Spider Resources Inc.

Spider Resources Inc.

October 21, 2005 16:18 ET

Spider Resumes Exploration Closes Initial Financing With Wellington West Capital Inc.

TORONTO, ONTARIO--(CCNMatthews - Oct. 21, 2005) - Spider Resources Inc. (TSX VENTURE:SPQ) ("Spider") is pleased to announce the closing of a flow-through private placement for gross proceeds of $579,340 on October 20, 2005. Pursuant to this offering, Spider issued 8,276,285 units of Spider (each a "Unit") at the price of $0.07 per Unit. Each Unit consists of one flow-through common share of Spider and one common share purchase warrant, each of which entitles the purchaser to purchase one common share that is not a "flow-through" share of Spider at an exercise price of $0.10 for a two-year period from the closing date.

Wellington West Capital Inc., acting as agent (the "Agent") was paid a cash fee totalling $40,554 representing 7% of the gross proceeds of the private placement. Additionally, the Agent received common share purchase warrants to purchase up to 827,628 shares of Spider.

The proceeds of this financing will enable Spider to resume exploration work on its joint-venture projects with KWG Resources Inc. (TSX-V; KWG). Programs for each of the James Bay Lowlands Diamond (MacFadyen Kimberlite area) and their McFauld's Lake VMS discoveries are being planned to begin after freeze-up is sufficiently advanced in this remote area of Northern Ontario. The McFauld's Lake main base camp (capable of supporting 30 people) will be made ready for winter operations to commence immediately after freeze-up (late November, early December).

A recovery-process scoping program has been developed for the Wawa Diamond project, to commence immediately. The program's objective will be to determine the type of rock processing application that will most effectively separate the evidently highly diamondiferous xenolithic nodules from their essentially diamond-barren host-rock matrix. The Wawa Diamond project encompasses a unique geologic phenomenon, to which the principal of physical concentration of a high-value fraction may be employed to greatly enhance potential recovery economics for diamonds. The joint venture partners have agreed to expend up to $150,000 on this scoping study.

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 204,123,280 shares of Spider issued and outstanding.

On Behalf of the Board of Directors.

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
    Spider Resources Inc.
    Jim Voisin
    Communications Manager
    519 699 5352