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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Inca Pacific Resources | TSXV:IP | TSX Venture | Common Stock |
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Hot Features
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Cluff Gold ("Cluff Gold" or the "Company") (AIM:CLF)(TSX:CFG), the dual
AIM/TSX-listed West African focused gold mining company, is pleased to announce
its results for the quarter ended 30 September 2011.
HIGHLIGHTS
Financial
-- Strong Q3 EBITDA: US$22.0m (208% increase over US$7.1m in Q2 2011; Q3
2010: US$4.6m)
-- US$17.9m operating cash flow in the quarter used to fund the Baomahun
feasibility study and exploration work across the Group's portfolio of
assets
-- Cash balance of US$25.6m as of 30 September 2011
-- Discussions progressing with potential debt providers for the Baomahun
project
Operations
-- Robust Kalsaka quarterly production of 23,611oz (61% production increase
over 14,681oz in Q2 2011; Q3 2010: 16,986oz) as grades and strip ratio
improve over the quarter
-- Cash costs of US$756/oz at Kalsaka, less than US$800/oz for the first
time since Q2 2010
-- Stacking and leaching operations at Angovia contributed 1,147oz to the
Group, at a cash cost of US$1,168/oz
-- Company is on track for 70,000oz of production in 2011
Exploration
-- Baomahun resource increase with 2.1 million ounces of indicated
resources (25.6 Mt grading at 2.5g/t), 46% over the previously reported
measured & indicated resources
-- Strengthened exploration team following the appointment of Peter Brown
as Group Exploration Manager, with structured exploration plans defined
across the asset base
-- Baomahun: On-going in-fill drilling aimed at further enhancing the
existing resource base, in addition to along strike exploration plans
-- Kalsaka: Exploration drilling focused on a number of oxide targets to
increase the existing mine life as well as deeper RC drilling focused on
sulphide opportunities beneath the existing pits, with promising results
received to date
-- Angovia: Diamond drilling programme focused on the long term sulphide
potential, with visible gold in core apparent in multiple locations,
together with RAB drilling programme targeting lateritic ore bodies to
allow mining to re-commence in the near term
Peter Spivey, Chief Executive of Cluff Gold, commented:
"We are pleased to announce our Q3 2011 results, which include 23,611oz of
production from Kalsaka, our strongest quarter to date, which leaves us on track
to deliver on our 70,000oz production target for 2011. The strong operating cash
flow generated at Kalsaka continues to ensure that we have the balance sheet to
fulfil our exploration plans. Under the direction of our new Group Exploration
Manager, Peter Brown, we are implementing our newly defined programmes to
realise our exploration goals.
Our feasibility study at Baomahun will now be available in H1 2012 while we
await the issuance of the environmental licence from the Government of Sierra
Leone. Notwithstanding this, our confidence in the economic robustness of the
project is underlined by the recent board approval of a US$16 million budget to
commence long-lead infrastructure work commencing this quarter, enabling a rapid
construction once the final development decision is taken. In addition,
negotiations with potential debt providers are progressing well.
By bringing Baomahun into production, we remain committed to transforming Cluff
Gold to a mid-tier gold producer with the first gold pour expected during H1
2014."
The Company will be hosting a live and subsequently archived audio webcast of
the Q3 results presentation on the homepage of the company's website,
www.cluffgold.com, starting at 9:30am (GMT) on 29 November 2011.
About Cluff Gold
Cluff Gold is a gold developer-producer with assets in West Africa. The Company
generates significant cash flow through its Kalsaka gold mine in Burkina Faso.
The Company remains focused on its objective of becoming a mid-tier producer
through the development of its wholly-owned Baomahun project in Sierra Leone,
which is expected to contribute an additional 135,000oz of gold per annum, with
significant exploration potential along strike. With its experience of bringing
new mines into production and a project pipeline spanning Burkina Faso, Cote
d'Ivoire and Mali, the Company aims to further increase its production profile
with its highly prospective exploration work across all assets.
Baomahun is Cluff Gold's defining development gold project in Sierra Leone.
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(1).
The current resource base 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.
(1) See news release dated 5 September 2011 entitled "Cluff Gold: Significant
Resource Increase at Baomahun"
Operational Review
Baomahun, Sierra Leone
The Baomahun project is the Company's flagship development project in Sierra
Leone, where the Company is developing a two-fold strategy: to advance to
production by completing a definitive feasibility study based on the currently
defined resource areas, whilst continuing to explore along strike and at depth
to demonstrate the substantial resource potential for the Baomahun area.
In September 2011 the Company announced a resource upgrade, with Indicated
resources estimated at 2.1 million ounces of gold (25.6 Mt grading at 2.5g/t),
representing a 46% increase over the measured and indicated resources announced
in June 2010. Inferred resources now stand at 0.9 million ounces (9.6 Mt grading
at 2.8g/t).
Progress has been made on the definitive feasibility study, with SRK Consulting
Limited recently completing 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.
The feasibility study will now be available in H1 2012 due to a number of
factors pertaining to the environmental and social impact assessment. Most
importantly, the government of Sierra Leone has not yet issued the final
environmental licence to allow mine construction to commence, and it is now
anticipated that this will be granted in H1 2012.
In the meantime, US$16m has been set aside for early infrastructure work,
indicating the board's confidence in the economic robustness of the project.
This infrastructure work will include rehabilitation of the site access road,
upgrading of the exploration camp for the construction phase and detailed mill
design work to secure an appropriate delivery date. Subject to receipt of the
environmental licence, the current budget will also allow plant site earthworks
to commence in advance of the rains in July 2012. Full construction should
commence in November 2012, following the completion of the wet season, with a
relatively simple construction timetable due to the early infrastructure work
having been completed. Based on the foregoing, the Company currently expects the
first gold pour to occur in 2014.
The Company is taking advantage of the delay to the feasibility study to further
improve the economics of the project. Further in-fill drilling has started at
the resource area with a focus of upgrading the remaining inferred resources
within the provisional open pit to the measured or indicated categories. Results
from this programme are expected in Q1 2012 for inclusion in the feasibility
study.
Work is also on-going for the hydro-electric power project, located
approximately 40km from the mine project, which has the potential to
significantly reduce cash operating costs by providing low cost electricity for
the project. Following the receipt of a draft feasibility study, work has
commenced on permitting.
The Company is also assessing a number of options for financing the Baomahun
mine construction. In addition to discussions with a number of project finance
banks, the Company has held initial discussions with a number of other potential
financiers ranging from industrial users of gold to specialist mining finance
providers. The Company is committed to ensuring that the Baomahun finance is
raised in the most appropriate way, minimising dilution to existing shareholders
whilst ensuring that equity holders remain exposed to the long term gold price.
Exploration
In addition to the work on the current resource area, the Company is highly
encouraged by the significant potential to further expand the resource base at
Baomahun: both at depth, and within the remainder of our mining and exploration
permits.
Prior to the wet season, 7,100m of diamond drilling was completed across the
previously defined targets identified by the VTEM geophysical survey. Full
results from this programme are not yet available, but those received to date do
not reflect the grades and widths associated with the Baomahun project area.
However, a number of encouraging intercepts have been identified which confirm
that the geology of the resource area continues for at least 4km to the north
along the banded iron formation. By contrast, results from the targets in the
far north of the exploration permit, targets 2, 4 and 7, as defined in the
original VTEM survey, did not contain any gold, with the interpreted conductors
being associated with a different type of sulphide mineralisation. With this in
mind, additional 3D analysis of the VTEM results for the resource area, the 4 km
strike extension to the north and Target 6 (2 km to the east of the resource
area) is being carried out. A further structural analysis will also be completed
in early December, the results of which, together with the 3D VTEM analysis,
will define new drill targets within the resource area and its extensions.
Our exploration drilling programme has resumed, focusing on the areas
immediately to the north of the current resource area. An initial 11 hole
programme comprising 1,700m of diamond core drilling has started, with further
drilling to be planned once the results of the 3D VTEM analysis and structural
interpretation are available.
Kalsaka, Burkina Faso
Production Statistics Three months ending Nine months ending
(Unaudited) 30 Sep 30 Jun 30 Sep 30 Sep
2011 2011 2011 2010
Ore mined (t) 549,931 384,565 1,401,125 1,111,779
Waste mined (t) 3,208,880 2,972,875 9,735,270 7,835,481
Total tonnage mined (t) 3,758,811 3,357,440 11,136,395 8,947,260
Ore processed (t) 451,454 326,337 1,230,422 1,111,155
Average ore head
grade (g/t) 1.63 1.47 1.50 1.68
Gold production (oz) 23,611 14,681 55,129 57,817
Cash costs excl.
royalties (US$/oz sold) 756 882 805 720
Average realised
gold price (US$/oz sold) 1,705 1,507 1,551 1,172
EBITDA (US$m) 23,604 8,257 39,418 22,693
As previously discussed, 2011 was predicted to be a year of two halves at
Kalsaka: a relatively weak first half as mining was to continue in lower grade
areas, followed by a much stronger prediction for the second half as the grades
strengthen at depth.
Operating and financial results in Q3 2011 saw the fulfilment of this
prediction, with Kalsaka generating US$23.6m of EBITDA, an increase of 198%
compared to the average for the previous two quarters. This was driven by strong
production, which totalled 23,611oz in Q3 2011, 61% higher than in Q2 2011.
Year-to-date production of 55,129oz is on track to deliver our production
guidance of 70,000oz in 2011.
This significant jump in production is attributable to improved grades and a
high level of stacked ore. Grades increased by 11% to 1.63g/t in the quarter as
mining activities transitioned to higher grade areas of the ore body. Stacked
ore totalled 451,454t in the quarter, a 38% improvement from Q2 2011, due to
softer ore being processed with a higher resulting level of plant availability.
The transition to the deeper parts of the ore body also saw a 25% reduction in
strip ratio to 5.8. This, together with the improvement in grade, saw a
US$185/oz reduction in mining and processing costs for the quarter, which has
led to total cash costs of US$756/oz, representing a 14% improvement over Q2
2011.
The strong operating results were also assisted by the strong gold price in the
quarter. A total of 21,039 ounces of gold were sold at an average price of
US$1,705/oz, 13% higher than achieved in the previous quarter.
Exploration
At Kalsaka, the extension of the oxide mine life is a key priority, with work
nearing completion at a number of oxide targets. Resource updates are expected
to be available by Q1 2012.
Exploration drilling continues with two available rigs focused on a number of
different targets including the splays from the Goungre shear zone in the
Eastern part of the exploration licence, which appear to be highly prospective,
and the eastern extension of the East Pit. With strong cash flow from operating
activities at Kalsaka, additional funds can be made available to accelerate
exploration on any prospective targets with strong initial results.
Work has also commenced on the Yako licence, located 32km southwest of Kalsaka,
with an updated resource calculation targeted for Q1 2012 on an area where
inferred resources have previously been estimated. Follow up surface sampling
along portions of a 20km long regional soil anomaly has been carried out with a
view to defining anomalous zones for drilling in Q4 2011 and Q1 2012.
As well as focusing on the oxide potential, work is underway to define the
longer term sulphide opportunities at the Kalsaka licence area. Once the oxide
life of the project has been depleted, a CIL/CIP plant will be required to
process the sulphide ore with the existing heap leach equipment available for
re-location to other oxide targets.
To date, very little drilling has been carried out focused on sulphide targets
at Kalsaka. Historical drill intercepts from the sulphide zone at Kalsaka
include the following:
---------------------------------------------------------------
Hole ID FROM TO AU (g/t) Interval (m)
---------------------------------------------------------------
KRC0047 100 103 1.33 3
---------------------------------------------------------------
KRC0048 90 105 7.44 15
---------------------------------------------------------------
KRC0048 119 125 1.02 6
---------------------------------------------------------------
KRC0104 116 119 1.02 3
---------------------------------------------------------------
KRC0146 125 129 18.52 4
---------------------------------------------------------------
A further twelve RC holes have been drilled in 2011 to date. These have focused
on the areas below the existing K Zone Pit. Of the holes drilled, assay results
are currently available for eleven holes, with five holes containing sulphide
mineralisation as set out in the table below and six holes without sulphide
mineralisation:(2)
----------------------------------------------------------------------------
Hole ID FROM TO AU (g/t) Interval (m)
----------------------------------------------------------------------------
KRC0193 119 125 5.96 6 including 2m @ 15.8 g/t
----------------------------------------------------------------------------
KRC0193 145 150 1.12 5
----------------------------------------------------------------------------
KRC0289 145 150 6.63 5 incl. 3m @ 9.94 g/t
----------------------------------------------------------------------------
KRC0290 124 132 8.22 8 Incl. 2m @ 29.76 g/t
----------------------------------------------------------------------------
KRC0496 105 121 1.28 16
----------------------------------------------------------------------------
KRC0573 170 171 1.00 7
----------------------------------------------------------------------------
(2) The drilling programme at Kalsaka was undertaken by an independent drilling
contractor. All the drill holes collar positions were pegged using a total
station theodolite and re-surveyed after drilling. The drill collars after
survey were checked by onsite geologist. Each 1.0m RC chipping passing through a
cyclone is collected in a plastic bag and reduced in a multistage splitter to
get a split of between 2kg and 4kg. Sampling was done under the supervision of
the site geologist. Duplicate samples were collected at every 10th sample point
and one blank inserted at every 20th point. Samples were submitted to the
in-house laboratory, dried, crushed and pulverised to 85-90% passing 106
micrometres and analysed by bulk leach extractable gold assays for twelve hours.
Check assays were also submitted to external commercial laboratories in Burkina
Faso as part of the Company's quality control procedures.
A diamond drill rig is being sourced to gather additional geological and
geotechnical information as part of the sulphide evaluation programme. Further
work is also planned to investigate the sulphide potential below the existing
East Pit. The objective is for initial sulphide resource estimates to be
available during 2012.
Angovia, Cote d'Ivoire
Production Statistics Three months ending Nine months ending
30 Sep 30 Jun 30 Sep 30 Sep
(Unaudited) 2011 2011 2011 2010
Ore processed (t) 32,619 - 172,460 636,503
Average ore head
grade (g/t) 0.86 - 0.73 0.91
Gold production (oz) 1,147 920 5,514 15,852
Cash costs excl.
royalties (US$/oz sold) 1,168 n/a 1,722 902
Average realised
gold price (US$/oz sold) 1,682 1,587 1,485 1,169
EBITDA (US$m) 680 (500) (1,396) 4,091
The Angovia mine in Cote d'Ivoire remains on care and maintenance, with a dual
strategy focused on defining sufficient lower cost, near surface lateritic ore
bodies to allow the mine to recommence using the existing heap leach
infrastructure, and defining the long term sulphide potential.
Leaching of the previously stacked material resumed in late Q2 2011 after the
suspension of operation in March 2011, with the previously mined stockpile also
added to the heaps. This generated a total of 1,147oz gold in the quarter at an
average cash cost of US$1,168/oz, allowing Angovia to generate a positive EBITDA
despite operations remaining disrupted. Gold production is expected to continue
at a low level throughout Q4 2011 and Q1 2012 ensuring that the care and
maintenance operations remain funded from internally generated cash flow.
Plans for a full resumption of mining activities are dependent on defining
sufficient oxide resources to warrant mobilising a mining fleet to site.
Exploration to date in 2011 has focused on a number of areas where it is
expected that low grade, low strip-ratio lateritic ore bodies can be defined to
achieve this aim, and we look to be in a position to report on progress in this
regard in the annual results.
Although we are confident that additional oxide resources will be discovered to
allow the recommencement of production with lateritic material, the Company
remains focused on a long-term objective of bringing a CIL/CIP plant on line to
realise the significant sulphide resource potential currently being
investigated. Due to the existing mine infrastructure, abundant local water
sources, and the availability of cheap hydro-electric power from the nearby
Kossou barrage only 5km away, the resources needed to justify the construction
of a CIL/CIP plant should be lower than would be the case in locations without
these natural infrastructural advantages.
An initial 3,500m diamond drilling programme has commenced focusing on the
sulphide potential around the existing Prospect 4 pit and the Kongonza prospect.
Encouragingly, visible gold has been seen in core which suggests that a
significant increase to the existing defined sulphide resources can be achieved
in the near-term at both locations. Provisional assay results have been received
for the first three holes on the previously un-modelled East-West structures
within the Prospect 4 pit, with the best intercepts from each hole being 17.4m
at 2.64 g/t from 55.4m, 14.2m at 1.94 g/t from 48.7m and 7.0m at 1.17 g/t from
76.0m(3). Screen metallic assays are in progress for these holes, which provide
a better analysis of gold content where coarse visible gold is present, and full
results will be announced once these assays are received. A high resolution
magnetic survey of the whole exploration permit and further structural analysis
is planned for early 2012.
(3) The Angovia drilling programme was undertaken by an independent drilling
contractor. Drill cores used for assaying were sampled at a maximum of one metre
intervals and were cut with a diamond saw with one-half of the core placed in
sealed bags and sent to SGS preparation facilities in Yamoussoukro. The core
samples were then crushed to minus 4mm and split, with approximately 1.5 kg of
sample pulverised down to 85% passing 75 microns. Approximately 150 grams of the
pulverised sample was then shipped to SGS laboratory in Tarkwa (Ghana) where the
samples were analysed for gold by fire assay using a 50g sample. As part of the
Company's QA/QC procedures, internationally recognized standards were adhered
to, part of which includes inserting into the sample batches and using interlab
comparisons of samples submitted to the external lab.
Mamoudouya, Mali
The Mamoudouya licence in Mali is an early stage exploration project located
approximately 300km west of Bamako, the capital city of Mali, which covers 109
sq. km of highly prospective Mali Birimian Kinieba inlier belt.
Following the trenching work and very promising termite mound sampling completed
in H1 2011, which defined a gold anomaly measuring 3.5km by 0.8 km, a Gradient
Array Induced Polarisation ("IP") survey has commenced and 10,000m of RC
drilling is planned to commence later in the quarter.
Financial
As expected, Q3 2011 represents a reversal of fortunes for the Group following
the difficult trading conditions encountered in H1 2011, with record quarterly
revenue and profit before taxation. This has been achieved through a combination
of the continued growth in the gold price, improved strip ratio and grades at
Kalsaka and the benefits of the run off on the remaining Angovia gold heap. Half
year profit after tax of US$0.4m has improved to a profit totalling US$8.5m for
the nine months ended 30 September 2011 which also compares favourably to
US$2.5m for the nine months ended 30 September 2010.
EBITDA, the Group's preferred measure of operating performance, was US$22.0m for
the quarter and US$33.1m for the nine months ended 30 September 2011. This
performance was mainly driven by the production performance at Kalsaka, which
generated US$23.6m in the quarter (an increase of US$19.4m on Q3 2010) and
US$39.4m in the nine months to date (an increase of US$16.7m on 2010). In
addition, Angovia returned to profit in the quarter generating segmental revenue
of US$2.1m and EBITDA of US$0.7m from the remaining stacked material.
Whilst costs continue to rise due to inflation and price pressure from our main
suppliers; the improved grades and lower stripping ratio in the quarter has seen
the cash cost fall below US$800/oz at Kalsaka for the first time since Q2 2010
to US$756/oz.
Cash totalling US$17.9m was generated from operating activities in the quarter
which was used to fund the feasibility study at Baomahun and exploration work at
Baomahun, Kalsaka and Angovia of over US$8m. Cash balances increased by US$8.5m
in the quarter and by US$4.7m in the year to date.
As at 30 September 2011 cash totalled US$25.6m compared to US$8.2m at 30
September 2010 and US$20.9m at the beginning of the year. These funds have been
allocated to commence the initial infrastructure work at the Baomahun project in
Q4 2011 through to Q2 2012, together with funding the increased exploration work
at Kalsaka, Angovia and the prospects in Mali.
CLUFF GOLD PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the three and nine months ended 30 September 2011 and 2010
3 months 3 months 9 months 9 months
ended ended ended ended
30 30 30 30
September September September September
2011 2010 2011 2010
Notes US$'000 US$'000 US$'000 US$'000
Unaudited Unaudited Unaudited Unaudited
Continuing operations
Revenue 38,817 25,294 86,592 86,253
Cost of sales (19,462) (23,041) (56,831) (64,757)
----------- ----------- ----------- -----------
Gross profit
19,355 2,253 29,761 21,496
General and
administrative
expenses (3,288) (1,177) (6,374) (5,214)
Other operating costs (3,777) (3,120) (9,543) (8,886)
Exploration expenses - (168) - (573)
----------- ----------- ----------- -----------
Operating profit/(loss) 12,290 (2,212) 13,844 6,823
Investment income 29 4 97 8
Finance costs (649) (576) (65) (1,259)
----------- ----------- ----------- -----------
Profit/(loss) before
taxation 11,670 (2,784) 13,876 5,572
Income tax (3,188) (784) (5,016) (3,125)
----------- ----------- ----------- -----------
Profit/(loss) for the
period 8,482 (3,568) 8,860 2,447
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Attributable to:
Equity holders of the
parent company 6,351 (3,366) 5,769 509
Non-controlling
interests 2,131 (202) 3,091 1,938
----------- ----------- ----------- -----------
Profit/(loss) for the
period 8,482 (3,568) 8,860 2,447
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Other comprehensive
income
Exchange differences on
translating foreign
operations - (953) - (1,861)
----------- ----------- ----------- -----------
Other comprehensive
income for the period,
net of taxation - (953) - (1,861)
----------- ----------- ----------- -----------
Total comprehensive
income for the period 8,482 (4,521) 8,860 586
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Attributable to:
Equity holders of the
parent company 6,351 (3,328) 5,769 (1,350)
Non-controlling
interests 2,131 (1,193) 3,091 1,936
----------- ----------- ----------- -----------
8,482 (4,521) 8,860 586
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Earnings/(loss) per
share
Basic (cents per share) 8 4.82 (2.74) 4.38 0.41
Diluted (cents per
share) 8 4.73 (2.74) 4.30 0.41
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
CLUFF GOLD PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2011
As at As at
30 September 31 December
2011 2010
Notes US$'000 US$'000
Unaudited Audited
ASSETS
NON-CURRENT ASSETS
Intangible assets 3 62,441 48,351
Property, plant and equipment 4 19,939 27,885
Other receivables 2,192 2,324
Deferred tax asset 943 693
-------------- --------------
Total non-current assets 85,515 79,253
-------------- --------------
CURRENT ASSETS
Other receivables 4,834 9,074
Inventories 5 16,707 12,767
Cash and cash equivalents 25,559 20,907
-------------- --------------
Total current assets 47,100 42,748
-------------- --------------
TOTAL ASSETS 132,615 122,001
-------------- --------------
-------------- --------------
CAPITAL AND RESERVES
Share capital 7 2,374 2,365
Share premium 117,774 117,410
Merger reserve 15,107 15,107
Share option reserve 3,118 2,556
Currency translation reserve 987 987
Accumulated losses (37,507) (43,431)
-------------- --------------
TOTAL EQUITY ATTRIBUTABLE TO THE PARENT 101,853 94,994
Non-controlling interests 4,723 2,012
-------------- --------------
TOTAL EQUITY 106,576 97,006
-------------- --------------
NON-CURRENT LIABILITIES
Provisions 6 7,397 6,059
-------------- --------------
Total non-current liabilities 7,397 6,059
-------------- --------------
CURRENT LIABILITIES
Trade and other payables 14,177 15,920
Corporation tax 4,465 3,016
-------------- --------------
Total current liabilities 18,642 18,936
-------------- --------------
TOTAL LIABILITIES 26,039 24,995
-------------- --------------
TOTAL EQUITY AND LIABILITIES 132,615 122,001
-------------- --------------
-------------- --------------
CLUFF GOLD PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the three and nine months ended 30 September 2011 and 2010
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
------------------------------------------------------
Share Currency
Share Share Merger option translation
capital premium reserve reserve reserve
US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2010 2,224 101,993 15,107 3,952 2,674
----------------------------------------------------------------------------
Profit for the period - - - - -
Exchange translation
differences on
translating foreign
operations - - - - (1,859)
----------------------------------------------------------------------------
Total comprehensive
income for the period - - - - (1,859)
----------------------------------------------------------------------------
Issue of ordinary
share capital 5 87 - - -
Share option charge - - - 630 -
Reserve transfer - - - (230) -
----------------------------------------------------------------------------
As at 30 September
2010 2,229 102,080 15,107 4,352 815
----------------------------------------------------------------------------
Loss for the period - - - - -
Exchange translation
differences on
translating foreign
operations - - - - 172
----------------------------------------------------------------------------
Total comprehensive
income for the period - - - - 172
----------------------------------------------------------------------------
Issue of ordinary
share capital 136 15,336 - - -
Share issue costs - (6) - - -
Share option charge - - - 258 -
Reserve transfer - - - (2,054) -
----------------------------------------------------------------------------
As at 31 December 2010 2,365 117,410 15,107 2,556 987
----------------------------------------------------------------------------
Profit for the period - - - - -
----------------------------------------------------------------------------
Total comprehensive
income for the period - - - - -
----------------------------------------------------------------------------
Issue of ordinary
share capital 9 364 - - -
Share option charge - - - 717 -
Reserve transfer - - - (155) -
Dividend - - - - -
----------------------------------------------------------------------------
As at 30 September
2011 2,374 117,774 15,107 3,118 987
----------------------------------------------------------------------------
ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT
--------------------------
Non-
Accumulated controlling Total
losses Sub-total interests equity
US$'000 US$'000 US$'000 US$'000
As at 1 January 2010 (39,643) 86,307 - 86,307
----------------------------------------------------------------------------
Profit for the period 509 509 1,938 2,447
Exchange translation
differences on
translating foreign
operations - (1,859) (2) (1,861)
----------------------------------------------------------------------------
Total comprehensive
income for the period 509 (1,350) 1,936 586
----------------------------------------------------------------------------
Issue of ordinary
share capital - 92 - 92
Share option charge - 630 - 630
Reserve transfer 230 - - -
----------------------------------------------------------------------------
As at 30 September
2010 (38,904) 85,679 1,936 87,615
----------------------------------------------------------------------------
Loss for the period (6,581) (6,581) (304) (6,885)
Exchange translation
differences on
translating foreign
operations - 172 380 552
----------------------------------------------------------------------------
Total comprehensive
income for the period (6,581) (6,409) 76 (6,333)
----------------------------------------------------------------------------
Issue of ordinary
share capital - 15,472 - 15,472
Share issue costs - (6) - (6)
Share option charge - 258 - 258
Reserve transfer 2,054 - - -
----------------------------------------------------------------------------
As at 31 December 2010 (43,431) 94,994 2,012 97,006
----------------------------------------------------------------------------
Profit for the period 5,769 5,769 3,091 8,860
----------------------------------------------------------------------------
Total comprehensive
income for the period 5,769 5,769 3,091 8,860
----------------------------------------------------------------------------
Issue of ordinary
share capital - 373 - 373
Share option charge - 717 - 717
Reserve transfer 155 - - -
Dividend - - (380) (380)
----------------------------------------------------------------------------
As at 30 September
2011 (37,507) 101,853 4,723 106,576
----------------------------------------------------------------------------
CLUFF GOLD PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the three and nine months ended 30 September 2011 and 2010
3 months 3 months 9 months 9 months
ended ended ended ended
30 30 30 30
September September September September
2011 2010 2011 2010
US$'000 US$'000 US$'000 US$'000
Unaudited Unaudited Unaudited Unaudited
Cash flow from operating
activities
Operating profit/(loss)
for the period 12,290 (2,212) 13,844 6,823
Depreciation/amortisation 4,393 5,819 11,610 14,441
Increase/(decrease) in
trade and other payables 2,544 3,506 4,236 (1,552)
Increase in trade and
other receivables (38) (2,864) (2,002) (4,834)
Increase in inventories (1,433) (753) (2,759) (911)
Increase in provisions 4 276 1,338 923
Share option charge 184 261 717 630
------------ ------------ ------------ ------------
Net cash flows from
operating activities 17,944 4,033 26,984 15,520
------------ ------------ ------------ ------------
Income taxes paid (815) - (3,818) -
------------ ------------ ------------ ------------
Cash flows used in
investing activities
Interest receivable 29 4 97 864
Interest payable (5) (301) (23) (1,089)
Purchase of property,
plant and equipment (1,147) (1,335) (3,392) (4,911)
Purchase of intangible
assets (7,165) (2,050) (15,147) (4,372)
------------ ------------ ------------ ------------
Net cash flows used in
investing activities (8,288) (3,682) (18,465) (9,508)
------------ ------------ ------------ ------------
Cash flows (used in)/from
financing activities
Proceeds from the issue
of share capital 8 - 373 92
Dividends paid (380) - (380) -
------------ ------------ ------------ ------------
Net cash flows (used
in)/from financing
activities (372) - (7) 92
------------ ------------ ------------ ------------
Net increase in cash and
cash equivalents 8,469 351 4,694 6,104
Cash and cash equivalents
at start of period 17,734 8,131 20,907 2,273
Exchange losses on cash (644) (275) (42) (170)
------------ ------------ ------------ ------------
Cash and cash equivalents
at end of period 25,559 8,207 25,559 8,207
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
CLUFF GOLD PLC
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
For the three and nine months ended 30 September 2011 and 2010
1. Basis of preparation
The interim financial information has been prepared on the basis of the
recognition and measurement requirements of International Financial Reporting
Standards (IFRS) as adopted by the European Union (EU) and implemented in the
UK. The accounting policies, methods of computation and presentation used in the
preparation of the interim financial information are the same as those used in
the Group's audited financial statements for the year ended 31 December 2010,
which this interim consolidated financial information should be read in
conjunction with. The financial information has been prepared in accordance with
International Accounting Standard 34 - Interim Financial Reporting.
The financial information in this statement does not constitute full statutory
accounts within the meaning of Section 434 of the Companies Act 2006. The
financial information for the nine months ended 30 September 2011 and 30
September 2010 is unaudited, and has not been reviewed by the auditors.
After review of the Group's operations, financial position and forecasts, the
directors have a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. Accordingly, the
directors continue to adopt the going concern basis in preparing the unaudited
interim financial information.
2. Segmental reporting
An analysis of the consolidated income statement by operating segment, presented
on the same basis as that set out in the 2010 annual report, is set out below:
All other
Kalsaka Angovia Baomahun segments Total
US$'000 US$'000 US$'000 US$'000 US$'000
Three months ended 30
September 2011
External revenue 42,746 2,083 - - 44,829
Direct costs of production (17,091) (229) - - (17,320)
Other operating and
administrative costs (2,051) (1,174) - (2,297) (5,522)
-------------------------------------------------
Segmental result - EBITDA 23,604 680 - (2,297) 21,987
-------------------------------------------------
-------------------------------------------------
Exploration expenditure 2,191 - 3,038 95 5,324
Other capital expenditure 464 559 161 44 1,228
-------------------------------------------------
-------------------------------------------------
Three months ended 30
September 2010
External revenue 20,200 5,360 - - 25,560
Direct costs of production (14,853) (3,541) - - (18,394)
Other operating and
administrative costs (1,196) (250) - (1,162) (2,608)
-------------------------------------------------
Segmental result - EBITDA 4,151 1,569 - (1,162) 4,558
-------------------------------------------------
-------------------------------------------------
Exploration expenditure - - 1,356 - 1,356
Other capital expenditure 303 971 48 13 1,335
-------------------------------------------------
-------------------------------------------------
Nine months ended 30
September 2011
External revenue 86,508 8,346 - - 94,854
Direct costs of production (41,486) (7,355) - - (48,841)
Other operating and
administrative costs (5,604) (2,387) - (4,889) (12,880)
-------------------------------------------------
Segmental result - EBITDA 39,418 (1,396) - (4,889) 33,133
-------------------------------------------------
-------------------------------------------------
Exploration expenditure 3,444 - 11,905 192 15,541
Other capital expenditure 2,248 793 393 101 3,535
-------------------------------------------------
-------------------------------------------------
Nine months ended 30
September 2010
External revenue 67,547 18,972 - - 86,519
Direct costs of production (40,048) (12,072) - - (52,120)
Other operating and
administrative costs (4,806) (2,809) - (3,849) (11,464)
-------------------------------------------------
Segmental result - EBITDA 22,693 4,091 - (3,849) 22,935
-------------------------------------------------
-------------------------------------------------
Exploration expenditure - - 4,445 - 4,445
Other capital expenditure 2,255 2,583 60 13 4,911
-------------------------------------------------
-------------------------------------------------
A reconciliation of segmental revenue to that reported in the interim
financial statements is as follows:
3 months 3 months 3 months 9 months
ended ended ended ended
30 30 30 30
September September September September
2011 2010 2011 2010
US$'000 US$'000 US$'000 US$'000
Revenue for reportable
segments 44,829 25,560 94,854 86,519
Change in accrued revenue for
gold bullion in stock (6,012) (266) (8,262) (266)
----------- ----------- ----------- -----------
Revenue for interim financial
statements 38,817 25,294 86,592 86,253
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
A reconciliation of segmental EBITDA to the profit before tax reported in
the interim financial statements is as follows:
3 months 3 months 9 months 9 month
ended ended ended ended
30 30 30 30
September September September September
2011 2010 2011 2010
US$'000 US$'000 US$'000 US$'000
EBITDA for reportable
segments 21,987 4,558 33,133 22,935
Depreciation and
amortisation (4,387) (5,951) (11,610) (14,573)
Share based payments (184) (261) (717) (630)
Net interest
received/(payable) 24 (297) 74 (1,081)
Change in accrued profit
for gold bullion in
stock (4,002) (109) (5,240) (92)
Exploration costs
written-off - (575) - (575)
Exchange rate variance (1,201) 1,121 (199) 858
VAT provided in period (567) (1,270) (1,565) (1,270)
------------ ------------ ------------ ------------
Profit/(loss) before
taxation 11,670 (2,784) 13,876 5,572
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
3. Intangible assets
Deferred Exploration and
exploration Costs mining rights Total
US$'000 US$'000 US$'000
Cost
At 1 January 2010 16,654 30,223 46,877
Additions 4,445 - 4,445
Exchange difference on
retranslation (376) - (376)
------------------- ------------------ ----------
At 30 September 2010 20,723 30,223 50,946
Additions 1,633 - 1,633
Exploration costs written
off (7) - (7)
Exchange difference on
retranslation (107) - (107)
-
------------------- ------------------ ----------
At 31 December 2010 22,242 30,223 52,465
Additions 15,541 - 15,541
------------------- ------------------ ----------
At 30 September 2011 37,783 30,223 68,006
------------------- ------------------ ----------
Depreciation
At 1 January 2010 - 2,182 2,182
Charge for the period - 1,727 1,727
------------------- ------------------ ----------
At 30 September 2010 - 3,909 3,909
Charge for the period - 205 205
------------------- ------------------ ----------
At 31 December 2010 - 4,114 4,114
Charge for the period - 1,451 1,451
------------------- ------------------ ----------
At 30 September 2011 - 5,565 5,565
------------------- ------------------ ----------
Net book value
37,783 24,658 62,441
At 30 September 2011
------------------- ------------------ ----------
------------------- ------------------ ----------
At 31 December 2010 22,242 26,109 48,351
------------------- ------------------ ----------
------------------- ------------------ ----------
At 30 September 2010 20,723 26,314 47,037
------------------- ------------------ ----------
------------------- ------------------ ----------
4. Property, plant and equipment
Mine development
and associated Motor vehicles,
property, plant office equipment,
and equipment fixtures and
costs computers Total
US$'000 US$'000 US$'000
Cost
At 1 January 2010 65,047 3,999 69,046
Additions 4,178 733 4,911
Exchange difference on
retranslation (9) (36) (45)
------------------- ------------------- ----------
At 30 September 2010 69,216 4,696 73,912
Additions 1,390 77 1,467
Disposals - (60) (60)
Exchange difference on
retranslation (2) (15) (17)
------------------- ------------------- ----------
At 31 December 2010 70,604 4,698 75,302
Additions 2,591 944 3,535
Transfer 161 (161) -
------------------- ------------------- ----------
At 30 September 2011 73,356 5,481 78,837
------------------- ------------------- ----------
Depreciation
At 1 January 2010 27,575 1,986 29,561
Charge for the period 11,480 652 12,132
Exchange difference on
retranslation (1) (43) (44)
------------------- ------------------- ----------
At 30 September 2010 39,054 2,595 41,649
Charge for the period 5,385 441 5,826
Disposals - (55) (55)
Exchange difference on
retranslation - (3) (3)
------------------- ------------------- ----------
At 31 December 2010 44,439 2,978 47,417
Charge for the period 10,825 656 11,481
Transfer 133 (133) -
------------------- ------------------- ----------
At 30 September 2011 55,397 3,501 58,898
------------------- ------------------- ----------
Net book value
At 30 September 2011 17,959 1,980 19,939
------------------- ------------------- ----------
------------------- ------------------- ----------
At 31 December 2010 26,165 1,720 27,885
------------------- ------------------- ----------
------------------- ------------------- ----------
At 30 September 2010 30,162 2,101 32,263
------------------- ------------------- ----------
------------------- ------------------- ----------
5. Inventories
As at As at 31
30 September December
2011 2010
US$'000 US$'000
Consumable stores 1,971 1,381
Ore stockpiles 1,900 1,668
Gold in process 8,758 8,661
Gold bullion 4,078 1,057
------------ ------------
16,707 12,767
------------ ------------
------------ ------------
6. Provisions
Decommissioning,
mine closure and
site restoration
provision
US$'000
At 1 January 2010 4,578
Provision in period 923
--------------------
At 30 September 2010 5,501
Provision in period 558
--------------------
At 31 December 2010 6,059
Provision in period 1,338
--------------------
At 30 September 2011 7,397
--------------------
--------------------
7. Share capital
As at 30 As at 31
September 2011 December 2010
US$'000 US$'000
Authorised:
200,000,000 Ordinary shares of 1p each 3,080 3,080
-------------- --------------
-------------- --------------
No. No.
Issued and Fully Paid:
Ordinary shares of 1p each 131,852,026 131,269,331
-------------- --------------
-------------- --------------
US$'000 US$'000
Issued and Fully Paid:
Ordinary shares of 1p each 2,374 2,365
-------------- --------------
On 1 January 2011 182,565 ordinary shares of 1p were issued at 40p, on 17 March
2011 365,130 ordinary shares of 1p were issued at 40p, on 8 April 2011 25,000
ordinary shares of 1p were issued at 34p and on 4 August 10,000 ordinary shares
of 1p were issued at 52.75p; all in respect of the exercise of share options.
8. Earnings per share
The calculation of basic and diluted earnings per ordinary share is based on the
following data:
3 months 3 months 9 months 9 months
ended ended ended ended
30 September 30 September 30 September 30 September
2011 2010 2011 2010
Shares Shares Shares Shares
Weighted average number
of ordinary shares in
issue for the period
- Number of shares
with voting rights 131,848,222 122,765,595 131,733,492 122,666,694
- Effect of share
options in issue 2,431,435 1,048,739 2,431,435 1,048,739
------------ ------------- ------------ ------------
- Total used in
calculation of
diluted earnings per
share 134,164,927 123,814,334 134,164,927 123,715,433
------------ ------------- ------------ ------------
------------ ------------- ------------ ------------
Profit/(loss) for the
period attributable to
owners of the parent
(US$'000) 6,351,458 (3,366,270) 5,769,623 508,970
------------ ------------- ------------ ------------
------------ ------------- ------------ ------------
Earnings/(loss) per
share
- Basic (cents per
share) 4.82 (2.74) 4.38 0.41
- Diluted (cents per
share) 4.73 (2.74) 4.30 0.41
------------ ------------- ------------ ------------
For the 3 months ended 30 September 2010 the Company recorded a consolidated
loss attributable to the equity shareholders of the Company. Accordingly, share
options at that time were not dilutive and the diluted loss per share is the
same as the basic loss per share.
9. Contingent liabilities
As stated in note 21 of the Annual report and accounts for the year ended 31
December 2010 the Company received a proposal for additional mining contractor
costs at Angovia totalling US$9.2m. Whilst the situation remains unresolved the
Company has received further external advice that confirms that the current
provision of US$1.0m is, in the opinion of the directors the maximum payable
under the terms of the contract.
During the period a further claim has been made by the contractor, totalling
US$5.4m, in respect of costs incurred in 2011. Given that the contract has been
terminated the directors consider this additional claim to be wholly without
merit and accordingly have not made any further provisions.
This report includes certain "forward-looking information" within the meaning of
applicable Canadian securities legislation.
All statements other than statements of historical fact included in this report,
including, without limitation, the positioning of the Company for future
success, statements regarding the exploration, drilling results and potential
future production at Angovia, Kalsaka and Baomahun, the timing of the
feasibility study for Baomahun, and future capital plans and objectives of Cluff
Gold, are forward-looking information that involve various risks and
uncertainties. There can be no assurance that such statements will prove to be
accurate and actual results and future events could differ materially from those
anticipated in such statements. Important factors that could cause actual
results to differ materially from Cluff Gold's expectations include, among
others, risks related to international operations, the actual results of current
exploration and drilling activities, changes in project parameters as plans
continue to be refined as well as future price of gold. Although Cluff Gold has
attempted to identify important factors that could cause actual results to
differ materially, there may be other factors that cause results not to be as
anticipated, estimated or intended. There can be no assurance that such
statements will prove to be accurate as actual results and future events could
differ materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking statements. Cluff
Gold does not undertake to update any forward-looking statements that are
included herein, except in accordance with applicable securities laws.
Non IFRS Measures - EBITDA (Earnings Before Interest, Income Taxes, Depreciation
and Amortization), cash cost per ounce and average realised gold price are
financial measures used by many investors to compare mining companies on the
basis of operating results, asset value and the ability to incur and service
debt. EBITDA is used because Cluff Gold's net income alone does not give an
accurate picture of its cash generating potential. Management believes that
EBITDA is an important measure in evaluating the Company's financial
performance, ability to fund future capital expenditures and repay any future
project financing, and in determining whether to invest in Cluff Gold.
Similarly, cash cost per ounce and average realised gold price are measures that
are considered key measures by Cluff Gold in evaluating the Corporation's
operating performance. However, EBITDA, cash cost per ounce sold and average
realised gold price are not measures of financial performance, nor do they have
a standardized meaning prescribed by IFRS, and may not be comparable to similar
measures presented by other companies.
Investors are cautioned that EBITDA should not be construed as an alternative to
net income or loss determined in accordance with IFRS as an indicator of Cluff
Gold's performance or to cash flows from operating, investing and financing
activities of liquidity and cash flows. These measures have been described and
presented in this document in order to provide shareholders and potential
investors with additional information regarding the Company's operational
performance, liquidity and its ability generate funds to finance its operations.
Peter Brown is a "Qualified Person" within the definition of National Instrument
43-101 and has reviewed and approved the information contained within this
announcement. Mr Brown (MIMMM) is the Group Exploration Manager.
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