Symbol on TSX Venture Exchange: KWG
Shares issued and outstanding: 636,878,941
MONTREAL, May 6 /CNW/ - KWG Resources Inc. (TSXV: KWG) reports that it remitted on behalf of itself and Spider
Resources Inc. ("Spider") $1.5 million of exploration funding last
Friday to Freewest Resources Canada Inc. ("Freewest") to complete the
second option period earn-in requirement to incur $5 million of
exploration expenditures in order to vest each of KWG and Spider with
an additional 1.5% interest in the Big Daddy Project. $750,000 of the
funds remitted by KWG to Freewest were funds advanced by Spider to KWG
pursuant to budgeted cash calls that were not spent on the approved
program. Subject to the terms of the option agreement, KWG and Spider
now each have the option to earn a further 2% interest in the Project
by each incurring $2.5 million of exploration expenditures in a program
operated by Spider to March 31, 2012.
"While we were able to very readily recover the drill-core bulk sample
for metallurgical test work, the balance of our planned program
suffered from several start-up delays and all manner of field
difficulties," explained KWG VP of Exploration Moe Lavigne. "This included sourcing an independent logistics support provider late
in the year to replace a previous commitment, accommodating a request
for dialogue with a First Nation and a shortage of drillers. Persistent
temperatures of minus 40 degrees during drilling reduced core
production as the crew had to contend with both frozen water lines and
frozen fuel." In the result, only two drill holes were completed of the program which
had been originally planned to recover core samples from up to twelve
drill holes. The Big Daddy chromite deposit was intercepted at a vertical depth of 450 metres, was
sampled and submitted for assay, which are pending.
Because the exigencies of this winter's field operations resulted in
program expenditures of less than $2.5 million being incurred by each
of KWG and Spider, KWG and Spider each elected to remit the balance of
funding to Freewest, the Optionor, as provided under the option
agreement, to each vest an additional 1.5% interest and maintain the
right to each earn the final 2% interest. Freewest has a 30-day period
following KWG's submission to Freewest of program expenditures within
which to confirm the sufficiency of such expenditures.
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SOURCE KWG Resources Inc.
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