LONDON, England, Feb. 11 /CNW/ - Cluff Gold, the West African focused gold mining company, announces an operational update as summarised below:
- Total production of 28,335 ozs from Kalsaka and 9,640 ozs from
Angovia since their respective commissioning on 30 June 2009 and
30 September 2009, equating to an annualised production rate of
- Total annual production from both producing mines of 76,753 ozs in
- Strong gold production to date in Q1 2010, and remains on track to
achieve the 100,000 ozs production target.
- Significant progress with scoping study for the Baomahun project in
Sierra Leone, with initial mine optimisation results indicating that
current defined resources are capable of sustaining a conventional
CIP/CIL processing facility to profitably recover more than 1m ozs of
Algy Cluff, Chairman and Chief Executive, said today "Our production results for last year were reasonable given the problems encountered which resulted in delays to commissioning. However, we are very encouraged by the strengthened production results to date in 2010 which are better than expected. We are confident that our 100,000 oz production target will be achieved this year. In respect of the scoping study, initial results indicate a significant recoverable resource with 75% of the mineralised trend yet to be drilled. We will continue to move forward with developing this flagship asset at Baomahun."
At the Company's Kalsaka Mine in Burkina Faso, a total of 28,355 ozs of gold were produced in the six months since commissioning. A number of issues reduced metallurgical recovery rates in Q4 2009, including exceptionally fine ore encountered at the top of the East pit which caused agglomeration issues, affecting gold flow from the heaps. These problems have since been rectified, with gold production in January 2010 exceeding 7,000 ozs. High gold recovery has continued in February - significantly ahead of budgeted production.
In 2010, Cluff has budgeted production of 70,000 ozs from Kalsaka. An updated estimate of resources and reserves as at 1 January 2010 is currently being completed for publication in Q1 2010. Exploration drilling will be undertaken this year on other prospects at Kalsaka to further increase the resources and reserves. There is also potential to further increase plant throughput with minimal additional capital expenditure.
Cash generation was constrained in 2009 due to delays in recovery of local VAT, with c. US$7m recoverable at 31 December 2009. The Company has undertaken significant ongoing work to resolve these issues and has recovered part of the outstanding amount in Q1 2010.
The Company intends to undertake a US$1.1 m capital expenditure programme in Q1 2010 to construct additional leach pads and further improve operational efficiency.
At the Angovia Mine in Côte d'Ivoire, delays in exiting commissioning were due to various issues in 2009 which culminated in a US$21.9m impairment charge at 30 June 2009, as previously announced in the Interim Report. However, since exiting commissioning, there have been significant improvements in the operational performance in Q4 2009, with total production being 9,582 ozs in the period.
2010 production is budgeted to be 30,000 ozs. An updated estimate of resources and reserves as at 1 January 2010 is currently being completed for publication in Q1 2010.
There is an ongoing exploration programme to identify additional resources following successes in 2009 which included the Blangan laterite, which proved to require low operating costs to exploit due to it being located near surface with minimal waste. Exploration in 2010 is focused on similar lateritic deposits to further enhance the resource and reserve position.
Work has continued at the Baomahun project in Sierra Leone, with the scoping study due for completion this quarter.
The scoping mine optimization indicates that current defined resources are capable of sustaining a conventional CIP/CIL processing facility to profitably recover more than 1m ozs of gold assuming 91% metallurgical recovery from over 12 Mt of ore sourced from both open pit and underground mining operations. Detailed mine schedules are being finalised by SRK Consultants in South Africa. Various scenarios have been examined, from 1.25 Mtpa to 2 Mtpa mill throughput. Processing plant and infrastructure capital is estimated to range from US$170m for a 1.25 Mtpa up to US$200m for a 2 Mtpa processing plant.
There is excellent potential to convert further resources already identified into additional reserves, to continue to add to underground resources at depth, as well as to further add new resources through continued exploration of the company's highly prospective mining lease area. This would further enhance the economics of the project. Additional drilling, which commenced in Q4 2009, is focused on identifying mineralised zones both along strike and down dip and has intersected high sulphide concentration usually associated with high gold values. This work is ongoing.
In addition to the ongoing work for the scoping study, work has commenced for some long lead aspects of the definitive feasibility study to ensure that this can be completed in a timely manner. A further significant drill programme is due to commence shortly to upgrade existing inferred resources to measured and indicated for inclusion in the Baomahun feasibility study which has a target completion in H1 2011. Additional exploration drilling work is also anticipated in 2010 to test the continuity of mineralisation along strike.
Cash & Debt Position:
The Group cash position at 31 December 2009 was US$2.55m. The Company has total debt facilities of US$10m, of which US$4m remains undrawn.
NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS PRESS RELEASE.
Douglas D Chikohora has reviewed and approved the information contained within this announcement. Mr Chikohora (MSc., MIMMM., CEng) is the Technical Director of the Company.
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.
SOURCE CLUFF GOLD PLC
For further information: For further information: Cluff Gold plc, J.G. Cluff, Chairman and Chief Executive, 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