KWG GROOMS DEBUT DIAMONDSKWG Resources Inc (KWG:TSXV) - News Alert
KWG GROOMS DEBUT DIAMONDS INC WITH ACQUISITIONS AND FINANCINGS BEFORE DIVIDEND
Symbol on TSX Venture Exchange: KWG
Shares issued and outstanding: 636,878,941
KWG Resources Inc. (TSXV: KWG) is pleased to announce a number of initiatives by its
subsidiary Debut Diamonds Inc. ("Debut", formerly Debuts Diamonds Inc.) in preparation for the
distribution by KWG of the Debut shares as a dividend to the holders of
KWG shares at a record date to be determined.
-- Debut to analyze glacial tills recovered from Canada Chrome
claims along 330 kilometers
-- New high-sensitivity-resolution airborne magnetic survey to be
conducted on Victor area claims
-- Option to acquire 70% interest in 33 new diamond targets near
Nakina to see drilling
-- KWG to exchange shares with Debut for $2.1 million
-- Debut to complete $2.8 million flow-through private placement
Debut to JV with KWG to analyze Canada Chrome till samples
KWG agreed to provide access to the valuable geotechnical database
covering a 330 kilometer north-south transect through the
base-metal-rich and diamond-bearing area from the Ring of Fire to Nakina. The database was created as a result of a mechanized-auger
soil sampling program conducted by Golder Associates that collected
nearly 6000 soil samples from 811 borings on claims staked by KWG
subsidiary Canada Chrome Corporation. Debut will process the glacial
till horizons at its cost under a reciprocal joint venture agreement,
to recover heavy and indicator minerals. Diamond discoveries following
from the analysis of these samples will be the property of Debut while
metal discoveries resulting from the work will be the property of KWG.
The analysis is expected to be completed in the next number of months
at a budget of $1 million.
New high-sensitivity-resolution magnetic survey to be completed at
Victor area claims
Debut also contracted recently for completion of a new
high-sensitivity/high-resolution airborne magnetic survey this summer
over the entire MacFadyen area claim blocks, adjacent to the De Beers
Victor Mine, at a budget of $1 million.
Option on 33 new diamond targets north of Nakina to be earned by
drilling this summer
Debut has also agreed to acquire a 70% operating interest in a group of
28 claim blocks which each contain potential kimberlite pipe targets as
determined by analysis of airborne magnetic data north of Nakina
generated in 2010 by the Ontario Geological Survey. The area of the
claim blocks straddles the Canada Chrome line of claims. Under an
agreement with the vendors, Debut will issue 1.5 million shares, pay
$30,000 plus 1.7 million KWG shares, and incur a total of $750,000 of
exploration expenditures for an option to acquire the interest. Debut
must pay $25,000 and issue 600,000 shares in each of the following two
years to exercise the option. In order to complete the exploration
expenditure a program is planned for later this summer to recover at
least one drill core sample from each of 33 high priority targets to
determine if they are kimberlites and diamondiferous.
KWG and Debut to exchange treasury units for $2.1 million
To acquire the KWG shares needed for the Nakina area option and increase
its working capital, Debut will complete an exchange of treasury units
with its parent KWG Resources Inc. under which Debut will issue 7
million treasury units valued at
.30 each in exchange for 21 million
KWG treasury units valued at
.10 each. The Debut units will each
comprise one new treasury share and one share purchase warrant; each
Debut warrant may be exercised to acquire an additional Debut treasury
share upon payment of
.40 at any time within 5 years. The KWG units
will each comprise one new treasury share and one share purchase
warrant; each KWG warrant may be exercised to acquire an additional KWG
treasury share upon payment of
.15 at any time within 5 years. The
transactions are subject to Board and regulatory approvals being first
received.
Debut to complete $2.8 million flow-through private placement
To fund the exploration programs Debut agreed to complete private
placements of 8 million flow-through units at
.35 each. Each unit
will comprise one new treasury share and one-half share purchase
warrant; each whole warrant may be exercised to acquire an additional
Debut treasury share upon payment of
.45 at any time within 2 years.
KWG to set record date for distribution of Debut share dividend
As part of these transactions, Debut's shares will be listed for trading
on the Canadian National Stock Exchange under trading symbol DDI and
the company will make application to the TSX Venture Exchange for the
listing of its shares. When conditional listing approval has been
received, KWG will establish a record date to determine its
shareholders entitled to receive a dividend of some or all of the 38.5
million shares of Debuts then held by KWG. It is anticipated that these
will be distributed to those KWG shareholders as a dividend of not less
than one share of Debut for every 20 shares of KWG held.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Information
This news release contains or refers to forward-looking information. All
statements, other than statements of historical fact that address
activities, events or developments that KWG believes, expects or
anticipates will or may occur in the future are forward-looking
information. Such forward-looking information includes, but is not
limited to, statements regarding the processing of the glacial till and
recovery of heavy and indicator minerals, completion of a new airborne
magnetic survey this summer, acquisition of a 70% operating interest in
a group of 28 claim blocks and incurring $750,000 of exploration
expenditures to acquire the option, the completion of a share exchange
between KWG and Debut, the completion by Debut of private placements of
flow-through shares, listing of Debuts shares on the Canadian National
Stock Exchange and on the TSX Venture Exchange, and the dividend of
Debuts shares by KWG to its shareholders.
This forward-looking information reflects the current expectations or
beliefs of KWG based on information currently available to it. In
connection therewith, certain factors and assumptions have been
considered, including (without limitation) completion of the
acquisitions, exploration programs, share exchanges, private
placements, share listings and the dividend distribution. Although KWG
believes that the assumptions inherent in the forward-looking
information are reasonable, forward-looking information is not a
guarantee of future actions and accordingly undue reliance should not
be put on such information due to the inherent uncertainty therein.
Forward-looking information is subject to a number of risks and
uncertainties that may cause the actual results to differ materially
from the conclusions or forecasts discussed in the forward-looking
information, and, even if such actual results are realized or
substantially realized, there can be no assurance that they will have
the expected consequences to, or effects on KWG. Factors that could
cause actual results or events to differ materially from current
expectations include, but are not limited to: the acquisitions and
exploration programs, share exchanges, private placements, share
listings and dividend distribution not being completed and
considerations and risks normally incidental to exploration and
development of, and production from, mineral properties and/or adverse
changes in securities markets, economic and general business and
financial conditions.
Forward-looking information speaks only as of the date on which it is
made and, except as may be required by applicable securities laws, KWG
disclaims any intent or obligation to update any forward-looking
information, whether as a result of new information, future events or
results or otherwise.
To view this news release in HTML formatting, please use the following URL: https://www.newswire.ca/en/releases/archive/July2011/06/c3663.html
SOURCE: KWG Resources Inc.
Bruce Hodgman Communications Director 416-646-1374 info@kwgresources.com Follow Us
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KWG at 11:48AM ET on July 6, 2011 is:
Last:
.085 CDN
Change: +0.005
Volume: 25,000
P/E Ratio: N/A
Today's High:
.09 CDN
Today's Low:
.085 CDN