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Clifton Star resumes control of Duparquet and looks to keep up drilling momentum

Clifton Star Resources (CVE:CFO) has resumed 100% control of the Duparquet Gold Project from Osisko (TSE:OSK) after the operator formally withdrew from the project, and will not continue with its option to earn 50%.

Clifton plans to extend holes that stopped in mineralization on the Beattie property and has retained consultants to determine potentially economic open pits for in-fill and expansion drilling on the Beattie, Donchester and Central Duparquet properties. A second phase of drilling will test deeper targets containing higher grade gold zones. The company retains north of $15 million in cash, and is well funded to continue a vigorous exploration effort through 2011 and 2012.

An updated NI 43-101 Technical Report is expected very shortly for Duquesne, which will also contain targets for a summer drilling campaign. An internal scoping study over the whole property is also expected within the next three months that will lead to a NI 43-101 Report in late 2011, or early 2012.

The current resource and exploration status at Duparquet includes an updated NI 43-101 Compliant Resource Estimate prepared by Peter Bevan, for Donchester, for a Measured and Indicated Resource of 22,512,260 tonnes at 1.84 g/t Au, for 1,331,936 ounces, and an Inferred Resource of 4,649,000 tonnes at 2.02 g/t Au, for 301,828 ounces, at a cutoff grade of 0.5 g/t, with the total resource now at 1,633,764 ounces of gold.

The Donchester Mine produced 208,000 ounces of gold, down to a depth of 381 meters, and hosted a previous estimate of 12.7 million tonnes at 2.8 g/t Au, for 1,102,766 ounces. The new estimate, which is based on 218 drill holes, doubles the tonnage of the Measured and Indicated Resource, and decreases the grade to 1.84 g/t Au, while adding 530,998 ounces in all categories.

A NI 43-101 Compliant Resource Estimate prepared by SGS of Canada, for Beattie, confirms an in situ Inferred Resource of 56.2 million tonnes at 1.53 g/t Au, containing 2.77 million ounces of gold at a cut off grade of 0.67 g/t. This was based on a total of 127,540 metres of drilling. Geological interpretation of the deposit identified five main structurally-controlled mineralized domains, and a lower grade envelope hosted by syenite porphyry.

Scoping studies produced an in-pit inferred resource of 32.0 million tonnes at 1.67 g/t Au to extract 1.72 million ounces of gold, at a cut off grade of 0.67 g/t. The selected base case operating parameters were modeled around a C$1,100 gold price, and utilized total operating costs of C$34.85 per tonne. Other assumptions included an 85% recovery of gold in oxidized material, and a pit wall slope angle of 50 degrees.

The conceptual open pit to extract 1.72 million ounces has approximate maximum dimensions of 1,600 metres in length, 850 metres in maximum width, and a maximum vertical depth of 400 metres. Selecting C$1,500 per ounce gold increases the in-pit Inferred Resource to 2.50 million ounces at a grade of 1.39 g/t gold.

The Beattie Mine was an underground mine with historic production of 1.265 million ounces of gold at a grade of 0.115 oz/t, with minor silver. The main ore body extended over a length of 352 metres and was mined down to a depth of up to 600 metres. The Beattie Mine is part of a 6.5 kilometre strike line that carries 3 major mineralized zones running from east to west.   

The current resource estimate at Beattie does not include the eastern extension of the conceptual Beattie open pit, as 2010 drilling was insufficient to calculate a resource on that extension. Drilling did confirm that the mineralized system beneath Beattie remains open at depth.

This brings the total number of Measured and Indicated Resource ounces at Donchester, Central Duparquet, Beattie Tailings, Duquesne and Beattie to 1,769,764 ounces and Inferred Resources to 3,447,919 ounces, for a total of 5,217,683 ounces.  This size of the total resource will increase when the new NI 43-101 Report for Duquesne will be issued.  

The Duquesne Mine had historical production of 60,000 ounces of gold at an average grade of 10.5-11.5 g/t.  Clifton Star completed 55 drill holes over a 250 meter strike length and depth of 932 meters, outlining resources on westerly extensions and at depth, which identified 4 parallel high grade gold veins, and wider mineralized zones, with a potential strike line extending for 3,000 metres. Duquesne currently hosts a Measured and Indicated Resource of 1,859,200 tonnes at 3.33 g/t Au for 199,161 ounces, and an Inferred resource of 1,563,100 tonnes at 5.58 g/t Au for 280,642 ounces, for a total of 476,804 ounces at a cut-off of 3.00 g/t.

In 2010, Osisko completed 69 holes comprised of 20,300 metres over this zone, with highlights that included DQ 10-52, which intersected 19.5 metres at 4.22 g/t Au from 27.0 to 46.5 metres, and included 1.5 metres at 21.40 g/t Au; DQ 10-61, which intersected 15.2 metres of 2.6 g/t  from 346.5 to 361.7 metres, and included 1.7 metres at 15.20 g/t Au; and DQ 10-76, which intersected 11 metres at 5.81 g/t Au from 96.0 to 107.10 metres, and included 2 metres at 17.7 g/t Au.     

A high-resolution airborne geophysical survey was completed and included total field magnetics, time-domain electromagnetics and radar altimetry for digital elevation modeling. Survey lines covered approximately 1030 line kilometres and included Beattie, Donchester and Duquesne properties as well as intervening ground and will be done in collaboration with two other public companies working in the area. This survey should allow for better interpretation of trends of structurally-controlled gold mineralization on the properties.

Osisko completed 123,000 metres of drilling, and expended approximately $15 million on the Duparquet Gold Project in 2010, before it terminated its agreement and allowed the option terms to formally lapse with Clifton Star. This allows the Company to retain Duquesne, along with the advanced exploration effort at no cost, as it seeks a new CEO with mining experience, along with additions to its geological team.

Clifton Star has also retained David Dreisinger, who is a noted metallurgist to review metallurgy at the project and develop process options for the Beattie tailings, which host a Measured and Indicated Resource of 4,757,280 tonnes at 0.76 g/t Au, for 114,700 ounces and an Inferred Resource of 2,913,600 tonnes at 0.72 g/t Au for 67,400 ounces, which carries near term cash flow potential, and may become a stepping stone for production increases from a series of open pits.