Vancouver KWG Resources (KWG-V) has sold its 8% stake in the Spider Resources‘ (SPQ-V) joint venture property in the James Bay Lowlands of northeastern Ontario.Picking up the interest is KWG’s major shareholder with a 33.7% equity stake, Diagem International Resource (DGM-V).
The price tag comes in at $2 million in exploration expenditure. At any time before the end of 2004, after the money is spent, Diagem can sell its interest back to KWG and Spider for 8.7 million shares of KWG and 9.6 million of Spider.
KWG and Spider have been busy exploring for base metal sulphides on the newly dubbed McFauld’s Lake property in the western portion of the James Bay Lowlands.
Drilling resumed in mid-July to follow up on encouraging sulphide mineralization originally cut by De Beers in 2002. The diamond explorer inadvertently hit base metal mineralization while drill-testing 13 diamond targets at the Spider 3 project.
One of the reverse-circulation (RC) holes intersected an 8-metre sulphide section of intermediate-to-mafic volcanics running 1.61% copper, 0.34% zinc and 0.13% lead, plus 0.13 gram gold and 9.9 grams silver per tonne, at the bottom of the hole. The 8-metre section included half a metre of 7.09% copper, 4.67% zinc, 2.68% lead, 0.76 gram gold and 150.6 grams silver.
The Spider 3 project covers a 70-by-180-km area of interest 150 km west of De Beers’ advanced-stage Victor diamond project in the Attawapiskat region and is jointly held by Spider, with a 49% interest, and KWG, with 51%. Between 1995 and 1997, the pair spent a total of $1.4 million on regional mapping and heavy-mineral sampling, in addition to a widely spaced low-level aeromagnetic survey. The geochemical samples were analyzed for kimberlite indicator minerals, as well as multi-element suites.
In April 2000, De Beers signed a confidentiality agreement with the pair and undertook a due diligence investigation that identified more than 20 priority diamond targets in the area of interest. Before signing a formal agreement nearly a year later, De Beers staked those targets and created the property base for the joint venture.
Over the summer of 2001, De Beers explored the Spider 3 properties with low-level magnetic and electromagnetic helicopter-borne surveys, while conducting regional mapping and geochemical sampling.
The company mobilized a RC rig to the property in March 2002 and drilled 13 targets without intersecting any kimberlite. De Beers, which had met its earn-in obligations for a half-interest in Spider 3, then handed the discovery over to Spider and KWG in exchange for a royalty interest.
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