Spider Resources Inc. and UC Resources Ltd.
Team up to Explore McFaulds VMS project in Northern Ontario
March 07, 2007 – Toronto, Ontario – Spider Resources Inc. ("Spider") (TSXV: SPQ) and UC Resources Limited ("UC") (TSXV: UC) announce the signing of a Letter of Intent (LOI), regarding a four year exploration program on the McFauld’s Lake volcanic-hosted massive sulphide ("VMS") project, located in northern Ontario in the James Bay Lowlands, held by Spider and its joint venture partner, KWG Resources Inc.. This LOI confirms the terms and conditions on which UC, will have an option to earn-in to an up to 55% undivided interest in the McFauld’s Lake project, which is currently owned, as to an undivided 50% interest, by each of Spider and KWG.
The UC Option: Subject to the terms and conditions set out in the LOI, UC shall be the operator of the property during the term of the option and shall have the option to earn up to a 55% undivided interest in the Property as follows:
On or prior to the first anniversary date of the signing of the agreement, UC shall incur exploration expenditures, of at least $1 million on the Property in order to earn a 10% vested interest in the Property;
If UC gives notice to Spider of its intent to continue the option for a second year, it shall be required to incur exploration expenditures of at least an additional $1 million on or before the second anniversary date in order to earn an additional 15% vested interest in the Property, bringing UC’s interest level to 25%;
On or prior to the second anniversary date hereof, UC shall give notice to Spider of its intent to continue the option for a third year, in which case it shall be required to incur exploration expenditures of at least an additional $1.25 million on or before the third anniversary date hereof in order to earn an additional 15% vested interest in the Property bringing the UC interest level to 40%;
On or prior to the third anniversary date, UC shall give notice to Spider of its intent to continue the option for a fourth year, in which case it shall be required to incur exploration expenditures of at least an additional $1.25 million on or before the fourth anniversary date in order to earn an additional 15% vested interest in the Property bringing the UC interest level to 55%;
In the event that UC fails to give notice of its intent to continue the option as required by any of the earn-in stages, UC shall be deemed to have elected not to continue with the option, and shall have earned the corresponding interest to the level of investment contemplated in the completed stage, provided however, that no partial interest shall be earned in respect of any requirement for expenditure in any of the stages, that has not been met in its entirety, within the required time period, and more particularly:
If UC does not expend at least $1 million in accordance with the initial stage, it shall be deemed to have earned no interest in the Property;
If UC earns a 10% interest, and elects not to proceed with the option, it’s interest maybe repurchased by Spider (66%) and KWG (33%) for an amount to be agreed by the parties, acting reasonably, other wise the parties shall immediately enter into a formal joint venture agreement, which shall provide, among other things, that Spider shall be entitled to contribute such further amounts as may be required to take its interest relative only to KWG, up to 66%, prior to KWG being entitled to contribute amounts to the joint venture, and otherwise shall contain standard provisions commonly found in joint venture agreements in the industry.
The McFauld’s Lake VMS project was initially discovered in 2002, while Spider, KWG and De Beers Canada Exploration Inc. in joint venture were exploring the project area for kimberlites. De Beers holds a 1.5% net smelter royalty on the project, 0.5% of which can be purchased from De Beers by Spider and KWG for $1.5 million. To date, 10 isolated VMS occurrences have been identified and drill tested on the project, two of which have undergone detail drilling. UC plans to continue exploring this new VMS camp. Immediate plans involve the completion of deep geophysics on McFaulds #3 and #1 to identify drill targets below and in the vicinity of these two partially drilled off VMS (copper and zinc) occurrences.
States Neil D. Novak, President & CEO of Spider Resources Inc.: "We are very pleased to team up with UC Resources Ltd., as a financial partner, to assist us in our exploration efforts in northern Ontario. Bringing a new partner into this project, in my opinion, will add new shareholder interest in this exciting massive sulphide camp, allowing the project to advance through the exploration phases required to determine the economic potential of these occurrences. My relationship with UC Resources Ltd., as director and officer, has provided Spider with this opportunity to continue exploring a very exciting project, and allowing Spider to focus its available funds to other corporate endeavors, including some property acquisitions, all of which I believe has the potential to add significant shareholder value to Spider".
UC Resources is a Canadian exploration, development and production company which has an opportunity-driven acquisition strategy. In addition to the Canadian McFauld’s Lake volcanic-hosted massive sulphide ("VMS") project, it has several other projects, all in Mexico. The Company currently has a 1,500 sq. km. land package at its flagship Copalquin exploration property, located in Mexico’s prolific Sierra Madres, and two production acquisitions, with an LOI on a third production asset.
Spider Resources Inc. is a tier 2 Canadian exploration company, quoted for trading on the TSX Venture Exchange under the symbol SPQ. There are 231,193,535 shares issued in Spider.
On behalf of the board of directors,
Neil Novak, President and CEO
For further information:
Contact Toronto Head Office
#1000, 15 Toronto St. Toronto Ontario, M5C 2E3 Canada
(416) 815 8666
Or:
Jim Voisin, Communications Manager
(519) 699 5352
Website: www.spiderresources.net
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This press release includes certain "Forward-Looking Statements" within the meaning of the US Private Securities Reform Act of 1995. Other than statements of historical fact, all statements are "Forward-Looking Statements" that involve such various known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove accurate. Results and future events could differ materially from those anticipated in such statements. Readers of this press release are cautioned not to place undue reliance on these "Forward-Looking Statements". All dollar amounts are Canadian dollars unless otherwise noted.
