S UMMARY R EPORT ON THE L EN P ROJECT A REA IN N ICARAGUA Cassius - - PDF document

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SUMMARY REPORT ON THE LEÓN PROJECT AREA IN NICARAGUA

Cassius Ventures Ltd.

8/1/2012 Eddy Canova, P.Geo.

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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)

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District

Nueva Segovia Leon Chontales

Concession

9 4 4

Area (ha)

60,814 62,000 38,000

Geological Model

Epithermal Quartz veins Epithermal System + Porphyry Epithermal system

Adjacent Properties

Golden Reign, Corazon Gold B2 Gold (Limon Mine) Condor (La India) B2 Gold (La Libertad Mine) 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

4 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

5 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

• n the development of deposits located in the northern part of Nicaragua (expected to produce 60,000
• unces 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

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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 Armenia 1,500 February 19, 2009 25 $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

7 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
• verall 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

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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

• f intermediate and mafic composition volcanics, and intruded by mafic and felsic intrusive rocks –

9 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

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Concession Rock Chip Samples Soil Samples Stream Sediment Samples La Leonesa 559 1,479 469 La Raya II 125 452 204 Armenia 28 168 16 Total 712 2,099 689

At Cerro Rojo, the stream sediment anomalies occur on a feldspar porphyry. Santa Barbara also has a number of anomalies occurring in quartz blocks. The third anomaly at Las Mercedes occurs on the eastern side (on the La Raya II concession) with anomalies trending NW over 40 km and occurring in

• xidized quartz veins. Northeast trending structures identified on the east side of the property helped

guide the exploration program in this area. The Paso Real property, located to the north of the main block of concessions has also yielded elevated gold, silver and copper values in rock chip samples. Fieldwork The exploration program at León commenced in July 2011 and continued into 2012 with the following taking place:

• 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

Table 3 below summarizes the work carried out on the León concessions:

Table 3 – Fieldwork on León Concessions

A total of eight sediment gold anomalies have been identified in a trend which runs NW – SE across the León concessions. On the La Leonesa and La Raya II concessions, the Cerro Rojo, Las Mercedes and Santa Barbara targets are being developed with encouraging gold assay results.

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CERRO ROJO

Overview Cerro Rojo is situated in the north western part of the León project area. Soil sampling at Cerro Rojo has identified a gold/copper/molybdenum anomaly that is associated with an intermediate quartz-feldspar porphyry that is oxidized and argillitized. Mapping of the porphyry indicates a coverage of approximately 6 km² of porphyry with oxidation, argillitization, quartz veinlets locally, brecciation, with 1% to 2% pyrite. The porphyry is quartz-andesitic to dacitic in composition. Mafic volcanics occur in contact or adjacent to the quartz-feldspar porphyries and are observed in several areas to the east and west of the porphyries (See Figure 7, 7A, 7B).

Figure 7 - Cerro Rojo Geochem and Geology Map

The mafic volcanics are weathered, chloritic and fine grain. The porphyry is medium grained with 1mm to 2mm feldspar and quartz subhedral crystals in a felsic to intermediate matrix (dacite to quartz- andesite).

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Figure 7A. Cerro Rojo Au Soil Geochem and Geology.

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Figure 7B. Cerro Rojo Mo Soil Geochem and Geology.

14 The porphyry outcrops on the hills and along the rivers. Along one of the rivers, the porphyry outcrops

• ver 800 m with mafic volcanics occurring on the west side. The porphyry has 2% to 4% disseminated

pyrite, fresh in certain areas and oxidized in other areas. In the northern part the porphyries are

• xidized, weathered, and friable at surface with the feldspars being weathered and argillitized. The

porphyries in the north have weathered and oxidized sulphides with quartz veining and brecciation (meteorization) (Figure 8).

Figure 8 - Volcanic Breccia, Cerro Rojo, León

The geochemical maps of this zone (Figures 7, 9 and 10) demonstrate a strong gold anomaly associated with pyrite in the quartz-feldspar porphyry and with an associated Mo and Ag anomaly. The mineralization model for the area is a porphyry gold – molybdenum mineralization. The recent discovery by Calibre Mining Corp. of a copper gold bearing porphyry in northern Nicaragua shows that such mineralization exists in Nicaragua. Soil Sampling From July to December, 2011 at Cerro Rojo, 1,058 soil samples were collected with maximum values of 125 ppb Au, 150 ppm Mo, and 297 ppm Cu. As a result of the Au soil geochem anomalies, focused rock sampling of 148 rock samples were collected with maximum values of 14,011 ppb Au, 81 ppm Ag, 653 ppm Mo, and 144 ppm Cu.

15 Rock Sampling and Mapping Rock sampling was carried out between January and April 2012 on the Cerro Rojo area. In an area of the porphyry where there is brecciation, quartz veining, quartz flooding and silicification, at 537422E and 1423576N (UTM WGS84), nine samples returned values above 1.00 g/t Au. The zone of brecciation and silicification occurs over a distance of 15 to 20 m. The porphyry is silicified and penetrated with fine quartz veinlets. The samples are surface grab samples giving values of 14.01 g/t Au, 7.79 g/t Au, 6.26 g/t Au, 2.02 g/t Au, 1.99 g/t Au, 1.48 g/t Au, 1.13 g/t Au and 1.05 g/t Au. In the first zone, four samples gave values of 14.01 g/t Au, 6.26 g/t Au, 2.02 g/t Au and 1.05 g/t Au within a porphyry that is brecciated, silicified and penetrated with quartz veinlets. Figure 9 below illustrates the location of each result noted above.

Figure 9 - Rock Sample Assays at Cerro Rojo

Approximately 488 m to the east-northeast of zone 1, another four samples at zone 2 returned values of 7.79 g/t Au, 1.99 g/t Au, 1.48 g/t Au and 1.13 g/t Au within a brecciated porphyry with a silicification and quartz veinlet. A third site, zone 3, approximately 594 m to the northeast of zone 1, returned values of 0.46 g/t Au within a silicified porphyry with quartz veinlets and brecciation. A fourth area, zone 4, 200 m to the east-southeast of zone 1 (537620E and 1423480N) returned values of 0.25 g/t Au in the quartz- feldspar porphyry. A fifth area, zone 5, 900 m east-northeast of zone 1 (538240E and 1423780N) has a number of anomalous grab samples assaying 0.12 g/t Au to 0.14 g/t Au over an area of 600 m in a silicified porphyry penetrated with quartz veinlets. See Figure 10 below.

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Figure 10 - Cerro Rojo, 5 Gold Anomalous Areas

This large porphyry system is an important target that Cassius recommends an airborne geophysics (MAG and Radiometrics), an IP ground survey and trenching be executed prior to drilling. Further detail

• n suggested additional work is provided below in the section entitled “Conclusion and

Recommendations”.

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LAS MERCEDES

Overview Based on results of recent soil geochemical work, gold mineralization has been identified in the area known as Las Mercedes, located on the eastern side of the Leon block, on the La Raya II concession. The mineralization is epithermal and trends to the north west. A total of 247 soil samples were collected with 25 soil samples being anomalous and ranging from 50 ppb Au to 196 ppb Au (Figure 11). The anomalous gold values have corresponding copper and Molybdenum values from soil sampling, attaining 92 ppm Cu and 60 ppm Mo. As a result of the Au soil geochem anomalies, focused outcrop mapping and rock sampling in this area helped identify and locate areas of gold mineralization. One of the northern soil anomalies has two historical workings with 1.8 m wide quartz veins cutting through the intermediate volcanics (andesites) and trending 119° dipping 60°S. The veins have tunnels located at 556384E 1420688N and at 556398E 1420637N assaying 0.25 g/t Au and 0.33 g/t Au respectively (Figure 12). Prospecting and mapping west of the tunnels uncovered two mineralized areas, the first site at 850 m west-southwest grading 32.15 g/t Au in a quartz vein within silicified intermediate volcanics and a second site 1.50 km west within quartz veins and silicified intermediate volcanics assaying 55.25 g/t Au . A third site, 700 m north, assayed 28.23 g/t Au in quartz veins within dacites. The soil geochemical anomaly in the southern part of Las Mercedes (block C on Figure 11), occurs in an area of oxidized rocks within intermediate volcanics. This area requires further follow-up with mapping and rock sampling.

Figure 11 - Las Mercedes, Soil Geochemistry Map (Au)

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Figure 12 – Las Mercedes – Soil Geochemistry with rock chip sampling results

Further prospecting and mapping in the area of Las Mercedes is planned with the objective of possibly identifying more of these veins. OTHER AREAS WITHIN LEÓN Santa Barbara At Santa Barbara, just west of El Sauce (Figure 5, 5A and 6), six rock samples returned gold assays greater than 0.275 g/t Au. The blocks are quartz blocks situated on the edge of a dome that appears to be sub-intrusive of intermediate composition porphyritic and in contact with andesites. Further work is recommended by carrying out geological mapping as well as rock and soil sampling of the area. Paso Real The Paso Real property, approximately 25 km northwest of El Sauce (Figure 2), has had 85 rock samples collected and 11 samples returned anomalous gold values ranging between 0.44 g/t Au and 19.73 g/t

• Au. The samples also demonstrate high silver and copper values with two samples returning values of

443 g/t Ag and >1% Cu, and 167 g/t Ag and >1% Cu. It is recommended that continued geological mapping and rock and soil sampling be carried at Paso Real.

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CONCLUSION AND RECOMMENDATIONS

Work to date indicated that the León project area contains two primary areas of interest that should be developed further, as well as additional areas which could be of interest as exploration continues. Cerro Rojo Cerro Rojo has the occurrence of gold – molybdenum mineralization in a quartz-feldspar porphyry. The mineralized porphyry can be better defined by carrying out an airborne MAG, Radiometric and VLF geophysics surveys. The magnetics will help map the geology jointly with the radiometrics and the latter will also help to outline zones of potassic and feldspar alteration. The cost of the airborne survey is estimated at $120,000 for all the main León property blocks. A ground based IP survey is planned on the Cerro Rojo porphyry to better define mineralization and potential areas of work with 200 m line spacing. The quote for this work is estimated at $150,000 for the six square km area on Cerro Rojo. A drilling program of 5,000 m at $220 per m is planned to follow up the mineralization in this area. Las Mercedes The Las Mercedes area has four Au anomalous areas outlined by the soil geochemical survey (Figure 11) with high grade gold values in quartz veins. The VLF geophysics survey will help localize the possible structures in the area. With completion of the geophysics, trenching is recommended, followed by drilling an initial 2,000 meters. Mapping, prospecting, sampling and trenching will continue on other areas of the León project area. These surveys are low cost programs aimed to continue to upgrade the potential of the property as a whole. Budget for Recommended Work A global work budget of $2.5 – 3.0 million is recommended for a compilation of the field data, results, interpretation, planning and execution of a 7,000 m drilling program in 2012 - 2013. Eddy Canova, P. Geo., OGQ (403), the Director of Exploration and a Director for the Company and a Qualified Person as defined by NI 43-101, has reviewed and is responsible for the technical information contained in this presentation.

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CASSIUS VENTURES LTD. KEY MANAGEMENT AND CONTACT DETAILS

Steven Dean, Chairman and Director steven@stevengdean.net 604.697.6202

• Mr. Dean is a Fellow of the Australian Institute of Mining and Metallurgy, a Member of the Canadian

Institute of Mining, Metallurgy and Petroleum, and a Fellow of the Institute of Chartered Accountants of

• Australia. He has extensive experience internationally in mining, most recently as President of Teck

Cominco Limited (now Teck Resources Ltd.). Prior to joining Teck, Mr. Dean was a founding director of Normandy Poseidon Group, (which became Normandy Mining) which was the largest gold producer until its sale to Newmont Mining in 2002, as well as founder of PacMin Mining which became a subsidiary of Teck Corporation in 1999. He was also a co-founder and former chairman of Amerigo Resources Ltd.

• Mr. Dean is Chairman and a director Spur Ventures Inc. (TSX-V:SVU), and of Infinito Gold Ltd. (TSX-V:IG),

Chairman of Dia Bras Exploration Inc. (TSX-V:DIB) as well as Chairman and CEO of Oceanic Iron Ore Corp. (TSX-V: FEO). John Thomas, President, CEO & Director johnthomas@cassiusventures.com 778.375.3126

• Mr. Thomas is a professional engineer, and holds an M.Sc. and Ph.D. from the University of Manchester,
• UK. Mr. Thomas also received a Diploma in Accounting and Finance from the U.K. Association of

Certified Accountants. Mr. Thomas has extensive experience in the mineral resource industry, particularly in Latin America, and is currently a director of Infinito Gold Ltd., Alexandria Minerals and Canada Zinc Metals Corp. He has previously served as Vice President, Development of Rusoro Mining, and Vice President, Operations of Bolivar Gold Corp. Eddy Canova, Director of Exploration, Director edcanova@sympatico.ca 514.289.1183

• Mr. Canova has over 25 years experience in the mineral exploration industry in Canada, Venezuela,

Mexico, and West Africa and four years experience in mineral production in Venezuela. His work has been focused in gold mineral exploration, base and precious metals, uranium and in the last year in the iron ore industry in Quebec. Mr. Canova has been exposed to a variety of geological environments and geological models working on some major projects such as Gold Reserves' Brisas' project, an 8 million oz Au project, Bolivar's Tomi Gold project, and as mine manager responsible for the acquisition and exploration on most of the properties of Alexandria Minerals from 2002 to 2009. Mr. Canova joined Oceanic in January 2011 as Exploration Manager. Mr. Canova has a BSc. in geology from McGill University and continually updates his knowledge through professional short courses, university courses and publications.

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APPENDIX A – SAMPLING PROCEDURES

The stream sediment sampling was carried out in stream with a water flow collected in the center of the

• stream. Samples of 1 kilogram were sieved so that the fine portion could be sent to the lab for analysis.

Prior to sending the sample, the sample was dried and ICP analysis was run on the stream sediments. Samples collected by Cassius were sent to Inspectorate Laboratories in Reno for carrying out the ICP analysis which included gold. Soil samples were collected at depths of 60 cm to 100 cm depths so that a B horizon soil could be

• collected. The coarse fraction and organic matter was removed as well as twigs and the fines were

collected to produce a 1 kilogram sample that was dried and sent to Inspectorate for ICP analysis which included gold. Trench samples were collected as 50 cm swaths over a length of 1 m per sample. Samples of 1.5 to 2.5 kilograms were sent to the Inspectorate Lab in Managua for sample preparation and a split of the sample was prepared and sent to Inspectorate Laboratory in Reno for gold and ICP analysis. Within a sampling sequence of 25 samples, a blank, a duplicate and a standard was included for QA/QC. The standard samples have a known gold value and the samples represent a low gold value, an intermediate gold value and a high gold value. All data is verified by Eddy Canova, who receives and analyzes reports received from Inspectorate. Any sampling results may be affected by such things as poor core recovery or improper sampling techniques. Any results with poor core recoveries are disclosed as appropriate. Written procedures and guidelines with respect to sampling techniques are provided to all field workers. Field workers are supervised to ensure such guidelines are followed.