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Cypress Development Corp.

Red Lake Projects, Ontario

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McKenzie Island Gold Project, Red Lake, Northwestern Ontario

Cypress Development Corp. holds a 100% interest in the 4,720 acres McKenzie Island gold property in the Red Lake greenstone belt of north-western Ontario.

Location of East McKenzie Island Property
to Goldcorp's Cochenour / Bruce Channel Deposit

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The McKenzie Island property is located west and adjacent to Goldcorp's Cochenour / Bruce Channel Deposit . The project is also on strike with the currently producing Goldcorp (TSX: G) Red Lake and Campbell gold mines 7 kilometres to the east.

The Bruce Channel deposit (BCD), located on Golcorp's Gold Eagle Mines property, is situated along the prolific Red Lake Trend. The BCD is immediately southwest of Goldcorp's past-producing Cochenour-Willans Mine which produced approximately 1.2 million ounces of gold from 2 million tonnes of ore at a recovered grade of 18.5 grams gold per tonne.

Gold Eagle Mines Ltd. (TSX: GEA) did over 85,000 metres of diamond drilling on the Bruce Channel deposit. The discovery is located approximately 800 metres beneath the shallow Bruce Channel waterway that separates McKenzie Island from the mainland. The current "footprint" of the BCD mineralized envelope is 1.45 kilometres vertically and horizontally, approximately 800 metres in a NE-SW direction and 450 metres in a NW-SE direction. Based on the exploration work done to date, there is an estimated 8-13 million ounces of gold in the Bruce Channel deposit and the mineralized envelope remains open in all directions.

The Western Discovery Zone is yet another gold zone that has been found on Goldcorp's Gold Eagle property and is located on the western side of the property close to Cypress' McKenzie Island project. This zone has a strike length of over 1 kilometre in an east--west direction and has a width of 350 metres from north to south. The Cypress Development / Skyharbour Resources joint venture is of the opinion that there is potential for the extension of the Western Discovery Zone onto the McKenzie Island property.

In September of 2008, Goldcorp Inc. announced it acquired Gold Eagle Mines Ltd. valued at approximately $1.3 billion. Under the Plan of Arrangement, shareholders of Gold Eagle received at their election and subject to proration either C$13.60 in cash or 0.292 of a share of Goldcorp or any combination thereof, for each Gold Eagle share they held.

Past Exploration and Drilling Completed on the McKenzie Island Property

An initial exploration program was completed on the property in 2002 by Cypress. This program consisted of data compilation, mapping, and geochemical and geophysical testing. This identified the highly prospective McAndrew gold / alteration trend extending across the centre of Cypress' McKenzie Island property - a comparable geological environment to the McKenzie Island Mine which historically produced 650,000 ounces of gold. As a result of this initial exploration phase, a first phase of drilling consisting of 13 holes totaling 6,828 feet (2,100 metres) to test targets identified during the 2002 exploration program was completed. In addition, overburden drilling totaling 2,990 feet tested the basal till at 133 sites in two areas on the property to identify new targets. Gold values were encountered along the McAndrew Trend on McKenzie Island as well as along the contact between the volcanics and sediments on the north part of the island.

In May 2004, the Company added an integral claim block to its existing land package. This acreage is situated in the middle of the held ground and now allows the Company to continue to follow another mile strike length of the known McAndrew geological trend.

In early 2005, 14 reconnaissance holes (approx. 3,300 metres) were also completed during Phase I and Phase II (February and April of 2005) diamond drill programs on the St. Paul's Bay region on the southern most portion of the McKenzie Island property to explore a district-scale W--NW trending structure known as the "D2" Structure.

Airborne Magnetic Data over
South End of McKenzie Island Property

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Phase I 2005 St. Paul's Bay Drill Hole Locations,
South End of McKenzie Island Property

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Significant zones of gold mineralization were discovered. The new zones were located in diamond drill holes M05-3 through to M05-7. In reconnaissance drill hole M05-3, visible gold was identified within several centimetre-scale quartz veinlets with sample results showing numerous multi-gram intercepts with a high value of 23.8 grams per tonne gold over 0.2 metres. In reconnaissance drill hole M05-4, highly anomalous gold values up to 850 ppb were intercepted over 60 metres. In reconnaissance drill hole M05-7, a 10-metre wide zone of gold mineralization was intersected in a zone hosted by quartz-sulfide veining and silica flooding within a strongly sericite altered felsic intrusive.

Some Assay Results from Phase I & II 2005 Drill Programs
on South End of McKenzie Island Property

All of the intercepted zones of gold mineralization lie within a large (1000+ metres by 150+ metres) envelope of quartz-sericite-chlorite alteration, which appears to be controlled by a district-scale, W--NW trending D2 deformation zone. The strike length of the altered system has not been limited by the 2005 drill programs. The Company is encouraged with the results of the 2005 Phase I & II drill programs on the south portion of its McKenzie Island property.

Three holes were completed in a 2006 winter drill program on the eastern portion of the McKenzie Island property adjacent to Goldcorp's Gold Eagle Mines property, where a significant angular unconformity has been projected. This unconformity appears to exert a strong regional influence on gold deposition, including past gold produced from the McKenzie Red Lake Gold Mine and the Gold Eagle Mine east of Cypress' property. The geologic corridor flanking this known unconformity is considered to be very prospective for gold deposition in the Red Lake gold camp.

Cypress Development remains convinced that there continues to be significant potential for the development of gold deposits on its McKenzie Island property.

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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