I took the opportunity to phone Neil this morning. We had a very nice chat for about 30 minutes. He was quite forthcoming with information about the health and direction of Spider Resources. It should be noted that the telephone number on the Spider Resources web page gets the caller to Billiken Management. Neil can be reached through the Noront Resources telephone number – 416-864-1456.

Some general facts. I will expand on them below in a discussion of his points.

General Facts

1) $4.8 million in the bank

2) No drilling on Freewest Option at this time

3) Ground geophysics being completed on Freewest Option in next two weeks

4) Burn Rate a) $450K per month when drilling b) $40K per month when not drilling

5) JV with UC Resources has not been signed but a “tri-party agreement” is in place which formalizes the “earn-in” relationship between SPQ-KWG and UC.

Discussion

1a) Neil Novak has a very good relationship with IBK. (Someone recently sent me a PM indicating that Mike White of IBK had bad-mouthed Richard Nemis of Noront Resources. I sensed no indication of this in my discussion with Neil. So the information I received was probably dis-information – basher tactic?)

Neil noted that it will be easy to get private placement money when he is ready. It is unfortunate he didn’t note at the AGM that IBK is probably the “institution” that wanted the reverse split. However, he told IBM that the shareholders did not want this action. He noted that he will probably have no problems in getting PP money anyway. **(Another note farther down on any future private placement.)

2a) There is no drilling on the Freewest Option at this time because Neil is awaiting the ground geophysics report. As noted in 1) above, there’s lots of money available for this continuing program.

In general terms, Neil made it very clear as to what he wants to with his drilling program. The chromite discovery on the Freewest Option is part of the ROFI (Ring of Fire Intrusion), which includes Noront’s E1 and E2. In Neil’s words, “it is fertile ground for metals.” The thicker chromite, which has been found, leads Neil to think in terms of finding a “Noront style conduit”. So he will be using the new geophysical data in an attempt to find a sulphide base within peridotite below the thick chromite (remember, 17 meters in places). But this will require some deep drilling. Once Neil has all of the necessary data, he will delineate the drill hole near the intrusion (which runs NE-SW).

3a) The ground geophysics is being completed as we speak. Neil noted that it will help to clarify the magnetics. He talked about the mathematics involved including “1st derivatives” which help define the instrusive gradient. One of the things the ground geophysics will help with is clearly defining this ROF intrusive, and then he will look for a “break” or breaks in the intrusive (I think he called them something like “blow holes”). These breaks might indicate a Noront like “feeder”.

4a) I think the burn rates are self explanatory. Spider Resources probably will go to the market in the Fall of 2008. ** I asked Neil about allowing private investors the opportunity to purchase SPQ shares from the PP. If a PP takes place, Neil will have what’s called a “President’s List”. It’s a list of private individuals who want to invest in Spider Resources without a brokerage fee. (Most likely it would be IBK.) I believe these shares are also called “flow through shares”.

5a) After my discussion with Neil about the JV with UC Resources, I feel more comfortable that things are on track. The assumption here is that UC Resources will spend the required amount of investment money over the next few years drilling up the McFaulds VMS’s. It is my understanding that Carmen Diaz, the securities lawyer for Spider Resources, has a very good handle on these negotiations. She is one smart cookie, by the sounds of it.

Final Thoughts

Neil has been asked by numerous companies to “help out”. The type of help probably ranges from becoming chief geologist to president, and everything in between. But Neil used the term “legacy”. I believe he is proud of his company and what he has “found” and accomplished to this point with Spider Resources. So he has some unfinished business with this company. He wants to succeed. So he has told people like Richard Nemis that he needs time to work with Spider Resources.

Neil Novak hinted at a couple of things. Remember, these are hints, NOT FACTS. He needs to make absolutely certain that the UC Resources JV is “lock-tight” and transparent. He also wants the Freewest Option drilling program to be successful – that’s why he is taking his time to gather and analyze the data.

The reason why he’s doing this. Hint #1 – Spider (and possibly other companies) won’t be around for ever. Hint #2 – Neil said “for example, let’s say Teck Cominco was interested” – they would want everything with regards to JV’s and percentages to be absolutely, absolutely clear.

Summation

So things are cooking. But patience will be required. Clearly some big mining corporations are kicking the tires, and awaiting more data. Neil Novak is looking to maximize his legacy.

Snug