Had a look through the code as I couldn't use the spade and now I know why.When it says not enough baldies to use the spade it has nothing to do with how many baldies you actually have.It checks how many enemies are active and then increases a counter,you need to leave a minimum of 3 enemies alive in order to get access to the spade.
Code:
cmp.w #2,_nmeactivecount
bgt SpadeCheckContinue
rts
SpadeCheckContinue:
add.l #1,_spadeInactivecounter
tst.w _spadeactiveflag
bne MoreCode
cmp.l #5000,_spadeInactivecounter
blt MoreCode
move.w #1,_spadeactiveflag