Sierra Eye: Junior mining Cluff Gold finding good grades in Sierra Leone

Algy Cluff, one of the more colourful British entrepreneurs in the mining sector, floated Cluff Gold, his latest mining venture, on AIM in December 2004. The company, ticker symbol CLF, is currently capitalised at £24 million (approximately US$47 million), is concentrating on gold and diamonds in West Africa and has a portfolio of mining and exploration interests in Sierra Leone, Côte dIvoire, Burkina Faso and Mali. The attributable resource base stands at over one million ounces and the short term aim is to acquire and develop three million resource ounces while the medium term aim is to have the capacity to produce three million ounces per annum. The four properties currently in hand are as follows: Baomahun, Sierra Leone; the Angovia project at Mt. Yaoure, Côte d'Ivoire, Kalsaka in Burkina Faso and Kabasso in Mali. Baomahun is the most prospective of these projects and the company has recently (11th January) released fresh drilling results. Cluff has the right to earn a 60% interest in the project on the earlier of incurring exploration expenditure of US$5 million or of completing a bankable feasibility study. The right is to be acquired from Winston Mines, which owned the two exploration licences over Baomahun, on an area of approximately 137 square kilometres. Baomahun is located roughly 180 kilometres to the east of Freetown in the Southern Province of Sierra Leone. The geological setting is similar to Lake Victoria gold fields in Tanzania. Prior to the latest drill results, five mineralised zones had been identified, over a combined strike length of 3.4 kilometres. The three most prospective zones so far are the Western, Eastern and Central Zones. The Eastern Zone, which is the primary target, has already thrown up a resource of approximately 205,000 ounces, which the independent consultants believe is conservative. The Central Zone has shown intercepts over 300 metres of strike, identifying 22.3 metres at 5.09 grammes/tonne, 19.9 metres at 9.4 g/t and five metres at 8.78 g/t. The site was worked in the late 1980s and early 1990s, including pilot mining, heap leach viability studies and substantial local infra structure development, including a 17 kilometre road to the site. The company believes that the deposit at Baomahun has the potential to host over one million ounces of gold and recent drill results would certainly underpin that view. The current JORC resource stands at 880,000 ounces of gold, but the drill programme to date has covered only 25% of the 12 kilometre strike. The Western Zone, which is the area under focus in this years drill programme, had prior to the latest set of results shown two areas with parallel trends with gold-in-soil anomalies over one kilometre of strike each, with another area containing anomalies over 900 metres of strike. The objective of the 2007 programme is as follows: to infill drill the known mineralised Zones in order to upgrade the resources to indicated and measured categories; to drill along strike and down dip to further increase the resource base; and to investigate new prospects outlined by geochemistry and trenching. The first three holes of this years programme have confirmed the along strike and down dip extension of the Western Zone. The first, drilled 100 metres to the north of the previously drilled section on the Zone, intersected seven metres at 5.76 g/t, extending from 97 metres down hole, and including one metre at 26.5 g/t. The second intersected eight metres at 7.67 g/t from 139 metres down hole and including three metres at 16.0 g/t, while the third hole intersected eight metres at 1.38 g/t gold from 80 metres down hole. Samples have been submitted to SGS Lakefield in South Africa for metallurgical test work; results are expected during this quarter. The second diamond drill rig is expected to arrive in February. Meanwhile on the other deposits, which are less advanced than Baomahun, the Angovia project in Côte dIvoire has had a validation drill programme of 2,500 metres carried out and has the potential for a resource of 800,000 ounces in oxides and sulphides; a JORC-compliant resource of 190,000 ounces has already been estimated. At Kalsaka in Burkina Faso there is a resource that is technically amenable to open-pit mining and heap leaching; a reserve of 290,000 ounces (at US$425/ounce) has been outlined, along with a resource of 600,000 ounces and this is believed to be conservative. In Mali, a joint venture agreement was signed in September 2005 over the Kabasso deposit under which Cluff acquires a majority interest in the research licence from Malian mining company Kaidel Mining. Taking the ounces outlined in the first three of these projects the company would appear already to be looking at a combined resource of 1.7 million ounces with the scope for considerably more.