KWG proposes Big Daddy scoping study and rail feasibility study

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Symbol on TSX-Venture Exchange: KWG


Shares issued and outstanding: 519,817,356





MONTREAL, April 8 /CNW/ - KWG Resources Inc. (TSXV - KWG) ("KWG") advises that, under the terms of the Option Agreement with Spider Resources Inc. (Spider) and Freewest Resources Canada Inc. respecting the Freewest Option Project, KWG became Operator on April 1st, 2010. Each of KWG and Spider currently hold a 26.5% interest in the Freewest Option Project which contains the Big Daddy chromite deposit and have the right to earn an additional aggregate 7% interest by spending $10 million or by delivering a positive feasibility study on or before March 31, 2012. As Operator, KWG has proposed to Spider that KWG and Spider undertake a scoping and related resource definition study on the Big Daddy chromite deposit as part of their earn-in. The scoping study would be completed in conjunction with a feasibility study to be undertaken by KWG for construction of a railroad from the deposit to Exton, Ontario along claims held by KWG's subsidiary Canada Chrome Corporation.


"As KWG is undertaking a railroad feasibility study through its subsidiary Canada Chrome Corporation, we have an opportunity to demonstrate the economics of using a rail line to transport ore from the Ring of Fire to market" said KWG president Frank Smeenk. "There are more than a few mineral discoveries around that are not economic because they have no transportation option. KWG therefore had Canada Chrome Corporation stake claims along terrain best suited to a railroad right-of-way. This proposed railway should support the viability of the Big Daddy deposit and enhance the value of our 1% Net Smelter Royalty interest in it and the Black Thor and Black Label deposits."


Canada Chrome Corporation and its engineering firm Krech Ojard & Associates have recently engaged Nuna Logistics Limited, of Edmonton, Alberta, a leading Aboriginal logistics, mining and heavy civil contractor specialized in working in the far north, to develop logistics scenarios and cost estimates for the railroad construction program. KWG plans to incorporate those recommendations into the proposed feasibility study.