Is this the "official" accounting procedure? I am far from being an expert so this opinion is simply the way that I read it.

To me it says that the DDI shares would be valued at .30 for the sake of distribution only. It then says that the fair market value of the DDI shares received by a particular Shareholder will reduce the adjusted cost base of the Shareholder's KWG common shares. So, what's the fair market value? Is it the market value the day you received the shares? Is that why the people that got theirs the first day said they were received at .30 and ours a couple of days later said .185?

It then says that you would be deemed to have rec'd a capital gain if the fair market value of the DDI shares exceeds the adjusted cost base of the shareholders KWG shares. So, if for instance you had 100,000 KWG on Dec. 15 you would later receive 6,000 DDI. If you sold all of your KWG before receiving the DDI shares 2 weeks later that the full value of the fair market value of your DDI shares would be a capital gain. Again, what is the fair market value?

Anyway, it appears to me that we should reduce our KWG adjusted price by the fair market value of DDI whatever that should be. Perhaps the price listed on the date we got them? I don't think I could have sold mine for the price that I received them at on the day that I received them. So, I would not agree to that being fair market value.

Again, that is just how I read it. I don't have a tax consultant to check with so I would sure appreciate it if you post the correct way to do it after talking to your accountant.

THANKS, Brent

MONTREAL, QUEBEC--(Marketwire - Nov. 24, 2011) - KWG Resources Inc. (TSX VENTURE:KWG) provides the following update on the status of the upcoming distribution of the shares of Debut Diamonds Inc. (CNSX:DDI) and its current diamond exploration programs.

CRA Advance Income Tax Ruling Received

KWG has received an Advance Income Tax Ruling from the Canada Revenue Agency which confirms that KWG's distribution to its shareholders of all of its shares of DDI as a reduction of the issued and paid-up capital account of KWG's common shares will constitute a reorganization that will cause KWG shareholders holding KWG common shares as capital property ("Shareholders") to be considered to receive a taxable dividend on the distribution only to the extent that the fair market value of the DDI shares distributed to the Shareholders exceeds the reduction of the issued and paid-up capital account of KWG's common shares. Since, in the present circumstances, KWG intends to reduce the issued and paid-up capital account of its common shares by an amount that is equal to the fair market value of the DDI shares distributed to the Shareholders, it is expected that no taxable dividend will be received by the Shareholders on the distribution. KWG shareholders of record on December 15, 2011 will be entitled to receive 6 shares of DDI for each 100 shares of KWG. It is expected that each DDI share will be valued at approximately $0.30 for the purposes of the distribution. The fair market value of the DDI shares received by a particular Shareholder will reduce the adjusted cost base of the Shareholder's KWG common shares. To the extent that the fair market value of the DDI shares received by a particular Shareholder exceeds the adjusted cost base of the KWG common shares to such Shareholder, the Shareholder will be considered to have realized a capital gain. The DDI shares will be posted for trading by the Canadian National Stock Exchange on December 13, 2011 when the KWG shares will commence trading on an ex-dividend basis.