in this case jumps in price from 31 cents to 38 cents. It was 22-24 cents for months before that. So all of a sudden, you have a huge amount of shareholders that have almost double their money. Without questioning what is going on, many take their profits and run...only to see the price keep climbing.
You see, Institutions want this to happen. But they know they must acquire 66 2/3 % of the shares to win the vote as FWR management is against this merger. So do institutions want the price to jump to $0.75 right away (which is what would of happened if we had waited for NOT to be at $3.) Of course not. They started it at 40 cents and will keep increasing the price until they have enough shares to win this vote.
Now, is the time for NOT to get a great NR out, drive their price higher and keep giving FWR shareholders more money for their shares. Everyone has their price. If this merger does not go thru and Cliffs does not come with a bid, FWR will fall fast and hard and the higher we climb, the harder we will fall. So most investors without emotional attachement to Mac will take the 100-200% return on investment-with no risk-and run with their profits. During this time, those shares are most likely falling into pro merger hands.
The other reason you want to do this with NOT way undervalued at $1.59 is that we knew the SP was going to go back up to a more reasonable level. With this increase in price, management can say...see, the market likes the merger. Now imagine if NOT did this at $3? Not falls to $2.25 and everyone says...ooh, the market hates this deal!! All perceptions. The BoD some love to hate know the game very, very well. I am counting on their greed to make me a huge pile of money!!!
On another note, I am hearing that Cliffs is preparing an offer for Freewest but as a FWR shareholder, I am even more nervous about this. Cliffs will not give us $2 for our shares at this point. We will be lucky to get $1. But if we sell to Cliffs, we are done, tous fini mon ami! Take your money and leave your shares at the door. No more chances for growth!
Versus with NOT, we now have a company that has:
225M shares outstanding
130M tons of Chromite-a mine life of 50-75 years
A great potential for 7-10millions tons of high grade nickel, Cu, PGEs-mine life of 5-10 years
A management team and BoD which most here love to villify (sp?) but these guys have done it before wether it be Aurelian, Kinross, Barrick Gold...
I believe we will have a TSX listing within 3-6 months.
Now once we get there, on the TSX, with those big names some love to hate (but fund managers look for to invest big, big money), with our chromite, nickel, Cu, PGEs, land position, money, ability to raise money, ability to have a rapid pay back of CapEx due to Eagle's nest (part of the problem with the chromite alone (as some FWR shareholders are suggesting they go at it alone) is the CapEx are paid back way too slowly and the CapEX pay back eats way too much into the revenues) in minning friendly Ontario, Canada...
What kind of valuation do you think the market will give this merged company?
I believe we will be at $2 Billion dollars+ or close to $10 per NOT share which would be $2.50 per FWR share.
When you really stop to think about all this...is it a big surprise the institutions are supporting Noront so much? When institutions want something, it is much better as investors to bet with them then against them!
Like I wrote a few days ago, this deal is done...but we will all be winners in the end!
Glorieux
