Management Discussion and Analysis Year Ended

SPIDER RESOURCES INC.
(A development stage company)

Interim Financial Statements

(Unaudited)

(Expressed in Canadian Dollars)

Three months ended March 31, 2010

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying unaudited interim financial statements of Spider Resources Inc. (A Development Stage Company)
were prepared by management in accordance with Canadian generally accepted accounting principles. The most
significant of these accounting principles have been set out in the December 31, 2009 audited financial statements.
Only changes in accounting policies have been disclosed in these unaudited interim financial statements.
Management acknowledges responsibility for the preparation and presentation of the unaudited interim financial
statements, including responsibility for significant accounting judgments and estimates and the choice of accounting
principles and methods that are appropriate to the Company’s circumstances.

Management has established processes, which are in place to provide them sufficient knowledge to support
management representations that they have exercised reasonable diligence that (i) the unaudited interim financial
statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or
that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the
date of and for the periods presented by the unaudited interim financial statements and (ii) the unaudited interim
financial statements fairly present in all material respects the financial condition, results of operations and cash flows
of the Company, as of the date of and for the periods presented by the unaudited interim financial statements.

The Board of Directors is responsible for reviewing and approving the unaudited interim financial statements together
with other financial information of the Company and for ensuring that management fulfills its financial reporting
responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee
meets with management to review the financial reporting process and the unaudited interim financial statements
together with other financial information of the Company. The Audit Committee reports its findings to the Board of
Directors for its consideration in approving the unaudited interim financial statements together with other financial
information of the Company for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company’s affairs in compliance with established
financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its
activities.

NOTICE TO READER

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim
financial statements, they must be accompanied by a notice indicating that the financial statements have not been
reviewed by an auditor.

The accompanying unaudited interim financial statements of the Company have been prepared by and are the
responsibility of the Company's management.

The Company's independent auditor has not performed a review of these unaudited interim financial statements in
accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim
financial statements by an entity's auditor.

Spider Resources Inc.
(A Development Stage Company)
Interim Balance Sheets
(Unaudited)
March 31, December 31,
2010 2009

Assets
Current assets
Cash $ 3,731,461 $ 2,716,778
Prepaid expenses and sundry receivables 551,055 496,746
Due from KWG Resources Inc. - 200,000

4,282,516 3,413,524
Mining interests (Note 5) 22,928,707 21,971,700

$ 27,211,223 $ 25,385,224

Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 199,358 $ 334,164

Future income tax liability 3,415,306 2,285,206

3,614,664 2,619,370

Shareholders' Equity (Statement) 23,596,559 22,765,854

$ 27,211,223 $ 25,385,224

Nature of operations and going concern (Note 1)
Subsequent events (Note 11)

See accompanying notes to unaudited interim financial statements

-1-

Interim Statements of Operations and Comprehensive Loss
(Unaudited)
Three months ended Cumulative from
March 31, January 1,
2010 2009 1995

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

- - 570,418

Expenses
Administrative expenses (Note 9) 359,942 244,598 8,163,257
Stock-option compensation 47,917 - 2,752,617
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

407,859 244,598 16,726,696

Other income and expenses
Operators fee (91,058) - (342,001)
Interest - - (14,650)
Gain on sale of marketable securities - - (134,257)

(91,058) - (490,908)

Net loss before income taxes (316,801) (244,598) (15,665,370)

Future income tax recovery - - 1,827,093

Net loss and comprehensive loss for the period $ (316,801) $ (244,598) $(13,838,277)

Basic and diluted loss per share $ (0.00) $ (0.00)

Weighted average shares outstanding 456,197,145 316,211,767


-2-

Interim Statements of Deficit
(Unaudited)

2010 2009 1995

Deficit, beginning of period $ (16,949,367) $ (16,201,090) $ (572,796)
Retroactive restatement of 2001 future tax liability - - (2,855,095)

Deficit, beginning of period restated (16,949,367) (16,201,090) (3,427,891)

Net loss for period (316,801) (244,598) (13,838,277)

Deficit, end of period $ (17,266,168) $ (16,445,688) $ (17,266,168)


-3-

Interim Statements of Changes in Shareholders' Equity
(Unaudited)
Share Contributed
Capital Warrants Surplus Deficit Total

Balance, December 31, 2008 $ 31,269,134 $ 1,997,131 $ 2,348,460 $ (16,201,090) $ 19,413,635

Tax effect of flow-through renunciation (85,550) - - - (85,550)
Expiry of warrants - (120,751) 120,751 - -
Net loss for the period - - - (244,598) (244,598)

Balance, March 31, 2009 $ 31,183,584 $ 1,876,380 $ 2,469,211 $ (16,445,688) $ 19,083,487

Balance, December 31, 2009 $ 31,292,375 $ 4,887,487 $ 3,535,359 $ (16,949,367) $ 22,765,854

Tax effect of flow-through renunciation (1,130,100) - - - (1,130,100)
Private placements 1,754,900 - - - 1,754,900
Warrant valuation (1,337,653) 1,337,653 - - -
Exercise of warrants 480,183 - - - 480,183
Fair value of warrants exercised 242,224 (242,224) - - -
Cost of issue - cash (5,394) - - - (5,394)
Agents options valuation (298,448) - 298,448 - -
Fair value of stock options granted - - 47,917 - 47,917
Net loss for the period - - - (316,801) (316,801)

Balance, March 31, 2010 $ 30,998,087 $ 5,982,916 $ 3,881,724 $ (17,266,168) $ 23,596,559

See Note 6 for share capital, warrants and contributed surplus from the date of inception of the development stage, January 1, 1995 to March 31, 2010.

-4-

Interim Statements of Cash Flows
(Unaudited)
2010 2009 1995

Cash flows used in operating activities
Net loss for the period $ (316,801) $ (244,598) $(13,838,277)
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-option compensation 47,917 - 2,752,617
Future income tax recovery - - (1,827,093)
Changes in non-cash working capital
Other receivables 200,000 - (155,325)
Funds held in trust - - 2,500
Prepaid expenses and sundry receivables (54,309) (15,146) (428,801)
Accounts payable and accrued liabilities (134,806) (85,164) 655,542

(257,999) (344,908) (7,315,681)

Cash flows used in investing activities
Acquisition of mining interests (957,007) (229,855) (23,136,434)
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)

$ (957,007) $ (229,855) $(23,519,905)


-5-

Interim Statements of Cash Flows
(Unaudited)
2010 2009 1995

Cash flows provided by financing activities
Proceeds from issuance of share capital $ 1,754,900 $ - $ 24,143,432
Proceeds from issuance of warrants - - 5,619,260
Proceeds from the exercise of stock options - - 878,232
Proceeds from the exercise of warrants 480,183 - 5,486,920
Issuance of convertible debentures - - 300,000
Costs of share issue (5,394) - (2,842,741)
Due from related parties - - 964,489
Repayment of notes payable - - (22,018)

2,229,689 - 34,527,574

Net change in cash 1,014,683 (574,763) 3,691,988
Cash, beginning of period 2,716,778 3,205,855 39,473

Cash, end of period $ 3,731,461 $ 2,631,092 $ 3,731,461

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


-6-

Notes to Interim Financial Statements
(Unaudited)

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. BASIS OF PRESENTATION AND ACCOUNTING POLICIES

The unaudited interim financial statements have been prepared in accordance with Canadian generally accepted
accounting principles ("Canadian GAAP") for interim financial information. Accordingly, they do not include all of the
information and notes to the financial statements required by Canadian GAAP for annual financial statements. In the
opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating
results for the three months ended March 31, 2010 may not necessarily be indicative of the results that may be
expected for the year ending December 31, 2010.

The balance sheet at December 31, 2009 has been derived from the audited financial statements at that date but
does not include all of the information and footnotes required by Canadian GAAP for annual financial statements. The
interim financial statements have been prepared by management in accordance with the accounting policies
described in the Company's annual audited financial statements for the year ended December 31, 2009. For further
information, refer to the audited financial statements and notes thereto for the year ended December 31, 2009.

Future accounting changes

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.

-7-

(Unaudited)

2. BASIS OF PRESENTATION AND ACCOUNTING POLICIES (Continued)

Future accounting changes (Continued)

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.

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 $23,596,559 (December 31, 2009 - $22,765,854).

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 three months ended March 31,
2010. 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.

-8-

(Unaudited)

4. PROPERTY AND FINANCIAL RISK FACTORS (Continued)

(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 March 31, 2010. Management believes that the credit risk concentration with respect to financial instruments is
minimal.

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 March 31, 2010, the Company had a cash balance of
$3,731,461 (December 31, 2009 - $2,716,778) to settle current liabilities of $199,358 (December 31, 2009 -
$334,164). 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 committed to spending eligible exploration expenditures of approximately
$1,953,000 resulting from flow-through offerings that were completed in fiscal 2009 and January 22, 2010 (Note
6(a)(i)).

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.
-9-

(Unaudited)

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 March 31, 2010.

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 March 31, 2010, 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.

5. MINING INTERESTS
Cumulative Cumulative Deferred
Acquisition Costs Exploration Expenditures
March 31, December 31, March 31, December 31,
2010 2009 2010 2009

Big Daddy Chromite Deposit $ 34,000 $ 34,000 $ 5,572,025 $ 4,625,772
Diagnos 39 39 66,919 66,919
McFaulds Lake - - 6,176,530 6,176,530
Spider #1 1,983,760 1,983,760 7,379,737 7,379,737
Wawa 466,173 466,173 1,249,524 1,238,770

$ 2,483,972 $ 2,483,972 $ 20,444,735 $ 19,487,728

Acquisition costs and deferred exploration expenditures
March 31, December 31,
2010 2009

Balance at beginning of period $ 21,971,700 $ 18,833,397
Acquisition cost and deferred exploration expenditures 957,007 3,138,303

Balance at end of period $ 22,928,707 $ 21,971,700

- 10 -

(Unaudited)

5. MINING INTERESTS (Continued)

On a quarterly basis, management of the Company reviews mining interests to determine if exploration costs are
eligible for capitalization. For a description of mining interests owned by the Company, refer to Note 6 of the audited
financial statements of Spider as at December 31, 2009. No specific changes to mining interests occurred from
January 1, 2010 to March 31, 2010.

6. 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

Balance, December 31, 2000 110,147,147 $ 17,538,621

- 11 -

(Unaudited)

6. SHARE CAPITAL (Continued)

(a) COMMON SHARES (Continued)


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

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)


- 12 -

(Unaudited)



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

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

Private placement 400,000 20,000
Exercise of warrants 26,998,216 2,676,870
Fair value of warrants exercised - 622,678
Fair value of stock options exercised - 48,004


- 13 -

(Unaudited)



Fair value of stock options exercised - 31,902

Broker compensation options - (105,000)
Warrant extension adjustment - (674,667)
Agents option valuation - (343,915)

Tax effect of flow-through renunciation - (1,130,100)
Private placement - flow-through (i) 9,823,336 589,400
Warrant valuation (i) - (451,873)
Agents options valuation (i) - (93,320)
Private placement - non flow-through (i) 23,310,000 1,165,500
Warrant valuation (i) - (885,780)
Agents options valuation (i) - (205,128)

Balance, March 31, 2010 471,194,433 $ 30,998,087

- 14 -

(Unaudited)



(i) On January 22, 2010, the Company completed a private placement where an aggregate of 9,823,336 flow-through
units, at a price of $0.06 per unit, and 23,310,000 non-flow-through units at price of $0.05 per unit, were issued to
subscribers for aggregate proceeds of $1,754,900. Each flow-through unit consists of one common share (issued on a
flow-through basis) and one common share purchase warrant (non-flow-through). Each non-flow-through unit consists
of one common share and one common share purchase warrant. Each common share purchase 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 date of issue.

Spider issued non-transferable compensation options (the “Agent Options”) to purchase up to 3,313,334 Units (the
“Agent Units”), of which 982,334 Agent Units are exercisable at an exercise price of $0.06 per Agent Unit and
2,331,000 Agent Units are exercisable at an exercise price of $0.05 per Agent Unit. The Agent Options are
exercisable at any time before 5:00 p.m. (Toronto time) on January 22, 2012. Each Agent Unit consists of one
common share and one common share purchase warrant exercisable to acquire one common share at an exercise
price of $0.10 per share on or before 5:00 p.m. (Toronto time) on the day that is 24 months from January 22, 2010.

The securities issued under the private placement were subject to a hold period from the date of issuance until May
23, 2010 in accordance with applicable securities laws and TSX Venture Exchange policies.

The fair value of the 9,823,336 warrants issued for the flow-through units was estimated to be $451,873 using the
Black-Scholes valuation model with the following assumptions: a two year expected term, 190% volatility, risk-free
interest rate of 1.17% per annum and a dividend rate of 0%.

The fair value of the 23,310,000 warrants issued for the non flow-through units was estimated to be $885,780 using
the Black-Scholes valuation model with the following assumptions: a two year expected term, 190% volatility, risk-free
interest rate of 1.17% per annum and a dividend rate of 0%.

The fair value of the 982,334 Agent Options was estimated to be $93,320 using the Black-Scholes valuation model
with the following assumptions: a two year expected term, 190% volatility, risk-free interest rate of 1.17% per annum
and a dividend rate of 0%.

The fair value of the 2,331,000 Agent Options was estimated to be $205,128 using the Black-Scholes valuation model
with the following assumptions: a two year expected term, 190% volatility, risk-free interest rate of 1.17% per annum
and a dividend rate of 0%.

- 15 -

(Unaudited)


(b) STOCK OPTIONS

The following table reflects the continuity of stock options and agent options for the three months ended March 31,
2010:

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

Balance, December 31, 2009 37,005,181 0.10
Granted (Note 6(a)(i)) 3,313,334 0.05

Balance, March 31, 2010 40,318,515 0.09

The following table reflects the actual stock options and agent options issued and outstanding as of March 31, 2010:
Exercisable
Outstanding Number of Weighted
Weighted Number of Stock Options Average
Average Stock Options and Remaining
Exercise and Agent Agent Contractual Life
Expiry Date Price ($) Options Options (Years)

Stock options
August 2, 2010 0.10 300,000 300,000 0.34
February 8, 2011 0.10 5,085,018 5,085,018 0.86
July 25, 2011 0.10 1,000,000 1,000,000 1.32
October 2, 2013 0.10 10,900,000 10,900,000 3.51
April 21, 2014 0.10 7,100,000 7,100,000 4.06
December 21, 2014 0.10 4,500,000 4,500,000 4.73
December 21, 2014 0.10 2,000,000 500,000 4.73

30,885,018 29,385,018
Agents options
August 7, 2011 0.03 - 0.06 2,500,000 2,500,000 1.35
December 24, 2011 0.06 2,083,298 2,083,298 1.73
December 30, 2011 0.06 1,536,865 1,536,865 1.75
January 22, 2012 0.06 982,334 982,334 1.81
January 22, 2012 0.05 2,331,000 2,331,000 1.81

0.09 40,318,515 38,818,515 2.96

- 16 -

(Unaudited)


(c) WARRANTS
The following table reflects the continuity of warrants from January 1, 1995 to March 31, 2010:
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)


- 17 -

(Unaudited)
(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

Broker warrants on above private placement 470,000 6,580

Broker warrants on above private placement 4,550,000 91,000
Warrant extension adjustment - 674,667

Private placement - flow-through (Note 6(a)(i)) 9,823,336 451,873
Private placement - non-flow-through (Note 6(a)(i)) 23,310,000 885,780

Balance, March 31, 2010 140,217,328 $ 5,982,916

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(Unaudited)


(c) WARRANTS (Continued)

The following table summarizes the warrants issued and outstanding as at March 31, 2010:

Number of Exercise
Expiry Date Warrants Price ($) Fair Value

October 11, 2010 29,555,666 $ 0.10 $ 2,187,120
November 27, 2010 4,700,000 0.10 65,800
November 27, 2010 470,000 0.10 6,580
December 30, 2010 1,200,000 0.10 19,200
July 24, 2011 18,554,996 0.05 - 0.10 333,990
July 28, 2011 1,429,999 0.03 - 0.06 28,600
August 7, 2011 12,500,000 0.05 - 0.10 225,000
December 24, 2011 22,887,999 0.10 1,052,848
December 30, 2011 15,785,332 0.10 726,125
January 22, 2012 9,823,336 0.10 451,873
January 22, 2012 23,310,000 0.10 885,780

140,217,328 $ 5,982,916

(d) CONTRIBUTED SURPLUS
The following is a continuity of contributed surplus:

Balance, January 1, 1995 to December 31, 2001 $ -
Stock option compensation 28,000

Balance, December 31, 2002 28,000


Reversal of valuation on exercise of stock options (6,260)


Balance, December 31, 2006 1,813,540
Expiry of warrants 57,107
Fair value of options exercised (48,004)

Balance, December 31, 2007 $ 1,822,643

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(Unaudited)


(d) CONTRIBUTED SURPLUS (Continued)

Balance, December 31, 2007 $ 1,822,643
Fair value of options exercised (31,902)

Agents options 448,915

Agents options (Note 6(a)(i)) 298,448

Balance, March 31, 2010 $ 3,881,724

7. RELATED PARTY TRANSACTIONS NOT DISCLOSED ELSEWHERE
For the three months ended March 31, 2010, the Company paid $34,500 (three months ended March 31, 2009 -
$24,000) to Nominex Ltd. ("Nominex") a company controlled by the President and director of the Company, for
geological and other services. Included in accounts payable and accrued liabilities is $12,075 (December 31, 2009 -
$8,400) owing to Nominex for management services provided.
For the three months ended March 31, 2010, the Company paid the Vice President of the Company fees totaling
$22,500 (three months ended March 31, 2009 - $18,000).
For the three months ended March 31, 2010, legal fees in the amount of $76,553 (three months ended March 31,
2009 - $55,439) were charged by a law firm in which the Corporate Secretary is a partner. In addition, as at March 31,
2010, this law firm was owed $76,553 (December 31, 2009 - $205,496) and this amount was included in accounts
payable and accrued liabilities.
For the three months ended March 31, 2010, the Company paid $7,500 to Marrelli CFO Outsource Syndicate Inc.
("Marrelli") for the services of Carmelo Marrelli to act as Chief Financial Officer of the Company (three months ended
March 31, 2009 - $7,500). Carmelo Marrelli is the president of Marrelli. The Chief Financial Officer is also the
president of a firm providing accounting services to Spider. During the three months ended March 31, 2010, Spider
expensed $21,103, (three months ended March 31, 2009 - $14,173) for services rendered by this firm. In addition, as
at March 31, 2010, this firm was owed $12,618 (December 31, 2009 - $15,860) and this amount was included in
accounts payable and accrued liabilities.

For the three months ended March 31, 2010, the Company paid consulting fees of $15,000 (three months ended
March 31, 2009 - $nil) to an officer of the Company. As at March 31, 2010, this officer was owed $10,817 (December
31, 2009 - $6,719), and this amount was included in accounts payable and accrued liabilities.

As at March 31, 2010, a company beneficially owned by a director of the Company was owed $nil (December 31,
2009 - $24,780) for outstanding consulting fees and unreimbursed expenses. This amount was included in accounts
payable and accrued liabilities.

- 20 -

(Unaudited)

7. RELATED PARTY TRANSACTIONS NOT DISCLOSED ELSEWHERE (Continued)

The Company expensed $7,250, (three months ended March 31, 2009 - $nil) as director fees. As at March 31, 2010,
the directors were owed $7,250 (December 31, 2009 - $nil). In addition, as at March 31, 2010, $15,146 (December 31,
2009 - $5,856) was owed to two of the directors as reimbursable expenses and it was included in accounts payable
and accrued liabilities.
These transactions are in the normal course of operations and are measured at the exchange amount which is the
amount of consideration established and agreed to by the related parties.

8. SEGMENTED INFORMATION

The Company's operations comprise a single reporting operating segment engaged in the business of mineral
exploration. As the operations comprise a single reporting segment amounts disclosed in the statements of operations
and comprehensive loss for the period and loss per share also represent segment amounts.
All of the Company's operations and assets are located in Canada.

9. ADMINISTRATIVE EXPENSES
Three months ended
March 31,
2010 2009

Accounting, tax and corporate services $ 19,808 $ 18,721
Shareholder relations 1,552 2,845
Professional fees 75,743 47,870
Management fees 34,500 24,000
Transfer agent, listing and filing fees 35,086 6,690
General and administration 22,418 12,622
Travel 23,927 24,247
Occupancy costs 3,750 3,750
Interest and bank charges 8,449 372
Advertising and promotion 79,719 48,838
Consulting fees 45,000 47,083
Insurance 9,990 7,560

$ 359,942 $ 244,598

10. COMMITMENT

The Company is committed to spending approximately $1,953,000 associated with the flow-through offerings that
were completed in fiscal 2009 and January 22, 2010. The Company is in the process of complying with its flow-
through contractual obligations with subscribers with respect to the requirements of the Income Tax Act (Canada).

- 21 -

(Unaudited)

11. SUBSEQUENT EVENTS

(a) On April 6, 2010, a total of 166,666 warrants were exercised for 166,666 common shares of Spider at $0.10 per
share for gross proceeds of $16,666.

(b) On April 13, 2010, a total of 333,333 warrants were exercised for 333,333 common shares of Spider at $0.05 per

(c) On April 20, 2010, a total of 1,000,000 warrants were exercised for 1,000,000 common shares of Spider at $0.05
per share for gross proceeds of $50,000.

(d) On April 26, 2010, a total of 416,666 warrants were exercised for 416,666 common shares of Spider at $0.05 per
share for gross proceeds of $20,833. In addition, a total of 358,500 agent options were exercised for 358,500
common shares of Spider at $0.06 per share for gross proceeds of $21,510 and 358,500 warrants with an exercise
price of $0.10 and expiry date of December 24, 2011, were issued.

(e) On May 3, 2010, a total of 583,333 warrants were exercised for 583,333 common shares of Spider at $0.05 per

(f) On May 3, 2010, a total of 416,666 warrants were exercised for 416,666 common shares of Spider at $0.05 per

(g) On May 14, 2010, 912,299 agent options were exercised for 912,299 common shares of Spider at $0.06 per share
for gross proceeds of $54,738 and 912,299 warrants with an exercise price of $0.10 and expiry date of December 24,
2011, were issued.

(h) On May 14, 2010, 88,701 agent options were exercised for 88,701 common shares of Spider at $0.06 per share
2011, were issued.

(i) On May 17, 2010, a total of 416,666 warrants were exercised for 416,666 common shares of Spider at $0.05 for
gross proceeds of $20,833.

(j) On May 21, 2010, 449,202 agent options were exercised for 449,202 common shares of Spider at $0.06 per share
2011, were issued.

(k) On May 25, 2010, Spider and KWG Resources Inc. (“KWG”) entered into a binding letter agreement (“Letter
Agreement”) which sets out the principal terms upon which it is proposed that the two corporations will complete a
business combination (the “Merger”), at the conclusion of which the shareholders of each corporation will hold 50% of
the outstanding shares of the ongoing public corporation. The combined company will hold a current interest of 53% in
the Big Daddy deposit, with the option to earn a further 7% to achieve a 60% interest in the project. It is anticipated
that the ongoing public corporation will continue to be named “KWG Resources Inc.” for a period of time after the
Merger and will continue to be listed on the TSX Venture Exchange (“TSXV”) and on the Canadian National Stock
Exchange (the “CNSX”). Following the Merger, it is proposed that the name of the ongoing public company will be
changed to “Spider-KWG Resources Inc.” subject to shareholder and regulatory approvals.

- 22 -

(Unaudited)

11. SUBSEQUENT EVENTS (Continued)

(k)(continued) It is anticipated that the Merger will be effected by way of a three cornered amalgamation under the
Canada Business Corporations Act (the “CBCA”), pursuant to which Spider will amalgamate with a newly-
incorporated, wholly-owned subsidiary of KWG, to become a wholly-owned subsidiary of KWG. Prior to the completion
of the Merger, KWG will transfer its interest in the railway right of way, in its 1% net smelter returns royalty covering
the Big Daddy Deposit, the Black Thor Deposit and the Black Label Deposit granted by Freewest Resources Canada
Inc., and cash in an amount to be agreed upon between KWG and Spider to KWG’s wholly-owned subsidiary, Debuts
Diamonds Inc. (“Debuts”), in exchange for Debut’s interest in various diamond exploration projects and a number of
common shares of Debuts to be specified, and will distribute all of the outstanding common shares of Debuts to the
shareholders of record of KWG.

Under the terms of the Merger:

(i) all of the common shares of Spider (the “Spider Shares”) outstanding will be exchanged for common shares of
KWG (the “KWG Shares”) at the ratio of one (1) Spider Share for that number of KWG Shares equal to:

(1) the number of outstanding KWG Shares, divided by
(2) the number of outstanding Spider Shares,

In each case calculated as at the close of business on the date immediately preceding the effective date of the
Merger (the “Exchange Ratio”);

(ii) each of the outstanding warrants to purchase one Spider Share (“Spider Warrant”) will, subject to regulatory
approval, be exchanged for a warrant of KWG (“KWG Warrant”) exercisable to acquire that number of KWG
Shares equal to the Exchange Ratio. All other terms of such KWG Warrant, including the exercise price and the
expiry date thereof, shall be the same as the Spider Warrant;

(iii) each of the outstanding options (whether or not vested) to acquire one Spider Share will, subject to regulatory
approval, be exchanged for an option of KWG exercisable to acquire that number of KWG Shares equal to the
Exchange Ratio at an exercise price per KWG Share and on other terms to be agreed upon and included in the
definitive agreement in respect of the Merger (the “Definitive Agreement”);

(iv) each of the outstanding compensation options of Spider (“Spider Unit Compensation Option”) to acquire a unit of
Spider (“Spider Unit”), each Spider Unit consisting of one Spider Share and one common share purchase warrant
of Spider, will, subject to regulatory approval, be exchanged for one compensation option of KWG (“KWG Unit
Compensation Option”) exercisable to acquire a number of units of KWG equal to the Exchange Ratio (“KWG
Unit”), each KWG Unit consisting of one KWG Share and one common share purchase warrant of KWG. All other
terms of the KWG Unit Compensation Options, including the expiry dates thereof, shall be the same as the Spider
Unit Compensation Options for which they are exchanged and all terms of the common share purchase warrants
of KWG comprising part of the KWG Unit, including the exercise price and expiry date thereof, shall be the same
as the common share purchase warrant of Spider comprising part of the Spider Unit; and

(v) KWG shall continue with its listing on the TSXV and the CNSX.

Completion of the Merger is subject to a number of conditions, including, but not limited to, confirmatory due diligence,
the negotiation and execution of the Definitive Agreement, the receipt of all required regulatory approvals, including
the approval of the TSXV, and approval of the shareholders of Spider.

- 23 -

(Unaudited)

11. SUBSEQUENT EVENTS (Continued)

(k)(continued) The Merger will be submitted to the shareholders of Spider for consideration and approval at a special
meeting to be convened by Spider as soon as possible following the completion, to the satisfaction of Spider and
KWG, as applicable, of their due diligence investigations and execution of definitive documentation.

Each party will pay its own costs and expenses (including all legal, accounting and financial advisory fees and
expenses) in connection with the Merger, including expenses related to the preparation, execution and delivery of the
Letter Agreement, the Definitive Agreement and such other required documents.

In addition, the parties have agreed that each party will pay the other a break fee of CDN$2.3 million if, among other
things, the Merger is not completed as a result of such party completing an alternative transaction, including but not
limited to a merger, amalgamation, share exchange, business combination, take-over bid, sale or other disposition of
material assets, recapitalization, reorganization, liquidation, sale or issuance of a material number of treasury
securities (except upon the due exercise of convertible securities outstanding on the date of this news release) or
rights or interests therein or thereto or rights or options to acquire any material number of treasury securities or any
type of similar transaction involving it or any of its subsidiaries other than with the other party to the Letter Agreement,
the board of directors of such party withdraws or modifies, in a manner materially adverse to the other party to the
Letter Agreement, its approval or recommendation of the Merger or otherwise fails to make such approval or
recommendation, such party enters into a letter of intent or definitive written agreement with respect to a Superior
Proposal (as defined in the Letter Agreement), or if such party is subject to a take-over bid initiated by a third party.
This break fee will also be payable by Spider to KWG if KWG terminates the Letter Agreement following the failure by
Spider to mail a proxy circular and related documents in respect of the Merger to its shareholder on or before June 21,
2010. The parties have further agreed that, in certain other circumstances, Spider will pay a break fee to KWG of
CDN$1.1 million or, KWG will pay a break fee to Spider of CDN$1.4 million.

Proposed Take-Over Bids for KWG and/or Spider by Cliffs Natural Resources Inc.

On May 24, 2010, Cliffs Natural Resources Inc. (“Cliffs”) announced that it intends to make take-over bids for all of the
issued and outstanding common shares (not already owned by Cliffs or its affiliates) of KWG and/or Spider for cash
consideration of $0.13 per share. Cliffs advised that neither bid would be conditional upon the completion of the other.
The board of directors of each of Spider and KWG has formed an independent special committee to consider the bid
by Cliffs.

(l) On May 26, 2010, a total of 3,500,000 warrants were exercised for 3,500,000 common shares of Spider at $0.10 for
gross proceeds of $350,000. On the same date, 2,500,000 agent options were exercised for 2,500,000 common
shares of Spider at $0.03 per share for gross proceeds of $75,000 and 1,250,000 warrants with an exercise price of
$0.05 and expiry date of August 7, 2010, were issued and exercised for gross proceeds of $62,500.

- 24 -

Management Discussion and Analysis Year Ended

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