Re: News - on KWG & Debut - can someone shed more light?
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Massive Black Horse Chromite Discovery
Black Horse deposit has an Inferred Resource Now 85.9 Million Tonnes @ 34.5%
Message: News - on KWG & Debut - can someone shed more light?
Upon brief examination, there are three differences from the Nov 26th NR which have caught my attention. Here are the NR from Nov 26 and Dec 11 reposted with differences highlighted for accentuation. There may be a lot more to this, but all I am seeing is accounting footwork. Note the dilution of shares for the financing is now backed by KWG rather than Debut. This could be a financial strategy, or something as simple as maximizing a tax return.
Once the split occurs, there will be two hands at play here. Decisions such as this one will leave subtle indications of how each hand should be played. Unfortunately, Im unable to read anything further from the NR than is mentioned, so any further feedback is definately appreciated!
| NOVEMBER 26, 2007 |
| Montréal, Canada, November 26th, 2007 – KWG Resources Inc (TSXV-KWG) has engaged Northern Securities Inc as its agent for the private placement of special warrants of Debuts Diamonds Inc for proceeds of up to $3 million on a best efforts basis. Debuts Diamonds will issue approximately 80 million shares in payment of the transfer to it of all of the diamond exploration assets of KWG. These shares of Debuts Diamonds will be distributed to the holders of the shares of KWG Resources Inc, determined as of an upcoming record date. One share of Debuts Diamonds Inc will be distributed as a tax-free return-of-capital-dividend for every three KWG shares held at the record date. A non-offering prospectus will be filed by Debuts Diamonds in connection with the dividend of its shares to the holders of KWG shares, and application will be made for the listing of the Debuts Diamonds shares upon a final receipt for the prospectus being issued. The prospectus will also qualify for distribution of the shares and warrants to be issued upon conversion of the special warrants, to be placed for the subscription proceeds before the end of 2007. The placement will comprise flow-through special warrants for a total of $2 million and unit special warrants for a total of $1 million. Upon final receipt for the prospectus, the flow-through special warrants, priced at $0.08, will automatically convert into one flow-through share and one-half common share purchase warrant, with each whole warrant entitling its holder to purchase a treasury share for $0.12 at any time within 2 years. The unit special warrants, priced at $0.065, will automatically convert into one common share and one common share purchase warrant entitling its holder to purchase a treasury share for $0.10 at any time within 2 years. If the conversion has not occurred by March 31, 2008 subscribers will receive 10% additional special warrants. If the conversion has not occurred by April 30, 2008 subscribers will have the option of converting the special warrants into KWG units of equivalent value derived from the volume-weighted average price of KWG’s shares throughout April 2008.The proceeds of the offering will be used to conduct three 200-tonne bulk samples of the Good Friday, MacFadyen 2 and MacFadyen 2 South diamondiferous kimberlites this winter. These are adjacent to the De Beers Victor Mine project and are the principle diamond assets to be vested by KWG in its newly-formed subsidiary. Debuts Diamonds will pay the agent a cash commission of 8% and broker warrants exercisable into 10% of the total units placed. |
DECEMBER 11, 2007
TORONTO, CANADA--(Marketwire - Dec. 11, 2007) - KWG Resources Inc (TSX VENTURE:KWG) and Northern Securities Inc have agreed to amend the terms of the private placement financing of Debuts Diamonds Inc announced on November 26th, 2007. KWG has now agreed to engage Northern Securities to undertake a private placement of KWG treasury units to provide funding to Debuts Diamonds Inc prior to the distribution of its shares as a dividend to the holders of KWG shares.
The placement will total $3 million, comprised of $2 million of flow-through units and $1 million of non flow-through units. The agent has been granted a 20% greenshoe option for each unit placement and will be paid a cash commission of 7% plus broker warrants equal to 10% of the units placed. The $0.12 flow-through units will be comprised of one KWG flow-through share and one-half share purchase warrant, with each whole warrant exercisable at $0.18 for two years. The $0.10 non flow-through units will be comprised of one KWG share and one share purchase warrant exercisable at $0.15 for two years.
It is intended that the majority of the proceeds of the placement will be subscribed by KWG to the equity of its subsidiary Debuts Diamonds Inc, to which all of KWG's diamond property interests will be simultaneously transferred. KWG plans to distribute the shares of Debuts Diamonds as a tax-free return-of-capital dividend to the holders of KWG's shares, at a date to be announced. It is anticipated that one share of Debuts Diamonds Inc will be distributed for every three shares of KWG then held.
The proceeds of the flow-through placement will be used to conduct bulk samples of the MacFadyen Kimberlites, which are adjacent to the De Beers Victor diamond mine now in the final phase of construction.
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