Dear Stakeholders:

Presently, KWG Resources is directing its strategic objective toward the development of a chromium project with Cliffs Natural Resources Inc. (NYSE-listed), who have purchased 19.9% of KWG.

In the "Ring of Fire" area in northern Ontario, we have a primary chromite deposit (called Big Daddy) which is high grade (40% or more chromium) with thick widths. This deposit could be the biggest occurrence of its kind with an in-situ dollar value being in the billions. If proven, such a large deposit may have the potential to supply the entire North American market, as well as a substantial part of other markets. Very few people are aware of the value and characteristics of these chromium discoveries.

This type of discovery is very reminiscent of 1991 when there were few people in the western hemisphere who were knowledgeable about diamonds. When Charles Fipke made a discovery, and diamonds became the hot commodity, there was a steep learning curve amongst earth scientists and the investment community. Now, chromium is the hot commodity.

While many companies have put exploration programs on hold, KWG has maintained its mineral properties in good standing. In addition to ongoing working capital requirements, KWG has sufficient funds for its immediate exploration expenses on the chromium, nickel & base metals claims in northern Ontario. KWG intends to pursue a prudent policy allocating available money to maintain existing properties and developing the chromium project.

On December 17, 2008, Debuts Diamonds Inc. (DDI), a KWG subsidiary became a reporting issuer in Ontario and has a pending application to have its shares listed for trading on the CNSX. KWG intends to deliver its DDI's common shares pro rata to the KWG shareholders concurrent with a financing transaction in order to continue its exploration program adjacent to the DeBeers' Victor mine.

Frank C. Smeenk
President and CEO