"Now a question, am I right in figuring that the 4M+ from UC is counted as SPQ's contribution to cover its' 50% of project value? "

No you are not. However, if in fact something significant is found by UC, it will be very easy for SPQ to raise the money to continue the drilling and earn its 30%.

The way it works out is that once UC has expended its full share and earned 55%, it will have to contribute 55% of any subsequent expenditure and SPQ/KWG the remaining 45% (i.e.pro rata). However, under the 2006 agreement KWG will not be allowed to contribute its share of the 45% and SPQ will contribute the full 45%, thus watering down KWG's share until the latter is 15%.

I don't think the 2006 agreement with Spiderwill is being challenged by KWG. That is solid. However, it appears that KWG is challenging some aspects of the farm-in agreement with UC, that Spider signed with UC on behalf of the SPQ/KWG JV as it is allowed to do under its 2006 agreement with KWG. KWG can not be challenging the totality of that agreement, because they acknowledged it in their various regulatory filings. Therefore, they must be challenging certain aspects of it. Aside from going to court, KWG has a relatively strong hand vs. UC, because a definitive agreement has not been signed, only a LOI. (In the circumstance UC might be reluctant to spend more money now until a definitive agreement is signed, so we may see a delay in the drilling on that land, unless they decide to take the risk and go ahead without a signed agreement).

One aspect that I suspect KWG is challenging is the one requiring any newly staked land within 10 km of the UC JV to be included in that JV. That is why I suspect the Dec 16 map on SPQ's web site shows one new block as 50/50 with KWG, whereas the Noront feb 2008 map shows it as part of the UC JV. (the other newly staked block to the north-west would not be in dispute, as it surrounds Diagnos staked land, and that is specifically excluded from the 2006 agreement and thus could not be part of the UC JV).