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
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
But as a result of the new estimate, the cease trade order was
revoked on Monday, March 5, with the stock now trading after the TSX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
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%
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.