Baomahun Sierra Leone
Highlights Baomahun is Cluff Gold’s flagship development-staged project in Sierra Leone, wholly owned by the Company. An updated resource estimate, consisting of 2.1Moz Au in measured and indicated resources and 0.9Moz Au in inferred resources, is hosted in an area of approximately 2 sq. km, while the total project licence area is 136 sq. km. A 3D visualisation of our updated resource model can be found
here.
The Company has a two-fold strategy for Baomahun: to advance towards production with the current resources while delineating additional ounces along the 12km strike.
A Preliminary Assessment for the immediate resource area was completed in August 2010 and generated positive results. The Preliminary Assessment was based on a previous resource estimate of 1.4Moz Au in measured and indicated categories and 1.0Moz in inferred resources, a steady state throughput rate of 1.9Mtpa (1.5Mtpa from open pit operation and 0.4Mtpa from underground), expected annual production of 157,000 ounces per annum, cash cost of US$500/oz and capex of US$195M. At a gold price of US$1,100/oz, this generated a 10% NPV of US$172M and an IRR of 31%.
The Company is advancing the Baomahun Project towards bankable feasibility study, which is due for completion in H1 2012, and development thereafter. SRK Consulting Limited has completed an initial open pit mine schedule based on a US$1,150 per ounce gold price, which contained 1.2 million ounces of indicated resources at an average diluted grade of 2.23g/t and a strip ratio of 12.6:1. The indicative open pit also contains 0.1 million ounces of inferred resources which have been treated as waste in the initial analysis. This generates a robust eight year mine life, producing 1.1 million ounces of gold at an average rate of 135,000 ounces per annum.
Further optimisation work continues, not least due to the initial results of geotechnical test-work received during Q4 2011 which indicated that the open pit slope stability is stronger than originally estimated, allowing pit wall angles to be increased with a corresponding reduction in the strip ratio. Additionally, hydro-electric power (HEP) has the potential to significantly reduce operating costs and hydrological monitoring is underway as a prerequisite to an HEP feasibility study.
As the second branch of the two-fold strategy, the Company is also focusing on demonstrating the significant upside potential at Baomahun. In December 2010, seven highly conductive zones were identified as high priority drill targets from the results of an airborne VTEM survey. Each zone is interpreted as having strikes and dips similar to mineralisation in the existing resource area. A trenching programme focused on the seven drill targets is ongoing, with a total of 1,049 metres completed across three targets to date.
Two exploration drilling rigs have commenced work at the Zone 5 prospect as part of the diamond drilling programme, with an additional rig expected to arrive on site during June 2011 to further accelerate the drilling campaign to a rate of 2,000 meters per month. Intercepts from the first hole assayed from Zone 5 are as follows:
• 5 metres @ 1.59g/t from 29 metres
• 2 metres @ 5.77g/t from 81 metres (including 1m @ 11.1g/t)
Although the widths and grades are not of themselves comparable with the resources delineated at Baomahun to date, these first results are fundamental to the along strike exploration programme at Baomahun, and support the strategy to follow up on the VTEM survey anomalies.
A budget of US$22 million has been allocated to Baomahun for 2011 for the completion of the bankable feasibility study at Baomahun and extending resource base along strike at Baomahun.
Basis for Technical Disclosure The technical information contained on this webpage, and more generally contained on this website pertaining to Baomahun, is based on the technical report entitled "Technical Review of the Baomahun Gold Exploration Project, Sierra Leone" dated as of August 12, 2010 and prepared by Dr. John Arthur and Dr. Chris Bonson, who are "qualified persons" (as such term is defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects) and independent of Cluff Gold plc. A copy of the report can be found by clicking on the link entitled "Baomahun NI43-101.pdf" under "Related Links".