Loewen, Ondaatje, McCutcheon says Clifton Star's new Donchester resource "positive" for stock price

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 nickel.
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 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.
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 same deposit".
"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 grade."