LONDON, June 4 (Reuters) - Cluff Gold Plc found 27 percent more gold at its Baomahum project in Sierra Leone after more exploration drilling, sending its shares higher on Friday, June 4.
Cluff shares in London, which have shed a third of their value since late March, jumped 4.8 percent to 71 pence by 0800 GMT, outperforming a 0.7 percent increase in the UK mining index .
"This mineral resource increase endorses the prospectivity of Baomahun, and we believe that this deposit has the potential to be considerably larger," said analyst Louise Collinge at Evolution Securities.
The broker reiterated its "buy" rating and target price of 124 pence on the company, which focuses on West Africa.
The total measured and indicated resources rose by 27 percent to 1.4 million ounces of gold at Baomahun and inferred resources now stand at 1.03 million ounces, a statement said.
Drilling would continue on areas identified by a so-called VTEM survey, in which a helicopter sends electromagnetic signals into the ground.
"The increase in the mineral resource and the preliminary results from the VTEM survey, reconfirm that our Baomahun Project continues to exceed our expectations," Cluff Technical Director Douglas Chikohora said.
"We aim to continue our drilling programme for the foreseeable future and we remain optimistic about the future economic viability of Baomahun."
The Baomahun project is located 180 kilometres east of Freetown and covers about 137 square kilometres. Cluff said on June 1 that it was no longer in talks about a possible takeover offer for the company after the interested suitors said they did not wish to proceed.
The company is expected to produce about 100,000 ounces of gold this year from its mines in Ivory Coast and Burkina Faso.
