Good Morning NOT

Yesterday I asked a couple of bright investment minds a few number game questions regarding the ROF. These friends are quite familiar with the story.

FNC got me thinking, how will the market react to a chrome or nickel find... I have my hopes and I think PRB showed us what a few duds will get you... in Japan they call it a "sport cut"...

I lived in Sapporo for 4 months in 1990. During my time, I needed a haircut. The barber asked me what I wanted. In English I said clean it up a bit... he was puzzled... so I pointed at a picture of a racing horse on his wall, the horses hair was a few inches long.

The barber nodded and replied in English, "sport cut..." I said, sure... next thing I knew I was pretty close to being enrolled in the army... since then a "sport cut" has become part of my vernacular.... ie when someone wants to cut my hair, I say "no sport cut"... The sport cut, that's what PRB got, considerably more then half off the top.

First, my assumption is NOT is undervalued... perhaps I am not alone in thinking this.

I realise there are some smart asses and smart people who will tell you your assets are only worth what the market will pay for them. I too once thought that was how the world works. That's what the book tells you, that's what the salesman tells you. However, there is more to this, and more to these people who tell you "that's all it's worth... they may be many things: stubborn (ego driven), ignorant or not looking, or have an ulterior motive.

Lets look at the US markets. How much commercial/mortgage paper has no value at all... billions upon billions, maybe more as no one will buy it. Yet, we are led to believe that there is value, or at least the fed will exchange real dollars for this stuff that has zero-5 cents on the dollar value. Are they trying to instil confidence in the market, or get their rich buddies out of trouble?

Think of FNM, pause and pay your respects as the old girl is on her last legs.... this company has had difficulty reporting financial statements for years... and yet the gov't has approved supporting the housing industry, and presumably FNM, with a $800 billion increase in the federal debt, for starters. Both dems and republicans are OK with this, supporting an entity that has no right trading on the pink sheets...yet alone the NYSE. (tisk tisk)

So what is fat fannie hiding that both dems and republicans are so willing to throw money at... even to the extent of considering taking fannie on the balance sheet of corporate US of A.

In short, FNM could go down as the foulest of cover-ups. The rich getting richer, or at minimum, bailing out the rich on the back of the public....

Back to mcfaulds... how can NOT have a market cap around $400 million and the rest of the ring of fire be worth a similar amount. I'm not asking if or stating there is an arbitrage... not my purpose. What I am suggesting is both are tremendously under priced.

Looking at NOT, lets take out Eagle 1, say 200million in value, lets take out windfall and the other projects, say 100 million... you buy the rest of NOT's land at Mcfaulds for $100million... the rest of NOT's targets and JV's for 100 million. How does that sound?

Consider trading NOT's unrealized potential for a similar value in FNC, PRB, FWR (I realise FWR has a lot going for it), WSR, BMK, SPQ... you pretty much get the rest of those lands for $100 million (there about,) as well.

Is that the best $200 million ever spent...? I don't know, but, Richard, go ahead, consider diluting us a little and tie up these other beauty land pieces, perhaps throw in a few jv partners for free.

Regarding NOT and above, in plain words, you get all the Blackbirds chrome and any nickel upside for $100 million... if I was one of these joker banks in the US at the begging bowl... I would trade my 10's of billions of junk paper in and take the fed's 10's of billions of US (junk) dollars back, then I would allocate say $100 million into NOT and let her ride on the potential of the rest of NOT's ROF holdings. For these guys that lost billions and billions, certainly the downside of this investment in NOT is limited.

The market seems to think that Mcfaulds has nothing left to prove. FWR, SPQ, and KWG hit a nice pocket of chrome. FNC has a fairly good chance of hitting something, whether it's Nickel or Chromite. NOT just signed a JV 30km's away, they must see something or at least see the potential of so many more strikes at Mcfaulds that they are forced to tie up more land.

Yes, they may be JV'ing at the request of an interested major... even better, the major sees so much more potential to hit they suggest NOT do so.

It's August and we are in the depths of the markets, or at least a few days off of it. Traditionally, this is when junior stocks are usually their cheapest.

Many of us have been scared of what's going on in the markets, as well as the geopolitical... however, NOT and Co's. finds are for real, and buying these finds is cheap by any standard...

Given the market, could the shares go lower? you bet.... Yet, they are still cheap. We are almost there.

In some cases the Mcfaulds stocks are pricing as if there will be nothing more to find... Is there nothing more to find at Mcfaulds? If so, don't bother building an airstrip.

not financial advise,(with the exception of the airstrip... that's a freebee for Richard or one of the new guys at NOT. I suspect they have considered this and our airstrip should be considered great news.)

everyone else, do your own dd

regards

cwallace