Friday, 9 March 2012

Clifton Star Resources set for new beginnings at its Duparquet project

After almost eight months of hiatus, Clifton Star Resources (CVE:CFO) is starting fresh, as the company resumed trading Friday with president and CEO, Michel F. Bouchard at the helm, who took over from former chief executive Harry Miller in November.
In February, the company filed an updated NI 43-101 resource report for its Donchester property, part of its Duparquet project, which is located along the prolific Destor-Porcupine fault in the Abitibi region of Quebec.
A previous technical report on Donchester from June 2011 was deemed non-compliant with the requirements of NI 43-101 by the British Columbia Securities Commission (BCSC), prompting a cease trade order on Clifton Star's stock.
But as a result of the new estimate, the cease trade order was revoked on Monday, March 5, with the stock now trading after the TSX Venture Exchange gave its approval. The company also has a revamped website to ensure compliance.
The latest NI 43-101 compliant report for Donchester gave an inferred resource of 11.01 million tonnes with an average grade of 3.06 grams of gold per tonne for 1.05 million contained gold ounces, at a cut-off grade of 1.5 grams of gold per tonne, and using a top-cut of 8.0 grams per tonne.
Aside from the new estimate, the company also issued two other news releases that Bouchard says ensures the Duparquet project's potential. The recent spurt of news is also part of the company's efforts to keep shareholders abreast of its situation, and to recognize how far Clifton Star has progressed in the past year.
Earlier this month, the company unveiled 2011 drill results from its Duparquet project, which were "very well received" at the PDAC mining event, says Bouchard.
Bouchard says the release of the results prior to the resumption of trade was agreed by the BCSC.
Indeed, significant results from the North and South zones on the Beattie and Donchester properties in 2011 included hole BD10-277 on the North zone, which intersected 58.3 metres of 2.06 grams per tonne (g/t) gold, and hole BD11-334M on the South zone, which returned 41.0 metres of 2.08 g/t gold.
On the RW/RS zone, which is located between the North and South zones on the Beattie and Donchester properties, hole BD11-335 hit 16.0 metres of 9.02 g/t gold near surface. The hole was drilled to test stacked horizontal structures, the company said.
Since re-assuming control of Duparquet last June from Osisko (TSE:OSK), Clifton Star drilled a total of 85 holes last year - totaling 26,754 metres - focused on the Beattie, Donchester, and Central Duparquet zones of the project.
Bouchard says the 2011 data will be included into a new NI 43-101 compliant resource report for the entire Duparquet project, which will move the Beattie and Donchester estimates under the same criteria and allow for one data bank for the whole deposit.
The Beattie area of the Duparquet project is currently estimated to contain 1.72 million inferred gold ounces at a cut-off of 0.67 g/t gold, all in pit resources, as opposed to the current cut-off of 1.5 g/t gold used in the NI 43-101 report for Donchester.
The new NI-43-101 report will be an "eye opener", says Clifton's CEO. It will be the first time that the combined Beattie, Donchester and Central Duparquet will be evaluated under the same cut-offs and criteria. It is on track for completion in late April, and is being prepared by InnovExplo, a mining consultation firm in Val-d'Or, Quebec. A preliminary economic assessment is expected to follow by later this year or in early 2013.
In addition to the 2011 drill results, Clifton also unveiled "excellent" metallurgical results from the project last week, fixing two prior problems for investors, Bouchard says.
"There was a previous perception that there was refractory ore at the project and that we couldn't handle it, as the last time ore was processed from the area was in the 50s generating only 81% to 82% recovery overall."
Bouchard adds, however, that more than 50 years has passed, with the general metallurgy and recovery process improving significantly.
Proving his point, the company released recent test results from SGS Lakefield Research, which showed that high gold recoveries from mineralization at the project are possible, using a combination of conventional flotation, pressure oxidation and cyanidation.
The overall average gold recovery from six metallurgical samples from the Duparquet project gold zones was 93 percent - which is "up there with the best", says Bouchard.
Six metallurgical samples, with head grades ranging from 1.25 grams per tonne (g/t) gold to 3.58 g/t gold, were provided to SGS Lakefield Research for gold recovery testing.
"Though the results are preliminary, they show the potential of the project. One cloud hanging over Duparquet has been lifted."
Another cloud was also lifted, as arsenic levels were low in all six samples, meaning environmental control of arsenic will be "straightforward" at these levels.
Prior to the metallurgy results, the arsenic at the project was perceived as a problem environmentally, "but the metallurgical process tested also fixated the arsenic, showing no leaching and indicating it will not pollute", says Bouchard.
In the first half of 2012, the company is focused on expanding resources and identifying new targets at Duparquet, and plans to spend roughly $2 million on exploration, with most of it allocated toward 15,000 metres of drilling, using two rigs.
The main goal of this program will be to test the extension of the mineralized gold-bearing zones to depth on the Beattie, Donchester and Central Duparquet properties.
After Clifton Star receives the new, unified technical report for the entire project, Bouchard says it will probably accelerate drilling by "a lot more". Indeed, with more than $14 million of cash on hand, and no debt, the company is certainly in a position to do so.
Clifton has also brought new management on board, first with Bouchard, who has more than 30 years of experience in exploration and mine development in Quebec, as well as M. Louis C. Martin, the new VP of exploration, and Louis Dufour, the new CFO.
"We are putting exploration and development on the fast track, and we have the people and the money to do it. We are solving our previous problems one by one," Bouchard says.
"There are many investors that have been very patient. We anticipate the market will recognize the long-term potential of Clifton Star, with shares expected to reflect the potential of the projects."
If Clifton is compared to any other junior company with the same inventory, "it is clearly undervalued", Bouchard concludes.
"With the CTO now revoked, and the metallurgy and environmental problems under control, this is expected to change."
Clifton Star, with just 35 million shares outstanding, counts San Francisco-based Passport Capital and New York-based Libra as significant shareholders. Shares of the company were changing hands Friday afternoon at around $2.09.

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