Institutional equity firm Loewen, Ondaatje, McCutcheon & Co. (LOM) said that an updated NI 43-101 report on Clifton Star Resources' (CVE:CFO) Donchester property "should be positive for the stock price" once shares resume trading.
Clifton Star Resources
is a Canadian junior mining exploration company with a focus on
properties that have had historic production of gold, silver, copper and
Its portfolio consists of seven properties, six of them near the
Porcupine-Destor Fault in Quebec and one on the Manitoba/Ontario border.
Earlier this week, Clifton Star filed an updated NI 43-101 report for
its Donchester property, part of the company's Duparquet project in
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
The latest report 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.
In a research report, LOM analyst Michael Fowler said the latest
resource estimate was "...within our expectations and should be positive
for the stock price once the initial swoon has taken place when the
cease trade order is lifted."
"The announcement shows that the suspension of the stock was not due
to an impairment of Clifton Star's asset base, but more to do with
disclosure issues," LOM's Fowler said.
LOM's Fowler remarked that the latest report used a higher than usual cut-off grade "probably to satisfy the BCSC".
"It is very rare to see such high bottom cut-offs used for a
potentially partially open-pit scenario and a top cut of just 8 grams
per tonne is the lowest we have ever seen."
The analyst pointed out that on the adjacent Beattie deposit at the
project, a company contracted to carry out a resource estimate used a
cut-off grade of 0.67 grams per tonne "on what is the extentsion of the
"The effect of the bottom cut-off grade used [in Clifton Star's
report] has a severe effect on the resource estimate," Fowler said.
"In our opinion, the company has the potential of proving up a
resource of plus 5 million ounces at a 0.5 grams per tonne cut-off