Group forecasts production totalling 70,000 ounces by end of year.

Gold miner Cluff Gold has announced its H1 results for 2012, ending June 30, describing itself as maintaining a “strong financial position” despite industry-wide cost pressures.

The company recorded a 21% increased in its gold production at the Kalsaka mine, reaching 15,191 ounces compared to Q1’s 12,504 ounces.


Its Group EBIDTA increased 17% to US $6.2 million (£3.9m) compared to Q1 2012 however this was dubbed “flat” compared to 2011, as a stronger gold price off-set lower overall production.

The company is now offering a production guidance of 60,000 to 70,000 ounces, with the expectation of strengthened production and head grade in H2.

Cluff Golf has also launched an extensive exploration programme at Yaoure gold project.

Peter Spivey, chief executive of Cluff Gold, said: “In the first six months of the year Cluff Gold has delivered solid results from Kalsaka and we expect head grade and production to continue to strengthen quarter-on-quarter for the remainder of 2012.

“Kalsaka continues to generate robust cash flow and through the integration of the Sega project, which is expected to begin production in H1 2013, we anticipate that Cluff Gold will be able to maintain production in Burkina Faso until Baomahun comes on-stream. In the second six months of the year we expect to reach significant milestones at Kalsaka, Baomahun and Yaoure as we take further steps along the path to becoming a mid-tier producer.”

Cluff Gold is expected to accelerate is cash generating in the second six months of the year as Kalsaka’s production profile is anticipated to increase quarter-on-quarter.

It is maintaining the a growth strategy in West Africa as a mid-tier producer. The arrival of John McGloin on its executive board is said to have provided Cluff Gold with a team exhibiting the “necessary skills and experience to lead the company along its transformational path”.

Cluff Gold finished Q2 with total cash and liquid assets of $28.8 million (£18.4m), including $4.5m (£2.8m) of accrued income on gold sold at the end of the quarter and $4.0m (£2.6m) of bullion sold after the quarter end.

The company’s exploration expenditure was particularly high in Q2 due to the “favourable drilling conditions” in the end of the dry season. Exploration expenditure is expected to reduce significantly in the coming months with the onset of the wet season.

Cluff Gold said that is believes that extensive exploration of its existing licence areas is the key to its growth, so it will continue to invest heavily in future. The company outlined, however, that it will ensure its investments in exploration and infrastructure do not exceed its cash inflow from operations.

Cluff Gold’s former chief executive and chairman Algy Cluff stepped down formally at the company’s AGM, marking the end of a nine year period in which he oversaw the company’s listing on two stock exchanges and production at both Kalsaka and Yaoure.