My understanding: KWG share has been reduced to 33 1/3 % of the 45% remaining, so the preemption right would give them 15/45 of the 55% offered by UC RESOURCES (1/3 of the 45% remaining) since Spider (CCFN) has elected to purchase their prorated share of the UC portion sold to Freewest...

A I tought, in these circumstances, Frank sees no advantage for KWG to increase its share, esp with the k9nd of meneu=y to be spend: Majority with operatorship was no good for UC, minority without operatorship is no better for KWG!

But I love the usual KWG way of answering to Big Cliffs: ' No rush, guys! We'll have a serious look at it, and will come back when we're done, OK... "

GLTA.

BaBe.

(I would really like to hear an interview of KWG management at this time... Georges?)

2011-11-14 12:52 ET - News Release

Mr. Frank Smeenk reports

KWG NOTIFIED OF CLIFFS ELECTION TO ACQUIRE UC INTEREST

KWG Resources Inc. received last Friday evening a notice of the election by Cliffs Chromite Far North Inc. that it will exercise its pre-emptive right to acquire from UC Resources Inc. the Participating Joint Venture Interest which it had agreed to sell to Freewest Resources Inc. on November 9, 2011. KWG has 45 days from receipt of the notice to elect to participate in the exercise of the pre-emptive right, proportionally to its present interest in the Joint Venture.

"It would appear difficult to justify spending some millions of dollars to have a larger non-operating but contributing minority interest in another joint venture with Cliffs", said KWG President Frank Smeenk. "But we will look at it closely. After we had agreed to a standstill to allow our original investment of $4.3 million to be reduced from 50% to 33.33% in the JV with Spider Resources Inc., the Operator unilaterally sold UC the option to earn 55% by spending only $4.5 million. We then subsequently agreed that our one-third interest could apply to the 45% residual when the other two parties together had earned their combined 85% interest to thus dilute us. This requires total expenditures on their part of some $24 million and less than half of that has been incurred to date. It would seem prudent to let the balance of it be spent without now drawing down our cash to contribute to those programs, just as we had originally planned. However, we are analyzing the matter carefully."