Spider, KWG sign exploration agreement with De Beers
KWG Resources Inc KWGR
Shares issued 97,846,256 Oct 6 close $0.07
Mon 5 Mar 2001 News Release
See Spider Resources Inc (SPQ) News Release
Mr. Norman Brewster reports
Spider Resources and joint venture partner KWG Resources Inc. (KWG) have
signed a $5.5-million multiyear exploration agreement with De Beers Canada
Exploration Inc. for diamonds only, covering a large area of Northern
Ontario, called the Spider No. 3 project area.
The Spider No. 3 area, located in the James Bay lowlands region of Northern
Ontario, was previously explored for its diamond potential by Spider and
KWG in early 1995. During the period 1995 to 1997, Spider and KWG's
exploration campaign included regional geological mapping, regional
geochemical surveying for kimberlite indicator minerals (KIMs) as well as
other metals, as well as a regional low-level aeromagnetic survey at
400-metre flight line spacing. This is a parallelogram-shaped area,
measuring 73 kilometres (E-W) by 180 kilometres (N-S) covering
approximately 13,000 square kilometres. Exploration expenditures by Spider
and KWG to the end of 1997 totalled $1.45-million.
De Beers Canada Exploration signed a confidentiality agreement with Spider
and KWG in April, 2000, in order to conduct due diligence investigations
into the areas potential and subsequently submitted an option/joint venture
proposal to KWG and Spider, that has recently been signed. The result of De
Beers's investigation identified approximately 20 high-priority targets
that De Beers, Spider and KWG agreed to stake. In addition, Spider and KWG
have also identified, separate to the diamonds-only agreement with De
Beers, an area of high potential with respect to precious group metals.
Spider and KWG recently staked 55 claims (348,800 hectares) covering a
large base and precious metal (PGM) target in this area.
The salient points of the De Beers/KWG/Spider agreement are:
Two-year option (2001 to 2003)
The initial two-year option requires De Beers spending a total of
$1.5-million in exploration ($500,000 by April 15, 2002, plus an additional
$1-million by April 15, 2003). Upon completion, De Beers will be deemed to
have exercised the option, and will have acquired an undivided 50-per-cent
co-ownership participating interest in all mining claims staked or
otherwise acquired by De Beers in the area. The remaining co-ownership
interest in the claims is shared between Spider and KWG on a pro rata
basis.
If De Beers fails to complete the minimum expenditure, prior to any of the
aforementioned periods, De Beers will not acquire any interest in the
claims staked or otherwise acquired by De Beers in the area, and shall
transfer its entire interest in the claims to Spider and KWG.
Formation of joint venture (2003 to 2007)
If De Beers exercises its option to proceed on or before April 15, 2003,
the claims will be transferred into a joint venture between De Beers,
Spider and KWG, with De Beers initially having a 50-per-cent participating
interest. De Beers, so long as its participating interest in the joint
venture equals or exceeds 50 per cent, will be the operator of the joint
venture. The remaining 50-per-cent interest will be shared between Spider
and KWG.
During the period commencing April 15, 2003, and ending April 15, 2007, De
Beers agrees to finance at its own expense, a total of $4-million for
prospecting, exploration and development at a rate of not less than
$250,000 for each of the four consecutive years commencing April 16, 2003,
and terminating on April 15, 2007. At completion, De Beers shall
automatically acquire a further 10-per-cent participating interest in the
joint venture. Spider and KWG will share the remaining 40-per-cent
participating interest in the joint venture. Expenditures (after April 15,
2007) related to the joint venture shall be shared according to each
party's participating interest according to normal joint venture dilution
mechanisms.
Other claims (PGM potential)
Separate from the De Beers joint venture, Spider and KWG have staked an
area that has base and precious metal group (PGM) potential. A total of 55
claims have been staked that effectively cover this PGM prospect, that is
currently interpreted as a structurally disrupted layered gabbro complex
previously identified during the 1996 summer field season. The geochemical
response that alludes to the potential of this gabbro consists of high
chrome, high nickel and moderate copper anomalies in till, glacial fluvial
and alluvial samples.
Spider and KWG are continuing their winter 2001 drilling program on the
Kyle No. 3 kimberlite also in the James Bay lowlands. Drilling commenced in
late January. This program is designed to test the western extension of the
kimberlite that was partially delineated by the 2000 drilling. On-site
activities are expected to be completed by mid-March, analysis of the
results will not be completed until late April.
Spider and KWG have evaluated their Ontario joint venture contributions
during 2000, and in accordance with their joint venture agreement, Spider
has increased its interest level in the Ontario joint venture to 48.82 per
cent; KWG's interest is currently 51.18 per cent.
(c) Copyright 2001 Canjex Publishing Ltd. stockwatch.com |
