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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.

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

February 3, 2014 Cypress announced it had commissioned an independent NI 43-101 Technical Report and has staked an additional 27 claims on strike to the immediate north and south of the Company's wholly owned Gunman zinc-silver project located on a well-developed N-S structural zone linking between the Carlin and Battle Mountain mineral trends. The property sits directly west of Barrick's Bald Mountain gold mine complex in White Pine County, Nevada.

With the majority of past drilling on the Gunman project predating National Instrument (NI) 43-101 (Standards of Disclosure for Mineral Projects), Cypress commissioned Riverbend Geological Services of Beausejour, Manitoba to complete an independent NI 43-101 Technical Report. The Technical Report and recommendations will be used by Cypress in the planning of a RC drill program in order to complete an independent NI 43-101 Compliant Resource Estimate on the Gunman RH Zone. The Company anticipates that this drill program will commence in early April.

A strike length of approximately 2 miles (south to north) has been staked to allow Cypress to effectively explore for additional high grade zinc-silver oxide and sulphide mineralization along the contact of Permian age carbonate-clastic units and recent gravels created by a range front normal fault. The mineralized carbonate unit at the Gunman project is localized within the east limb of a fault bounded syncline. The shallow mineralization consists of very high grade zinc-silver oxides and local sulphides along with arsenic, gold and mercury mineralization within karsted and strongly oxidized, Permian age silty limestone host rocks. The dominant surface expression of the known zone is a series of jasperiod outcrops and subcrops. These jasperiods are anomalous in zinc-silver-arsenic-gold-antimony and mercury.

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.

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
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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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