Apr 23 2014
KWG Resources Inc. ("KWG") today announces that it has entered into an agreement to acquire fifty-percent of the ownership rights in two United States provisional patent applications (which include a fifty-percent interest in any of the vendor's associated intellectual property) (the "Chromium IP") relating to the production of chromium iron alloys directly from chromite ore, and the production of low carbon chromium iron alloys directly from chromite concentrates (the "Chromium IP Transaction").
The Chromium IP Transaction includes the right to use these provisional patent applications as the basis for filing additional patent applications in the United States, Canada and elsewhere worldwide.
The parties' interests in the Chromium IP will be held through a limited partnership (the "LP") established by the vendor and KWG for purposes of completing the Chromium IP Transaction and developing and exploiting the Chromium IP. The limited partners of the LP will be a wholly-owned subsidiary of KWG and a corporation beneficially owned by the vendor. The general partner of the LP, which will manage the business of the LP, will be another wholly-owned subsidiary of KWG.
The vendor has agreed to assign its fifty-percent interest in the Chromium IP (to be held by the LP) in exchange for 25 million units of KWG (each, a "Unit"), with each Unit comprising one common share of KWG and one common share purchase warrant of KWG exercisable at a price of $0.10 for 5 years from closing date of the Chromium IP Transaction.
KWG will have the option to acquire a further 25% interest in the Chromium IP from the vendor (held through the LP) in exchange for the issuance of an additional 12.5 million Units to the vendor at any time within one year from closing (the "First Option"). If the First Option is exercised, KWG will have an additional option to acquire the vendor's remaining 25% interest in the Chromium IP (held through the LP) in exchange for the issuance of a further 12.5 million Units to the vendor at any time within one year after the exercise of the First Option (the "Second Option"), thereby acquiring 100% of the LP.
In November 2013, KWG announced that it was very encouraged with the results of ongoing metallurgical test work to determine the thermodynamics of metalizing the chromite from the Black Horse deposit that forms part of KWG's Koper Lake Project by its reduction with natural gas.
The closing of the Chromium IP Transaction is subject to acceptance of the TSX Venture Exchange. The company has also applied for TSX Venture Exchange acceptance of a further flow-through private placement of 2.2 million units for total proceeds of $220,000. Each unit comprises one flow-through treasury share and one warrant which may be exercised to acquire a further flow-through share for $0.15 at any time within twelve months. All securities issued are subject to a four-month hold period.
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 Canada Chrome Corporation which has staked claims and conducted a $15 million surveying and soil testing program for the engineering and construction of a railroad to the Ring of Fire from Exton, Ontario.
Source: http://www.kwgresources.com/