Cypress Development

Unique Approach to Lithium Exploration in Nevada

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Overview

Cypress Development Corp. (TSXV:CYP, FRA:C1Z1,OCTQB:CYDVF) is a junior resource company focused on lithium exploration in Nevada’s lithium-rich Clayton Valley, home to Albermarle’s (NYSE:ALB) Silver Peak Mine. Cypress Development’s flagship projects are the Dean and Glory Claystone/Brine projects located nearby the wells at the Silver Peak Mine and adjacent to Pure Energy Minerals’ (TSXV:PE) Clayton Valley South Project.

In September 2016, Cypress Development entered into an agreement to acquire a 100 percent interest in the Dean Lithium Claystone Project. During 2016 exploration efforts, initial assay results ranged up to 2,940 ppm lithium with an overall average grade of 925 ppm lithium. Further sampling also showed a maximum value of 3,730 ppm lithium. Initial diamond drilling was conducted in nine shallow holes in May 2017 and the company has received a BLM (US Bureau of Land Management) permit for additional drilling on the property.

Cypress’ other key project is the 100 percent owned Glory Lithium Claystone/Brine project, which is adjacent to the Dean project. Initial exploration results on the Glory property have been used as foundational data for the Dean project due to their proximity. Seismic data contained in a NI 43-101 technical report prepared for the property points to the potential for lithium brine targets on the Glory Claim group. Surface sampling conducted by Cypress in 2016 on the Glory claims was successful in identifying high grade lithium from a large zone of claystones. Successful lab testing using a cost-effective and environmentally-friendly leaching method has produced exceptional lithium recovery rates averaging 95 percent.

On October 19, 2017 the company announced the start of a drilling program that includes 12 holes totalling 4,000 feet and will be conducted across both adjacent properties.

Company Highlights

  • Flagship Dean and Glory Lithium Claystone/Brine projects located in the heart of the Clayton Valley lithium brine exploration area of Esmeralda County, Nevada—adjoining the Albemarle Silver Peak lithium mine.
  • Wholly-owned Dean Lithium Claystone project showing initial assay results up to 2,940 ppm lithium with an overall average grade of 925 ppm lithium achieved.
  • Initial drilling program on Dean property successfully completed and permitted second drilling program to start end of September 2017.
  • 2016 sampling results in Glory Lithium Claystone/Brine project show two kilometers of north-south strike of lithium rich outcropping claystones assaying 1,500 ppm lithium on average including a maximum value of 3,830 ppm lithium.
  • 2016 leach test of lithium extracted directly from the surface claystones at Glory show an average of 95 percent recovery of lithium without costly and complex treatments.
  • 2017 drill program launched across both properties.

Clayton Valley Dean Lithium Project

Cypress entered into an agreement in September 2016 to acquire a 100 percent interest in the Dean Lithium Claystone project. Located in the center of the Clayton Valley lithium exploration area, the 2,700-acre Dean property is adjacent to Albemarle Silver Peak Mine’s lithium brine wells on its western boundary, Pure Energy’s resource area on its southwestern boundary and Cypress’ Glory Lithium Claystone/Brine project on its southern boundary. The property also includes Angel Island, which is an isolated exposure of highly deformed and metamorphosed rocks of Cambrian age akin to many others in the region. The rocks in these occurrences are surrounded by basin-fill evaporite rocks known as claystones.

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Initial exploration results

Assay results reported in October 2016 from Cypress’ Phase 1 exploration program on the Dean property showed positive results. A total of 55 samples were collected and submitted for lithium content analysis. Results up to 2,940 ppm lithium with an overall average grade of 925 ppm lithium were achieved.

Following the October 2016 program, Cypress conducted further sampling which took place in parallel to their geological mapping program. In Phase 2, another 72 samples were collected and analyzed for lithium content. Results from this sampling program included a maximum value in claystone of 3,730 ppm lithium, eight samples that assayed greater than 2,000 ppm lithium and 29 samples at greater than 1,000 ppm lithium. A two-square-kilometer area has been defined as a new high-grade zone open for expansion to both the north and the south and with an average grade of over 1,500 ppm lithium.

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Drilling in 2017

In May 2017, Cypress conducted a nine-hole core drill program on the Dean property. The drilling has shown that all mineralized intercepts in all nine drill holes begin near the surface and the mineralized thickness is over 220 feet. The results outline a lithium mineralized area of four kilometers by two kilometers and open in all directions. All nine holes encountered high values within claystone, ranging up to 1,790 ppm lithium and averaging 900 ppm lithium.

“The discovered mineralization at Dean sits within a basin that hosts the only significant lithium production in the United States,” said Cypress Development President Donald Huston. “Cypress’ Clayton Valley, Nevada lithium project is well located in close proximity to essential mining infrastructure. Cypress Development believes this discovery has the scale to significantly impact the future production of lithium in the Clayton Valley. Cypress also believes this developing zone could very well represent a long term, reliable supply of lithium given the known size, chemistry and geometry of the discovery.”

Cypress was granted a BLM permit for a second drill program on the property and that led to the launch of a second drilling program in October 2017. The fall Dean Drill program is well underway at this time.

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Glory Lithium Claystone/Brine Project

The Glory Lithium Claystone/Brine Project is also located in the Clayton Valley, on the east boundary of Albemarle’s Silver Peak Mine.The 1,520-acre property’s north boundary is shared with the Cypress Dean Project.

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As the project area is located in an active lithium mining and exploration region, significant local infrastructure is already in place including state highway and road networks, electric power, water, exploration and operation services and skilled labor.

Seismic data shows lithium brine potential

Cypress’ management has reviewed the seismic data in Pure Energy’s July 2015 Technical Report for its Clayton Valley South project. The seismic data also covers ground along the western and west-central portions what is now Cypress’ Glory property and indicates favorable lithium brine exploration targets.

High grade lithium in claystone offers unique opportunity

Results from Phase 1 and Phase 2 surface sampling programs show 1.5 kilometers by 3 kilometers of north-south strike of outcropping claystone that assay approximately 1,500 ppm lithium on average and includes a maximum value of 3,830 ppm lithium. These outcropping claystones may represent uplifted portions of the stratigraphy within which the lithium brines of the Clayton Valley basin are found and produced.

The results from the 2016 sampling program returned the highest reported assay result for lithium at surface (3,830 ppm lithium) publicly reported in Nevada’s Clayton Valley

The surface sampling results suggest a strong possibility of a continuously mineralized volume of lithium rich claystone at surface and immediately east of both of Silver Peak’s brine production wells and Pure Energy’s North Resource Area reported lithium brine potential.

“Silver Peak’s production accounts for four percent of the world’s lithium. Average production out of Silver Peak’s brines is less than 200 ppm lithium—they’re mining that and making money,” said Huston. “We are right beside it and we are now showing the world there is the potential to extract higher grades of lithium.”

Feasibility testing of lithium extraction from surface claystones

In the first half of 2016, leach testing using the dilute acid method was performed on lithium extracted directly from the surface claystone. The testing included 47 samples taken from the two-kilometer strike length of exposed lithium mineralization, which  averaged 1,334 ppm lithium using the industry standard four-acid method. The samples subsequently averaged 1,276 ppm lithium following the dilute acid leach testing. The results show an average of 95 percent recovery of lithium compared to the original assays—without using costly, complex treatments such as roasting.

“The takeaway here is that a readily soluble form of lithium has been discovered at the Cypress Clayton Valley project which can potentially be extracted directly from the mineralized claystones using a simple, low cost and environmentally friendly method,” added Huston. “Most importantly, the data strongly suggests that the lithium is not contained in silicate. Extracting lithium from silicate requires a complicated and expensive process.

Phase 3 Surface Sampling Program

Cypress commenced a Phase 3 property-wide surface sampling program at its Glory Lithium Claystone/Brine Project in conjunction with Pure Energy Minerals in September 2016. More than 500 samples collected complemented previous sampling, which encountered a strongly mineralized zone averaging 1,350 ppm lithium along a one-kilometer strike length traversing north to south on the property’s west portion. The program provided Cypress with a property-wide view of lithium distribution contained in the surficial claystone material covering the property.

The Glory Project has identified several well mineralized lithium zones of 1,400 ppm to over 2,000 ppm lithium.. The company considers this highly mineralized area a prime target for developing a large surface footprint of lithium mineralization averaging over 2,000 ppm.

Planned Drill Program

Encouraged by the high potential indicated by their exploration results to date, Cypress has planned the first phase of their drilling program which began in October 2017. In anticipation of this, Cypress was granted an Area of Disturbance Permit from the BLM that allows the company to conduct shallow diamond drilling on the Glory Clayton Valley property. Drilling will target the area of lithium-rich claystone discovered at surface and the company hopes to use results to estimate size, lithium grade and tonnage in the claystone.

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Management

Donald C. Huston—Chairman and President

Don Huston has been associated with the mineral exploration industry for over 30 years and has extensive experience as a financier and in-field manager of numerous mineral exploration projects in North America. He spent 15 years as a geophysical contractor with C.D. Huston and Sons as a mineral exploration consultant in northern Ontario, Manitoba and Saskatchewan. Huston serves as a director of four Canadian public resource companies.

William Willoughby, PhD, PE—Director and CEO

William Willoughby is a mining engineer with 38 years of experience in all aspects of natural resources development. Since 2014, he has been principal and owner of consulting firm Willoughby and Associates, PLLC. Prior to that, he was President and COO of International Enexco Ltd, which was acquired by Denison Mines in 2014. He previously held various positions with Teck (Cominco). Willoughby has been a Professional Engineer since 1985 and received his Doctorate in Mining Engineering and Metallurgy from the University of Idaho in 1989.

Robert Marvin, B.Sc—Director and VP Exploration

Bob Marvin has been involved in mineral exploration and evaluation of lithium, gold, copper, zinc and uranium deposits throughout the Americas as an employee and as an independent consultant. He graduated from the University of New Mexico with a Bachelor of Science degree in geology in 1984. A third generation Nevada resource geologist, Marvin has learned the business from the field starting at an early age. Always keen to explore high grade deposits, he has been involved in several successful gold-silver projects in Canada, most recently with Bayfield Ventures in the Rainy River gold district in Ontario but also at Meliadine and in the Committee Bay Belt of the far north.

James G. Pettit—Director and CFO

Jim Pettit is currently serving on the board of directors of five publicly traded companies and offers over 25 years of experience within the industry specializing in finance, corporate governance, executive management and compliance. He was previously Chairman and CEO of Bayfield Ventures, which was purchased by New Gold in January 2015.

Donald G. Myers—Director and Investor Relations

Don Myers is currently serving on the board of directors and manages the investor relations and corporate communications of three publicly traded mineral exploration and development companies. He has 30 plus years of experience in public company management and investor relations having helped raise over $350 million in venture capital for resource and technology companies listed on the TSX Venture, NASDAQ and Toronto Stock Exchanges.

Amanda Chow, CPA, CMA—Director

Amanda Chow is a Chartered Professional Accountant (CPA, CMA) and a graduate of Simon Fraser University where she earned her Bachelor of Business Administration degree. She began working with public companies in 1999.

Donald Mosher—Corporate Development

Donald Mosher has worked in the capital markets for 30 years, specializing in Venture Companies. He started his career as a financial adviser at Union Securities in Vancouver where he was introduced to the public markets, trading stocks listed on the Vancouver Stock Exchange. In 1998, he went to work for a company called Napier Environmental Technologies, remaining with the company until 2004. In 2004, Mosher started a business called B and D Capital Partners. The business funded Venture Companies in all sectors of business including mining, pharmaceutical, oil and gas, etc. He previously held the position of CEO and President of Rodinia Minerals which was focused on exploring for lithium in Clayton Valley, Nevada.


 

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