Cliffs Natural Resources announced in early July 2010 it had reached an agreement with Spider Resources to acquire Spider in a cash transaction valued at about C$125 million. As of July 27, Cliffs had acquired 85% of Spider’s shares and said it expected to complete full acquisition of Spider by the fourth quarter of 2010.
Spider held a 26.5% interest in the Big Daddy chromite deposit in the emerging Ring of Fire region in the James Bay lowlands of northern Ontario. That interest in combination with a 47% interest held by Cliffs gives Cliffs a controlling interest in the property. KWG Resources, which unsuccessfully tried to counter Cliffs’ bid by merging with Spider, continues to hold a 26.5% interest in the deposit.
The Big Daddy deposit is an advanced exploration property that is contiguous to two properties, Black Thor and Black Label, already held 100% by Cliffs. Preliminary estimates by Cliffs indicate that Black Thor is larger and wider than the other deposits and more amenable to open-pit operations. However, gaining control of the Big Daddy deposit will allow the company to develop an integrated, long-term development plan for all three deposits.
(www.cliffsnaturalresources.com and www.spiderresources.ca)