LONDON, England, Sept. 30 /CNW/ - Cluff Gold plc (AIM: CLF; TSX: CFG) ("Cluff" or the "Company"), the West African focused gold mining group, announces its results for the six months ended 30 June 2009. The Company is on course to achieving its forecast annualised production rate of 100,000 ounces of gold by the end of the current financial year.
Baomahun gold deposit, Sierra Leone (100% ownership)
- 7,000 metre drilling programme successfully completed to test
potential at depth
- Nine out of eleven holes intersect mineralisation in Central and
- Resource update underway, expected publication in October 2009
Kalsaka Gold Mine, Burkina Faso (78% ownership)
- New mining contractor commenced work in January
- Mining operation commissioned at the end of June
- Gold production for the first six months amounted to 26,772 ounces
- Cash operating cost for the period averaged US$595 per ounce
Angovia Gold Mine, Cote d'Ivoire (90% ownership)
- Larger mining fleet deployed in January
- Upgrade to agglomeration drum completed in April
- New oxide deposit identified within 2 km of plant site
- Impairment charge of US$21.9m at period end
- Listing on the Toronto Stock exchange in February (symbol "CFG")
- Successful placing raised gross proceeds of US$11.4m in March to
further develop the Baomahun gold deposit in Sierra Leone
- Cash at 30 June amounted to US$7.6m
Algy Cluff, Chairman and Chief Executive, said today, "I am pleased to report good progress by the Company in the first six months of this year. Operations at the Kalsaka Gold Mine reached standards set for successful commissioning with gold production of 26,772 ounces. Production for the full year is expected to be in the order of 60,000 ounces of gold. Whilst the Angovia Gold Mine did not meet forecast production in this period, I am pleased to report that both mining performance and grade are on the increase and I am confident that this operation will shortly exit commissioning. Unfortunately, the turn around has come too late to prevent the impairment of this operation and we have taken the prudent decision to write this asset down by US$21.9m at the period end.
The 7,000 metre drilling programme at the Baomahun gold deposit in Sierra Leone was successful in that nine out of the eleven holes drilled encountered mineralisation in both the Central and Eastern Zones. The results from the drilling demonstrate the down dip continuity of the mineralisation at grades and widths which we believe shows strong potential to support the development of an underground operation either alongside or subsequent to an open pit operation. A resource update is expected to be published in October 2009 and a revised scoping study will follow later in the first quarter of next year.
In the last quarter of this year I expect that the Company will be producing at an annualised rate of 100,000 ounces of gold. With this level of production, a robust gold price and continued success at Baomahun, I am optimistic about our future in West Africa."
The Group's operating loss before impairment charge is US$7.7 million. This operating loss has increased in the period due to an increase in the operating costs at Kalsaka and Angovia that are not directly attributable to mine commissioning, and are therefore included in the income statement rather than being capitalised within mine development costs.
Non-current assets have fallen since 31 December 2008, from US$121.3 million to US$89.7 million, due to a number of factors including the impairment charge for the Angovia Gold Mine, US$9 million of profits realised during the commissioning phase of the Kalsaka Gold Mine, and a transfer of inventories and tax receivables totalling US$8 million to current assets at the period end, reflecting the successful completion of the commissioning phase.
The Group's cash at 30 June 2009 totalled US$7.6 million, with debt of US$6 million drawn down from a US$10 million working capital facility with RMB Australia Holdings Ltd.
The Company's financial statements can be found at www.sedar.com.
NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS
This News Release includes certain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements other than statements of historical fact, included in this release, including, without limitation, the positioning of the Company for future success, statements regarding potential future production at Angovia and Kalsaka, exploration and drilling results at Baomahun, and future capital plans and objectives of Cluff Gold, are forward-looking information that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Cluff Gold's expectations include, among others, risks related to international operations, the actual results of current exploration and drilling activities, changes in project parameters as plans continue to be refined as well as future price of gold. Although Cluff Gold has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Cluff Gold does not undertake to update any forward-looking statements that are included herein, except in accordance with applicable securities laws.
In this New Release the term "cash operating cost" is used as a performance measure. Cash operating cost is used on a per ounce of gold basis. Cash operating cost per ounce is equivalent to mining operations expenses for the period divided by the number of ounces of gold sold during the period.
SOURCE CLUFF GOLD PLC
For further information: For further information: Cluff Gold plc, J.G. Cluff, E.Carr, Chairman and Chief Executive, Finance Director, Tel: +44 (0) 20 7340 9790; Evolution Securities Limited, Rob Collins, Tim Redfern, Tel: +44 (0) 20 7071 4300; Joanna Longo, Investor Relations (Canada), The Equicom Group, (416) 815-0700 ext 233, firstname.lastname@example.org; Simon Robinson, Investor Relations (U.K.), Farm Street Communications Ltd, +44 (0) 20 7099 2212, email@example.com