S UMMARY R EPORT ON THE L EÓN P ROJECT A REA IN N ICARAGUA Cassius Ventures Ltd. 8/1/2012 Eddy Canova, P.Geo. 1
INTRODUCTION Cassius Ventures Ltd., a junior mining company listed on the TSX Venture Exchange (CZ-V), is currently exploring three project areas located in Nicaragua. The project areas comprise 17 concessions over 160,000 hectares and are located in the León, Nueva Segovia and Chontales districts. The three project areas are all easily accessible by asphalted and/or and gravel roads. The location of Cassius’s concessions as well as other concessions and mines of interest are shown in Figure 1. Figure 1 – Cassius Ventures Project Areas (Nueva Segovia, León, Chontales) 2
Figure 2 - Concessions and Target Anomaly Areas Table 1 below provides an overview of the concessions and geology by project area as well as adjacent activity of other producers and developers in Nicaragua. Table 1 - Overview of Concessions by Project Area Nueva District Leon Chontales Segovia Concession 9 4 4 Area (ha) 60,814 62,000 38,000 Epithermal Geological Epithermal Epithermal System + Model Quartz veins system Porphyry Golden B2 Gold Reign, B2 Gold Adjacent (Limon Mine) Corazon (La Libertad Condor (La Properties Gold Mine) India) 3
The Company completed a 12 month exploration program from July 2011 – June 2012 consisting of: • Stream sediment, soil, rock chip, and trench channel sampling on concessions not previously sampled as well as concessions worked on historically • Soil geochemistry surveys on prospective areas • Trenching on four historic targets in addition to other targets identified as part of the exploration program • 1,270 metres of drilling over 10 holes focused on targets in the Nueva Segovia project area • The identification in the León project area of several gold anomalies and an extensive trend of gold anomalies over 15km, in addition to an Au-Mo mineralization system within a porphyry Over the past few months, the Company has compiled an extensive amount of information through its exploration efforts. In the coming months, focus will be placed on compiling these results and interpreting the data to re-define the exploration program and refocus the trenching and drilling. This paper is focused on providing geological background, work completed to date and recommendations for future work in respect of the León project. Nicaragua - Background Nicaragua is a stable country with a government that has favorable mining regulations and with an availability of excellent labour and manpower. The Nicaraguan economy is led by the coffee industry but gold is in second place and quickly catching up. The present government was elected in November 2011 and has a five year term. From meetings with Mr. Daniel Ortega, the Nicaraguan president, Cassius Ventures understands that mining is viewed by the government as a vital economic driver to decrease poverty in the country. Figure 3 – John Thomas, President and CEO of Cassius with President Daniel Ortega 4
The main gold producers in the country are B2 Gold with the El Limon and La Libertad mines (production slated to be 160,000 ounces in 2012, rising to 200,000 in 2014) and Hemco, a private company, focused on the development of deposits located in the northern part of Nicaragua (expected to produce 60,000 ounces in 2012). There are producers and explorers operating in proximity to the Company’s project areas. The El Limon (B2 Gold) and La India (Condor Resources) mines are located on the west and east side of the León properties and the two combined have produced over 4 million ounces of gold historically. The two properties also have multi-million ounce gold resources. Golden Reign has an advanced exploration project practically surrounded by the Nueva Segovia concessions, and in the south east, the Chontales concessions are near the La Libertad mine. Despite present production, Nicaragua is considered to be underexplored, and possesses great potential. Accessibility to the country is excellent with several flights daily from the US. Nicaraguan Mining Law was revised in 2006 – some of the key elements of law include: • Concessions rent ranges from $0.75/ha p.a. to maximum $12/ha after 12 years • Royalty to government of 3% NSR • Concession owners exonerated from payment of import duties and sales taxes on all equipment and accessories necessary for exploration and exploitation of mineral resources • 30% corporate tax rate with typical depreciation and loss allowances 5
LEÓN PROJECT OVERVIEW The León concessions are located 100 km north of Managua and are easily accessible via the Pan- American Highway with a well paved road 30 km to the east. The concessions consist of 63,000 hectares forming one continuous block with one smaller concession (Paso Real) to the north of the León block. Table 2 and Figure 4 below provide an overview of the individual concessions located within the León area. Table 2 - León Concessions Data Concession Area (Ha) Date of approval Issued Years Next Semester Costs La Leonesa 47,190 March 13, 2008 25 $62,212 La Raya II 13,445 March 13, 2008 25 $20,333 February 19, 2009 25 Armenia 1,500 $1,131 Paso Real 634 February 2, 2006 25 $958 Total 62,769 $84,634 The León concessions are located between El Limon, operated by B2 Gold and the La India mine owned by Condor Gold PLC, which is presently closed but has a JORC resource of 1.6 million ounces. Access throughout the project area is excellent with gravel roads and trails. Topography in the area is generally flat and rolling, with low relief. The town of El Sauce, where the Company has accommodation for employees, office space and storage and logging facilities, is located in the center of the concession. Local labor is readily available. Figure 4 – León Project Concession Areas At León, four areas are 6
being focused on with encouraging gold assay results: Cerro Rojo, Las Mercedes, Santa Barbara and Paso Real. Figure 5 and 5A below highlights the location of these target areas within the context of the overall León project area. Cerro Rojo is part of the La Leonesa concession, located northwest of the León block Las Mercedes is part of the La Raya II concession, located on the east side of the León block Santa Barbara, located in the northern part of La Leonesa, is less than 6 km from the town of El Sauce, referred to above Paso Real is a small concession area to the north of the León block Figure 5 – León Project Area – Rock Sampling Results 7
Figure 5A – León Project Target Areas HISTORICAL WORK DESCRIPTION The León concessions were previously held by Fortress Resources, a Canadian company based in Vancouver. Fortress acquired the concessions and carried out exploration work between 2005 and 2007, collecting 142 rock samples, 229 soil samples, and 21 stream sediment samples over the properties. LOCAL GEOLOGY The León properties are located just east of the Quarternary to Recent volcanic deposits situated in a graben feature trending northwest. The properties are situated within the Tertiary Volcanics consisting of intermediate and mafic composition volcanics, and intruded by mafic and felsic intrusive rocks – 8
porphyritic in texture. The Coyol Group hosts the known vein gold deposits in Nicaragua, in particular the El Limon (B2 Gold) and La India (Condor) mines. The outcrop exposure is low except on steeper topography. In the western part of La Leonesa at Cerro Rojo, there exists a white medium grain, massive quartz- feldspar porphyry with oxidation of pyrite and weathering of feldspars – argillitization. On the western contact of the porphyry are basalt and locally, the porphyry is in contact with andesite and basalt volcanics. The porphyry locally has brecciation, quartz veining and geodic textures. These areas are generally oxidized and mineralized with pyrite. On the eastern side of the León concessions (La Leonesa and La Raya II), andesitic to mafic volcanics are cut by quartz veins, mineralized with pyrite and more typically epithermal quartz vein systems mineralized with gold similar to the El Limon Mine and the La India mines noted above. RECENT WORK, DESCRIPTION AND RESULTS Overview Extensive stream sediment sampling has covered the majority of the property area and detailed soil sampling has been carried out on Cerro Rojo, Santa Barbara and Las Mercedes. The stream sediment anomaly map (Figure 6) illustrates the gold anomalies occurring on all three areas. Figure 6 - León Property Stream Sediment Anomaly Map 9
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