LITERATURE REVIEW — KWG sees four mines on Russian horizon

Through its wholly owned subsidiary, Far East Gold (FEGI-C), Montreal-based KWG Resources (kwg-t) has signed letters of intent with two Russian gold companies to acquire interests in four gold deposits in the Magadan region.

The company can earn up to a 90% interest in the Pavlik deposit, currently owned by Zulatorudnaya, and the Radionosvshlol, Degdekan, and Boets deposits, which are held by Industrial Mining Company Vostok.

To earn 75% in Pavlik, Far East must complete a feasibility study by year-end, as well as fund any future development costs. Upon signing of a definitive agreement, the company must also pay Zulatorudnaya US$100,000 cash and $250,000 worth of company shares.

If the project is brought to production, Far East can acquire a further 15% by making cash payments to Zulatorudnaya in the amount of US$75,000 per 1% interest.

For the remaining deposits, Far East can earn up to a 75% interest in three equal stages by completing an approved US$1.7-million exploration program, completing a feasibility study on one of the deposits, and funding development costs

to bring one into production. Following commercial production at any one deposit, the company can acquire a further 15% interest from Vostok by making cash payments of US$50,000 per 1%.

Based on calculations provided by the Russians, KWG says the four deposits contain total resources of 6.24 million oz. gold. Individually, these consist of:

n Pavlik — which hosts proven and probable resources of 59 million tonnes grading 5 grams gold per tonne and possible resources of 100 million tonnes grading 5 grams;

n Radionosvshlol — which hosts proven and probable resources of 8.5 million tonnes grading 15 grams and possible resources of 16.5 million tonnes grading 15 grams;

n Degdekan — which hosts proven and probable resources of 8.5 million tonnes grading 26.4 grams and possible resources of 4 million tonnes grading 26.4 grams; and

n Boets — which hosts proven and probable resources of 3.8 million tonnes grading 6.5 grams and possible resources of 5.2 million tonnes grading 6.5 grams.

The Pavlik deposit consists of several separate mineralized areas characterized by quartz veins and lenses. The largest area has been outlined for more than 300 metres in width and 600 metres in length; it has been tested by 235,127 cubic metres of trenching, 4,655 metres of surface drilling, 20,279 metres of underground exploration adits and 4,974 metres of underground drilling.

According to KWG, all areas are amenable to open-pit mining methods.

At the remaining deposits, small-scale mining is producing a total of 10,000 oz. per year. All are also considered by KWG to be amenable to open-pit methods.