Cluff Gold PLC

Cluff Gold PLC

August 15, 2012 07:00 ET

Cluff Gold plc: H1 and Q2 2012 Results

LONDON, UNITED KINGDOM--(Marketwire - Aug. 15, 2012) - Cluff Gold plc ("Cluff Gold" or the "Company") (AIM:CLF)(TSX:CFG), the dual AIM/TSX-listed West African focused gold mining company, is pleased to announce its results for the half year and quarter ended 30 June 2012.



  • 21% increase in gold production at Kalsaka gold mine to 15,191 ounces compared to Q1 2012 (12,504 ounces)
  • 5% decrease in cash cost per ounce produced to US$961/oz compared to Q1 2012 (US$1,015) due to higher grades and reduced strip ratio
  • 2012 production guidance of 60,000-70,000 ounces maintained as production and head grade are expected to continue to strengthen in H2
  • Resource update for Baomahun gold project expected to be released in October following re-evaluation of structural control of gold mineralisation led by John McGloin
  • Extensive exploration programme underway at Yaoure gold project with inferred resource anticipated by the end of 2012


  • 17% increase in Group EBITDA to US$6.2 million compared to Q1 2012 (US$5.3 million)
  • Cash and liquid assets of US$28.8 million with no debt or hedging


  • Completion of Sega gold project acquisition which should extend Kalsaka's mine life
  • Management team strengthened as John McGloin appointed as Executive Chairman at AGM
Q2 2012 Q1 2012 H1 2012 H1 2011
Total Gold Production (oz) 15,191 12,504 27,695 31,518
Cash Costs excl. Royalties (US$/oz produced) 961 1,015 986 842
Average Realised Gold Price (US$/oz sold) 1,608 1,701 1,650 1,442
Revenue (US$M) 23,924 23,605 47,529 47,775
EBITDA (US$M) 6,192 5,310 11,502 11,146
Basic EPS (cents) 1.19 (0.89 ) 0.49 (0.44 )

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

"In the first six months of the year Cluff Gold has delivered solid results from Kalsaka and we expect head grade and production to continue to strengthen quarter-on-quarter for the remainder of 2012. Kalsaka continues to generate robust cash flow and through the integration of the Sega project, which is expected to begin production in H1 2013, we anticipate that Cluff Gold will be able to maintain production in Burkina Faso until Baomahun comes on-stream. In the second six months of the year we expect to reach significant milestones at Kalsaka, Baomahun and Yaoure as we take further steps along the path to becoming a mid-tier producer."

The Company will host a live and subsequently archived audio webcast of the H1 and Q2 results presentation on the homepage of the Company's website,, starting at 9:30am UK time today. An analyst conference call facility will also be available at 9:30am EDT/2:30pm UK time for those unable to access the webcast. Dial-in details are as follows:

Canada +1-866-270-8076
USA +1-866-793-4279
Other parts of the world +44 20 8609 0205
Participant PIN Code: 754198#

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, where the production profile has been enhanced by the recent acquisition of the neighbouring Sega project. 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 135,000oz of gold per annum, with significant exploration potential along strike. In addition, the Company is also exploring the significant sulphide potential at its Yaoure project in Côte d'Ivoire. With its experience of bringing new mines into production and a project pipeline spanning Burkina Faso, Côte d'Ivoire and Mali, the Company aims to further increase its production profile with its highly prospective exploration work across all assets. For more information, please visit

Operational Review


Cluff Gold's strategy is to grow into a mid-tier producer through the development and continued exploration of its key assets in West Africa. With the addition of John McGloin to the Executive Board, Cluff Gold's management team has the necessary skills and experience to lead the Company along its transformational path. The focus of H1 was preparing Cluff Gold's projects in Burkina Faso, Sierra Leone and Côte d'Ivoire for the next stage of their growth, with several key milestones expected to be reached in H2.

As anticipated, stronger grades were encountered at the Company's producing mine, Kalsaka in Burkina Faso, in Q2 and production increased by 21% on Q1 2012. Despite the weakening gold price, Group EBITDA increased by 17% and Cluff Gold continues to be well funded for its current operations and exploration activities. Maintaining cashflow is a key priority and the completion of the preliminary economic assessment ("PEA") for the recently acquired Sega gold project, which is 20km north of Kalsaka, is expected to ensure that production will continue uninterrupted and the Company's cash flow delivery will remain strong.

In Sierra Leone, the feasibility study for Baomahun is at an advanced stage, with all aspects regarding the 2Mtpa CIL plant now complete. The project is fully permitted, with just the resource update and geotechnical work for the open pit ongoing. Following John McGloin's appointment and his initial review of operations, the Company is re-analysing the structural control of the gold mineralisation in the genesis of the Baomahun gold deposit. This work is expected to have a positive impact on the resource update, demonstrating greater continuity of the gold mineralisation than previously modelled. The resource update is now expected to be released in October, with the detailed mine schedule to follow. The expected timing for the feasibility study will be announced simultaneously with the resource update. Meanwhile, Cluff Gold continues to evaluate strategic options for the financing of Baomahun to ensure the Company's flagship project is developed in the format that is most beneficial to shareholders. The management does not believe it is in the best interests of shareholders to raise equity finance in the near term and debt advisors have been appointed to explore alternative financing options. Drilling around the resource area continues to yield encouraging results and infrastructure upgrades are largely complete.

An intensive drilling campaign was conducted in Q2 at Yaoure, the sulphide resources focused exploration project in Côte d'Ivoire, as the Company believes that Yaoure has significant exploration upside. Cluff Gold is focused on delineating an inferred resource initially, which will demonstrate the project's large scale potential, which is expected to be completed in Q4 2012. Côte d'Ivoire offers a compelling environment for investment, with good existing infrastructure including a 150MW hydro-electric power facility closer to the Yaoure site, a mining friendly government and highly prospective terrain.

Cluff Gold expects to continue to increase production quarter-on-quarter in 2012 as the Company moves into higher grade zones at Kalsaka in H2 and gold in circuit is realised. The Company maintains its guidance of 60,000-70,000 ounces for the full year and cash costs are not expected to increase in H2 compared to the costs achieved in H1 (US$986/oz produced excluding royalties).

Cluff Gold has a number of milestones on the near term horizon, with the resource update for Baomahun and the PEA for Sega due to be released during H2. The Company is at a transformational stage of its development and with cashflow from Kalsaka and a strong balance sheet underpinning its growth prospects at Baomahun and Yaoure, Cluff Gold is moving closer to its goal of becoming a mid-tier producer.

Kalsaka, Burkina Faso

Production Statistics (Unaudited)
Q2 2012 Q1 2012 Q2 2011 H1 2012 H1 2011
Ore mined (kt ) 434 519 384 953 851
Waste mined (kt ) 1,645 2,888 2,972 4,533 6,526
Total tonnage mined (kt ) 2,079 3,407 3,357 5,486 7,378
Strip ratio (w:o ) 3.8:1 5.6:1 7.7:1 4.8:1 7.7:1
Ore processed (kt ) 408 407 326 815 779
Average ore head grade (g/t ) 1.42 1.10 1.47 1.26 1.43
Gold production (oz ) 15,191 12,504 14,681 27,695 31,518
Cash costs excl. royalties (US$/oz produced ) 961 1,015 882 986 842
Cash costs excl. royalties (US$/oz sold ) 1,008 960 905 985 842
Average realised gold price (US$/oz sold ) 1,608 1,701 1,507 1,650 1,442
Pre-tax cash margin (US$/oz sold ) 600 741 602 604 546
EBITDA US$m 9.1 7.9 8.3 17.0 15.8

As predicted in Q1, the Kalsaka mine delivered a stronger quarter in Q2, with a 21% increase in gold production to 15,191 ounces compared to Q1 2012 (12,504 ounces). Cash costs were US$961/oz produced, which generated EBIDTA of US$9.1 million from Kalsaka, 15% higher than the previous period. The improved performance was driven by higher grades in the East pit and K-zone. At 1.42g/t (Q1: 1.10g/t), the grade stacked corresponded more closely with the 1.5g/t expected from the remaining reserves and was in line with the 1.43g/t achieved in H1 2011.

However, further strengthening of performance is expected in H2, as in Q2 the longer leach cycle of the higher grade, harder crushed ore continued to impact production. This harder, slower leaching ore represented over 20% of the total stacked material in H1, which has led to an increase in gold in circuit that is expected to be recovered in H2, which in turn will lead to improved production levels.

Despite the weakening gold price in Q2, EBITDA remained robust due to stronger production. Cash costs for gold sold increased by a modest amount, but the average gold selling price of US$1,608/oz allowed a pre-tax cash margin of US$600/oz to be generated. For H1 as a whole, the pre-tax cash margin was US$604/oz, an 11% increase on H1 2011. This was driven by a stronger gold price.

Q2 also saw a reduction in the overall stripping ratio to 3.8, from 5.6 in Q1. This is due to the areas of focus, which included two small open pits with lower than average overall strip requirements. The stripping ratio is expected to remain below the 2011 average of 6.7 for the remainder of the year, which is expected to contribute to reduced mining costs. The tighter stripping ratio did not fully impact cash costs reported in Q2 due to timing issues. This is discussed in more detail in the finance section below.

Grades are expected to continue to strengthen as the year progresses, with production weighted towards H2. Despite the unusually heavy rainy season in Burkina Faso this year, the Company remains on track to achieve its annual production guidance of 60,000-70,000 ounces in 2012 and cash costs are not expected to increase in H2 2012 compared to those reported for H1.

Kalsaka exploration

Exploration continued at Kalsaka throughout Q2, focusing on areas east of the existing K-zone pits along the K-zone shear structure. In-fill drilling at a line spacing of 50m has confirmed the continuity of mineralisation between the Rondo and Zoungwa prospects over a strike length of 900m. Resource estimations for these areas are expected to be completed during Q4 2012.

Soil sampling at the Ribou prospect in the Yako permit, 20km south of Kalsaka, detected a 4km long gold anomaly along the regional shear that extends north-east from the Nansenge area, where 150,000 ounces (2.5Mt at 1.9g/t)(i) of inferred resources have previously been defined. A RAB drilling campaign will be conducted at Ribou in Q3 2012.


The acquisition of the Sega gold project is the key to ensuring that Cluff Gold maintains continuity of cashflow until Baomahun commences production. The transaction with Orezone Gold Corporation was completed on 23 May 2012 and it allows Cluff Gold access to ore that is anticipated to be higher grade than the remaining reserves at Kalsaka. The indicated oxide and transitional resources at Sega total 257,572 ounces (4.9Mt at 1.6g/t), plus 56,258 ounces (1.2Mt at 1.5g/t) of inferred resources(ii). Although the weighted average resource grade of the oxide and transitional ore at Sega is similar to the Kalsaka reserves, it is expected that the grade of the material processed from Sega will be higher than that at Kalsaka due to the high grade core of the mineralisation. The deposit is located 20km to the north of the existing Kalsaka plant in central Burkina Faso, where the ore from Sega will be processed.

The Company will continue to mine and process the remaining reserves at Kalsaka until Sega ore is available, ensuring that production at the existing Kalsaka plant is uninterrupted, absent unforeseen events. The K Zone 1 pit is outperforming the model on an ongoing basis and other areas are performing materially in line with expectations, so management believes that production will continue at Kalsaka until the Sega ore comes on-stream with a comfortable handover period.

Work continues on the preliminary economic assessment, which outlines the plans to truck Sega's resources to Kalsaka for processing and an assessment of the optimal way to integrate Sega into the Kalsaka operation. The PEA's focus is to ensure that sufficient data is provided to the Burkina Faso Government for a mining licence to be granted. The current timetable, as agreed with the Government, envisages the filing of the PEA in October. This will allow the Government adequate time to review all the technical details in order to grant a mining licence and allow the trucking of ore to commence in H1 2013.

Provisional authorisation has been agreed with the Government for infrastructure work associated with Sega to commence in advance of the final mining licence being granted. This work includes the construction of a dedicated haul road between Kalsaka and Sega and the expansion of the crushing facilities at both operations, with an associated upgrade to power and transmission plants. The initial economic and social analysis has also been provided to the Government of Burkina Faso and the Company awaits written confirmation in advance of the work on the haul road commencing.

Sega exploration

Exploration at Sega remains a primary focus. The geology and structure at Sega is typical of Birimian greenstone belts, with gold mineralisation hosted in shear zones and closely associated with quartz stockworks at the contact between metasediments and volcanic rocks. Sega's current resources combined with Kalsaka's existing mine life are expected to allow Cluff Gold to continue to produce gold and deliver cash flow until Baomahun commences production. However, management is optimistic that there is further upside potential beyond Sega's current resources and in Q2 US$0.2 million was invested to begin the process of expanding the deposit's footprint.

At the start of Q1, before Sega was transferred to Cluff Gold, Orezone conducted a 10,000m drilling programme on Sega's 313km2 licence area at a cost of US$0.5 million. The drilling covered 11 targets and the most significant intercepts recorded were at the Touli, Sampella and KNW prospects. The Touli prospect and the KNW prospects, which are just south of the centre of the licence area, are located along a regional asymmetric fold, whilst the Sampella target is located in the north-east of the Sega licence area at the north-east end of the regional fold. Further RC drilling commenced in Q2 and is ongoing at the Touli target and RC drilling at Sampella and KNW is planned for Q3. Cluff Gold continues to evaluate the results of this drilling programme and they will be included in the PEA.

Baomahun, Sierra Leone

Feasibility study progress update

The feasibility study for a 2Mtpa CIL plant at the Baomahun gold project in central Sierra Leone is at an advanced stage, with most of the key elements now complete. These include the:

  • Detailed engineering design

  • Geotechnical design for the plant site

  • Infrastructure plans

  • Feasibility study for a run-of-river hydro-electric power station (further details given below)

  • Metallurgy

  • Capex and opex plans

There are only two major technical aspects of the feasibility outstanding: the resource update, from which the final mining schedule will be derived, and the geotechnical work for the open pit. The Company expects a positive impact on the resource base and subsequent feasibility study as a result of re-analysing the structural controls on the gold mineralisation in the formation of Baomahun. This work follows a geological review driven by John McGloin and Peter Brown, Group Exploration Manager, and has demonstrated greater continuity of mineralised zones within the deposit. This work has involved the re-logging of core samples in conjunction with structural mapping of the deposit, recognising the close relationship of gold mineralisation with mylonitised shear zones. The management believes that taking additional time to underpin the resource estimate with a thorough understanding of the structural controls will produce a more accurate grade estimation. This should result in a more reliable geological model and consequently a better resource schedule and optimised open pit. It is anticipated that the final resource update will be announced in October 2012. The geotechnical work is ongoing in parallel with the resource update and the timing of the completion of the feasibility study will be announced as part of the resource update.

In Q2 the site infrastructure developments at Baomahun, which commenced in Q1, were largely completed. The work is being undertaken in order to ensure a smooth transition for Baomahun from exploration to development. It includes an upgrade to the existing exploration camp, at a total cost of US$1.4m. The 17km site access road from Mongeri to Baomahun is also being improved, which will ensure efficient access to site during the construction and operation phases, at an estimated cost of US$3.7m. A total of US$4.4m was spent on these projects in H1 2012, with the remaining US$0.7m expected to be spent by the end of 2012.

Cluff Gold is also continuing negotiations with the Sierra Leone Government with regards to the fiscal stability agreement. These discussions are expected to conclude in Q1 2013 when the new parliament sits following the presidential elections in November.

In conjunction with the initial infrastructure work at Baomahun, Cluff Gold has been exploring alternative power options for the project in order to decouple it from the oil price. As discussed in Q1, management believes that there is significant potential for optimisation of the current plans for Baomahun through the introduction of hydro-electric power ("HEP") within 40km of the mine. With up to 40% of the processing costs of a modern CIL plant associated with power, the availability of HEP is expected to substantially reduce cash costs and have a major impact on Baomahun's feasibility study compared to a heavy fuel oil ("HFO") power plant. Whilst Baomahun will require a HFO power station to be built, generating power at an estimated US$0.23/kWh, the availability of HEP in close to the mine would reduce power costs to typically less than US$0.01/kWh. This is expected to have a significant effect on the long term economics of the project by decoupling it from the oil price.

In 2011 a feasibility study for a 24MW run of river HEP plant was completed by Knight Piesold in Vancouver. It is estimated that Baomahun's power requirements are 50% of this, approximately 12MW, but due to the dry season when the amount of water in the river will be reduced, it is expected that it would be able to provide approximately 72% of Baomahun's power. Discussions are ongoing with the Sierra Leone government and third party financiers to establish an independent power producer structure to fully fund the construction of the HEP plant, with a long term offtake agreement available for Baomahun. The resulting power costs, estimated at between US$0.08/kWh and US$0.10/kWh would represent a significant reduction compared to the current cost of HFO power generation, without the need for Cluff Gold to provide equity or debt to finance construction. With a similar construction period to the mine, it is envisaged that low cost HEP could be available early in the mine life.

Strategic options for financing Baomahun

In view of the current challenging market environment, management does not believe it is presently in the best interest of shareholders to raise equity finance in order to fund in full the construction of Baomahun. The Company is exploring options to minimise long term equity dilution and has appointed Mike Price and Lee Barnes of Rich Vein Consulting as debt advisors to facilitate this approach. They are evaluating a number of funding scenarios for Baomahun, which could provide funding without the need for gold hedging.

Importantly, the Company's near term objective is to maintain production at Kalsaka/Sega throughout the construction of Baomahun and during the project's commissioning in order to ensure that cashflow continues uninterrupted. The various strategic options and timeframes are being considered with this as a priority and management are confident that it is achievable for the Company to maintain a sound financial base.


A key element of Cluff Gold's long term strategy is to continue to explore its licence areas. Along with selective acquisitions, this is essential to our evolution and growth. Whilst Baomahun's current indicated resource of 2.07Moz (25.6Mt at 2.5g/t) is considered sufficient to justify the construction of a CIL plant, Cluff Gold believes that there is significant upside potential in the long term beyond the existing additional 0.86koz of inferred resources (9.6Mt at 2.78g/t)(iii). Baomahun is a classic Archaean gold deposit with the opportunity for further depth extensions, which the Company plans to examine once open pit mining has commenced to establish the viability of an underground operation.

In the near term, Cluff Gold's exploration team has two primary focuses: The area immediately north of the existing resource area at Pujehun South and around the extensive artisanal workings in the Makong South licence, north of the Baomahun mining lease.

Pujehun South

A number of potential mineralised zones on the northern continuation of the Baomahun Western Zone mineralisation were identified by reworking the Versatile Time Domain Electronics (VTEM) data through 3D Inversion. These areas have been the focus of Cluff Gold's along strike exploration programme in 2012. This area, which includes the Pujehun South and Target 5 prospects, has similar geology to the resource area and is immediately north of the current resources, following a 4km strike extension.

Diamond drilling of these targets has confirmed the presence of mineralisation and conforms with Cluff Gold's growing understanding of the structural controls of the mineralisation within the main resource area. Mineralisation is seen to be associated with a large cross-cutting shear zone trending NW-SE from Pujehun South to immediately east of the Eastern Zone, which has been delineated over more than 400m. Previously announced intercepts include multiple intersections in a single hole: 5m at 2.1g/t from 17m, 10m at 1.5g/t from 37m and 8m at 1.5g/t from 118m(iv). The Company's intention is to test this link over an estimated 800m strike length to a depth of 150m when drilling can recommence in November 2012 following the rainy season. A full analysis of recent drilling intercepts and our plans for the next drilling campaign will be announced in Q4.

Makong South

The Makong South licence is due north of the Victoria exploration licence, approximately 10km due north of the existing Baomahun resource area. This was officially awarded to the Company in March 2012. In contrast to the Baomahun resource area, the geological setting at Makong South demonstrates high-grade quartz vein type mineralisation with visible gold, appearing to be located near the thrusted contacts of granite and schists (including talc schists). There are extensive artisanal workings within the Makong South licence, and the Company has commenced a surface sampling programme to understand the nature of the mineralisation associated with these. Initial results are promising and reconnaissance work further south in the licence area indicates that other areas justify examination.

A total of US$7.75m exploration expenditure has been incurred in H1 at Baomahun, with almost US$4 million of that in Q2. The three months from April to June are an optimal time to conduct drilling programmes in West Africa as it is the end of the dry season. Exploration expenditure at all of Cluff Gold's assets will diminish in Q3 with the onset of the wet season, which is in line with management's strategy of ensuring expenditure does not exceed cash generation.

Yaoure, Côte d'Ivoire

Activity at Yaoure in H1 focused on exploration. Cluff Gold's objective at Yaoure, which is located in southern Côte d'Ivoire, is to define a large sulphide deposit underlying the previously mined oxide resources.

Côte d'Ivoire as an investment environment

For any gold deposit to be brought into production, location is always one of the most important factors. If power and water are readily available, the resource hurdle that a company must overcome is reduced and the project economics will be significantly improved. With good infrastructure already in place, a smaller or lower grade resource can still be highly economic. Cluff Gold believes that Yaoure's location presents a number of advantages, which will enhance the prospects for a CIL plant to be developed at Yaoure.

Côte d'Ivoire is highly prospective and yet historically underexplored, containing 35% of West Africa's Birimian Greenstone belt but only 4% of the region's delineated gold resources. In contrast, neighbouring Ghana contains only 16% of the Birimian Greenstone belt but 62% of the resources, which suggests that Côte d'Ivoire offers significant exploration potential. Cluff Gold believes that there is likely to be substantial upside to its current resources at Yaoure.

Côte d'Ivoire has excellent existing infrastructure. It has good transport links, with Yaoure just 12km from a tar road and 55km from Yamoussoukro, the political capital of Côte d'Ivoire. There is also excellent transport infrastructure from the port of Abidjan to Yamoussoukro.

Yaoure is expected to benefit from lower operating and capital costs due to the Kossou Barrage, a 150MW HEP facility with unutilised capacity which is located just 5km from the site. As with the HEP opportunity in Sierra Leone, there will be a number of benefits besides the reduced cost per kWh and the decoupling of the project from the long term oil price. The primary difference to the Sierra Leone opportunity is that the infrastructure is already in place in Côte d'Ivoire.

Finally, Cluff Gold is confident in its ability to do business in the Côte d'Ivoire as the Government is mining friendly and recognises the importance of encouraging foreign investment. The Company's exploration permit for the Yaoure project was renewed on 9 August 2012 for three years by the Minister of Mines and Energy.

Exploration strategy

The Company believes strongly that investing in exploration at Yaoure is the best way to realise the project's value for shareholders, and is therefore focused on delineating an inferred resource in late 2012 to demonstrate the project's large scale, moderate grade potential. Furthermore, by defining a sizeable resource at Yaoure, Cluff Gold will achieve greater flexibility in its portfolio of assets and will be one step closer to achieving its goal of becoming a mid-tier producer.

The drilling results announced to date include significant intercepts, such as 28.4m at 3.24g/t from 35.3m, 22.1m at 2.54g/t from 31.4m and 10.1m at 7.15g/t from 57.8m(v). Cluff Gold's focus is on the wider, moderate-grade, shallow-dipping zones of mineralisation with open pit potential where continuity is being established. It is expected that the thinner, higher grade sub-vertical cross-cutting veins with frequent visible gold will enhance the overall grade of the orebody. However, since the continuity of these over any meaningful distance would require costly close spaced drilling, they are not the primary target in the current exploration phase.

Cluff Gold spent US$4.1 million on exploration at Yaoure in Q2 and US$6 million in total in H1, as part of a US$28 million total exploration budget for 2012. Drilling is expected to be completed in early Q4, after which work will focus on completing a resource estimate with exploration expenditure rates falling significantly. Exploration is the lifeblood of a mining company in its growth phase but Cluff Gold remains focused on ensuring its business model is sustainable. Expenditure on exploration or other areas will not exceed cash inflows as Cluff Gold is dedicated to ensure its balance sheet remains robust at a time in the market when companies without cash flow are at a distinct disadvantage.

The heap leach operation at Yaoure continues to produce a small amount of gold, which is more than sufficient to cover the costs associated with it. As the exploration programme at Yaoure has accelerated the administration requirements have also increased, as expected. Cluff Gold expenses all of its administration costs and therefore all of the exploration expenditure relates directly to exploration.


The most important part of any business is its people and the recent addition of John McGloin as Executive Chairman has further enhanced the skillset of the Board. John's appointment adds a significant dimension to the executive team with his geological background and strong market experience as a respected analyst. This compliments the hands-on experience of Peter Spivey who successfully managed the construction of the North Mara and Sabodala gold mines, and the financial background of Pete Gardner. The resolution to appoint John McGloin as Executive Chairman was approved at Cluff Gold's AGM on 28 May 2012.

Cluff Gold's former Chief Executive Officer and Chairman, Algy Cluff, stepped down formally at the Company's AGM. This marked the end of a nine year period in which he oversaw the Company's listing on two stock exchanges and production at both Kalsaka and Yaoure. Algy is renowned throughout the natural resources industry for his entrepreneurial spirit and the management and Board wish him success in his new venture. The general administrative costs in Q2 were higher than usual due to this event.

The management is committed to ensuring Cluff Gold has a sustainable business model, where operating cash flows are invested to benefit all shareholders. The Company is in a strong position as it continues to deliver cash into its balance sheet and it is reviewing strategic options for growth without raising additional equity in the near term. In addition, one of Cluff Gold's focuses is to enhance the Company's short term productive capacity if an accretive opportunity arises and our robust cash position allows us to do this.

Financial Report

Group Financial Highlights
US$000 Q2 2012 Q1 2012 Q2 2011 H1 2012 H1 2011
Revenue 23,924 23,605 21,383 47,529 47,775
Gross profit 9,994 6,135 6,587 16,129 10,406
EBITDA 6,192 5,310 6,518 11,502 11,146
Profit before taxation 4,110 1,397 2,715 5,507 2,206
Basic EPS (cents per share) 1.19 (0.89 ) 0.66 0.49 (0.44 )
Cash generated from operating activities 1,569 6,079 3,076 7,648 9,040
Net change in cash and cash equivalents (32,708 ) 24,531 (5,213 ) (8,177 ) (3,775 )
Total cash and cash equivalents 20,298 53,386 17,734 20,298 17,734
Total capital expenditure 41,379* 10,996 7,619 52,375 12,524
*includes Sega acquisition

Cluff Gold delivered a good performance financially in H1 2012, despite industry wide cost pressures, as the management team remained focused on maintaining a strong financial position. Compared to H1 2011 revenue and EBITDA were flat as a stronger gold price off-set lower overall production. Cluff Gold continues to generate cash and this is expected to accelerate in the second six months of the year as Kalsaka's production profile is anticipated to increase quarter-on-quarter.

Cash costs per ounce produced in H1 2012 totalled US$986, a 17% increase on H1 2011. This increase has been driven by a 12% fall in the average grade processed, which was in line with management expectations. Cash costs have also been impacted by inflation, as seen across the mining sector, and other changes at Kalsaka in 2012. These include:

  • Wage inflation in West Africa has increased total costs by approximately US$80,000 per month across the full Kalsaka operation
  • The processing cost per tonne of ore increased by 20% in H1 2012 on H1 2011, due in part to the additional costs of the crushing circuit incurred for the first time in H1 2012 as the harder, higher grade ore was prepared for leaching
  • The mining costs per tonne of ore have increased by 18% in H1 2012 on H1 2011, not least due to the increase in taxation on fuel in Burkina Faso. This has been offset within the total cost of mining by a 37% improvement in the stripping ratio evident in H1 2012, ensuring that the mining cost per ounce of gold produced has increased only marginally despite the reduction in grade

The Company achieved a 21% increase in production in Q2 2012 compared to Q1 2012 due to the higher grades processed at Kalsaka, as anticipated. However, the weakening gold price has meant that this only equates to a 1.4% increase in revenue and has diminished the positive impact on Group EBITDA in Q2.

Cash costs excluding royalties per ounce produced in Q2 were US$961/oz (Q1: US$1,015). Despite the improved grade and stripping ratio experienced in Q2, cash costs per ounce produced only showed a slight decrease in comparison to Q1 due to timing issues. Firstly, due to the length of the leach cycle in heap leach operations, there is an average of 45 days of costs in stock relating to stacked ore at any time. Accordingly, the improvements in grade in Q2 2012 are not fully realised in the cash costs of production reported in the period, although these benefits should be realised in Q3. Secondly, during Q1 2012, 110kt of ore was added to the run of mine stockpile. The material processed in Q2 incorporates a significant amount of this previously mined ore from the stockpile, for which the costs attached include a higher element of waste stripping than was evident in Q2 2012. Q3 cash costs are expected to benefit from the increased grade and reduced waste stripping costs evident in Q2 as the average cost of gold in process included in stock at Q2 is 25% lower than in Q1.

In Q2 2012 the pre-tax cash margin per ounce sold totalled US$600/oz. This is 19% lower than in Q1 2012 due to a US$100/oz reduction in the average realised gold price. Cluff Gold is focusing on maintaining tight control of its cash costs in order to protect and expand this margin going forwards. The pre-tax cash margin excludes a 3% turnover royalty and 17.5% corporation tax payable to the Government of Burkina Faso together with the cost of sustaining capital for the project.

Cluff Gold finished Q2 with total cash and liquid assets of US$28.8 million, including US$4.5m of accrued income on gold sold at the end of the quarter and US$4.0m of bullion sold after the quarter end. This represents a decrease on Q1 2012 of US$27.5 million. This is in line with management's expectations and includes the cash component of the Sega gold project acquisition, associated fees, expenses and pre-completion exploration costs totalling US$16.3 million.

Excluding the Sega acquisition, sustaining capital totalled US$3.0 million in Q2 2012 as additional leach pads were constructed for ongoing stacking at Kalsaka and the road and camp upgrades at Baomahun were progressed. Other notable cash outflows included US$4.3 million of income tax at Kalsaka, including the balancing payment for the 2011 financial year.

Exploration expenditure was also particularly high in Q2 (US$10.6 million) due to the favourable drilling conditions in the end of the dry season. Exploration expenditure is expected to reduce significantly in the coming months with the onset of the wet season. Cluff Gold believes that extensive exploration of its existing licence areas is the key to its growth, so it will continue to invest heavily in future, but the Company is committed to ensuring its investments in exploration and infrastructure do not exceed its cash inflow from operations.

For the three and six months ended 30 June 2012 and 2011
3 months
30 June
3 months
30 June
6 months
30 June
6 months
30 June
Notes US$'000 US$'000 US$'000 US$'000
Unaudited Unaudited Unaudited Unaudited
Continuing operations
Revenue 23,924 21,383 47,529 47,775
Cost of sales (13,930 ) (14,796 ) (31,400 ) (37,369 )
Gross profit 9,994 6,587 16,129 10,406
General and administrative expenses (2,694 ) (1,571 ) (4,793 ) (3,084 )
Other operating costs (2,870 ) (2,897 ) (5,493 ) (5,766 )
Operating profit 4,430 2,119 5,843 1,556
Investment income 60 602 94 668
Finance costs (380 ) (6 ) (430 ) (18 )
Profit before taxation 4,110 2,715 5,507 2,206
Income tax (1,239 ) (1,200 ) (3,375 ) (1,828 )
Profit for the period 2,871 1,515 2,132 378
Attributable to:
Equity holders of the parent company 1,924 871 726 (582 )
Non-controlling interests 947 644 1,406 960
Profit for the period 2,871 1,515 2,132 378
Total comprehensive income for the period 2,871 1,515 2,132 378
Earnings/(loss) per share
Basic (cents per share) 3 1.19 0.66 0.49 (0.44 )
Diluted (cents per share) 3 1.18 0.58 0.49 (0.44 )
As at 30 June 2012

As at
30 June
As at
30 June
As at
31 December
Notes US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Intangible assets 4 111,733 57,666 68,027
Property, plant and equipment 5 21,287 22,844 17,453
Other receivables - 2,738 1,452
Deferred tax asset - 1,005 -
Total non-current assets 133,020 84,253 86,932
Inventories 6 17,734 15,064 18,275
Other receivables 12,514 6,849 6,586
Cash and cash equivalents 20,298 17,734 28,905
Total current assets 50,546 39,647 53,766
TOTAL ASSETS 183,566 123,900 140,698
Share capital 7 2,950 2,374 2,375
Share premium 163,185 117,766 117,823
Merger reserve 15,107 15,107 15,107
Share option reserve 3,593 2,948 3,316
Currency translation reserve 987 987 987
Accumulated losses (30,060 ) (43,872 ) (30,886 )
Non-controlling interests 777 2,972 3,441
TOTAL EQUITY 156,539 98,282 112,163
Provisions 9,192 7,393 8,578
Deferred tax liability 293 - 305
Total non-current liabilities 9,485 7,393 8,883
Trade and other payables 15,058 16,070 14,705
Corporation tax 2,484 2,155 4,947
Total current liabilities 17,542 18,225 19,652
TOTAL LIABILITIES 27,027 25,618 28,535
TOTAL EQUITY AND LIABILITIES 183,566 123,900 140,698
For the three and six months ended 30 June 2012 and 2011
Sub-total Non-controlling
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2011 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
Profit for the period - - - - - 12,971 12,971 3,863 16,834
Total comprehensive income for the period - - - - - 12,971 12,971 3,863 16,834
Issue of ordinary share capital 1 57 - - - - 58 - 58
Dividend - - - - - - - (3,394 ) (3,394 )
Share option charge - - - 383 - - 383 - 383
Reserve transfer - - - (15 ) - 15 - - -
As at 31 December 2011 2,375 117,823 15,107 3,316 987 (30,886 ) 108,722 3,441 112,163
Profit for the period - - - - - 726 726 1,406 2,132
Total comprehensive income for the period - - - - - 726 726 1,406 2,132
Issue of ordinary share capital 575 47,712 - - - - 48,287 - 48,287
Share issue costs - (2,350 ) - - - - (2,350 ) - (2,350 )
Dividend - - - - - - - (4,070 ) (4,070 )
Share option charge - - - 377 - - 377 - 377
Reserve transfer - - - (100 ) - 100 - - -
As at 30 June 2012 2,950 163,185 15,107 3,593 987 (30,060 ) 155,762 777 156,539
For the three and six months ended 30 June 2012 and 2011
3 months
30 June
3 months
30 June
6 months
30 June
6 months
30 June
US$'000 US$'000 US$'000 US$'000
Unaudited Unaudited Unaudited Unaudited
Cash flow from operating activities
Operating profit for the period 4,430 2,119 5,843 1,556
Depreciation/amortisation 1,323 2,754 5,469 7,217
(Decrease)/increase in trade and other payables (2,787 ) (4,644 ) 314 1,690
(Increase)/decrease in trade and other receivables (3,498 ) 2,608 (4,616 ) (1,964 )
Decrease/(increase) in inventories 1,679 (793 ) (353 ) (1,326 )
Increase in provisions 229 689 614 1,334
Share option charge 193 343 377 533
Net cash flows from operating activities 1,569 3,076 7,648 9,040
Income taxes paid (4,330 ) (3,003 ) (5,849 ) (3,003 )
Cash flows used in investing activities
Interest receivable 60 28 94 68
Interest payable - (6 ) - (18 )
Purchase of property, plant and equipment (4,269 ) (1,169 ) (7,945 ) (2,245 )
Purchase of intangible assets - deferred exploration (10,779 ) (4,152 ) (17,647 ) (7,982 )
Purchase of intangible assets - mining rights (14,959 ) - (14,959 ) -
Net cash flows used in investing activities (29,947 ) (5,299 ) (40,457 ) (10,177 )
Cash flows from financing activities
Proceeds from the issue of share capital (net of costs) - 13 34,551 365
Dividend - - (4,070 ) -
Net cash flows from financing activities - 13 30,481 365
Net decrease in cash and cash equivalents (32,708 ) (5,213 ) (8,177 ) (3,775 )
Cash and cash equivalents at start of period 53,386 22,371 28,905 20,907
Exchange (losses)/gains on cash (380 ) 576 (430 ) 602
Cash and cash equivalents at end of period 20,298 17,734 20,298 17,734
For the three and six months ended 30 June 2012 and 2011

1. Basis of preparation

The condensed 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. 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 2011, which this interim consolidated financial information should be read in conjunction with. The financial information has been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting.

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 2012 and 30 June 2011 is unaudited, and has not been reviewed by the auditors.

The financial information for the year ended 31 December 2011 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 auditor's report on the statutory financial statements for the year ended 31 December 2011 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 the acquisition of Sega, a review was carried out on the residual values of certain plant items at Kalsaka and the values were adjusted accordingly. The impact was to reduce depreciation in the six month period by US$1.1m.

2. Segmental reporting

An analysis of the consolidated income statement by operating segment, presented on the same basis as that set out in the 2011 annual report, is set out below:

Kalsaka/Sega Yaoure Baomahun All other
US$'000 US$'000 US$'000 US$'000 US$'000
Three months ended 30 June 2012
External revenue 24,433 592 - - 25,025
Direct costs of production (12,992 ) (219 ) - - (13,211 )
Other operating and administrative costs (2,338 ) (912 ) - (2,372 ) (5,622 )
Segmental result - EBITDA 9,103 (539 ) - (2,372 ) 6,192
Exploration expenditure 2,139 4,122 3,968 398 10,627
Other capital expenditure 1,990 216 2,217 3 4,426
Mining rights 26,326 - - - 26,326
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
Six months ended 30 June 2012
External revenue 45,698 1,707 - - 47,405
Direct costs of production (24,903 ) (1,448 ) - - (26,351 )
Other operating and administrative costs (3,775 ) (1,803 ) - (3,974 ) (9,552 )
Segmental result - EBITDA 17,020 (1,544 ) - (3,974 ) 11,502
Exploration expenditure 3,456 6,081 7,756 551 17,844
Other capital expenditure 3,023 240 4,909 33 8,205
Mining rights 26,326 - - - 26,326
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

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

3 months ended
30 June
3 months ended
30 June
6 months ended
30 June
6 months ended
30 June
US$'000 US$'000 US$'000 US$'000
Revenue for reportable segments 25,025 23,453 47,405 50,025
Change in accrued revenue for gold bullion in stock (1,101 ) (2,070 ) 124 (2,250 )
Revenue for interim financial statements 23,924 21,383 47,529 47,775

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

3 months ended
30 June
3 months ended
30 June
6 months ended
30 June
6 months ended
30 June
US$'000 US$'000 US$'000 US$'000
EBITDA for reportable segments 6,192 6,518 11,502 11,146
Depreciation and amortisation (1,323 ) (2,754 ) (5,469 ) (7,217 )
Share based payments (193 ) (343 ) (377 ) (533 )
Net interest received 60 22 94 50
Change in accrued profit for gold bullion in stock (668 ) (1,036 ) 158 (1,238 )
Exchange rate variance (338 ) 631 (486 ) 1,002
VAT provided in period 380 (323 ) 85 (1,004 )
Profit before taxation 4,110 2,715 5,507 2,206

3. Earnings/(loss) per share

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

3 months
30 June
3 months
30 June
6 months
30 June
6 months
30 June
Shares Shares Shares Shares
Weighted average number of ordinary shares in issue for the period
- Number of shares with voting rights 161,520,465 131,839,828 147,964,420 131,675,176
- Effect of share options in issue 870,215 2,489,291 1,392,044 -
- Total used in calculation of diluted earnings per share 162,390,680 134,329,119 149,356,464 131,675,176
Profit/(loss) for the period attributable to owners of the parent (US$'000)
871 726 (582 )
Earnings/(loss) per share
- Basic (cents per share) 1.19 0.66 0.49 (0.44 )
- Diluted (cents per share) 1.18 0.58 0.49 (0.44 )

In the six months ended 30 June 2011 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. The total of the potentially dilutive share options effect was 2,821,008.

4. Intangible assets

Exploration and
US$'000 US$'000 US$'000
At 1 January 2011 30,223 22,242 52,465
Additions - 10,217 10,217
At 30 June 2011 30,223 32,459 62,682
Additions - 11,478 11,478
At 31 December 2011 30,223 43,937 74,160
Additions 26,326 17,844 44,170
At 30 June 2012 56,549 61,781 118,330
At 1 January 2011 4,114 - 4,114
Charge for the period 902 - 902
At 30 June 2011 5,016 - 5,016
Charge for the period 1,117 - 1,117
At 31 December 2011 6,133 - 6,133
Charge for the period 464 - 464
At 30 June 2012 6,597 - 6,597
Net book value
At 30 June 2012 49,952 61,781 111,733
At 31 December 2011 24,090 43,937 68,027
At 30 June 2011 25,207 32,459 57,666

5. Property, plant and equipment

Assets in the
course of
and associated
property, plant
and equipment
Motor vehicles,
office equipment,
fixtures and
US$'000 US$'000 US$'000 US$'000
At 1 January 2011 - 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
Additions - 949 651 1,600
Disposals - (24 ) - (24 )
At 31 December 2011 - 73,267 5,918 79,185
Additions 4,413 3,114 678 8,205
Transfer - - -
At 30 June 2012 4,413 76,381 6,596 87,390
At 1 January 2011 - 44,439 2,978 47,417
Charge for the period - 6,960 388 7,348
Exchange difference on retranslation - 133 (133 ) -
At 30 June 2011 - 51,532 3,233 54,765
Charge for the period - 6,114 858 6,972
Disposals - (5 ) - (5 )
At 31 December 2011 - 57,641 4,091 61,732
Charge for the period - 3,862 509 4,371
At 30 June 2012 - 61,503 4,600 66,103
Net book value
At 30 June 2012 4,413 14,878 1,996 21,287
At 31 December 2011 - 15,626 1,827 17,453
At 30 June 2011 - 20,810 2,034 22,844

6. Inventories

As at
30 June
As at
30 June
As at
31 December
US$'000 US$'000 US$'000
Consumable stores 1,886 1,614 2,358
Ore stockpiles 5,780 1,086 6,544
Gold in process 8,009 10,296 7,347
Gold bullion 2,059 2,068 2,026
17,734 15,064 18,275

7. Share capital

As at
30 June
As at
30 June
As at
31 December
US$'000 US$'000 US$'000
200,000,000 Ordinary Shares of 1p each 3,080 3,080 3,080
No. No. No.
Issued and Fully Paid:
Ordinary shares of 1p each 168,047,937 131,842,026 131,897,937
US$'000 US$'000 US$'000
Issued and Fully Paid:
Ordinary shares of 1p each 2,950 2,374 2,375

During the period 36,150,000 ordinary shares were issued as follows:

On 8 March 2012, 150,000 ordinary shares of 1p were issued at 74p in respect of the exercise of share options.

On 22 March 2012, by way of placing, 25,000,000 ordinary shares of 1p were issued at 92p.

On 24 March 2012, 11,000,000 ordinary shares of 1p were issued at 62.75p in respect of the acquisition of the Sega Gold project in Burkina Faso.

8. Contingent liabilities

As stated in note 21 of the Annual report and accounts for the year ended 31 December 2011, the Company received a proposal for additional costs sustained by the mining contractor at the Yaoure Mine totalling US$9.2m in February 2011.

An updated claim was made in June 2011 totalling a further US$5.4m. Whilst the situation remains unresolved the Company has received 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.

The terms of the contract clearly state that the rates set out therein shall apply regardless of the difficulty in performing the works under the contract, such that the majority of the additional costs claimed cannot be recovered under the contract.

9. Asset acquisition

On 23 May 2012 the Company completed the acquisition of the Sega Gold Project in Burkina Faso from Orezone Gold Corporation. Consideration totalled US$27.7m and was settled as follows:

Cash 15,551
11,000,000 ordinary share of 1p at a premium of 64.75p 11,366
Acquisition fees 743

10. Related party transactions

Following the appointment of John McGloin as Executive Chairman on 28 May 2012, Mr McGloin was granted 1,680,480 on 6 July 2012 at an exercise price of 62.75p per share.

Following the resignation of John Gordon Cluff as Executive Chairman on 28 May 2012, a bonus payment totalling US$0.65m was made in recognition of his contribution to the Group.

This 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 report, including, without limitation, the positioning of the Company for future success, anticipated production at Kalsaka and cash flow from Kalsaka, expected grade of material processed from Sega, the finalisation of a fiscal stability agreement with the Sierra Leone Government, commencement of production at Baomahun, statements regarding the exploration, drilling results and potential future production at Yaoure, Kalsaka and Baomahun, the timing of the feasibility study for 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, the Company's ability to delineate sufficient sulphide resources for the development of a CIL/CIP operation, 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.

Non IFRS Measures - EBITDA (Earnings Before Interest, Income Taxes, Depreciation and Amortization), cash cost per ounce, pre-tax cash margin 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, pre-tax cash margin and average realised gold price are measures that are considered key measures by Cluff Gold in evaluating the Company's operating performance. However, EBITDA, cash cost per ounce and average realised gold price are not measures of financial performance, nor do they have a standardized meaning prescribed by IFRS, 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 IFRS 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.

Peter Brown is a "Qualified Person" within the definition of National Instrument 43-101 and has verified the data disclosed in this release, including sampling, analytical and test data underlying the information contained herein, and reviewed and approved the information contained within this announcement. Mr Brown (MIMMM) is the Group Exploration Manager.

i See the technical report titled "Technical Review of the Kalsaka Gold Mine, Burkina Faso" dated 16 October 2008 and filed on SEDAR
ii See the technical report titled "Technical Report on the Mineral Resource of the Sega Gold Project" and dated 18 January 2010, previously prepared by Orezone Gold Corporation and filed on SEDAR
iii See Company's press release, "Significant Resource Increase at Baomahun", dated 5 September 2011 and the technical report titled, "A 43-101 Technical Report Mineral Resource Estimate at the Baomahun Gold Project, Sierra Leone" dated 20 October and filed on SEDAR
iv See Company's press release, "Baomahun Exploration Results and Feasibility Study Update", dated 29 February 2012
v See Company's press releases: "Further Drilling Results From Yaoure Project", dated 14 August 2012; "Significant Drilling Results from the Yaoure Project" dated 20 June 2012; and "Yaoure Project Drilling Results" dated 19 January 2012


Contact Information

  • Cluff Gold plc
    John McGloin
    +44 (0)20 7340 9790

    Cluff Gold plc
    Peter Spivey
    Chief Executive Officer
    +44 (0)20 7340 9790

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

    Cluff Gold plc
    Katharine Sutton
    Head of Investor Relations
    +44 (0)20 7340 9790

    Canaccord Genuity Limited
    (Nominated Adviser & Broker, London)
    John Prior
    +44 (0)20 7523 8350

    Canaccord Genuity Limited
    (Nominated Adviser & Broker, London)
    Sebastian Jones
    +44 (0)20 7523 8350

    Canaccord Genuity Limited
    (Nominated Adviser & Broker, London)
    Joe Weaving
    +44 (0)20 7523 8350

    Pelham Bell Pottinger
    (Financial Public Relations)
    Charlie Vivian
    +44 (0)20 7861 3232

    Pelham Bell Pottinger
    (Financial Public Relations)
    Daniel Thole
    +44 (0)20 7861 3232

    Pelham Bell Pottinger
    (Financial Public Relations)
    James MacFarlane
    +44 (0)20 7861 3232