Cluff Gold PLC
AIM : CLF
TSX : CFG

Cluff Gold PLC

May 02, 2011 09:30 ET

Cluff Gold Plc: Baomahun Gold Project-Feasibility Study Update

LONDON, UNITED KINGDOM--(Marketwire - May 2, 2011) - Cluff Gold plc (AIM:CLF)(TSX:CFG) ("Cluff Gold" or the "Company"), the dual AIM/TSX listed West African focused gold mining company, is pleased to announce positive progress on the definitive feasibility study ("DFS") work at its Baomahun Gold Project ("Baomahun") in Sierra Leone.

Highlights:

  • 15,000m of in-fill drilling has been completed since the last resource update, announced on 4 June 2010, which has confirmed greater continuity of mineralisation within the current resource area than had previously been modelled.
  • Completion of the definitive feasibility study is expected in Q3 2011, with all major aspects well underway.
  • Ongoing metallurgical optimisation studies suggest that an intermediate flotation stage may result in a material decrease in both capital and cash operating costs compared to a conventional CIP/CIL plant due to reduced grinding requirements.
  • A feasibility study has been commissioned into the establishment of a hydro-electric power station which would have the potential to materially reduce cash costs compared to the heavy fuel oil power option currently modelled.

Peter Spivey, Chief Executive Officer of Cluff Gold, commented:

"We are very pleased with the progress we have made to date, and we remain on track for the completion of the feasibility study in Q3 2011. With the hydro-electric power and flotation options, together with the along strike exploration program currently underway, there is significant potential to further improve the project economics beyond the feasibility study."

Feasibility Study Update

Since the last resource update, announced on 4 June 2010, over 15,000m of in-fill drilling has been completed, which has confirmed greater continuity of mineralisation within the current resource area than had previously been modelled. Assay results have been received for first 20 holes totalling 8,340m, which continue to confirm broad, high grade mineralised zones. Notable intercepts include:

  • 16m @ 7.1g/t from 346m, including 10m @ 10.2 g/t from 347m
  • 19m @ 5.7g/t from 611m, including 10m @ 6.89 g/t from 612m
  • 22m @ 4.2g/t from 332m, including 11m @ 7.0 g/t from 335m
  • 13m @ 5.4g/t from 421m, including 3m @ 18.7 g/t from 429m
  • 12m @ 8.2g/t from 48m, including 5m @ 12.8g/t from 50m

A full schedule of assay results is set out in the Appendix.

A new resource block model is currently being developed, which is expected to be announced during Q2 2011. A lower-risk open-pit only mining method is being adopted for the DFS, compared to the combined open pit and underground mining schedule set out in the Preliminary Economic Assessment announced on 12 August 2010.

The DFS is expected to be completed in Q3 2011, with all major components including environmental and social studies, engineering plans and mine infrastructure planning well underway.

The Company is also carrying out additional cost optimisation studies outside the DFS with a view to achieving the best possible economics. Principally these are:

  • Ongoing metallurgical test work suggests that a process route incorporating a flotation stage may be viable. If successful, this would result in a significant reduction in capital and operating costs compared to the conventional CIP/CIL option currently modelled due to a reduction in grinding requirements. Final results for this test work are expected to be available in Q3 2011 for integration in the detailed plant design.
  • The topographical relief and rainfall pattern of the region enables the provision of hydro-electric power ("HEP") without the need for major dam construction or land inundation. A feasibility study into the establishment of an HEP station has been commissioned, with 12-month river flow gauging due to be completed in July 2011. Results to date suggest that a 20MW run of river HEP plant could provide 72% annual power availability, which would significantly reduce cash costs at current fuel prices compared to the heavy fuel oil power option currently modelled. The HEP feasibility study is expected to be completed in Q4 2011.

Quality Assurance and Quality Control

Drill intersections were calculated using a cut-off of 0.5g/t and include up to two metres of internal waste. The intersections are from infill drill holes within the resource area and do not necessary represent extensions to already defined zones of mineralisation. The true thickness of the mineralisation may vary from 40% to 70% of the intersected widths.

Drill cores for assaying were taken at a maximum of one metre intervals and were cut with a diamond saw. One half of the core was placed in sealed bags and sent to the Company's sample preparation facility at Baomahun, Sierra Leone. The core samples were then crushed to minus 4mm and split, with approximately 1.5kgs of sample pulverised down to 95% passing 106 microns. Approximately 120 grams of the pulverised sample were then shipped to the SGS Laboratories (which are independent of the Company) in Siguiri, Guinea, and Tarkwa, Ghana, where the samples were analysed for gold by fire assay using a 50g charge. As part of the Company's QA/QC procedures, internationally recognised standards and blanks were inserted into the sample batches.

About Cluff Gold

Cluff Gold is a gold developer-producer with assets in West Africa. The Company generates significant cash flow through its Kalsaka gold mine in Burkina Faso. The Company remains focused on its objective of becoming a mid-tier producer through the development of its wholly-owned Baomahun project in Sierra Leone, which is expected to contribute an additional 157,000oz of gold per annum, with significant exploration potential along strike. With its experience of bringing new mines into production and a project pipeline of exploration licenses in Burkina Faso and Mali, the Company aims to further increase its production profile with its highly prospective exploration work across all assets.

Baomahun is Cluff Gold's defining development gold project in Sierra Leone. Definitive feasibility study work is progressing in the immediate resource area, where 1.4Moz of measured and indicated resources (0.5Moz measured comprising 5.5Mt at 2.9g/t and 0.9Moz indicated comprising 9.6Mt at 2.9g/t) and a further 1.0Moz of inferred resources (comprising 12.2Mt at 2.6g/t) have been delineated to date1. The current resource base is contained in an area of approximately 2 sq. km while the total project licence area is 136 sq. km, with significant exploration upside along strike.

This press 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 Baomahun, the implementation and potential benefits of intermediate flotation stage and hydro-electric power, 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.

Mr. Andrew Asante, (M.Sc., AusIMM), Resource Manager for Cluff Gold plc and a "qualified person" as such term is defined in National Instrument 43-101, has reviewed the contents of this press release. Mr. Asante has verified the data disclosed in this release, including sampling, analytical and test data underlying the information contained herein.

1 As per 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.

Appendix
Hole IDDip (°)Azimuth (°)InterceptFrom (m)Comments
DDH325502298m @ 2.10 g/t68
2m @ 1.30 g/t94
3m @ 1.62 g/t245
16m @ 2.19 g/t252Includes 3m @ 4.55 g/t from 255m
6m @ 3.58 g/t278
3m @ 1.06 g/t310
DDH326731823m @ 1.11 g/t89
4m @ 1.86 g/t115
2m @ 1.02 g/t137
3m @ 2.65 g/t147
8m @ 5.92 g/t341Includes 4m @ 11.04 g/t from 344m
DDH327452122m @ 1.19 g/t76
DDH328452623m @ 1.39 g/t109
3m @ 3.00 g/t127
DDH329A602195m @ 7.18 g/t327Includes 2m @ 15.2 g/t from 328m
5m @ 1.76 g/t378
6m @ 6.27g/t386Includes 3m @ 11.9 g/t from 386m
DDH330582072m @ 1.30 g/t282
2m @ 1.63 g/t290
15m @ 1.55 g/t378
DDH331522124m @ 2.45 g/t305
16m @ 7.09 g/t346Includes 10m @ 10.20 g/t from 347m
DDH332672053m @ 2.38 g/t417
6m @ 2.16 g/t471
DDH33349586m @ 3.09 g/t365Includes 2m @ 7.89 g/t from 368m
2m @ 1.02 g/t374
DDH33447472m @ 2.24 g/t301
5m @ 1.69 g/t401
7m @ 5.26 g/t409
2m @ 1.20 g/t452
DDH33552612m @ 1.15 g/t505
19m @ 5.68 g/t611Includes 10m @ 6.89 g/t from 612m
3m @ 2.02 g/t642
3m @ 6.29 g/t671
DDH33649659m @ 1.66 g/t273
4m @ 1.90 g/t285
7m @ 2.15 g/t305
32m @ 2.16 g/t352Includes 4m @ 5.77 g/t from 370m
DDH337476812m @ 3.27 g/t315Includes 6m @ 5.60 g/t from 319m
22m @ 4.15 g/t332Includes 11m @ 7.03 g/t from 335m
2m @ 2.20 g/t361
11m @ 1.11 g/t377
3m @ 2.00 g/t391
10m @ 1.46 g/t397
15m @ 1.42 g/t443
DDH33847652m @ 2.19 g/t415
13m @ 5.43 g/t421Includes 3m @ 18.66 g/t from 429m
10m @ 3.03 g/t439Includes 3m @ 6.46 g/t from 444m
8m @ 1.09 g/t473
5m @ 3.62 g/t537
DDH33945552m @ 2.83 g/t430
5m @ 4.00 g/t441Includes 3m @ 5.37 g/t from 442m
3m @ 11.38 g/t451
DDH340No significant intersection
DDH341253788m @ 1.53 g/t196
3m @ 1.25 g/t256
2m @ 1.71 g/t264
4m @ 1.04 g/t281
DDH342247725m @ 2.09 g/t253
5m @ 2.49 g/t288
4m @ 1.60 g/t332
DDH34355012m @ 8.15 g/t48Includes 5m @ 12.76 g/t from 50m
3m @ 2.25 g/t77
2m @ 1.19 g/t102
2m @ 4.07 g/t150
DDH344253705m @ 1.00 g/t51
5m @ 4.60g/t177Includes 3m @ 6.76 g/t from 178m

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

Contact Information

  • Cluff Gold plc
    J.G. Cluff
    Chairman
    +44 (0) 20 7340 9790

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

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

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

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

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

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