Clifton Star and Osisko announce first drill results after new partnership

Vancouver – The first drill results are in from a revised exploration program at Clifton Star Resources’ (CFO-V) Duparquet gold project in Quebec, and the junior’s share price gained 78¢ on the news to reach $7.20, the last jump in an impressive climb from just $2.50 three months ago.

Clifton had been focusing on exploring high-grade veins but, with major financial backing now coming from Osisko Mining (OSK-T), the drill program at Duparquet has shifted to mapping out broad zones of mineralization better suited to large-scale open pit mining. And the work is returning long, well-mineralized gold intercepts.

Drilling is focused on the historic Beattie and Donchester mine properties, which together cover some 700 hectares. Beattie was mined between 1933 and 1956, while Donchester was mined from 1946 to 1956; together they yielded 1.1 million oz. gold. Mineralization at the adjacent properties consists mostly of tabular, subvertical zones of finely disseminated pyrite-gold and variable arsenopyrite in brecciated or sheared porphyry.

The mineralized zones occur at the north and south contacts of the Beattie-Donchester intrusion, an east-west striking body that is over 3 km long, 150 to 450 metres wide, and at least 900 metres deep. The zones are each roughly 2.6 km long and up to 80 metres thick and are open to the east and west and at depth.

Complementing the Beattie-Donchester intrusion is a second, parallel, mineralized porphyry intrusion just to the southeast. The Dumico porphyry is roughly 2.2 km long and 350 metres wide and hosts two mineralized zones known as Central Duparquet and Dumico, which are similar in nature to the Beattie-Donchester intrusion zones. Combined with Beattie-Donchester, the two intrusions make for a total strike length of 5.5 km.

The latest drill results include 34 holes from Beattie-Donchester, as well as three holes from the nearby Duquesne property. Highlights on the northern contact of the Beattie-Donchester zone include 72 metres grading 1.85 grams gold per tonne starting at 107 metres depth and 184.4 metres carrying 2.17 grams gold starting 168 metres downhole. The RW section, on the western edge of the strike, returned 99.5 metres averaging 1.95 grams gold starting at 10 metres, 171.1 metres grading 1.62 grams gold per tonne starting at 156 metres, and 119.4 metres of 1.5 grams gold starting at 79 metres.

The south section produced only one new drill result, returning 34.5 metres grading 1.23 grams gold starting essentially at surface. The nearby Duquesne property provided three drill results: 17 metres at 5.31 grams gold starting at 304 metres depth, 6 metres at 3.86 grams gold starting 17 metres downhole, and 11 metres at 2.17 grams gold starting 42 metres below surface.

These latest drill results are on top of extensive exploration already done in the area. Between 1987 and 2009 previous owners drilled 520 holes totaling 147,297 metres on the Duparquet gold properties, of which 429 holes totaling 112,965 metres probed the Beattie-Donchester properties alone.

Much more drilling is planned for 2010, with joint-venture partner and operator Osisko outlining a 120,000-metre drill program for the Duparquet project. Most of the drilling, about 100,000 metres, will concentrate on defining the Beattie-Donchester area, while the remaining 20,000 metres will help to define the Duquesne property. The partners want to define a bulk-tonnage inferred resource by early 2011 on the Beattie-Donchester porphyry complex. Four drills are currently working to complete this objective.

Osisko put itself squarely behind the Duparquet project in late 2009 when it signed a significant earn-in deal with Clifton. Osisko agreed to spend $70 million on exploration over four years to earn a 50% stake in the properties, including at least $15 million in 2010. Osisko also agreed to advance $31 million to Clifton at 5% interest for option payments on the properties. Finally it extended a $6-million credit line to Clifton, but that was not used before it expired at the end of last year.

On top of potential underground resources, Clifton also estimates it can recover upwards of 220,000 oz. of gold from tailings reclamation in the area over three years.

The drill results lifted Clifton’s share price 78¢ in two days, to reach a new all-time high of $7.20. The company’s shares have climbed dramatically since signing the joint-venture deal with Osisko in mid-November, gaining almost 200% to create a 52-week share price range of $1.65 to $7.25. Clifton has 25 million shares outstanding. Osisko’s share price rose 20¢ on the day to close at $8.86. Osisko’s 52-week share price range is between $4.22 and $9.24, with 336 million shares outstanding.