KWG announces non-brokered private placement



    
    Symbol on TSX-Venture Exchange: KWG
    Shares issued and outstanding: 374,718,877
    

    MONTREAL, Aug. 4 /CNW/ - KWG Resources Inc. (TSX-V: KWG) ("KWG" or the
"Company") announces a proposed non-brokered private placement (the "Private
Placement") of a maximum of $1,437,500 of units of securities of the Company
comprised of (a) up to 20,000,000 "flow-through" units (each, an "FT Unit") at
a price of $0.05 per FT Unit, with each FT Unit comprised of one common share
of KWG (each, a "Common Share") to be issued on a "flow-through" basis and one
Common Share purchase warrant (each, a "Warrant") exercisable at a price of
$0.10 per Warrant to acquire one Common Share for a period of 5 years from the
date of the issuance the Warrant (the "FT Offering"); and (b) up to 8,750,000
non-"flow-through" units (each, a "Unit") at a price of $0.05 per Unit, with
each Unit comprised of one Common Share and one Warrant (the "Unit Offering").
    The net proceeds of the proposed Private Placement will be used to
finance the exploration work on the Freewest Option in the Ring of Fire and
for working capital. The proceeds from the FT Offering will be used for
eligible flow-through exploration expenses and will be renounced for the 2009
taxation year. Two directors of the Company have indicated they will each
subscribe for 5 million FT Units with the balance of the FT Offering to be
subscribed by non-insiders of the Company. It is expected that the Unit
Offering will be subscribed by Cliffs Greene B.V. ("Cliffs"), an affiliate of
Cliffs Natural Resources Inc. (NYSX: CLF) (Paris: CLF), in order to maintain
its 19.9% equity interest in KWG following the Private Placement and KWG's
recent acquisition of a royalty interest. The expected participation of Cliffs
and the two directors in the Private Placement will constitute a "related
party transaction" under Multilateral Instrument 61-101 -Protection of
Minority Security Holders in Special Transactions ("MI 61-101"). However, the
Company expects that it will be exempt from both the formal valuation and
minority shareholder approval requirements of MI 61-601 in connection with the
Private Placement because neither the fair market value of the securities to
be issued, nor the consideration for such securities, is expected to exceed
25% of the Company's market capitalization as calculated in accordance with MI
61-601.
    The Private Placement remains subject to the approval of the TSX Venture
Exchange.

    Forward Looking Information:

    This press release contains certain "forward-looking statements". 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 (including, without limitation, statements relating to the
Private Placement are forward-looking statements. These forward-looking
statements reflect the current expectations or beliefs of KWG based on
information currently available to KWG. Forward-looking statements are subject
to a number of significant risks and uncertainties and other factors that may
cause the actual results of KWG to differ materially from those discussed in
the forward-looking statements, 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 failure to
failure to complete the Private Placement.
    Any forward-looking statement 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 statement,
whether as a result of new information, future events or results or otherwise.
Although KWG believes that the assumptions inherent in the forward-looking
statements are reasonable, forward-looking statements are not guaranteed of
future performance and accordingly undue reliance should not be put on such
statements due to the inherent uncertainty therein.

    About KWG Resources Inc.

    KWG Resources is a mineral exploration company with extensive claim
holdings in the James Bay Lowlands of Northern Ontario, Canada, where
important discoveries of nickel and chrome have been made recently in the Ring
of Fire. KWG has an equal joint venture interest in a large claim block in the
central part of the discovery area, with Spider Resources Inc. The joint
venture is developing the Big Daddy chromite deposit adjacent to the Black
Thor and Black Label chromite discoveries of Freewest Resources.

    
    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 news release
    





For further information:

For further information: Bruce Hodgman, Communications Director, Direct:
(416) 646-1374, info@kwgresources.com; Michel Côté, Director, (514) 866-6001;
Or visit our website: www.kwgresources.com

Organization Profile

KWG RESOURCES INC.

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