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Cassidy Proposes Financing and 1 for 3 Share Consolidation
Cassidy Gold Corp (the "Company") has
arranged a non-brokered private placement of up to 20,000,000 units at a
price of $0.05 per unit for aggregate proceeds of up to $1,000,000. Each unit
will consist of one common share of the company and one non-transferable
share purchase warrant, each warrant entitling the holder to purchase an
additional common share at a price of $0.10 per share for a period of one
year from the completion of the offering. Shares acquired by the placees, and
shares which may be acquired upon the exercise of the share purchase
warrants, will be subject to a hold period of four months plus one day from
the date of completion of the financing in accordance with applicable
securities legislation. Finder's fees in amounts yet to be determined may be
paid to persons who introduce the company to investors. Proceeds will be used
for working capital, as well as an induced polarization geophysical survey
and further drilling upon the Company's Kouroussa Gold Project, Guinea West
Africa.
The Company also announces that upon completion of the financing described
above, it will effect, subject to shareholder and regulatory approval, a
consolidation of its issued common shares on the basis of 3 old shares for 1
new share. The Company intends to call a special shareholders meeting on or
about July 30, 2009 to seek shareholder approval of the consolidation.
As disclosed in the Company's news release of February 18, 2009, "Initial
Scoping Results for Cassidy Gold's Kouroussa Gold Project, Guinea, West
Africa", Coffey Mining recommended further work focused on the discovery
of additional "new" resources. Permits have been renewed, and
pending completion of the current financing, the project is on care and
maintenance.
The scoping study has concluded that Kouroussa could produce an average of
79,000 ounces of gold annually at a cash operating cost of $484 (U.S.) per
ounce over a six-year mine life.
The study proposes open-pit mining of a series of pits utilizing contract
miners. Ore would be processed through a conventional gravity-CIP
(carbon-in-pulp) plant with a design capacity of one million tonnes per annum
("Mtpa"). The average gold recovery is 94.5 per cent and the strip
ratio is 6.7:1. Initial capital costs for the Kouroussa project are estimated
to be $97-million, with a further $11-million estimated for sustaining
capital.
The NPV 10% AND IRR SENSITIVITY TO GOLD PRICE table shows the net present
value ("NPV") at a discount rate of 10 per cent and the internal
rate of return ("IRR") for the project for a range of gold prices
at a milling throughput of one Mtpa employing a gravity-CIP process
configuration and assuming 100 percent equity financing. Project economics
are favourable at a gold price of greater than $900 (U.S.).
NPV 10% AND IRR SENSITIVITY TO GOLD PRICE Au price (U.S./oz) NPV10% (US$ million) IRR (%) $750 -$23.6 1 $838 $0.0 10 $900 $16.8 16 $950 $30.3 21 $1,000 $43.7 25
Scoping work was based on an indicated resource of 680,000 ounces contained
in 11.38 million tonnes grading 1.9 grams per tonne gold and an inferred
resource of 363,000 ounces contained in 6.46 million tonnes grading 1.7g/t
Au. Coffey Mining completed the resource estimate in October, 2008, in
accordance with Canadian National Instrument 43-101, Standards of Disclosure
for Mineral Projects and the classifications adopted by CIM Council in
December, 2005. Coffey Mining validated and interpreted the exploration data,
constructed wire frames, completed three-dimensional block models, and
estimated resources for each of the mineralized zones using an ordinary
kriging technique. Mineral resources that are not mineral reserves do not
have demonstrated economic viability. The preliminary assessment includes
inferred mineral resources that are considered too speculative geologically
to have the economic considerations applied to them that would enable them to
be categorized as mineral reserves, and there is no certainty that the preliminary
assessment will be realized.
Pit optimization studies confirm that the bulk of potentially mineable
resources are contained in the Koekoe Trend, particularly in the Sanu Filanan
deposit, with important contributions coming from the Kinkine Trend. The
Sodyanfe Trend deposits (Junction-Bag Farm) are too low grade to contribute
significantly to the resource base given current economic conditions.
In addition to a conventional gravity-CIP process configuration, a
gravity-only option was investigated. Gravity recoveries range between 62.5
per cent and 58.4 per cent for oxide, transitional, and sulphide ore types.
These relatively low recoveries negatively affect the economics for a
gravity-only configuration, though considerably more test work is required to
assess this option more fully.
A series of metallurgical test work including gravity recoverable tests,
variability extraction tests, comminution tests, and viscosity settling tests
will also be required. Further study on defining tailings storage facility
requirements and geotechnical and hydrological characteristics will be
needed. Baseline studies of environmental and social conditions will be
necessary as well.
In the scoping report, Coffey Mining recommended further work focused on the
discovery of additional "new" resources. A series of metallurgical
test work including gravity recoverable tests, variability extraction tests,
comminution tests, and viscosity settling tests were also recommended.
Further study on defining tailings storage facility requirements and
geotechnical and hydrological characteristics will be needed. Baseline
studies of environmental and social conditions will be required as well.
Company management believes that more work is warranted to move the project
toward feasibility including trying to reduce capital and operating cost
estimates and investigating alternative mining configurations.
The technical content of this news release has been prepared under the
supervision of Christopher Wild, P.Eng, Vice-President Exploration, who is a
Qualified Person under National Instrument 43-101. Harry Warries, MAusIMM,
principal consultant, is the qualified person overseeing the Kouroussa
scoping study on behalf of Coffey Mining.
On behalf of the Board of Directors
Cassidy Gold Corp.
James T. Gillis
James T. Gillis, President & CEO
For further information, please contact:
Jim Gillis, President -- Phone: 250-372-8222 or Fax: 250-828-2269
This press release may be accessed at Cassidy Gold Corp.'s website: www.cassidygold.com and at SEDAR-CDY.
If you wish to be placed on Cassidy Gold Corp.'s e-mail press release list,
please contact us at cassidygold@telus.net
Neither the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this news release.
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