KWG Resources Inc.
TSX VENTURE : KWG

KWG Resources Inc.

December 04, 2007 11:20 ET

KWG's Debuts Diamonds Inc Reports Results

Initial James Bay Lowlands (MacFadyen's Good Friday Kimberlite Pipe) Bulk Sample Yields a Grade of Nearly 20 Carats per Hundred Tons.

MONTREAL, QUEBEC--(Marketwire - Dec. 4, 2007) - KWG Resources Inc (TSX VENTURE:KWG) -

Final results of bulk sample processing work carried out at SGS Lakefield Research laboratory, Lakefield, Ontario, Canada, have now been received. The laboratory work has been done on samples from four kimberlite occurrences:



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Kimberlite Occurrence Net weight of sample Grade
cpht
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MacFadyen No. 1; pipe 1,118 kg Very low
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MacFadyen No. 2; dyke 474 kg 12.1
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MacFadyen No. 2 south; pipe 834 kg 1.0
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Good Friday; pipe 1,210 kg 19.7
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The volume of each bulk sample was smaller than planned or expected, after retaining one half of each sample diamond drill core for future reference.

MacFadyen 2 proved to be a relatively narrow dyke; much enclosing limestone was drilled along with the kimberlite. Attrition during scrubbing produced various amounts of fines which were eliminated through the 0.85mm bottom screen of the dense media separator (DMS). Therefore, the largest of these initial bulk samples that could be sent for processing did not exceed 1.2 net tons.

The Debuts Diamonds' Attawapiskat property is adjacent to the north, of the DeBeers Canada ground that includes the Victor diamond mine which is scheduled to start commercial mining and processing operations in 2009. The DeBeers property also includes their Attawapiskat kimberlite cluster which, other than Victor, consists of 18 kimberlite occurrences. Three of them: Tango Extension, India 1 and Delta 1 kimberlite pipes may in time, following additional development work and the obtainment of good results, be declared economically exploitable. It must be understood that, once Victor's profitable operations have amortized the capital outlays that were required initially to ensure its successful launch and later continuing profitable operations, that other kimberlite pipes could also be brought on stream, despite being somewhat less economically well-endowed in terms of grade and quality of diamonds than Victor's.

It is along that line of thinking that a grade of close to 20 cpht may be considered promising, even at this early stage when nothing is known regarding the monetary value per carat of the diamonds. One white 0.23 carat diamond cleavage was recovered in Good Friday's bulk sample.

The 12 cpht grade of the MacFadyen No. 2 bulk sample is also regarded with favour because of the very small size of the sample.

As a follow-up to these very encouraging results, it is proposed to take advantage of the presence, at Victor's site, of an oil rig used in De Beers' service, to extract three bulk samples of 110 net tons per sample, one each from Good Friday, MacFadyen 2 and MacFadyen 2 south. The drill holes would be about 22 or 24 inches in diameter. They would be sunk singly or as a battery of holes to yield close to 200 gross tons of chips which, after screening over a 0.85mm screen would yield slightly over 100 net tons, say 110 net tons of bulk sample. A representative 10 ton sample from each occurrence would be split off during drilling for immediate processing. The processing would take place in a commercial lab, either at Lakefield, or Thunder Bay, or elsewhere. The three remaining samples, of 100 net tons each, would be processed at De Beers' convenience, at Victor in a new DMS bulk sampling plant that will be constructed during the spring and early summer of 2008.

The drilling program is scheduled to take place in the winter of 2008 as soon as ice roads can be built from Victor, to each drill site.

As recently announced by KWG Resources Inc., it will distribute as a tax-free return-of-capital dividend the shares of Debuts Diamonds Inc. to be issued in exchange for the transfer of its diamond exploration properties. One common share of Debuts Diamonds Inc will be dividended for every three shares of KWG Resources Inc. held by its shareholders. Debuts Diamonds has engaged Northern Securities Inc. to complete a coincident private placement of special warrants for gross proceeds of $3 million.

This press release has been reviewed by Mousseau Tremblay, Ph.D., P. Eng., Chairman of the Company and a qualified person under National Instrument 43-101.

Options

The Company also announces that the Board of Directors approved, subject to the approval of regulatory authorities, an increase in the number of common shares reserved for issuance under the Company's stock option plan to 24,400,000. The approved maximum number represents approximately 10% of the current number of shares issued and outstanding. The Board granted a total of 3,760,000 options of which 2,570,000 were granted to the directors, 640,000 to officers who are not also directors, and 370,000 to employees and consultants of the Company.

Shares issued and outstanding: 244,604,171

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Frank C. Smeenk
    President and CEO
    416-642-3575
    514-866-6193 (FAX)
    or
    Michel Cote
    Director
    514-866-6001 Ext. 266
    514-866-6193 (FAX)
    www.kwgresources.com