Up until this month, Cypress Development (TSX:V.CYP, Stock Forum) has been limping along near-dead since its fall from grace in late 2009 when it began a 92% plummet over four years struggling to find reasonably good levels of gold at its jointly-owned Broulan Reef property with Skyharbour Resources (TSX:V.SYH, Stock Forum) located in Red Lake, Ontario.
The company market value bottomed in May 2013 when it finally unloaded Broulan Reef, selling its share of the elusive asset to Premier Gold Mines (TSX:PG, Stock Forum) which left it trading at $0.02 and below. Investors wondered at the time if the company still had a pulse.
Cypress kept plugging along in an incredibly tough market, and under the guidance of Don Huston, president and CEO, it began making strategic acquisitions, grabbing up the remaining 20% interest at McKenzie Island in Red Lake and 100% interest in the South Bay project east-northeast of Red Lake. Then the company commenced further exploration at its Gunman zinc-silver project located in Nevada in early 2014.
With the release if its maiden NI 43-101 technical report for Gunman in March, the company saw an upswing in market value as investors were piqued by the positive news showing the discovery of very high-grade zinc and silver mineralization in Gunman's RH Zone, but investors were tired of the smoke they had seen repeatedly at Broulan, this time they wanted fire.
Cypress moved ahead with drilling permits to explore five targets within and around the RH Zone and commenced drilling operations in the beginning of May. After phase one completed, assay result ignited some investment tinder. First with grab samples of surface rock chips from the Far North Target showing up to 10% copper and RC drilling revealing significant grades between 5% to 33% zinc and 0.5 to 15.0 oz/ton silver in the RH Zone reported in the company's May 4, 2014 press release.
Today's news fanned the flames of interest into a full-fledged bonfire with what bull boarders say could be the best drill results posted by a junior miner in Nevada in years.
According to the news release, the company announced intersecting 175 feet of 12% zinc and 121 g/t silver including 209.2 g/t silver and 19.7% zinc over 85 feet at GMRC-9. Other highlights recently received assay results included 128 g/t silver and 7.20% zinc over 155 feet at GMRC-4, and 63.3 g/t silver and 8.90% zinc over 200 feet including 147 g/t silver and 21% zinc over 55 feet at GMRC-5.
But wait for it, the real good news is there's considerable arguments for a structural connection between the RH Zone and the Far North anomaly area due to strong, linear features seen in contoured topographic data. These results point to a large extension of the known mineralized system at Gunman which now stretches from the Far South Zone, north through the RH South, RH and RH North zones and then further north to the new Far North target area, a total indicated strike length of approximately 9000 feet.
So now that all of the assay results are in, what's next on the agenda at Gunman? Mr. Huston let me know in phone interview, “We are now in the process of doing a compilation and a resource estimate of what we know of the RH and the RH South.”
He went on to explain, “Of course we know that more exploration is needed here. We're not believers that this pod of high-grade zinc is the only pod of zinc that exists, I just don't believe that they come like that. We believe there's more and that takes time and that takes money.”
Investors will be glad to know that Cypress has over a million in the till, which will allow the company to follow through on its exploration commitments at Gunman without diluting its share base by having to reach out to the market place for further capital.
With its potential at Gunman, one would think that majors would be sniffing about. Don filled me in, “With numbers out like this as you can guess, we've had several calls from different factions. From producers, from smelters in the States, we've had a few sight visits from senior geologists from other companies. There are things happening, people are expressing serious interest in this particular play.”
The company hasn't forgotten about its other holdings as Mr. Huston explains, “We continue to stay active within the Red Lake camp and we are working on developing a 2014 exploration program.”
They expect to be back at Red Lake camp, located to the west of the Goldcorp mine, in September although no fixed date has been set yet.
Admittedly this is just the beginning, but it is more positive results than the company has had in a long time, and with the company's current price point, market cap and no debt, investors on the bullboards are celebrating.
Shares climbed 50% by the end of trading to $0.03 per share.
Currently there are 150.3m outstanding shares with a market cap of $3.8 million.