Audited financials-apr-08-2010

SPIDER RESOURCES INC.
(A Development Stage Company)

Financial Statements

December 31, 2009 and 2008

Auditors' Report

To the Shareholders of
Spider Resources Inc.

We have audited the balance sheets of Spider Resources Inc. (A Development Stage Company)
as at December 31, 2009 and 2008 and the statements of operations and comprehensive loss,
deficit, changes in shareholders' equity, and cash flows for each of the years then ended and for
the period from January 1, 1995 to December 31, 2009. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable assurance
whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial
position of the Company as at December 31, 2009 and 2008 and the results of its operations and
its cash flows for each of the years then ended in accordance with Canadian generally accepted
accounting principles.

"McCarney Greenwood LLP"

Toronto, Canada McCarney Greenwood LLP
February 22, 2010 Chartered Accountants
Except for Note 14, which is dated March 22, 2010. Licensed Public Accountants

Balance Sheets
December 31, 2009 2008

Assets
Current assets
Cash (Note 5) $ 2,716,778 $ 3,205,855
Prepaid expenses and sundry receivables 496,746 377,939
Due from KWG Resources Inc. (Note 6(e)) 200,000 -

3,413,524 3,583,794
Mining interests (Note 6) 21,971,700 18,833,397

$ 25,385,224 $ 22,417,191

Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 334,164 $ 166,081

Future income tax liability (Note 10) 2,285,206 2,837,475

2,619,370 3,003,556

Shareholders' Equity (Statement) 22,765,854 19,413,635

$ 25,385,224 $ 22,417,191

Nature of operations and going concern (Note 1)

Approved by the Board "Neil Novak" Director "Norman Brewster" Director

The notes to the financial statements are an integral part of these statements.

-2-

Statements of Operations and Comprehensive Loss
Cumulative from
Year ended December 31, 2009 2008 January 1, 1995

Revenue
Sale of geophysical and geochemical data $ - $ - $ 454,168
Gain on sale of mining interests - - 116,250

- - 570,418

Expenses
Administrative expenses (Note 11) 1,198,139 719,168 7,803,315
Stock based compensation (Note 7(b)(i)(iii)) 427,100 457,800 2,704,700
Loss on disposal of property, plant and equipment - - 10,844
Write-down of marketable securities - - 43,050
Write-down of investments - - 794,533
Loss on foreign exchange - - 37,159
Write-down of mining interests - - 4,925,236

1,625,239 1,176,968 16,318,837

Other income
Operator's fee (250,943) - (250,943)
Interest - - (14,650)
Gain on sale of marketable securities - - (134,257)

(250,943) - (399,850)

Net loss before income taxes $ (1,374,296) $ (1,176,968) $(15,348,569)

Future income tax recovery (Note 10) 626,019 460,107 1,827,093

Net loss and comprehensive loss
for the period $ (748,277) $ (716,861) $(13,521,476)

Basic and diluted earning per share (Note 8) $ (0.00) $ (0.00)


-3-

Statements of Deficit

Cumulative from

Deficit, beginning of the period $(16,201,090) $(15,484,229) $ (572,796)
Retroactive restatement of 2001
future tax liability - - (2,855,095)

Deficit, beginning of period restated (16,201,090) (15,484,229) (3,427,891)
Net loss for the period (748,277) (716,861) (13,521,476)

Deficit, end of the period $(16,949,367) $(16,201,090) $(16,949,367)


-4-

Statements of Changes in Shareholders' Equity
Share Contributed
Capital Warrants Surplus Deficit Total

Balance, December 31, 2007 $ 30,448,200 $ 2,273,397 $ 1,822,643 $ (15,484,229) $ 19,060,011
Tax effect of flow-through renunciation (609,000) - - - (609,000)
Private placements 295,000 - - - 295,000
Warrant valuation (85,000) 85,000 - - -
Broker warrant valuation (6,580) 6,580 - - -
Cost of issue - cash (21,150) - - - (21,150)
Exercise of stock options 107,235 - - - 107,235
Fair value of stock options exercised 31,902 - (31,902) - -
Exercise of warrants 840,600 - - - 840,600
Fair value of warrants exercised 267,927 (267,927) - - -
Expiry of warrants - (99,919) 99,919 - -
Fair value of stock options granted - - 457,800 - 457,800
Net loss for the year - - - (716,861) (716,861)
Tax effect of flow-through renunciation (73,750) - - - (73,750)
Private placements 4,520,400 - - - 4,520,400
Warrant valuation (2,529,973) 2,529,973 - - -
Broker options valuation (448,915) - 448,915 - -
Warrant extension adjustment (674,667) 674,667 - - -
Fair value of stock options granted - - 427,100 - 427,100
Exercise of warrants 5,100 - - - 5,100
Fair value of warrants exercised 3,400 (3,400) - - -
Expiry of warrants - (310,884) 310,884 - -
Cost of issue - cash (778,354) - - - (778,354)
Net loss for the year - - - (748,277) (748,277)

See note 7 for share capital, warrants and contributed surplus from the date of inception of the development stage, January 1, 1995 to December 31, 2009


-5-

Statements of Cash Flows
Cumulative from

Cash flows used in operating activities
Net loss for the period $ (748,277) $ (716,861) $(13,521,476)
Adjustment for
Gain on sale of mining interests and
exploration expenditures - - (116,250)
Gain on sale of marketable securities - - (134,257)
Loss on disposal of property, plant
and equipment - - 10,844
Write-down of mining interests - - 4,925,236
Write-down of investments - - 794,533
Write-down of marketable securities - - 43,050
Stock based compensation 427,100 457,800 2,704,700
Future income tax recovery (626,019) (460,107) (1,827,093)
Changes in non-cash working capital
Other receivables (200,000) 102,000 (355,325)
Funds held in trust - - 2,500
Prepaid expenses and sundry receivables (118,807) (212,394) (374,492)
Accounts payable and accrued liabilities 168,083 (89,225) 790,348

(1,097,920) (918,787) (7,057,682)

Cash flows used in investing activities
Acquisition of mining interests (3,138,303) (2,009,974) (22,179,427)
Acquisition of property, plant and equipment - - (61,079)
Proceeds from sale of marketable securities - - 199,230
Proceeds from disposition of mining
interests - - 124,000
Proceeds from disposition of investments - - 50,000
Purchase of investments - - (695,622)

(3,138,303) (2,009,974) (22,562,898)

(Continued on next page)

-6-

Statements of Cash Flows (continued)
Cumulative from

Cash flows provided by financing activities
Proceeds from issuance of share capital 1,541,512 203,420 22,388,532
Proceeds from issuance of warrants 2,978,888 91,580 5,619,260
Proceeds from the exercise of stock options - 107,235 878,232
Proceeds from the exercise of warrants 5,100 840,600 5,006,737
Issuance of convertible debentures - - 300,000
Cost of share issue (778,354) (21,150) (2,837,347)
Due from related parties - - 964,489
Repayment of notes payable - - (22,018)

3,747,146 1,221,685 32,297,885

Net change in cash (489,077) (1,707,076) 2,677,305
Cash, beginning of the period 3,205,855 4,912,931 39,473

Cash, end of the period $ 2,716,778 $ 3,205,855 $ 2,716,778

Supplement schedule of non-cash transactions
Shares issued for acquisition of
mining interests - - 1,000,000
Shares issued in settlement of debt - - 1,580,069
Shares issued for conversion of
convertible debentures - - 300,000
Warrants issued in settlement of debt - - 28,500


-7-

Notes to Financial Statements

1. NATURE OF OPERATIONS AND GOING CONCERN
Spider Resources Inc. (the "Company" or "Spider") is an exploration enterprise and carries on business in one
segment, being the exploration for valuable minerals, exclusively in Canada. To date, the Company has not earned
significant revenues from its exploration rights and is considered to be in the development stage. As such, the
Company has applied Accounting Guideline 11 "Enterprises in the Development Stage" from January 1, 1995, which is
the date of inception of the development stage.
The recoverability of amounts shown as mining interests is dependent upon a number of factors including, among
others, environmental risk, legal and political risk, the discovery of economically recoverable reserves, confirmation of
the Company's interest in the underlying properties, the ability of the Company to obtain necessary financing to
complete the development and future profitable production or proceeds from the disposition thereof.
These financial statements have been prepared on the basis that the Company is a going concern, which contemplates
the realization of its assets and the settlement of its liabilities in the normal course of operations. The ability of the
Company to continue operations is dependent upon obtaining necessary financing to complete the development of its
properties and/or the realization of proceeds from the sale of one or more of its properties. The development of its
properties and the future profitability of the Company is directly related to the market price of certain minerals. These
financial statements do not include any adjustments related to the carrying values and classifications of assets and
liabilities that would be necessary should the Company be unable to continue as a going concern.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Measurement uncertainty
The preparation of these financial statements in conformity with Canadian generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
and the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts and
revenues and expenses during the reported period. Actual results may differ from these estimates.
The significant accounting policies are as follows:

Mining interests
Mining interests include wholly-owned mining properties, rights to acquire interests in mining properties and deferred
exploration expenditures.
The Company follows the practice of capitalizing all costs relative to the acquisition, exploration and development of its
mining interests. These costs will be amortized over the estimated productive life of the property once it is placed into
commercial production. If a property is sold, abandoned, or exploration results are negative and no further work is
planned in the foreseeable future, the related costs are charged to operations in that year.
The recorded book value of mining interests is not intended to reflect their present or future value.
The recoverability of amounts shown for mining interests and related deferred exploration expenditures is dependent
upon the discovery of economically recoverable reserves, confirmation of the Company's interest in the underlying
mineral claims, the ability of the Company to obtain necessary financing to complete development, and future profitable
production or proceeds from the disposition thereof.
Proceeds from the sale of a mining interest are applied against related carrying costs and any excess is reflected as a
gain in the statement of operations. In the case of a partial sale, if carrying costs exceed the proceeds, only the loss is
reflected.

-8-

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Mining interests (Continued)

The Company reviews and evaluates its mining properties for impairment annually or when events or changes in
circumstances indicate that the related carrying amounts may not be recoverable. Impairment is considered to exist if
the total estimated future undiscounted cash flows are less than the carrying amounts of the assets. An impairment
loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated
based on expected future production, commodity prices, operating costs and capital costs.

Share issue costs
The Company charges the share issue costs directly to share capital.
Financial Instruments
All financial instruments are classified into one of the following five categories: held-for-trading, held-to-maturity, loans
and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments, including
derivatives, are measured in the balance sheet at fair value except for loans and receivables, held to maturity
investments and other financial liabilities which are measured at amortized cost using the effective interest method.
Subsequent measurement and changes in fair value will depend on their initial classification, as follows: held-for-trading
financial assets are measured at fair value and changes in fair value are recognized in the statement of operations in
the period in which they arise; available-for-sale financial instruments are measured at fair value with changes in fair
value recorded in other comprehensive income until the investment is de-recognized or impaired at which time the
amounts would be recorded in the statement of operations.

The Company has made the following classifications:
Cash Held for trading
Sundry receivables Loans and Receivables
Accounts payable and accrued liabilities Other liabilities

Transaction costs are expensed as incurred for financial instruments classified as held for trading. For other financial
instruments, transaction costs are expensed on initial recognition. The Company accounts for regular purchases and
sales of financial assets using trade date accounting.

Capital Disclosures and Financial Instruments – Disclosures and Presentation

On December 1, 2006, the CICA issued three new accounting standards: Capital Disclosures (Handbook Section
1535), Financial Instruments – Disclosures (Handbook Section 3862), and Financial Instruments – Presentation
(Handbook Section 3863). These new standards became effective for the Company on January 1, 2008.
Capital Disclosures
Handbook Section 1535 specifies the disclosure of (i) an entity’s objectives, policies and processes for managing
capital; (ii) quantitative data about what the entity regards as capital; (iii) whether the entity has complied with any
capital requirements; and (iv) if it has not complied, the consequences of such non-compliance. The Company
has included disclosures recommended by the new Handbook section in Note 3 to these financial statements.

-9-

Capital Disclosures and Financial Instruments – Disclosures and Presentation (Continued)

Financial Instruments
Handbook Sections 3862 and 3863 replace Handbook Section 3861, Financial Instruments – Disclosure and
Presentation, revising and enhancing its disclosure requirements, and carrying forward unchanged its
presentation requirements. These new sections place increased emphasis on disclosures about the nature and
extent of risks arising from financial instruments and how the entity manages those risks. The Company has
included disclosures recommended by the new Handbook sections in Note 4(b) to these financial statements.
Amendments To Section 1400 – General Standards of Financial Statement Presentation
In June 2007, the CICA amended Handbook Section 1400, Going Concern, to include additional requirements to
assess and disclose an entity’s ability to continue as a going concern. Section 1400 is effective for interim and annual
reporting periods beginning on or after January 1, 2008. The adoption of this standard had no impact on the Company's
operating results or financial position.

Inventories

On January 1, 2008 the Company adopted Canadian Institute of Chartered Accountants (“CICA”) Section 3031
“Inventories,” which requires inventory to be measured at the lower of cost and net realizable value. The standard also
provides guidance on the types of costs that can be capitalized and requires reversal of previous inventory write-downs
if economic circumstances have changed to support the higher inventory values. The adoption of this standard had no
impact on the Company's operating results or financial position.

Asset retirement obligation
The Company measures the expected costs required to retire its mineral properties and mining interests at a fair value
which approximates the cost a third party would incur in performing the tasks necessary to abandon the field and
restore the site. The fair value is recognized in the financial statements at the present value of expected future cash
outflows to satisfy the obligation.
Asset retirement costs are depleted using the unit of production method based on estimated reserves and are included
with depletion and amortization expense. The accretion of the liability for the asset retirement obligation is included in
the statement of operations. As at December 31, 2009 the Company did not have an asset retirement obligation.

- 10 -

Income taxes
Income taxes are calculated using the asset and liability method of tax accounting. Under this method, income taxes
are recognized for the future income taxes consequences attributable to the difference between the financial reporting
and tax bases of assets and liabilities and on unclaimed losses carried forward and are measured using the
substantially enacted tax rates that are expected to be in effect when the differences are expected to reverse or losses
are expected to be utilized. Future tax assets are recorded to recognize tax benefits only to the extent that, based on
available evidence, it is more likely than not they will be realized.
Flow-through financing
The Company has financed a portion of its exploration activities through the issue of flow-through shares which transfer
deductibility of exploration expenditures to the investor. Proceeds received on the issue of such shares have been
credited to share capital and the related exploration costs have been charged to mining and resource interests. Under
the terms of the flow-through share agreements, the resource expenditure deductions for income tax purposes are
renounced to subscribers in accordance with the appropriate income tax legislation. A future tax liability is recorded and
share capital is reduced by the estimated tax benefits transferred to the flow-through common share subscribers at the
time when the qualifying expenditures are renounced to such subscribers.
Stock-based compensation
The Company has a stock-based compensation plan which is described in Note 7(b) and accounted for using the
recommendations in Section 3870 of the CICA Handbook, "Stock-based Compensation and Other Stock based
Payments". These recommendations state that all stock-based awards be measured and recognized at the date of
grant using the fair value method. The estimated fair value of the stock options is recorded as compensation expense
over the vesting period or at the date of grant if the options vest immediately, with the offset recorded in contributed
surplus. Any consideration paid to the Company with respect to the exercise of stock options is credited to share capital
along with any related amounts in contributed surplus.
New Accounting Standards
Categories of financial assets and liabilities
In June 2009, the Canadian Accounting Standards Board issued an amendment to CICA Section 3862, “Financial
Instruments – Disclosures” in an effort to make Section 3862 consistent with International Financial Reporting
Standards Section 7 – Disclosures (“IFRS 7”). The purpose was to establish a framework for measuring fair value in
GAAP and expand disclosures about fair value measurements. To make the disclosures an entity shall classify fair
value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the
measurements. The fair value hierarchy shall have the following levels: (Level 1) quoted prices (unadjusted) in active
markets for identical assets or liabilities; (Level 2) inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and (Level 3)
inputs for the asset or liability that are not based on observable market data (unobservable inputs). These standards
apply to interim and annual consolidated financial statements relating to fiscal years ending after September 30, 2009.
The Company has included disclosures recommended by the new Handbook section in Note 4(c) to these financial
statements.
Credit Risk and the Fair Value of Financial Assets and Financial Liabilities
In January 2009, the CICA approved EIC 173 Credit Risk and the Fair Value of Financial Assets and Financial
Liabilities. This guidance clarified that an entity's own credit risk and the credit risk of the counterparty should be taken
into account in determining the fair value of financial assets and financial liabilities including derivative instruments.
This guidance is applicable to fiscal periods ending on or after January 20, 2009. The Company is continually
evaluating the effects of this standard.

- 11 -

New Accounting Standards (Continued)

Mining Exploration Costs
On March 27, 2009, the CICA approved EIC 174, “Mining Exploration Costs”. This provides guidance on capitalization
of exploration costs related to mining properties in particular, and on impairment of long-lived assets in general. The
Company has applied this new abstract for the year ended December 31, 2009 and there was no significant impact on
its financial statements as a result of applying this abstract.

Goodwill and Intangible Assets
In February 2008, the CICA approved Handbook Section 3064, “Goodwill and Intangible Assets” which replaces the
existing Handbook Sections 3062, “Goodwill and Other Intangible Assets” and 3450 “Research and Development
Costs”. This standard is effective for interim and annual financial statements relating to fiscal years beginning on or
after January 1, 2009, with earlier application encouraged. The standard provides guidance on the recognition,
measurement and disclosure requirements for goodwill and intangible assets. The adoption of this standard had no
impact on the Company's operating results or financial position.

Future Accounting Standards

International Financial Reporting Standards (“IFRS”)
In January 2006, the CICA’s Accounting Standards Board ("AcSB") formally adopted the strategy of replacing Canadian
GAAP with IFRS for Canadian enterprises with public accountability. The current conversion timetable calls for
financial reporting under IFRS for accounting periods commencing on or after January 1, 2011. On February 13, 2009
the AcSB confirmed that the use of IFRS will be required in 2011 for publicly accountable profit-oriented enterprises.
For these entities, IFRS will be required for interim and annual financial statements relating to fiscal years beginning on
or after January 1, 2011.
The Company is currently assessing the impact of IFRS on its financial statements.

Business Combinations, Consolidated Financial Statements and Non-Controlling Interests

The CICA issued three new accounting standards in January 2009: Section 1582, "Business Combinations", Section
1601, "Consolidated Financial Statements" and Section 1602, "Non-Controlling interests". These new standards will be
effective for fiscal years beginning on or after January 1, 2011. Section 1582 replaces section 1581 and establishes
standards for the accounting for a business combination. It provides the Canadian equivalent to IFRS 3 - Business
Combinations. Sections 1601 and 1602 together replace section 1600, Consolidated Financial Statements. Section
1601, establishes standards for the preparation of consolidated financial statements. Section 1602 establishes
standards for accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent
to a business combination. It is equivalent to the corresponding provisions of IFRS lAS 27 - Consolidated and Separate
Financial Statements. The Company is in the process of evaluating the requirements of the new standards.

- 12 -

3. CAPITAL MANAGEMENT
The Company’s objective when managing capital is to maintain adequate levels of funding to support the acquisition,
exploration and development of mineral properties.

The Company considers its capital to be equity, which comprises share capital, warrants, stock options, contributed
surplus, and deficit, which at December 31, 2009 totaled $22,765,854 (2008 - $19,413,635).
The Company manages its capital structure in a manner that provides sufficient funding for acquisition, exploration and
development of mineral properties. Funds are primarily secured through equity capital raised by way of private
placements. There can be no assurance that the Company will be able to continue raising equity capital in this manner.
The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the
expertise of the Company's management to sustain future development of the business.
Management reviews its capital management approach on an ongoing basis and believes that this approach, given the
relative size of the Company, is reasonable.

There were no changes in the Company's approach to capital management during the year ended December 31, 2009.
The Company is not subject to externally imposed capital requirements.
4. PROPERTY AND FINANCIAL RISK FACTORS
(a) Property risk
The Company's mining interests are the only properties that are currently material to the Company. Unless the
Company acquires or develops additional material properties, the Company will be solely dependent upon its current
mining interests. If no additional mineral properties are acquired by the Company, any adverse development affecting
the Company's mining interests would have a material adverse effect on the Company's financial condition and results
of operations.
(b) Financial risk
The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including
interest rate, foreign exchange rate and commodity and equity price risk).
Risk management is carried out by the Company's management team with guidance from the Audit Committee under
policies approved by the Board of Directors. The Board of Directors also provides regular guidance for overall risk
management.
Credit risk
Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. The Company's
credit risk is primarily attributable to sundry receivables. The Company has no significant concentration of credit risk
arising from operations. Financial instruments included in sundry receivables consist of sales tax receivable due from
government authorities in Canada and deposits held with service providers. Sundry receivables are in good standing
as of December 31, 2009. Management believes that the credit risk concentration with respect to financial instruments
is minimal.

- 13 -

4. PROPERTY AND FINANCIAL RISK FACTORS (Continued)
(b) Financial risk (Continued)
Liquidity risk
Liquidity risk refers to the risk that the Company will not be able to meet its financial obligations when they become due,
or can only do so at excessive cost. The Company's approach to managing liquidity risk is to ensure that it will have
sufficient liquidity to meet liabilities when due. As at December 31, 2009, the Company had a cash balance of
$2,716,778 (2008 - $3,205,855) to settle current liabilities of $334,164 (2008 - $166,081). All of the Company's financial
liabilities have contractual maturities of less than 30 days and are subject to normal trade terms. The Company is also
committed to spending approximately $2,320,000 in exploration expenditures by December 31, 2010. If the Company
does not spend these funds in compliance with the government of Canada flow-through regulations, it may be subject
to litigation from various counterparties. The Company intends to fulfill all flow-through commitments within the given
time constraints.
Market risk
(i) Interest rate risk
Interest rate risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market interest
rates. The Company has cash balances and no interest-bearing debt. The Company's current policy is to invest excess
cash in investment-grade short-term deposit certificates issued by its banking institutions. The Company periodically
monitors the investments it makes and is satisfied with the creditworthiness of its banks.
(ii) Foreign currency risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in
a currency that is not the entity’s functional currency. The risk is measured using cash flow forecasting. The Company's
functional and reporting currency is the Canadian dollar and major purchases are transacted in Canadian dollars. As a
result, the Company's exposure to foreign currency risk is minimal.
(iii) Price risk
The Company is exposed to price risk with respect to commodity price. Commodity price risk is defined as the potential
adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company
closely monitors commodity prices to determine the appropriate course of action to be taken by the Company.

- 14 -

4. PROPERTY AND FINANCIAL RISK FACTORS (Continued)

(c) Fair Value Hierarchy and Liquidity Risk Disclosure

Fair value measurement of assets and liabilities recognized on the balance sheet are categorized into levels
within a fair value hierarchy based on the nature of valuations inputs. The Company's cash is classified in Level
1 within the fair value hierarchy as at December 31, 2009.
Sensitivity analysis

Sundry receivables which are classified for accounting purposes as loans and receivables, are measured at amortized
cost. Accounts payable and accrued liabilities are classified for accounting purposes as other financial liabilities, which
are measured at amortized cost. Due to the short-term nature of these instruments, their carrying value approximates
fair value.
Fair value represents the amount that would be exchanged in an arm's length transaction between willing parties and is
best evidenced by a quoted market price, if one exists.

Commodity price risk could adversely affect the Company. In particular, the Company’s future profitability and viability
depends upon the world market price of valuable minerals. Commodity prices have fluctuated significantly in recent
years. There is no assurance that, even as commercial quantities of valuable minerals may be produced in the future, a
profitable market will exist for them. As of December 31, 2009, the Company was not a producer of valuable minerals.
As a result, commodity price risk may affect the completion of future equity transactions such as equity offerings and
the exercise of stock options and warrants. This may also affect the Company's liquidity and its ability to meet its
ongoing obligations.

- 15 -


5. CASH COMMITTED TO FLOW-THROUGH EXPENDITURES
Flow-through common shares require the Company to pay an amount equivalent to the proceeds of the issue on
prescribed resource expenditures. If the Company does not incur the committed resource expenditures, it will be
required to indemnify the holders of the shares for any tax and other costs payable by them as a result of the Company
not making the required resource expenditures.
On November 27, 2008, 4,700,000 common shares were issued for cash under a private placement, flow-through
financing. The terms of the financing include the issuance of 4,700,000 "flow-through" common shares of the Company
at $0.05 per share for gross proceeds of $235,000.
On December 30, 2008, 1,200,000 common shares were issued for cash under a private placement, flow-through
financing. The terms of the financing include the issuance of 1,200,000 "flow-through" common shares of the Company
at $0.05 per share for gross proceeds of $60,000.

On July 24, 2009, 48,333,333 common shares were issued for cash under a private placement, flow-through financing.
The terms of the financing include the issuance of 48,333,333 "flow-through" common shares of the Company at $0.03
per share for gross proceeds of $1,450,000.

On August 7, 2009, 25,000,000 common shares were issued for cash under a private placement, flow-through
financing. The terms of the financing include the issuance of 25,000,000 "flow-through" common shares of the
Company at $0.03 per share for gross proceeds of $750,000.

Company at $0.06 per share for gross proceeds of $1,373,280.

Company at $0.06 per share for gross proceeds of $947,120 .

As at December 31, 2009, the Company's remaining commitment with respect to unspent resource expenditures under
flow-through common share agreements is approximately $2,320,000 for the 2009 issuances (2008 - $195,284).
6. MINING INTERESTS

Cumulative Cumulative Deferred
Acquisition Costs Exploration Expenditures
December 31, 2009 2008 2009 2008

Spider #1 (a) (b) $ 1,983,760 $ 1,983,760 $ 7,379,737 $ 7,379,737
Wawa (c) 466,173 466,173 1,238,770 1,133,232
McFaulds Lake (d) - - 6,176,530 5,999,624
Big Daddy Chromite Deposit (1) and
(e) 34,000 34,000 4,625,772 1,769,913
Diagnos (f) 39 39 66,919 66,919

$ 2,483,972 $ 2,483,972 $ 19,487,728 $ 16,349,425

(1) Formerly known as the Freewest property

- 16 -

6. MINING INTERESTS (Continued)
Acquisition costs and deferred exploration expenditures

December 31, 2009 2008

Balance at beginning of the year $ 18,833,397 $ 16,823,423
Acquisition costs and deferred exploration expenditures 3,138,303 2,009,974

Balance at end of the year $ 21,971,700 $ 18,833,397

On May 15, 2006, the Company and KWG Resources Inc. ("KWG") agreed to amend and revise their joint venture
agreement. The companies agreed to treat each project in their joint venture as a separate joint venture, to enable
each company to either increase or decrease its interest in a project based upon their respective strategic
objectives. The Company and KWG agreed to have their respective interest established at 50% in all the current
projects of the joint venture.

Each party agreed to have its interest diluted by not contributing further to the other party's exploration program until
its interest has reached 33 1/3%. At that level, a party's interest in a project may be maintained by contribution to
subsequent programs, or suffer further dilution. When an interest has been reduced to less than 10%, it will be
automatically converted to a 0.5% NSR in base metals and 1% NSR in precious metals and diamonds.
The six projects that have been developed by the joint venture include: (i) the MacFadyen Kimberlites, (ii) the Kyle
Kimberlites, (iii) the Wawa project, (iv) the McFaulds Lake VMS properties, (v) the Freewest Option/Big Daddy
Chromite Deposit and (vi) the Diagnos Initiative properties. The Spider #1 project includes the MacFayden
Kimberlites project and the Kyle Kimberlites project.
(a) The Spider #1 project, except for the Kyle Lake #1 Kimberlite, is subject to an agreement whereby Ashton Mining of
Canada Inc. may acquire a 25% interest by reimbursing 300% of the exploration and evaluation costs of the
discovery prior to the decision to mine. The Company would be awarded a pro rata portion of the reimbursement.

- 17 -

(b) On July 20, 2006, the Company, KWG and Renforth Resources Inc. ("Renforth") (formerly Wycliffe Resources Inc.)
formed a three year option agreement whereby Renforth can earn a 55% interest in the 5 diamondiferous Kyle
Kimberlite properties located in the James Bay Lowlands area of Northern Ontario whereby:
i. Renforth completes an exploration and development program of no less than $6 million over a period of three
years, with annual exploration expenditures at the minimum rate of $2 million; and
ii. Renforth contributes all of its existing claim holdings (39 claims covering 7,248 hectares) in the Attawapiskat River
area to a mutual joint venture amongst the Company/KWG and Renforth where the Company and KWG will retain
45% in the Kyle properties once Renforth has earned its 55% interest, and Renforth will transfer 45% interest in its
properties to the Company/KWG. A minimum of 75% of the annual $2 million expenditure must be dedicated to the
Kyle properties in order for Renforth to acquire its 55% interest. Renforth agrees to fund the project in its entirety for
the first three years and as such, is the operator during the earn-in option period. Renforth further agrees, at its
discretion, to employ former management to oversee the exploration program until such time as they have
completed their earn-in. This facilitates the conveyance of information and familiarity with the project area as well as
immediate access to local infrastructure and facilities required to launch an exploration program. Terms of
employment with former management will be within normal industry standards. On completion of the option earn-in,
the program converts to a regular joint venture.
On September 27, 2007, pursuant to the terms of an Amending Letter, the parties agreed to the following changes
to the option agreement, which became effective as of September 27, 2008 and are in the process of being formally
documented in an amended and restated option agreement whereby:

(1) Renforth will issue to the Company/KWG two million (one million each) of its common shares at a deemed price
of $0.50 per share for (i) making up any shortfalls in the first $2 million payment owed to the Company/KWG
pursuant to the terms of the option agreement and (ii) rescheduling the remaining work costs otherwise due
pursuant to the option agreement over a two year period beginning on the later of June 30, 2009 and the day on
which Renforth's common shares begin trading on the TSX Venture Exchange.

(2) Renforth will receive a fully vested 20% interest in the Kyle Claims and subsequent 17.5% fully vested interests
for each additional $2 million in work costs which it incurs on the Kyle Claims, up to a maximum 55% interest in the
Kyle Claims. The Company/KWG will receive a fully vested 9% interest (4.5% each) in the Renforth Claims and
subsequent 18% fully vested interests (9% each) at the time that Renforth receives each additional 17.5% interest,
up to a maximum 45% interest (22.5% each) in the Renforth Claims.

(3) One member of the Board of Directors of the Company and one member of the Board of Directors of KWG will
be recommended to Renforth's Governance Committee as candidates for directorships.
(c) The Wawa project is jointly held with KWG with pro rata interest levels adjusted annually in accordance with the
exploration expenditures. The project consists of 45 square kilometres of exploration terrain located 35 kilometres
north of the town of Wawa, Ontario.
(d) McFaulds Lake adjoins Spider #1 area. The McFaulds Lake project area measures 70 kilometres by 180
kilometres, and covers approximately 13,000 square kilometres within the Porcupine and Thunder Bay Mining
Divisions in the James Bay Lowlands in Ontario. This project area was created as a logical extension to the Spider
#1 exploration project area.
Following work performed in 2002 and the discovery of massive sulphide mineralization, KWG/the Company and De
Beers Canada Exploration Inc. ("De Beers") entered into a royalty agreement whereby De Beers transferred the
acquired participating interest in the project in consideration of a 1.5% (NSR) royalty on all mineral products that
may be produced from the property. KWG/the Company had the option to buy back 1/3 (0.5%) of the royalty at any
time before April 30, 2008 for a purchase price of $1,500,000. KWG/the Company did not exercise the buy back
option.

- 18 -

On March 6, 2007, the Company signed a Letter of Intent ("LOI") with UC Resources Limited ("UC"), which was
amended and replaced by an option agreement dated as of March 6, 2009 regarding a four year exploration
program on the McFauld’s Lake volcanic-hosted massive sulphide project, located in northern Ontario in the James
Bay Lowlands, held by the Company and its joint venture partner, KWG. This LOI confirms the terms and conditions
on which UC will have an option to earn up to a 55% undivided interest in the McFauld’s Lake project, which is
currently owned, as an undivided 50% interest, by each of the Company and KWG.
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. To earn its interest, UC must give notice of intent to continue or incur exploration
expenditures on the property as follows:
(1) 10% interest by incurring $1,000,000 in exploration expenditures on or before March 6, 2008 (completed);

(2) An additional 15% interest by incurring an additional $1,000,000 in exploration expenditures on or before March
6, 2009 (completed);
(3) An additional 15% interest by incurring an additional $1,250,000 in exploration expenditures on or before March
6, 2010 (completed);

(4) A final 15% interest by incurring an additional $1,250,000 in exploration expenditures on or before March 6,
2011.
(e) On December 2, 2005 the Company and its joint venture partner KWG entered into an agreement with Freewest
Resources Inc. to acquire a 25% interest in 78 mining property claims contiguous to McFauld's Lake in Ontario. The
contribution of the Company in the consideration is as follows:

• Issuance of 150,000 common shares (issued) which were valued at $9,000 and pay $25,000 cash (paid).

• A commitment to carry out exploration work in the amount of $1,500,000 before October 31, 2009 (including
an amount of $100,000 before February 28, 2006 which was paid in 2006).

Each venturer may earn an additional 5% interest each upon subsequent delivery of a bankable feasibility study.
The venturers may then increase their combined interest to 60% by arranging production financing.

On September 14, 2009, Spider announced that it has amended and restated the December 2005 Option
Agreement with respect to Freewest Resources Canada Inc.’s (“Freewest”) McFauld’s property located in Ontario.
Each of Spider and KWG Resources Inc. (“KWG”) has earned a 25% interest in the Big Daddy Chrome property to
date, which is comprised of four 16 unit claims, one twelve unit claim and two additional one unit claims (1,248
hectare property), pursuant to an Option Agreement first entered into with Freewest in December 2005.

During the negotiations, the delivery of a Bankable Feasibility Study by the Optionees was removed as a
requirement of the earn-in and consequently the Optionees (Spider and KWG) can only vest with 30% each once
each fulfills the conditions of the new Option agreement.

Under the Amended Option Agreement, Freewest has granted additional options to KWG and Spider under which
each can earn an additional 5% undivided interest (10% in the aggregate) in the McFauld’s joint venture property by
incurring an additional $7.5 million in expenditures ($15 million in the aggregate) by March 31, 2012. Each of KWG
and Spider can acquire: (i) an additional 1.5% interest in the McFauld’s joint venture property by incurring $2.5
million in expenditures by March 31, 2010, which KWG and Spider have completed; (ii) an additional 1.5% interest
in the property by incurring an additional $2.5 million in expenditures by March 31, 2011; and (iii) an additional 2%
interest in the property by incurring an additional $2.5 million in expenditures by March 31, 2012. If either KWG or
Spider elects not to exercise any portion of its option under the Amended Option Agreement, the other has the right
to exercise the option in its place.
- 19 -



Alternatively, if one or more of the optionees incurs at least $5 million in expenditures and delivers a positive
feasibility study to the two other parties on or before March 31, 2012, such optionee or optionees, as the case may
be, will be deemed to have earned the aggregate 10% interest in the McFauld’s joint venture property,
notwithstanding that less than $15 million of expenditures were incurred prior to that date. Any decision to undertake
a positive feasibility study must be made by the operator of the McFauld’s joint venture project, who must notify
Freewest of any such decision on or before March 31, 2011.

The Amended Option Agreement further provides that Spider and KWG will alternate as operator of the McFauld’s
joint venture project for one-year terms, until March 31, 2012, with Spider acting as initial operator until March 31,
2010. The three parties will decide on the operator for the period after March 31, 2012 by way of majority vote.
Pursuant to the option agreement, the operator will receive a 5% operator cost based on the total invoiced
expenditures. As of December 31, 2009, Spider earned a total of $250,943 in operator cost.

The Amended Option Agreement also provides that upon the earlier of the termination of the option period, or
Spider and KWG acquiring an aggregate 60% interest in the McFauld’s joint venture property, a Joint Venture
Agreement among the three parties will automatically enter into effect. The Joint Venture Agreement is a schedule
to the Amended Option Agreement.

KWG and Spider have committed to undertake an exploration program on the Big Daddy Chrome Property under
which an aggregate of at least $5 million will be spent by March 31, 2010. Such committed exploration expenditures
were fully incurred in 2009.

As at December 31, 2009, KWG's contribution to the JV was underfunded. KWG made up the underfunded portion
of its contribution subsequent to year end. As a result of the underfunded contribution, KWG owes a balance of
$200,000 to Spider as at December 31, 2009.

(f) During fiscal 2006, the Company and its joint venture partner KWG started this project on the staked property
located in the vicinity of the Kyle properties in the James Bay Lowlands area of Northern Ontario.

- 20 -

7. SHARE CAPITAL

(a) COMMON SHARES
Authorized
An unlimited number of common and preference shares issuable in series.
Issued:
Number
of Shares Amount

Balance, date of Inception on January 1, 1995 39,239,070 $ 4,099,577
Private placements 11,284,045 2,468,043
Shares issued for acquisition of mineral properties 150,000 31,000
Exercise of stock options 32,000 6,720
Exercise of warrants 3,414,689 631,904

Balance, December 31, 1995 54,119,804 7,237,244
Exercise of warrants 200,000 66,000

Shares issued in settlement of debt 3,913,044 450,000


Private placements 3,450,000 330,000

Conversion of convertible debt 4,000,000 300,000


Retroactive restatement of share issue costs - (942,171)

Balance, December 31, 2002 116,903,511 $ 17,272,086

- 21 -

7. SHARE CAPITAL (Continued)
(a) COMMON SHARES (Continued)
Number
of Shares Amount

Private placement - flow-through 14,920,000 1,492,000
Private placement - non-flow-through 9,100,000 910,000
Warrant valuation - (724,280)
Exercise of stock options 2,830,468 283,047
Reversal of warrant valuation on exercise of warrants - 1,900
Costs of issue - (191,756)

Warrant valuation - (1,350,411)
Broker warrant valuation - (158,529)
Conversion of property rights 9,600,000 960,000
Exercise of warrants 11,650,000 1,398,000
Expiry of warrants - 94,050
Cost of issue - cash - (439,665)

Reversal of stock option valuation on exercise of stock options - 6,260
Private placement - flow-through 8,276,285 579,340
Expiry of warrants - 382,480


- 22 -

Number
of Shares Amount

Tax effect of flow-through renunciation - (278,610)
Shares issued for mineral property 150,000 9,000
Private placements - flow-through 12,100,855 819,060
Private placement 2,500,000 150,000
Expiry of warrants - 1,503,940

Tax effect of flow-through renunciation - (295,844)
Private placement 400,000 20,000
Warrant valuation - (1,594,667)
Exercise of warrants 26,998,216 2,676,870
Fair value of warrants exercised - 622,678
Fair value of stock options exercised - 48,004
Cost of issue - (304,044)

Tax effect of flow-through renunciation (i) - (609,000)
Private placement - flow-through (ii) 4,700,000 235,000
Warrant valuation (ii) - (65,800)
Broker warrant valuation (ii) - (6,580)
Private placement - flow-through (iii) 1,200,000 60,000
Warrant valuation (iii) - (19,200)
Fair value of stock options exercised - 31,902
Cost of issue - (21,150)


- 23 -

Number
of Shares Amount

Private placements - flow-through (iv)(v) 73,333,333 2,200,000
Warrant valuation (iv) (v) - (660,000)
Broker warrant valuation (iv) - (91,000)
Broker compensation options ("Agent options")(v) - (105,000)
Tax effect of flow-through renunciation (vi) - (73,750)
Warrant extension adjustment (Note 7(c)(1)) - (674,667)
Private placement - flow-through (vii) 22,887,999 1,373,280
Warrant valuation (vii) - (1,052,848)
Agents option valuation (ix) - (343,915)
Private placement - flow-through (viii) 15,785,332 947,120
Warrant valuation (viii) - (726,125)


(i) In connection with the issuance of flow-through shares under the private placements during fiscal 2007, the
Company renounced $320,000 and $1,780,000 of qualifying expenditures respectively to the shareholders in February
2008. The tax benefits forgone by the Company relating to these renunciations at the future tax rates amounted to
$92,800 and $516,200, respectively.
(ii) On November 27, 2008, the Company closed a private placement of 4,700,000 flow-through units (the "Flow-
Through Units") at a price of $0.05 per unit, for gross proceeds of $235,000. Each Flow-Through Unit will consist of one
flow-through common share and one common share purchase warrant (the “Warrant”) and each Hard Dollar Unit will
consist of one non flow-through common share and one Warrant. Each whole Warrant will be exercisable for one
common share of the Company at $0.05 per share for a period of one year from the date of closing and thereafter a
price of $0.10 for a period of one year.
IBK Capital Corp., acting as agent (the “Agent”) was paid a cash fee totaling $21,150 representing 9% of the gross
proceeds of 4,700,000 units sold by the Agent under the private placement. Additionally, the Agent received common
share purchase warrants to purchase up to 470,000 shares of the Company exercisable for one common share of the
Company at $0.05 per share for a period of one year from the date of closing and thereafter a price of $0.10 for a
period of one year.
The warrants were valued on the date of issue using the Black-Scholes option pricing model with the following
assumptions: dividend yield 0%, risk-free interest rate of 1.78%, expected volatility of 152% and an expected life of 1.5
years. The value attributed to the 4,700,000 warrants and 470,000 broker warrants were $65,800 and $6,580,
respectively.
(iii) On December 30, 2008, the Company closed a private placement of 1,200,000 flow-through units (the "Flow-
Through Units") at a price of $0.05 per unit for gross proceeds of $60,000. Each Flow-Through Unit will consist of one
flow-through common share and one common share purchase warrant (the “Warrant”) and each Hard Dollar Unit will
consist of one non flow-through common share and one Warrant. Each whole Warrant will be exercisable for one
common share of the Company at $0.05 per share for a period of one year from the date of closing and thereafter a
price of $0.10 for a period of one year.

- 24 -


The warrants were valued on the date of issue using the Black-Scholes option pricing model with the following
assumptions: dividend yield 0%, risk-free interest rate of 1.11%, expected volatility of 163.9% and an expected life of
1.5 years. The value attributed to the 1,200,000 warrants was $19,200.
(iv) On July 24, 2009, Spider completed the first tranche of a private placement of 48,333,333 flow-through units at a
price of $0.03 per unit, for gross proceeds of $1,450,000. The private placement is part of a larger offering of up to
73,333,333 flow-through units (the “Offering”). Each unit consists of one common share (issued on a flow-through
basis) and one-half of one common share purchase warrant. Each full warrant entitles the holder to acquire one
common share (which share shall not be issued on a flow-through basis) at a price of $0.05 for a period of one year
from the date of issue and thereafter at a price of $0.10 for a period of two years from the date of issue.

Spider engaged IBK Capital Corp. ("IBK") to complete the first tranche of the Offering on a best efforts agency basis.
Spider paid an aggregate cash commission in the amount of $102,375 to IBK and its selling group agents and issued
4,550,000 broker warrants (“Broker Warrants”) entitling IBK and its selling group agents to purchase up to 4,550,000
common shares in the capital of Spider at a price of $0.03 for a period of one year from the date of issue and thereafter
at a price of $0.06 for a period of two years from the date of issue. IBK engaged the following sub-agents in connection
with the completion of the first tranche of the Offering: Brant Securities Limited, Octagon Capital Corp., CIBC Wood
Gundy, TD Waterhouse Canada Inc., MGI Securities Inc., and Dundee Securities Corporation.

The securities issued under the private placement are subject to a hold period from the date of issuance until
November 25, 2009 in accordance with applicable securities laws and TSX Venture Exchange policies.

The fair value of the 24,166,661 warrants issued in the first tranche of the private placement was estimated to be
$435,000 using the Black-Scholes valuation model with the following assumptions: a two year expected term, 156%
volatility, risk-free interest rate of 1.36% per annum and a dividend rate of 0%.

The fair value of the 4,550,000 Broker Warrants was estimated to be $91,000 using the Black-Scholes valuation model
with the following assumptions: a two year expected term, 156% volatility, risk-free interest rate of 1.36% per annum
and a dividend rate of 0%.

(v) On August 7, 2009, Spider completed the second tranche of a private placement with the MineralFields Group of
25,000,000 flow-through units at a price of $0.03 per unit, for gross proceeds of $750,000. Each unit consists of one
common share (issued on a flow-through basis) and one-half of one common share purchase warrant. Each full
warrant entitles the holder to acquire one common share (which share shall not be issued on a flow-through basis) at a
price of $0.05 for a period of one year from the date of issue and thereafter at a price of $0.10 for a period of two years
from the date of issue.

Spider engaged Limited Market Dealer Inc. to complete the second tranche of the Offering on a best efforts agency
basis. Limited Market Dealer Inc. was paid an aggregate cash commission of $37,500 and was issued 2,500,000
broker compensation options ("Agent Options"). Each Agent Option is exercisable for one unit (“Option Unit”) at a price
of $0.03 for a period of one year from the date of issue and thereafter at a price of $0.06 for a period of two years from
the date of issue. Each Option Unit consists of one common share and one-half of one common share purchase
warrant. Each full warrant will be exercisable for one common share at a price of $0.05 until August 7, 2010 and
thereafter at a price of $0.10 until August 7, 2011.

The securities issued under the private placement are subject to a hold period from the date of issuance until
December 8, 2009 in accordance with applicable securities laws and TSX Venture Exchange policies.

- 25 -


The fair value of the 12,500,000 warrants issued in the second tranche of the private placement was estimated to be
The fair value of the 2,500,000 Agent Options was estimated to be $105,000 using the Black-Scholes valuation model
with the following assumptions: a two year expected term, 155% volatility, risk-free interest rate of 1.36% per annum
and a dividend rate of 0%.

(vi) In connection with the issuance of flow-through shares under the private placements during the year of 2008, the
Company renounced $235,000 and $60,000 of qualifying expenditures respectively to the shareholders in February
2009. The tax benefits forgone by the Company relating to these renunciations at the future tax rates amounted to
$58,750 and $15,000, respectively.

(vii) On December 24, 2009, Spider completed the first tranche of a private placement of 22,887,999 flow-through
units at a price of $0.06 per unit, for gross proceeds of $1,373,280. The private placement is part of a larger offering of
up to 50,000,000 flow-through units at a price of $0.06 per unit and up to 40,000,000 non flow-through units at the price
of $0.05 per unit. Each flow-through unit consists of one common share (issued on a flow-through basis) and one non
flow-through common share purchase warrant. Each full warrant entitles the holder to acquire one common share
(which share shall not be issued on a flow-through basis) at a price of $0.10 for a period of two years from the date of
issue.
The securities issued under the private placement are subject to a hold period from the date of issuance until April 25,
2010 in accordance with applicable securities laws and TSX Venture Exchange policies.
$1,052,848 using the Black-Scholes valuation model with the following assumptions: a two year expected term, 190%
(viii) On December 30, 2009, Spider completed a second tranche of a private placement of 15,785,332 flow-through
units at a price of $0.06 per unit, for gross proceeds of $947,120. Each unit consists of one common share (issued on a
flow-through basis) and one common share purchase warrant. Each full warrant entitles the holder to acquire one
common share (which share shall not be issued on a flow-through basis) at a price of $0.10 for a period of two years
from the date of issue.
The securities issued under the private placement are subject to a hold period from the date of issuance until May 1,
2010 in accordance with applicable securities laws and TSX Venture Exchange policies.
(ix) Spider engaged Sandfire Securities Inc . ("SSI") to complete the offering. Spider paid an aggregate cash
commission in the amount of $132,457 to SSI and its selling group agents and issued 3,620,163 non-transferable
compensation options ("Agents Options") entitling SSI and its selling group agents to purchase up to 3,620,163 units at
a price of $0.06 per unit for a period of two years from the date of issue. Each unit consist of one common share and
one common share purchase warrant exercisable to acquire one common share at the price of $0.10 per share for a
period of two years from the date of issue of the Agent Options. The Company issued two tranches of Agent Options:
(i) 2,083,298 units at a price of $0.06 which expire on December 24, 2011. The attached warrants to these Agent
Options also expire on December 24, 2011; and (ii) 1,536,865 units at a price of $0.06 which expire on December 30,
2011. The attached warrants to these Agent Options also expire on December 30, 2011.

- 26 -


(ix) (Continued) The fair value of the 3,620,163 agents options was estimated to be $343,915 using the Black-
Scholes valuation model with the following assumptions: a two year expected term, 190% volatility, risk-free interest
rate of 1.39% per annum and a dividend rate of 0%.
(b) STOCK OPTIONS
The Company maintains an employee stock option plan under which the Board of Directors, or a committee appointed
for such purpose, may from time to time grant to employees, officers, directors of, or consultants to, the Company,
options to acquire common shares in such numbers, for such terms, and at such exercise prices, as may be
determined by the Board or such committee.
The stock option plan provides that the maximum number of common shares in the capital of the Company that may be
reserved for issuance for all purposes under the stock option plan shall be equal to 10% of the total issued and
outstanding common shares and that the maximum number of common shares which may be reserved for issuance to
any one optionee pursuant to share options may not exceed 5% of the common shares outstanding at the time of
grant.
The options are valid for a maximum of five years from the date of issue. Vesting of options shall be determined by the
Board of Directors of the Company in accordance with applicable stock exchange or other regulatory requirements.
The exercise price of options equals the closing price of the Company's stock on the last trading day prior to the date of
grant and the minimum exercise price is $0.10 per share.
The following table reflects the continuity of stock options and agent options for the years ended December 31, 2009
and 2008:

Number of
Stock Options and Weighted Average
Agent options Exercise Price ($)

Balance, December 31, 2007 16,382,368 0.14
Granted 10,900,000 0.10
Exercised (1,072,350) 0.10
Expired (725,000) (0.13)
Granted (i) 7,100,000 0.10
Granted (ii) 2,500,000 Agent Options 0.05
Granted (iii) 4,500,000 0.10
Granted (iv) 2,000,000 0.10
Granted (v) 3,620,163 Agent options 0.06
Expired (8,200,000) (0.17)

The weighted average fair value of options granted during the year is $0.049 (2008 - $0.042).
(i) On April 21, 2009, the Company granted 7,100,000 options to directors, officers and consultants of Spider
exercisable over a five-year period at a price of $0.10 per share. The fair value of these options at the date of the grant
was estimated using the Black-Scholes valuation model with the following assumptions: a five year expected term,
127% volatility, risk-free interest rate of 1.87% per annum; and a dividend rate of 0%. The fair value assigned to these
options was $220,100 which was expensed to the statement of operations with the corresponding amount allocated to
contributed surplus as all options vested when granted.

- 27 -

(b) STOCK OPTIONS (Continued)

(ii) Note 7(a)(v)
(iii) On December 21, 2009, the Company granted 4,500,000 options to directors and officers of Spider exercisable
over a five-year period at a price of $0.10 per share. The fair value of these options at the date of the grant was
estimated using the Black-Scholes valuation model with the following assumptions: a five year expected term, 167%
volatility, risk-free interest rate of 2.57% per annum; and a dividend rate of 0%. The fair value assigned to these options
was $207,000 which was expensed to the statement of operations with the corresponding amount allocated to
contributed surplus as all options vested when granted.
(iv) On December 21, 2009, Spider granted 2,000,000 options to an investor relations consultant exercisable over a
five-year period at a price of $0.10 per share. The fair value of these options at the date of the grant was estimated
using the Black-Scholes valuation model with the following assumptions: a five year expected term, 167% volatility,
risk-free interest rate of 2.57% per annum; and a dividend rate of 0%. The fair value assigned to these options was
$92,000; the options will vest quarterly over a period of one year.
(v) Note 7(a)(ix)

The following table reflects the actual stock options and agent options issued and outstanding as at December 31,
2009:

Outstanding Exercisable
Number of Number of Remaining
Exercise Options and Agent Options and Contractual Life
Expiry Date Price ($) Options Agent Options [Years]

Stock Options
February 8, 2011 0.10 5,385,018 5,385,018 1.11
July 25, 2011 0.10 1,000,000 1,000,000 1.56
October 2, 2013 0.10 10,900,000 10,900,000 3.76
April 21, 2014 (Note 7(b)(i)) 0.10 7,100,000 7,100,000 4.31
December 21, 2014 (Note 7(b)(iii)) 0.10 4,500,000 4,500,000 4.97
December 21, 2014 (Note 7(b)(iv)) 0.10 2,000,000 - 4.97

30,885,018 28,885,018
Agent Options
August 7, 2011 (Note 7(b)(ii)) 0.03 - 0.06 2,500,000 2,500,000 1.60
December 24, 2011 (Note 7(b)(v)) 0.06 2,083,298 2,083,298 1.98
December 30, 2011 (Note 7(b)(v)) 0.06 1,536,865 1,536,865 1.98

0.10 37,005,181 35,005,181

The weighted average remaining contractual life for the options is 3.31 years.

- 28 -

(c) WARRANTS
The following table reflects the continuity of warrants from January 1, 1995 to December 31, 2009:
Number of
Warrants Fair Value

Balance, January 1, 1995 - $ -
Private placements 4,150,000 -

Balance, December 31, 1995 4,150,000 -
Expiry of warrants (3,950,000) -
Exercise of warrants (200,000) -

Expiry of warrants (864,146) -
Exercise of warrants (2,050,204) -


Balance, December 31, 1998 and 1999 1,650,000 -
Broker warrants 1,150,000 -



Balance, December 31, 2002 - -
Settlement of debt 1,500,000 28,500
Exercise of warrants (100,000) (1,900)

Balance, December 31, 2003 25,420,000 722,380
Broker warrants 2,264,705 158,529
Expiry of warrants (4,950,000) (94,050)
Exercise of warrants (11,650,000) (221,350)


- 29 -

(c) WARRANTS (Continued)
Number of
Warrants Fair Value

Private placements - flow-through 12,116,285 306,485
Broker warrants 827,629 30,622

Broker warrants 671,585 22,162
Expiry of warrants (21,590,955) (1,503,940)

Balance, December 31, 2006 36,696,354 908,137
Private placement 400,000 7,245
Broker warrants on above private placement 3,066,667 190,133

Private placement - flow-through (i) 4,700,000 65,800
Broker warrants on above private placement (i) 470,000 6,580
Private placement - flow-through (ii) 1,200,000 19,200

Private placement - flow-through (iii) 36,666,661 660,000
Broker warrants on above private placement (iii) 4,550,000 91,000
Private placement - flow-through (iv) 22,887,999 1,052,848
Warrant extension adjustment (v) - 674,667
Private placement - flow-through (vi) 15,785,332 726,125

(i) See Note 7(a)(ii) for assumptions used in the Black-Scholes option pricing model.
(ii) See Note 7(a)(iii) for assumptions used in the Black-Scholes option pricing model.
(iii) See Note 7(a)(iv)(v) for assumptions used in the Black-Scholes option pricing model.
(iv) See Note 7(a)(ix) for assumptions used in the Black-Scholes option pricing model.
(v) See Note 7(c)(1) for assumptions used in the Black-Scholes option pricing model.
(vi) See Note 7(a)(viii) for assumptions used in the Black-Scholes option pricing model.

- 30 -

Audited financials-apr-08-2010

Audited financials-apr-08-2010

Recommended

Recommended

More Related Content

What's hot

What's hot (19)

Viewers also liked

Viewers also liked (20)

Similar to Audited financials-apr-08-2010

Similar to Audited financials-apr-08-2010 (20)

More from Spider Resources, Inc.

More from Spider Resources, Inc. (8)

Recently uploaded

Recently uploaded (20)

Audited financials-apr-08-2010