JOHANNESBURG (miningweekly.com) - A special committee comprising the board of junior miner KWG Resources has determined that Cliffs Natural Resources' sweetened offer for Spider Resources was not superior to its proposal for a merger.

This followed after Cliffs had once again hiked its offer for a cash takeover of junior miner Spider in an effort to gain control of the Big Daddy chromite project in the 'Ring of Fire' mineral district in northern Ontario.

Spider's board of directors then said that Cliffs revised offer was a superior proposal compared with the amended terms of the proposed merger with KWG, in which KWG offered Spider's shareholders C$0,165 a share.

However, KWG noted that Spider board's conclusion that Cliffs amended offer constituted a superior proposal was determined "in less than an hour" of after receiving the amended offer on Friday.

Cliffs offered Spider's shareholder C$0,19 a share, which implied a total equity value for Spider on a fully diluted basis of C$125-million.

Cliffs announced in May that it planned to acquire both KWG and Spider, the two junior miners that each owned a 26,5% stake in the Big Daddy project, in a bid to gain majority ownership of the chromite project, in which it held a 47% stake.

However, the junior miners announced a day later that they planned to merge, giving the combined company a controlling stake in the project, which started the battle of control for the Big Daddy project.

KWG said that its special committee, with the assistance of the company's financial and legal advisers, would continue to consider what steps to take going forward, considering the determination that Cliffs offer was not superior to its own offer.

RING OF FIRE KIMBERLITE DISCOVERY

Meanwhile, Spider and KWG announced the discovery of a new kimberlite located on the eastern edge of the ‘Ring of Fire' exploration area on Tuesday.

KWG communications director Bruce Hodgman said that drilling continued at the site with one drill rig on the new discovery. A second hole was also being planned to continue the test of the new kimberlite.