Bernard:

Your comments are very interesting. For me, any switch to KWG from SPQ would be prompted by a strong corporate vision as to where KWG Resources is going with the Cliff's investment.

I went out to the KWG website to have a closer look to see whether I could find any indication of such a vision. The President's Annual Message (last message 2006) mentions the decision for KWG to go its separate way from Spider Resources:

Under the proposed amendment of the joint venture agreement, each of these four projects will become governed by a separate agreement between the parties. This will facilitate the possible introduction of a major project investor, into each project, in future. KWG has elected to invest further in the sampling of the MacFadyen kimberlites, as De Beers has now commenced construction of Ontario’s first diamond mine at the adjacent Victor pipe. When your Company’s additional exploration expenditures there equal half of the total previously invested by the joint venture, Spider may elect to then contribute further to maintain a one-third interest.

At the same time, KWG has elected not to contribute to additional exploration expenditures at Kyle, McFaulds Lake, or Wawa, until such time as some $15 million has been further spent there to reduce the Company’s interest to one-third from our present one-half. In addition, the parties have agreed to contribute equally to two new projects: the Freewest Option, and the Diagnos targets.

I then looked on KWG's business review page (last updated in 2006), which talked mostly about kimberlite and diamonds. But I did find this paragraph which mentions potential 'massive investment':

The absence of transportation infrastructure in the remote locations of the Joint Venture’s discoveries, (McFaulds Lake and the Kyle Diamond occurrences) have currently dictated that the mineralization identified, in the quantities delineated thus far, might not be economic. But, the numerous mineral occurrences identified by all the claim-holders to date, combined with the undiscovered metallic-mineral concentrations of possible economic interest forecasted to be found by the community of earth scientists, may ultimately provide the justifying for the massive investment to create such infrastructure. In the meantime KWG will focus its attention and financial resources on those areas and targets where management can develop increased shareholder value in a time frame meeting their expectations.

On the homepage of KWG we read about the creation of Debuts Diamonds:

Debuts Diamonds Inc was recently created to hold KWG's 58% interests in the MacFadyen Kimberlites (adjacent to De Beers Victor Mine), and its 50% interest in the Kyle Kimberlites and the Wawa diamond project.

In the News section of the website, there is the mention of the Cliffs Private Placement, and at the end of the news item there is this description of KWG Resources with no mention of diamonds:

KWG Resources is a mineral exploration company with extensive claim holdings in the James Bay Lowlands of Northern Ontario, Canada, where important discoveries of nickel and chrome have been made recently in the so-called Ring of Fire. KWG has an equal joint venture interest in a large claim block in the central part of the discovery area, with Spider Resources Inc. (TSXV: SPQ). The joint venture is developing the Big Daddy chromite deposit adjacent to the Black Thor and Black Label chromite discoveries of Freewest Resources Canada Inc.

So, what is KWG Resources - 'animal, vegetable, or mineral'?

I would guess KWG is mineral specifically chromite and whatever other opportunitistic metal they can get involved in. Cliffs threw them a lifeline. KWG is now in the metals business although the far-from-updated website gives no clear indication of that fact.

To my way of thinking, a discussion should take place at the Spider Resources AGM as to where Neil Novak is taking SPQ in light of where KWG seems to be going. Questions should be put to the BOD about the latest effort at a private placement and future buy-ins by companies like Cliffs. And assuming that SPQ has enough money for the 2009 summer drilling season, will SPQ be the operator or will KWG?

Snug