McFaulds Lake VMS

On March 6, 2009, an option agreement was signed between Spider and UC Resources Limited ("UC") on the McFaulds Lake Property. 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 by incurring a total of $4.5 million of exploration expenditures over a period of four years.

The exploration history of the James Bay Lowlands/McFaulds Lake area dates back to about 1886 when Robert Bell of the Geological Survey of Canada (GSC) mapped the geology along the Attawapiskat River from the James Bay coast inland past the McFaulds Lake area.

In about 1906 and also between 1940 and 1965, the GSC and the Ontario Department of Mines (ODM) undertook regional studies focused on (a) the petroleum potential of the sedimentary basins in Hudson and James Bays and (b) the potential for industrial and fuel minerals in the Moose River Basin.

Technical Reports filed on SEDAR by Howard Lahti for UC Resources Limited/Spider (2007) and by P & E Consultants Inc. for Noront Resources Limited (2008) describe early diamond exploration activities which were carried out intermittently between 1959 and 1988. However the most notable diamond exploration programs commenced in the early to mid- 1990's when Spider/KWG employed a multi-disciplinary approach over the Spider number 1 and 3 areas which entailed a high resolution fixed wing magnetometer survey, helimag surveys over 48 selected airborne magnetic anomalies, stream sediment sampling, limited bedrock mapping, air photographs interpretation and diamond drilling. This work led to the discovery of the Good Friday and MacFayden kimberlites in the Attawapiskat cluster and the 5 Kyle kimberlites located to the east and northeast of the property.

In 2001, De Beers Canada Inc. (De Beers) optioned information regarding the Spider 3 area from Spider and KWG. In 2002, De Beers conducted a follow-up reverse circulation drill program on magnetic anomalies which culminated in the discovery of copper mineralization which was later delimited by Spider and KWG and named the McFaulds No. 1 VMS deposit. Subsequent work by Spider and KWG led to the discovery of the McFaulds No. 3 deposit and other related VMS occurrences. These VMS discoveries prompted the staking of claims in the McFaulds Lake area. In five field seasons 10 individual VMS occurrences have been discovered and drill-tested, some with only a single hole. Seven of these contain VMS-style sulfide zones.

To date, in excess of $9 million has been expended on the project of which 47 drill holes, totalling nearly 15,000 meters have been drilled on the McFaulds #1 and #3 occurrences. Down hole IP, coupled with surface geophysics (Max-Min) delineated the surface expression of both occurrences, confirmatory drilling has traced both occurrences below the detection limits of the surface and downhole geophysics. Gravimetric surveying was completed late in the program (winter 2006), focusing on the McFaulds #3 occurrence. Excess mass, not explained by the size of the sulphide body that has been drill tested to date, is evident in the gravity survey results, identifying a high specific gravity anomaly that tops out at 600 meters below surface, although more gravity work needs to be completed to close the gravity anomaly. Diamond drilling has only effectively tested this zone to 400 meters depth. Deep drilling has been recommended and is contingent on completion of deep imaging geophysical surveying as required to position drill holes to intercept any conductive targets below or nearby the two main occurrences. Successfully intersecting massive sulphide mineralization below McFaulds #3 would infer a large VMS target and could also explain the excess mass evident in the gravity survey. UC plans on aggressively pursuing this mineralized zone to depth.

Following are some of the highlights of these two occurrences over the course of the exploration program:

McFaulds #1 (16 holes drilled to date, 4,720 meters)

McFaulds #3 (31 holes drilled to date, 10,169 meters)