Ann: MOU between Vale and CLE for development Iron Bear Project, page-39

Attended GM this morning. All resolutions passed as predicted. Nominally a small company on a shoestring budget has to pay their people somehow.
Paul spoke re the MOU. The BOD expect that the option to proceed will occur more rapidly than the 90 days. Vale's bureaucracy is stepping into gear. He said that deal was very complex and out of the ordinary but a good deal. I quizzed him on the intention of the board. The DNA of CLE is to a project to the point of sale and make a sale, with a dividend to the shareholder. TS was happy to say that the BOD want a payday.

There is a clause in the contract offering free carry. Both Vale and CLE would prefer a clean break. However there is concern that come the DTM, the payout to buy CLE out and put up the CAPEX maybe too big a hurdle even for Vale. The concern is that to continue will mean that we are just the junior partner.

Other majors were in the data room and had to be kicked out due to the MOU and exclusivity. Personally Vale has greater incentive to get to a DTM. The others have motives to shelve in lieu of their current projects.