Letter to the Editor: Freewest not yet in the bag for Cliffs

I have been following your coverage of the takeover struggle between Cliffs Natural Resources and Noront Resources for Freewest Resources Canada.

As we all know, Noront seems to have been eliminated as the acquirer of Freewest, and most people seem to think that Cliffs will take Freewest lock, stock and barrel for $200 million in Cliffs shares.

One problem with that assumption is that Freewest retail shareholders are mounting a campaign to reject, through a proxy vote at a special meeting to be held Jan. 25, 2010, the Cliffs offer as it is currently presented.

One needs only to visit any of the online investor forums to get a feel for the displeasure being expressed by retail over this bid.

On Dec. 10, there were 51 million shares of Freewest traded and these new shareholders have gained a vote in that proxy since the record date for voting Freewest shares is Dec. 22, 2009.

Just who holds the critical percentage is unknown. Cliffs is estimated to hold slightly less than 30 million shares. This battle for Freewest may be a long way from being in the bag.

It has been estimated that the offer as it now stands represents only a small percentage of the in-situ value of the Black Thor deposit alone, not to mention the other assets, properties, cash etc. that are in the Freewest package, and the retail holders intend to press Cliffs for considerably more.

In my opinion, this development is newsworthy and we trust that your publication will give this important subject some consideration.

A retail Freewest shareholder (name withheld upon request)
Calgary, Alta.