Spider Resources Inc.
TSX VENTURE : SPQ

Spider Resources Inc.

February 01, 2006 09:28 ET

Spider Resources Inc: January 2006 President's Message

TORONTO, ONTARIO--(CCNMatthews - Feb. 1, 2006) - Spider Resources Inc. (TSX VENTURE:SPQ) is quoted for trading on the TSX-V exchange under the exchange symbol "SPQ", there are currently 216,442,680 shares issued.

Spider Resources has been active on a number of fronts as we start this new year. As reported in the news release issued on December 19th, 2005, your company has initiated an arrangement with joint-venture partner KWG Resources Inc., to more efficiently tailor the exploration funding to meet the focus and priority of each company. Through the past collaboration of our joint venture arrangement, six exploration projects have been generated, each of which demonstrates the potential to justify additional exploration funding. However, our partner did not share our beliefs on which of these projects should be given funding priority, and this was creating an impasse, that limited our ability to continue exploration as 2005 drew to a close.

The solution that we have agreed to is to allow each company to divide decision-making and majority funding responsibilities among the projects between them, so that each partner can directly fund the projects they have the greatest confidence in, so that the ownership interest will be amended upward to 66.6% in favour of the company that is funding the work on each project. Once that level has been achieved, both parties will be required to fund the ongoing exploration, in proportion to their respective interest (66.6% or 33.3% as the case may be, on a project by project basis). To the extent that one party does not contribute its proportionate share of future expenditures once the 2/3 - 1/3 interests have been achieved, normal rights of dilution shall apply such that once ownership has fallen below 10% of any given exploration project, a partner's interest in the project will be converted automatically to a royalty. We are pleased with this revised plan to proceed with our joint venture partnership, as it opens the way for each partner to advance their preferred projects and still ensures that both parties have the ability to maintain their respective pro rata interest if they choose to participate. This new arrangement also opens the door for either party to negotiate with third parties to arrange new joint venture partnerships in particular projects with greater flexibility than under the previous joint venture arrangements.

Since the management of KWG is more interested in advancing the McFadyen diamond project, Spider Resources will allow our interest to be diluted down to a 33.3% ownership initially in that project. This will allow your company to concentrate our efforts to advancing the exploration at the McFaulds Lake VMS properties, where we would like to continue to explore and determine the economic significances of our earlier VMS discoveries. We will also continue to work on the diamond exploration programs near McFaulds Lake and at the Kyle series of kimberlites in the James Bay Lowlands, and also our diamond exploration work near Wawa, Ontario. Under the terms of the proposed arrangement, KWG will allow its interest in those projects to be diluted down to a 33.3% interest.

We are pleased that we were able to successfully raise capital through the private placements that were closed at the end of 2005. This has provided us with the project funding to continue with our exploration programs. Earlier this month (January 11, 2006, news release), we announced our winter exploration plans, and on January 10th, drilling commenced as part of our regional efforts to explore a zinc - copper discovery in the VMS belt that geophysically appears to extend across the McFaulds Lake properties into newly optioned properties from Freewest Resources Canada Inc. to partially meet the obligations of the Freewest option (details originally announced December 19, 2005) We plan on testing at least three geophysical targets during this phase of drilling, and KWG has agreed to fund half of the exploration budget on this program to maintain their shared interest with your company as we contribute to earn a collective joint 50% interest from Freewest on this optioned property. The main objective of this program is to follow up on our nearby discovery in 2004, where we reported an intersection of 2.05 meters that averaged 1.15% Zn, along with anomalous copper (0.19% Cu), from drill hole McF-04-40. Based on our interpretation of geophysical surveying that we have completed in the area, we believe that our current drilling program will test for the same style of mineralization further along the geophysical trends, with potentially higher metal values.

We are also initiating work to evaluate and prioritize kimberlite targets on recently staked properties in the McFaulds Lake area, as part of our diamond exploration efforts. We also have been involved in discussions with possible joint venture partners that are interested in exploring and advancing our five Kyle kimberlites, where we have been planning additional ground surveying work in preparation for a future drilling program. In Wawa, we are anxiously awaiting the results of a scoping study that is being completed by Lakefield Research on samples selected from the Lalibert township diamond occurrence location. The selected samples represent xenolith, matrix and a combination of both. Preliminary rock characterization studies of the three rock types imply that there is a measurable specific gravity difference between the xenolith and matrix portion of the rock, however more work is still underway. In addition, we continue to remain vigilant in search of new opportunities in Ontario and elsewhere, to generate new projects with potential for the discovery of diamonds or other mineral deposits. I look forward to providing updates on our activity in the future, as more information becomes available.

This year is going to be an exciting time for your company, and as a result of the proposed amendments to our joint venture arrangement, we are now in position to aggressively pursue our own exploration initiatives. This will enable us to fully participate in the bull market conditions that we currently enjoy in the junior mining sector. We appreciate the support of our investors that have enabled the results we have established to date, and we feel strongly that we will be able to reward your confidence with additional success in the very near future. It is important to note that the amendments to the joint venture arrangements have been agreed to in principle by the boards of Spider and KWG, however, final documentation has not been executed at this time and will be subject to all required regulatory and other approvals.

Neil Novak, President and CEO

For more information on Spider Resources Inc. and its exploration projects please visit our website www.spiderresources.com.

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
    or
    Spider Resources Inc.
    Jim Voisin
    Communications Manager
    (519) 699-5352