18th May 2006 07:01
Cluff Gold PLC18 May 2006 Cluff Gold Plc (the "Company") AGM Statement At the Company's AGM, to be held today at 10.00am at the offices of MaclayMurray & Spens, 1 London Wall, London EC2Y 5AB, the Chairman and Chief ExecutiveMr J G Cluff will be making the following statement: "Ladies and gentlemen, it is fair to say that, operationally speaking, yourCompany has progressed satisfactorily during the past twelve months addingsignificant value in particular at the Baomahun project in Sierra Leone and atthe Angovia project in the Ivory Coast. I must also mention the fund raising sponsored by BMO Nesbitt Burns which hasadded approximately £15 million to our treasury, providing us with a strongbalance sheet and enabling us to advance two of our projects towards production,whilst continuing an aggressive exploration programme elsewhere. I should addthat the larger proportion of the placing was taken by new North Americaninvestors, mostly specialist mining funds. Their support and that of NesbittBurns followed the commissioning, by Nesbitt Burns, of a due diligence exerciseinto the Company conducted by the Toronto based Kilpatrick and Associates.Amongst other comments Kilpatrick averred that Baomahun should evolve into amulti million ounce orebody. This is very much the view of our technical staffand it is our objective to validate that assertion during the current drillingcampaign, which will continue throughout the remainder of this year. Two of our non-executive directors, Edward Haslam and Bobby Danchin, havereturned from a visit to Baomahun and to Angovia this week and it is theirdispassionate view that Baomahun is indeed evolving into a substantial orebody.We will be announcing regular drilling results from hereon. This morning I canreport on the ongoing trenching programme which continues to yield notableresults such as 47m @ 1.41 g/t AU (including 8m @ 4.76 g/t) in trench 26; 11m @3.58 g/t AU in trench 29; 50m @ 1.52 g/t AU in trench 30 and 29m @ 1.14 g/t AUin trench 32. The importance of these results is that they suggest the possiblelinking of the Western and Central zones into one structure whose strike extentcould be more than two kilometres. In comparison, the current resource of518,000 ounces is hosted in structures with a combined strike of 700 metres. Ourprevious drilling programmes were conducted to a vertical depth of up to 150metres and at present the mineralisation is still open at depth and alongstrike. Accordingly, the present campaign provides for further evaluation ofthe orebodies to a vertical depth of 250 metres, as well as along strike belowthe encouraging trenching results that we are encountering in our ongoingtrenching programme. We will soon be in a position to announce the results ofthe first assays from this multifaceted exploration programme. The Baomahun project is already the largest gold project in Sierra Leone and Iam glad that I can assure you of the sound relationship we have developed withthe ministry of mines, and in particular with the minister, who is himself amining man, having trained at the Camborne School Of Mines, whom I have knownfor twenty-five years. I firmly believe that any difficulties which we mayencounter in Sierra Leone will derive not from political instability but ratherfrom damaged infrastructure. This has not impeded our activities to date but weforesee challenges in securing power generation commensurate with the scale ofthe project we envisage. I turn now to Angovia, a gold mine in the Ivory Coast which was in operationbetween 1998 and 2003 and is located on our 534 sq km exploration licence. Weare acquiring from the Ivorian state mining company, for a sum equivalent toapproximately $200,000, assets which include a significant part of the plant,all of the housing and other facilities. We are presently undertaking a resourcedefinition drilling programme which is planned to be completed during the nextthree months and which we hope will enable us to optimise the development of theoxide material currently estimated at between 200,000 and 300,000 ounces. Byreason of our acquisition of much of the plant we would anticipate developmentcosts under $10 million which we expect to fund without recourse to the banksfor project finance. The project's returns should therefore be eminentlysatisfactory. In addition to the oxide resource potential there is a 500,000ounce sulphide resource potential as previously announced. This resourcepotential is open along strike and at depth. We can therefore anticipate asustained level of production from that operation. The political circumstancesof the country have been complex for the past two years. It is now clear thatthe situation has stabilised and the de facto division of the country into twohalves, the legitimate government in the south and the rebellious factions inthe north, could well be resolved by national elections presently being planned.From our point of view, we judge that there is presently no consideration thatwill deter us from proceeding to mine our deposits. Moving now to Burkina Faso and the Kalsaka deposit. The reserves there have beenrecalculated by RSG Consultants and are estimated to be over 300,000 ounces. Theproject has a resource of approximately 600,000 ounces together with 150,000ounces at our nearby Yako prospect. In addition there are four identified drilltargets, which have been drill tested in the past with positive results, atKalsaka. The combination, therefore, of this level of ounces, complemented bythe significant increase in the gold price, have led your Board to determine toproceed with the development of the project which is expected to yield in theregion of 60,000 ounces per annum. We are now in the process of arrangingproject finance with our bankers, RMB Resources Limited. Politically speakingBurkina Faso remains stable. Our remaining project is an exploration licence in Mali on which we shallcommence drilling towards the end of the year. The emerging markets and the commodity markets have this week been assailed bysevere turbulence. One can only be philosophical about this and conclude thatit creates an attractive environment for a potential investment opportunity inthe Company." For further information, please contact: Cluff Gold Parkgreen CommunicationsJ.G. Cluff Cathy Malins / Annabel LeatherTel: +44 (0) 20 7340 9790 Tel: +44 (0) 20 7493 3713 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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