leveland company is eyeing control of Big Daddy chromite discovery in Ontario.

Eyeing control of a northern Ontario chromite find, U.S. giant Cliffs Natural Resources Inc. (NYSE: CLF, Stock Forum) has raised its takeover bid for Spider Resources Inc. (TSX: V.SPQ, Stock Forum) by 46% and said it as signed a lock up deal with the junior’s biggest shareholder.

Cleveland, Ohio-based Cliffs said Friday it is willing to pay 19 cents a share in cash for Spider, up from its previous offer of 13 cents. The offer values Spider at $125 million.

News of the latest offer came just hours after KWG Resources Inc. (TSX: V.KWG, Stock Forum) sweetened an earlier proposal that would allow it to merge with Spider in order to facilitate development of the Big Daddy chromite discovery.

In order to gain Spider’s support, KWG said it was willing to match Cliffs’ earlier proposal to raise its bid for Spider to 16.5 cents from 13 cents. KWG also said it was willing to toss in 50% of its interests in a railway right of way, and a 2% net smelter royalty return interest in Big Daddy and two chromite discoveries located nearby.

When KWG unveiled its latest offer after the close of trading on Friday, it said shareholders would have an opportunity to vote on the merger deal on July 8th.

But Cliffs now says the Spider board has determined that its revised bid is superior to the one that is being proposed by KWG. Cliffs also said it has signed a lockup deal with MineralFields Group, which owns 13.8% of Spider.

Under that deal, Cliffs said MineralFields will tender to the revised offer from Cliffs and vote against the merger with KWG.

Cliffs already owns a 47% interest in the Big Daddy chromite discovery, which is located in the Ring of Fire region of northern Ontario. Spider and KWG each own 26.5% of Big Daddy and have the option to raise their interest to 30%.

A Cliffs spokesman has said the company is aiming for control of Big Daddy. However, he added that the company can achieve that objective without launching a takeover offer for KWG.

On May 24, when Cliffs said it intended to bid for Spider, it also indicated that it would make an offer for KWG. However, on Friday evening, Cliffs said it has now determined that it will not bid for KWG.

Cliffs said KWG now has until just after midnight on July 6th to match the revised offer from the U.S. company.

“Spider shareholders have an important decision ahead and we think they should choose the value and certainty of our premium cash offer,’’ said William C. Bloor, President of Cliffs’ Ferroalloys business unit.

Before trading in both companies was halted on Friday, KWG was trading at 12 cents, down 4%. Spider was trading at 16 cents, down 3%.

Cliffs said its revised offer includes conditions that Spider execute a support agreement with Cliffs and that Cliffs receives commitments in the form of lock-ups with Spider’s directors and officers to tender their shares and vote against the merger.

Cliffs’ revised offer is also conditional on Spider terminating its agreement to merge with KWG.