Here is the S House post mentioned that was posted by Derekwpg. I am from Wpg but this is not me. Brent

Spoke with Chris at KWG on Friday.

Sorry for the delay in relaying this info.

Chris said :
they are expecting a mid Feb metallurgy report

The outstanding warrants are worth $20 million to the KWG coffers if they can all be bought B4 they expire (in the next 18 months). The price to make all warrants deemed worthy of exercising would be 17 cents. That way they would avoid further dilution.

Right now they have 5 million cash on hand to get them through April.

They are looking at the possible split off of the rail road and NSR as the RR is now considered a $2 billion project that they would be looking for $30-50 million financing to "make the RR a go". They would like to do this through the split thereby not diluting KWG any further. They believe the value of the company that ends up holding the RR rights would/could be be worth 150-200 million in goodwill for all of the ground work they will have done (ie:10% of a $2 billion) What that equates to share value was not disclosed. They are actively pursuing third party investors just for the RR. China was mentioned.

The split off of Debut Diamonds and Canada Chrome would be structured in this fashion: ALL shareholders of KWG would be entitled to a % of shares based on the amount each company or individual holders from a certain date forward. Chris gave out the number 1 for 10 but that might not be the final ratio ultimately. Therefore if someone owns, let's say, 19.3% of KWG shares they are entitled to 19.3 % of the ratio split of available shares in each company. Cliff will own a % of each split off company as well but they will not have the right of first refusal for future PP's or additional financing which means their % would eventually drop unless they buy the PP's. If I own 100,000 shares then I would receive 10,000 shares into the split off company. There is the compensation I was enquiring about.

KWG is not a mining/RR company. it is an exploration company and is looking to "clean it's assets up to reflect that." No specific dates were mentioned as to when this is to happen.

KWG right now has $115 million tax losses on the books so a large injection of cash through buy-out or financing through company splits still renders it as a tax neutral company until that threshold is broken.



I hope this is helpful

GLTUA

Derek