Cluff Gold

HOLD

30/09/2010 Robert Tyerman

Cluff Gold is on track to produce 100,000 oz a year after turning a previous $29.5m (£18.6m) interim loss into an $8.5m pre-tax profit.

The West Africa-focused gold miner and developer boosted turnover 52% to $61m in the half year to June, helped by a strong gold price and a 50% production increase to 40,831 oz at its 78%-owned Kalsaka mine in Burkina Faso, where cash costs fell 12% to $678 an oz, little more than half the current price.

AIM-quoted Cluff, steered by entrepreneurial chairman Algy Cluff, produced 11,278 oz of gold at its 90%-owned Angovia mine in Cote d'Ivoire. The company also has high hopes for its Baomahun gold project in Sierra Leone, with an estimated potential of 1.4m to 2.4m oz, expected average cash costs of $500 an oz and capital expenditure of $195m needed.

Cluff, which ended June with $8.1m cash, hopes to attract more serious institutional attention by becoming a 100,000-oz a year producer. Recommended by Growth Company Investor at 42.25p last year, the shares have now reached 101.5p.

Hold on.

Tags: AIM, Commodities, Emerging markets, Growth Stocks

Sector: Mining

Companies: Cluff Gold

Market cap: £124.6m

PE Forecast: 13.7

Share price: 101.5p