EdZedBlog

HELLELUYA!

Ed Zederayko — Wed, 02 Apr 2008 14:37:00 GMT

HELLELUYA! (The exclamation mark is mine.) The rather unique form of the greeting is part of an Easter message sent by an old Esso/Exxon days Geologist friend. His mother tongue is Arabic. As result, my friend Bill sometimes communicates with words and phrases that are “Bush-esque”. Today his phrase was particularly “ept”, because it arrived as I watched Cassidy stock. It was getting “Shellacked”. A persistent seller was driving the share price downwards for the third day in a row.

Then, suddenly, HELLELUYA! the trend reversed. Buyers came out to lift the stock price and relieve the selling pressure. The trading day ended with about a quarter million shares changing hands and actually closing on an uptick!

CHOICES: We will never know whether that selling was a “short sale” by a wannabe market shark or selling by a shareholder hard-pressed by his broker to ante up some cash to cover a margin account. The world market is in turmoil. The US market literally stands on its head. The Fed drops interest rates and the dollar goes up! The greater risk of inflation results in a drop in gold prices! I guess its time to rewrite the “Economics 101 Textbooks”. What a heck of a time to find a goldmine! Anyhow - I hope the seller was a wannabe shark and that he got his lesson right.

In my imagination I see President Gillis. He is harassed by shareholders complaining that news is so slow in coming. As time ticks by it must seem to Gillis that the quote from Oscar Wilde that "He has no enemies, but is disliked by his friends" applies.

Eureka! At last he has enough data to allow a meaningful news release to be made. Did he rub his hands and chuckle in anticipation of discomfiting a possible short seller? I certainly hope so! And I hope he squeezes ‘em tight!

NO LEAKS: This “helleluya” provides insight into how Cassidy manages information. Clearly, information had accumulated for some time. It can be seen that it includes some very good results. But the trading history indicates there was nary a whisper of a leak. No leaks is an important attribute. It is appreciated by investors. They are all fairly dealt with. The lift in share price, although short-lived after the announcement indicates to me that at least some persons appreciate what the results mean.

SIGNIFICANCE: Some of us remember the original TV cop, Sgt Joe Friday, LAPD. The news release was like a typical Joe Friday utterance. Joe always wanted, “Just the facts Ma’am, just the facts”. So Sgt. Friday, here are the facts:

1.    The results announced carry astounding implications. This drilling pattern reported might be described as “aimed at finding out where the gold ain’t”. Obviously, these holes were not considered as aimed at “prime targets” or they would have been done months before!

2.    Serendipitally (Sorry, but I get tired of writing words that don’t send at least someone to the dictionary) these latest results demonstrate why we should listen when they say “Open along strike and to depth”. Results at the actively mined areas both north and south of Cassidy’s ground previously caused many gold seekers to write off Guinea as being “Small Deposit” country. “You want to find big gold, go to Mali or Tanzania.” Well, not necessarily so guys! Go just a little bit deeper and drill 3 widely separated zones with excellent grade content for thickness as great as 42 meters. That’s a little bit more than 125 feet guys!

3.    Moreover, the description also identified “splays”. So was I anatomically wrong when I identified the area of the armpit? This looks more like the armpit maybe. The previously drilled trends now start to look like mere elbows on a centipede. The “open as to depth” suddenly takes on Dollar Signs. It says that the scooping study now underway should have strong impetus to be “optimistic” about the probability of developing a mine.

WHERE ARE THE WISE GUYS? Scouts at companies seeking advanced stage exploration projects have to be taking increased notice of Cassidy’s Kouroussa project. The depletion of gold reserves continues everywhere. Cost increases increasingly result in decreased world gold production and stifle exploration. The “inverted economics” attendant on the US trying to patch its “sick at home situation” must inevitably right themselves. As I watch the Cassidy stock action I keep saying to myself that there must be someone with “smart pockets” who stands in and keeps on buying. Most of a million ounces of gold resource. One hundred million shares. Nine hundred dollar gold. Hmm, that’s $9 of gold in the ground and growing, for $0.30. Time to stick around and see the hand revealed.

Playing The Numbers

Ed Zederayko — Thu, 24 Jan 2008 03:33:00 GMT

SOMEBODY IS BUYING A LOT: Trading activity in CDY common shares, analyzed to be for a positive, single-minded client seeking to accumulate shares in Cassidy Gold Corp. occurred again on the floor of the TSE this past week.

In Q3 2007, under a similar trading pattern, a professionally executed buying program took more than three million shares off the floor of the TSE without mussing a hair, hurting anyone’s reputation, or, sadly, raising the per- share price.

Now, in 2008 YTD another very professionally executed buying program appears to be underway. More than 650,000 shares of the miner have traded. The same trade pattern earmarks are seen. The bid is for relatively small orders, never stretching for shares at higher prices and backing off whenever there are signs that the buying is causing share price to run away.

The professionalism evident in the trading discipline is remarkable. A total of 2,630,000 shares were traded since late October 2007. The cost is just slightly more than one million dollars. The result is an average price of $0.43 per share. That $0.43 average per share is the closing price today, up one cent per share from January 31, 2008.

January 21, 2008 the sky was falling! At least as far as the TSE Indices, the Gold bullion price, and the price of many wannabe miners’ shares were concerned. CDY shares evidenced serene stability and liquidity through this serious stock market tilt. INTERESTING!

SMART BUYER ON DOOTY? The similarity of pattern of the share purchases strongly suggests a single buyer. If so, more than four million shares have been accumulated off the floor of the TSE by a determined smart buyer(s).

A brokered private placement of 8,000,000 common shares of the Company (and warrants to purchase added shares) sold for four million dollars ($0.50 per share). This means that as many as 12 million shares (plus warrants to buy more) changed hands in the period. This represents more than 10% of the undiluted capitalization of the Company.

Someone out there is buying. They must consider it to be a bargain. The facilitating broker of the last private placement, Jennings Capital took shares on the placement. Jennings was the buyer or agent for the buyer in the Q3 2007 accumulations. Recently the smart buys are being done by broker Canaccord. It could be Canaccord for its house account, but more likely it’s Canaccord for a client. I suspect it is the same buyer who bought the majority of the private placement,

WHODUNNIT? Identification of the purchasers of the common shares issued by the treasury of the company under private placement terms is reported.

The purchaser of the largest proportion of the most recent issue (and a returning purchaser from previous placements) is Phoenix Gold Fund, an investment managed by Asian Investment Management Services (AIMS Ltd), from Malaysia. Asian Investment Management Services (AIMS Ltd), is a fund management and advisory business. It has assets under management that top USD 250 million, including a 100m USD portfolio managed for Soros Fund Management. Here is a paragraph lifted from its Phoenix Gold Fund’s January 2008 newsletter :

"However, this steep fall in the price of many of the smaller stocks, combined with the sharp rise in the gold price, particularly during the last quarter of 2007 and the first few days of 2008, has produced a situation where we are able to find many stocks that have already delineated substantial resources and where they are now trading at a fraction of the price at which we expect they will be the subject of an acquisition. If gold is now going to remain on the right side of $800 an ounce, we expect that many of the smaller gold explorers will soon be recognised as bargains and these stocks will again far outpace the bullion price."

Does this sound like a description of Cassidy at this time? You betcha boots! Is this the mystery buyer? Could be.

WHY BUY? Cassidy has accomplished something very few gold juniors do - actually prove potential of a mine. Most small companies sell off their discoveries long before they reach that stage. They sell to the majors. The majors are majors because they buy up the little guys for a song. CDY is somewhat unique in holding on as long as it has. To quote my favourite Geologist, Arte Johnson (From the old LaughIn show) VERRRRY INTERESTING!

The next step for the big boy investors in Cassidy may be to get the share price up. If the hundred million bucks or so needed to make a mine doesn't scare them off, they only need get the stock up to say, a couple of bucks. That is still well below value in the ground per share of the gold already evidenced. Then. if one assumes a 50/50 debt to equity mine financing one needs dilute only by 25 million more shares to get mining. Cassidy becomes a 125 to 150 million share company with a "nearly proved" nearly one Billion dollar ore asset in the ground. At that point the asset is getting ready to come out. Best of all, Cassidy has great potential to add mineable resources both downward and sideways at Kourassa. It has now done everything to justify having great credibility among investors and competitors.

Shareholders like Dundee and AIMS look for really big gains from LARGE investment opportunities. They are not satisfied with "chicken shit big moves" on small potential stocks. These funds have way too much money to look at multitudes of small holdings. They rely on technical expertise. Managers can only keep up with so many stock positions. The fact that these professionals chose to invest in Cassidy (some several times over) is, to me, vindication of my past expressed interpretations.

I see really deep and very patient pockets accumulating CDY shares. The question is - will they cause the stock to climb? Will they support in order to get the financing for the mine at least dilution? Or, will they use their accumulation to hold the price down in order to be the investors willing to put up the $50 million in equity to build the mine? I suspect they might become both - equity investor and lender for mine building.

Afterwards they could stay while Cassidy uses the supernumerary cash flow to explore the rest of the concession. Cassidy’s permits are in the fairway that is situated between a profitable mine to the south and two to the north. They soon may be seen to contain a mine in progress as well. Owning shares acquired at a very good price in a company that has room for great growth appeals. How does Cassidy fit in the picture?

In mid Q4 of 2007 Cassidy announced calculations accounting for the continuing delineation of the first project, called Kourassa. The deposits are a cluster of accumulations in proximity to Guinea’s principal highway. The known accumulations occupy an area that is only between five to ten per cent of the total area that CDY has rights to explore and, if economic, to mine for profit.

The Company has very highly regarded expert opinions expressing that the ores can be efficiently processed to yield 96% of the contained precious metal. A study to determine potential profitability was initiated in late Q4, 2007.

Drilling underway is intended to "flesh out" resources that, if confirmed to strict standards, will enhance mining profit projections. CDY will resume exploration as soon as possible. Past drilling already demonstrates that some deposits extend to coalesce with others. This makes mining possibility more profitable. The accumulations extend to unknown depth. Logically, some can be expected to be richer at depth.

RESOURCES IDENTIFIED NOVEMBER 2007: CDY’s press release dated Nov. 8, 2007 informed shareholders of resources recognized by Cassidy’s highly conservative consulting engineers. The report filed bears the name of Coffey Mining Pty Ltd. The resources reported at Kourassa total 940,000 ounces of gold with average grade of 1.95 grams gold per ton when using a cutoff of 0.7 g/t (i.e. the cutoff is $21 per ton dirt at current gold price).

The resource calculation is conservatively cautious and does not include potentials indicated by drill holes that tested gold in widely spaced holes. As an explorer, it is illogical to me that extensions of the recognized trends are not projected into these numbers. But I rely on their caution to allow me to speculate that the indications are for more than one million ounces of gold resource to exist at Kourassa.

The detailed report was filed with Public Company Information Regulator, SEDAR, on Dec 21, 2007. The name RSG Global, is now a division of Coffey Mining Pty Ltd whose name appears on the report. In the past I have claimed RSG uses excess caution especially in regard to intervals with higher gold readings. "Capping" is a cautious engineer’s insurance against reporting optimistically high readings caused by "nugget effect". Previous reports included calculations with and without capping. I may have been too much of a gadfly. Here is an excerpt verbatim from that report :

"The outcome of applying the high grade capping process was that relatively few data were capped (generally less than 5 composites), although 18 data were adjusted for domain 110 at Sanu Filanan. The capping has resulted in a substantial reduction in mean grade for some domains, although this was generally based on the adjustment of relatively few data."

Sadly, Sanu Filanan is one of the principal rich localities ah well, big sigh, engineers!

THE CONSULTANT’S CONCLUSIONS, (paraphrased and abbreviated) :

1. Cassidy has delineated resources of gold that merit consideration for mining.

2. The quality of the work and assaying done is very good. There is no cause for concern about the resource existing,

3. Cassidy should reduce its concentration on pinning down the resources at Kourassa and resume exploration of its very large tract of highly prospective permits.

MY CONCLUSIONS :

* Cassidy has attracted the attention of investors who appear very knowledgeable, Some are continuing to avail themselves of opportunities to acquire shares at these very low prices. All have the capacity to invest large sums;

* Cassidy now has the hard evidence needed to attract possible joint venterers, and/or company acquisitors under terms that are solidly beneficial to shareholders;

* Comparisons with recent deals suggests that the Kourassa project alone, as is, would fetch $160 to $300 million ($1.60 to $3.00 per share) "on the street". Additional value, several times that amount can be imputed for the exploration potentials;

* Cassidy’s management has expressed intentions to follow the consultant’s advice to concentrate on exploration of the additional potential of its holdings. Exploration news makes markets move!

* Cassidy’s management expresses intents to promote the company now that it has reached a "comfortable" basis of "bragging rights";

* The company has started a campaign to make the company known to added investors at "gold shows" and venues arranged by brokers who recognize the inherent value and by extension, the potential for extraordinary share price advances;

* The company will outshine its competitor counterparts by reason of having the resource solidly pinned down with added properties of equal or better potentials;

* The financial expertise resident in the larger shareholders better guarantees that dealings with third parties will be beneficial to all Cassidy shareholders. The seeming unsatisfied appetite for shares provides good liquidity prospects for other shareholders;

* The existence of more than one major investor better assures that no single party will steamroller small shareholders;

* World economics, fears of slowdown or recession will serve Cassidy in two positive ways. First, Gold is likely to continue to hold or build on its value if dollar fears continue. Second, slowdowns may reduce the cost to equip and operate mines.

Cassidy appears to be ready to have its share price climb to new highs.

Keep the faith!

Rats and Bats

Ed Zederayko — Wed, 10 Oct 2007 22:04:00 GMT

Rats and Bats!!

Question : What is wrong with Cassidy Gold?

Answer : NOTHING !! except the stock price really sucks!!

I quote Resource World Magazine’s "How to profit with Mining Stocks" 2007 Summer Edition. "When the Company recovers many drill cores indicating good metal values over long intercepts, the share price usually reflects the value of the discovery – but not always. This is where promotion comes in. The investing public has to be aware of the discovery in order for investors to bid up the share price. It is important for the mining company to get its story out there to investors. When you don’t promote a terrible thing happens -- NOTHING". (The capitals are mine).

Cassidy’s management does not promote the stock

Announcements lack "embroidery" normally used to create wide awareness of potentials. Information releases are infrequent. Press releases are detailed, but entirely without "editorial comment". Failure to express even the most fundamental and logical anticipations affects shareholder appreciation of results. Popularity, liquidity and share price show no reaction to good news. Such news seems not understood to indicate CDY’s truly unusual success.

What’s next? Cassidy Shareholder’s anticipations are now focussed on an independent third party report. This will "officially" describe the situation following the latest exploration and delineation program. Based on questions asked of me by the "average" shareholder" I realize that many shareholders are unaware of the rules that govern the reports on which their anticipations are now hung. I will try to put these in perspective.

How come? : The disappointing share performance is somewhat related to Cassidy management’s self-imposed constraints. Results are reported in a way that undoubtedly enhances "professional esteem" from "peer engineers". But professional accolades do not serve the Company’s Shareholders. Failures of verbal communication are made worse by a lack of graphic content on the website. The Company has not made a publicity-oriented appearance for at least two years. Cassidy’s management and its independent consultants, RSG Global, release information that is very conservatively worded. It is very far within the limits proscribed by securities regulators and professional associations. They both appear cowed by Canada’s NI 43-101 mineral property reporting standards.

Those regulatory standards were imposed after the scandal and collapse of a company known as Bre-X Mining. Suffice it to say that all of the information released to date by Cassidy is complete, detailed and certified accurate. The only scandal is that the resource potential is so under-communicated.

Understanding the Reports: The content and format of reports released by Canadian public companies must comply with NI 43-101. The "official" definition of the descriptive terms is contained by reference with linkages below. The fundamental aspect is that these are essentially "pigeon holed" but do allow wide discretionary application of commonsense by the qualified person i.e. Geologist/Engineer preparing the report.

The next milestone: Cassidy engaged consultants, RSG Global, to once again prepare a NI 43-101 compliant Resource Report. The summary of the report is expected in October 2007. The full report is to be provided to regulators within 60 days thereafter. That is when I will be looking for key details. Many of today’s comments are based on the two reports previously submitted to Cassidy by RSG. As well, I looked at reports filed describing results for another company working in the same region as Cassidy.

And after that: Cassidy’s management announced it considers starting a "scoping" or Preliminary Assessments study. Scoping is the first step leading towards determinations of actual economic potentials for resources. To the mining community the scooping result starts to make things "really real". Shareholder enthusiasts long have considered the project as "real". But to the mining engineer, scoping starts processes of consideration for investment. There is anticipation of specific mining results. It narrows the focus and permits calculation and timing of possible future profits. This action should be reason for a positive share price reaction.

My expectation: I look for a major boost in reported, total, combined, indicated and inferred, resources. This expectation is based on the new drilling. More areas are confirmed mineralized. See the maps and comments I put on for my last blog. My hope is that the "hard marking" of last year’s report will be eased now that added drilling is done. Logic demands that the consistency of results implied by data from the several thousands of holes for which there are results should "loosen the tight-assed report writer’s attitude". The amounts of data are far more than my modest modelling program can employ and I rely on ‘informed by analogy’ analysis to make my judgement.

RSG Global’s Inconsistency ?: RSG Global reported NI consistent results from the first drilling program. It decided that high grades reported in cores should be capped and considered non representative. The calculations assumed that the mineralization could not be considered as continuous between holes. RSG calculated and reported resource in July 2007 of about 430,000 ounces of gold. It said that if the capping constraints had not been applied, the resource would total about 600,000 ounces of gold.

Thousands more feet of drilling was done. This confirmed that the mineralization appeared to be consistently continuous between most holes on a trend. The number of areas of known gold occurrence increased. The two first-found trends were significantly (I thought) increased in length and extended to greater depths. A dozen "new pockets" of gold bearing rock were confirmed by the drills. In April, 2006 I calculated averages for gold content and thickness of penetrated zone. The numbers generated times the dimensions of the reported trends showed a probability that the resources count would easily reach a total of more than two million ounces. My assumption was that the consistency of results would be considered statistically significant given the number of data points. Instead, the richest and longest trends were "marked down". RSG reported total resources at only about 750,000 ounces, combined. Even in "Gold Mining for Dummies" this is hard to explain considering the reports of extension and finding. There were no explanations given for the seeming subtractive interpretation

Too big a reputation consultancy? Cassidy’s geological consultants, RSG Global, enjoy worldwide recognition of excellence in mining geology. RSG manages day-to-day operations for Cassidy. RSG’s field geologists demonstrate excellent ability in interpreting the geology. They direct Cassidy’s project and their efforts seemingly result in improvement of grade, new finds and successful extension of known mineralized areas.

RSG is also employed to interpret, calculate and report on the results of the drilling. EXAMINATION OF RSG’S PAST EFFORTS IN THIS RAISES THIS QUESTION? Is protection of the reputation of RSG with "Banks and Buyers" resulting in RSG making "too safe" a calculation? Constraints applied in RSG’s calculations in its two past efforts seem excessively cautious. These are "very safely correct" calculations. Is this safety policy with an eye to better guarantee fees from Banks or major Companies? Is Cassidy a "small fish" not worth risking RSG’s hard won reputation?

Based on RSG’s past bent in doing its sums, I fear that the new report will be miserly. Despite thousands feet more of successful drilling in 2006/07 will the interpretation follow past practice? Will it calculate a very small increase in total resource? Will the increase be only in shifting results to a "more certain" category? Will RSG report its rationales for classification and consideration?

Geologist's Choice : Re-reading of the guidelines attendant in 43-101 Standards for Reporting on Resource Properties reveals this: The "Qualified Person" has great latitude in deciding on the decision to assign the classification of, and amounts of, resource. My curiosity about changes in the evaluator’s confidence level for the 2007 calculations is piqued. The matter appears to hinge on the evaluator’s confidence. I would ask this. If as an evaluator, you see a "fence" of drill holes spaced, say, 40 meters apart on a trend that persists for hundreds of meters, when are you willing to include the mineralization as a resource? Is it geologically and statistically logical:

1. To assume that the same condition prevails for 20? 40? More? Less? meters laterally to the fence? Both ways?

2. If there is a 60 meter gap in coverage followed by another series of holes 40 meters apart showing the same physical pattern and approximate grade, is there continuity of trend between the fences or not? Is there any gold between?

3. Whenever a hole encounters high grade mineralization is that random encounter always a total anomaly? Do you arbitrarily cap the reported result, or, does it mean you have "jewelry shop" areas that you "just missed" in your other drilling? Isn’t it possible for the high grade to extend for even a little? If you find several on the trend?

Causes Affected: Cassidy intends to have a scoping study done using RSG’s resource evaluation report. The assumptions and models created by RSG will strongly effect that report and therefore the appetite of investors and potential partners in the project. My cause in this is not to discredit RSG. But I do believe that the shareholders are entitled to know the actual parameters that RSG employs to include, project, exclude or discount reported results. Qualifiied Person, Please do not assume from our patience that all shareholders are qualified dummies!

NI 43-101 and the Post Bre-X phenomenon. The existence of more than 700 junior resource companies in Canada means that a company must do a lot of "squeaking" in order to get attention and its share of the "grease". Shares of a particularly well-greased junior, a public company named Bre-X share price rose more than a hundredfold and then collapsed. The Company’s reports were found to be false.

A get tough approach about "what may be said and who can say it" regulatory regime to get the heat off the regulators, was initiated. Reporting was to provide a consistent "level playing field." The protocol adopted was decided by geologists and engineers at large mining companies and market regulating bureaucrats.

The reporting standards are officially referred to as being in National Instrument 43-101 (sometimes NI 43-101 or NP 43-101). The vagaries in NI required creation of "Companion Policy 43-101CP to National Instrument 43-101, a guide to reporting under Standards of Disclosure for Mineral Projects. What it seems mostly about is the making sure that there is something in all the blanks. Understanding NI 43-101 and 43-101CP affects CDY by inhibiting management discussion and disclosures of "hopeful" activities.

Why do I call the NI Nefarious Idiocy?: The concept of a universal hard and fast formula to substitute for real knowledge and common sense benefits only the regulator. Zeal in seeing that smaller companies adhere to the NI 43-101 rules has some companies, like Cassidy, fearful of communicating opinions, hopes and ideas. The same zeal is not applied to the big companies. Pigeonholing the infinitely variable combinations of geologic and economics conditions is impossible. Some of the "rules" are benign, others are ludicrous. Bureaucratalk prevails in the documents.

Persons ask me, how close do the holes have to be to have so-and-so classification? The answer is, "Ask the Geologist Engineer - the competent person". It might depend on the consulting firm’s policy, the Engineer’s familiarity with the data, the region, the geology, the company, or even whether the Engineer had hi-test or decaff coffee that day. See for yourself.
The actual NI definitions are at the internet site linkages indicated.

Companion Policy 43-101CP to National Instrument 43-101;
Standards of Disclosure for Mineral Projects
15 pages

NI 43-101, together with its Companion Policy 43-101CP and Form 43-101F1 Technical Report can be downloaded from the Canadian Council of Professional Geoscientists website.

The definitions of resources and reserves approved by the Canadian Institute of Mining, Metallurgy and Petroleum and adopted by NI 43-101 are available from the Standards and Guidelines section of the CIM website

CARTOON!

Ed Zederayko — Tue, 14 Aug 2007 03:33:00 GMT

I can already guess what Cassidy's president, JT Gillis will argue when he hears my case in favour of "CARTOONS". They are unprofessional! But I know them to be effective in informing ALL people, the simple and the sophisticates alike. They eliminate a lot of "Jawboning" explanation and they free management to work more effectively. I have some CARTOONS for you because I believe Cassidy's announcements are too much aimed at its elite, mining educated investors. In "days of yore" small shareholders benefited from a large population of broker's analysts trained to sift and sort among junior companies other than those in which their own brokerage firm was involved. Superior performance and potential were recognized and chronicled. It's no longer so for small resource company stocks.

So when an average investor sees that news fails to cause the stock to rise he is confused. If this is good news, why doesn't the stock go up and stay up? Cassidy publishes results without explaining their success. Management avoids inciting speculation. Through time this resulted in concentration of share ownership in "strong" hands. These fund providers are uniquely capable to judge the worth of the venture. They are putting in the money! They want the maximum number of shares for their money. They want the maximum spent on development and the least on promotion of higher share price.

But what is the universal measure of success in taking part in the market? To most, success is measured by the thickness of and denominations of the bills one folds away after selling a stock. Even if one is not selling one's stock at the moment, "bragging rights" count to provide satisfaction. Cassidy's small investor audience obviously doesn't have the sophistication to interpret results. Other companies put out a press release if the drill doesn't break down. Cassidy waits to announce assays from 25 or more holes at a time. The impact of a constant stream of information is lost. The lack of broader market following is to be very costly to small shareholders now when added money is needed. The risk takers who provided the "seed" money are seriously disadvantaged as to both value and liquidity..

THESE CARTOONS ARENT FUNNY! I REFRAIN FROM PRESENTING THE SADDEST OF THEM ALL! That is the share price chart for the past year and especially the period since November 2006.

My CARTOONS use the updated maps available (at last) on Cassidy's website. The originals show results accurate to three decimal places. I have highlighted the areas where significant additions and/or extensions are reported. I don't think I need to list and label these or address what they show. It's self-evident! This is commonsense.

For convenience my CARTOONS include notes of the resource calculations made for drill results up to September 2006. It is left to the observer to interpolate what resources have been added by the drilling results reported. My interpretation is that these cartoons show an incredible two to three fold increase in the areas found significantly gold bearing. I can make no estimate of the split in distinction between inferred and indicated resource that will be reported. THESE PICTURES SURE AS HELL ENTIRELY CONTRADICT THE HISTORY OF SHARE PRICE MOVEMENT. IT IS DOWN FROM SEVENTY FIVE CENTS LAST NOVEMBER (WHEN THE RSG INDEPENDENT STUDY RESULTS WERE ANNOUNCED) TO FORTY TWO CENTS PER SHARE.

My frustration about lack of effective shareholder communication does not dull my appreciation of the results reported. Opinions expressed in my recent " Ittsa Mine" blog is reinforced by assay results since reported. The indication of quantities indicated as added by the cartooned maps buoys me. I understand that such a map is not needed by the professionals. But small shareholders need to have someone "join the dots" in order to visualize the potential. Hopefully, someday, some simple vertical diagrams will be added on the web site to demonstrate that important dimension.

My next blog will deal with the standards and processes that govern calculations of resource, reserves etc, under National Policy 101. I expect to make some observations about the past reports by RSG in preparation of the report to be ready by September.. RSG will probably provide only a summary of their calculations at first. I hope the market will be impressed by the results and then again when the full report is available, by the (typically) cautious and conservative procedures employed to compile the result.

The question of share price is critically important to a company like Cassidy when its only source of "cash flow" is the issuance of equity: A mine of appropriate size to exploit only the Kourassa resource can cost approximately fifty million dollars. At current share price raising the equity would require the company to double its capitalization. But putting in the effort to gain even a dime more in stock price when one's shares are 50 cents is a "dilution saving" of more than 15%. That is not pin money. That is simply seeking capital in a manner that levels the playing field!

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Itsa Mine!

Ed Zederayko — Thu, 19 Jul 2007 04:07:00 GMT

ITSA MINE!

And that is not an attempt to express ownership in broken English!

No news was good news. Ordinary and unusual circumstances affected Cassidy’s operations in early 2007. Impatient shareholders deserted at a time just before the good news was announced. News of drill results in Q1 and Q2 of 2007 was delayed by country wide worker unrest and inadequate assay lab capacity in Guinea. Only three press releases giving assay results (June 26, July 10, and July 17) were issued between March and July 07.

This time the good news did not have its usual negative effect on Cassidy’s stock price. The stock just wobbled around for a bit this time. Share price had already dropped 33% in the three months since the announcement of previous good news in March. The seeming traditional drop in stock price immediately after the release of good news from Cassidy didn’t happen!

I’m almost afraid to write about it! This is therefore written in whispers! There is good news and better news coming. These reports of assays from the first half of 2007 drilling would be considered excellent results anywhere. Cassidy efforts especially extended the mineral deposits in the Kourassa locality that I sometimes refer to as the “armpit”. Now I can refer to it as “The Golden Armpit”. Drilling proved that the occurrence of gold in this region where structural elements cross to create a complex of features is riddled with gold! The “anatomical” classification of one of the several other separate discovery areas north and northeast of the Golden Armpit seems appropriate. The very exciting Kinekine feature appears only as a “blob” to me. One needs to see cores and sample descriptions to propose a model. The significant fact is that the areal extent of Kinekine was not limited despite long step-outs in every direction.. The Kinekine feature may well become the “Fat Albert” of the family of finds. Step-out drilling to define the edges of the Kinekine discovery also indicates “Fatness” vertically with stacked mineralized zones as well as width horizontally.

So what? So everything! The drilling results show:

1. The initial discovery zones are continuous along strike (length) over long distances, literally for miles.

2. Mineralization extends to depth with grade and thickness that indicates contained gold will be economically practical to extract.

3. The mineralization is not contained within a single “layer” or “sheet”. Multiple layers of gold-bearing strata multiply potential for profit to be realized from a locality.

4. The ability to aim drilling to confirm where the mineralized beds are thick and/or contain higher grades of gold shows that the geological model is well interpreted.
a. Such demonstration of predictability will impress any joint venturer or lender who is approached to finance the mine facility.
b. The demonstration of effective geologic prediction will speed up the proving of economics of the several other already discovered areas.
c. The proof of multiple important discoveries is a harbinger of future discoveries. As stressed before, remember that the “Golden Armpit” was the focus of first explorations because of geographic expediency and not best geologic indications. Other locales on these vast holdings can be of equal or even greater potential.

5 Re: “Itsa Mine!” Obviously, drilling since October 2006 greatly extended the area where a gold resource is known.
a. The assays confirm a much wider extent (volume/tonnage) of rock containing gold at grades equal to or greater than are currently mined at a profit nearby.
b. Infill drilling increases confidence that the gold is consistently continuous. Categorization of gold to be called “indicated resource” should swell in the next report.
c. My plot of the increases in area of gold occurrence suggests that total resource should now at least double the 700,000 ounces total Au calculated by independent consultants RSG Global and announced in October 2006.
d. The great number of test holes drilled makes it difficult for me to outguess the proportion of resource that will be classified inferred and indicated.
e. Any amount approaching one million ounces of indicated total resource should cause significant market attraction.
f. Examination of the parameters applied by RSG in calculating last October’s resource number shows these to be exceedingly stringent. Familiarity with the area should see some rational easing of parameters governing certainty. Delineation done should be to the exact liking of the consultants because they are directing the work. This time they need to dull the axe wielded to chop the results as were calculated last October. A new resource calculation is to be ready in September 2007.
g. Cassidy had very competent metallurgists determine that gold recovery in the 98% range can be achieved easily and with almost no need for chemicals. This makes the value of the mineral zones higher and lessens environmental impacts.
h. The wide extent of gold deposit extending from the surface permits anticipation that mining can be profitable from day one..
i. Anticipation of immediate returns greatly lessens the need of the amounts of reserve needed to start mine building.
j. The desire to “gild the lily” by establishing a very large resource to feed a giant mine is understandable but not necessary.
k. In this region, mines can be and are started to exploit reserves of 700,000 ounces the amount of resource determined a year ago!
l. Beginning to mine at less than optimal size need not be feared! Raising funds later to expand or twin a profitable operation will likely be less dilutive than waiting to establish the absolute “right” sized facility.

6. It’s a moneymaker! Preparing to actually put in a mine to realize from the resource should begin soon, hopefully this year.
a. Shareholders will be greatly encouraged when they see “actual” projections regardless of their sophistication in mining.
b. As planning occurs. shareholders will better appreciate the value of the assets.
c. The gross in the ground value of the resource identified by Cassidy (remember this is after exploring less than 25% of its area) is conservatively assessed at between $420 million and $1 billion.
d. The resource already identified can easily support a mining operation producing 100,000 to 150,000 ounces of gold per year for 7 to 10 years. . Gross revenues from 100,000 ounces a year would be $65 million. Net profits on 100,000 oz per year would be considerably more than 32 million. Let's be pessimists and say this is 30 cents per year per share (EPS) on a then 100 million shares. Stock price should be 10 to 25 times EPS? (depends on continuing exploration results, dividend policy and so on.). Even on the basis of such pessimistic calculations the stock price could easily be $3 to ?$7.50 per share in anticipation .

7. Reality check: An analyst from Sprott Precious Metals Fund (also patient shareholders of Cassidy) laid it on the line in a radio broadcast recently.
a. In response to questions about where future metals supply was coming from the analyst remarked that over the past four or five years more than 1,500 Canadian junior mining explorer companies raised moneys and went exploring.
b. He said that of all these only a relatively small handful of companies managed to find deposits that may end up being mines.
c. Cassidy is among these.
d. What he didn’t say is that most of that money was pissed away because it came easily and many dollars were spent creating illusions rather than seeking real wealth.
e. Many of us (‘mea culpa’) have expressed regret that Cassidy is not better at “blowing its horn” about its achievements. The facts should soon be better evident.

8. RISK: When in discussion with persons about Cassidy stock and the promotion or lack of it comes up the usual excuse is “country risk”.
a. While Guinea is not the shining example of Africa’s progress toward a “westernized economy” it does produce a lot of mineral wealth.
b. The uneven distribution of that wealth does not nullify existence of it, the country permits profits and lets you take them out of the country.
c. Despite some “rashes” the likely continuance of business opportunity is indicated.
d. Country risk seems to not bother China. It announced debt forgiveness and is starting giant new projects in Guinea.

My worry of risk in Cassidy’s future is that as the value in Cassidy is better confirmed, moneyed entities will make a lowball offer for the company. The defence is for Cassidy to have well informed shareholders. Cassidy’s management closely adheres to the requirements of market regulators in not making speculative or future predicting remarks. The regulations themselves cause shareholders to be ill served. Hence this blog.

Ed Zed

I Told You So!

Ed Zederayko — Wed, 07 Feb 2007 01:00:00 GMT

I Told You So!

More rich intercepts of gold reported in the "JJ Vein". These provide unarguable evidence of rich gold bearing continuity to great depth. Cassidy's ability to aim the drill so as to consistently intercept gold laden zones provides proof that their geologic interpretations are correct. The only other explanation would be that the gold is so widely distributed that you can't miss it!

Cassidy has also been drilling on at least three other promising localities. When the assayers' reports catch up to the drills, it will, hopefully be to report that "Gold! You cawnt miss it"?

Your Geology Lesson

The geometry of the JJ Vein, its extensions and its neighbouring mineralized zones will govern whehter the deeper part of the "JJ Vein" and the associated deposits are best mined by open pit or from underground. The reported grades satisfy profit calculations for either method. The JJ is obviously a shear zone. It is one of a family of shears that were fed gold-mineralizing fluids from the guts of the earth. Mining methods chosen to exploit the deep zones will depend on how the zones coalesce and on physical stability of the rock at depth. The area surrounding the JJ is already credited with containing almost 600,000 ounces of gold resources. The extensions identified by this drilling may be cause for "officially" calculating the "million ounce miracle" that seems to so attract the market. If Ed Sullivan was still around to comment he would probably say, "The really big shew is when the market figures out that there are at least three other related neighbouring zones that must extend to depth too!"

Your Stock Lesson

Inexperienced mining investors may find it hard to accept that this is good news. The lack of price movement on the shares is disappointing. The bald-ass truth is that information learned over the past two years very strongly reiforces my early projections of gold content potentially becoming worth tens of dollars in value per share of Cassidy. Cassidy's shares are far better underpinned by identified resources of gold than are those of any other similar sized company. The news means the shares have become increasingly undervalued. Part of the cause is concern about instability in the Government of Guinea.

Investor Relations

Management's dedication is keeping the treasury capable. Available funds are used to improve the asset. The decision to not stridently promote share price alienates some shareholders. These include one of North America's foremost "mining stock gurus". Recently, Cassidy engaged an investor relations firm to improve its market popularity. I have not yet seen any activity attributable to the efforts of the PR firm.

Cassidy does not participate in "pump and dump" stock promotional activity. This disappoints the fast money crowd. Cassidy attracted very knowledgeable investors. These collectively now hold more than 50 per cent of the shares outstanding. They hold warrants to buy even more.

Those knowledgeable large shareholders are the small investor's shield. None will allow any other to acquire absolute control at a bargain price. All can prevent predation by the senior mining companies that typically prey on the juniors. All did provide funds to advance the work. The largest shareholder, Dundee Precious Metals, manages actual mine building and mine operations.

Projections

My several year old value projection was, and still is, based on geological observations that lead to logical conclusions.

First: Gold is found at surface here at many localities.
Second: Because gold is found in bedrock, the depth of gold bearing zones could easily be several times the depths to which drilling has proved occurrences. These are "mother lodes"! More drilling will greatly improve the ability to do extensions and make new finds.
Third: Average grades and thickness of zones consistently justify anticipation of economic success based on comparison with operations with the other mining companies working nearby.

                                       Disclosure
                  Ed Zederayko is a shareholder of Cassidy Gold Corp.
                                 He is not an insider of the company.

RSG Reports 25 Karat Gold!!

Ed Zederayko — Thu, 16 Nov 2006 01:00:00 GMT

Read to the end of this. There is a pile of good news, stated in Cassidy's November 14 release.

Don't hit me! I (and RSG Global) know that 24 karat 
is pure gold. Many markets prefer to work using a "fineness" scale. 
We know 24K gold or 100% pure gold has a fineness of 999.

So what's this with the 25 karat stuff?

Its about RSG reporting the glass half empty! A read of RSG's full report of the processes used to determine the amounts of inferred and interpreted resource they calculate for Cassidys Kourassa area project prompts me to list the following observations:

1. The amounts of resource reported by RSG this past September uses calculations that cap (read arbitrarily diminish) high reported assay values. RSG also arbitrarily limited the anticipated horizontal continuity of zones with high gold content determined by drilling. This is the method of compensation for the probability that the high readings are "sports" caused by "nugget effect".

2. Nugget effect assumes that the sample taken is not truly representative and that an unusual "aim" of the drill occurred. Consider this a typical drill hole has a 13 cm (5 inch) diameter. It represents an area of about 225 square centimeters. A typical "full cell" used to calculate resources could be up to 40 meters across with an area of say 126,000 centimeters. That hole represents a sampling at a ratio of as little as 1 part on 560. Makes it easy to see why the caution is applied. I can just see those nasty nuggets lurking underground waiting to leap into the sample in order to mislead the engineer. Can't you?

3. I don't want to see ourselves transported to a fool's paradise but would have liked to see the report include the calculation of resource with assay grade uncapped and full cell volume as dictated by hole spacing and zone thickness. Just to make me feel good, like they did last year. Knowing what might be there is just as useful as knowing what may not be there!

4. The independent Engineer's report details the great care taken by RSG to affirm that all reported results were checked and lab processes confirmed by check assays at other labs and by the slipping in of "standards " i.e. not identified samples that can catch inadvertent or intended errors in assay reports.

5. And readers, after RSG taking all those certainty-building precautions is why I call for 25 karat gold! This is more than pure gold! (See RSG's report for yourself: Kouroussa Gold Project, Independent Technical Report - September 2006 at www.sedar.com)

The glass half full (or maybe a little more than half)? Nice surprises from RSG.

A number of unanticipated good news aspects arise out of the RSG report. Some of these are :

1. One of the reasons that I calculated and anticipated a higher tonnage of total pay rock (and therefore of total ounces of gold) is that the rocks of the top 80 meters are lighter than expected. Light, in mining, also means weak. It means lower costs to crush and separate the good stuff. Good!

2. "Resource pattern drilling" was successful in elevating a large proportion of the inferred resource to the "indicated category" . The drilling that was done changed the category of the resource under National Policy 43-101.

3. Consistency of results prompted RSG's staff, the operations management team, to recommend that Cassidy concentrate on extensions and exploration rather than on "added proofing" of the known areas of resources.

4. The Kourassa area continues to become additionally attractive. The most important aspect is consistency of finding gold at shallow depth and rapidly developing geologic interpretations of the controls over mineral emplacement. Applicability of geophysical interpretations appears to provide another powerful tool for the exploration process.

5. Continued high gold selling price, very favorable metallurgy with high recovery anticipated, availability of extraordinarily competent and dedicated workers and reduction in "third world country" anxiety levels make the attractions of the Kourassa area in Guinea grow.

6. Traditionally, anticipations have been that a reserve of more than one million ounces of recoverable gold must be indicated in order that a company can consider initiating mining. This appears to be an overly high threshold.

7. Recently Etruscan Resources Inc. received an updated feasibility study for its 90-per-cent-owned Youga gold project located in Burkina Faso, West Africa. The updated feasibility study prepared by RSG Global of Perth, Australia, and MDM Engineering of South Africa updates the original feasibility study prepared by these consultants in January, 2005.

8. The Younga project, has a startling similarity to Cassidy's Kourassa project at the current stage. The Youga Gold Deposit feasibility study completed January, 2005 by RSG Global (Pty) Ltd. and MDM Ferroman (Pty) Ltd. concludes that Youga will produce an average of 88,000 ounces of gold per year at a cash operating cost of US$256 per ounce over a 5.5 year mine life from three deposits included in the Youga Gold Deposit feasibility study.

9. Additional drilling was undertakenby Etruscan on two near-by zones on the deposit. This additional drilling increased reserves from 5.5 million tonnes at 2.9 g/t to 6.6 million tonnes at 2.7 g/t. As a result, total reserves for the project increased from 515,000 ounces, as reported in the Youga Gold Deposit feasibility study, to 580,000 ounces.

10. Etruscan calculates that at current Gold selling price a mine will recover its total capital cost of 44 million US$ in two and one half years and provide an internal rate of return of more than 50%.

11. RSG Global says the resources interpreted at Cassidy's Kourassa project already exceed 700,000 ounces. These are in 8 areas that have had sufficient drilling to permit calculation of tonnages. All of the discovery areas are open to extension to depth and along trend.

Clearly, this discussion of the conservative aspects of the RSG report to Cassidy instills confidence. The Kourassa project is not a will-o'-the-wisp that will blow away in a West African wind. Cassidy is already entitled to be promoted to the class of "advanced stage" exploration and development company. The comparison of Cassidy's Kourassa project, even at this early stage, with the projectin Burkina Faso, West Africa is entirely defendable. It provides some guidance as to future values.

The principal difference is that we know that Cassidy has numerous additional leads where Gold accumulations can be found. The lesson that the first, or, the already-found is not necessarily the best to be found, keeps repeating for Cassidy. The over-arching fact is that Cassidy has explored only a small fraction of the land area to which it has license. Serendipity alone, in the form of easy highway access guided it to the first discoveries. As good as these initial finds appear, reason requires that they be viewed from the perspective of having had the most exploration to date. The first ones represent rather nice examples. Results from recent drilling reinforce the causes for anticipations to be high.

Making the glass bigger and fuller. Press release on November 14, 2006. Let's do the bad news first. The undependable drill supplied by West Africa Drill Services did not improve its disposition over the layover despite ministrations by WADS chief mechanic. Hold WADS feet to the fire JT!! Times awasting!

The GOOD NEWS! Drilling in the latest phase concentrated on the promising KD-1 trend. Eighteen holes are reported including the coring of a predicted deeper occurrence of gold.

Here is some math anyone can do. RSG calculated that the KD-1 trend as outlined before Sept 2006 contained total resources of 42,000 ounces of gold along a length of 165 meters. The latest drilling has extended the zone to now be 550 meters. Hmmm. 165 goes into 550 at least 3 times. Maybe we should consider KD-1 to potentially indicate a resource total of 126,000 ounces for a total boost for the Kourassa area of 12% to nearly 780,000 ounces total. Looking good! The KD-1 results, hole by hole are at least as good as the previous ones. Yep, 550 meters and still open in three directions. Sounds more like the Eveready Bunny to me.

DISCLOSURE STATEMENT

Ed Zederayko is a shareholder of Cassidy Gold Corp. He is not an insider of the company.

Addemup!

Ed Zederayko — Mon, 25 Sep 2006 01:00:00 GMT

Does anyone know where the "f" goes when you try to spell out how NP43-101 makes "sense"? The answer: there is no "f" in sense in some parts! For example: One policy directive prohibits Cassidy from adding two classes of resource together. This pertains even when it references the same mineralized zones!

Disbenefits to shareholders:

Confusion arising from applying this prohibition in a report to shareholders appears to have reduced the market capitalization of Cassidy a cool fifteen million bucks, more or less. The blame should be spread about a little. Blame can be laid at the feet of four parties. Blame the too shortsighted drafters and interpreters of the policy. Blame the myopic headline writer who captioned the press release using the lowest number in sight, totally neglecting the second batch of figures. Blame shareholders like me for not understanding that total ounces of resource are not total ounces when bureaucracy rules. My previous last blog tried to explain about resource categories. I missed the no summing directive. Maybe I read it but assumed that such nonsense must be a typo.

Addemup yourself

Cassidy announced that the summary of RSG Global's 43-101 compliant resource update on Cassidy's 100% owned Kouroussa Gold Project reports as follows : RSG calculates presence of 337,000 ounces of gold it classes as "indicated" together with, and, plus, +, (take your choice): 364,000 ounces of gold classed in the inferred category. That totals 701,000 ounces. Don't like what I say and how I say it? Sue me!

History: RSG calculated, and Cassidy reported, in spring 2006 that the Sanu Filanan, JJ and Sanu Folo Gold Zones contain inferred resources at 433,000 ounces in 4,933,000 tonnes averaging 2.7 g/t gold. A 0.7 g/t gold cut-off grade was used then and now. To me the update report released Sept 2006 indicates that total ounces are increased by 268,000 ounces, or a 62% more than the past reported amounts. Moreover, (and I would like to argue this one with someone) maybe the 337,000 ounces of indicated resource should get a heavier weighting somehow. I think I'll leave it to the National Policy Police to redefine the weight relation between an inferred ounce relative to an indicated ounce. My mind works on old logic and Im not up to making such distinction.

So, what happened?

The summary update attributes resource numbers to new zones. The mineralized areas now drilled at sufficient intensity to now have resources calculated now include Kinekine, Bag Farm, Junction, X-vein and KD-1. A significant portion of the resources previously considered inferred are now recognized as indicated resources. Notable among these are Sanu Filanan with 169,000 ounces now classed indicated. Surprisingly, the recently discovered Kinekine zone has a large indicated resource attributed. Definition of resources of both classifications at Sanu Folo, JJ and KD-1 leaves only the rich X-vein area not listed as containing indicated resources. A table available at Cassidy's website provides details. The critical elements to note are that the average grade shown for all resource combinations is higher than the average grades reported as being profitably mined at the competitors' operations in the region. That's really good news!

Where are my million ounces!!??

They're all still there! Cassidy reports results in sufficient detail that a patient observer can piece together a picture of the shape, extent and content of the mineralized zones. Like all Geologists, I am an optimist. For many years I evaluated after- discovery resources for a living. Most of my experience is in oil and gas resource valuation. I may tend to be too literal a "projector" when I look at precious metals.

My expectations for Cassidy are based on less sophisticated modeling methods than those used by RSG. I guessed that the likely total reported would be a doubling of the 433,000 ounces reported last spring. I was looking for the reported number to be pushing 900,000 ounces. I knew that the discoveries indicated by the aircore exploration would carry little effect. I knew that RSG would employ traditional constraints in their calculations. So I cut my more than 1 million (logically derived, of course!!) ounce figure by more than 20%. Not enough! But I still think my million ounces are already there. Yours too! Tell you why I believe that in a minute.

Why does it matter?

My preoccupation with this is sparked by the lessons contained in the classic value investing analysis textbook The Intelligent Investor, written by the fathers of stock analysis Benjamin Graham and David Dodd. They said that speculating is OK. In fact it can be fun and very rewarding. Their caution is that speculation should be done only when one is in fullest possible possession of the key facts. Two principles are expressed. The first is, that just because a stock is up, doesn't mean it should be sold. One must have an idea of the value underlying the stock and have notion of when the value is fully realized. The second precept is that one must consider value, not momentum. What we saw when only half the resource number was published was decisions by momentum. The value was and still is, in Cassidy. I want to be there when it is finally, more than fully realized!

The Swiss Cheese Model: Excerpts from the summary report contain one clue to the cause for major disparity between my model and the RSG report. The full report will be posted eventually. I can then see what other differences exist between my methods and RSG's. Here's my excuse.

When I look at data I try to see a continuum. That is, when holes are drilled and identified as being along a trend, I assume that (within reasonable between hole distances, say up to 100 meters) the change between sample points along a defined trend is regular and gradual. Notionally then, if one sampled midway between the two points the thickness and grade would be the average of the two reported results. One could probably do a statistical probability of the truth in this considering the large numbers of holes now reported. The line in the report that provides excuse for most difference in result anticipations is: "Table 1 summarizes the Indicated and Inferred resources at Kouroussa estimated using a 0.7 g/t Au cut-off grade and a 3-metre minimum horizontal thickness." Know what that means? It means they are calculating the amount of the resource excluding all zones that are less than 3 meters thick. To me this conjures up the analogy of calculating the volume of a cheese while not measuring the smaller holes in it. I know that's not really a fair analogy! But I loved saying it, because I think one needs to exercise some logic on how numbers are derived. We already know how a resource pyramid looks. The low grade amounts always exceed the high grade! After all, since this is likely to be a pit mining effort, it will take the skinny zones as well as the fat. The dozers and scrapers aren't that discerning! Usually, the full report contains variances in calculations resulting if certain conditions are not applied. So, we the cheery believers, may get another kicker out of this in about two months when the full report is filed.

What next?

Fortunately for shareholders, Cassidy's history of favourable results enabled a healthy treasury. The Company has the funds to carry on at an increased pace. The results to date provide ample justification to get with it! Cassidy outlined an aggressive drilling program to begin in October this year. The first aim will be to fill in the gaps in confirmed mineralized zones. This should result in resource numbers recognition appreciating rapidly. I expect that resource calculation will be done on an "evergreen" basis with two or three reports made public over the next year.

Mineralization discovered toward the end of the last program at Dalaoule, Banjounani, and Kinkine will be extended and defined. Capability to now drill deeper beneath known zones can add dramatic results quickly. RSG Global will once again be managing the exploration program on behalf of Cassidy. The return of RSG's personnel will result in important continuity in the management and aiming of the anticipated combined 35,000 meters of RC and diamond coring. Keep the faith and addemup!

Disclosure

Ed Zederayko is a shareholder of Cassidy Gold. He is not an insider of the company.

September's Song

Ed Zederayko — Thu, 07 Sep 2006 01:00:00 GMT

It has been a long, long while from June to September.

September's Song: September's song is probably nearly complete. It is being written by Cassidy's world-respected consulting team from RSG Global. The "tune" should be heard soon. The break in drilling for the rainy season permits an up-to-date Canadian National Instrument 43-101 conforming report to be done. RSG will report results from drilling done to the end of the first half of 2006. I expect the quantity of resources conservatively reported, will approximately double the 433,000 ounces "inferred" reported in the first half of 2006. More importantly, the intensity of drilling in the Sanu Folo Sanu Filanan mineralized trend areas should result in upgrades of levels of confidence anticipating that the deposits can be mined at a profit. Let me explain.

The Legacy of Bre-X: Canadian National Instrument 43-101, is a policy developed by Canadian Securities Administrators. It attempts to ensure that investors are informed in a consistent manner. The policy, administered by the provincial Securities Commissions, governs how scientific and technical information about mineral projects is disclosed to the public. The fundamental rule is: Release of information must be approved by a "Qualified Person". A qualified person is defined as a licensed geoscientist, competent in the mineral deposit under evaluation. A standard for claiming reserves and resources is defined in the policy documents.. A mineral "resource" is defined as a concentration of mineralization defined by sampling and one which might be of economic interest. Grading conveys levels of probability that the mineral deposit can be mined economically. Confirmation of the economics is not at the forefront. Three resource sub-categories that indicate grading in increasing order of confidence are defined. They are: Inferred, Indicated and Measured. "Measured" indicates there is sufficient geologic, drill hole and sample data to indicate continuity and grade of mineralization. A "reserve" is the economically mineable part of a resource. The economically mineable part of the equation incorporates consideration of capital and operating cost, metallurgical properties, tax liability and other relevant economic factors all considered at some stated metal price.

Quantity of resource and cutoff or average grade deserves consideration in the investor's own evaluation of opportunity. Changes in metal selling price can have immense influence on what will be an effective reserve. Great comfort can be taken with respect to Cassidy's prospects. Cassidy's reported average grades are significantly higher than those actually mined nearby. Those nearby mines operated at a profit even when gold sold for half of today's price.

Calculating Cassidy's Reserves: Reserves are broken into two categories: proven and probable. Proven reserves are measured resources that show clear economic viability. Probable reserves are measured and indicated resources that the geoscientist considers, for any reason, not readily economic. They only rise into the proven category when confirmed to be economic. If, in future, the gold selling price originally used in calculating a reserve is exceeded, that increases the amount of reserve considered economic. After reserves are defined the stock price more closely tracks gold prices. This pertains for any "almost certain to become a producer" company.

Calculation of reserve as reported in a preliminary feasibility study attracts more, and more knowing, investors. September song 2006 will be an unfinished melody. But it will provide guidance to management on where more effort is needed. Cassidy plans to use at least two and possibly even three drills beginning in October 2006. This means that it can quickly remedy any gaps in sampling needed to bring any defined resource to the next higher confidence level. Cassidy has already done metallurgical studies. It has the financial capacity to do exploration and development drilling. Comparisons with mines nearby show that companies do operate at a profit. Profit results even when mining lower average grades than Cassidy reports. Profits were earned at lower gold selling price too! Cassidy employs persons with the talent and reputation needed to direct the work to lift the resources to reserve status. Therefore, to me it is logical for Cassidy to begin a preliminary feasibility study. This would put an entirely different complexion on the company.

Effects on Share Price: Cassidy shareholders should recognize that a strong share price rise usually results when a company begins to report actual reserve and feasibility results. The denoting of an actual "proved reserve" enhances attraction to an entirely new investor type. As well, classifying even one deposit as containing a reserve will lift the profile of all the other discoveries made along the trends that Cassidy has explored to date.

The eminent quality (read conservatism) of the company's advisors (both, RSG and Cassidy's Board) appeals to the type of investors that are next needed by Cassidy. There is no certainty that even a proven and probable reserve will actually be economic.The reputations of a Company's "Qualified Persons", the integrity of the data and manner of past reporting are important. That history influences the ability to attract the further large financial resources needed to make a mine. Cassidy has an excellent record in every facet of this "bank comfort" activity.

My anticipation of effects on share price of future drill program results is for much greater positive impact in 2006/07 than last year. Use of drills that are more versatile and dig deeper and faster than those used before is intended. The better "geological aim" made possible by the past years' experience will aid in getting more good results. A greater than ever flow of new information should provide ample reasons for market activity. In short, the outlook for strong share price appreciation is very good. Growing conviction that several mines can result will further develop as the drill program inexorably progresses.

The Next Hoorah: Last, but not least, I look at what is happening elsewhere. Some analysts describe the recent Goldcorp deal as paying $200 per ounce of reserve and resource of Glamis. The sharp intake of breath at the thought of paying that price will diminish as the numbers of successful smaller miners declines further. More takeovers by giant companies unable to replace reserves produced is inevitable. "Notional" prices per ounce in the ground will rise. Meanwhile Cassidy is busy adding to the confirmation of riches beneath its area. One need not be a "goldbugger" to see that the additions to Cassidy's intrinsic value over the past year are about to become more highly appreciated. A bit of boasting by the influential groups that recognized Cassidy's extraordinary potential in 2006, and then made significant investment and further commitments, will also help.

Disclosure Statement

Edward Zederayko is a shareholder of Cassidy Gold. He is not an insider of the corporation.

Disclosure Statement

Edward Zederayko is a shareholder of Cassidy Gold. He is not an insider of the corporation.

Brace Yourself Sheila!

Ed Zederayko — Tue, 20 Jun 2006 01:00:00 GMT

An old joke: Students of OZ will recognize that phrase as defining "Australian foreplay". (Among Canadians, its counterpart is, "You asleep?") I use it because I wanted to hold your attention while we muse about the results of calculations that some hope will "adjust" Cassidy share prices strongly upward.

Waiting for the gold: Better recognition of "Cassidy's value" is expected after publication of a report of gold resource calculated by the respected Australian consultant firm, RSG Global. Based on conversations with my circle of shareholder friends, the number needed to attract "wide" market attention is the "magic one million ounces number.

No surprise for some:

My Loucheux Indian Journalist friend, Miss Edith Josie, always started her weekly letter from Old Crow in the Yukon with, "HERE ARE THE NEWS!" So, HERE ARE THE NEWS: Wide recognition of Cassidy's value occurred some time ago! It's obvious. Cassidy provides full disclosure of assay results. It publishes accurate maps of locations of drill holes. Therefore any diligent person can collate all the information and calculate a number reasonably close to the "official" as anticipated by RSG. One only needs a similar program to the one they use. Such evaluations must have been done to convince the sophisticated investors now accumulating stock. Their actions indicate obvious belief that "value" is higher than current share prices. The history of those investors shows them to be extremely astute and to expect very substantial reward realization from their investments. One buyer is now probably the largest Cassidy shareholder. Gold rush anyone?

Modeling:

Modeling is a process of making judgments, whether one is judging swimsuited bodies or ore bodies. Judgments depend on what your focus is, your relevant experience and how you view extraneous influences. I am not expert in judging swimsuit bodies. I know a bit about judging ore bodies and relating these to stock price. Differences can result between various calculators even though based on the same data. The numbers depend on the constraints imposed by the modeler. Questions need to be asked by investors and prospective investors:

How does the model project values in the same beds below or above the depth where minerals were encountered?

Does the model average results between the next nearest sample in the trend or does it assume a fixed radius surrounding each measured occurrence?

Does it assume all assay values higher than, say, 30 g/t Au are "nugget effect" and then "highgrade cap" i.e. diminish these to some arbitrary figure?

What is that figure?

Does the model recognize consistency within the data set and allow greater scope?

Does the model allow for likelihood based on things like characteristics of the host rock?

Most models can be "slanted" by the user. I, as a Geologist/explorationist, allow much more favourable "what ifs" in my model than most engineers probably would.

The RULES:

RSG Global's Engineers and Geologists are constrained by a set of policy requirements referred to as "National Policies or NPs". These are reporting policies imposed by the securities regulators on public companies. The standards were created in the immediate aftermath of the credibility crisis arising from the Bre-X Mining frauds. Many consider that these NP compliant reports result in "over-facted but under- informed" investors. Following the NP rules is essential. Securities regulators police statements rigorously and the need to be succinct if one expects to have company press releases read means that important qualifying information is sometimes found only in the "long form" filings.

How great a difference can all this make?

A lot! As example, I use the full report tendered to Cassidy by RSG Global in 2005 and available for download from the Sedar database, the designated repository for Canadian Public Company announcements and reports. I noted, "RSG Global's report to Cassidy calculates an INFERRED RESOURCEof 315,000 ounces of gold" (at a 0.7 g/t grade cut-off). This was "press released". RSG's full report indicates that this calculation applies both highgrade cap and highgrade restrictions. Such restrictions are considered appropriate by RSG until drill hole spacing is down to its professional comfort level. Recalculation of the inferred gold resource when a 0.5 g/t Au cutoff and when the highgrade restrictions are not applied, is calculated to be - (hold your breath!) 591,000 OUNCES OF GOLD!" This nearly doubles the results even though relaxing constraint on only a few parameters, but still using the exact same modeling program on the same dataset. My own (simpler) modeling assumes that because the trend was once mined at surface, that averaged results extend down from surface to, and as far below as, the deepest find. It assumes that changes "sideways" between holes are consistent and gradual. And an assay value is a value! Use of these (reasonably logical to me) assumptions more than doubles RSG's highest resource number. My message is, in my view, the magic million was indicated a very long time ago, but:

1. The next report will include new zones and larger sampling of old zones. There still may not be enough drilling and sampling to permit unconstrained modeling for all these. The results will represent calculations reported under the constraints needed to meet NP standards. Shareholders should apply the distinctions between classifications of resource and reserve stated as inferred, measured, proven, etc., before reacting.

2. Added resources that can be "EdZed inferred" to exist as result of a plethora of new discoveries but RSG will not have sufficient sampling to permit NP qualifying reports to recognize and add significant resource numbers for these. So, despite the very good and obviously internally consistent results, the "official" number will be restrained.

3. Geophysical surveys show that drill sampled features have "signatures" that extend laterally beyond where they are currently confirmed by drilling. . Similar "geophysical signatures" exist at still-unsampled localities that do not show any evidence of past artisanal workings whatsoever. These are considered to indicate vast added potentials for future exploration drilling, but are not in any way recognized as assets under the NP.

So what?

Mystique adds attraction only while there is favourable anticipation. What if less than "magic million ounces" is reported? Stick around to have a really good look. Hold your nose and see what constraints are imposed. Typically, the full resource report is not available for weeks after the initial press release. One really should wait to see it. Cassidy's full treasury and stable of extraordinary targets to spend it on and its intent to continue resource delineation through the rainy season spells continuing opportunity for news. The almost total lack of analyst coverage of Cassidy creates "wallflower"value, The company continues to sit out the dance despite persons obviously having heard a quickening beat. Someone smarter may even be waiting to "cut in".

When will we hear Waltzing Matilda upgraded to a "Cha! Cha" tempo?

Disclosure Statement

Ed Zederayko is a shareholder of Cassidy Gold. He is not an insider of the company.