Proactive Investors articlehttps://www.proactiveinvestors.com/companies/news/36296/clifton-star-resources-drives-duparquet-project-success-to-pea-stage-expected-rerating-ahead-36296.html
() says it has proven it has got the golden ticket, with continued strong drilling results from its Duparquet project in Quebec, along with metallurgy results that showed recovery rates of over 93 per cent.
The junior miner is now focused on putting out its preliminary economic report - which it hopes will secure a re-rating of its stock.
"We are expecting a new resource estimate, which will include 2012 drilling up to September, as well as the preliminary economic assessment for the project - expected to be completed by the end of the year," says president and CEO, Michel Bouchard.
The miner anticipates releasing the documents to the markets early in the new year.
The first integrated resource report on the project, released in May, included the Beattie, Donchester, Dumico and Central Duparquet properties, as well as the Beattie tailings.
The report noted 1,284 ounces of gold in the measured category, 1.71 million ounces of gold in the indicated category and 1.67 million ounces of gold in the inferred category.
"The new resource number, which will also include quite a bit of surface sampling and trenching, is expected to be much more solid, and will confirm and probably increase what we had before," says Bouchard.
"We have published a number of drilling results over the year, which have all been quite good."
Indeed, as an example, the latest results from the North Zone of the property include 29.6 metres grading 2.52 grams per tonne (g/t) gold in hole BD12-15, and 21.0 metres grading 2.55 g/t gold in hole BD12-11.
At the same time, though Bouchard expects a higher resource number, one of the main purposes of the drilling campaign was to upgrade resources from the inferred to the indicated category, as well as from the indicated to the measured category.
Mining consulting firm InnovExplo will update the resource estimate and will also design the mining sequence for open-pit operations, while Bateman Australia is designing the metallurgical treatment circuit and mill.
Bouchard adds that Stavibel Engineering Services, a unit of (), is also studying all of the environmental and social aspects of the project, as well as assessing and designing the waste rock and tailings storage facilities.
"We've been following our plan announced early this year, and so far, everything has fallen into place. Even our metallurgical tests, which are still ongoing, are looking to improve process and lower costs."
"We've got $9 million in the bank, which allows us to continue our plans, despite market conditions for juniors right now," affirms Bouchard.
The gold explorer still has two drills on its Duparquet property that are attempting to expand the known mineralized zones toward the east, on an "area that was never drilled before".
The company expects to publish more drill results soon.
Clifton Star has also made strides in securing a more favourable option agreement for its Duparquet property, to ensure it has enough cash going forward.
The new deal, announced in September, lifted the uncertainty regarding Clifton's ability to meet the upcoming December payment, by significantly reducing the amount and "tailoring the payment plan to the evolution of the project".
Now, if Clifton pays a total of $52 to $52.2 million over a period of five years in a series of staged payments, it will own a 100 per cent interest in the properties.
The December 2012 payment is now just $2 million and 250,000 shares, compared to $22 million, previously.
"This new deal gives us breathing room, as we will have time to get to feasibility stage within the next two years, without having to pay again until 2014, following the December payment."
Clifton Star has also inked a deal to sell its Duquesne mine property to ()(OTCQX:XMTTF) in exchange for a 19 per cent stake in the Quebec peer.
The deal, which is expected to wrap up at the end of the year, consolidates Clifton's land position in the area, giving it a significant interest in the eastern extension of its Duparquet project.
The Duquesne Mine property is right next to the eastern boundary of 's Duquesne-Ottoman project.
Ultimately, Bouchard says that its Duparquet project has the goods to pay off.
Markets have started to firm up as of late, with some mergers and acquisitions activity in the junior gold space. Just this week, () announced a proposed $341 million deal to acquire ().
"Argonaut is a mid-tier producer acquiring a junior with a good deposit. Prodigy's Magino mine is in Canada, and it has lots of potential. It's the best way for a mid-tier company to grow rapidly," Clifton's CEO says.
The deal follows the transaction earlier this year that saw Iamgold (TSE:IMG) buy , also in an effort to diversify its assets geographically.
"This shows interest toward robust assets in spite of unfavourable market conditions,” insists Bouchard.
“People will recognize our project for being in a mining-friendly area, with infrastructure, man power and stability that no other region has seen. Considering the multiple paid for both Trelawney and Prodigy, we are way undervalued."
As M&A activity heats up, Clifton's main occupation is to focus on developing its Duparquet project, readying it for the preliminary economic assessment report, after which it would go to feasibility stage.
"We've done everything we said we would do - we have delivered. So far, the results are exactly what we thought they would be," Bouchard concludes.