January 11, 2006

Merry Christmas!

Cassidy shareholders got a $7 million market cap increase for Christmas.  Per share price rose from  $0.45 p.s. to  $0.58. Two causes for this are:.

1.      Sophisticated investors put in $6 million, paying $0.50 per unit for 12 million units.

a.     Such investors usually demand and get discounts. They didnt get a discount from $0.45. They paid $0.50. Obviously they see potential.

b.     The investors get units that include warrants to buy 12 million shares more for $9 million. The term for the warrants is 2 years but the warrants carry an "accelerator condition". That is also unusual when powerful firms deal with junior explorer companies.

c.      Evidence of confidence in Cassidy's properties and management by these investors exists. An attempt to "blackmail" Cassidy by registering a lawsuit in B.C. Court on the eve of the financing did not sink the underwriting. Cassidy resisted demands for bribes or payoffs.

 i.      The initially planned  $4 million financing enlarged to $6 million.

ii.      My cynical observation is that, since Hemlo, a lawsuit means only that there is greedy recognition of something worth fighting over!

2.     Cassidy released drill results after the funding was completed.  These results extend known zones and report gold at a new site called, "Junction".

For A Happy and Prosperous New Year: 

The ranks of Cassidy shareholders taking new equity in this issue include two new, and one repeat buyer. New investor, Dundee Precious Metals, buyer of 6 million shares becomes a 10% shareholder with right to become a 19% holder of Cassidy shares. In an earlier life, I provided oil stock analyses to investment counselors, including Beutel Goodman (BG). I came to know Ned Goodman, (The Goodman of BG and one of two Goodmans ??? - or should I say Goodmen?? - in Dundee). Ned is a graduate from McGill ("Hardrock Geology"). His son Jon is also a geologist with degrees in business. Jon is CEO of Dundee., a very unique company. It is a "closed end" fund that invests in promising junior mining companies and most unusually for a fund, it is also an operating company developing a mining business.

Therefore Dundee should know mining investment better than almost all others! Dundee is very successful!  A look at its books for 2004 shows the $300 million fund made many investments in "juniors ". Almost all amounts risked were much less than the $3 million  directed at Cassidy. Some Dundee holdings show "fourple" gains. For the Dundee money men to demonstrate belief in Cassidy, paying hard cash for a larger than usual chunk and provision to invest more is a mighty encouraging event!

What Next?  The happy result is that Cassidy can continue to evaluate its numerous finds and continue explorations.  Investors mesmerized by the "magic" of a million ounces of gold resource  will see that result sooner because the company has "action" money. The real action will result from the market realizing how much more exploration potential exists. Significant gold is found beneath every ancient working drilled. It is an incredible outcome. The latest new find is named Junction. It is where shear zones cross.  To me, Junction is another "armpit" as described in this blog months ago. The project scientists applied deodorant to make this armpit sweeter by calling it  "Junction.  

The consistency of Cassidy's finding using old artisanal workings clues does not amaze. Consider the incentive to concentrate effort. You are hand-digging rock in the tropical sun. At the same time, your wife and family carry water from a distant sources so that you can pan out the yellow metal. Finding prosperous workings was literally a life and death matter for those ancient diggers.

Cassidy's effort will expand to include larger areas. Cassidy can make money from rock with gold content far less than that needed to sustain artisans. Cassidy also has tools to find zones that the artisans could not find or could not mine because of lack of water or shelter.     

Drilling beneath old workings has proved an excellent exploration strategy. Many kilometers of still undrilled trends exist. They are future targets. An important new exploration tool will join the effort. Interpretation of Cassidys airborne geophysics survey done in Q3 2005 should show where extensions of already drilled trends are. The  "map geometry" of relationship between finds will speed evaluation.  Airborne readings should point Cassidy to new sites. This will make expectations of multimillion ounce potential believable by a wider audience.

The effect of adding new large shareholders is considered entirely positive for other shareholders. Large investors are there because they liked what they saw. If they disliked the scene they would have kept their wallets zippered. Dundee's capability to actually operate a mining company does not mean it wants to operate except if it becomes sole owner. Cassidy has several groups of shareholders with large holdings. This removes he risk of a "lowball buyout" by any single shareholder.   

Tidings of Joy: Cassidy Shareholders have cause to rejoice:

1.     New shareholders will be attracted as the identity and qualifications of the newest investors spreads.

2.     The availability of $15 million of action money and fixed dilution means share price advances will occur and sustain.

3.      The history of share price advance was plagued by many causes:

a.     Typically, announcements of excellent results of drill programs were dulled by the need to once again tap the "believer shareholders" for more money;

b.     At least some of these needed to sell part of their holdings to put money in treasury. Increased availability of shares diminished recognition of the results being excellent;

c.      That condition is unlikely to arise again. The treasury is full! More  investors have the capacity to add funds when warranted.

4.      Except in the first flush of discovery, Cassidy shares have never carried a premium for logically anticipated large reserves.  Such anticipations are increasingly expectable as the results pile up.

5.       The evidence from "scientific" airborne geophysics indicating more zones can attract shareholders willing to pay for potentials. Recognition of much wider extent of mineralized zones is occurring.

6.        Cassidy has a history of fair, leakless dissemination of information carried in  "no spin" releases. This appeals to true investors. Its participation lessens share price "bounces" induced by "hit and run" speculators.

The high level of activity in 2006 itself will attract attention from broker's mining analysts. Broker analyst recommendations are more effective than the typical "PR" efforts done by most paid promoters.

Disclosure Statement 

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