Dual AIM/TSX listed West African focused gold mining company Cluff Gold on Wednesday made public its Baomahun project exploration and feasibility study update. The highlight infill-drilling results included lengths between 3 and 31 metres with gold grades ranging from 1.4 grams per tonne (g/t) to as high as 7.9 g/t. The programme in total consisted of 33 holes over 7,024m reported Proactive Investors.
Cluff said its feasibility study is on track for delivery in H1 2012 (June 2012).This will incorporate additional results from a completed in-fill drilling programme in the resource area. However, an updated resource incorporating infill drill results is expected in April 2012.
Commenting on the activities of his company, Peter Spivey, Chief Executive Officer of Cluff Gold said: “We are pleased with our recent progress at Baomahun, which continues to underline the opportunity for Cluff Gold to achieve its objective of developing an open pit gold mine capable of producing over 130,000 ounces of gold per annum.
Exploration drilling along strike from the resource area has also recommenced. Results so far include intersections with lengths ranging from 2 to 10 metres and grades of 1 g/t to 4.1 g/t.
The miner said definitive feasibility study work is “progressing in the immediate resource area, where 2.1Moz of indicated resources (25.6Mt at 2.5g/t) and a further 0.9Moz of inferred resources (comprising 9.6Mt at 2.8g/t) have been delineated to date”.
The current resource base it furthered “is limited to only 1.5km of a total 12km strike length. Exploration drilling is on-going, targeting the 4km northerly strike extension of the current resource area.”
“We continue to see the Baomahun project developing into a world class mine, encompassing not only the initial open pit development that will be the subject of our feasibility study, but also the longer term potential for additional resources along strike, high-grade feed from underground sources, and cost efficient hydro-electric power generation de-coupling the project economics from the long term oil price” Spivey said.
Early infrastructural development work is on-going at Baomahun. The Company revealed it is “undertaking a number of site development initiatives whilst the feasibility study is being completed”.
It pointed out the “access road” from the town of Mongeri which it said “is being upgraded to ensure that site access does not cause any delays to the final mine construction timetable”.
The exploration camp it furthered is being “upgraded” to ensure what it described as “a seamless springboard” from which the early project team can commence its construction activities. Additional value created by the completion of a feasibility study for a run-of-river hydro-electric power station, demonstrating potential for significant operating cost savings was also made public by the miner.
The Company disclosed it has received a draft feasibility study, prepared by Knight Piesold Vancouver, setting out the “potential for a run of river hydro-electric power facility 40km north of the Baomahun project site”.
Cluff “envisages” that the capital cost for such a hydro-electric power station would be “funded by a third party”. The company intends to secure a Long Term “off-take agreement” at costs it said would be “significantly below the cost of generation through heavy fuel oil”.
The Miner announced that “a number of groups” including international development agencies and original equipment manufacturers, have expressed an interest in pursuing this opportunity.
Cluff also expects to agree the position of the forest boundary and environmental permit with the Sierra Leone government. Explaining it said the environmental permit is currently “subject to the final demarcation of a formerly unmarked forest boundary by the government”. Final resolution of this issue expected in Q1 2012 and will not “affect the physical project infrastructure footprint”.
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