Good thoughts Hoov.
These are certainly some valid possibilities. Others that I didn't mention:
1. Even if Cliff's were to ignore Big Daddy and concentrate on Black Thor, I think we have value for Big Daddy in the sense that Cliff's wants to position themselves "to become the sole North American primary chromite and ferrochrome producer/exporter." I don't think they want other kids playing in the sandbox.
2. The acquisition of Big Daddy, considering that BT is already held, could be for purposes other than near-term mining. I don't believe that anyone has mentioned this yet. There is intrinsic value in BD, even if they don't plan to turn it into a mine for four or five decades, because it can be drilled out into resource definition that moves into the proven category from indicated and/or inferred, which strengthens their balance sheet considerably for future corporate purposes. In a general sense (I'm not making any specific acquisitions here), let's say that members of the Cliffs Board had remuneration packages which could provide compensation in the form of stock options if certain metrics are achieved regarding the size and/or strength of the balance sheet ... that might add pressure onto the impetus to pursue BD, even if it isn't needed right now as a core asset.
3. Desire to outflank other majors. I doubt that anyone is going to step in and put forth a competing bid. But Cliffs still has to be concerned that someone might do that for purposes other than an actual mine (ie. positioning or balance sheet).
4. External to Cliffs, there is a small chance that another major might want to put in a bid just so Cliffs doesn't sew up the North American market. Would Xstrata or someone else throw in a bid either "just to annoy" Cliffs, or because they felt the had a gap in their portfolio? Probably not, but anything is possible. Although the fact that Cliffs owns 47% (will be 40% eventually, under this scenario), is a detracting factor.
These are all possibilities which could support a higher valuation, or even a premium over my previous thoughts. However, there are other arguments which support a lower price, chief among them being, as Hoov pointed out, the fact that the purchase of Freewest was for more than just the portion of Big Daddy.
IF Cliffs takes out Big Daddy, how monopolistic does that make the situation? Would that give them a better chance of controlling the selling price versus the possibility of two separate mines in the ROF by competing majors? There are only about half a dozen other significant sources of chromite out there, and none in North America. Oligopolies are generally price setters rather than price takers.
