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.