Spider Resources Inc.

Spider Resources Inc.

May 15, 2006 11:20 ET

Spider & KWG Finalize Joint Venture Revision to Advance Projects

TORONTO, ONTARIO--(CCNMatthews - May 15, 2006) - Spider Resources Inc. (TSX VENTURE:SPQ) and KWG Resources Inc. (TSX VENTURE:KWG) having reached parity in their joint venture as announced December 19, 2005, have revised and amended their Ontario Joint Venture as previously constituted in 1992, and amended in April 2003. From almost $39 million invested in exploration during a twelve year period, the partners have generated six separate exploration projects in their Joint Venture. The companies will now treat each of the six projects as a separate joint venture to enable each company to either increase or decrease its pro-rata interest based upon their own strategic objectives.

The six projects that have been developed by the joint venture include: (a) the MacFadyen Kimberlites, (b) the Kyle Kimberlites, (C) the McFaulds Lake VMS properties, (d) the Diagnos Initiative properties, (e) the Freewest Option, and (f) the Wawa project. The parties conducted an accounting review of expenditures incurred on each property over the course of the 12 years of JV exploration activity. Expenditures not directly related to the remaining properties or project areas will be written off by both parties. As the Freewest and Diagnos projects were generated as a result of regional exploration, those regional expenditures not attributed to capital in the other joint ventures have been assigned to the Freewest and Diagnos projects (for JV accounting purposes only). Expenditures for the six projects have been allocated as follows:

Property Deemed Expenditure

MacFadyen Kimberlites $7,660,547

McFaulds Lake VMS 8,655,718

Kyle Kimberlites 11,835,971

Wawa 2,077,353

Freewest Option 1,888,949

Diagnos Initiative 3,822,519

Total $35,941,057

As of the date of the amending agreements, each of KWG and Spider will be allocated an undivided 50% participating interest in each project

Spider has been appointed manager of the McFaulds Lake, Kyle and Wawa projects. KWG has been appointed manager of the MacFadyen project. Under the terms of the individual joint venture agreements, the non-manager will not participate in any program until the manager has spent an amount equal to its 50% interest, thereby increasing to 66.67% its interest in the project. When the non-contributing party's interest has thus been reduced to 33.33% it may elect to contribute to future programs to maintain its interest, or be diluted down to a 10% working interest. At 10%, the interest will be automatically converted into a 1% net proceeds from production royalty in the case of diamonds, or a 1% net smelter royalty in the case of precious metals (for primary precious metal deposits), or a 0.5% net smelter royalty in the case of base metals.

These amendments will enable both parties to focus on those projects they wish to advance, without the requirement of the other party's prior approval.

Each of the Freewest and Diagnos projects will be treated as a separate 50:50 Joint Venture, under the initial management of Spider (due to the proximity of Spider's other projects) and KWG and Spider intend to fund their initial exploration equally.

Under the new agreements, a project's manager will have the right to invite an arm's length third party to acquire a participating interest in the joint venture, provided the non-manager's interest is not reduced below 10% as a result.

Spider intends to resume drilling at the MacFaulds Lake VMS project in June. KWG plans a drilling and sampling program at the MacFadyen Kimberlites this summer. Drill-core samples from the Freewest Option are currently being sampled for platinum group element mineralization. Geophysical analysis is being completed to determine drill targets in the Diagnos Initiative properties for drilling later this summer.

Spider Resources Inc. is a tier 2 junior resource company, quoted for trading on the TSX Venture Exchange under the symbol "SPQ" and there are currently 227,144,135 shares of Spider issued and outstanding.

Neil Novak, on Behalf of the Board of Directors

The TSX Venture Exchange has NOT reviewed this release and it does not accept responsibility for its adequacy or accuracy.

Contact Information

  • Spider Resources Inc.
    Neil Novak
    President and CEO
    (416) 815-8666
    Spider Resources Inc.
    Jim Voisin
    Communications Manager
    (519) 699-5352