Symbol on TSX-Venture Exchange: KWG


Shares issued and outstanding: 359,718,877





MONTREAL, July 16 /CNW/ - KWG Resources Inc (TSXV: KWG) has agreed to acquire from the holder half of a 2% net smelter royalty (1%) underlying the mineral claims of Freewest Resources Canada Inc (TSXV: FWR) ("Freewest") including those in which KWG and Spider Resources Inc (TSXV: SPQ) are earning a joint venture interest. The claims include the Freewest Black Thor chromite discovery and the KWG and Spider Big Daddy chromite discovery. These are located in the Ring of Fire in the James Bay Lowlands of Northern Ontario.


On closing, KWG will acquire from the vendor half of the 2% NSR (1%) on any minerals produced from the claims but not the remaining 1% which is subject to a prior purchase option in favour of Freewest. Under the prior purchase option, Freewest may purchase the remaining 1% NSR for $1,000,000 at any time and KWG and Spider hold an undivided interest in such right as it affects the claims optioned from Freewest and in which KWG and Spider are earning a joint venture interest.


Under terms of the purchase agreement KWG has agreed to issue 15 million shares and 15 million share purchase warrants (each warrant exercisable at $0.10 for 5 years) and pay $635,000 on closing. A further $1 million will be paid within one year. Closing of the transaction is subject to TSX Venture Exchange approval.