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