Freewest Resources Canada Inc. Signs Amendment to Option Agreement for McFaulds Joint Venture Property With KWG Resources Inc. and Spider Resources Inc.
- Freewest Grants Options to KWG and Spider to Earn an Aggregate 10% Additional Interest by Incurring $15 Million in Expenditures by March 2012
-KWG and Spider Each Currently Holds a 25% Interest in McFaulds Joint Venture Property
MONTREAL, QUEBEC- (Sept. 14, 2009) - Freewest Resources Canada Inc. (TSX VENTURE:FWR) announces that Freewest, KWG Resources Inc. (TSX VENTURE:KWG) and Spider Resources Inc. (TSX VENTURE:SPQ) have amended their December 2005 Option Agreement with respect to Freewest's McFaulds joint venture property located in Northern Ontario. Each of KWG and Spider has to date earned a 25% interest in the McFaulds joint venture property.
Under the Amended Option Agreement, Freewest has granted additional options to KWG and Spider under which each can earn an additional 5% undivided interest (10% in the aggregate) in the McFaulds joint venture property by incurring an additional $7.5 million in expenditures ($15 million in the aggregate) by March 31, 2012. Each of KWG and Spider can acquire: (i) an additional 1.5% interest in the McFaulds joint venture property by incurring $2.5 million in expenditures by March 31, 2010, which KWG and Spider have committed to spend; (ii) an additional 1.5% interest in the property by incurring an additional $2.5 million in expenditures by March 31, 2011; and (iii) an additional 2% interest in the property by incurring an additional $2.5 million in expenditures by March 31, 2012. If either KWG or Spider elects not to exercise any portion of its option under the Amended Option Agreement, the other has the right to exercise the option in its place.
Alternatively, if one or more of the optionees incurs at least $5 million in expenditures and delivers a positive feasibility study to the two other parties on or before March 31, 2012, such optionee or optionees, as the case may be, will be deemed to have earned an aggregate 10% interest in the McFaulds joint venture property, notwithstanding that less than $15 million of expenditures were incurred prior to that date. Any decision to undertake a positive feasibility study must be made by the operator of the McFaulds joint venture project, who must notify Freewest of any such decision on or before March 31, 2011.
The Amended Option Agreement further provides that Spider and KWG will alternate as operator of the McFaulds joint venture project for one-year terms, until March 31, 2012, with Spider acting as initial operator until March 31, 2010. The three parties will decide on the operator for the period after March 31, 2012 by way of majority vote.
The Amended Option Agreement also provides that upon the earlier of the termination of the option period, or Spider and KWG acquiring an aggregate 60% interest in the McFaulds joint venture property, a Joint Venture Agreement among the three parties will automatically enter into effect. The Joint Venture Agreement is a schedule to the Amended Option Agreement.
Freewest is a well-financed mineral exploration company with more than C$6.0 million in working capital. It is actively exploring for gold, base-metals and chromite within eastern Canada. Corporate information can be accessed on the Internet at www.freewest.com Freewest's shares are listed on the TSX Venture Exchange under the symbol FWR.
Forward-Looking Statements
This news release may contain "forward-looking information" which may include, but is not limited to, statements with respect to the future financial or operating performance of Freewest Resources Canada Inc. and its projects. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Freewest Resources Canada Inc. to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and Freewest Resources Canada Inc. disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Freewest Resources Canada Inc. undertakes no obligation to update forward-looking statements if circumstances, management's estimates or opinions should change, except as required by applicable securities legislation. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CONTACT INFORMATION:
Freewest Resources Canada Inc.
Mackenzie I. Watson
President and CEO
(514) 878-3551 or 1-888-878-3551
Fax: (514) 878-4427
info@freewest.com
www.freewest.com
or
Bay Street Connect
Michael D'Amico
Investor Relations
(647) 500-6023
or
AGORACOM
Investor Relations
FWR@Agoracom.com
http://agoracom.com/ir/freewest
