QUARTERLY REPORT FOR PERIOD ENDING 30 JUNE 2010
HIGHLIGHTS:
• BULK
SAMPLING BY LARGE DIAMETER DRILLING COMPLETED
• $500,000 RAISED VIA PLACEMENT FOLLOWING APPROVAL AT AGM
BINGARA DIAMOND PROJECT (Cluff 100%, Atlantic Gold 10% NPR, reducing to
5%)
13 large diameter percussion drill holes targeting the claystone layer
on EL 3325 in the vicinity of Doctor’s Creek (nearby the old Monte
Christo prospect) were completed by contractors to a depth of 60 to 68
metres.
All material recovered from
the holes was collected and has been transported to the company’s
processing plant at Mount Ross, Copeton. Processing has commenced, and
is continuing over the next two to three weeks.
Core drilling using the Company’s
diamond core dill rig also continued during the quarter, with the completion
of 4 more drill holes in the vicinity of the Doctor’s Creek prospect
area.
Restoration of the
Upper Four Mile pit area, undertaken by the Company in 2005, has commenced
and other areas excavated by the Company over the past 12 months during
recent exploration programs will also be rehabilitated this year.

Percussion
drilling at Bingara June 2010
The company appointed a consultant senior geologist and mine manager to
undertake a review of Bingara and Copeton, and received preliminary reports
after a site visit.
Core Drilling
Program
Core drilling of the claystone is continuing in the Doctors Creek area,
and future holes are shown below, aimed at determining the further extent
and thickness of the claystone, as well as the lithology and extent of
the upper geological layers which have already been demonstrated to carry
diamonds with varying grades.

Planned Core
Drilling Program, and Bulk Sampling Pit, Doctors Creek:
Planned core drill holes as stars, completed drill holes as dots,
bulk sampling site as triangle.
COPETON DIAMOND
PROJECT (Cluff 100%)
Some restoration work
was undertaken in the vicinity of the upper tailings dam at Mount Ross,
Copeton. The Company’s trommel and jig plant was used throughout
the Quarter to process samples derived from the Bingara exploration program.
RUBY MINE
(Cluff 100%)
Meetings were held with the consent authorities to examine the success
of rehabilitation of mined areas, which confirmed that the Company was
in compliance with its environmental obligations. Final rehabilitation
is programmed for the following 6 months.
TIN (Cluff
100%)
Excepting DPI reporting, no activities were undertaken on Cluff’s
tin projects during the quarter. The Company has had several approaches
to joint venture its tin projects, and these are under discussion.
EGERTON GOLD
PROJECT (Cluff earning up to 75% from Tech-Sol Pty Ltd)
There
were no field activities undertaken at the Egerton Gold Project during
the quarter.
INDIA
Further negotiations have proceeded and the company remains positive that
the terms of an economically viable joint venture will be completed in
the near future.
CORPORATE
As a result of motions put to shareholders at the Annual General Meeting
on the 7th of June, the position of Mr Peter Kennewell as Managing Director
and as a Director of Cluff Resources Pacific NL and of its subsidiary
companies was terminated. Mr Kennewell’s entitlements upon termination
have been fully paid.
FINANCE
$500,000 was raised via a placement to Firebird Global
Master Fund, who were issued a total of 111,111,111 fully paid ordinary
shares and 111,111,111 free attaching 31 July 2011 $0.01 listed options
at a price of $0.0045 per share. Approval of this placement was granted
by shareholders at the AGM.
The Company has received
a good number of applications for July 31 2010 listed optionholders (CFRO)
to convert these securities into fully paid ordinary shares, with over
$15,000 being received from optionholders at this point in time. The shares
issuable from these conversions will be allotted in the week following
the expiry of these securities. The Company is grateful for the continued
support of its security holders.
PLAN OF OPERATIONS
FOR THE FOLLOWING 6 MONTHS
Following the change of management at the AGM, the company has put into
place a plan for its Australian operations for the next 6 months:
Aside from other activities
which may develop as a result of current discussions, the company plans
to undertake the following:
1. Completion of the processing of the material extracted from the percussion
program at Bingara;
2. Completion of the current diamond core hole at Doctor's Creek;
3. Detailed geological mapping of the "drift" (historically
recognised diamond bearing zones) at Bingara, with a view to confirming
the historical records and defining an inferred resource;
4. Diamond core drilling to be undertaken at Big Hill, Bingara (proposed
program of 4 to 6 holes) to verify the lithology of this prospect which
has demonstrated high diamond grades from the Company’s recent bulk
sampling;
5. Processing of bulk sampling at Eaglehawk mining area, Bingara, to be
undertaken;
6. Possible detailed mapping of EL3325, including an aerial survey and
DGPS;
7. Detailed review of all data from previous exploration programs at Bingara;
8. Review of Dr Julian Hollis's opinions as a consequence of the recent
program and re-interpretation of the data. (Dr Hollis has provided interpretation
of exploration results in the past);
9. Preparation of a further exploration program for Bingara, following
the collation of data and examination of results achieved from the above
activities;
10. Upper Four Mile pit at Bingara to be fully rehabilitated;
11. Monte Christo pit at Bingara to be fully rehabilitated;
12. The small processing plant at Copeton to be reconstructed to provide
for its long term viability and to be modularised to allow it to be transported
relatively easily. If this cannot be achieved economically the small plant
to be disassembled for sale and a new modern small plant constructed or
purchased;
13. Ruby Mine to be completely closed and the site fully rehabilitated,
and all environmental bonds returned. Components of the ruby processing
plant to be assessed for compatibility with the Copeton plant components,
with a view to constructing the most efficient modularised plant;
14. The large processing plant at Copeton to be disassembled and sold,
pending assessment of its continued viability for bulk sample processing;
15. Copeton processing area to be thoroughly tidied up;
16. The yard and workshop at Inverell to be completely re-organised and
all excess or unwanted equipment to be sold or scrapped; and
17. Tin tenements at Ardlethan and Buddigower to be preserved by ensuring
expenditure commitments have been met.
CORPORATE
RE-STRUCTURE
The company also has plans for some changes to its corporate structure
and plans a Special General Meeting in mid September at which it will
seek shareholder approval for such changes.
Scott Enderby,
Company Secretary
26 July 2010
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