TORONTO (miningweekly.com) – Junior project developer KWG Resources has clinched a deal to acquire five strategic claims straddling Ontario’s nascent Ring of Fire (RoF) mining district.
The company planned to issue seller MacDonald Mines Exploration with about $100 000 in scrip to acquire the Hornby property, located in an area dominated by Noront Resources.
Noront had earlier this year scooped-up a majority land position in the district when Cliffs Natural Resources agreed to bow out of the prospective region by selling its claims for $20-million. The deal included a 100% interest in Cliffs' prized Black Thor chromite deposit and a 100% interest in the Black Label chromite deposit.
The Hornby claims comprised an extensive holding next to the southerly boundary of the 70/30 Noront and KWG joint venture (JV) Big Daddy property, immediately to the north. Hornby would effectively double the surface area available for possible future mining operations at the Big Daddy deposit and the adjoining Black Thor deposit.
The parties agreed that the seller would retain a 2% net smelter return (NSR) royalty, half of which could be bought back by KWG for $1-million at any time before production from the property. KWG would also have the first right to buy the balance of the NSR at any time the holder wished to sell it.
The Hornby claims were also next to the Koper Lake property that was situated to the west and contained the Black Horse chromite deposit. The westernmost claim was underlain by the RoF intrusion, the host rock of all the chromite deposits.
As such, the trend represented an important unexplored gap, KWG advised. The property carried more than $390 000 in banked assessment credits that would provide almost ten years of tenure.
KWG on Friday also announced that it would issue 361 600 common shares at $0.025 to RBL Communications for the third payment under the shares-for-services contract, announced in January. KWG would also issue 904 000 shares to Agora Internet Relations and 1.35-million shares to JDBailey Productions to partially fund a documentary to chronicle the history of the RoF.
Further, KWG applied for and was granted relief to the Canadian Stock Exchange minimum price rule.