Algy Cluff Builds A US Fan Club For Cluff Gold
[ Note: Cluff Gold is CLF on London AIM exchnage FL ]
By Jack Hammer -- May 5, 2006 -- minesite.com -- MINEWS Story
Algy Cluff recently brought a whole swathe of American investors into AIM listed Cluff Gold, with the help of US investment bank BMO Nesbitt Burns. Accessing capital in the US made sense for Cluff on a number of levels. “I thought it would be interesting to test the water in the US,” he says. “Over here, the banks fall over themselves to give you project finance – for the first time I can remember - but it is still very competitive accessing money from fund managers.” To be fair he hasn’t tried that hard, thus far having laboured under the belief that Cluff Gold was too small to attract much interest from anyone.
But whereas the big American funds “were quite windy about AIM two years ago”, now, according to Mr Cluff, they are no longer worried about AIM, “or indeed Africa”. And a big advantage of having the likes of Nesbitt Burns on the share register is that, having commissioned technical due diligence from industry consultants Kilpatrick, the bank and its clients know what Cluff is potentially worth, and so are less likely to succumb to the charms of over-rated north American paper.
So what’s Algy Cluff got that’s attracting in the American heavyweights? When Cluff Gold came to the market back in 2004 the Kalsaka gold project in Burkina Faso was the core asset. But the company has come a long way in a short time. Kalsaka has come on leaps and bounds – it’s “fortunes have been transformed by the gold price”, says Mr Cluff – and a decision on development looks close. But that’s not what’s bringing the Americans in. US interest lies in the Baomahun asset in Sierra Leone. Cluff has the right to earn a 60 per cent interest in Baomahun from Harry Winston, now that the diamond merchant has established there are no diamonds on the property.
But although it’s of limited interest to Winston, the gold shows were very interesting to Cluff. So far Baomahun is already showing 4.54 million tonnes of ore with a mean grade of 3.6 g/t, giving 518,000 ounces indicated and inferred, as audited by SRK under the JORC code. But Baomahun is open at depth and along 9 kms of strike, and, according to the report prepared by Kilpatrick for Nesbitt Burns, offers the potential for the discovery of a high grade multi-million ounce deposit. Cluff has already put 4,600 metres of drilling into Baomahun, and will continue drilling into the summer.
If Cluff transforms itself into a producer by getting the green light on Kalsaka and also manages to deliver several million ounces on Baomahun then the faith of the Americans will have been repaid in full. With gold at its current levels, there’ll be smiles all round. Nonetheless, Cluff has other projects to fall back on if either of those assets doesn’t fly. In Cote d’Ivoire there’s an 800,000 ounce resource called Angovia. Although Angovia’s resource numbers aren’t compatible with a recognised reporting code, there’s already plant in place, so Mr Cluff’s assertion that it ought to be possible to get a mining operation there fully up and running for US$6-7million doesn’t look outlandish.
In Mali a US$1 million trenching programme on exploration ground on trend with Resolute’s 5million ounce deposit will get underway this summer. The Americans must surely derive further reassurance from the industry heavyweights that Mr Cluff has assembled to provide support to Cluff’s board. Bobby Danchin and Ed Haslam are well known and well experienced in Africa and Eileen Carr is no stranger to mining or Africa either. Mr Cluff now plans to market to UK institutions. “I’ve tried to keep it a simple story”, he says, and the institutions will no doubt appreciate that. The focus is clearly on West Africa, although Mr Cluff says he would consider “anything that has compelling geology in Africa.” As for future strategy, a hostile takeover from Algy Cluff doesn’t look imminent: “I think mining companies should grow by discovery not by acquisition”, he says. The company certainly seems to have enough to keep it busy for now.
Companies featured in this Story
Cluff Gold Plc (AIM-CLF)
