Cluff signs memorandum of understanding with Samsung

Cluff Gold, a west Africa-focused gold miner, has signed a memorandum of understanding (MoU) for a long-term strategic partnership with Samsung which will begin with an unhedged facility to provide Cluff with additional funding for the development of its asset portfolio.

In addition to the $20m facility, the MoU has been made to provide a general framework for the potential long-term funding of the Baomahun project in Sierra Leone and other development opportunities.

In return for its financial support, which will also be used to ensure the company remains well funded during the development of the Sega project, Samsung will gain access to a reliable supply of gold bullion.

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Subject to the outcome of a feasibility study, a further "substantial" financing for the development of the Baomahun project, which has 2.1m oz of indicated resources (25.6m tonnes at 2.5g/t), is expected.

John McGloin, Chairman of Cluff Gold, said: "This agreement provides immediate financing support on competitive terms compared to other recent financings without the requirement to hedge any of our current or future gold production. More importantly, it also offers a framework for a cornerstone financing in the Baomahun project or other development opportunities, capable of satisfying a significant portion of the total Baomahun financing needs.

"The initial $20m drawdown provides us with the balance sheet flexibility to use existing cash flow to fund our exploration programmes whilst maintaining development momentum at Sega and Baomahun. We look forward to working with Samsung as we deliver our company strategy to grow into a mid-tier producer through the development of our existing portfolio whilst looking at other accretive growth opportunities in the region."

The share price rose 4.92% to 80p by 11:40.

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