Clifton Star fuses Duparquet gold deposits into indicated resource

VANCOUVER — Gold exploration outfit Clifton Star Resources (CFO-V) saw its efforts pay-off following extensive resource drilling, as the company uncovered a multi-million-oz., in-pit indicated resource at its 100%-owned Duparquet gold project in northwestern Québec.

Clifton’s Duparquet project is in Québec’s prolific Abitibi region, and compromises two property tenements that run 7.7-km along strike on the Porcupine-Destor fault zone, which has accounted for historic gold production in excess of 80 million oz. The company completed 85 drill holes over 28,000 metres at Duparquet following joint-venture partner Osisko Mining’s (OSK-T) abrupt termination of its stake in the project last June.

The new resource marks the first time Clifton has been able to incorporate results from its five main zones into a single estimate. Duparquet lies along a stretch of historic-underground gold operations, including the Beattie, Donchester, and Duquesne mines, which jointly produced over 1.5 million oz. of gold between 1933 and 1991. The project houses two additional resource-stage targets in the Central Duparquet and Dumico zones.

Clifton’s integrated resource is based on 223 surface channel samples, and 668 surface drill holes. Duparquet’s combined indicated resource totals 30 million tonnes grading 1.8 grams gold per tonne for 1.7 million contained oz. gold. The project has a further inferred resource of 29 million tonnes carrying 1.8 grams gold or 1.7 million contained oz,

“Close to half of the resources are now in the indicated category and most of the mineral resources are within the in-pit shell,” explained president and CEO Michel Bouchard. “We’ll attempt to upgrade the resources category by definition drilling, and continue to expand the zones with targeted-exploration drilling.”

The company’s initial resource estimates focused on Duparquet as separate deposits, and were limited to the inferred category. Clifton’s updated model assumes a high-grade cap of 25 grams gold with a minimum true width of three metres. Mining and milling costs clocked in at US$24 per tonne under a Whittle open-pit structure with a US$1380 per oz. gold price and a 0.6 gram gold in-pit cut-off.

“The combined mining and milling costs used in the pit simulation for the base case cut-off are conservative,” commented Bouchard. “The gold price is based on a three-year average. Our preliminary waste-ore ratio sits at around eight-to-one, but the offset is the relatively high gold grade at Duparquet.”

Breaking the resource down by section, the project’s in-pit indicated resource totals 22 million tonnes grading 1.81 grams gold or 1.3 million oz. contained gold. Underground indicated resources account for an additional 3.6 million tonnes carrying 2.74 grams gold for 314,600 contained oz., while historic dry-land tailings at the Beattie mine add indicated resources totalling 4 million tonnes at 0.93 gram gold for 123,200 contained oz.

Clifton released complimentary metallurgical testing results to end April, with sulphide-oxidation recoveries clocking in at roughly 93%,

“Two conventional processes [BIOX and Pressure Oxidation] and one emerging process [Albion] have all proven capable of achieving high gold recoveries from Duparquet concentrates,” Bouchard explained. “The choice between processes may now be considered based on relative economics.”

Clifton has limited its drilling to depths less than 400 metres in a bid to expand its resource footprint, but has found that many of its drill holes have bottomed out in mineralization, and Bouchard notes that discoveries in the Abitibi region can extend to depths of up to 2-km.

Two drills continue to run at Duparquet with a focus on the Beattie and Donchester properties — extensions of the Beattie North and South zones being a priority. Clifton will also work to define the limits of the known mineralization at depth, as drilling extends to 600-metre targets.

Clifton intends to use the updated resource as a springboard to catapult itself into a preliminary economic assessment slated to be released by the end of the year. According to Bouchard, the conservative nature of the preliminary model will leave the company room to improve the project’s economics,

“Preliminary sensitivities studies have demonstrated that lowering of mining and milling costs, as well as pit design changes, could allow for a lower cut-off and an increase in the resource,” he explained.

The company is well cashed-up and debt free going forward, with roughly US$13 million in the bank, and a tight share structure that includes a fully diluted position of 40 million shares and $37.4 million presstime market capitalisation. Clifton also maintains a right through November under its joint-venture agreement with Osisko to convert a loan worth roughly US$23 million into common Clifton shares at a conversion price of $3.12 per unit.

Clifton underwent a corporate governance shift late last year, after the company was left in a bit of a lurch when Osisko declined to earn its 50% stake. Michel Bouchard earned the nod as president and CEO, while Louis Martin was named VP exploration. Martin marks an interesting addition considering his history with Noranda Exploration, and work modelling regional Québec geology.

The resource announcement provided a market boost for Clifton, which had fallen below the $1 per share range over the past seven days, to a 52-week low of 90¢. Company shares jumped 14% or 13¢ following the announcement, closing the day at $1.05 on large 252,000 share trade volumes.