Cluff Gold PLC
AIM : CLF
TSX : CFG

Cluff Gold PLC

September 12, 2011 09:30 ET

Cluff Gold: Interim Results 2011

LONDON, UNITED KINGDOM--(Marketwire - Sept. 12, 2011) - Cluff Gold (AIM:CLF)(TSX:CFG), the dual AIM/TSX-listed West African focused gold mining company, announces its interim results for the half-year ended 30 June 2011.

HIGHLIGHTS

  • H1 2011 Group EBITDA: US$11.1m (158% increase over US$4.3m in H2 2010; H1 2010: US$18.4m)

  • Kalsaka production in H1 2011 of 31,518oz at US$842/oz (H2 2010: 33,242oz at US$943/oz; H1 2010: 40,831oz at US$672/oz)

  • Strong start to H2 at Kalsaka, with 16,000oz production in July and August 2011 as grades strengthen – the Company remains on track to meet 2011 target of 70,000oz production

  • Cash and cash equivalents of US$17.7m as at 30 June 2011 (31 December 2010: US$20.9m; 30 June 2010: US$8.1m)

  • Exploration expenditure increased to US$10.2m (H2 2010: US$3.0m; H1 2010: US$3.1m) as the Company accelerates activity at Baomahun and Kalsaka, supported by strong operating cash flow from Kalsaka

  • Leaching recommenced at Angovia, with resumption of full operations targeted for Q1 2012

Corporate:

  • Algy Cluff appointed Non-Executive Chairman

  • Peter Brown appointed Group Exploration Manager, with over 25 years of exploration experience across Africa and South America

Peter Spivey, Chief Executive of Cluff Gold, commented:

"We are pleased to report our interim results for the Company. We remain on track to deliver our production target of 70,000 ounces for the year at Kalsaka and are very encouraged by the production levels achieved in recent months, with 16,000 ounces produced in July and August 2011. We anticipate our H2 production levels and cash generation to be ahead of that seen in H1 2011.

Our strong balance sheet and significant operating cash flow ensure that we have the resources to fulfil our vastly accelerated exploration plans across all assets. The addition of Peter Brown further strengthens our experienced management team and is another important step towards realising our new exploration goals.

The Company's efforts remain focused on developing Baomahun and we look forward to reporting our definitive feasibility study during Q4 2011. We also believe in the long term sulphide potential of the Angovia asset, where the commencement of diamond drilling is as important as the resumption of processing in H2 2011, with full operational production targeted for Q1 2012.

I echo our Non-Executive Chairman's belief that the Company has the potential to be a 250,000 ounce per annum producer by 2013, which is within eight years of the foundation of the Company."

Chairman's Statement

I referred in my last interim statement to 'the perils consonant with the mining business' and we have endured our share of them this year. In Côte d'Ivoire, we were obliged to close the Angovia Mine due to the political unrest resulting from President Gbagbo's refusal to cede power despite losing the Presidential election; and in Burkina Faso, in common with most other mining companies, we experienced an illegal withdrawal of labour as a direct consequence of the distress caused to the workers by food price inflation. However in Sierra Leone we made solid progress as evidenced in last week's publication of a Mineral Resource Statement for Baomahun which will be complemented by the release of the detailed definitive feasibility study during Q4 this year.

The impact of the strike at Kalsaka and the closure of Angovia are evident from these interim figures which they unfavourably distort. However, I am pleased to report that notwithstanding the issues at Kalsaka, and having concluded a favourable resolution with the workforce, the mine is operating strongly and we remain on our budgeted target to produce 70,000 ounces this year. Indeed we produced 16,000 ounces in July and August 2012, which included a record weekly smelt of 3,730 ounces. I am also pleased to report that we have begun recovering gold from Angovia again by stacking a 40,000 tonne stockpile of ore. We have also commenced a short drilling programme which we expect will herald the full resumption of mining (away from the previously mined areas) in Q1 next year.

I should point out that the strong cash flow which we currently enjoy from Kalsaka has enabled us to apply part of our healthy cash balance to sustained exploration programmes. Our recently appointed Group Exploration Manager, Dr Peter Brown, is charged with managing these programmes with various objectives, which in particular are to extend the oxide life of the Kalsaka Mine and the Angovia Mine and to determine the sulphide potential for much larger operations; to explore the wider Baomahun licence area following the interpretation of the VTEM survey (drilling has begun and the results are now being received); and to inaugurate exploration activity at our new licences in Burkina Faso and Mali.

Of crucial importance to the Company when reviewing this period is undoubtedly the advance in our knowledge of the potential for production at Baomahun. The economics of this deposit will be apparent when we announce the definitive feasibility study shortly and I believe it is not imprudent to reflect that your Company has the potential to be a 250,000 ounce per annum producer by 2013, which is within eight years of the foundation of the Company.

When I wrote last year's interim statement I was the Chairman and Chief Executive. This is a very demanding business and, at the age of 71, I consider it is not appropriate to continue to hold an executive role and I have accordingly, last month, assumed the Non-Executive Chairmanship. I am confident that your executive team has the capability to deliver on the manifold challenges I have outlined above.

J.G. Cluff

September 2011

Chief Executive's Statement

Writing this report has caused me to reflect on the achievements of Algy Cluff, who has overseen the development of a very successful business with a suite of quality mining assets in West Africa that are capable of forming the basis of a 250,000 ounce per annum gold producer. His decision to step down to non-executive chairman from August 2011 marks a natural progression in the Company's development, strengthening the Company by ensuring that the board continues to benefit from his years of experience, whilst allowing the new executive team to manage the changes required for the Company to achieve its goals. Algy has been a leading light of the UK mining and resource sector for over 50 years creating jobs and wealth, both in the UK and Africa. As an entrepreneur he has set an example that through hard work and determination ambitions can be realised, and we strive to deliver those ambitions as we take the Company forward.

The first half of 2011 represented my first six months as Chief Executive of Cluff Gold, a period which has seen a healthy gold price averaging over US$1,400 per ounce. The strength in the gold price has ensured that the Company remains in a strong financial position to realise our short term goals. The cash flow generated by our production from Kalsaka in the first half of 2011, and more importantly our expectations for production during the second half of 2011, are integral to our business strategy: delivering long term growth through exploration across our portfolio of West African assets funded from internally generated cash flow.

Subsequent to the period end the gold price has increased further, reaching recent highs of US$1,900 per ounce. I personally believe that the conditions that have generated the strong demand for gold, weak global growth and concerns about the strength of major global currencies are not likely to change in the near term. Accordingly, although we expect to see short term price volatility, I do not expect a major downturn in the current gold price environment. This is therefore a very exciting time to be planning the construction of a significant gold mine at our Baomahun project in Sierra Leone, as we aim to fulfil its objective of becoming a 150,000 ounce per annum producer.

The potential of the Baomahun project was one of the key drivers behind my decision to join Cluff Gold in 2010 and I believe that this potential has been underlined by the significant increase in resources announced last week. Work is progressing well on the definitive feasibility study, which is on track for completion during Q4 2011. We believe that the updated resource estimate forms a strong platform to justify the capital requirements for a stand-alone mine, with significant potential to further increase the total resource base both within the resource area and also in the large portions of our mining and exploration permits that are still to be properly evaluated.

The financing of the Baomahun development will be a pivotal event for Cluff Gold, and we are working hard to evaluate all of the potential options available. Despite the growth in our cash resources, the board believes it is likely that we will need to raise some additional equity, alongside other financing structures, to fund the construction of Baomahun. In this respect, the board has a clear understanding that nothing will be done without the involvement of our existing shareholders, who must be rewarded for their on-going support of the Company as the feasibility study process is completed.

Elsewhere, we firmly believe that West Africa remains one of the most exciting regions for gold exploration and development. Beyond the Baomahun and Kalsaka projects, we are actively seeking to develop a pipeline of future opportunities across the region.

Now that the political situation in Côte d'Ivoire has returned to normal, we are once again focusing on the extraordinary geological potential within the country, with the largest under explored Birimian greenstone belt coverage of any West African nation. I am very pleased that activity at our Angovia project has resumed in the second half of 2011, with gold production from existing stockpiles expected to continue for the remainder of the year. Exploration drilling is on-going, focused on both the long term sulphide potential and near surface laterite and saprolite areas with low waste to ore ratios. We expect that the latter will allow the Company to profitably operate the existing processing facilities, with full production anticipated to resume during Q1 2012.

As we aim to develop our business into a 250,000 ounce per annum producer, one of the most important jobs for me as Chief Executive is to ensure that we develop our management and operating teams appropriately. The ability to bring quality employees and consultants into the business at an appropriate time is fundamental to our success, and I have been fortunate to be able to draw on my long experience operating in West Africa to help identify suitable personnel.

On that note, I am pleased to announce that Peter Brown has recently joined Cluff Gold as Group Exploration Manager. The increased balance sheet strength that has allowed us to vastly accelerate our exploration programmes also requires a consummate increase in the Company's hard working exploration teams, and Peter's appointment will help us to achieve that. Peter brings a wealth of experience from 25 years of exploration across Africa and South America, giving a renewed focus for our exploration ambitions.

Finally, one aspect of the current market conditions which I find surprising is the on-going divergence between the growth in the spot gold price and the performance of gold equities, including Cluff Gold. The consensus view among analysts is that the relative underperformance of gold equities will reverse as investors take note of the growing free cash flow that producers are currently generating. I believe that this "tail wind" on our operational cash flow and the supportive macroeconomic environment for gold will allow Cluff Gold to deliver on its strategy for growth over the next 12 months.

Peter Spivey

September 2011

Operational Review

Baomahun, Sierra Leone

2011 is a pivotal year at Baomahun, Cluff Gold's defining development project in Sierra Leone. During the first half of the year over 15,000 metres of infill drilling were completed, the results of which have been incorporated into a resource update announced on 5 September 2011. This resulted in the indicated resources increasing to 2.1 million ounces of gold (25.6Mt at 2.5g/t), representing a 46% increase over the measured and indicated resources announced in June 2010 (5.5Mt at 2.9g/t measured and 9.6Mt at 2.9g/t indicated)1.

The significant increase in the mineral resources at Baomahun has resulted from a better understanding of the ore body. Increased continuity has been demonstrated within the mineralised structures, demonstrating significant additional tonnes of mineralised ore along the limbs from the high grade fold noses that had been the focus of previous drilling campaigns. The additional ore, much of which is contained within the open pittable areas of the resource, is at a lower grade than the mineralisation at the fold noses. This has resulted in a slight decrease in the average grade from that previously reported. This is very positive for the project overall, as more of the material contained within the open pit will now be classified as ore, allowing a deeper pit with a larger gold content to be mined without excessively increasing the waste to ore stripping ratio.

As set out in the news release of 5 September 2011, the updated mineral resource estimate has been classified on the basis of a different geostatistical interpolation compared to that used for the June 2010 mineral resource estimate. This change was adopted by our consultants, SRK Consulting (UK) Limited, as it allows a more detailed audit of the key parameters used in the resource estimation process. As a result of the updated methodology, a more conservative approach to classification has been applied, such that the previously reported measured resources have now been included within the indicated category. From a practical perspective this makes no difference to the ore that forms the basis of the economic modelling for the feasibility study, as all measured and indicated resources can be included within the finally delineated reserves.

Drilling is expected to resume in the main resource area of Baomahun following the end of the wet season in November 2011. This will focus on further opportunities that have been identified to increase the resource base through converting inferred resources to the measured and indicated categories.

Definitive Feasibility Study

The new mineral resource estimate will form the basis of the Baomahun definitive feasibility study, which is on track for completion during Q4 2011. This will be modelled on an open-pit only mining scenario, compared to the higher risk combined open-pit and underground mining schedule set out in the preliminary economic assessment announced on 12 August 2010, which envisaged production of 157,000 ounces per year over an eight year mine life with an average cash cost of US$500 per ounce and an upfront capital requirement of US$195 million.

All major components of the definitive feasibility study are nearing completion, with a number of international consultants being utilised in addition to an in-house team. The resource estimation and mining engineering aspects are being performed by SRK Consulting in the UK and South Africa. Metallurgical engineering, process plant design and cost estimation work is being completed by Senet Engineering of South Africa. The environmental and social impact assessment and management plans are being completed by Amec in the UK. Amec have also undertaken the work on the tailing storage facility, geotechnical engineering and hydrological and hydrogeological aspects.

Work is also progressing on maximising cost saving measures identified to date, which will be presented alongside the definitive feasibility study:

  • The location of the primary crushing circuit is being reviewed with a view to minimising the distance which ore is hauled downhill from the edge of the open pit. This has the potential to reduce operating costs for both diesel and truck maintenance, whilst also reducing the number of haulage trucks needed for the mining fleet.

  • A feasibility study into the establishment of a run-of-river hydro-electric power station is due for completion in Q4 2011. The topographical relief and rainfall pattern of the region enables the provision of hydro-electric power without the need for major dam construction or land inundation, with initial studies suggesting that a 20MW facility could provide 72% annual power availability. This could significantly reduce cash costs compared to relying on power generation from a heavy fuel oil power station year round.

Along Strike Exploration

In addition to activities in the existing 2 sq. km resource area, the Company's two-fold strategy at Baomahun is also focused on the opportunities for additional mineralisation to be delineated elsewhere in the 136 sq. km project area.

Over 7,000m of first pass scout drilling has been completed in 2011 together with 2,750m of trenching in four zones highlighted by the VTEM geophysical survey, which was completed in 2010. Results have been received from approximately 30% of this drilling programme to date. Some sulphide and gold mineralisation have been intercepted, including 5 metres at 1.59g/t from 29 metres and 2 metres at 5.77g/t from 81 metres as previously announced2, although this is not comparable to the mineralisation defined in the main resource area and further analysis is required before the results can be properly understood. The total cost of this exploration programme in H1 2011 was US$1.8 million.

Further results from the drilling completed to date are expected during Q4 2011 and a full analysis will be announced when available. Exploration drilling will recommence in November 2011, following the completion of the wet season. This will focus on the remaining VTEM targets and other target areas already identified close to the existing resource area.

Kalsaka, Burkina Faso

Production Statistics FY 2010 H1 2010 H2 2010 H1 2011
Ore mined (t) 1,539,557 778,937 760,620 851,194
Waste mined (t) 11,135,933 4,989,719 6,146,214 6,526,390
Total tonnage mined (t) 12,675,490 5,768,656 6,906,834 7,377,584
Ore processed (t) 1,550,373 789,830 760,543 778,968
Average ore head grade (g/t) 1.6 1.8 1.3 1.4
Gold production (oz) 74,073 40,831 33,242 31,518
Cash costs excl. royalties (US$/oz sold) 793 672 943 842
Average realised gold price (US$/oz sold) 1,221 1,150 1,305 1,442
EBITDA (US$m) 29.1 18.5 10.6 15.8

2010 was a year of two-halves for Kalsaka. Production totalled 40,831 ounces in H1 2010 with average head grades of 1.8g/t, falling to 33,242 ounces in H2 2010 as mining focused on lower grade areas with average head grades of 1.3g/t. This reflects the nature of the mining industry – the ore body contains areas where grades are both above and below average and high grade zones cannot be chosen for mining at will.

In 2011, production at Kalsaka is following the opposite pattern to 2010 – a relatively weak first half followed by a much stronger prediction for the second half. This was expected at the start of the year and was reflected in the Company's budgets. Production of 31,518 ounces in H1 2011, with average head grades of 1.4g/t, is below the 70,000 ounces annual target. However, both production and grades have increased significantly in H2 2011 to date, with over 16,000 ounces of gold produced in July and August 2011, and average head grades improving to 1.7g/t. With grades expected to remain strong for the remainder of 2011 the Company is confident that the 70,000 ounce annual production target will be reached.

Despite the low grades encountered in H1 2011, production was assisted by high stacking rates, with 779kt of ore stacked. This is in-line with stacking rates achieved during 2010, despite the impact of a strike disrupting operations in Q2 2011. Stacking rates have remained above budget in H2 2011 to date, further assisting gold flow and helping to ensure that Kalsaka can reach its 70,000 ounces production target in 2011.

The low head grades processed in H1 2011 have also impacted cash costs, which totalled US$842 per ounce in H1 2011, a 6% increase compared to the full year in 2010. However, 2010 cash costs also showed wide variation, totalling US$672 per ounce in H1 compared to US$943 per ounce in H2. This was caused by both the 0.5g/t fall in average head grades and an increase in the stripping ratio from 6.4 to 8.1. The H1 2011 cash costs actually represent an 11% or US$101 per ounce reduction compared to H2 2010, driven by a slight improvement in the grade and strip ratio. With the stronger grades and production currently being experienced, cash costs are expected to reduce further in H2 2011.

In H1 2011 Kalsaka sold 29,809 ounces of gold at an average of US$1,442 per ounce, an increase of 18.5% or US$225 per ounce compared to the average selling price in 2010. The strong gold price helped generate US$15.8m EBITDA, a 49% increase compared to H2 2010. With the average gold selling price in H2 2011 to date increasing to over US$1,700 per ounce, cash generation in H2 2011 is expected to remain strong, ensuring that the Company's exploration plans are well financed from operating cash flow.

Exploration

With production at Kalsaka continuing to deliver, exploration remains the Company's key priority, focused on the dual goal of oxide mine life extension and investigation of longer term sulphide potential. Good oxide targets have been identified in two structural settings at Kalsaka: the eastern continuation of the K-Zone shear, the most advanced target on which is Rondo, and magnetic splays deriving from the Goungre shear. Sulphide work has focused on areas below the K-Zone pit, where previously reported intersects include 15m at 7.44g/t in the sulphide zone.

Work during H1 2011 has included gradient array induced polarisation geophysical surveys targeting areas of conductivity and chargeability, which suggest the presence of quartz and sulphide mineralisation that may be associated with gold. Geochemical surface sampling has also been carried out across the Kalsaka permit to help generate potential drilling targets. Two drill rigs have been on site at Kalsaka during H1 2011. RAB drilling commenced in February 2011, initially focused on the Goungre and Rondo targets. RC drilling commenced in March 2011, following up previous scout drilling programmes and RAB results. A total of 14,240 metres of RAB drilling and 10,987 metres of RC drilling were completed in H1 2011. Total exploration expenditure at Kalsaka in H1 2011 totalled US$1.3 million.

Results from the H1 2011 Kalsaka exploration programmes have identified areas where it is believed additional oxide resources will be delineated, with intercepts such as 18m at 1g/t from 4m at Rondo. It has also demonstrated sulphide mineralisation below the K-Zone pit, with intercepts such as 8m at 8.22g/t from 124m3. Soil sampling and trenching has also been undertaken in the Yako licence, 20km south of Kalsaka, which will be followed up with RAB and RC drilling in Q4 if results warrant. Exploration will also commence in the new permit areas in Eastern Burkina Faso in Q4 2011. A full analysis of the exploration results at Kalsaka to date is ongoing under the guidance of the Company's new Group Exploration Manager, Peter Brown. A full announcement will be made setting out the Kalsaka exploration results and goals in due course.

Angovia, Côte d'Ivoire

Production Statistics FY 2010 H1 2010 H2 2010 H1 2011
Ore mined (t) 903,301 486,002 417,299 176,418
Waste mined (t) 3,343,923 1,707,133 1,636,790 878,233
Total tonnage mined (t) 4,247,224 2,193,135 2,054,089 1,054,651
Ore processed (t) 811,921 420,435 391,486 139,841
Average ore head grade (g/t) 0.9 1.0 0.9 0.7
Gold production (oz) 20,222 11,278 8,944 4,367
Cash costs excl. royalties (US$/oz sold) 1,212 837 1,685 1,867
Average realised gold price (US$/oz sold) 1,218 1,145 1,301 1,392
EBITDA (US$m) (0.9 ) 2.5 (3.4 ) (2.1 )

The Angovia mining operation suffered severe disruption in H1 2011 due to the political instability in Côte d'Ivoire, which resulted in the operations being placed under care and maintenance in March 2011. The lack of availability of supplies including fuel, explosives, cement and cyanide, together with the closure of the country's banking system made efficient operations impossible to sustain, forcing this temporary suspension.

A total of 4,367 ounces were produced by Angovia in H1 2011, which were sold at an average selling price of US$1,392 per ounce. Cash costs, excluding changes in stock, totalled US$1,047 per ounce, meaning that in pure cash terms the operation has been able to sustain its operations without financial support during the period of care and maintenance. However, accounting for the value of work in progress at the previous year-end that relates to the production in the period, together with a write-down in the value of the stockpile to reflect the fact that oversize ore will no longer be crushed, generates an accounting EBITDA loss of US$2.1m in the period.

In H2 2011 stacking has now recommenced at Angovia, focused on a 40kt stockpile, estimated to contain over 1,200 ounces of gold. Spraying has recommenced on the existing heaps, with approximately 850 ounces of gold poured in late August 2011. It is expected that this activity will allow gold recovery to continue at Angovia throughout the remainder of 2011, generating sufficient cash at the current gold price to cover the on-going cash requirements of the processing facility.

Exploration

Exploration drilling restarted at Angovia in late June 2011, focusing on recommencing production in the short term with lateritic ore bodies similar to the Blangan deposit, a high grade and low strip ratio deposit that contained approximately 24,000 ounces at 1.7g/t, that was defined in Q3 2009 and mined between Q4 2009 and Q1 2010. Similar targets have been identified which are the subject of an on-going RAB drilling programme, from which promising initial drill results have been received. A full analysis of drilling results from this programme will be announced once available. The Company aims to bring the Angovia mine back into full production in Q1 2012 focusing on such lateritic ore bodies.

Most importantly, the Company believes that the project's true potential lies in its considerable sulphide mineralisation, as demonstrated by previously announced drill results of up to 30 metres at 3.64g/t below the current pit. To date, 292,000 ounces of sulphide resources (at 1.6g/t) have been delineated in the measured & indicated categories (169,000 ounces at 1.5g/t measured and 123,000 ounces at 1.7g/t indicated). Diamond core drilling has recently commenced at Angovia following up on these favourable sulphide intersections4.

Due to the relatively shallow depth of the sulphide resources delineated to date at Angovia, and the shallow dipping nature of the ore body, together with the close availability of hydro-electric power, the Company considers that a conventional CIL processing plant could be developed at Angovia to fully exploit the resource base.

Mamoudouya, Mali

The Mamoudouya licence in Mali is an early stage exploration project located approximately 300km west of Bamako, the capital city of Mali, which covers 109 sq. km of highly prospective Mali Birimian Kinieba inlier belt. A total of 898m of trenching was completed at Mamoudouya during H1 2011, together with termite mound sampling. Results to date have been promising, with sample grades such as 40m at 0.7g/t, 13m at 1.5g/t and 3m at 3.9g/t returned from trenching. A gradient array induced polarisation survey is planned for H2 2011 to define drilling targets. Full results of work programmes will be announced once available.

Financial

The financial results for H1 2011 represent a difficult period, with the problems at Angovia caused by the political instability in Côte d'Ivoire generating unusual losses. Despite this, the group generated a small overall post tax profit, driven by the strong gold price and on-going production at Kalsaka. The seasonality of our expected results, particularly the operating performance at Kalsaka, should represent a reversal of our fortunes compared to 2010 when a first half profit was transformed to a full year loss.

EBITDA, an approximate measure of cash generation from a business unit and the Company's preferred measure of operating performance, totalled US$11.1m in the period, which generated a net cash inflow from operations in the period of US$9.0m. EBITDA was driven by a strong performance from Kalsaka, which generated US$15.8m in the period, a 49% increase compared to H2 2010.

The US$9.0m surplus from operating cash flow was used to fund capital expenditure on both exploration and tangible assets totalling US$12.5m. Significant expenditure included US$9.0 million on exploration and feasibility study work at Baomahun, US$1.3 million on exploration at Kalsaka and US$1.6 million on tangible fixed assets extending the leach pads at Kalsaka.

The closing cash balance of US$17.7m represents a net cash outflow of US$3.2m in the period, mainly relating to the payment of tax for 2010 in Burkina Faso, plus a payment on account for 2011. The strong gold pours in H2 2011 to date, allied with the strengthening gold price, have ensured that the Company's cash balance has increased since the balance sheet date. As such, the Company remains well funded to meet its short term goals and ensure that work for our feasibility study at Baomahun and exploration across the entire portfolio can continue in H2 2011 without constraint.

Quarterly Information

We have included for the first time, at the end of the interim report, quarterly operating and financial data for the first two quarters of 2011. Whilst this information does not form part of the Interim Financial Information and is not included in the Independent Review Report, we consider it is helpful in showing the improving trend in profitability during H1 2011, mainly as a result of the reduced operating costs following the cessation at Angovia. As noted elsewhere, current trading is strong and the current third quarter is expected to show a material improvement in production and (in combination with the continued lower production costs) profitability. It is our intention to release an operating and financial update for the third quarter during November 2011 and for future financial quarters.

INDEPENDENT REVIEW REPORT TO CLUFF GOLD PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2011 which comprises the consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, consolidated statement of cash flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules of the London Stock Exchange.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared using accounting policies consistent with those to be applied in the next annual financial statements.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Condensed set of financial statements Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim condensed set of financial statements consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2011 is not prepared, in all material respects, in accordance with the AIM Rules of the London Stock Exchange.

PKF (UK) LLP

London, UK

9 September 2011

CLUFF GOLD PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2011
6 months
ended
30 June
2011
6 months
ended
30 June
2010
12 months ended 31 December
2010
Notes US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Continuing operations
Revenue 47,775 60,959 115,804
Cost of sales (37,369 ) (41,716 ) (94,176 )
Gross profit 10,406 19,243 21,628
General and administrative expenses (3,084 ) (3,932 ) (7,684 )
Other operating costs (5,766 ) (5,766 ) (12,963 )
Exploration expenses - (405 ) (519 )
Loss on disposal of property, plant & equipment - - (12 )
Operating profit 1,556 9,140 450
Investment income 668 4 349
Finance costs (18 ) (788 ) (1,775 )
Profit/(loss) before taxation 2,206 8,356 (976 )
Income tax (1,828 ) (2,341 ) (3,462 )
Profit/(loss) for the period/year 378 6,015 (4,438 )
Attributable to:
Equity holders of the parent company (582 ) 3,875 (6,072 )
Non-controlling interests 960 2,140 1,634
Profit/(loss) for the period/year 378 6,015 (4,438 )
Other comprehensive income
Exchange differences on translating foreign operations - (908 ) (1,309 )
Other comprehensive income for the period/year, net of taxation - (908 ) (1,309 )
Total comprehensive income for the period/year 378 5,107 (5,747 )
Attributable to:
Equity holders of the parent company (582 ) 1,977 (7,759 )
Non-controlling interests 960 3,130 2,012
378 5,107 (5,747 )
(Loss)/earnings per share
Basic (cents per share) 6 (0.44 ) 3.16 (4.92 )
Diluted (cents per share) 6 (0.44 ) 3.12 (4.92 )

CLUFF GOLD PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2011
As at
30 June
2011
As at
30 June
2010
As at 31 December
2010
Notes US$'000 US$'000 US$'000
Unaudited Unaudited Audited
ASSETS
NON-CURRENT ASSETS
Intangible assets 3 57,666 45,494 48,351
Property, plant and equipment 4 22,844 35,264 27,885
Other receivables 2,738 2,560 2,324
Deferred tax asset 1,005 999 693
Total non-current assets 84,253 84,317 79,253
CURRENT ASSETS
Other receivables 6,849 8,151 9,074
Inventories 15,064 16,126 12,767
Cash and cash equivalents 17,734 8,131 20,907
Total current assets 39,647 32,408 42,748
TOTAL ASSETS 123,900 116,725 122,001
CAPITAL AND RESERVES
Share capital 5 2,374 2,229 2,365
Share premium 117,766 102,080 117,410
Merger reserve 15,107 15,107 15,107
Share option reserve 2,948 4,091 2,556
Currency translation reserve 987 776 987
Accumulated losses (43,872 ) (35,538 ) (43,431 )
TOTAL EQUITY ATTRIBUTABLE TO THE PARENT 95,310 88,745 94,994
Non-controlling interests 2,972 3,130 2,012
TOTAL EQUITY 98,282 91,875 97,006
NON-CURRENT LIABILITIES
Provisions 7,393 5,225 6,059
Total non-current liabilities 7,393 5,225 6,059
CURRENT LIABILITIES
Trade and other payables 16,070 17,513 15,920
Corporation tax 2,155 2,112 3,016
Total current liabilities 18,225 19,625 18,936
TOTAL LIABILITIES 25,618 24,850 24,995
TOTAL EQUITY AND LIABILITIES 123,900 116,725 122,001

CLUFF GOLD PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2011
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
Share
capital
Share
premium
Merger
reserve
Share option
reserve
Cumulative translation reserve Accumulated
losses
Sub-total Non-controlling interests Total
equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2010 2,224 101,993 15,107 3,952 2,674 (39,643 ) 86,307 - 86,307
Profit for the period - - - - - 3,875 3,875 2,140 6,015
Exchange translation differences on translating foreign operations - - - - (1,898 ) - (1,898 ) 990 (908 )
Total comprehensive income for the period - - - - (1,898 ) 3,875 1,977 3,130 5,107
Issue of ordinary share capital 5 87 - - - - 92 - 92
Share option charge - - - 369 - - 369 - 369
Reserve transfer - - - (230 ) - 230 - - -
As at 30 June 2010 2,229 102,080 15,107 4,091 776 (35,538 ) 88,745 3,130 91,875
Loss for the period - - - - - (9,947 ) (9,947 ) (506 ) (10,453 )
Exchange translation differences on translating foreign operations - - - - 211 - 211 (612 ) (401 )
Total comprehensive income for the period - - - - 211 (9,947 ) (9,736 ) (1,118 ) (10,854 )
Issue of ordinary share capital 136 15,336 - - - - 15,472 - 15,472
Share issue costs - (6 ) - - - - (6 ) - (6 )
Share option charge - - - 519 - - 519 - 519
Reserve transfer - - - (2,054 ) - 2,054 - - -
As at 31 December 2010 2,365 117,410 15,107 2,556 987 (43,431 ) 94,994 2,012 97,006
(Loss)/profit for the period - - - - - (582 ) (582 ) 960 378
Total comprehensive income for the period - - - - - (582 ) (582 ) 960 378
Issue of ordinary share capital 9 356 - - - - 365 - 365
Share option charge - - - 533 - - 533 - 533
Reserve transfer - - - (141 ) - 141 - - -
As at 30 June 2011 2,374 117,766 15,107 2,948 987 (43,872 ) 95,310 2,972 98,282

CLUFF GOLD PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2011
6 months ended
30 June
2011
6 months ended
30 June
2010
12 months ended 31 December
2010
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Cash flow from operating activities
Operating profit for the period/year 1,556 9,140 450
Depreciation/amortisation 7,217 8,622 19,858
Increase/(decrease) in trade and other payables 1,690 (5,762 ) (856 )
Increase in trade and other receivables (1,964 ) (410 ) (1,698 )
(Increase)/decrease in inventories (1,326 ) (158 ) 2,994
Increase in provisions 1,334 647 1,481
Share option charge 533 369 888
Exploration costs written off - - 7
Exchange gains - 263 315
Loss on disposal of fixed assets - - 5
Net cash flows from operating activities 9,040 12,711 23,444
Income taxes paid (3,003 ) - -
Cash flows used in investing activities
Interest receivable 68 4 46
Interest payable (18 ) (1,156 ) (1,775 )
Purchase of property, plant and equipment (2,245 ) (3,576 ) (6,317 )
Purchase of intangible assets (7,982 ) (2,322 ) (5,718 )
Net cash flows used in investing activities (10,177 ) (7,050 ) (13,764 )
Cash flows from financing activities
Proceeds from the issue of share capital 365 92 15,564
Issue costs paid - - (6 )
Repayment of borrowings - - (6,000 )
Net cash flows from financing activities 365 92 9,558
Net (decrease)/increase in cash and cash equivalents (3,775 ) 5,753 19,238
Cash and cash equivalents at start of period/year 20,907 2,273 2,273
Exchange gains/(losses) on cash 602 105 (604 )
Cash and cash equivalents at end of period/year 17,734 8,131 20,907

CLUFF GOLD PLC
NOTES TO THE INTERIM FINANCIAL INFORMATION
For the six months ended 30 June 2011

1. Basis of preparation

The interim financial information has been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and implemented in the UK and in accordance with the AIM Rules. The accounting policies, methods of computation and presentation used in the preparation of the interim financial information are the same as those used in the Group's audited financial statements for the year ended 31 December 2010, which this interim consolidated financial information should be read in conjunction with.

The financial information in this statement does not constitute full statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial information for the six months ended 30 June 2011 and 30 June 2010 is unaudited, but has been reviewed by the auditors. The financial information for the year ended 31 December 2010 has been derived from the Group's audited financial statements for the period as filed with the Registrar of Companies. It does not constitute the financial statements for that period. The auditors' report on the statutory financial statements for the year ended 31 December 2010 was unqualified and did not contain any statement under sections 498(2) or (3) of the Companies Act 2006.

After review of the Group's operations, financial position and forecasts, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the unaudited interim financial information.

Following a review of the primary economic environment in which each Group entity operates, on 1 January 2011 the US dollar was adopted as the functional currency for Cluff Gold plc (company) Cluff Gold UK Limited and Cluff Gold (SL) Limited leading to all material entities in the Group using the US dollar as their functional currency. Consequently, there are no exchange differences on the translation of subsidiaries and the currency translation reserve will remain frozen as at the 31 December 2010 balance.

2. Segmental reporting

An analysis of the consolidated income statement by operating segment, presented on the same basis as that set out in the 2010 annual report, is set out below:

Kalsaka Angovia Baomahun All
other
segments
Total
US$'000 US$'000 US$'000 US$'000 US$'000
Six months ended 30 June 2011
External revenue 43,762 6,263 - - 50,025
Direct costs of production (24,395 ) (7,126 ) - - (31,521 )
Other operating and administrative costs (3,553 ) (1,213 ) - (2,592 ) (7,358 )
Segmental result – EBITDA 15,814 (2,076 ) - (2,592 ) 11,146
Exploration expenditure 1,253 - 8,867 97 10,217
Other capital expenditure 1,784 234 232 57 2,307
Year ended 31 December 2010
External revenue 90,643 24,208 - - 114,851
Direct costs of production (53,850 ) (20,984 ) - - (74,834 )
Other operating and administrative costs (7,687 ) (4,100 ) - (5,604 ) (17,391 )
Segmental result – EBITDA 29,106 (876 ) - (5,604 ) 22,626
Exploration expenditure - - 6,078 - 6,078
Other capital expenditure 2,642 3,608 101 27 6,378
Six months ended 30 June 2010
External revenue 47,347 13,612 - - 60,959
Direct costs of production (25,195 ) (8,531 ) - - (33,726 )
Other operating and administrative costs (3,610 ) (2,559 ) - (2,687 ) (8,856 )
Segmental result - EBITDA 18,542 2,522 - (2,687 ) 18,377
Exploration expenditure - - 3,089 - 3,089
Other capital expenditure 1,952 1,612 12 - 3,576

A reconciliation of segmental revenue to that reported in the interim financial statements is as follows:

6 months ended
30 June
2011
6 months ended
30 June
2010
12 months ended
31 December
2010
US$'000 US$'000 US$'000
Revenue for reportable segments 50,025 60,959 114,851
Change in accrued revenue for gold bullion in stock (2,250 ) - 953
Revenue for interim financial statements 47,775 60,959 115,804

A reconciliation of segmental EBITDA to the (loss)/profit before tax reported in the interim financial statements is as follows:

6 months ended
30 June
2011
6 months ended
30 June
2010
12 months ended
31 December
2010
US$'000 US$'000 US$'000
EBITDA for reportable segments 11,146 18,377 22,626
Depreciation and amortisation (7,217 ) (8,622 ) (19,858 )
Share based payments (533 ) (369 ) (888 )
Net interest received/(payable) 50 (784 ) (1,729 )
Loss on disposal of fixed assets - - (12 )
Change in accrued profit for gold bullion in stock (1,238 ) 17 436
Exploration costs written-off - - (520 )
Exchange rate variance 1,002 (263 ) 303
VAT provided in period/year (1,004 ) - (1,334 )
Profit/(loss) before taxation 2,206 8,356 (976 )

3. Intangible assets

Deferred
exploration
costs
Exploration
and mining
rights
Total
US$'000 US$'000 US$'000
Cost
At 1 January 2010 16,654 30,223 46,877
Additions 3,089 - 3,089
Exchange difference on retranslation (1,243 ) - (1,243 )
At 30 June 2010 18,500 30,223 48,723
Additions 2,989 - 2,989
Exploration costs written off (7 ) - (7 )
Exchange difference on retranslation 760 - 760
At 31 December 2010 22,242 30,223 52,465
Additions 10,217 - 10,217
At 30 June 2011 32,459 30,223 62,682
Depreciation
At 1 January 2010 - 2,182 2,182
Charge for the period - 1,047 1,047
At 30 June 2010 - 3,229 3,229
Charge for the period - 885 885
At 31 December 2010 - 4,114 4,114
Charge for the period - 902 902
At 30 June 2011 - 5,016 5,016
Net book value
At 30 June 2011 32,459 25,207 57,666
At 31 December 2010 22,242 26,109 48,351
At 30 June 2010 18,500 26,994 45,494

4. Property, plant and equipment

Mine
development
and
associated
property,
plant and
equipment
costs
Motor vehicles,
office
equipment,
fixtures and
computers
Total
US$'000 US$'000 US$'000
Cost
At 1 January 2010 65,047 3,999 69,046
Additions 3,175 401 3,576
Exchange difference on retranslation (29 ) (114 ) (143 )
At 30 June 2010 68,193 4,286 72,479
Additions 2,393 409 2,802
Disposals - (60 ) (60 )
Exchange difference on retranslation 18 63 81
At 31 December 2010 70,604 4,698 75,302
Additions 1,577 730 2,307
Transfer 161 (161 ) -
At 30 June 2011 72,342 5,267 77,609
Depreciation
At 1 January 2010 27,575 1,986 29,561
Charge for the period 7,311 452 7,763
Exchange difference on retranslation (4 ) (105 ) (109 )
At 30 June 2010 34,882 2,333 37,215
Charge for the period 9,554 641 10,195
Disposals - (55 ) (55 )
Exchange difference on retranslation 3 59 62
At 31 December 2010 44,439 2,978 47,417
Charge for the period 6,960 388 7,348
Transfer 133 (133 ) -
At 30 June 2011 51,532 3,233 54,765
Net book value
At 30 June 2011 20,810 2,034 22,844
At 31 December 2010 26,165 1,720 27,885
At 30 June 2010 33,311 1,953 35,264

5. Share capital

As at
30 June
2011
As at
30 June
2010
As at
31 December
2010
US$'000 US$'000 US$'000
Authorised:
200,000,000 Ordinary shares of 1p each 3,080 3,080 3,080
No. No. No.
Issued and Fully Paid:
Ordinary shares of 1p each 131,842,026 122,765,595 131,269,331
US$'000 US$'000 US$'000
Issued and Fully Paid:
Ordinary shares of 1p each 2,374 2,229 2,365

On 1 January 2011 182,565 ordinary shares of 1p were issued at 40p, on 17 March 2011 365,130 ordinary shares of 1p were issued at 40p and on 8 April 2011 25,000 ordinary shares of 1p were issued at 34p all in respect of the exercise of share options.

6. (Loss)/earnings per share

The calculation of basic and diluted (loss)/earnings per ordinary share is based on the following data:

6 months
ended
30 June
2011
6 months
ended
30 June
2010
12 months
ended
31 December
2010
Shares Shares Shares
Weighted average number of ordinary shares in issue for the period
- Number of shares with voting rights 131,675,176 122,615,595 123,415,485
- Effect of share options in issue - 1,402,404 -
- Total used in calculation of diluted earnings per share 131,675,176 124,017,999 123,415,485
(Loss)/profit for the period attributable to owners of the parent (US$'000) (582 ) 3,875 (6,072 )
(Loss)/earnings per share
- Basic (cents per share) (0.44 ) 3.16 (4.92 )
- Diluted (cents per share) (0.44 ) 3.12 (4.92 )

At 30 June 2011 and 31 December 2010 the Company recorded a consolidated loss attributable to the equity shareholders of the Company. Accordingly, share options at that time were not dilutive and the diluted loss per share is the same as the basic loss per share.

7. Contingent liabilities

As stated in note 21 of the Annual report and accounts for the year ended 31 December 2010 the Company received a proposal for additional mining contractor costs at Angovia totalling US$9.2m. Whilst the situation remains unresolved the Company has received further external advice that confirms that the current provision of US$1.0m is, in the opinion of the directors the maximum payable under the terms of the contract.

During the period a further claim has been made by the contractor, totalling US$5.4m, in respect of costs incurred in 2011. Given that the contract has been terminated the directors consider this additional claim to be wholly without merit and accordingly have not made any further provisions.

The following pages are for information purposes only and do not form part of the Interim Financial Information and have not been reviewed or audited by the independent auditors.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the three months ended 31 March 2011
3 months
ended
31 March
2011
3 months
ended
31 March
2010
US$'000 US$'000
Unaudited Unaudited
Revenue 26,392 30,740
Cost of sales (22,573 ) (20,566 )
Gross profit 3,819 10,174
General and administrative expenses (1,513 ) (2,007 )
Other operating costs (3,016 ) (2,550 )
Operating (loss)/profit (710 ) 5,617
Investment income 213 1
Finance costs (12 ) (1,943 )
(Loss)/profit before taxation (509 ) 3,675
Income tax (628 ) (1,078 )
(Loss)/profit for the period (1,137 ) 2,597
Segmental reporting Kalsaka Angovia Baomahun All other
segments
Total
US$'000 US$'000 US$'000 US$'000 US$'000
Three months ended 31 March 2011
External revenue 21,796 4,776 - - 26,572
Direct costs of production (12,613 ) (5,643 ) - - (18,256 )
Other operating and administrative costs (1,626 ) (709 ) - (1,353 ) (3,688 )
Segmental result – EBITDA 7,557 (1,576 ) - (1,353 ) 4,628
Exploration expenditure 167 - 3,663 - 3,830
Other capital expenditure 810 77 156 32 1,075
Three months ended 31 March 2010
External revenue 23,843 7,740 - - 31,583
Direct costs of production (11,520 ) (4,725 ) - - (16,245 )
Other operating and administrative costs (1,455 ) (1,026 ) - (1,616 ) (4,097 )
Segmental result – EBITDA 10,868 1,989 - (1,616 ) 11,241
Exploration expenditure - - 1,515 - 1,515
Other capital expenditure 911 494 11 - 1,416
Production statistics 31 March 2011 31 March 2010
Kalsaka Angovia Kalsaka Angovia
Ore Processed (t) 452,631 139,841 419,512 246,330
Average ore head grade (g/t) 1.4 0.7 1.8 1.1
Gold production (oz) 16,837 3,447 21,481 6,708
Cash costs excl. Royalties (US$/oz sold) 807 1,250 562 857
Averaged realised gold price (US$/oz sold) 1,382 1,388 1,110 1,107
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the three months ended 30 June 2011
3 months
ended
30 June
2011
3 months
ended
30 June
2010
US$'000 US$'000
Unaudited Unaudited
Revenue 21,383 30,219
Cost of sales (14,796 ) (21,150 )
Gross profit 6,587 9,069
General and administrative expenses (1,571 ) (1,925 )
Other operating costs (2,750 ) (3,621 )
Operating profit 2,266 3,523
Investment income 455 3
Finance costs (6 ) 1,155
Profit before taxation 2,715 4,681
Income tax (1,200 ) (1,263 )
Profit for the period 1,515 3,418
Segmental reporting Kalsaka Angovia Baomahun All other
segments
Total
US$'000 US$'000 US$'000 US$'000 US$'000
Three months ended 30 June 2011
External revenue 21,966 1,487 - - 23,453
Direct costs of production (11,782 ) (1,483 ) - - (13,265 )
Other operating and administrative costs (1,927 ) (504 ) - (1,239 ) (3,670 )
Segmental result – EBITDA 8,257 (500 ) - (1,239 ) 6,518
Exploration expenditure 1,086 - 5,204 97 6,387
Other capital expenditure 974 157 76 25 1,232
Three months ended 30 June 2010
External revenue 23,504 5,872 - - 29,376
Direct costs of production (13,675 ) (3,806 ) - - (17,481 )
Other operating and administrative costs (2,155 ) (1,533 ) - (1,071 ) (4,759 )
Segmental result – EBITDA 7,674 533 - (1,071 ) 7,136
Exploration expenditure - - 1,574 - 1,574
Other capital expenditure 1,041 1,118 1 - 2,160
Production statistics 30 June 2011 30 June 2010
Kalsaka Angovia Kalsaka Angovia
Ore Processed (t) 326,337 - 370,318 174,105
Average ore head grade (g/t) 1.5 - 1.8 0.9
Gold production (oz) 14,681 920 19,350 4,570
Cash costs excl. Royalties (US$/oz sold) 882 n/a 790 963
Averaged realised gold price (US$/oz sold) 1,507 1,587 1,199 1,210

Peter Cowley (Fellow IMMM), a Non-Executive Director of Cluff Gold and a "qualified person" as such term is defined in National Instrument 43-101, has reviewed the technical contents of this financial and has verified the exploration data disclosed in this financial report, including sampling, analytical and test data underlying the information contained herein.

This financial report includes certain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements other than statements of historical fact included in this financial report, including, without limitation, statements regarding the exploration, drilling results and potential future production at Angovia, Kalsaka and Baomahun, the positioning of the Company for future success, statements regarding potential future production at Baomahun and Angovia, the expansion of the resource base within existing pittable areas or by underground mining methods, the potential generation of hydro-electric power at Baomahun, the timing of the feasibility study and exploration and future 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.

Cluff Gold plc is a "Designated Foreign Issuer" in accordance with National Instrument 71-102 – Continuous Disclosure and Other Exemptions Relating to Foreign Issuers ("NI 71-102") in Canada, subject to the foreign regulatory requirements of a foreign regulatory authority, namely, the AIM market of the London Stock Exchange.

Canadian Non-GAAP Measures – EBITDA (Earnings Before Interest, Income Taxes, Depreciation and Amortization), cash cost per ounce and average realised gold price are financial measures used by many investors to compare mining companies on the basis of operating results, asset value and the ability to incur and service debt. EBITDA is used because Cluff Gold's net income alone does not give an accurate picture of its cash-generating potential. Management believes that EBITDA is an important measure in evaluating the Company's financial performance, ability to fund future capital expenditures and repay any future project financing, and in determining whether to invest in Cluff Gold. Similarly, cash cost per ounce and average realised gold price are measures that are considered key measures by Cluff Gold in evaluating the Corporation's operating performance. However, EBITDA, cash cost per ounce sold and average realised gold price are not measures of financial performance, nor do they have a standardized meaning prescribed by Canadian GAAP, and may not be comparable to similar measures presented by other companies. Investors are cautioned that EBITDA should not be construed as an alternative to net income or loss determined in accordance with Canadian GAAP as an indicator of Cluff Gold's performance or to cash flows from operating, investing and financing activities of liquidity and cash flows. These measures have been described and presented in this document in order to provide shareholders and potential investors with additional information regarding the Company's operational performance, liquidity and its ability generate funds to finance its operations. A reconciliation of segmental EBITDA to profit/loss before taxation can be found in Note 2.

Baomahun

1. As per the Company's Significant Resource Increase at Baomahun: Total Mineral Resources Increased by 46% to 2.1 Million Ounces of Gold (Indicated) together with 0.9 Million Ounces of Inferred Resources at Baomahun press release announced 5 September 2011.
2. As per the Company's Baomahun Exploration Update: Confirmation of new discovery press release announced 17 May 2011.

Detailed information can be found in the Company's report Technical Review of the Baomahun Gold Exploration Project, Sierra Leone dated 12 August 2010, made available on the Company's website and on SEDAR.

Kalsaka

3. Detailed information can be found in the Company's report entitled Technical Review of Kalsaka Gold Mine, as prepared by SRK Consulting, dated October 2008 and available on SEDAR.

The drilling programme at Kalsaka was undertaken by an independent drilling contractor. All the drill holes collar positions were pegged using a total station theodolite and re-surveyed after drilling. The drill collars after survey were checked by onsite geologist. Each 1.0m RC chipping passing through a cyclone is collected in a plastic bag and reduced in a multistage splitter to get a split of between 2kg and 4kg. Sampling was done under the supervision of the site geologist. Duplicate samples were collected at every 10th sample point and one blank inserted at every 20th point. Samples were submitted to the in-house laboratory, dried, crushed and pulverised to 85-90% passing 106µm and analysed by bulk leach extractable gold assays for twelve hours. Check assays were also submitted to external commercial laboratories in Burkina Faso as part of the Company's quality control procedures.

Angovia

4. Detailed information can be found in the Company's report entitled Technical Review of Angovia Gold Mine, Mount Yaoure, Cote d'Ivoire, as prepared by SRK Consulting, dated October 2008 and available on SEDAR.

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

Contact Information

  • Cluff Gold plc
    Pete Gardner
    Finance Director
    +44 (0) 20 7340 9790

    Cluff Gold plc
    Carrie Lun
    Investor Relations Manager
    +44 (0) 20 7340 9790

    Evolution Securities Limited
    Jeremy Ellis
    +44 (0) 20 7071 4300

    Evolution Securities Limited
    Tim Redfern
    +44 (0) 20 7071 4300

    Pelham Bell Pottinger
    Lorna Spears
    Investor Relations (Global)
    +44 (0) 20 7861 3232

    Pelham Bell Pottinger
    Philippe Polman
    Investor Relations (Global)
    +44 (0) 20 7861 3232

    Farm Street Communications Limited
    Simon Robinson
    Press Relations (U.K.)
    +44 (0) 7593 340 107
    simon.robinson@farmstreetmedia.com