Which property does SPQ have 2/3 rds of ? McFauld's lake is 55%
UC and 45% SPQ & KWG combined.
Spider Resources options McFauld's Lake to UC Resources
2007-03-07 15:30 ET - News Release
Also News Release (C-UC) UC Resources Ltd
Mr. Neil Novak of Spider reports
SPIDER RESOURCES INC. AND UC RESOURCES LTD. TEAM UP TO EXPLORE MCFAULDS VMS PROJECT IN NORTHERN ONTARIO
Spider Resources Inc. and UC Resources Ltd. have signed 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-per-cent undivided interest in the McFauld's Lake project, which is currently owned, as to an undivided 50-per-cent 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-per-cent 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-per-cent 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-per-cent vested interest in the property, bringing UC's interest level to 25 per cent.
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-per-cent vested interest in the property bringing the UC interest level to 40 per cent.
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-per-cent vested interest in the property bringing the UC interest level to 55 per cent.
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; and
if UC earns a 10-per-cent interest, and elects not to proceed with the option, its interest may be repurchased by Spider (66 per cent) and KWG (33 per cent) for an amount to be agreed by the parties, acting reasonably, otherwise 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 per cent, 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 volcanogenic massive sulphide (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-per-cent net smelter royalty on the project, 0.5 per cent 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 No. 3 and No. 1 to identify drill targets below and in the vicinity of these two partially drilled off VMS (copper and zinc) occurrences.
Neil D. Novak, president and chief executive officer of Spider Resources, states: "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 endeavours, including some property acquisitions, all of which I believe has the potential to add significant shareholder value to Spider."
We seek Safe Harbor.
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