Projects - Kalsaka, Burkina Faso

Key Points 

• JORC-compliant Total Mineral Resource of 790,000 ounces.
• JORC-compliant Total Reserve of 323,000 ounces (at a gold price of US$525 per ounce).
• Ore bodies amenable to open-pit mining and heap leach processing methods.
• Cluff Gold  has a 78% ownership in the Kalsaka Gold Project, the remaining interest being held by the Company's local partner, IMAR-B (12%) and the Government of Burkina Faso (10% free-carried interest).
• 20 year Mining and Water permits granted.
• Construction on schedule to commence production in H2, 2008 at an annualised rate of 60,000 ounces with significant potential to increase.

Kalsaka Hills Facing North-East

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 Licence

Cluff Mining (West Africa) Limited is the operator of a joint venture on the project. Part of the project is covered by an exploitation decree which is held by the Kalsaka Exploitation Company. The decree covers an area of some 25km²   for an initial term of twenty years.

The remaining part of the project area is under a joint venture, with IMAR-B. Under the joint venture agreement, Cluff Mining (West Africa) Limited is required to fund 100% of exploration expenses.

ROMWALL construction at Kalsaka

Leach pads areas under construction at Kalsaka

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 Location and History

The project is located approximately 150km north west of Ouagadougou, the capital of Burkina Faso, and contains an oxide gold mineral resource that has already been demonstrated, by a feasibility study, to be technically amenable to open-pit mining and processing via heap leaching.

Schematic section through Kalsaka Syncline

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Resources

The Company has updated the bankable feasibility study of the Kalsaka project to reflect current capital and operating costs, a gold price of US$525 per ounce out of a resource estimate of 790,000 ounces, and the project has a JORC-compliant project reserve of 323,000 ounces of gold. The project economics reflect a higher gold price than assumed in previous studies. The higher gold price has compensated for increased capital and operating costs, due primarily to higher fuel, construction and material costs. Drilling of known satellite prospects in order to increase the reserves will be undertaken after bringing the project into production.

Classification	Tonnes (millions)	Grade (g/t.Au)	Gold Content (Oz/Au)
Measured	6.2	1.7	346,000
Indicated	5.9	1.5	287,000
Inferred	3.3	1.5	157,000

(Based on a 0.5 g/t Au cut-off)

Classification	Ore Tonnes (millions)	Grade (Au g/t)	Metal Content (Ounces)
Proved	3.7	2.0	238,000
Probable	1.4	1.9	85,000
Total Ore Reserves	5.1	2.0	323,000

(Based on US $525 per ounce gold price)

The Yako permit lies adjacent to the Kalsaka permit area and provides potential for increased mill feed to the Kalsaka project.  Currently, the permit has a JORC compliant resource of 150,000 ounces within a highly prospective trend.

The Yako permits comprise an aggregate area of approximately 442km²  situated to the south of, and continuous to, Kalsaka. The permits are currently held by the local subsidiary under exploration licences (with a 10% free carried government interest in any production and 2% royalty for AAC).   

 

 

Planview of Kalsaka Project orebodies and drilling

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 Development

In October 2006 the Company took the decision to go ahead with the development of the Kalsaka Gold Mine. As such, the Company engaged the services of Banlaw Africa Ltd (“Banlaw”) as the mining contractor and Anthony Smith (“Tony Smith”) as project engineer. Banlaw is a company based in Ghana and provides contract mining and earthworks civil engineering to mining companies in West Africa. Tony Smith is a metallurgical engineer with over 20 years’ experience in the mining industry, mainly in Africa and Australia. He has previously managed the development, construction and operation of various heap leach projects, including the Ayanfuri Gold project in Ghana for Cluff Resources plc. 

Warehouse erection at Kalsaka

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Development Status

Mine construction and development is on course with production scheduled to commence in the second half of 2008. Most of the steel work and plant equipment have now been delivered to the site and the mining contractor has commenced pre-stripping.

 

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 Short-term Strategy

• Complete construction of the heap leach facility
• Commence production in the second half of 2008, building up to an annual production rate of 60,000 ounces of gold
• Undertake exploration drilling around Kalsaka targeting known satellite deposits
• Complete follow up exploration on the Company's nearby Yako licence which has an initial Inferred Resource estimate of 150,000 ounces of gold. (Cluff's attribuatable resource -135,000 ounces of gold) 

 

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Qualified Person:
Douglas D Chikohora has reviewed the information on Kalsaka, Burkina Faso contained on this web page . Douglas D Chikohora, Msc, MIMMM, CEng, is the Technical Director of the Company.

   

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Downloads:

• Final Kalsaka Feasibility Study (prepared by SRK Consulting)
• Kalsaka Feasibility Study (prepared by SRK Consulting)
• Kalsaka Technical Due Diligence Review (Prepared by L.R. Kilpatrick Associates INC).

Last updated: 2008/05/06 03:35:50 PM