Wow, buying at .10, some investors may do very well!

I keep looking at my notes on these two independent valuations....

Cormark Securities Inc. ("Cormark") values the KWG common shares, issued and outstanding: 589,549,206, within a range of C$0.22 to C$0.30.

Broad Oak Associates ("Broad Oak") values the potential cash flow from KWG's interest in the Big Daddy Chromite Deposit at C$0.27 per KWG common share.

- The value of the KWG common shares is between US$172 - US$240 million on an aggregate basis or C$0.22 - C$0.30 per share (based on 829 million fully diluted shares and a US$/C$ exchange rate of 0.95)

- The value of a 30% interest in the Big Daddy Chromite Deposit is between US$105 - US$150 million (US$100-US$145 million after accounting for the remaining expenditures required to earn the remaining 3.5% under KWG's option having been incurred)

- The value of Debuts Diamonds mineral claims is between US$10 - US$15 million

- The value of the Railway Right of Way is between US$25 - US$40 million

- The value of the NSR interest is between US$8 - US$10 million (US$7 - US$9 million after accounting for the remaining payment due to Richard Nemis having been made)

- Cormark also accounted for working capital of US$3.1 million (based on KWG's March 31, 2010 balance sheet, adjusted for subsequent financing transactions) and US$27 million in cash proceeds, assuming exercise of all in-the-money options and warrants

Value of Combined Company resulting from the Proposed Business Combination

In connection with the Proposed Business Combination, Spider's 30% interest in the Big Daddy Chromite Deposit (and its interests in other claims, primarily interests in the Debuts Diamonds assets) worth between US$110 - US$160 million, as well as net working capital of an estimated US$18 million after exercise of all Spider options and warrants, would be contributed to the combined company, which will have a value of between US$300 - US$418 million (C$315 - C$440 million, based on a US$/C$ exchange rate of 0.95) following completion of the Proposed Business Combination.

The completion of the Proposed Business Combination implies a value to Spider shareholders of between C$160 - C$223 million, or C$0.24 - C$0.34 per Spider share (based on Spider's fully diluted ownership of the combined company).


The Broad Oak Valuation

The Broad Oak Valuation was of the potential cash flow from the Big Daddy Chromite Deposit and determined that a 30% interest in the indicated and inferred resources presently identified at the Big Daddy deposit, if mined as a pit and sold into export markets as lump ore, has a NPV of between US$140.7 million and US$300.1 million based on a discount rate of 8% at lump ore prices of US$300/tonne and US$350/tonne, with the mid-range of US$325/tonne yielding a US$220 million NPV.

The significant cost assumption incorporated in Broad Oak's DCF model is that the entire US$1.7 billion projected cost of construction of a railroad to ship lump ores to export market ports is borne by the mining of only the presently identified and assumed open-pittable resources providing a life-of-mine of 15 years. KWG believes that this railroad will serve a new mining district expected to develop at its northern terminus and thus have a useful life that would permit its cost to be amortized over very many decades.

Nevertheless, the Broad Oak Valuation indicates that the Big Daddy interest alone has a net present value, calculated on this basis, of from US$0.17 to US$0.36 per KWG share, with the mid-range yielding US$0.27 per share.