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- Freewest Grants Option to KWG and Spider to Earn an Aggregate 10% Additional Interest by Incurring $15 Million in Expenditures by March 31, 2012
- KWG and Spider Each Currently Hold a 25% Interest in The Big Daddy Chrome Project
- Aggressive $5 million Exploration Program to commence immediately
TORONTO, ONTARIO – Sept. 14, 2009 – 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.
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.
For more information, please contact
Spider Resources Inc.
NEIL D. NOVAK, P.Geo.
President and CEO
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