Companies: CLF   

West Africa-focused Cluff Gold hopes to raise £12.8 million at 88p for various development and exploration projects.

BMO Capital Markets, WH Ireland and Smith's Corporate Advisory are handling the placing for the AIM-listed company. Cluff says the funds will partly go towards investigating existing and potential mineralised zones at Baomahun in Sierra Leone, where it has established a potential gold resource of 1.6 million oz, with only 30 per cent of the zone so far drilled.

The company will use some of the money to start production at Kalsaka in Burkina Faso, with an estimated 600,000 oz of gold, recoverable by open-pit mining. Some expedite exploration in Cote d’Ivoire, where Cluff has spoken bullishly of the current production outlook, and some elsewhere.

Recommended by Growth Company Investor at 46p in 2005 and again at 78p at the end of 2006, Cluff shares reached 102p in last November, but have eased since then. Now 88.5p, valuing the company at £61 million, they may be slow performers in the short term, but could resume growth if the projects meet expectations.

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