However, KWG has moved to clarify the situation, saying that because Cliffs is a large shareholder, it needed KWG to retain a third party to conduct a formal valuation of the junior prior to launching any takeover bid. KWG said that in a letter delivered to its office on Monday, Cliffs said it should continue with the process of obtaining a formal evaluation for its shares.

Cormark Securities Inc. has been hired to make that third party evaluation, paid for by Cliffs, which would have to see the evaluation before making what would be deemed a fair offer for KWG.

Meraw said company officials will be interested to see what the valuation has to say about its assets, which also include a 1% net smelter royalty stake in Big Daddy and two nearby chromite discoveries – the Black Thor and Black Label – which are wholly-owned by Cliffs . “That’s one of the main things which separates us and makes us a little bit different from Spider as far a valuations go,’’ he said.

KWG is hoping that the evaluation will be available within the next two weeks, enabling the company to release the results prior to the expiry date of the Cliffs offer for Spider and in advance of the Spider/KWG merger vote on July 8. The Cliffs offer for Spider expires on July 6th at 5:00 p.m.

“There will be a formal evaluation in the hands of KWG which certainly could shed some more light on the value of the Cliffs offer for Spider,’’ Meraw said. “If the valuation comes in higher than 13 cents for our chromite asset, then the Cliffs’ offer of 13 cents for [Spider’s] chromite asset would seem low.’’

“As a result, the valuation could be used as a barometer by Spider shareholders potentially.’’