Dean claystone project; Clayton Valley, Nevada
Things seem to go as planned for Cypress Development (CYP.V), as the first three holes drilled on the Dean project returned very solid intercepts, as part of the Stage 2 fall program. Results ranged from 102.7m @1029ppm Li for hole DCH-11 to 62.8m @677ppm Li for DCH-12. This last hole generated dark green to black ash-rich mudstone at a depth of 53.4m. Management hasn't seen this before, and assumes that this type of claystone doesn't differ a lot recovery-wise, and just has a different color, but has to sample and test this first of course to be sure. This is a table of the last results:
These results are in line with the results of the earlier completed holes, and confirm the continuity of the mineralization at the Dean Project. It is still early days, but it seems that a mineralized zone of about 4km x 2km has already been outlined here, as stated by management in the news release. Because of this size, Cypress seems to be firmly on track to prove up a large bulk tonnage deposit in my view, as I guesstimated in my first article on the company which was also based on a 4km x 2km target zone. Below is a map of the drill collar locations:
Clayton Valley, Nevada; drill hole locations
As can be seen, there is still a lot of the Dean property to be explored. The holes that got lost at depth were lost because of wet clay, and will demand different equipment. The company is looking into this, and might return to these holes during the next drill program, possibly with larger diameter core. The average target depth is at least 300 feet or about 100m. Most holes are ending in claystone and mineralization so far, but there is no real need to go much deeper. The fall 2017 program was planned for 12 to 14 drill holes, up to 1500 meters of core, and is divided between Dean and Glory. Results from the remaining holes on Dean are expected in December, and in the mean time the drill rig was already moved south onto the adjoining Glory property where drilling is continuing and seven holes are planned.
The company is already making preparations to continue infill drilling on Dean and Glory during the first quarter (aiming at mid February), and will apply for a drill permit to the BLM in January 2018.
Laboratory work continues to test the solubility of the lithium-enriched claystone under varying conditions and reagents.
Besides the drilling news, and faster than I had anticipated, Cypress managed to cut a deal with another interested party for the majority of their Gunman Zinc/Silver Project in Nevada. This party was Pasinex, which acquired the option held by Silcom, which entitled them to buy 80% of Gunman. Pasinex is considered a stronger partner by Cypress management as it is a zinc producer. Here are the terms of this option agreement:
The treasury of Cypress contains about C$1.5M at the moment, which will take them well into 2018. Drilling in Nevada claystone is cheap, the target depth just 100m and goes fast, so the drill programs go a long way with the current cash position. For example 10 holes can be done of 100m each at say $200/m all-in costs which results in total costs of just C$200,000. Management estimates the costs for the current drilling and met work coming in less than C$300,000.
Cypress Development is proceeding with building the resource at Dean according to plan, and there is no doubt in my mind they will prove up a significant deposit, hopefully to the tune of 6-7Mt LCE. More drill results will be coming in during the next few weeks before year end, also for Glory, and I estimate another batch of 900-1,000ppm Li average grade assays. Awaiting the round of drilling, a bit more focus will shift towards important met test work in order to advance earlier and successful testing towards obtaining a fully commercial recovery method for lithium. If management succeeds in this department as well, Cypress could easily be a multi-bagger as the project is relatively large.
I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter, in order to get an email notice of my new articles soon after they are published.
The author is not a registered investment advisor, and has a long position in this stock. Cypress Development is a sponsoring company. All facts are to be checked by the reader. For more information go to www.cypressdevelopmentcorp.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
Glory claystone project; Clayton Valley, Nevada