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.