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Cypress Development Corp.
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Gunman Zinc-Silver Project, Nevada

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Cypress holds a 100% interest in the approximately 1140 acre Gunman Zinc-Silver Project located in White Pine County, northeast of Eureka, Nevada. Three RC drill programs totaling approx. 38,000 feet have been completed by Cypress on the Gunman project with significant grades between 5% to 33% per ton zinc and 0.5 to 15.0 oz per ton silver over considerable widths encountered. Zinc could represent the next big base metal play due to ongoing demand growth and the closures of 3 major mines in Canada, Australia and Ireland and not enough supply coming on stream from new projects. Sentiment could shift towards zinc, with prices potentially rallying in anticipation of tightening supplies.


July 2014 Cypress Gunman Zinc-Silver Project, Nevada

Less than 20 miles east of the White Pine District is the Robinson District and the Ruth Pit (at one time, the largest copper producer in the world). Ten miles east of the Gunman Prospect is the Bald Mountain Gold Mine. The town of Carlin and the world-class mines of the Carlin Trend are located 60 miles to the north-northwest. The Cortez Gold Mine is approximately 50 miles west-northwest.

2014 Exploration & Drill Program

The Phase 1 2014 drill program at its wholly owned Gunman zinc oxide project, Nevada, has been completed. The 1140 acre Gunman zinc-silver-gold project is located directly west of Barrick's Bald Mountain gold mine complex on the southern Carlin mineral trend in White Pine County, Nevada.

Cypress Development Corp contracted New Frontier Drilling of Fallon, Nevada, to complete approximately 3000 feet of RC drilling in a Phase 1 program on the Gunman project.

2014 RC Drill Hole Location Map
 Click to Enlarge
President Don Huston stated: "it's time for Cypress Development to become proactive at the Company's Gunman zinc-silver oxide project in northeast Nevada. There is a bullish outlook for the zinc market with the tightening of zinc mine supply world wide, illustrated by a global zinc metal deficit in 2013 for the first time in five years. Cypress believes it has a great opportunity to duplicate the RH zinc-silver rich zone discovered at the Gunman project in 2000 with extended drilling in 2014 to the RH North Zone "

A surface sampling program was completed on the newly staked adjacent ground which forms the northern extension of the Gunman property. The Company's senior geologist, Mr. Robert Marvin, has mobilized to the Gunman project and has established an exploration grid to facilitate the systematic sampling of rock exposure on the north of the property.

Fractured, Brecciated and Oxide Flooded Dolomite
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Quartz Veinlets
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Quartz Veinlets and Cast Boxworks
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Speckled, oxidized and copper-arsenic oxide mineralized, coarse grained sandstone
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Copper Oxide Showing
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Outcropping Copper Oxide Mineralization
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Gunman Project Phase 1 Surface Sampling Results
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Gunman Project Phase 1 Surface Sampling Results

2014 Drill Program Results:

Thirteen reverse circulation (RC) drill holes were completed at the Gunman zinc-silver-copper project in eastern White Pine County, Nevada. The drilling program totaled 3520 feet and was directed at three targets areas located in the central portion of the property. Infill and confirmation drilling within the RH Zone intersected long intervals of strong dolomitic alteration containing abundant gossanous iron oxide zones. Assays from five foot interval samples within the oxide zone and adjacent fractured dolomitized limestone show spectacular zinc and silver mineralization.

The assays from the drilling within the RH Zone are summarized in table 1 below.

Table 1: RH Zone Zinc and Silver Assay Results
Hole ID
From (ft)
To (ft)
Interval (ft)
Ag (g/t)
Zn (%)
GMRC-3
55
95
40
60.3
2.00
and
140
155
15
33.5
3.20
GMRC-4
20
175
155
128.0
7.20
including
125
175
50
87.7
17.09
including
135
150
15
83.9
30.64
GMRC-5
5
205
200
63.3
8.90
including
125
180
55
147.0
21.00
including
150
165
15
100.1
32.20
GMRC-8
130
185
55
54.3
6.50
GMRC-9
50
225
175
121.0
12.00
including
130
215
85
209.2
19.70
GMRC-10
55
80
25
24.2
4.60
and
105
120
15
8.0
1.70
and
140
155
15
5.9
1.20
and
170
220
50
20.3
8.70
GMRC-11
0
150
150
18.3
3.10
and
165
215
50
125.6
7.90

* All intervals above were computed from Chemex assay results of representative, 5 foot interval samples collected from the reverse circulation sample return. All intervals have been selected based on a 1% zinc lower cut-off. The intervals above are restricted to contain no more than one included interval that falls below the 1% zinc lower cut-off. No high grade cut has been applied. All samples were continuously collected from each 5 foot interval during drilling. The samples are large and average approximately 6 kilograms in weight.
* g/t = grams per metric tonne.
* The true width lengths are estimated to be approximately 65%-75% of down hole intervals.


As the table above indicates, zinc and silver mineralization occurs both as long, highly variable but completely continuous mineralized down hole intervals (Hole GMRC-9 for example) as well as holes with shorter intervals of strong mineralization separated by lower grade intervals (Hole GMRC-10 for example).

Note that, as Table 2 below indicates, for hole GMRC-9, the entire 175 foot down hole interval that grades 121.0 g/t silver and 12.00% zinc does not contain a single interval grading less than 1% zinc.

Table 2: Complete 5 Foot Interval Assays for a portion of Hole GMRC-9
Hole ID
From(ft)
To(ft)
sample weight (kg)
Ag g/t
Zn %
GMRC-9
50
55
4.12
26.1
5.19
GMRC-9
55
60
9.86
9.3
3.17
GMRC-9
60
65
9.44
16.9
2.65
GMRC-9
65
70
11.40
13.3
5.92
GMRC-9
70
75
8.54
13.6
2.09
GMRC-9
75
80
9.76
16.7
3.51
GMRC-9
80
85
4.24
45.5
6.40
GMRC-9
85
90
9.34
33.9
6.42
GMRC-9
90
95
8.04
31.0
3.76
GMRC-9
95
100
16.08
20.4
1.84
GMRC-9
100
105
7.30
82.8
8.49
GMRC-9
105
110
13.60
35.0
3.20
GMRC-9
110
115
5.50
45.3
7.19
GMRC-9
115
120
7.52
63.2
9.29
GMRC-9
120
125
5.04
30.1
2.51
GMRC-9
125
130
10.02
124.0
9.03
GMRC-9
130
135
5.04
154.0
22.10
GMRC-9
135
140
8.34
146.0
25.60
GMRC-9
140
145
5.52
299.0
36.30
GMRC-9
145
150
9.42
156.0
27.90
GMRC-9
150
155
3.52
92.7
16.80
GMRC-9
155
160
11.14
54.3
3.91
GMRC-9
160
165
5.90
70.4
3.37
GMRC-9
165
170
9.26
143.0
5.93
GMRC-9
170
175
6.04
327.0
14.85
GMRC-9
175
180
8.30
371.0
15.55
GMRC-9
180
185
4.26
345.0
22.30
GMRC-9
185
190
9.46
192.0
16.90
GMRC-9
190
195
5.18
272.0
24.10
GMRC-9
195
200
7.42
379.0
27.90
GMRC-9
200
205
4.32
276.0
22.80
GMRC-9
205
210
10.30
231.0
33.21
GMRC-9
210
215
6.12
49.1
15.45
GMRC-9
215
220
9.44
50.3
2.91
GMRC-9
220
225
4.18
24.8
1.09

* Detailed Notes on Chemex Assay Procedures Used: A basic aqua regia-ICP multi-element package was run on 50 gram splits from 250 gram master pulps. Intervals assaying >100 grams/tonne silver and/or 1% zinc were rerun using a complete aqua regia digestion followed by ICP-AES analysis. Intervals assaying greater than 30% zinc following complete aqua regia digestion were then re-assayed from a fresh 50 gram pulp using classical titration methods.

RH Zone Geologic Discussion
Evidence from both drilling and surface exposures of the RH Zone strongly suggests that the mineralization is structurally controlled and is focused within an envelope of hydrothermally altered, fractured and brecciated dolomite. Outcrop and drill data also indicate that the dolomite is of hydrothermal origin.

Phase 1 Lithologic and Mineralization Details
RH Zone Drill Hole GMRC-9
Click to Enlarge


Data gathered during the 2014 Phase 1 drill program points strongly to base metal, precious metal veining within a focused zone of dolomite alteration, fracturing and brecciation forming within an active zone of faulting. Subsequent oxidation of the original poly metallic veining mineralization has produced significant down hole intervals of spectacular, silver rich, zinc and iron oxide gossans with local sulfide cast boxworks.

RH North Target Results and Geologic Discussion
Four holes were completed in the grass roots exploration stage RH North target area in the Phase 1 2014 program. Three of the holes were completed on 90 to 300 foot step outs from the RH North discovery hole GD-15, which was completed in 2007. Hole GMRC-2 intersected an 80 foot wide interval of low grade zinc and silver mineralization. A five foot interval within the low grade intersection returned 1.28% zinc and 6.6 g/t silver. Hole GMRC-2 assays show that the hole was still in low grade mineralization with the last assay interval from 295 to 300 feet returning 7.1 g/t silver and 0.29% zinc.

The exploration of the RH North target area remains at a reconnaissance stage as only seven holes have been completed to date. Low grade (<1% zinc and 10 g/t silver) mineralization has been encountered in two of the seven holes. Both of the broadly mineralized holes also contain narrow intervals of zinc mineralization of >1%. The host rocks at the RH North target area are very similar to those at the RH Zone, located 1500 feet to the south.

Results to date indicate significant down hole intervals of mineralization in both oxidized and reduced limestone is present in the target area. This setting is considered highly favorable for the presence of much higher grade mineralization. Geologic compilation of results is underway in an effort to identify additional drill targets at the RH North target area.

Far North Target Area Surface Sampling Results Interpretation
As has been recently reported, Cypress completed a reconnaissance surface rock chip sampling program in the far northern portion of the Gunman project early on in the Phase 1 2014 exploration. The assay results of the sampling have been previously reported (see news release June 4, 2014).

Two important results from the ICP assays of these samples are:
  1. A sample of bleached, weathered float collected in a dry stream bed 2000 feet east of the Gunman property boundary assayed 22350 ppm zinc or 2.235% zinc. The stream bed drains from an area of hills within the Far North Target area on the Gunman property.
  2. A cluster of outcrop samples of silicified and strongly oxidized limestone conglomerate contain highly anomalous zinc, arsenic and mercury. Scattered bismuth anomalies also occur in samples from the anomaly area. This anomaly cluster lies in the Far North Target area and is hosted by the limestone conglomerate unit which caps the strongly mineralized sandy dolomite and limestone in the RH area.
The results show strong evidence for the continuation of the known, structurally controlled mineralization at Gunman. The outcropping silicified and geochemically anomalous carbonates are located approximately 6000 feet north of the RH Zone. No previous exploration or drilling is known to have been conducted in this area.

A strong case for a structural connection between the RH Zone and the Far North anomaly area can be made from strong, linear features seen in contoured topographic data as well as in detailed digital elevation data. The host rock for the anomaly area is definitely the limestone conglomerate that stratigraphically overlies the high grade mineralization at the RH Zone.

These results are very encouraging as they 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.

TQCU Copper Target Results
Two shallow angle holes from a common collar were added to the Phase 1 program to conduct initial sub surface exploration of a well-developed copper oxide showing located 300 feet west of the RH Zone. The copper showing has been explored by historical shallow workings. Grab samples from one these pits at TQCU returned very high copper assays as was recently reported (see news release June 4, 2014 "Cypress Samples Up to 10% Copper").

The TQCU target is one segment of a 2500 to 3000 foot long zone of outcropping copper oxide mineralization hosted in a distinctive coarse grained sandstone unit. This copper mineralization flanks the zinc and silver mineralization delineated at the RH and RH South Zones.

Gunman Outcropping Copper Oxide Mineralization
The two holes intersected strongly oxidized sandstone and underlying limestone. It is possible a cross fault has offset the mineralization. Detailed sampling and mapping of the copper mineralization is planned to better define drill targets.

Cypress will continue in its exploration efforts to delineate the RH North target area with the potential establishment of a mineralized zone similar to the existing high grade RH zinc-silver oxide discovery zone located approximately 1500 feet to the south in the middle of the property.

Mineralization at the Gunman project appears to be controlled by a series of well developed NNE trending fracture zones. This setting is seen in other locations along the Carlin and the Battle Mountain gold trends where the NS to NNE alignments of mineralized zones are located in cross cutting structural zones within or adjacent to the main NNW striking trends. The mineralization of the zinc-silver zones on the Gunman is located close to surface. The very high grade of zinc-silver mineralization seen in the RH zone is a compelling reason to continue exploration on the Gunman project.

Past surface sampling and drilling by Cypress on the Gunman property has resulted in the discovery of a series of zones of zinc-silver mineralization over a strike length of 2500 feet. The northern most mineralization known (hole GD-15) on the property was discovered at the end of the 2007 drill program.
SUMMARY OF GUNMAN ZINC-SILVER PROJECT NATIONAL INSTRUMENT 43-101 COMPLIANT TECHNICAL REPORT (March 2014)

Cypress Development has prepared a Technical Report detailing base metal and precious metal exploration results on its 100% owned Gunman project.

Surface sampling and past drilling on the property by Cypress has resulted in the discovery of a series of zones of zinc and silver mineralization over a strike length of approximately 2500 feet. The northern most mineralization known on the property was discovered at the end of the most recent drill program in 2007 and this mineralization remains essentially unexplored.

The mineralization at Gunman appears to be of carbonate replacement style with central zones of massive mineralization being flanked by halos of partial replacement and veining. The replacements are now very strongly oxidized within 400 feet of surface. Sulfide mineralization, sphalerite, pyrite and argentite, is seen at the base of the oxidized portion of the high grade zones.

The high grade Gunman RH Zone lies in the central portion of the 2500 foot strike length of known mineralization. Mineralization within the RH Zone is spectacular for its zinc and silver grade, for the down hole interval length of the very high grade mineralization and for the continuous nature of zinc grades in excess of 5% accompanied by multi ounce silver values. The mineralization is also located close to surface.

Very impressive oxide zinc and silver mineralization was found in reverse circulation drilling of the RH Zone in several holes including hole GM-26 in August of 2000. The interval in GM-26 from 40 to 250 feet down hole, a 210 foot interval, including lower grade upper and lower contact zones, grades 13.1% zinc and 4 oz/t silver. This interval includes a 165 foot interval from 50 feet down hole to 215 feet down hole that assayed 16.6% zinc and 5 oz/t silver.

Mineralization at Gunman appears to be controlled by a series of well-developed NNE trending fracture zones. This setting is seen in other locations along the Carlin and Battle Mountain gold trends where north-south to NNE alignments of mineralization and ore zones are located in cross cutting structural zones within or adjacent to the main NNW striking trends.

The complex carbonate and calcareous clastic sediments that host the known mineralization lie in the east limb of a north striking syncline. This rock package dips steeply west into the nose of the syncline located in the western portion of the property. The syncline is cut by a series of well-developed N-S trending fault-fracture zones that appear to control the position of mineralization. Fracturing along the axis of the syncline is covered by the Cypress claim block but has not been explored by drilling to date and represents one of the high quality exploration targets on the property.

The very high grade of zinc and silver mineralization in the RH Zone is a compelling reason to continue exploration on the Gunman property. Five main exploration targets have been identified and exploration recommendations are made for each of them in this report. The five targets are:

  • North RH Zone. Hole GD-15 intersected multiple zones of zinc-silver mineralization in a position approximately 1300 feet north of the RH Zone. The grade of the mineralization in the hole is from 0.5 to 2.0% zinc and has accompanying silver mineralization in the 5 to 15 ppm range. This low grade mineralization is very similar to that seen on both the east and west flanks of the RH Zone. 1200 feet of RC drilling in a position north and east of GD-15 is recommended.

      

  • Confirmation drilling of the high grade RH Zone is recommended in order to provide high quality data for a resource estimation and to obtain large samples of mineralization for metal recovery studies. Approximately 1000 feet of RC drilling is needed.

      

  • Down-dip exploration of the east limb of the syncline. No systematic exploration of the deeper extensions of the RH Zone has been done. It is recommended that an east-west fence of holes be completed into the footwall carbonaceous shale which underlies the known mineralization at the RH Zone. A total of 1800 feet of RC drilling is recommended.

      

  • Syncline axis exploration west of the RH Zone. Surface mapping and analysis of detailed DEM and satellite imagery indicate that the axis of the syncline at Gunman is strongly fractured. No drilling of the axis of the fold has been done. Drill testing of the target in a position down-dip of the RH Zone would require two holes totalling 1400 feet.

      

  • Surface sampling of carbonate rubble crop in the far north portion of the property, the Far North Target Area is strongly recommended as preliminary observations made during the staking of the north extension claims indicate that abundant altered carbonate rock rubble crop or near source float is present in a position roughly on strike with the known mineralization to the south. Identification of significant Zn or Ag mineralization in the north portion of the property would immediately increase the scope of the project.

      

A phased approach to the recommended work is the most efficient way to proceed. Phase 1 would include items 1 and 2 above, the very important exploration drilling around RH North discovery hole GD-15 and the confirmation drilling of the RH Zone. This would amount to the drilling of 8 - 10 holes and a total of 2200 feet of R-C drilling. The phase 1 program should also include surface sampling in the Far North Target Area as this area has the potential to materially change the scope of the project at a very modest cost.

The drilling of the down dip RH target and the syncline axis fracture zone target along with follow-up and further extension drilling at RH North is recommended to form the core exploration work of a Phase 2 program. Drilling of any high quality targets that could result from the Phase 1 surface sampling at the Far North Target area could also be added to Phase 2. Priorities will be identified based on Phase 1 results. The Phase 2 program would entail approximately 4000 feet of R-C drilling.

Significant zinc and silver assays previously reported by Cypress from the Gunman project include:

Hole IDFromToIntersectionZn Ag
GM-26 0ft 250ft 250ft 11.04% 2.6 oz/ton
Incl. 130ft 205ft 75ft 26.88% 7.7 oz/ton
Incl. 175ft 180ft 5ft 33.45% 15.1 oz/ton
Incl. 190ft 200ft 10ft 29.34% 12.9 oz/ton
GM-32 50ft 170ft 120ft 9.10% 1.5 oz/ton
Incl. 75ft 130ft 55ft 16.51% 2.3 oz/ton
Incl. 100ft 125ft 25ft 22.63% 1.9 oz/ton
GM-09 120ft 345ft 225ft 4.01% 0.9 oz/ton
Incl. 175ft 190ft 15ft 14.67% 2.4 oz/ton
Incl. 245ft 260ft 15ft 11.98% 1.9 oz/ton

Other significant zinc and silver assays previously reported by Cypress from the Gunman project include:

Hole IDFromToIntersectionZn Ag
GM-01 115ft 215ft 100ft 4.91% 1.0 oz/ton
Incl. 165ft 185ft 20ft 19.62% 3.5 oz/ton
and 355ft 385ft 30ft 10.03% 3.9 oz/ton
Incl. 355ft 365ft 10ft 23.37% 9.2 oz/ton
GM-07 70ft 205ft 135ft 6.98% 1.3 oz/ton
Incl. 115ft 150ft 35ft 14.73% 2.5 oz/ton
Incl. 185ft 195ft 10ft 21.68% 3.1 oz/ton
GM-08 130ft 250ft 120ft 2.69% 1.5 oz/ton
Incl. 185ft 205ft 20ft 12.61% 3.8 oz/ton
GM-24 60ft 110ft 50ft 6.32% 1.2 oz/ton
Incl. 65ft 80ft 15ft 16.76% 1.9 oz/ton
GM-25 150ft 155ft 5ft 6.17% 0.4 oz/ton
GM-27 0ft 250ft 250ft 2.81% 0.5 oz/ton
Incl. 185ft 200ft 15ft 14.36% 2.3 oz/ton
Incl. 195ft 200ft 5ft 28.53% 2.7 oz/ton
GM-28 0ft 210ft 210ft 8.12% 1.3 oz/ton
Incl. 85ft 175ft 90ft 14.18% 2.5 oz/ton
Incl. 135ft 170ft 35ft 20.93% 3.1 oz/ton
GM-29 0ft 270ft 270ft 2.45% 0.6 oz/ton
Incl. 40ft 65ft 25ft 10.30% 1.6 oz/ton
Incl. 140ft 160ft 20ft 9.07% 1.6 oz/ton
GM-30 30ft 65ft 35ft 5.01% 0.7 oz/ton
Incl. 35ft 50ft 15ft 11.17% 1.3 oz/ton
GM-31 40ft 85ft 45ft 3.50% 0.6 oz/ton
Incl. 45ft 55ft 10ft 13.60% 1.7 oz/ton

*oz = troy ounce

For additional documentation of the data used in the Technical Report please refer to the full report filed on SEDAR and on Cypress' web site dated March 17, 2014 and titled: GUNMAN ZINC-SILVER PROJECT NATIONAL INSTRUMENT 43-101 COMPLIANT TECHNICAL REPORT.

Don Huston, President of Cypress commented: "The Gunman project is a high-quality asset in Cypress' portfolio with significant upside exploration potential. Three RC drill programs totaling approx. 38,000 feet have been completed by the Company on the project with significant grades between 5% to 33% zinc and 0.5 to 15.0 oz per ton silver over considerable widths encountered. There is a bullish outlook for the zinc market due to ongoing demand growth and an impending supply shortage coincident with the closures of numerous major mines globally. More than 2 million tons of required new zinc supply is forecasted by 2016 yet there are very few new zinc mines in the development pipeline. We believe there will be strong upward pressure on the price of the commodity and the high grade, shallow Gunman zinc-silver project offers Cypress and its shareholders leveraged exposure to this potential price increase."

The near surface Gunman RH North Zone was a new discovery found by drilling vertically through the over lying gravel deposits and into the mineralized limestone beneath. Follow-up work was limited due to adverse market conditions with numerous untested targets remaining. The strike of the known zinc and silver mineralized zones at the Gunman property is approximately 4,200 feet.

Additional drilling is being planned to further delineate the Gunman high grade RH zone and assess nearby targets on strike. Cypress intersected >1% zinc mineralization on a 1500 foot NNE stepout in the last hole drilled in 2007. Grades in that hole are very similar to those found on the east and west flanks of the main high grade RH zone. The mineralization is carbonate replacement type and is almost exclusively zinc oxide. Strong potential exists to identify additional high grade zinc-silver mineralization at the Gunman project.

RH Zone Plan Map with Phase 2 Targets Areas
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Past exploration

Two drill programs completed in 2000 and 2004 by Cypress Development on the Gunman property included 26,000 feet of drilling, which returned some spectacular drill intercepts with grades reaching up to 33% zinc over 5.0 feet, and 26.8% zinc and 8 oz per ton silver over 75 feet. (SEE PICTURES AND CHART BELOW)

Gunman Perspective View
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RH Zone (looking North)
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Cross Section Geological
Elements and Mineralization

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2000/2001 Drill Locations with
footage and percentage Zinc

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Significant 2000/2001
High-Grade Drill Holes

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Additional drilling is planned to further delineate the RH zone and assess nearby targets. The tabular RH zone covers an area 275 feet long by 125 feet wide with an average thickness of 82 feet and an average grade of 8.9% zinc based on 14 adjoining holes. The mineralization is carbonate replacement type and is almost exclusively zinc oxide. Strong potential exists to identify several medium tonnage deposits that could one day constitute an intermediate sized, high-grade zinc mining operation.

Location of Phase One 2004 drill holes
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In January 2007, Cypress Development announced the completion of two geophysical programs over a 2.5 kilometre long trend of variable zinc mineralized stratigraphy at the Gunman zinc project.

A "Titan 24" electrical survey was completed on the Gunman property in August  2007 and was followed by a detailed gravity survey completed by mid December. Both surveys were centered on the high-grade RH zinc-silver oxide / sulfide zone and extended a total of 2.5 km north to south to cover the known extent of alteration / mineralization within the host carbonate section. The surveys were intended to identify drillable targets with RH Zone type signatures, as well as possible sulfide hosted targets in the underlying reduced stratigraphy.

Gunman Property 2007 Drill Target Basemap
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Titan - IP Inversion View
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Titan -- DC Inversion View
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The Titan Survey results indicate a series of strong, discrete conductors apparent along Titan line 300E. Detailed geologic control from surface mapping indicates that these conductors occur within north to south striking RH Zone stratigraphy, and represent a very prospective series of anomalies. Outcrops of strongly altered and locally mineralized limestone are scattered along the strike of the Titan 300E line. The mapped conductors occur beneath and to the south of the known RH zinc oxide zone. None of the mapped conductors have been drilled to date.

Four new targets (in addition to the RH zinc oxide zone) have been identified as having zinc oxide potential. A total of five targets have been identified as having zinc sulfide potential. ce.

Of major significance to the Company is the size of the potential targets. All of the new targets are believed to be significantly larger than the known RH Zone.

The combined presence of host rock, structure, drill indicated zinc-silver mineralization, and strong Titan conductive anomalies make the RH Trend targets a priority for the exploration of additional zinc/silver deposits.

In October 2007, Cypress Development announced it had completed a diamond drill program of 18 holes totalling 11,516 feet (3,510 metres) and confirmed the presence of high-grade zinc-silver mineralization in the RH Zone and identified further mineralization in a nearby step out area 1200 feet to the north of the RH Zone deposit.

2007 Gunman Zinc Project Drill Map
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The Company believes there is significant potential to discover a major new geological extension to the north of the known RH Zone zinc deposit encountered in the 2007 drilling. Cypress is now compiling all data from this program with the intent of returning to the Gunman property in the future to explore the possibility that the two known zones can be connected along strike.

While this new step-out zone is lower grade than the RH Zone, the geologic setting of the new zone is identical to that at RH. The mineralization in Hole GD-15 is localized in strongly altered Gunman limestone in a position immediately east of the fossiliferous limestone section.

2007 Hole GD-15 Core Picture
Click to Enlarge

Four points are important in the interpretation of the potential of this new step-out discovery:

1. The zinc and silver grades intercepted in Hole GD-15 closely match those seen at the east and west flanks of the RH Zone. The Company believes it is highly probable that higher zinc and silver grades would be found by a program of offset drilling to the north, south and east of Hole GD-15.

2. The top of the mineralized zone in Hole GD-15 is a fault zone. It is likely that the upper portion of the mineralized zone has been down-faulted to a position immediately east of the hole.

3. Very limited drilling of the 1200 feet between the RH Zone and Hole GD-15 has effectively tested the vertical zone of mineralization found in Hole GD-15. It is considered very likely that additional mineralization exists in the 1200 feet strike length between the 2 known mineralized zones.

4. The total strike length of known zinc-silver mineralization within the Gunman limestone has been increased from 800 feet to 2000 feet by step-out Hole GD-15.

Overview Of The Gunman Project Geology

The Gunman project covers an area of Permian carbonates and clastic rocks over-thrusted on a steeply dipping carbonate sequence.  The proximity of this thrust plane to the RH zone suggests a possible genetic relationship between the two.  Future work will include a regional exploration program to identify other potential deposits on the Gunman and adjoining properties.

The geology of the Gunman property is dominated by a broad north-south plunging syncline with sandstone-conglomerate in the core.  The main body of mineralization appears to be located over a sub-parallel fault 50-75 feet west of the Range Front fault.  Outcropping mineralization is found throughout the Gunman prospect. Zinc, silver, copper, and a variety of accessory metals occur in potentially economic quantities and grades.  A function of water table and weathering at depth, minerals are found to be either oxidized or in their primary sulfide form, both of which are amenable to conventional recovery techniques.

Metallurgical advancements in the treatment of oxide zinc deposits have made their economic viability increasingly attractive.

Preliminary testing using acetic acid digestion on the Gunman ore showed a high solubility and XRD identified Smithsonite (Readily Soluble) as the primary oxide zinc bearing mineral. This shows the recovery using acid digestion is very high in this case. Meaning, this project is very amendable to heap leaching (Please see chart below).

Preliminary Results Using Acetic Acid Digestion
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2014 Zinc Outlook

The Zinc market in the Western world has been in a supply deficit for quite some time, and now, for the first time, it is in a global deficit. And the deficit will only get bigger. 40% of Zinc production comes from junior miners, as the big zinc ore bodies are tapped out and the large mines close, they will continue to be replaced by smaller zinc operations. Brunswick was the first large zinc mine to close, Century, Skorpion and a whole host of other mines are following suit.

The big zinc ore bodies are near an end and there is no replacement on the horizon for two reasons:

1) There are no more big ore bodies available.

2) There is no serious exploration for zinc.

Interestingly, as Brunswick,  Century and Skorpion shut down their zinc operations, the sector has been freed up to bring on smaller-capacity mines, which helps the supply situation. But none of these potential developments can replace the magnitude of what we are losing by way of the big ore bodies going extinct.

Why Zinc?

  • The zinc market has rebounded since the beginning of 2009.
  • China, a long term world zinc supplier is now a net importer.
  • Rapidly growing BRIC economies will further increase the demand in the years to come.
  • Best estimates suggest that a significant portion of mine capacity will be closing or decreasing over the next few years.
  • Growing risk of the tightening of the zinc concentrate market.
  • Few new mines are currently being developed and therefore it is predicted that few will be entering production in the foreseeable future.

Uses

  • Its most important application is in the protection of steel against corrosion.
  • Steel is one of the most widely used materials in the world and zinc allows its durability to be prolonged. It extends the life and reduces the maintenance costs of many steel goods such as homes, cars, bridges, and port facilities.
  • Zinc fuel cells are used to power electric vehicles, generators, computers, cell phones, and hearing aids.
  • Is a natural component of the earth's crust. It is also present in air, water, plants, animals and humans.
  • Is an essential element for human health.  Adequate daily intake is important for the proper function of immune system, digestion, and reproduction.
  • Is a natural element that plays a critical role in the biological processes of all living organisms. Therefore it is critical to the environment rather than harmful.
  • It is used in food, animal feed, and fertilizers, as well as pharmaceuticals and cosmetics.
  • Is fully recyclable.

Zinc is produced and consumed in five major forms: metals, chloride, dust, oxide and sulphate, with metal being by far the largest tonnage and used predominantly in galvanizing and alloys. Zinc's main market is galvanizing, which accounts for almost half its modern-day demand. The electrochemistry of zinc is such that steel coated with zinc (galvanized steel) exhibits very high levels of corrosion resistance, which gives added protection against corrosion to building structures, vehicles, machinery and household equipment. This application accounts for 47% of total refined demand. Zinc based alloys in die-casting, ranging from automotive components to toys and models, account for 14% of refined demand, with copper based zinc alloys (brass) accounting for 13%. Other uses of metallic zinc include roofing products and dry cell batteries. Chemical and other applications account for the remainder of refined demand (11%) where it is used in a diverse range of products and uses such as tires, paints, pharmaceuticals and chemical processing.

World Zinc Production & Industrial Consumption
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With supply-demand fundamentals arriving back in the global zinc market, the Gunman project has the potential to become an exceedingly valuable asset for Cypress Development Corp.

Robert Marvin, P.Geo., CPG, Project Geologist for Cypress Development is the Qualified Person as defined by National Instrument 43-101 and supervised both the project field exploration and the preparation of the technical information on this website.

 
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