Cluff Gold plc - CLF - Broker Recommendation (WH Ireland)

8/15/2019 Cluff Gold plc - CLF - Broker Recommendation (WH Ireland)

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WH Ireland Limited, 11 St Jamess Square, Manchester, M2 6WHWH Ireland is authorised and regulated by The Financial Services Authority and is a member of The London Stock Exchange.Important disclosures and certifications regarding companies that are the subject of this report can be found within the disclosures pageat the end of this document.

CLUFF GOLD PLC*

Cluff Begins Development on 2 Key Projects

Cluff Gold plc (Cluff/ the company) has begun developing both its Kalsaka

(Burkina Faso) and Angovia (Ivory Coast) projects. Cluff has retained the services

of Banlaw Africa as its mining contractor, a company which has extensive West

African experience and has a client list including Newmont, Goldfields, and AIM

Resources. The company has also appointed a Project Engineer.

The Angovia project development has recently been strengthened by the definition of

additional resources. Angovia now comprises 330,000 ounces of gold (oz Au), comprising

both oxide and sulphide resources of 6.15 million tonnes (mt) at a grade of 1.7grammes

per tonne (g/t) Au . The oxide resources which will be first developed equate to 3.7mt at

1.4g/t Au for 170,000oz Au. Mineralisation remains open at depth (i.e. into the sulphide

zone) and along strike, meaning that there is the potential for additional oxide resources to

be defined in the vicinity of the mineralisation known of to date, which could be processed

cost effectively as part of this mining plan. Cluff can also ascertain the additional sulphide

resources from deeper drilling. A further drilling programme is planned for H1 2007.

Drilling has re-commenced at Baomahun, Sierra Leone and the results are the first holes

are very encouraging mineralisation has been confirmed to extend along strike and

down dip in the Western Zone. High grades have been encountered in these new

intersections in the order of 7m at 5.76g/t Au from 96m depth and 8m at 7.67g/t Au from

139m depth. Cluff has still only explored approximately 25% of this mineralised trend.

We anticipate another resource update for Baomahun, following the 880,000 ounce

resource inventory, with the focus being upgrading the inferred resources into the

indicated category so the company can start a pre-feasibility study in H2 of this year.

Cluffs discovery costs for Baomahun are impressive - less than US$5/oz.

We retain our buy recommendation on Cluff, as we believe that the company is well

positioned to deliver the markets desire of cash flow from its two smaller projects, whilst

maintaining its focus on advanced exploration at Baomahun the companys biggest

project. Cash flow from the Burkina Faso and Ivory Coast assets will be used to progress

Baomahun.

BUY 69p

Target Price 107p

Market Cap 31.66m

Index Aim

Shares in Issue 45.55m

NAV N/A

Net Cash $21m

Performance (%) Absolute Aim

1 month: -9 -11

3 months: +16 +8

12 months -2 +5

High/Low

12 months: 83 - 57

55

60

65

70

75

80

85

Jan06

Feb06

Mar06

Apr06

May06

Jun06

Jul06

Aug06

Sep06

Oct06

Nov06

Dec06

Jan07

Last Results Finals, Sept 5

Next Results Interims, Feb 07

Next Event AGM, Oct 19

Reuters/BBG CLF.L / CLF LN

Change in Recommendation No

Analyst Louise Collinge+44 (0)207 220 1692

[email protected]

Key SalesContact

Laurie Beevers+44(0)161 819 8724

[email protected]

*WH Ireland acts as NOMAD and broker toCluff Gold plc. Any research on this companyshould not be relied on as objective orimpartial. This note is intended for institutionalinvestors only and is not for distribution toprivate clients.

25th

January 2007 UK EQUITY RESEARCH

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Summary

Cluff Gold listed on AIM on 15th

December 2004 with a suite of assets in west Africa. Prior

to Cluff Gold, Chairman and CEO Algy Cluff formed Cluff Resources, which was

subsequently acquired by Ashanti Goldfields, and then Cluff Mining, which became Ridge

Mining.

The most advanced project is the Kalsaka project in Burkina Faso (of which Cluff has a

78% interest), approximately 150km north of the capital, Ouagadougou. This deposit has

a reserve of 290,000 oz, and nearby potential to increase resources once the plant is

developed. The Angovia district has potential for a substantial deposit of near surface,

heap leachable oxides. With the plant already on site, this project could provide cash flow

for very little investment, and certainly no debt. The Baomahun deposit in Sierra Leone is

the companys key focus as it has the potential to have a large resource inventory. Cluff is

currently spending $5m in order to earn a 60% interest in the project, which currently has

a resource of 880,000 oz. Cluff also has some interesting exploration ground in Mali

which, although early stage, looks prospective.

Fig 1: Life Cycle of a Mining Companys Share Price

Source: Taken from Cluff presentation

We have added the above picture as it illustrates the natural shape of a one project

companys share price graph through exploration, discovery, then ultimately through

feasibility, decision to develop to development and production. The point is that Cluff is

not a one project company but has four key projects, to ensure that the share price should

continue to rise as value is constantly added, through progression of one or more of the

projects.


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Angovia, Ivory Coast

The Angovia project is located within the Mt. Yaoure permit area, which is 40km northwest

of Yamoussoukro, the political capital of the Ivory Coast. The project contains the old

Angovia Gold Mine, which was in production from 1998 until 2003. The mine reportedly

produced over 180,000 oz of gold from heap leaching 2 million tonnes of oxide material.

There is much artisanal activity on the site now. Infrastructure is good as there is a HEP

dam 6km from the mine site. Cluff has a 90% interest in the Angovia project, which it

acquired in late 2004 from the previous owners COMINOR, a subsidiary of the French

uranium company, COGEMA. This acquisition included COMINORs technical database

and plant.

The Mt. Yaoure permit consists of the Birimian age units (approx 2.2ba), consisting of

mafic metavolcanics, felsic volcanic intrusions and minor conglomerates, which are

intruded by ultramafic and calc-alkaline plutonic intrusions. Locally, the geology has been

hydrothermally altered and intruded by dyke swarms and larger intrusions. The rocks

have been affected by local and regional folding. Weathered lateritic material overlays the

stratigraphy, and is the source of the oxide deposits. The actual orebody is a quartz vein

which varies from 3 to 10 metres in width. The known mineralisation is open along strike

and at depth. Mineralisation appears structurally controlled as opposed to lithologicallycontrolled and relates to sheared and brecciated zones within intermediate volcanic rocks.

There appears to be a series of these veins, in a linear trend, some of which occur within

the oxide layer.

Cluff currently has a resource of 330,000 oz, a recent 70% increase the result of an

independent resource estimation undertaken by Ankobra Resource Services, and

reported by SRK. This resource update has put an additional 25% of the resources into

the indicated category. This increase has resulted from the drilling programme of 2006

which has defined the resources in 4 target areas, all within 2km from each other. The

plant, which Cluff already owns, will be located in an area central to resources.

We feel it acceptable in the short term to assume the oxides are heap leachable, as that

was the processing method for the 5 years in which the mine was in operation. COGEMA

experienced recoveries of 80% with its heap leaching operations. The oxides are crucial

as this means the company should be able to cheaply process the material and should be

able to commence production without requiring project finance, thereby generating cash

flow. The sulphides (essentially a continuation of the oxides at depth) will form a different

project, with a more complex and capital intensive plant. We feel the company should

focus on exploring more potential near surface oxide resources.


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Table 1: Angovia Resources (lower cut-off 0.5g/t Au, upper cut-off 20g/t Au)

Resource Characteristics Resource Category Tonnes (millions) Grade (g/t Au) Ounces Au

Oxidised Indicated 2.78 1.4 130,000

Inferred 0.93 1.4 40,000

Sub-total 3.71 1.4 170,000

Sulphide Indicated 0.87 2 60,000

Inferred 1.57 2 100,000

Sub-total 2.44 2 160,000

All Material Indicated 3.65 1.6 190,000

Inferred 2.5 1.8 140,000

Total 6.15 1.7 330,000

Source: Company data / WH Ireland research

Kalsaka, Burkina Faso

The Kalsaka project is Cluffs most advanced, having a completed bankable feasibility

study. The project is located approximately 150km north west of the capital,

Ouagadougou. Cluff owns 78% of Kalsaka, with 12% held by IMARB and the government

has a 10% free carried interest.

The licence area forms a folded greenstone belt (the Birimian Series) area between 2

granitic intrusions. Outcropping gold mineralisation has been identified at several

locations within the licence area, but there have only been two areas drilled in detail,

therefore only two areas have been included in the feasibility work. These areas arehighlighted in red on the diagram (overleaf). The two pits closer to the south form the

Kalsaka Hill Orebody, while the 2 smaller pits in the north (750m north of Kalsaka Hill) are

the K-Zone Orebody. The total measured and indicated resources at both Kalsaka Hill

and the K-Zone are 10.9 million tonnes at 1.5g/t gold, equating to 500,000 oz, and a

further 2.8 million tonnes of inferred resources at 1.1g/t for 100,000 oz. As inferred

resources cannot be converted to reserves, the measured and indicated resources

converted to reserves of 290,000 ounces of gold. These reserves comprise near surface,

oxidised deposits which are heap leachable.

Cluff has began development at Kalsaka, and has appointed Banlaw Africa Ltd as the

mining contractor, and will look into financing options for the project, some portion of

which will be debt.


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Fig 2: Kalsaka Mining Area


Although Kalsaka may be a small project financially, it remains of interest in terms of

potential upside. The schematic diagram, Fig 2 shows the site, with the red areas being

pits defined in the BFS. The blue areas are additional prospects of interest, along the

same strike as the open pits (therefore the company has prior geological understanding)

which will soon be explored with a view to adding resources in the area, and

commissioning a plant with additional capacity so as to enable production to be increased.

We believe there is the potential for the company to define resources in these

neighbouring discrete areas.

Fig 3: Kalsaka and Yako Permits


In addition to the prospects around the Kalsaka project, Cluff has also been granted the

exploration licence immediately to the south of the Kalsaka belt, and already has a

resource of 150,000oz on its Koupela Nagsene prospect, Yako permit, therefore addingcredibility to the prospectivity of that belt. The company also has 5 additional target areas

along the same belt to further explore.


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Baomahun, Sierra Leone

We believe Baomahun represents Cluffs company maker project. A site visit has

demonstrated the potential to define further resources based on the strike length, a good

geological understanding and a sensible exploration programme.

Cluffs Baomahum project is located 180km due east of Freetown, the countrys capital.

The site is accessible by roads, of which over half the journey is on good asphalt roads.

Currently there is diesel generated power on the site but a visit showed pylons leading

most of the way towards the project. These pylons were erected in conjunction with a

major hydroelectric dam project which was put on hold due to the civil war over the past

decade. There are hopes that this project will be re-instated, therefore there is the

possibility that cheaper power will be provided to the project area.

The project comprises 2 exploration licences, Baomahun and Victoria, both of which are in

the name of Winston Mines Limited. Cluff has the right to acquire a 60% interest in these

licences, through spending US$5m or completing a bankable feasibility study, which ever

is earliest. The company has currently spent over US$3m, so is well on the way to

completing the transaction. The licences cover an area of 51.8km2

and 85.5km2

respectively. The company is looking to consolidate its land holding on the Kangari

greenstone belt.

There is considerable history of gold and gold production in the area. Gold was first

discovered in the area in the 1920s. A small amount of mining was undertaken during that

time, but there are no records for this. In the 1960s the Sierra Leone Geological Survey

explored the area, undertaking soil sampling and drilling. A variety of companies also

looked at the project throughout the 1970s and the early 1980s and mapping, further

drilling and trial mining took place during this time. Winston Mining obtained the

exploration licences in 1985 and between that time and 1993, an adit was driven into the

deposit and fan drilling was undertaken. The operations ceased in 1993 as rebels

destroyed the site during the countrys civil war. Activity in the area recommenced by

Winston Mines in 2004, when the company re-entered the adit, and took channel samples

at 1 metre intervals along the adit walls. This adit has been of the utmost importance to

the exploration team, as it has enabled the company to essentially visualise the centre of

the deposit. As fan like drilling was undertaken at the end of the drive, this area has been

classed as indicated in terms of the companys resource statement. The adit was visited

on the recent site visit and the trenches, drilling, and mineralisation were seen. Another

notable point is the large number of artisanal miners panning for gold in the thin layer of

surface oxides covering the bedrock deposit.

Geologically, much of Sierra Leone is underlain by Archaean terrain, comprising granites,gneisses and sedimentary rocks, which form the West African Craton. The Baomahun

Project is located in the Sula Mountain/ Kangari Hills Greenstone Belt, which consists of

folded and sheared metasediments and metavolcanics. These form the country rocks of


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the deposits. The localised geology consists of a variety of schists these have been

identified and logged by the field geologists who identified the transition in and out of more

dominant minerals, and include biotite-quartzite schist, cordierite schist, garnet-mica schist

and garnet cummingtonite schist banded iron formations (BIF) which tend to be

interlayered within the schists, and amphibolites (i.e those rocks which have undergone a

more intense metamorphism).

The geological team on site have developed a good understanding of the controls on

mineralisation. They note a BIF association with gold mineralisation, but only in BIF areas

where the rocks have been structurally distressed, meaning either along the contacts with

BIF and schist, or where the BIF has been internally sheared. This appears to have

encouraged gold deposition. The gold is not necessarily found within the BIF layers, but

where there is gold mineralisation there are usually BIF units in the vicinity. Gold is

always associated with the presence of sulphides, and more specifically, is either

associated with arsenopyrite and/or pyrrhotite. The company now only begins assaying

for gold when the geologists see the first signs of sulphides coming into the core, as they

know from experience there will be no gold prior to that.

Fig 4: Airborne Magnetic Map


There are 3 discrete zones which have been initially targeted by the company for drilling

and resource estimation. These are, the Eastern Zone, the Central Zone and the Western

Zone.

The company flew airborne magnetic geophysics over the 2 licences, and this has

identified the BIF units (see figure 1) within the area, and therefore has given the company

a clear focus on future exploration. The geophysics map also shows the locations of the


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three zones currently with resources. In addition it shows the areas which have been soil

sampled (these have also been trenched now), and it also shows the areas to be soil

sampled next year.

The Eastern Zone - 12 holes have been drilled in the eastern zone. This was the first area

targeted by the company as it contains the adit previously described. In this zone it is the

presence of pyrrhotite which influences gold mineralisation, but in addition, it is the

amount of arsenopyrite which drives the gold grade. The whole area has a resource of

380,000 oz, but 40,000 oz are classified as indicated due to the drilling pattern and level

of understanding in and around the adit area.

Fig 5: Baomahun Core, Eastern Zone

Source: Analysts photograph

A recent drill hole for this area, DDH47 has one particular mineralised intercept of 16m

grading on average 20.16g/t Au (see picture opposite). Interestingly, this drill hole has

also revealed another mineralised horizon below the one already known about, which is

interpreted to be part of an en echelon array of structures forming along the same strike.

The Western and Central Zones 17 holes have been drilled in each zone. The controls

on mineralisation are the same as for the eastern zone, i.e. BIF and sulphide association,

however, gold mineralisation is more closely associated with the presence of arsenopyrite

in the central zone than pyrrhotite. Cluff has recently drilled in between these two zones

and interpretation to date is that mineralisation between these two zones is continuous.

Cluff has interpreted that all three zones are on the same structural trend and that the

rocks are folded in between the Central and the Eastern Zones.


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A report was written in 1992 for Harry Winston, entitled Characterisation of an ore sample

from the Baomahun Gold Deposit: Chemistry, Mineralogy and Metallurgical Testwork.

Importantly, the study concluded that 95.2% of the gold is free milling. It also stated that

approximately 95% of the gold could be recovered by a variety of standard processing

routes including gravity concentration and cyanidation. The company will undertake

metallurgical work in the near future, but we believe that this document is a good

endorsement of the metallurgy for the time being.

The companys exploration plan involves systematic soil sampling, followed by trenching,

parallel to the line of soil samples, with 2 trenches per soil sample line. It is from these

trenches that drill targets are defined. The company is steadily progressing north with the

soil and trench samples, with the area north of the Western Zone currently being trenched.

Further north the company has been soil sampling, and has identified areas suitable to

trench. This exploration plan is simple but effective:- stick within the BIF areas (generated

by airborne geophysics), soil sample, trench, drill, in a continuous progression moving

north. Because of this, we feel the project is being well managed, and there is scope for

additional resources to be defined along the length of the BIF belt.

The drilling in 2006 has resulted in the definition of a further 362,000, an over 70%

increase on the previous resource for the project, which now stands at 880,000 oz, with an

average grade of 3.2g/t Au. The drilling programme comprised 4400m of diamond drilling,

and comprised the results from holes DDH029 to DDH048.

Table 2: Baomahun Mineral Resources

Resource Class Resource Area Tonnage Grade (g/t Au) Ounces Au

Indicated East 240,000 5 40,000

Inferred East 2,080,000 4.8 320,000

Inferred Central 2,210,000 3.9 280,000

Inferred West 4,120,000 1.9 250,000

Total Indicated East 240,000 5 40,000

Total Inferred All areas 8,410,000 3.1 840,000

All Categories All areas 8,650,000 3.2 880,000


The results of 3 recently drilled holes have been released. These holes have confirmedthe along strike and down dip extent of mineralisation in the Western Zone which when

combined with the knowledge that only 25% of this mineralised belt has currently been

drill tested, is highly encouraging. Exciting intersections are as follows: 7m at 5.76g/t Au


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from 96m depth, 8m at 7.67g/t from 139m depth and 8m at 1.38g/t Au from 80m. Cluff

expects a second diamond drill rig to arrive on site in February, which will speed up the

30,000 planned metres which we believe will lead to both an increase in the resource

inventory, plus an increase in the confidence category into more measured and indicated

resources. Cluff hopes to initiate a pre-feasibility study into Baomahun in H2 2007.

Karbasso, Mali

Fig 6: Karbasso Licence


Mali represents Cluffs grass roots exploration. The company has signed a JV agreement

with Kadiel Mining, in which it has a 90% interest in the Karbasso licence area, situated insouthern Mali, close to the Ivory Coast. The concession has been carefully selected as it

is along strike, on the main mineralised belt in the country, from Resolutes 5m oz Syama

mine, and Etruscan Resources permit, the drilling of which has returned some good

intersections.


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Peer Group Comparison

Table 3: Comparable Companies

Company Country Listed

Shareprice(US$)

MarketCapitalisation

(US$)Cash(US$)

EnterpriseValue (US$)

AttributableResources

(oz)EV/ Resource Ounce

(US$)

Cluff Gold

Sierra Leone, IvoryCoast, Burkina

Faso, Mali AIM 1.35 61,420,400 21,000,000 40,420,400 1,443,000 28.01

Mano RiverResources Sierra Leone TSX/AIM 0.23 67,235,000 1,800,000 65,435,000 1,400,000 46.74

Equigold Ivory Coast ASX 1.22 209,781,000 45,200,000 164,581,000 3,494,900 47.09

Perseus MiningGhana, Ivory Coast,

Kyrgyzstan ASX 0.38 33,930,000 4,680,000 29,250,000 949,000 30.82

Orezone Burkina Faso TSX 1.36 180,888,500 24,780,000 156,108,500 3,660,000 42.65

Etruscan

Ivory Coast, Mali,Niger, Burkina

Faso, Ghana, SouthAfrica TSX 3.31 333,429,500 22,601,500 310,828,000 2,325,000 133.69

Golden StarResources Ivory Coast TSX 3.29 679,558,000 10,000,000 669,558,000 11,000,000 60.87

Axmin CAR, SL TSX 0.85 142,562,000 7,578,000 134,984,000 3,327,000 40.57

Goldbelt Resources Burkina Faso TSX 0.96 56,737,500 11,168,000 45,569,500 1,138,000 40.04

Semafo Inc Burkina Faso TSX 1.63 313,590,500 32,366,000 281,224,500 4,947,400 56.84

Avnel Gold Mining Mali TSX 0.77 42,933,500 2,017,000 40,916,500 1,334,000 30.67


* Data as of 25 th January 2007

The above table contains details of companies active in the West African region. The

average EV per resource ounce of the peer group is US$51. The table clearly shows that

when considering EV/ resource ounce, Cluff is undervalued in comparison to its peers. If

it were to be valued at the mean EV/resource ounce this would equate to 1.07 per share.

This is based on current resources and does not take into account exploration potential -

in the large strike extent of Baomahun, the potential in the Kalsaka and Angovia areas,

and the grass roots area in Mali.


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West Africa

Sierra Leone Sierra Leone has recently emerged from a 10 year civil war which began in

1991 when the Revoltionary United Front (RFU), led by former army corporal Foday

Sankoh, campaigned against the then President Momoh. The UN intervened in 1999, but

the civil war was officially declared over in 2002. During the war, diamonds were being

used in exchange for arms from Israel, and were referred to as blood or conflict diamonds.

The country is working towards reconstruction, and the extraction of natural resources,

namely diamonds and gold, has helped the post conflict economy. Sierra Leone has long

been well regarded as prospective for diamonds and gold, and in the last few years the

country has begun to encourage foreign interest in the industry again. Companies such

as Sierra Leone Diamonds, Mano River Resources, Axmin, Sierra Rutile, Koidu Holdings,

African Diamonds, Argyll Resources, in addition to Cluff, have all been active in Sierra

Leone an endorsement on the improving political situation.

Ivory Coast The Ivory Coast was formerly seen as the most stable and wealthy country

in west Africa. This changed in 2002 when a civil war began. For the 30 years prior to

this the country was renowned for ethnic diversity with harmony, and its well developed

economy. The civil war has divided the country in 2 the government controlled south

and the rebel controlled north. The northern muslims, including many immigrants fromBurkina Faso and Mali who have long lived in the country working in agriculture, especially

cocoa farming, began to feel they were politically disadvantaged. Fighting has now

stopped, but the situation remains tense, and a buffer zone between the north and the

south is maintained by the UN. Disarmament has not yet begun. Cluffs Angovia project

is well within the government controlled south of the country. Regarding mining, the

country has favourable geology and a robust mining code, dated 1995, which encourages

foreign investment. Randgold and Ashanti are active in the Ivory Coast in conjunction with

several juniors, including Etruscan Resources, Equigold, and Golden Star Resources.

Burkina Faso Burkina Faso remains one of the poorest countries in the world. The

countrys economy is reliant on cotton production. It has significant gold resources.

Droughts continue to affect the country, and desertification causes problems for farming.

The country has been linked to the conflicts in neighbouring countries, including

accusations of involvement in diamond smuggling by rebels in Sierra Leone. Many

Burkinabes have a history of working in the Ivory Coast but relations are strained as the

Ivorians have accused Burkina Faso of backing rebels in the north of the country. Burkina

Faso has in turn accused the Ivory Coast of mistreating Burkinabes who live there.

Regarding mining, there is a modern mining law, 2003. There are exploration companies

operating in Burkina Faso, including AIM resources who has an advanced zinc project in

the country. Other active mining/ exploration companies in the country are High River

Gold, Orezone, Etruscan, Goldfields and Randgold.


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Mali Mali is relatively under-explored and is a stable multi party democracy (since 1992)

with a modern mining code. These factors lead it to be an attractive country for gold

mining and foreign investment. The country is known historically for gold production.

Many companies are active in Mali, including Randgold Resources, Anglogold Ashanti,

Glencar, IAMGold, Resolute Resources, Nevsun Resources and Avnel Gold Mining.

Fig 7: Cluffs Countries of Operation



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Directors and Management

Algy Cluff, Chairman and CEO Mr Cluff has been involved in the natural resources

industry for over 30 years. In 1972 he formed CCP to bid for North Sea oil licences, and

then subsequently Cluff Oil Ltd which acted as the management company for CCP. He

then founded and was chairman of Cluff Resources. From the early 1980s, Cluff

Resources became focused on mineral exploration in Africa and was eventually acquired

by Ashanti in 1996. Mr Cluff then formed Cluff Mining, now Ridge Mining and was with the

company until he resigned in 2004. He formed Cluff Gold in 2003.

Nicholas Berry, Non-Executive Joint Deputy Chairman Mr. Berry is chairman of

Stancroft Trust Ltd, and a number of other public companies. He joined the Cluff group in

May 2004.

Edward Haslam, Non Executive Joint Deputy Chairman Mr. Haslam was CEO of Lonmin

from 1999-2004. He qualified as a metallurgist whilst working for British Steel. He then

joined Falconbridge in 1978. He worked in various international marketing positions

before being appointed by Falconbridge to Western Platinum Ltd as Marketing Director.

In 1997 he was appointed Managing Director of Lonplats and subsequently appointed to

the Lonmin board in 1999. He joined Cluff Gold in May 2005.

Douglas Chikohora, Technical Director A Chartered Engineer with over 20 years

experience in the mining industry. His experience covers rare earth minerals and base

and precious metals with various companies including Cluff Resources, which he joined in

1987 and where he was in charge of the exploration and development of the Ayanfuri

mine in Ghana. After the acquisition of Cluff Resources by Ashanti Goldfields in 1996, Mr

Chikohora joined Cluff Mining plc (now Ridge Mining plc) in June 1996 before being

appointed managing director of Cluff Mining (West Africa) Limited, responsible for its West

African gold interests. He joined Cluff Gold plc in January 2004.

Charles Lutyens, CFO Mr Lutyens was formerly Managing Director of Rio Tinto India

and Head of Project Finance for the Rio Tinto group. He has extensive knowledge of

project finance and business development in emerging economies and has worked in

natural resources for over 20 years. He has in depth experience of working in partnership

with investors, banks, governments, multi-lateral and donor institutions and has negotiated

a significant number of financings, joint ventures, acquisitions and investment agreements

with host governments. Mr Lutyens also advises a group of governmental donor agencies,

including the UK's Department for International Development (DFID) on issues affecting

private sector investment in developing country infrastructure.

Eileen Carr, Non-Executive Director Ms. Carr is a qualified accountant and has over 20

years experience in finance in the resources sector. She was previously Finance Director

of Cluff Resources until the Ashanti acquisition, after which she continued to work for the

parent company. She also worked for Marc Rich (now Glencore) and has held various


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other corporate financial roles in resources companies. She is an Executive Director of

Monterrico Metals, and CFO of Alexander Mining. She joined Cluff Gold in November

2003.

Bobby Danchin, Non Executive Director Mr Danchin is a geologist and a chemist. He

recently retired from Anglo American where he was CEO of the exploration and

acquisition department and group deputy technical director. He is a Non Executive

Director of Gold Mines of Algeria. He is also a director of the South African Council of

Geosciences and a member of the Australian CSIRO Mineral Resources Sector Advisory

Council. He joined the group in May 2004.

Tim Wadeson, Non Executive Director Mr Wadeson is a mining engineer. He was the

group technical director of Anglo American having worked there from 1993-1999, and prior

to that he was Technical Director of Minorco. Mr Wadeson is a Non Executive Director of

Mwana plc and Highland Gold. He joined Cluff Gold in May 2004.


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Share Price Target

The share price target is the level the stock should currently trade at if the market were to accept the analysts view

of the stock and if the necessary catalysts were in place to effect this change in perception within the performance

horizon.

Stock Rating Distribution

Recommendation Total Stocks Percentage

Buy 6 10%

Outperform 25 40%

Market Perform 26 43%Underperform 4 7%

Sell 0 0%

Total 61 100%

This table demonstrates the distribution of WH Ireland recommendations. The first column illustrates the distribution

in absolute terms with the second showing the percentages.

Conflicts of Interest Policy

This research is classified as being non-objective as defined by the FSAs Conduct of Business Rule 7.16.5.

Please refer to www.wh-ireland.co.uk for a summary of our conflict of interest policy.

Analyst Certification

The research analyst or analysts attest that the views expressed in this research report accurately reflect his or her

personal views about the subject security and issuer. Furthermore, no part of his or her compensation was, is, or will

be directly or indirectly related to the specific recommendation or views expressed in this research report.

Companies Mentioned

* see table 3, page 11

Share Price Date/Time

Company Name Recommendation Price Price Date/Time

Cluff Gold Buy 73p 09:30 25/01/2007

Summary of Company Notes

N/A

Summary of Security Recommendations

N/A

*Current Analyst (CA), Previous Analyst (PA)

WH Ireland Recommendation Definitions

BuyExpected to outperform the FTSE All Share by15% or more over the next 12 months.

OutperformExpected to outperform the FTSE All Share by5/15% over the next 12 months.

Market PerformExpected to perform in line with the FTSE AllShare over the next 12 months.

Underperform

Expected to underperform the FTSE All Shareby 5/15% or more over the next 12 months.

SellExpected to underperform the FTSE All Shareby 15% or more over the next 12 months.

Trading BuyExpected to rise by 15% or more in absoluteterms within 3 months

Trading SellExpected to fall by 15% or more in absoluteterms within 3 months

Speculative BuyThe stock has considerable level of upside butthere is a higher than average degree of risk.

Disclosures

DisclaimerThis research recommendation is intended only fordistribution to market counterparties andintermediate customers as defined under the rules ofthe Financial Services Authority and is not directed atprivate customers. This note contains investmentadvice of both a general and specific nature. It hasbeen prepared with all reasonable care and is notknowingly misleading in whole or in part. Theinformation herein is obtained from sources which weconsider to be reliable but its accuracy andcompleteness cannot be guaranteed. The opinionsand conclusions given herein are those of WHIreland Ltd. and are subject to change without notice.Clients are advised that WH Ireland Ltd. and/or itsdirectors and employees may have already actedupon the recommendations contained herein ormade use of all information on which they are based.WH Ireland is or may be providing, or has or mayhave provided within the previous 12 months,significant advice or investment services in relation tosome of the investments concerned or relatedinvestments. Recommendations may or may not besuitable for individual clients and some securitiescarry a greater risk than others. Clients are advisedto contact their investment advisor as to thesuitability of each recommendation for their owncircumstances before taking any action. Noresponsibility is taken for any losses, including,without limitation, any consequential loss, which maybe incurred by clients acting upon suchrecommendations. The value of securities and theincome from them may fluctuate. It should beremembered that past performance is notnecessarily a guide to future performance. For our

mutual protection, telephone calls may be recordedand such recordings may be used in the event of adispute. Please refer to www.wh-ireland.co.uk for asummary of our conflicts of interest policy andprocedures.


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WH Ireland Limited

11 St Jamess Square

Manchester M2 6WH

T: 0161 832 2174

F: 0161 839 5706

h i l d k

NATURAL RESOURCES

ContactsChief ExecutiveLaurie [email protected]

Deputy Chief ExecutiveHead of CorporateDavid [email protected]

Head of ResearchMatthew Davis0113 [email protected]

Natural ResourcesLouise [email protected]

James [email protected]

Philip Haydn-Slater (Sales)

[email protected]

Small & Midcap ResearchKeith [email protected]

Liz [email protected]

John Cummins0113-346-2844

[email protected]

Matthew Davis (Head of Research)[email protected]

Emerging CompaniesAnne Margaret [email protected]

Small & Midcap SalesGary [email protected]

Peter [email protected]

Rachel [email protected]

Sales TradingNick [email protected]

Sonia [email protected]

Gabby [email protected]

Les [email protected]

Research AssistantGill [email protected]

Cluff Gold plc - CLF - Broker Recommendation (WH Ireland)

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