The second answer below is particularly important here: CLF's interest in KWG will be diluted within the merger :)

Hi Bernie,

Thank you for your note today.

Please find below the answers to your questions:


Q - one poster has been adamently posting that Cliff and KWG have some legally binding agreements in place that will prevent the merger from happening. True or false?

A - This is disinformation. False.


Q - If the proposed merger succeeds, will Cliff's first right of refusal allow them to purchase additional PP shares to maintain their 19%+ interest in the new company?

A - Subject: RE: Agreement with Cliffs, dated March 16, 2009 The issue of
treasury shares by KWG in payment for the acquisition of property other than
cash is one of the transactions that is excluded from those events that
trigger the Cliffs preemptive right to maintain its 19.9%. The proposed
merger structure would have KWG issue treasury shares to Spider's
shareholders when Spider and KWG's subsidiary (created for the purpose)
amalgamate. This is how a Quebec company (which cannot change its
jurisdiction) can effectively merge with a Canada company (like Spider), by
putting its assets into a wholly-owned subsidiary Canada company.


Q - Will the valuation be available in time for KWG to counter Cliff's lowball offer to Spider?

A - That matter is in the hands of the KWG Special Committee and at this
moment I unfortunately have no additional information for you.


Thank you for your continued support.

Best regards,

Chris Meraw
Corporate Communications
KWG Resources Inc.
(888) 644-1374 (Toll Free)

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