KWG Seeks Partnership in Ring of Fire

Frank Smeenk, President & CEO, KWG Resources
Frank Smeenk, President & CEO, KWG Resources
Frank Smeenk, President & CEO, KWG Resources
Frank Smeenk, President & CEO, KWG Resources

THUNDER BAY – MINING – In meetings this week KWG Resources Inc. (CSE:KWG)(FRANKFURT:KW6)  (“KWG”) has discussed with the Chiefs of the Webequie and Marten Falls First Nations an outline of principal terms for the possible creation of an equal partnership through which to undertake the development and exploitation of mineral deposits in the Ring of Fire.

“A little more than a year ago now, we welcomed the Webequie and Marten Falls First Nations joining forces to act together in concluding a ‘Negotiation Protocol Respecting Early Exploration in the Ring of Fire,'” said KWG President Frank Smeenk.  “The railroad feasibility study that China Railway FSDI proposes to undertake for us is based on the railroad being part of the large-volume underground chromite mining operations being envisaged to supply a gas reduction processing facility where the chromite would be upgraded to ferrochrome. Those mining and transportation capital assets will be largely located within the traditional territories of Webequie and Marten Falls.

“As we seek offtake terms for this potential new ferrochrome supply, it is crucial that such terms include a floor price which insures these large-volume operations, once begun, can continue without interruption for the many decades possible. To guarantee this we have proposed to transfer our mining claims into a limited partnership provided that Webequie and Marten Falls make an investment into the limited partnership equal to KWG’s. We have offered to provide them with a non-recourse loan of $40 million to facilitate this.

“The shares of the General Partner managing the limited partnership would be equally held by KWG as to half, and Webequie and Marten Falls jointly, as to the other half. Both shareholders would appoint an equal number of Directors but the Chairman of the Board would be a KWG nominee.”

Webequie Chief Cornelius Wabasse and Bruce Achneepineskum, Chief Marten Falls FN, have undertaken to study the proposal with their respective councils. The parties have also agreed to discuss at a later date the opportunities for equity participation in KWG subsidiary Muketi Metallurgical LP, which is prosecuting two chromite-refining patent applications in Canada, China, India, Indonesia, Japan, Kazakhstan, South Africa, South Korea, Turkey, and USA.

About KWG:

KWG has a 30% interest in the Big Daddy chromite deposit and the right to earn 80% of the Black Horse chromite where resources are being defined. KWG also owns 100% of CCC which has staked claims and conducted a surveying and soil testing program, originally for the engineering and construction of a railroad to the Ring of Fire from Aroland, Ontario. KWG subsequently acquired intellectual property interests, including a method for the direct reduction of chromite to metalized iron and chrome using natural gas. The Company is prosecuting patent applications for both the direct reduction method and for a method of producing high purity chromium metal by continuous smelting.

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