Cluff Gold plc
TSX : CFG
AIM : CLF

Cluff Gold plc

March 19, 2010 09:30 ET

Cluff Gold Record Gold Production in First Two Months of 2010

LONDON, UNITED KINGDOM--(Marketwire - March 19, 2010) - Cluff Gold plc ("Cluff Gold" or the "Company") (TSX:CFG)(AIM:CLF) -

Cluff Gold, the dual AIM/TSX listed West African-focused gold mining company, announces record gold production for the first two months of 2010.

Highlights:

  • Total of 19,288 fine ounces of gold produced in January and February 2010;
  • Cash position increased to US$5.7 million at 28 February 2010 due to improved performance at the Kalsaka mine;
  • Mining convention signed in Côte d'Ivoire removing the need for the Company to pay VAT to suppliers from 1 March 2010;
  • Further US$3 million of VAT recovered since 28 February 2010;
  • Operating cash costs for the two months were US$547 per ounce of fine gold produced at Kalsaka and US$797 per ounce of fine gold produced at Angovia.

Algy Cluff, Chairman and Chief Executive of Cluff Gold, commented: 

"We are delighted to announce record production from our two mines at Kalsaka and Angovia in the first two months of 2010. The results are ahead of our production forecasts and we are confident that this strong performance will continue throughout the year."

Gold production

The total amount of fine gold produced in January and February 2010 was 19,288 ozs; 14,887 ozs at Kalsaka and 4,401 ozs at Angovia. This has subsequently been sold at an average price of US$1,112 per oz.

The production at Kalsaka is ahead of forecast due to a number of factors including the delayed recovery of gold from fine ore processed in Q4 2009, as previously reported on 11 February 2010, together with the impact of modifications to spraying efficiency and improved stacking methodology. The average operating cash costs per ounce of gold produced at Kalsaka in the period, excluding royalties and off-take costs, was US$547. This compares to the cash cost of US$595 per ounce for the six months ended 30 June 2009 as announced on 21 July 2009.

Production at Angovia is in line with current expectations. The average operating cash costs per ounce of gold produced at Angovia in the period, excluding royalties and off-take costs, was US$797. The company is finalising a technical study on potential modifications to the Angovia processing plant which have the potential to improve operational efficiency.

These levels of production are above the current target production of 100,000 ounces in 2010 across both operations.

Updated cash position

The closing consolidated cash balance at 28 February 2010 is US$5.7 million, which is a US$3.4 million increase from 31 December 2009. This significant increase in the Company's cash balances has been driven by the improved operational performance at Kalsaka.

In addition, the Company has made significant progress in resolving the ongoing VAT recovery problems previously reported on 11 February 2010. A total of US$4.3 million of VAT has been recovered in Burkina Faso; US$1.3 million in February and US$3.0 million in March. The signing of the mining convention in Côte d'Ivoire will also improve cash flow because the Company will not be paying VAT to suppliers and contractors with effect from 1 March 2010.

About Cluff Gold

Cluff Gold is focused on the identification, acquisition and development of gold deposits in West Africa that are amenable to open-pit mining and low cost production techniques. The Company has assembled a portfolio of mineral interests at various stages of development in Côte d'Ivoire, Burkina Faso and Sierra Leone. Cluff Gold progressed from being an explorer to a producer in Q1 2008 and is expected to produce a total of 100,000 ounces of gold in 2010 from its Angovia Gold Mine in Côte d'Ivoire and its Kalsaka Gold Mine in Burkina Faso. Cluff Gold is actively evaluating known satellite deposits to expand the resource base at both mines. The Company is also pushing forward with the pre-feasibility study at its wholly-owned Baomahun project in Sierra Leone where a measured and indicated resource estimated to contain over 1.0 million ounces of gold, in accordance with NI 43-101, has been announced to date (380,000ozs at 3.0g/t measured; 723,000ozs at 2.8 g/t indicated; plus an additional 957,000ozs at 3.2g/t inferred).

This News Release includes certain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements other than statements of historical fact, included in this release, including, without limitation, the positioning of the Company for future success, statements regarding potential future production at Angovia and Kalsaka, exploration and drilling results at Baomahun, and future capital plans and objectives of Cluff Gold, are forward-looking information that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Cluff Gold's expectations include, among others, risks related to international operations, the actual results of current exploration and drilling activities, changes in project parameters as plans continue to be refined as well as future price of gold. Although Cluff Gold has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Cluff Gold does not undertake to update any forward-looking statements that are included herein, except in accordance with applicable securities laws.

A technical report prepared by SRK Consulting (UK) Limited entitled "Technical Review of the Baomahun Gold Exploration Project, Sierra Leone" was filed on 17 February 2009 at www.sedar.com

Douglas D Chikohora has reviewed and approved the information contained within this announcement. Mr Chikohora (MSc., MIMMM., CEng) is the Technical Director of the Company.

Dealing Disclosure Requirements

Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of "relevant securities" of Cluff Gold, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Cluff Gold, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of Cluff Gold by Cluff Gold, or by the potential offer ors, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at http://www.thetakeoverpanel.org.uk.

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel.

NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS PRESS RELEASE.

Contact Information

  • Cluff Gold plc
    J.G. Cluff
    Chairman and Chief Executive
    +44 (0) 20 7340 9790
    or
    Cluff Gold plc
    Douglas Chikohora
    Technical Director
    +44 (0) 20 7340 9790
    or
    Evolution Securities Limited
    Rob Collins
    +44 (0) 20 7071 4300
    or
    Evolution Securities Limited
    Tim Redfern
    +44 (0) 20 7071 4300
    or
    Pelham Bell Pottinger
    Charles Vivian
    Investor Relations (Global)
    +44 (0) 20 7337 1500
    or
    Pelham Bell Pottinger
    Klara Kaczmarek
    Investor Relations (Global)
    +44 (0) 20 7337 1500
    or
    Farm Street Communications Ltd
    Simon Robinson
    Press Relations (U.K.)
    +44 (0) 7593 340 107
    simon.robinson@farmstreetmedia.com