Spider Resources Q1 2010 MD&A

Spider Resources Inc.
Management’s Discussion and Analysis
Three Months Ended
March 31, 2010

Management’s Discussion & Analysis
Dated – May 28, 2010 Three Months Ended March 31, 2010

INTRODUCTION

The following management’s discussion and analysis (“MD&A”) of the financial condition and results of
operations of Spider Resources Inc. (“Spider” or “Company”) constitutes management’s review of the
factors that affected the Company’s financial and operating performance for the three months ended March
31, 2010. This MD&A has been prepared in compliance with the requirements of National Instrument 51-
102 – Continuous Disclosure Obligations. This discussion should be read in conjunction with the audited
annual financial statements of the Company for the year ended December 31, 2009, as well as the
unaudited interim financial statements for the three months ended March 31, 2010, together with the notes
thereto. Results are reported in Canadian dollars, unless otherwise noted. The unaudited interim financial
statements have been prepared in accordance with Canadian generally accepted accounting principles
(“Canadian GAAP”) for interim financial reporting and, accordingly, do not include all of the information
and notes required by Canadian GAAP for annual financial statements. In the opinion of management, all
adjustments (which consist only of normal recurring adjustments) considered necessary for a fair
presentation have been included. The results for the interim periods presented are not necessarily indicative
of the results that may be expected for any future period. Information contained herein is presented as at
May 28, 2010, unless otherwise indicated.

For the purposes of preparing this MD&A, management, in conjunction with the board of directors,
considers the materiality of information. Information is considered material if: (i) such information results
in, or would reasonably be expected to result in, a significant change in the market price or value of Spider
common shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it
important in making an investment decision; or (iii) if it would significantly alter the total mix of
information available to investors. Management, in conjunction with the Board of Directors, evaluates
materiality with reference to all relevant circumstances, including potential market sensitivity.

Further information about the Company and its operations is available on Spider’s website at
www.spiderresources.com or on SEDAR at www.sedar.com.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This MD&A contains certain forward-looking information and forward-looking statements, as defined in
applicable securities laws (collectively referred to herein as “forward-looking statements”). These
statements relate to future events or the Company’s future performance. All statements other than
statements of historical fact are forward-looking statements. Often, but not always, forward-looking
statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”,
“scheduled”, “estimates”, “continues”, “forecasts”, “projects”, “predicts”, “intends”, “anticipates” or
“believes”, or variations of, or the negatives of, such words and phrases, or state that certain actions, events
or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved. Forward-
looking statements involve known and unknown risks, uncertainties and other factors that may cause actual
results to differ materially from those anticipated in such forward-looking statements. The forward-looking
statements in this MD&A speak only as of the date of this MD&A or as of the date specified in such
statement. Specifically, this MD&A includes, but is not limited to, forward-looking statements regarding:
the potential of Spider’s properties to contain valuable mineral deposits; the Company’s ability to meet its
working capital needs at the current level for the next nine-month period ending in the fourth quarter of
fiscal 2010; the plans, costs, timing and capital for future exploration and development of Spider’s
property interests, including the costs and potential impact of complying with existing and proposed laws
and regulations; management’s outlook regarding future trends; sensitivity analysis on financial

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instruments, which may vary from amounts disclosed; prices and price volatility for minerals; and general
business and economic conditions.

Inherent in forward-looking statements are risks, uncertainties and other factors beyond Spider’s ability to
predict or control. These risks, uncertainties and other factors include, but are not limited to, mineral price
volatility, changes in debt and equity markets, timing and availability of external financing on acceptable
terms, the uncertainties involved in interpreting geological data and confirming title to the Company’s
properties, the possibility that future exploration results will not be consistent with Spider’s expectations,
increases in costs, environmental compliance and changes in environmental and other local legislation and
regulation, interest rate and exchange rate fluctuations, changes in economic and political conditions and
other risks involved in the mining industry, as well as those risk factors listed in the “Risk and
Uncertainties” section below. Readers are cautioned that the foregoing list of factors is not exhaustive of
the factors that may affect the forward-looking statements. Actual results and developments are likely to
differ, and may differ materially, from those expressed or implied by the forward-looking statements
contained in this MD&A. Such statements are based on a number of assumptions that may prove to be
incorrect, including, but not limited to, assumptions about the following: the availability of financing for
Spider’s exploration and development activities; the Company’s operating and exploration costs; its ability
to retain and attract skilled staff; timing of the receipt of regulatory and governmental approvals for
exploration projects and other operations; market competition; and general business and economic
conditions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may
cause Spider’s actual results, performance or achievements to be materially different from any of its future
results, performance or achievements expressed or implied by forward-looking statements. All forward-
looking statements herein are qualified by this cautionary statement. Accordingly, readers should not place
undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly
or otherwise revise any forward-looking statements whether as a result of new information or future events
or otherwise, except as may be required by law. If the Company does update one or more forward-looking
statements, no inference should be drawn that it will make additional updates with respect to those or other
forward-looking statements, unless required by law.

The Company is a reporting issuer under applicable securities legislation in the provinces of Alberta,
British Columbia, Ontario and Quebec and its outstanding shares are listed on the TSX Venture Exchange
under the symbol “SPQ”.

DESCRIPTION OF BUSINESS

The Company 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
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.



Spider's near term goal is to deliver superior returns to shareholders by concentrating on the acquisition of
exploration properties that have the potential to contain valuable mineral deposits. The Company plans to
focus on certain of its properties, as set out below under “Mineral Exploration Properties”.

OVERALL PERFORMANCE

Management is focusing on and developing the “Big Daddy” chromite deposit. The Company's long-term
goal is to continue to explore the economic potential of the deposit and consider developing the deposit
through to commercial production or to sell its interest at a favourable price once an independent valuation
has been determined to ensure fairness in the event of a sale of this strategic asset.

KWG Resources Inc. (“KWG”) became operator of the Big Daddy project on April 1, 2010. KWG and
Spider each currently hold a 26.5% interest in the Freewest Option Project, which contains the Big Daddy
chromite deposit. KWG and Spider each have the right to earn an additional aggregate 7% interest by
spending $10 million by March 31, 2012, or by delivering a positive feasibility study on or before March
31, 2012, and related resource definition study on the deposit as part of their earn-in. As operator, KWG
has proposed to Spider that KWG and Spider undertake a scoping and related resource definition study on
the deposit as part of their earn-in. The details of the proposal have yet to be finalized.

See “Subsequent Events” for proposed business combination (“Merger”) between Spider and KWG.

While general economic conditions continue to improve and stability appears to be returning to financial
and commodity markets, significant uncertainty concerning the short and medium term global economic
outlook persists. Management, in conjunction with the Board of Directors, will continue to monitor these
developments and their effect on Spider’s business.

At March 31, 2010, the Company had assets of $27,211,233 and a net equity position of $23,596,559. This
compares with assets of $25,385,224 and a net equity position of $22,765,854 at December 31, 2009. The
Company has $199,358 of liabilities and no debt. The Company spent $957,007 during the three months
ended March 31, 2010, on exploration activities on its mining interests. At March 31, 2010, the Company
had mining interests of $22,928,707, compared to $21,971,700 at December 31, 2009. The majority of
expenditures during the three months ended March 31, 2010, were incurred on the Big Daddy chromite
deposit.

At March 31, 2010, the Company had working capital of $4,083,158, compared to $3,079,360 at
December 31, 2009. The Company had cash of $3,731,461 at March 31, 2010, compared to $2,716,778 at
December 31, 2009, an increase of about 37%. The increase in cash during the three months ended March
31, 2010, is primarily due to the private placement that closed on January 22, 2010, for total gross proceeds
of $1,754,900. Refer to “Liquidity and Capital Resources”, below.

The Company plans to spend approximately $1,953,000 resulting from its remaining flow-through
commitment at March 31, 2010, associated with its flow-through obligations

The Company plans to undertake an expanded exploration program on its projects in the McFaulds Lake
area. In particular, KWG and Spider have committed to undertake an exploration program on the Big
Daddy chromite deposit under which an aggregate of at least $5 million (Spider’s share - $2.5 million and
KWG’s share – $2.5 million) will be spent by March 31, 2011. The details of the proposed program have



yet to be finalized. Spider will also engage in a $100,000 diamond drill program on both the Wawa project
and Diagnos Initiative property.

The Company has sufficient cash on hand to fund its working capital needs at the current level for the next
nine-month period ending in the fourth quarter of fiscal 2010. Refer to “Liquidity and Capital Resources”
below.

See “Mineral Exploration Properties” below.

TRENDS

The Company anticipates that it will continue to experience net losses as a result of ongoing exploration of
its prospective mineral properties and operating costs until such time as revenue-generating activity is
commenced. The Company’s future financial performance is dependent on many external factors. Both the
price of and the market for copper, zinc, chromite and diamonds are volatile, difficult to predict, and
subject to changes in domestic and international political, social, and economic environments.
Circumstances and events such as current economic conditions and ongoing volatility in the capital
markets could materially affect the future financial performance of the Company. For a summary of other
factors and risks that have affected, and which in future may affect, the Company and its financial position,
please refer to the sections entitled “Trends” and “Risks and Uncertainties” in the Company’s
management's discussion and analysis for the fiscal year ended December 31, 2009, available on SEDAR
at www.sedar.com.

MINERAL EXPLORATION PROPERTIES

Spider has been exploring in a vast region of Northern Ontario, now referred to as the “Ring of Fire
exploration area” and also to the northeast of Lake Superior near the town of Wawa, Ontario. The
Company is involved in three project areas in Ontario, known as “Spider #1”, “Spider #3” and “Wawa”. Of
these areas, Spider’s main focus remains on the Spider #3 area, which includes the property optioned by
Spider and KWG from Freewest Resources Canada Inc. (“Freewest”) where the Company can earn up to a
30% interest, the Diagnos property, where the Company has a 50% interest, the McFaulds Lake property,
currently under option to UC Resources Inc. (“UC”), which can earn up to a 55% interest in this property,
leaving the Company with 30% interest, and the Kyle property, optioned to Renforth Resources Inc.
(“Renforth”), which can earn up to a 55% interest in the property, leaving the Company with 30% interest.

The following table outlines Spider’s projects and level of involvement:

JV details (potential
Property Claims Hectares interest) Commodity sought

JV with KWG and Freewest
(Spider operator until March
Freewest
7 1,280 31, 2010, then KWG is Chrome, nickel, PGMs
Option
operator)
Spider to earn 30%



JV with KWG
Diagnos Diamonds, base and
22 3,696 (Spider operator)
Initiative precious metals
Spider to maintain 50%

UC to earn in from
McFaulds
51 11,200 Spider/KWG (UC operator) Copper, zinc
Project (W)
Spider to reduce to 30%

McFaulds UC to earn in on project
73 17,088 Copper, zinc
Project (E) Spider to reduce to 30%

McFaulds UC to earn in on project
13 2,688 Copper, zinc
Project (N) Spider to reduce to 30%

Renforth to earn in 55%
from Spider/KWG
Kyle Project 8 2,048 Diamonds
(Renforth operator)
Spider to reduce to 30%
Renforth option to reduce to
Renforth
15 3,616 55% Diamonds, base metals
claims
Spider to earn up to 30%

JV with KWG
Wawa Project 45 4,500 (Spider operator) Diamonds
Spider to earn 66 2/3%

JV with KWG
MacFadyen
5 672 (KWG operator) Diamonds
Project
Spider to reduce to 33 1/3 %

Spider #3 Project Area (includes McFaulds, Freewest and Diagnos properties)

The Spider #3 project area is geographically located immediately west of the Spider #1 project area. The
project area includes several identified properties, the McFaulds Lake (East and West) VMS (volcanogenic
massive sulphide) properties, the Freewest Option property (chromite and PGEs) and the Diagnos Initiative
property.

Freewest Option Property

This property, located approximately 15 kilometres southwest of the McFaulds Lake VMS property,
includes four 16-unit claims, one 12-unit claim and two additional one-unit mineral claims constituting 78
claim units (1,248 hectare property).



Under the terms of the original agreement with Freewest, Spider and KWG agreed to spend an aggregate
of $3 million on exploration over a four-year period to earn an initial joint 50% interest in the Freewest
Option property. Under this agreement Spider and KWG could earn a cumulative joint 60% interest in the
property by delivering a bankable feasibility study on any mineralization identified, and subsequently a
cumulative joint 65% interest by arranging financing on behalf of Freewest to put the property into
commercial production. At present, Spider and KWG have earned an initial 50% interest in the property
by jointly expending a total of $3 million, as announced on January 16, 2009.

On March 27, 2009, the Company negotiated an amendment to the Freewest Option agreement whereby
the option earn-in calls for a $15 million, three-year commitment. As a result of this amendment, the
Company no longer is required to prepare a bankable feasibility study within 18 months, as had been called
for in the 2005 agreement, upon successful completion of documentation evidencing such amendment and
the receipt of all required approvals. Under the amendment, Spider would have a $7.5 million
commitment over the next three years, of which $2.5 million was required to be spent before March 31,
2010. Spider announced on September 14, 2009, that it has amended and restated the December 2005
option agreement.

During most of fiscal 2008, the Company reported that the main exploration focus of the Spider-KWG
joint venture was on the massive chromite occurrence. This deposit underwent significant drill testing
during the year, as did other nearby deposits. The Big Daddy deposit is located approximately 3.6
kilometres northeast of Noront’s Eagle One Magmatic Massive Sulphide (nickel, copper and PGM), or five
kilometres northeast of Noront’s Blackbird One and Two (chromite) discoveries, and four kilometres
southwest of Freewest’s Black Thor and Black Label chromite discoveries. Over the course of 2008
several drill holes intersected economic grade chromite mineralization, but much more work was needed to
quantify the resource. It was determined that chromite mineralization consists of varying widths of a
variable tenor, in many instances high tenor of chrome, forming a series of stacked beds. Additional
drilling was required to confirm continuity of the beds from section to section and to the northeast. The
deposit was open to depth as well as along strike in both directions. In addition, near surface drilling of the
upward extension to surface had not been completed. A number of faults were noted from the drilling,
some of which appeared to occur at the contact of the chromite with the surrounding peridotite/dunite.
These fault sets were modeled, as they would likely affect the interpretation and continuity of the
mineralization from section to section.

During 2009, the main exploration activity of the Spider-KWG joint venture on the Big Daddy chromite
deposit was several ground geophysical surveys, designed to outline and delineate the chromium-enriched
deposit. The results of the geophysical surveys infer that the earlier drill program, which consisted of 14
drill holes, had only tested the extreme southwest portion of the deposit over a strike length of 400 metres.
The gravimetric survey results, when coupled with the magnetic survey results, inferred that the favourable
area of mineralization might extend to drill section 20+00NE and beyond. The deposit remained open to
depth and was geophysically inferred to extend to the northeast for a further 700 metres. Drilling
commenced in the third quarter of 2009 and continued through the fourth quarter and was completed
during the first quarter of 2010.

On January 7, 2010, the Company reported that diamond drilling on the Big Daddy project had resumed,
with the intent to complete drilling sufficient to complete a NI 43-101 compliant resource estimate during
Q1 2010. In addition, the company reported results of nine holes from the 2009 drilling at Big Daddy,
highlighted by hole FW-09-36, which encountered 86.2 metres of chromite mineralization between 9.8
metres and 96.0 metres downhole. The initial 11.2 metres of chromite mineralization in this hole averaged



40.14% Cr2O3; the last 48.35 metres averages 41.35% Cr2O3. In addition, hole FW-09-33, after passing
through 11.0 metres that averaged 40.29% Cr2O3, entered a narrow nickel sulphide filled fault zone that
averages 2.74% nickel, 0.12% cobalt and 1.04 g/t Pt+Pd over 1.0 metres. A sample selected for
petrographic analysis was determined to contain a low temperature alteration assemblage of minerals
including godlevskite along with veinlets of mackinawite, which infers a possible nearby primary nickel
source. Eight of the nine holes reported on January 7, 2010, encountered chromite mineralization in excess
of 35% Cr2O3 over significant widths.

On January 22, 2010, the Company reported results of the remaining six holes from the 2009 drilling at
Big Daddy, highlighted by hole FW-09-43, which had encountered two zones of massive chromite
mineralization, 24.0 metres averaging 35.75% Cr2O3, as well as 57.0 metres averaging 40.52% Cr2O3,
separated by 11.0 metres of thin, massive beds of chromite averaging 15.47% Cr2O3. All six holes
reported on this date for Big Daddy encountered chromite mineralization in excess of 35% Cr2O3 over
significant widths. Spider also reported that drilling continues, and that it anticipated completion of drilling
by the end of January.

On February 16, 2010, Spider reported that all priority drillholes for the 2010 program had been
completed, and initial analytical results from 2010 drilling were arriving. Hole FW-10-48 encountered two
zones of massive chromite mineralization, 14.85 metres averaging 39.52% Cr2O3, as well as 32.4 metres
averaging 42.51% Cr2O3. In light of a First Nations blockade on neighbouring projects, negotiations were
underway with First Nations communities to resolve a list of issues related to exploration in the general
area. The blockade was subsequently removed in March.

On March 5, 2010, all analytical results were completed and were reported, highlighted by hole FW-09-50,
which had encountered chromite mineralized envelope of 126.3 metres, of which 63.3 metres averaged
41.93% Cr2O3 with Cr:Fe ratio of 1.96. As well, seven of the final eight holes encountered grades in
excess of 35% Cr2O3. A National Instrument 43-101 compliant resource estimate was to commence on the
Big Daddy chromite deposit.

In early March 2010, Spider engaged Micon International Ltd. to complete a National Instrument 43-101
compliant resource estimate on the Big Daddy Deposit. Micon had much earlier visited the project site on
two occasions and had been monitoring project progress for nearly one year, having previously reported on
the project one year earlier.

On May 3, 2010, Spider announced the initial resource estimate for the Big Daddy chrome deposit. Micon
estimates that within the Massive Chromite Domain Big Daddy is estimated to contain an indicated
resource of 23.2 million tonnes averaging 40.66% Cr2O3, additional inferred resource of 16.3 million
tonnes averaging 39.09% Cr2O3.

Spider’s expenditure on this project for Q1 2010 amounted to $946,253.



Diagnos Initiative Properties

These properties are prospective for kimberlite and are located in the vicinity of the Kyle properties in the
James Bay Lowlands area of Northern Ontario. The properties were acquired by staking and by a purchase
agreement in 2005. During the first quarter of 2006 the Company completed ground geophysical
surveying on the six properties. This exploration work has been compiled and interpreted as required for
drill positioning, and the Company has presented the results to its joint venture partner for discussion and
planning. The Company intends to continue the review of the geophysical results and make plans for
drilling selected anomalies during fiscal 2010. Consequently, discretionary exploration expenses for 2010
have been allocated to this project. A few of the claims involved in this project lapsed during Q1 2010 but
were subsequently restaked. No exploration work was completed on this project during Q1 2010.

The cost of this program, if undertaken, will be shared equally with KWG. It is anticipated that one target
will be drill-tested during 2010 on this project at an estimated cost of $200,000. Spider is responsible for
50% of the cost of this program.

McFaulds Lake VMS Properties

This project covers three properties, the McFaulds (East) property, the McFaulds (West) property and the
McFaulds (North) property (the latter property is located north of McFaulds (East) property). Collectively,
these volcanogenic massive sulphide (VMS) properties cover approximately 31,000 hectares and are
located in the western portion of the James Bay Lowlands. The VMS potential of this diamond exploration
project became apparent in 2002 while the company was exploring in joint venture with De Beers Canada
Exploration Limited. As a result of the discovery of VMS-style mineralization, the Company and its joint
venture partner, KWG, completed several exploration campaigns, including diamond drilling programs,
during the period 2003 to early 2007, outlining several VMS-style occurrences, including two where
definition drilling was completed (McFaulds #1 and #3 VMS occurrences).

On March 7, 2007, the Company announced the signing of a letter of intent with UC regarding a four-year
exploration program on the McFaulds Lake project. This LOI outlined the terms and conditions upon
which UC has an option to earn-in up to a 55% undivided interest in the McFaulds Lake project, leaving
45% to be shared pro rata by the Company and KWG. This agreement was amended in March 2009. To
date, UC has earned a 40% interest in the project and upon spending an additional $1.25 million prior to
the fourth anniversary (prior to March 2011), UC can earn the entirety of its 55% interest. Then the option
agreement would be fulfilled and a formal joint venture would be entered into, with UC holding 55%
interest and the Company and KWG holding the remaining 45% interest. The Company would then start
spending during the KWG dilution phase, during which KWG’s interest can be reduced to 15%, leaving
the Company with 30%, after which all parties contribute pro rata or undergo additional dilution.

During the latter part of 2008, Scott Wilson Roscoe Postle Associates Inc. completed a review of the
historical drilling on the McFaulds #1 and #3 occurrences and provided indicated and inferred resource
estimates for the two occurrences. The estimates were included in a technical report that was
independently prepared and filed on SEDAR in the third quarter of 2008. The following is a summary
only, the reader is referred to the full report, “UPDATED TECHNICAL REPORT ON THE MCFAULDS
LAKE PROJECT PORCUPINE MINING DIVISION JAMES BAY LOWLAND, ONTARIO,
CANADA”, which may be viewed on SEDAR at www.sedar.com. The following tables provide details
of the resource estimates:



Spider Resources – McFaulds 3 Deposit

Indicated Resources
Location
Tonnes % Cu % Zn
Copper-Zinc Domain 802,000 3.75 1.1
Total, Indicated 802,000 3.75 1.1

Notes:
1. CIM definitions were followed for mineral resources.
2. Mineral resources are estimated at cutoff grades of 1.5% Cu
3. Mineral resources are estimated using an average long-term copper price of US$2.50 per pound.
4. A minimum mining width of two metres was used.

Spider Resources – McFaulds 1 Deposit

Inferred Resources
Location
Tonnes % Cu % Zn
Copper Domain 279,000 2.13 0.58
Zinc Domain 560,700 0.48 3.27
Total, Inferred 839,700 1.03 2.38

Notes:
1. CIM definitions were followed for mineral resources.
2. Mineral resources are estimated at cutoff grades of 1.5% Cu and 1% Zn
3. Mineral resources are estimated using an average long-term copper price of US$2.50 per pound.
4. A minimum mining width of two metres was used.

At present the McFaulds Lake project area is the focus of attention as a result of some very encouraging
news by other explorers in the region; namely Noront and its exploration/pre-feasibility activities related to
the magmatic massive sulphide (“MMS”) Eagle’s Nest Deposit located 27.4 km to the west-southwest of
the two main McFaulds Lake VMS occurrences. The MMS style mineralization encountered by Noront
contains appreciable copper, nickel, platinum, palladium and gold. Much attention is also being given to
Noront’s JJ gold occurrence located a few kilometres to the west of the Eagle’s Nest, as well as the
chromite potential of the area as noted in the discovery of the Blackbird deposits (of Noront), the Black
Label/Black Thor of Cliffs (Freewest) and the Company’s Big Daddy. Noront has also identified
Vanadium in their Thunderbird deposit. The geophysical anomalies associated with all these type of
occurrences are slightly different than those of VMS-style mineralization that was the original focus of the
McFaulds Lake project. Consequently, the historical geophysics over the McFaulds Lake projects (E and
W) are undergoing review by UC to ascertain whether there are similar-looking anomalies on this option
property. Spider’s management is assisting in this review and planning process.



UC completed several holes during 2009, none of which encountered significant mineralization; however,
some of the drill results and geophysical work were intriguing. The results of the UC 2009 program were
reviewed in Q1 2010 and will continue to be subject of review by Spider management during Q2 2010.

Because this project is currently funded by UC, Spider has no financial requirements for it during fiscal
2010. Furthermore, information concerning the work done on the property by UC has been provided to
Spider by UC. While management of Spider believes this information to be correct, it has relied on UC in
respect of the information provided.

Spider #1 Project Area (includes Kyle and MacFadyen properties)

The Spider #1 project is a regional reconnaissance project located on the western edge of the James Bay
Lowlands in northern Ontario. The project was initiated in the early 1990s to explore diamond bearing
kimberlite bodies. The project encompasses numerous identified kimberlite occurrences and two distinct
project areas, the Kyle project and the MacFadyen project. The project area (except for the Kyle Lake #1
kimberlite) is subject to an agreement whereby Ashton Mining of Canada may acquire a 25% interest
under certain conditions. The Company maintains an interest in a minimum number of claims that
effectively cover the identified kimberlites. The Kyle properties are currently the subject of an option
agreement with Renforth Resources Inc., whereby Renforth can earn up to a 55% interest in the Kyle
properties.

Kyle Properties

These properties consist of five diamondiferous kimberlites, including Kyle Lake #1 and Kyle #3, both of
which have undergone mini-bulk testing in earlier exploration campaigns by the Company. Kyle 2, 4 and 5
properties require additional exploration work, having been the subject of only preliminary drilling in 1994
and 1995 by the Company.

These properties are currently subject to an option agreement with Renforth whereby Renforth can earn up
to a 55% interest. In order to earn its interest, Renforth was to make an aggregate of $6 million in
exploration expenditures by June 30, 2009, with annual exploration expenditure requirements of $2.0
million. The option agreement was amended in 2007 whereby Renforth advised that it failed to complete
the minimum expenditure due by June 30, 2007, and requested an amendment whereby it could make
payment in lieu of expenditures. Both Spider and KWG agreed to the amendment. Renforth sought and
received a one-year extension on the next work commitment that was due on June 30, 2008. In partial
payment for these concessions, Renforth agreed to pay Spider and KWG shares valued at $1.0 million, to
be shared in a pro rata manner between Spider and KWG, the levels to be reflective of each party’s current
interest. At the date of this MD&A, Spider has not received the Renforth shares, although Renforth has
advised that it intends to deliver the shares.

In addition, Renforth must contribute all of its existing claim holdings (15 claims covering 3,616 hectares)
in the Attawapiskat River area, to be added to the Kyle project area.

Spider/KWG will retain a collective 45% in the Kyle properties once Renforth has earned its 55% interest,
and Renforth will transfer a 45% interest in its own properties in the project area to Spider/KWG. No less
than 75% of the annual $2 million expenditure must be dedicated to the Kyle properties in order for
Renforth to acquire its 55% interest. Renforth agreed to fund the project in its entirety for the first three
years and as such, is the operator during the earn-in option period.



Pursuant to the revision to the Spider/KWG joint venture dated May 12, 2006, KWG agreed to not
contribute further to Spider’s exploration program on the Kyle kimberlite project and as such appointed
Spider as manager. In May 2006, both parties were deemed to have a 50% interest in the Kyle kimberlite
project. Once Renforth has earned its 55% interest in the project, the underlying agreement terms will
apply to Spider and KWG in determination of their respective interests.

No work was reported on this project by Renforth during Q1 2010.

As a result of this project being funded by Renforth’s earn-in agreement, Spider expects to only contribute
a minor amount of the spending. Furthermore, information concerning the work done on the property by
Renforth has been provided to Spider by Renforth. While management of Spider believes this information
to be correct, it has relied on Renforth in respect of the information provided.

MacFadyen Property

This property includes three diamond-bearing kimberlites (MacFadyen-1, MacFadyen-2 and Good Friday)
located eight kilometres north of the Victor Diamond Mine project of De Beers Canada Explorations Inc.
that commenced full production in August 2008.

The Company announced in May 2006 that under a revision to the joint venture with KWG, the Company
had permitted its interest level to be diluted to one-third, allowing KWG to expend sufficient funds on its
own to obtain up to two-thirds. An exploration agreement was negotiated with the Attawapiskat First
Nation covering further exploration programs to be undertaken at the property by KWG over the next two
years. Upon its signing, KWG commenced a reconnaissance program in September 2006, and made
preparations for a winter drilling program to sample each of the five kimberlite pipes that constitute the
MacFadyen cluster.

Initial results of the kimberlite processing of a drilling program carried out by KWG were reported on June
21, 2007, when KWG announced that a 0.23 quarter-carat diamond had been recovered from one of its
MacFadyen kimberlite samples. Bulk sample processing and diamond sorting and picking were executed at
the SGS Lakefield Research Laboratory in Lakefield, Ontario.

No work has been reported by KWG on this project during Q1 2010.

As a result of this project being the focus of KWG until Spider is diluted to a one-third interest, Spider
does not expect to expend any funds on it in the near future.

Project #6 Wawa Diamond Property

This project is located 35 km north of Wawa in central Ontario on the northeast shore of Lake Superior
along the Trans-Canada Highway (Hwy 17), encompassing 44.2 square kilometres.

The property encompasses several diamond occurrences in lamprophyre dykes, one of which was drill
tested in October 2008 by four short HQ holes totaling 307 metres. These holes were designed to undercut
a lamprophyre dyke that hosts numerous diamond bearing xenoliths. This dyke had been previously
exposed in 2004/2005 by mechanical stripping over a strike length in excess of 300 metres. Some 42
samples were collected and submitted to SGS Lakefield for caustic dissolution diamond analysis. These
samples were processed during Q3 2009.



Subsequent to the end of Q3 2009, the Company received micro-diamond results pertaining to the four
holes drilled during 2008. Highlights of the caustic dissolution test results included the recovery of a total
of 1,095 diamonds from 336 kilograms of xenolith bearing lamprophyre dyke core selected from four
diamond drill holes. Of these, eight diamonds were retained on a +0.425 mm sieve, 45 were retained on a
+0.300 mm sieve, 140 were retained on a +0.212 mm sieve, 301 were retained on a +0.150 mm sieve and
601 were retained on a +0.106 mm screen. Five of the 8-kilogram samples, in which the number of
xenoliths ranged between 6 and 10 in the sample interval, had a group weight for only those diamonds
retained on +425 mm screen of 0.01339 carats (equating to 0.33 carats per tonne for 40 kilogram of
selected samples). Additional work is being considered for the summer of 2010 to follow up on these
encouraging results.

Spider’s expenditure on this project for Q1 2010 amounted to $10,754.

Following are plans related to the Company’s properties for fiscal 2010. Planned expenditures for fiscal
2010 have been estimated based upon expenditure requirements.

Timing for
Project/Property Plans for Completion
Planned Remaining
Name Project of Planned Remaining
Expenditures Expenditures
Activities Commitment
(rounded)

Exploration
with intent March 31,
Freewest Option $2,500,000 $1,554,000 $2,500,000 (1)
to define 2011
resource

Diamond
Diagnos Initiative $100,000 (2) Q4 ‘10 $100,000 $0
drilling

UC to
McFaulds
continue its $0 NA $0 $0
Project (W)
earn-in
UC to
McFaulds
continues $0 NA $0 $0
Project (E)
its earn-in
UC to
McFaulds
Project (N)
earn-in
Kyle Project Renforth to
Renforth claims earn-in
Diamond
Wawa Project $100,000 Q4 ‘10 $89,000 $0
drilling
MacFadyen KWG to $0 NA $0 $0



Project continue its
earn-in to
66.6%

(1)
Additional $2,500,000 to be completed by March 31, 2012; and
(2)
Exploration budget of $200,000 - Spider is responsible for 50% of the cost of the program.

TECHNICAL DISCLOSURE

Mr. Neil Novak, P.Geo., President, Chief Executive Officer and director of the Company, is a Qualified
Person as defined under National Instrument 43-101. Mr. Novak has reviewed and verified the technical
information in this MD&A.

ENVIRONMENTAL LIABILITIES

The Company is not aware of any environmental liabilities or obligations associated with its mining
interests. The Company is conducting its operations in a manner that is consistent with governing
environmental legislation. Pertaining to the Freewest Option project, AECOM has been retained by the
project operator to commence an environmental base line study.

OVERALL OBJECTIVE

The Company’s business objective is to discover a viable mineral deposit, more specifically copper, zinc,
chromite and diamonds, on a property in which it holds an interest. The Company is in the business of
exploring its mining interests and has not yet determined whether these properties contain an economic
mineral deposit. The recoverability of the amounts shown for mining interests is dependent upon: the
selling price of copper, zinc, chromite and diamonds or any other commodity that is discovered at the time
the Company intends to mine its properties; the existence of economically recoverable reserves; the ability
of the Company to obtain the necessary financing to complete exploration and development; government
policies and regulations; and future profitable production or proceeds from disposition of such properties.

To date, the Company has not discovered an economic deposit. While discovery of ore-bearing structures
may result in substantial rewards, it should be noted that few properties that are explored are ultimately
developed into producing mines.

The Company notes that although the exploration of its existing projects is positive, mineral exploration in
general is uncertain. As a result, the Company believes that by acquiring additional mineral properties, it
is able to better minimize overall exploration risk. In conducting its search for additional mineral
properties, the Company may consider acquiring properties that it considers prospective based on criteria
such as the exploration history of the properties, the location of the properties, or a combination of these
and other factors. Risk factors to be considered in connection with the Company’s search for and
acquisition of additional mineral properties include the significant expenses required to locate and establish
mineral reserves; the fact that expenditures made by the Company may not result in discoveries of
commercial quantities of minerals; environmental risks; risks associated with land title; the competition
faced by the Company; and the potential failure of the Company to generate adequate funding for any such
acquisitions. See “Risks and Uncertainties” below.



SUMMARY OF QUARTERLY RESULTS

First Fourth Third Second
Quarter Quarter Quarter Quarter
March 31, December 31, September 30, June 30,
2010 2009 2009 2009
Revenue (including interest and
other income) $91,058 $250,943 $0 $0
Expenses $407,859 $534,229 $297,863 $548,549
Gain on sale of marketable
securities $0 $0 $0 $0
Future income tax (recovery) $0 ($626,019) $0 $0
($548,549)
Net income (loss) $(316,801) (1) $342,733 (2) ($297,863) (3) (4)

Net income (loss) per share
basic ($0.00) $0.00 ($0.00) ($0.00)
diluted ($0.00) $0.00 ($0.00) ($0.00)
Cash flows from (used in)
operating activities ($257,999) ($244,174) ($368,833) ($140,005)
Cash and cash equivalents, end
of period $3,731,461 $2,716,778 $3,238,880 $2,261,080
Assets $27,211,223 $25,385,224 $23,567,913 $21,722,068
Long term liabilities $3,415,306 $2,285,206 $2,923,025 $2,923,025

2009 2008 2008 2008
Revenue (including interest
income) $0 $0 $0 $0
Expenses $244,598 $732,804 $163,338 $157,892
Gain on sale of marketable
securities $0 $0 $0 $0
Future income tax (recovery) $0 ($460,107) $0 $0
($157,892)
Net income (loss) ($244,598) (5) ($272,697) (6) ($163,338) (7) (8)

basic ($0.00) ($0.00) ($0.00) ($0.00)
diluted ($0.00) ($0.00) ($0.00) ($0.00)
Cash flows from (used in)
operating activities ($344,908) ($375,190) $59,286 ($370,928)
Cash and cash equivalents, end
of period $2,631,092 $3,205,855 $4,102,592 $4,602,542



2010 2009 2009 2009
Assets $22,087,429 $22,417,191 $22,852,916 $22,548,038
Long term liabilities $2,923,025 $2,837,475 $3,392,082 $3,392,082

Notes:
(1) The net loss of $316,801 principally relates to (i) professional fees of $75,743; (ii) transfer
agent fees of $35,086; (iii) advertising and promotion expenses of $79,719; (iv) consulting fees
of $45,000; (v) management fees of $34,500; (vi) and stock-option compensation of $47,917.
All other expenses related to general working capital purposes.

(2) The net income of $342,733 principally relates to a future income tax recovery of $626,019
and an operator fee of $250,943. These amounts were partly offset by (i) professional fees of
$54,641; (ii) advertising and promotion of $38,470; (iii) consulting fees of $108,900; and (iv)
stock option compensation of $207,000. All other expenses related to general working capital
purposes.

(3) The net loss of $297,863 principally relates to (i) professional fees of $62,541; (ii)
advertising and promotion of $61,096; and (iii) consulting fees of $40,500. All other expenses
related to general working capital purposes.

(4) The net loss of $548,549 principally relates to (i) stock-option compensation of $220,100;
(ii) consulting fees of $95,800; (iii) shareholder relations expense of $83,219; and (iv)
professional fees of $54,450. All other expenses related to general working capital purposes.

(5) The net loss of $244,598 principally relates to (i) advertising and promotion of $48,838; (ii)
professional fees of $47,870; (iii) consulting fees of $47,083; and (iv) travel of $24,247. All
other expenses related to general working capital purposes.

(6) The net loss of $272,697 principally relates to (i) stock based compensation of $457,800; (ii)
future income tax recovery of $460,107; (iii) professional fees of $60,000; and (iv) consulting
fees of $47,500. All other expenses related to general working capital purposes.

(7) The net loss of $163,338 principally relates to (i) accounting and corporate services of
$37,004; (ii) consulting fees of $32,500; (iii) management fees of $24,011; and (iv) professional
fees of $15,030. All other expenses related to general working capital purposes.

(8) The net loss of $157,892 principally relates to (i) shareholder relations expense of $50,576;
(ii) consulting fees of $25,000; (iii) management fees of $24,000 and (iv) professional fees of
$16,060. All other expenses related to general working capital purposes.



RESULTS OF OPERATIONS

Three months ended March 31, 2010, compared with three months ended March 31, 2009

The net loss from operations for the three months ended March 31, 2010, was $316,801 or $0.00 per share,
compared to net loss of $244,598 or $0.00 for the comparative period in 2009. The $72,203 increase in
loss from operations was driven by several variables, including:

• The Company incurred a stock-based compensation expense of $47,917 for the three months
ended March 31, 2010, compared to the three months ended March 31, 2009 of $nil. The increase
can be attributed to the vesting term of 2,000,000 stock options issued on December 21, 2009.
These stock options were granted to an investor relations consultant exercisable over a five-year
period at a price of $0.10 per share. The fair value of these stock 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 incentive stock options was $92,000. These stock
options will vest quarterly over a period of one year. There were no stock options granted during
the three months ended March 31, 2009.

Several variables are used when determining the value of stock options using the Black-Scholes
valuation model:

o The expected term: the Company used the expected term of five years, which is the
maximum term ascribed to these stock options, for the purposes of calculating their value.
The Company chose the maximum term because it is difficult to determine with any
reasonable degree of accuracy when these stock options will be exercised.
o Volatility: the Company used historical information on the market price of its common
shares to determine the degree of volatility at the date the stock options were granted.
Therefore, depending on when the stock options were granted and the period of historical
information examined, the degree of volatility can be different when calculating the value
of different incentive stock options.
o Risk-free interest rate: the Company used the interest rate available for government
securities of an equivalent expected term as at the date of the grant of the stock options.
The risk-free interest rate would vary depending on the date of the grant of the stock
options and their expected term.
o Dividend yield: the Company has not paid dividends in the past because it is in the
development stage and has not yet earned any significant income. Also, the Company
does not expect to pay dividends in the foreseeable future because it does not expect to
bring its mineral properties into production and earn significant revenue any time soon.
Therefore, a dividend rate of 0% was used for the purposes of the valuation of the
incentive stock options.

Incentive stock options are issued to attract key personnel to work for the Company.

• Professional fees during the three months ended March 31, 2010, were $75,743 (three months
ended March 31, 2009 - $47,870). The increase of $27,873 resulted from an increase in services
provided by legal counsel in relation to increased corporate activity during the three months ended
March 31, 2010, compared to the corresponding period in 2009.



• The $9,796 increase in general and administration expenses for the three months ended March 31,
2010, over the comparative period in 2009 is due to director fees of $7,250 incurred in Q1 2010
compared to $nil in the comparative period.

• Advertising and promotion expense increased by $30,881 during the three months ended March
31, 2010, over the comparative period in 2009 as a result of investor relation expenditures and
increased corporate activity.

• The increase in transfer agent, listing and filing fees of $28,396 during the three months ended
March 31, 2010, compared to the year-earlier three months is a result of higher reporting issuer
costs incurred in Q1 2010 compared to Q1 2009.

• Management fees during the three months ended March 31, 2010, were $34,500 compared to the
three months ended March 31, 2009, of $24,000. The monthly payment to the Chief Executive
Officer of the Company has increased from $8,000 to $11,500.

• The increase in interest and bank charges of $8,077 consists of an $8,000 accrual for Part XII.6 tax
(Canada) on the Company’s flow-through obligation in Q1 2010 compared to Q1 2009.

• Other expense fluctuations can be related to small variances seen in accounting and corporate
services, interest and bank charges, travel, occupancy costs, consulting fees and insurance.

LIQUIDITY AND CAPITAL RESOURCES

The activities of the Company, principally the acquisition and exploration of properties that have the
potential to contain metals, are financed through the completion of equity transactions such as equity
offerings and the exercise of incentive stock options, agent options and warrants. For the three months
ended March 31, 2010, the Company had the following equity transaction:

• 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 will 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.

• On January 12, 2010, a total of 2,500,000 warrants were exercised for 2,500,000 common shares
of Spider at $0.05 per share for gross proceeds of $125,000.

• On March 16, 2010, total of 1,111,000 warrants were exercised for 1,111,000 common shares of
Spider at $0.10 per share for gross proceeds of $111,100. In addition, a total of 200,000 warrants
were exercised for 200,000 common shares of Spider at $0.05 per share for gross proceeds of
$10,000.

• On March 17, 2010, a total of 161,666 warrants were exercised for 161,666 common shares of
Spider at $0.05 per share for gross proceeds of $8,083.

• On March 18, 2010, a total of 1,500,000 warrants were exercised for 1,500,000 common shares of
$4,500.

• On March 19, 2010, a total of 2,800,001 warrants were exercised for 2,800,001 common shares of
$20,833.

• On March 22, 2010, a total of 833,333 warrants were exercised for 833,333 common shares of
Spider at $0.05 per share for gross proceeds of $41,667.

There is no assurance that future equity capital will be available to the Company in the amounts or at the
times desired or on terms that are acceptable to the Company, if at all. See “Risks and Uncertainties”
below.

The Company has no operating revenues and therefore must utilize its current cash reserves, funds
obtained from the exercise of warrants, stock options, agent options, and other financing transactions to
maintain its capacity to meet ongoing discretionary and committed exploration and operating activities.

As of March 31, 2010, the Company had 471,194,433 common shares issued and outstanding, 140,217,328
warrants outstanding which would raise $12,368,883 if exercised in full, and 40,318,515 incentive stock
options and agent options outstanding which would raise $3,556,202 if exercised in full.

To date, the cash resources of Spider are held with HSBC Bank Canada. The Company has no debt and its
credit and interest rate risk is minimal. Accounts payable and accrued liabilities are short-term and non-
interest bearing.

The Company’s liquidity risk with financial instruments is minimal as excess cash is invested in
investment grade short-term deposit certificates. As of March 31, 2010, the Company’s funds were in two
non-interest bearing accounts. The Company did not have any investments as of March 31, 2010.



In addition, sundry receivables are composed of sales tax receivable from government authorities in
Canada and deposits held with service providers.

Accounts payable and accrued liabilities decreased to $199,358 at March 31, 2010, compared to $334,164
at December 31, 2009, primarily due to less accounts payable at March 31, 2010, compared to December
31, 2009. The Company’s cash as at March 31, 2010, is sufficient to pay these liabilities.

The Company’s use of cash at present occurs, and in the future will occur, principally in two areas,
namely, funding of its general and administrative expenditures and funding of its investment activities.
Those investing activities include the cash components of the cost of acquiring and exploring its mineral
claims. Currently, the Company’s operating expenses are averaging approximately $120,000 per month for
working capital related expenses. The Company also plans to incur exploration expenditures of $2,700,000
on its mining interests. Of this, $2,500,000 relates to the Big Daddy chromite deposit and must be spent by
March 31, 2011 ($946,000 spent (rounded)); about $200,000 relates to other mining interests, and which
the Company anticipates spending by December 31, 2010 ($11,000 spent (rounded)). See “Mineral
Exploration Properties”, above. The Company’s existing funds on hand at March 31, 2010, are anticipated
to be adequate for Spider to meet its working capital needs at the current level for the next nine-month
period ending in the fourth quarter of fiscal 2010. This is subject to the Company’s ability to attract and
retain skilled staff and consultants. The Company’s anticipated spending includes its flow-through
commitment of approximately $1,953,000. The flow-through obligations from fiscal 2009 are required to
be spent by December 31, 2010, under the Canadian tax rules regarding flow-through shares. The
Company can elect to spend the January 22, 2010, flow-through financing by December 31, 2011, under
the same tax rules. The decision where to spend the remaining $210,000 flow-through commitment from
the January 22, 2010, flow-through financing will be determined by management in due course.

OFF-BALANCE-SHEET ARRANGEMENTS

As of the date of this filing, the Company does not have any off balance sheet arrangements that have, or
are reasonably likely to have, a current or future effect on the results of operations or financial condition of
the Company, including, and without limitation, such considerations as liquidity and capital resources.

PROPOSED TRANSACTIONS

There are no proposed transactions of a material nature being considered by the Company. However, the
Company continues to evaluate properties and corporate entities that it may acquire in the future. See
“Overall Objective” above

TRANSACTIONS WITH RELATED PARTIES

During the three months ended March 31, 2010, the Company paid $34,500 (three months ended March
31, 2009 - $24,000) to Nominex Ltd., a company controlled by Neil Novak, 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.

The Company paid Richard Hamelin, the Vice President of the Company, fees totaling $22,500 for the
three months ended March 31, 2010 (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 paid to a law firm in which the Corporate Secretary, Carmen Diges, is a
partner. 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 (three months ended March 31,
2009 - $7,500) to Marrelli CFO Outsource Syndicate Inc. ("Marrelli") for the services of Carmelo Marrelli
to act as Chief Financial Officer of the Company. The Company's Chief Financial Officer is the president
of Marrelli and Marrelli Support Services Inc., a firm that provides 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.

During the three months ended March 31, 2010, the Company paid consulting fees of $15,000 (three
months ended March 31, 2009 - $nil) to James G. Burns, 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, Franklin Geosciences Ltd. was owed $nil (December 31, 2009 - $24,780) in
outstanding consulting fees and unreimbursed expenses. This amount was included in accounts payable
and accrued liabilities. Franklin Geosciences Ltd. is a company beneficially owned by Jim Franklin, a
director of the Company.

During the three months ended March 31, 2010, the Company paid $7,250 (three months ended March 31,
2009 - $nil) as director fees. Director fees include payments to Earl Coleman - $1,750; Norman Brewster -
$1,500; Bryan Wilson $1,250; Jim Franklin $1,500; and Gregory Roberts - $1,250). As at March 31, 2010,
$15,146 (December 31, 2009 - $5,856) was owed to two directors as reimbursable expenses and this
amount was included in accounts payable and accrued liabilities (March 31, 2010: Neil Novak - $13,063
and Earl Coleman - $2,083) (March 31, 2009 - Neil Novak - $5,856).

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.

CRITICAL ACCOUNTING ESTIMATES

The preparation of the Company’s unaudited interim financial statements requires management to make
certain estimates that affect the amounts reported in the financial statements. The accounting estimates
considered significant are the valuation of the Company’s mining interests, warrants and stock-based
compensation.

The policy of capitalizing exploration costs to date does not necessarily relate to the future economic value
of the exploration properties. The valuation of mining interests is dependent entirely upon the discovery of
economic mineral deposits.

The Company uses the Black-Scholes model to determine the fair value of stock options and warrants. The
main factor affecting the estimates of stock-based compensation and warrants is the stock price volatility
used. The Company uses historical price data and comparables in the estimate of future volatility.



Changes in the accounting estimates in the items discussed above may have a material impact on the
financial position of the Company.

Other items requiring estimates for the three months ended March 31, 2010, are accounts payable and
accrued liabilities and asset retirement obligation. Changes in the accounting estimates in these items may
have a material impact on the financial position of the Company.

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 IAS 27 - Consolidated and Separate
Financial Statements. The Company is in the process of evaluating the requirements of the new standards.

International Financial Reporting Standards (“IFRS”)

The Canadian Accounting Standards Board has confirmed that IFRS will replace current Canadian GAAP
for publicly accountable enterprises, including the Company, effective for fiscal years beginning on or
after January 1, 2011.

Accordingly, the Company will report interim and annual financial statements in accordance with IFRS
beginning with the quarter ended March 31, 2011. The Company's 2011 interim and annual financial
statements will include comparative 2010 financial statements, adjusted to comply with IFRS.

IFRS Transition Plan

The Company has established a comprehensive IFRS transition plan and engaged third-party advisers to
assist with the planning and implementation of its transition to IFRS. The following summarizes the
Company's progress and expectations with respect to its IFRS transition plan:

Initial scoping and analysis of key areas
for which accounting policies may be
impacted by the transition to IFRS. Complete.
Detailed evaluation of potential changes
required to accounting policies,
information systems and business
processes, including the application of
IFRS 1 First-time Adoption of
International Financial Reporting Complete.



Standards.
Final determination of changes to
accounting policies and choices to be
made with respect to first-time adoption In progress, completion expected during
alternatives. Q2 2010
Resolution of the accounting policy
change implications on information
technology, business processes and In progress, completion expected during
contractual arrangements. Q3 2010
Quantification of the financial statement
impact of changes in accounting policies. Throughout 2010
Management and employee education and Throughout the transition process
training.

Impact of Adopting IFRS on the Company’s Business

As part of its analysis of potential changes to significant accounting policies, the Company is assessing
what changes may be required to its accounting systems and business processes. The Company believes
that the changes identified to date are minimal and the systems and processes can accommodate the
necessary changes.

To date, the Company has not identified any contractual arrangements that may be affected by potential
changes to significant accounting policies.

The Company's staff and advisers involved in the preparation of the financial statements are being trained
on the relevant aspects of IFRS and the anticipated changes to accounting policies. Employees of the
Company who will be affected by a change to business processes as a result of the conversion to IFRS will
also be trained as necessary.

The Board of Directors and the Audit Committee have been regularly updated on the progress of the IFRS
conversion plan, and made aware of the evaluation to date of the key aspects of IFRS affecting the
Company.

First-time adoption of IFRS

The adoption of IFRS requires the application of IFRS 1 First-time Adoption of International Financial
Reporting Standards (“IFRS 1”), which provides guidance for an entity’s initial adoption of IFRS. IFRS 1
generally requires retrospective application of IFRS, effective at the end of its first annual IFRS reporting
period. However, IFRS 1 also provides certain optional exemptions and mandatory exceptions to this
retrospective treatment.

The Company has identified the following optional exemptions that it expects apply in its preparation of an
opening IFRS statement of financial position as at January 1, 2010, its transition date:

• To apply IFRS 2 Share-based Payments only to equity instruments issued after November 7,
2002, and that had not vested by the transition date.



• To apply IFRS 3 Business Combinations prospectively from the transition date, therefore not
restating business combinations that took place prior to the transition date.
• To apply the transition provisions of IFRIC 4 Determining whether an Arrangement
Contains a Lease, therefore determining if arrangements existing at the transition date
contain a lease based on the circumstances existing at that date.
• To apply IAS 23 Borrowing Costs prospectively from the transition date. IAS 23 requires
the capitalization of borrowing costs directly attributable to the acquisition, production or
construction of certain assets.

Prior to reporting interim financial statements in accordance with IFRS for the quarter ending March 31,
2011, the Company may decide to apply other optional exemptions contained in IFRS 1.

IFRS 1 does not permit changes to estimates that have been made previously. Accordingly, estimates used
in the preparation of the Company’s opening IFRS statement of financial position as at the transition date
will be consistent with those made under current Canadian GAAP. If necessary, estimates will be adjusted
to reflect any difference in accounting policy.

Impact of Adopting IFRS on the Company’s Financial Statements

The adoption of IFRS will result in some changes to the Company's accounting policies that are applied in
the recognition, measurement and disclosure of balances and transactions in its financial statements.

The following provides a summary of the Company's evaluation to date of potential changes to accounting
policies in key areas based on the current standards and guidance within IFRS. This is not intended to be a
complete list of areas where the adoption of IFRS will require a change in accounting policies, but to
highlight the areas the Company has identified as having the most potential for a significant change. The
International Accounting Standards Board has a number of ongoing projects, the outcome of which may
have an effect on the changes required to the Company’s accounting policies on adoption of IFRS. At the
present time, however, the Company is not aware of any significant expected changes prior to its adoption
of IFRS that would affect the summary provided below.

1) Exploration and Evaluation Expenditures

Subject to certain conditions, IFRS currently allows an entity to determine an accounting policy that
specifies the treatment of costs related to the exploration for and evaluation of mineral properties. The
Company expects to establish an accounting policy to expense, as incurred, all costs relating to
exploration and evaluation until such time as it has been determined that a property has economically
recoverable reserves.
The application of this policy on the adoption of IFRS will have a significant impact on the
Company’s financial statements. On adoption of IFRS, the carrying value of the mineral resource
properties will be reduced to zero (as at the transition date), with a corresponding adjustment to
accumulated deficit. All subsequent exploration and evaluation costs will be expensed as incurred
until such time as it has been determined that a property has economically recoverable reserves.



2) Impairment of (Non-financial) Assets

IFRS requires a write down of assets if the higher of the fair market value and the value in use of a
group of assets is less than its carrying value. Value in use is determined using discounted estimated
future cash flows. Current Canadian GAAP requires a write down to estimated fair value only if the
undiscounted estimated future cash flows of a group of assets are less than its carrying value.

The Company's accounting policies related to impairment of non-financial assets will be changed to
reflect these differences. However, the Company does not expect that this change will have an
immediate impact on the carrying value of its assets. The Company will perform impairment
assessments in accordance with IFRS at the transition date.

3) Share-based Payments

In certain circumstances, IFRS requires a different measurement of stock-based compensation related
to stock options than current Canadian GAAP.

The Company does not expect any changes to its accounting policies related to share-based payments
that would result in a significant change to line items within its financial statements.

4) Asset Retirement Obligations (Decommissioning Liabilities)

IFRS requires the recognition of a decommissioning liability for legal or constructive obligations,
while current Canadian GAAP only requires the recognition of such liabilities for legal obligations. A
constructive obligation exists when an entity has created reasonable expectations that it will take
certain actions.

The Company's accounting policies related to decommissioning liabilities will be changed to reflect
these differences. However, the Company does not expect this change will have an immediate impact
on the carrying value of its assets.

5) Property and Equipment

IFRS contains different guidance related to recognition and measurement of property and equipment
than current Canadian GAAP.

The Company does not expect any changes to its accounting policies related to property and
equipment that would result in a significant change to line items within its financial statements.

6) Income Taxes

In certain circumstances, IFRS contains different requirements related to recognition and
measurement of future (deferred) income taxes.

The Company does not expect any changes to its accounting policies related to income taxes that
would result in a significant change to line items within its financial statements.



Subsequent Disclosures

Further disclosures of the IFRS transition process are expected as follows:

• The Company’s MD&A for the 2010 interim periods and the year ended December 31, 2010, will
include updates on the progress of the transition plan, and, to the extent known, further information
regarding the impact of adopting IFRS on key line items in the annual financial statements.
• The Company's first financial statements prepared in accordance with IFRS will be the interim
financial statements for the three months ending March 31, 2011, which will include notes disclosing
transitional information and disclosure of new accounting policies under IFRS. The interim financial
statements for the three months ending March 31, 2011, will also include 2010 financial statements for
the comparative period adjusted to comply with IFRS, and the Company’s transition date IFRS
statement of financial position (at January 1, 2010).

MANAGEMENT OF CAPITAL

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.

PROPERTY RISK AND FINANCIAL RISK AFFECTING FINANCIAL INSTRUMENTS

(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, it 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 its 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 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 on January 22, 2010.

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 recognized 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.

(c) Fair Value Hierarchy and Liquidity Risk Disclosure

Fair value measurement of assets and liabilities recognized on the balance sheet is 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, 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 depend upon the world market price of valuable minerals. Commodity prices
have fluctuated significantly in recent years. There is no assurance that, even if commercial quantities of
valuable minerals are 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. Even so, 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.

DISCLOSURE OF INTERNAL CONTROLS

Management has established processes to provide them sufficient knowledge to support 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.

In contrast to the certificate required for non-venture issuers under National Instrument 52-109
Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic
Certificate does not include representations relating to the establishment and maintenance of disclosure
controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-
109. In particular, the certifying officers filing this certificate are not making any representations relating
to the establishment and maintenance of:



i) controls and other procedures designed to provide reasonable assurance that information required to
be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted
under securities legislation is recorded, processed, summarized and reported within the time periods
specified in securities legislation; and

ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with
sufficient knowledge to support the representations they are making in this certificate. Investors should be
aware that inherent limitations on the ability of certifying officers of a venture issuer to design and
implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks
to the quality, reliability, transparency and timeliness of interim and annual filings and other reports
provided under securities legislation.

ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT
REVENUE

The following table sets forth a breakdown of material components of mining interests for the three months
ended March 31, 2010, and the year ended December 31, 2009.

Exploration expenditures

Projects March 31, December 31,
2010 2009
($) ($)

Spider #1

Opening balance 7,379,737 7,379,737

Geophysics nil nil

Closing balance 7,379,737 7,379,737

Wawa

Opening balance 1,238,770 1,133,232

Contractor wages 6,540 4,440
Geochemical nil 74,735
Operator costs nil 7,979
License fees 875 18,120
Travel, meals and accommodation 3,339 264
Geophysics nil nil


Spider Resources Q1 2010 MD&A

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