The CHROME FARM -> a review

Since there is no other known resource with the same unique characteristics, infrastructure, proximity to shipping or markets, now or in the future. Given the project, like all mining projects will take time, there are no fatal flaws in the way of this one, which is part of its uniqueness.

CHROME -> the source countries are not viewed as desirable or reliable sources, due to constraints in their supply and infrastructure, and costs.

FREEWEST CHROME FARM: yet to be developed but requiring no new technology, but rather capital inputs, will supply at least the Western Hemisphere with CHROME for the foreseeable future with chrome at market prices, profitable to its producer.

STAINLESS STEEL: As with all progress, there will be MORE stainless produced in the future not less, West or East. Who makes and uses stainless? The same old actors, the industrialized and industrializing. Lots of people around the world want to have stainless in their lives to improve it. We go forward from here.

PRODUCERS : Basically the CHROME FARM is irresistable to at least one of the MAJORS, IMO. One of them is going to jump, sooner or later. There is no current substitute for chrome, nor is there an available chrome deposit like the CHROME FARM.

So far we know certain "Indicator Institutions" are in there "bird-dogging" the way, kinda pointing what they think are good long holdings. Looking at Pine Tree Capital, we see they tend to be HOLDERS, rather than short-sellers, so they are not really what you'd call Heddgies, per se. The fact that PineTree is TSX traded is a plus. Now not exactly a vulture fund but a real BAY STREET BUDDY to who knows whom, my thoughts are that they are in it for the bucks, now or later. They bought FREEWEST for Cents. I dont think they will sell FWR for CENTS, I am more thinking that they want to sell FREEWEST for DOLLARS. In this respect you can say PineTree is calling FREEWEST, DIALING FOR DOLLARS. I want DOLLARS, not Cents. You want your nickle's, dimes and quarter to make DOLLARS ? ? ? PINE TREE CAPITAL DOES !

I wonder what major will be Our FIRST Dollar CALLER ?

Since the CHROME FARM has value to a minimum of a dozen global firms plus any number of nationally run funds, you have to wonder who will be our NEXT DOLLAR CALLER in the FREEWEST CHROME DIAL-IN DERBY??

Which institutions are dialing in now for blocks now that its hit FORBES magazine, online, and other financial news outlets.
Who is whispering in [ God Forbid ! ] JIM CRAMERS ears?? Look out Planet Earth, I think the CHROME FARM is gaining orbital escape velocity..........

FORTY-THREE days and counting

FREEWEST now has experienced the Fourth [ 4th ] bid since the Oct 6th inception of this CHROME FARM Auction. Like all good auctions it starts out with a lot of jostling as the first bids come in. The Friedland experience is fresh in all participants minds, and the bidders mostly likely would care to avoid such a repeat. The Sellers, the FREEWEST Stockholders on the other hand are savoring a return to the racetrack atmosphere surrounding the final days of that time.

FORTY-THREE [ 43 ] days and counting. The market will have its say, opening this morning at 88 cents, high of 89, taking into account this latest bid. The CHROME FARM is clearly the prize, and so far, as in the opening stages of any great auction, the prices are just starting to arc upwards. I think when this is over,
Sotheby's or Christy's will be envious they didnt get a piece of this.

The bidding seems to have drawn the typical Bay Street cast, as well as representatives from Main St., Wall Street, and we shall see, is there someone in the back from The CITY ? Lots of would be bidders, but with a minimum of FORTH-THREE [43 ] days to run, I seriously doubt that there are many savvy sellers yet. Lots of back room side action, but no one wants to sell too early which may cause some more movement in the shares. The game is on !

HOLA another OFFER? NPV & Math. TA next post

I am comfortable in thinking that the mining professionals are better informed than others in the arena of the RING of FIRE. I am also more impressed when serious companies put themselves out there for all to see. Working on this knowledge, I then
decided to use some data presented by CLIFFS in their offer for FREEWEST. The data I am using here is what has been presented by CLIFFS with some slight inclusions to assure myself I included most of the other outside possibilities.

I am doing this to check the potential logic and reasonableness of my Preliminary Technical Analysis conclusions. I do so because this process going on NOW in the "RING of FIRE" can seem maddeningly slow and we all want results NOW NOW NOW !

Here is the link for the NPV caculator.

http://www.investopedia.com/calculator/NetPresentValue.aspx?viewed=1

Further my primary idea is that the simpler we keep this, the closer to reality we will end up. I say that meaning we pursue ALL avenues with an eye to simplicity.
We use all Intell and all Evidence, but we use it in its simplest context.

To be fair, and not to guess whether we are in a DEPRESSION, RECOVERY or TEOTWASKI
I used 3 interest rates in the NPV to simulate all three conditions. Five % for depression, 8% for RECOVERY, and 12% for "THE END OF THE WORLD AS WE KNOW IT."

The next input, NUMBER 2 is the life of the mine which is " 30 YEARS".

Intial cost, is the NUMBER 3 input figured at 800 MIL, but I added back the Scientific Wild Donkey Guess for the RAIL at $400 MIL, and "Project CREEP" for $200 MIL. to attempt to give some flex to again what are "Guessimates" based on CLIFF's figure given since they went public with their First offer for FREEWEST.

The next FIVE inputs are simply expected cash flow in the first 5 years, NONE, but since the formula demanded an input, I used 0.01 in the first five slots.

The next FIVE inputs were the expected REVENUE / CASH FLOW from the project, figured at 1.4 BIL per year, current dollars.

All these inputs stay STATIC, Except the Interest Rate. Now using the 8% rate

We get a NET PROJECT VALUE NOW - Now - > now, of 3.84 BIL, after taking out the comprehensive estimated cost of the project. Discount that by 8% to now and the NET, NEt, net Present Value of the project is $2.44 Billion.

THATS THE NPV of all the future dollars in NOW DOLLARS, not share price.

NOW FOR THE MATH. This deposit at this price will assure CLIFFS' dominance over a lot of the stainless market. That is of value to CLIFFS but not figured in here.
We can explore that later. Lets go back to the VALUE of the RING of FIRE Chrome Freewest Project. I don't feel greedy thinking FREEWEST Shareholders should be rewarded for their Risk-Bearing by profiting to the extent of 1 year of profit from the FREEWEST RoF Chrome project.

WHAT IS ONE YEAR'S PROFIT FROM THIS PROJECT? Lets go back to the conference call, when one of the Analysts from the BIGGIES asks CLIFFS what their profit will be from this FREEWEST RoF Chrome Project. So the CLIFFS guy that their COST is : ".... it is in the lowest quartile." WOW, now lets speak ENGLISH. My understanding of the English language and both finance and English are my mother tongues, is that it means the COST is in the LOWEST QUARTER. No doubt many will turn the meaning but if you listened to the teleconf, you now the obvious pride with which that answer is delivered and how happy the analysts were with that answer.

At this point it does not take a "Weatherman to tell which way the wind is blowing"
ala Bob Dylan. The non-verbal message [ " wink and a nod" ] here is that all the parties in that conversation loved that answer.

In brief, if the cost is 25% of the revenue, then what is left is 75%. To me the math is too simple to be ignnored. Seventy-Five percent of the gross annual gross revenue for the project would be NET revenue for the project or 1.05 BILLION.
Lets round off and simply divide the 1 Billion by say, 215 Mil shares of FREEWEST.
BINGO we get $4.65 per share. So far we have used the figures from the most savvy and seasoned professionals out there, CLIFFS. They might not want to invest that much in acquiring the project UNLESS THEY MUST . It IS understood that no one pays more than they must, neither you nor I.
So, if you listened early on in the CLIFFS teleconf you heard them say as I paraphrase THEY WILL TRUMP ANY OTHER OFFER. If you take them at their word, well the conclusion is inescapbable, hold your shares to the end of the process and as yet, there is no end in sight, even the Jan shareholders meeting is NOT an endpoint.

Next post we can look at a bit of TA.

Drilling Season is upon us, in the RING of FIRE

and everyone from the Major Major to the tiniest of Juniors are playing close attention to the current tidal wave of interest in the mineral values in the RING.

Who started what doesn't matter as much as who gets what. Who gets what has been
the primary element of the struggle to - date.

Noront announced its unsolicited all stock offer [ 1 share of Noront for each 4 shares of FREEWEST ][ as unissued, this would have resulted in a 1/3 dilution for all shareholders, new and old ] in early October and was greeted with great skepticism by both the Market and FREEWEST Holders. FREEWEST management was more direct and called for an outright rejection of the offer and advised against tendering any shares to Noront. While Noront has not publicized how many shares it did obtain, subsequent events seemed to make this offer untenable, as FREEWEST's price moved far and away better than Noront would have penciled out to be.

FREEWEST and its holders maintained that CLIFFS [ former CLEVELAND-CLIFFS ] of Cleveland, Ohio, had the inside track and would make a superior offer to Noront.

On Nov 23rd, FREEWEST CEO "Mac" Watson, announced just such an offer by CLIFFS, with an estimated value of 70 cents per share of Freewest, for their RING of FIRE
Chromite properties. That is where it stands as of this moment. Theoretically, the NORONT deal is open until Noront says it is not, or until the FREEWEST stockholders vote on the CLIFFS deal. That part is about 6 weeks out. So for a minimum of 6 weeks there is going to be a virtual donnybrook about the values attached to RING of FIRE Properties, the bidders and those sought after. More will be posted here about such.