RSG Global's report to Cassidy Gold calculates an INFERRED RESOURCE of 315,000 ounces of gold (at a 0.7 g/t grade cut-off). This is for the Sanu Filanan zone only, and for only the length of zone explored to Dec 31, 2004. RSG 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 25 meters. Calculation 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!    

SO, THERE IS NO EGG ON MY FACE AND NO CROW IN MY DIET! 

The "more generous" calculations reported by RSG (although still properly professionally cautious) are for the 700 meters of trend they evaluated. This is 74% of the real length (used in my effort). They didn't add the extensions by holes drilled and reported in 2005. RSG's number corresponds almost exactly with mine, at 802,071 (taken in proportion), compared to the 800,000 ounces of gold that my simple calculations predicted as the lower end of my numbers. 

What's next?  A lot of work! 

Cassidy's treasury is replenished. The company can do both explore and confirm, and delineate resources. A backlog of assay information and to-be assayed samples is building up. A worldwide spate of frantic mining exploration, especially the gold hunt, is straining the resources of service providers. Last week, this made headlines. Assay turn-around times of three weeks or more are reported and an almost total unavailability of drill equipment and staff were reported. Cassidy is caught in the assay crush but blessed by having two of the scarce drill rigs.      

Specific near time tasks include :

1.                  Drilling more holes along the JJ trend. RSG's report strongly recommends this because it sees JJ as an even richer trend than the S.F.

2.                  More holes are needed to bring the S.F. to a drill spacing that will permit studies leading to the preparation of a Bankable Feasibility Study. (applies to JJ as well).

3.                  Drill RC holes twinning one or two coreholes to confirm truth in samples obtained from RC drilling.

4.                  Study geology of the S.F. and JJ to predict where best to drill holes to extend (or maybe join?) the trends.

5.                  Solve the assay delay problem.

     a.      Drilling without having assays results to guide efforts is OK when drilling between already sampled points to upgrade the classification of state of confidence in the resource value.

     b.      Drilling to explore new trends can be tricky if likely gold bearing intervals are not visually identifiable. It can waste a lot of time and money, and even worse, cause one to miss some goodies. Fortunately, Cassidy has a lot of "infill" drilling that needs to be done on the S.F. and JJ.

     c.      Cassidy has at least a half dozen still-undrilled trends where strong clues point to equal to, or better than, S.F. or JJ gold content potentials. Cassidy can therefore easily pace itself in a program that would test new trends without risk of wasting efforts on lower quality alternates because of assay delay.

Watching the neighbours.

On March 12, 2005, a Guinea miner, the Canadian Norwegian amalgam called Guinor "left its blinds up". We saw intent to install a $15 million operation to recover gold from three localities north of Cassidy's permits. My impression is that those deposits are not as rich as Cassidy's. Despite that, the projected numbers are impressive! They forecast cash costs less than $200 per ounce produced. At the expected mining rate, the facility will pay out in less than three months. The reserves are expected to last for seven to ten years.

Implications for Cassidy.

Today, Cassidy entered a new category of "investment" identity. A worldwide respected firm of engineers trusted by Banks and Securities Regulators has spoken. RSG Global says that Cassidy has inferred resources in one trend and likelihood of even richer resources in a second trend. The classification of the "degree of certainty" used to express the confidence that the engineers put on their interpretation of facts is expressed in a universal "language". This language was devised and approved by the C.I.M., the Canadian Institute Of Mining (and Metallurgy), an august and ancient professional body. Like any proper language there are rules of grammar. The grammar provides a basic level for expressing degrees of confidence a scientist has that a mineral body of specific size exists. Interpreters may have differing experience with specific types of deposits. The grammar includes rules and certain mathematical/statistical tests. Even if not always correct, these always treat data in the same way. Testing identifies the most common errors, omissions or misstatements.  The language provides a basis for communicating value between sophisticated professionals.

RSG recommends that Cassidy should drill more holes on both the S.F. and JJ trends that already show promise of economic value. The drilling will provide data that will increase the confidence of the engineers in stating that a specific amount of gold exists. Future reports that are issued are almost certain to show higher "counts" of gold to exist because they will look at a larger volume of rock known to contain gold. "Infill" holes will upgrade the degree of certainty expressed. When a concrete business plan can be prepared to see the resource exploited, the highest category, "proved reserve" is applied. That is Cassidy's ever-targeted goal.

Cassidy's share prices have, until now, depended on whether assays added gold-bearing zones, and whether these exceeded or were less than the market's anticipations.  "The next hole will make it or break it" statements are great for brokers who prosper if there are lots of orders to fill. It doesn't mean anything to an investor (unless the Company is spending its last dollar) except perhaps if he is a speculator, then he should have sold the stock the previous trading day. Results always disappoint some speculators. As the play matures, there will be fewer speculators. The imprimatur given by RGS, although only "inferred resource", provides a peg to hang one's hat on. There is a basis for intelligent interpretation using whatever past knowledge one has.

Here is how I see it. The "knock down drag'em out number of ounces of resource" determined by RSG is 315,000. Let's "mentally" mine these. If cash production costs are projected to be not higher than the neighbours', and assuming the same capital cost gives same throughput and production, then projected Cassidy earnings are $1 per share. That means the stock was undervalued if selling at under $1 because there was no "hope" in it at all, it was all "value".

Let's put some "hope" in. Mentally mine the total 950 meter length of the S.F. and the 500 meter of JJ. Take out the highgrade caps and restraints. Now we have 1.5 million ounces and a five year mine life. It used up our entire store of "hope" but we have a $5 stock.

Let's really put the hope in. We see what results from drilling and mining the S.F. and JJ. We spend some of the earnings to drill still unexplored other anomalies that look as good as S.F. and JJ. Depending on: the two-years-out gold price, anticipations for future gold prices and expectation of added reserves from continuing exploration of trends ten or more times the length of the producing ones, the Cassidy stock could, in two years, support a 20Xs to 30Xs current PE.                

Good work RSG!

Your sophisticated science confirms what this old exploration Geologist saw using common horse sense. You get a Gold Star!

Good work all you Cassidys You get the gold!