KWG Resources Inc.

KWG Resources Inc.

December 11, 2007 14:26 ET

Northern Securities and KWG Amend Debuts Diamonds Financing

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.

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

  • KWG Resources Inc.
    Frank C. Smeenk
    President and CEO
    514-866-6193 (FAX)
    KWG Resources Inc.
    Michel Cote
    514-866-6001 - Ext. 266
    514-866-6193 (FAX)