Recommendation Speculative Buy Target Price $1.30 Risk High Ave. Monthly Trading Vol. 1,753,525 Quick Facts Recent Price $0.66 Symbol CDY:TSXV Shares O/S 29.1 million 52 Wk. Range $1.40-$0.25 Fiscal Year End Oct. 31 EPS CFPS 2001 n.a. n.a. 2002e n.a. n.a. 2003e n.a. n.a. Data Source: www.bigcharts.com THE SOURCE OF INDEPENDENT EQUITY RESEARCH Analyst: Robert Simpson, MA April 21, 2004 Cassidy Gold Corp. Cassidy Gold Corp is a precious metals exploration company focused on the Kouroussa gold project in Guinea, West Africa. SUMMARY AND RECOMMENDATION STRENGTHS Large land position in prospective geological environment A good working knowledge of Guinea, West Africa High-grade gold discovered in early stage drill program RISKS Inherent risk in mineral exploration CONCLUSION Good project An Experienced management team Share appreciation on successful exploration We recommend Cassidy Gold as a Speculative Buy to investors seeking an early stage, good potential, yet, high-risk mineral exploration exposure. We expect to see significant appreciation of the Company's share price as more highgrade gold discoveries are made on the Company's Kouroussa Gold Project in Guinea, West Africa. Cassidy Gold Corp.'s Kouroussa gold project has many positive attributes to attract investors. The area has historically proven to be rich in gold. Three gold mines operate within a 100 kilometre radius, and the mineralized zones identified on the property are hosted in lower Proterozoic-aged Birimian terrane, the same lithology hosting almost all the gold deposits in West Africa. There are also early indications that a large, leachable, near surface resource may exist and preliminary drill results on two quartz gold vein systems have proven impressive. It should not go unmentioned that the Kouroussa gold project is still in the very early stages of the exploration cycle, but in the current bull gold market share prices will significantly appreciate on news of additional high-grade gold discoveries. The Company is well positioned to take advantage of these market conditions on this vast, prospective and under-explored property package. Cassidy Gold Corp. is currently conducting a fourth phase of its exploration program designed to provide additional information for structural analysis of the known gold structures located in one of the seven prospective areas identified on the property. Another phase of drilling (10,000-20,000 metres) is planned in the second and third quarter of 2004 to determine the extent of gold mineralization in this quartz vein system, both laterally and at depth. Once the limits are better understood, an infill drill program is scheduled to establish resource estimates. Independent Equity Research Corp. 130 Adelaide St. W, Suite 2215, Toronto Ont., Canada M5H 3P5, www.eresearch.ca
Kouroussa Gold Project is in the early stages of the exploration cycle and shares will significantly appreciated on news of additional discoveries. Cassidy Gold Corp. The Company is also conducting a regional exploration program including geological mapping and geochemical sampling. So far, regional exploration has identified a number of prospective targets for follow-up. Cassidy's exploration efforts appear to be well financed with sufficient funds in the treasury to cover its 2004 exploration plans and financial obligations. If the Company does require an equity financing, it is our opinion that based on the strength of the management team and the early exploration results on the property, in the current market, Cassidy will have little difficulty raising the necessary funds. Cassidy Gold Corp. has a strong management team comprised of experienced mining professionals. The on-site management team has exceptional credentials and experience in both exploration and development in West Africa. The Company currently has 29.1 million shares outstanding and 41 million fully diluted with 70 percent of the common shares held by insiders, management and close associates. The Company has C$1.6 million in the treasury and can expect another C$3.2 million from warrants that should be exercised this year. THE COMPANY Primarily focused on exploration of the 490 square kilometre Kouroussa gold project located in Guinea, West Africa Cassidy Gold is the first company to drill test the Kouroussa gold property and to apply modern mineral exploration techniques on this vast land holding Cassidy Gold Corp. is a Canadian precious metal exploration company that trades on the TSX-Venture exchange under the symbol CDY. The Company is primarily focused on exploration of the 490 square kilometre Kouroussa gold project located in Guinea, West Africa where Cassidy Gold Corp. has the right to earn 100% interest subject to 15% State participation. Cassidy Gold was incorporated in 1984 under the name P.M.A. Technologies. The Company's name was changed to P.M.A. Resources in 1988 and in 1996 changed to Cassidy Gold Corp. Over this time, the Company has been involved in a number of property acquisitions and exploration projects located in British Columbia, Nunavut and the Northwest Territories, but as of October 2003, Cassidy Gold divested of most of the properties to focus exploration efforts on the Kouroussa Gold project in eastern Guinea. The Kouroussa Gold project is an early stage exploration project located in a known gold region with plenty of previous mining history. The previous owners of the property identified three mineralized gold zones on which Cassidy Gold has since identified and drill tested several gold bearing targets. While the larger areas have the potential for a leachable, near surface resource, Cassidy has focused its efforts on three higher-grade gold quartz vein systems: the Sanu Filanan Vein, Sanu Folo Vein and the JJ Vein. In 2004, exploration was expanded to include two other targets located within a two-kilometre radius of the Sanu Filanan Vein, named the Sodyanfe and Marie Structures. The very limited drilling that has been conducted to date has only touched on the potential of these gold systems. An aggressive drilling program is planned for 2004. It is important to note that Cassidy Gold is the first company to drill test the Kouroussa gold property and to apply modern mineral exploration techniques on this vast land holding. 2 April 21, 2004
Cassidy Gold Corp. eresearch In July 2003 Cassidy Gold Corp. extended the size of its concessions by acquiring the Tambiko concessions that encompass a 10-kilometre wide corridor adjoining the Kouroussa concession to the east, south and west. With this acquisition the total land package measures 490 square kilometres. At the same time, the Company entered into an option agreement on the Siguiri permit a 191 square kilometre land package, located approximately 100 kilometres northeast of the Kouroussa Gold exploration permit, east of and adjacent to the mining concession of Societe Ashanti de Guinee. Cassidy Gold Corp. has an experienced management team with a good mix of technical mineral exploration and business administrative experience. The prime objective of Cassidy Gold Corp. is to achieve market recognition and growth in shareholder value by delineating an economically viable resource at the Kouroussa Gold Project. Members of the management team and board of directors have several years of experience in West Africa and have a very good understanding of the geographic, geological and socio-political environment. It is highly probable the Company will continue to add property assets as they are identified and become available in the region. Guinea, West Africa is a stable democratic country, with a modern mining code and several modern producing precious metal mines. Mining concessions are granted for a 25-year period with 10-year extensions available. The government retains a 15% carried interest in any developed mines. PROJECTS Kouroussa Gold Project The Kouroussa Gold Project encompasses 490 square kilometres of property located 540 kilometres by paved highway from Conakry, the capital of Guinea, West Africa. In June 2002, Cassidy Gold Corp entered into an option agreement with Guinea Golden Mines S.A.R.L. for 100% interest of the original project area encompassing 240 square kilometres. Cassidy's interest in the Kouroussa Gold concessions is earned through a series of staged payments over four years totalling US$155,000 with an annual payment of US$50,000 each year thereafter. Another US$50,000 is due at the test production stage and US$100,000 if production begins. Cassidy Gold Corp. will also issue 600,000 common shares over the first four years of the agreement. The royalty agreement calls for a payment of US$1.00 per ounce of gold in reserve established by the feasibility report, and an additional US$1.00 per ounce of gold produced if the average price of the London price is under $350 per quarter. If the price is higher, a US$2.00 per ounce royalty is payable. In July 2003, Cassidy Gold Corp. acquired the Tambiko concession, a 250 square kilometre property that encompasses a 10 kilometre wide corridor abutting the Kouroussa concession to the east, south and west. The option agreement allows the Company to earn 100% interest by making cash payments of US$64,500 over four years, and a further US$25,000 annually. Another US$50,000 is due at the test production stage and US$100,000 upon beginning production. In addition, Cassidy Gold Corp. will issue 300,000 common shares to Miniere Africaine S.A.R.L. over the first four years of the agreement, while the conditions of the royalty agreement are the same as those on the Kouroussa concession. April 21, 2004 3
Three anomalies, the Koe Koe South, Koe Koe River and Sodyanfe were outlined Cassidy Gold Corp. Previous operators of the Kouroussa Gold concessions collected 2,776 soil samples over a 3.2 square kilometre central portion of the property. The assays from the samples averaged 342 parts per billion gold (ppb) including three separate anomalies: the 500 by 500 metre Koe Koe South averaging 1,020 ppb, the 50/100 by 900 metre Koe Koe River averaging 1,250 ppb and the Sodyanfe, which averaged 490 ppb. Recent geological mapping has indicated that the mineralized zones discovered on the property are hosted in mafic metavolcanic and metasedimentary rocks of Birimian age, the same lithology that is host to almost all of the gold deposits in West Africa. Among these, Semafo's 60,000 ounce per year Kiniero mine is located 27 kilometres south of the Kouroussa concession and Society Ashanti de Guinee's 270,000-ounce per year Siguiri Mine to the north east, 90 kilometres from Kouroussa. Figure 1: Sanu Filanan Vein drill sections Source: Company reports The potential for a leachable, near surface gold resource is untested, however three high- grade gold zones have been discovered The most prospective of the three gold zones identified to date is the Koe Koe South which encompasses an area measuring 1.5 by 1.5 kilometres with gold values in excess of 100 ppb (0.1g/t) and with a 500 metre by 500 metre core that averaged 1.02 grams per tonne gold. The potential for a leachable, near surface resource is untested; however in 2003, Cassidy Gold identified three structural targets, which led to the discovery of three high-grade gold zones-the Sanu Filanan Vein, Sanu Folo Vein and the JJ Vein. The Sanu Filanan Vein is marked at surface by a northwest-trending 500-metre-long trench dug by artisanal miners over many years. So far, the Company has sunk 17 diamond drill holes (3,471 metres) through the structure and has confirmed highgrade gold. The best results assayed 6.15 g/t gold over 23.79 metres in KD-49 and 4 April 21, 2004
Cassidy Gold Corp. eresearch 6.21 g/t gold over 13.22 metres in KD-52. Drill hole KD-12 intersected 5.92 grams gold over 23.33 metres, while almost 290 metres southeast along the same trend, hole number 10 returned 4.94 grams gold over 16.97 metres. All intervals are true thicknesses. A structural analysis of the drill results along the northwest extension of the trend has led Company geologists to believe that the gold zone plunges to the northwest with a thickened zone of mineralization at depth. Another phase of drilling is planned for later this month (April 2004) and will focus on a step-out program, followed by some infill drilling in June when the Company hopes to begin defining a resource along this structure. To date the Company has drilled 56 diamond drill holes totalling 7,246 metres on the property Cassidy Gold has also drill tested the Sanu Folo Vein Trend which is located approximately 250 metres northeast of the Sanu Filanan Vein. A number of thin but consistent gold bearing structures have been intersected. Located 400 metres northeast of the Sanu Filanan Vein is the JJ Vein structure. This is a northwest-trending structure marked by a trench that was previously mined by artisanal miners. The trench averages five metres wide and four metres in depth over a total distance of 300 metres. The Company has drilled five holes testing under the artisanal workings and has identified a high-grade gold zone. The first hole to test the JJ Vein Trend, KD-23, intersected a mineralized zone grading 21.57 g/t gold over a thickness of 6.11 metres. A second drill hole, KD-24, was collared 47 metres southeast of and on section with KD-23, intersecting two distinct mineralized zones separated by 16 metres of weakly mineralized rock. The upper zone averaged 3.96 g/t gold over 6.25 metres true width and the lower assayed 12.87 g/t gold over 3.95 metres true width. Fifty metres northwest, again two zones were intersected; an upper zone assaying 46.57 g/t gold over 1.50 metres and a lower zone of 1.89 g/t gold over 3.92 metres. Diamond drill hole KD-26 was drilled 35 metres southwest of KD-23 and again showed the same geological structure of two zones with a well-defined lower zone that assayed 11.23 g/t gold over 2.22 metres. April 21, 2004 5
Cassidy Gold Corp. Figure 2: DDH Overview Source: Company reports The Sodyanfe gold zone is located approximately one kilometre northwest of the Koe Koe South gold zone. This anomaly was defined by 213 samples collected on a 25 by 50 metre spaced grid. The average gold content of these samples is 0.49 g/t gold with the highest value being 8.63 g/t gold. Two diamond drill holes have been sunk to investigate the structural controls on the east side of the anomaly. Highlights from Sodyanfe drilling include 1 g/t gold over 16.50 metres, 5.3 metres below surface, in oxidized saprolite. A geochemical sampling program completed in February 2004 over the southern half of the Kouroussa Concession yielded a large number of anomalies. Initial exploration work by Cassidy geologists has begun on the Tambiko exploration permit, which covers 250 square kilometres east of the Kouroussa permit. This initial work involved mapping and sampling of the historic and current artisanal mining activities on permits, plus regional mapping and soil sampling to identify and prioritize potential drill targets. The Company has identified several new artisanal mining areas on the properties and has budgeted for an aggressive regional exploration campaign to identify potential structural anomalies in 2004. 6 April 21, 2004
Cassidy Gold Corp. eresearch MANAGEMENT AND DIRECTORS James T. Gillis, President Mr. Gillis has 22 years of experience in the mining industry with expertise in business administration and mineral exploration. Jean-Jacques Lefebvre, M.Sc., Director, Project Manager Mr. Lefebvre is a geologist with over thirty years experience in all stages of mineral exploration, with particular expertise in sub-saharan Africa. He has extensive knowledge and appreciation of African history and culture-an invaluable asset in the smooth implementation of a rapidly expanding development. Christopher J. Wild, P. Eng., Vice President, Exploration Mr. Wild is a consulting geological engineer with 19 years of experience in mining and mineral exploration in North and South America as well as West Africa. Prior to becoming chief mine geologist for the Mount Polley Mine near Likely, British Columbia, he was employed as the chief geologist at the Goldstream Mine, north of Revelstoke, British Columbia. An experienced management group has substantial administrative and financial expertise, and supported by a strong geological and engineering that is well versed in West Africia mining and gold exploration Marthe Archambault, M.Sc., P.Geo, Director Ms. Archambault is an economic geologist with 20 years of mining experience including several projects in the Birimian region of Ghana and Mali. In supervising a variety of projects in environments as diverse as Eskay Creek and the Democratic Republic of Congo, she has acquired a broad perspective in the application of modern exploration technology. Fluent in French and English, she also provides a cultural link between the Francophonie of Guinea and Canada. Glenn Walsh, P.Eng., Director Mr. Walsh is the president of Tercon Contractors Ltd., a construction company with particular expertise in excavation-related activities, including open pit mining and mine development. Thomas Hasek, P.Eng, Executive V.P., Director Mr. Hasek is a professional geologist with over 40 years of experience in the mining industry. His experience ranges from the owner of a small drilling company to directing worldwide exploration programs. Recently as managing director of a junior public company, Mr. Hasek was responsible for financing and supporting a gold project in Ghana. Robert Barron, M.B.A., C.G.A., M.ST(US), Director Mr. Barron is a certified general account with a masters degree in U.S. tax law. April 21, 2004 7
Cassidy Gold Corp. VALUATION AND RECOMMENDATION Cassidy Gold's Kouroussa Gold Project is an early stage gold exploration play in a region that has a long history of gold production. From the very limited drilling to date, the Company has identified three potentially large gold zones with several highgrade gold quartz veins within them. The early results of the drill programs are very encouraging offering investors an opportunity to get in early while the market is still rising on news of additional discoveries. The Company does not have any defined resources on the property, but regionally the area is prospective, and based on what Company geologists are seeing, the Company has been expanding its property position to include other areas with artisanal workings. It appears that the Company likes what it sees in the region. Considering the results of the recent drilling, there is significant upside potential for this stock from exploration success. Increasing certainty about the resource and continued positive drill results will provide more upside potential for the shares in addition to a clear direction for the project. We see a target price of C$1.30 within reach in a 12-month period given the planned heightened exploration activity and attention brought to the project to date. 8 April 21, 2004
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Ditem Explorations Inc. eresearch Recommendation System Buy: Expected total return within the next 12 months is at least 20% Speculative Buy: Hold: Sell: Expected total return within the next 12 months is at least 40%. Risk is High (see below) Expected total return within the next 12 months is between 20% and the T-Bill rate Expected total return within the next 12 months is less than the T-Bill rate eresearch Risk Rating System A company may have some but not necessarily all of the following characteristics of a specific risk rating to qualify for that rating: High Risk: Medium Risk: Low Risk: Financial - Little or no revenue and earnings, limited financial history, weak balance sheet, negative free cash flows, poor working capital solvency, no dividends. Operational - Weak competitive market position, high cost structure, industry consolidating, business model/technology unproven or out-of-date. Financial - Several years of revenue and positive earnings, balance sheet in line with industry average, positive free cash flow, adequate working capital solvency, may or may not pay a dividend. Operational - Competitive market position and cost structure, industry stable, business model/technology is well established and consistent with current state of industry Financial - Strong revenue growth and earnings over several years, stronger than average balance sheet, strong positive free cash flows, above average working capital solvency, company may pay (and stock may yield) substantial dividends or company may actively buy back stock. Operational - Dominant player in its market, below average cost structure, company may be a consolidator, company may have a leading market/technology position. For further informations and subscription contact: Independent Equity Research Corp. 130 Adelaide St. W, Suite 2215, Toronto Ont., Canada M5H 3P5 Toll-free: 1-866-854-0765 Our research is accessible on: www.eresearch.ca Price Single Report $29* Annual Subscription $99* (full service) Annual Subscription $50* (single company) * plus applicable tax Disclosure Statement eresearch accepts fees from the companies it researches (the covered companies ) and from subscribers. The sole purpose of this policy is to defray the cost of researching small and medium capitalization stocks which otherwise receive little research coverage. In this manner, eresearch can minimize fees to its subscribers. Cassidy Gold Corp. paid eresearch a fee of $4,300 to conduct research on the Company. To ensure complete independence and editorial control over its research, eresearch follows certain business practices and compliance procedures. Among other things, fees from covered companies are due and payable prior to the commencement of research and, as a contractual right, eresearch retains complete editorial control over the research. eresearch analysts are compensated on a per-company basis and not on the basis of his/her recommendations. Analysts are not allowed to solicit prospective covered companies for research coverage by eresearch and are not allowed to accept any fees or other consideration from the companies they cover for eresearch. Analysts are also not allowed to trade in the shares, warrants, convertible securities or options of companies they cover for eresearch. In addition, eresearch, its officers and directors cannot trade in shares, warrants, convertible securities or options of any of the covered companies. eresearch accepts payment for research only in cash and will not accept payment in shares, warrants, convertible securities or options of covered companies. eresearch will not conduct investment banking or other financial advisory, consulting or merchant banking services for the covered companies. eresearch is not a brokerage firm and does not trade in securities of any kind. eresearch s sole business is in providing independent equity research to its institutional and retail subscribers. No representations, express or implied are made by eresearch as to the accuracy, completeness or correctness of its research. Opinions and estimates expressed in its research represent eresearch s judgment as of the date of its reports and are subject to change without notice and are provided in good faith and without legal responsibility. Its research is not an offer to sell or a solicitation to buy any securities. The securities discussed may not be eligible for sale in all jurisdictions. Neither eresearch nor any person accepts any liability whatsoever for any direct or indirect loss resulting from any use of its research or the information it contains. This report may not be reproduced, distributed or published without the express permission of eresearch. 12 January 23, 2003