Spider Resources Inc., KWG Resources Inc. and Freewest Resources Canada Inc. Sign Amended and Restated Option Agreement for the
September 14 2009 - 11:00AM
Marketwired
Spider Resources Inc. (TSX VENTURE: SPQ), is pleased to announce
that it has amended and restated the December 2005 Option Agreement
with respect to Freewest Resources Canada Inc.'s ("Freewest")
McFauld's property located in Ontario. Each of Spider and KWG
Resources Inc. ("KWG") has to date earned a 25% interest in the Big
Daddy Chrome property, which is comprised of four 16 unit claims,
one twelve unit claim and two additional one unit claims (1,248
hectare property), pursuant to an Option Agreement first entered
into with Freewest in December 2005.
As of the fall of 2008, both of Spider and KWG had each expended
sufficient funds to earn 25% interest in the Option property;
however the next phase of exploration called for the preparation of
a Bankable Feasibility Study ("BFS") within 18 months to earn an
additional 7.5% interest each. The exploration results achieved on
the Big Daddy Chrome project during the 2008 exploration season
were encouraging, however, they were insufficient to determine the
presence of a mineable resource as pre-requisite for a BFS. Much
additional work was required, and much additional time was needed
to undertake the work. Negotiations commenced and it was agreed
that 3 years would be an appropriate time line for the envisioned
work program leading up to a Feasibility type study, the cost of
which would approximate $15 million. During the negotiations, the
delivery of a BFS by the Optionees was removed as a requirement of
the earn-in and consequently the Optionees (Spider and KWG) can
only vest with 30% each once each fulfills the conditions of the
new Option agreement.
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
McFauld's 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 McFauld's 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 the aggregate 10% interest in the McFauld's 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 McFauld's 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 McFauld's 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 McFauld's 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.
KWG and Spider have committed to undertake an exploration
program on the Big Daddy Chrome Property under which an aggregate
of at least $5 million will be spent by March 31, 2010. The field
aspect of this program will commence immediately. It is anticipated
that approximately 11,000 metres of diamond drilling will be
completed during the next phase of exploration, which will form the
basis for an initial resource estimate for Big Daddy. The
metallurgical work that is currently underway will be reviewed,
additional test-work is being planned to better understand the
metallurgical characteristics and variability of this chrome
deposit. In addition, base line environmental work and Traditional
knowledge studies; both of which will involve the project's First
Nation neighbours will be undertaken to provide the necessary
information for future development plans.
About Spider Resources Inc.
Spider Resources Inc. is the Pioneer Exploration Company in the
James Bay Lowlands of Northern Ontario, exploring this area since
1993. Spider's exploration team is responsible for the discovery of
eight kimberlites in this area of Ontario. Regional diamond
exploration by Spider in joint venture with KWG in 1995 - 96, as
followed up by De Beers Canada Exploration Inc. in JV with
Spider/KWG lead to the discovery of the McFauld's Lake Volcanogenic
Massive Sulphide ("VMS") deposits (1 and 3) in 2002-03, as well as
8 other VMS occurrences spawning the McFauld's - Ring of Fire
Exploration Area. Geophysical surveying and other exploration
efforts as initially conducted by Spider (et. al.) formed the
exploration data-set that lead to the first discovery of Chrome in
the area in 2006 as well as the Eagle One Magmatic Massive Sulphide
Deposit, located 4 kilometres to the west. Spider Resources Inc. is
a Tier 2 Canadian exploration company, quoted for trading on the
TSX Venture Exchange under the symbol SPA. There are currently
389,545,100 shares issued in Spider. Spider has approximately $4.4
million in working capital at present.
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 the companies
and their 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 state
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 the companies 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
the companies disclaim 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. The companies undertake no
obligation to update forward-looking statements if circumstances,
management's estimates or opinions should change, except as
required by securities legislation. Accordingly, the reader is
cautioned not to place undue reliance on forward-looking
statements.
Contacts: Spider Resources Inc. NEIL D. NOVAK, P.Geo. President
and CEO Direct: 416-203-8636 info@spiderresources.com
www.spiderresources.com
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