Cluff Gold plc: Proposed Offering of up to 25 Million Shares

LONDON, March 13, 2012 - Cluff Gold (AIM:CLF)(TSX:CFG), the dual AIM/TSX-listed West African focused gold mining company, announces a proposed offering of up to 25 million new ordinary shares in the Company.


Highlights

- Proposed offering of up to 25 million new ordinary shares ("Shares") to institutional and other investors (the "Offering") under existing authorities by way of an accelerated bookbuild process.

- The net proceeds from the Offering will be used to:
-- satisfy the consideration and capital costs required for the Company's recent conditional acquisition of the Sega gold project in Burkina Faso;
-- accelerate the exploration programme at the Yaoure property in Côte d'Ivoire, where highly encouraging sulphide intercepts have recently been reported; and
-- further enhance the funds available for exploration across the remainder of the Company's portfolio of assets.


Background to the Offering

On 3 February 2012 the Company announced that it had entered into a conditional sale and purchase agreement with Orezone Gold Corporation ("Orezone") for the acquisition of Orezone's Sega gold project ("Sega") for consideration comprising 11 million Shares and US$15 million cash. The Sega project hosts 450,366oz (8.3Mt at 1.69 g/t) of indicated resources and 147,344oz of inferred resources (2.9Mt at 1.58g/t)1, located within trucking distance of the Company's Kalsaka mine in Burkina Faso. The acquisition provides an opportunity to significantly increase the Kalsaka mine life with limited upfront expenditure. Work has commenced on a Preliminary Economic Assessment for Sega, which is expected to be completed in April 2012. The transfer process of the Sega licences is underway, following the submission of the licence application to the Burkina Faso Government on 7 March 2012.

The Company is fully able to satisfy the cash element of the acquisition consideration from its existing cash resources. However, this would limit the Company's ability to fully capitalise on the significant growth opportunities that exist across its asset portfolio. The Board is keen to strengthen the Company's balance sheet in order to ensure that the anticipated capital requirements for bringing the Sega project into production are fully funded, whilst also accelerating the Group's exploration plans.

At Baomahun, the Company's flagship project, good progress continues to be made. The development programme has underlined the opportunity for Cluff Gold to achieve its objective of developing a robust open-pit gold mine, capable of delivering average production of 135,000oz per annum with first gold pour targeted for 2014. The results from a recently completed in-fill drilling programme will be incorporated into an updated resource due for publication in April, and the bankable feasibility study which is due for publication in H1 2012.

At Kalsaka, where strong cash flow continues to be delivered through the 60-70,000oz of production expected in 2012, an aggressive exploration programme is currently underway. The programme has recently yielded promising oxide exploration results and longer term sulphide potential as demonstrated by deeper drilling. In addition, the Company plans to ensure that an appropriate exploration programme is undertaken at the Sega project in 2012, following on from the recent 10,000m RC drilling programme completed by Orezone, for which results are awaited.

Meanwhile, promising sulphide drilling results from the Company's Yaoure project in Côte d'Ivoire suggest that the existing sulphide resource of 169,000oz (3.4Mt at 1.5g/t) in the measured category and 123,000oz (2.2Mt at 1.7g/t) in the indicated category, can be significantly increased during 2012 through increased exploration.2


Use of proceeds

In addition to the cash balance of approximately US$25.0 million as at 29 February 2012, the net proceeds of the proposed Offering will significantly strengthen the Company's balance sheet and will be utilised as follows:

- to satisfy the US$15 million cash component of the consideration for the recently announced acquisition of the Sega project;

- to fund the capital costs associated with the commencement of production at Sega, which are estimated at approximately US$8 million, together with a payment of US$2 million to reduce a net smelter royalty associated with the project;

- to accelerate the exploration programme at the Yaoure property in Côte d'Ivoire, where highly encouraging sulphide intercepts have recently been reported; and

- to maintain and enhance the funds available for the current exploration programmes at Kalsaka, Baomahun, Sega and the Mamoudouya project in Mali.


Details of the Offering

Cluff Gold has entered into a placing agreement with a syndicate led by Collins Stewart Europe Limited and GMP Securities Europe LLP (the "Lead Managers"), with Clarus Securities Inc. and Casimir Capital L.P. as special selling group members (together with the Lead Managers collectively, the "Managers"), with respect to the Offering.

Pursuant to the Offering, the Company will issue up to 25 million Shares at a price to be determined during a book-building process and expected to be at or around the current market price. Details of the number of Shares offered and price at which they were offered will be announced as soon as practicable after the close of the book-building process. North American purchasers will subscribe for Shares pursuant to the Offering on and subject to subscription letters to be entered into by each respective North American purchaser and the relevant Manager.

The book will open with immediate effect and close no later than 12.00pm UK time on 14 March 2012. The timing of the closing of the book and the making of allocations may be accelerated or delayed at the sole discretion of the Lead Managers. The Appendix to this announcement contains the detailed terms and conditions of the Offering. The Offering is not being underwritten by the Managers or any other person.

The closing of the Offering is expected to occur on or about 21 March, 2012, or such other date as the Company and the Lead Managers may agree in writing (the "Closing Date").

The Company will apply for admission of the Shares to be issued pursuant to the Offering to trading on AIM. The Offering is being made in Canada on a private placement basis to accredited investors, and the Company will also apply to the Toronto Stock Exchange ("TSX") in order for the Shares to be issued pursuant to the Offering to be listed for trading on the TSX. It is expected that such admission and listing will become effective and that trading will commence on or around the Closing Date. The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including that of the TSX.

The Shares issued pursuant to the Offering will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of Cluff Gold, including the right to receive all dividends and other distributions declared after the date of their issue.

Your attention is drawn to the detailed terms and conditions of the Offering described in the Appendix to this announcement (which forms part of this announcement).

Cluff Gold is a gold developer-producer with assets in West Africa. The Company generates significant cash flow through its Kalsaka gold mine in Burkina Faso, and is exploring the significant sulphide potential at its Yaoure project in Côte d'Ivoire. The Company remains focused on its objective of becoming a mid-tier producer through the development of its wholly-owned Baomahun project in Sierra Leone, which is expected to contribute an additional 135,000oz of gold per annum, with significant exploration potential along strike. With its experience of bringing new mines into production and a project pipeline spanning Burkina Faso, Côte d'Ivoire and Mali, the Company aims to further increase its production profile with its highly prospective exploration work across all assets. For more information, please visit www.cluffgold.com.

The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold in the United States unless the securities are registered under the U.S. Securities Act, or an exemption from the registration requirements of the U.S. Securities Act is available. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful.



Forward-Looking Information

This press release contains certain forward-looking information. All information, other than information regarding historical fact that addresses activities, events or developments that Cluff Gold believes, expects or anticipates will or may occur in the future is forward-looking information. Forward-looking information contained in this press release includes, but may not be limited to, mineral resource estimates and the anticipated exploration and development activities of Cluff Gold, the extension of the existing mine life at Kalsaka, the completion of the feasibility study at Baomahun, the increase of the mineral resources estimates at Yaoure, the gross proceeds raised under the Offering, the timing of completion of the Offering, and obtaining requisite approvals for the Offering. The foregoing and any other forward-looking information contained in this press release reflects the current expectations, assumptions or beliefs of Cluff Gold based on information currently available to Cluff Gold. With respect to the forward-looking information contained in this press release, Cluff Gold has made assumptions regarding, among other things, general business conditions; and it has also been assumed that no significant events occur outside of the normal course of Cluff Gold's business.

Such forward-looking information is subject to a number of risks and uncertainties that may cause actual results or events to differ materially from current expectations, including: risks normally incidental to exploration and development of mineral properties; uncertainties in the interpretation of results from drilling and test work; risks related to the future price of gold; risks related to regulations including mining and tax law; risks associated with the inherent accuracy of mineral resource and reserve estimates; risks of availability of outside contractors and equipment when required to carry out our exploration activities; risks relating to government interests in subsidiary holding exploration permits; risks relating to health concerns; political risk related to civil disturbances and political instability; environmental risks; and risks related to the potential unavailability of insurance to cover certain risks; future unforeseen liabilities and other factors.

Any mineral resource figures referred to in this press release are estimates and no assurances can be given that the indicated levels of minerals will be produced. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. Cluff Gold's resource estimates by their nature are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. If such mineral resource estimates are inaccurate or are reduced in the future, this could have a material adverse impact on Cluff Gold. Due to the uncertainty that may be attached to inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration.

Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable law, Cluff Gold disclaims any obligation to update or modify such forward-looking information, either as a result of new information, future events or for any other reason.

Peter Brown is a "Qualified Person" within the definition of National Instrument 43-101 and has verified the data disclosed in this release, and reviewed and approved the information contained within this announcement. Mr Brown (MIMMM) is the Group Exploration Manager.

1 Mineral resources estimates effective as of 11 January 2010. Stated cut-off grade of 0.5g/t Au. Further details of Sega's mineral resources are contained in the technical report entitled: Technical Report on the Mineral Resource of the Sega Gold Project, dated January 11, 2010, filed by Orezone Gold Corporation and available on SEDAR.

2 Please refer to press release titled "Yaoure Project drilling results", 19 January 2012. Detailed geology, descriptions of the various exploration prospects at Yaoure, and other exploration information can be found in the Company's NI43-101 report Technical Review of Angovia Gold Mine, Mount Yaoure, Côte d'Ivoire, as prepared by SRK Consulting, dated October 2008 and available on SEDAR. Resource estimation was subsequently updated for production and exploration changes in Cluff Gold's 2010 Annual Report and dated 31 December 2010. The resource calculations were based on a 0.5g/t Au cut off, and US$1,000/oz gold price for reserve calculations, with the exception of Angovia 2, which was modelled on a US$1,000/oz pit shell and represents 41% of total reserves.

Notes:
The Appendix to this Announcement (which forms part of this Announcement) sets out certain terms and conditions applicable to the Offering.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by any of the Managers or by any of their respective affiliates or agents or brokers, as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Collins Stewart Europe Limited ("CS") is acting for Cluff Gold and for no-one else in connection with the Offering, and will not be responsible to anyone other than Cluff Gold for providing the protections afforded to customers of CS nor for providing advice to any other person in relation to the Offering or any other matter referred to herein. CS is authorised and regulated in the United Kingdom by the Financial Services Authority (the "FSA").

GMP Securities Europe LLP ("GMP") is acting for Cluff Gold and for no-one else in connection with the Offering, and will not be responsible to anyone other than Cluff Gold for providing the protections afforded to customers of GMP nor for providing advice to any other person in relation to the Offering or any other matter referred to herein. GMP is authorised and regulated in the United Kingdom by the FSA.

Casimir Capital L.P. ("Casimir") is acting for Cluff Gold and for no-one else in connection with the Offering, and will not be responsible to anyone other than Cluff Gold for providing the protections afforded to customers of Casimir nor for providing advice to any other person in relation to the Offering or any other matter referred to herein.

Clarus Securities Inc. ("Clarus") is acting for Cluff Gold and for no-one else in connection with the Offering, and will not be responsible to anyone other than Cluff Gold for providing the protections afforded to customers of Clarus nor for providing advice to any other person in relation to the Offering or any other matter referred to herein.

The distribution of this Announcement and the Offering in certain jurisdictions may be restricted by law. No action has been taken by Cluff Gold, CS, GMP, Casimir or Clarus that would permit the Offering or possession or distribution of this Announcement or any other offering or publicity material relating to the Offering in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement becomes available are required by Cluff Gold, CS, GMP, Casimir and Clarus to inform themselves about, and to observe, such restrictions.

The price of the Shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the Shares.

This Announcement does not contain an offer or constitute any part of an offer to the public within the meaning of Sections 85 and 102B of the Financial Services and Markets Act 2000, amended ("FSMA") or otherwise. This Announcement is not an "approved prospectus" within the meaning of Section 85(7) of FSMA and a copy of it has not been, and will not be, delivered to the FSA in accordance with the Prospectus Rules or delivered to any other authority which could be a competent authority for the purpose of the Prospectus Directive. Its contents have not been examined or approved by the London Stock Exchange plc, nor has it been approved by an "authorised person" for the purposes of Section 21 of FSMA.

The Offering pursuant to this Announcement is only being, and may only be, made to and is directed at:

(a) persons in the United Kingdom who are both (i) a "Qualified Investor" within the meaning of Section 86(7) of FSMA acting as principal or in circumstances where Section 86(2) FSMA applies and (ii) within the categories of persons referred to in Article 19(5) (Investment professionals) or Article 49(2)(a) to (d) (High net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005, or persons in the United Kingdom to whom the Offering may otherwise be made or to whom the Offering may otherwise be directed in the United Kingdom without an approved prospectus having been made available to the public in the United Kingdom before the Offering is made, and without making an unlawful financial promotion;

(b) persons subject to the laws of a member state of the European Economic Area (other than, for the avoidance of doubt, the UK), who are (i) "qualified investors" (as defined in Article 2(1)(e) of the Prospectus Directive 2003/71 EC) acting as a principal for their own account to whom an invitation or Offering to subscribe for Shares in the manner contemplated by this announcement and any communication or correspondence in connection therewith is permitted by the laws of that member state or (ii) if they are not in any such member state but are acting for the account of such person then (i) applies in respect of each such purchaser;

(c) persons in or otherwise subject to the laws of Switzerland to whom the Offering or an invitation to subscribe for the Shares in the manner contemplated by this announcement and any communication or correspondence therewith is permitted by the laws of Switzerland and will not result in an 'public offer' under Swiss law; and

(d) persons outside Canada, the United States, the United Kingdom, Switzerland or other member states of the European Economic Area to whom the Offering or an invitation to subscribe for the Shares in the manner contemplated by this announcement and any communication or correspondence therewith is permitted by the laws of the jurisdiction in which it is situated or from where the Purchaser submitted its bid to subscribe for Shares and it is a person to whom the Shares can lawfully be offered and issued under all applicable laws, without the need for any approval, registration, filing or lodgement of any kind, including a prospectus or other disclosure document;

all such persons together being referred to as "Relevant Persons".

The securities being offered in the Offering pursuant to this Announcement are only available to, and any invitation, offering or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this Announcement or any of its contents.

The Shares under the Offering may not (unless an exemption from the requirement to file a prospectus, registration, statement or equivalent document under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia, Hong Kong or Singapore or any other jurisdiction.

The Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and may not be offered, sold or delivered within the United States except in transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws. The Managers have agreed that, except as permitted by the Placing Agreement and as expressly permitted by applicable laws of the United States, they will not offer or sell the Shares within the United States. The Placing Agreement permits the Managers, through certain of their U.S. broker-dealer affiliates, to offer the Shares in the United States to "accredited investors" as defined in Rule 501(a) of Regulation D under the U.S. Securities Act that will purchase Shares from the Company pursuant to Rule 506 of Regulation D under the U.S. Securities Act. This Announcement does not constitute an offering to sell, or a solicitation of an offering to buy, any Shares in the United States. Moreover, the Placing Agreement provides that the Managers will offer and sell the Shares outside the United States only in accordance with Regulation S under the U.S. Securities Act. Until 40 days after the commencement of the Offering, an offer or sale of the Shares within the United States by a dealer (whether or not participating in the Offering) may violate the registration requirements of the U.S. Securities Act unless such Offering or sale is made pursuant to an exemption from registration under the U.S. Securities Act.

Persons (including individuals, funds or otherwise) by whom or on whose behalf a commitment to acquire Shares under the Offering is given (the "Purchasers") will be deemed to have read and understood this Announcement, including the Appendix, in its entirety and to be participating in such Offering, unless otherwise agreed or required by the Lead Managers, on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in the Appendix and in particular will be deemed to represent, warrant and acknowledge that it is: (i) a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Shares that are allocated to it under the Offering for the purposes of its business; and (ii) outside the United States and is subscribing for the Shares under the Offering in an "offshore transaction" (within the meaning of Regulation S under the Securities Act).

This Announcement, including the Appendix, is not for distribution directly or indirectly in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia) or any jurisdiction into which the same would be unlawful. No public offering of securities of Cluff Gold will be made in connection with the Offering in Canada, the United Kingdom, the United States, the EEA, Switzerland or elsewhere.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of the Appendix or this Announcement should seek appropriate advice before taking any action.

The Shares to be issued pursuant to the Offering will not be admitted to trading on any stock exchange other than AIM or the TSX. Neither the content of Cluff Gold's website nor any website accessible by hyperlinks on Cluff Gold's website is incorporated in, or forms part of, this Announcement.

APPENDIX

TERMS AND CONDITIONS - IMPORTANT INFORMATION REGARDING THE OFFERING FOR PURCHASERS OUTSIDE THE U.S. AND CANADA

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX AND THE INFORMATION IN IT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, JAPAN, OR REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

EACH PURCHASER SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES.

1. Offering

1.1 As agents and brokers on behalf of Cluff Gold plc (company number: 4822520), a company incorporated pursuant to the Companies Act 1985 (AIM:CLF)(TSX:CFG) (the "Company"), Collins Stewart Europe Limited ("CS"), or its broker dealers, affiliates or agents in applicable jurisdictions, its broker dealers, affiliates or agents in applicable jurisdictions, and GMP Securities Europe LLP ("GMP") or its broker dealers, affiliates or agents in applicable jurisdictions (collectively, with CS, the "Lead Managers"), will, together with Clarus and Casimir and their respective broker dealers, affiliates or agents in applicable jurisdictions (together with the Lead Managers, collectively the "Managers") undertake an institutional bookbuild ("Bookbuild") for the Offering by the Company of new ordinary shares ("Shares").

1.2 Pursuant to the Offering, the Company will issue up to 25 million new ordinary shares at a price to be determined during a book-building process. Details of the number of shares offered and price at which they were offered will be announced as soon as practicable after the close of the book-building process.

1.3 The timing and closing of the books and the making of allocations may be accelerated or delayed at the sole discretion of the Lead Managers.

2. Allocation and conditions to Offering

2.1 Shares under the Offering will be issued on the Closing Date (as defined below).

2.2 The allocation of Shares to prospective purchasers in respect of bids made by prospective purchasers, including the subscription amount payable, will be agreed between the Lead Managers and the Company following the Bookbuild.

2.3 Acceptances of the Offering and allocations of Shares (including the subscription amount payable) will be as:

2.3.1 confirmed (orally or in writing) with prospective purchasers who are in the United Kingdom (or as the Lead Managers and Company may agree, in any other jurisdiction) by the respective Manager (or their agents as agent of the Company). That confirmation constitutes an irrevocable legally binding commitment of that person (who will at that point become a purchaser ("Purchaser")) to subscribe for the number of Shares allocated to it on the terms and conditions set out in this Appendix (a copy of the terms and conditions having been provided to the Purchaser prior to or at the same time as such confirmation) and in accordance with the Company's articles of incorporation; or

2.3.2 (unless paragraph 2.3.1 applies) by the completion and return of such letter of confirmation and registration or other forms as the Lead Managers or their agents may in their absolute discretion require and in that event the terms and conditions set out in such letter of confirmation and registration or other form shall apply to the exclusion of this Appendix.

2.4 For the avoidance of doubt, acceptance of the Offering constitutes a Purchaser's irrevocable legally binding agreement, subject to the Placing Agreement (as defined below) not having been terminated, to pay the aggregate settlement amount of the Shares regardless of the total number of Shares (if any) subscribed for by any other investor(s).

2.5 In the event that the Managers have procured acceptance from Purchasers in connection with the Offering prior to the date of the despatch of this Appendix to such a Purchaser, the Managers will, prior to admission to trading on AIM and TSX, request confirmation from any such Purchaser that its participation as agreed in any earlier commitment remains firm and binding upon the terms and conditions of this Appendix. Upon such confirmation being given (whether orally, in writing or by conduct (including without limitation by receipt by the Lead Managers of the relevant placing proceeds)) any earlier agreement made in respect of the Shares shall be varied, amended and/or ratified in accordance with the terms of this Appendix.

2.6 In making an investment decision, Purchasers must rely on their own examination of the Company and its prospects and the terms of the Offering, including the merits and risks involved in investing in the Shares.

2.7 Settlement will occur on a date to be advised but expected to be 21 March 2012 ("Closing Date").

3. Shares and Quotation

3.1 The Shares will rank equally, from the date of issue, in all respects with the Company's existing issued ordinary shares.

3.2 Application for admission of the Shares to trading on AIM ("AIM Admission") will be made in accordance with the AIM Rules. It is anticipated that AIM Admission will occur in respect of the Shares on or about 8.00am (London time) on 21 March 2012.

4. Placing Agreement

The Company and each of the Lead Managers have entered into a placing agreement in connection with the Offering ("Placing Agreement"). The Placing Agreement provides that the Lead Managers will use their respective reasonable endeavours to place Shares offered in the Offering with prospective purchasers.

The Managers' obligations under the Placing Agreement in respect of the Placing Shares are conditional on, inter alia:

(a) none of the warranties contained in the Placing Agreement being untrue, inaccurate or misleading as at the date of the Placing Agreement and the date of Admission as though they had been given and made on such dates (by reference to the facts and circumstances existing at such dates);

(b) the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing Agreement;

(c) Admission taking place not later than 8:00 a.m. on 21 March 2012 or such later date as the Company and the Lead Managers may otherwise agree but not being later than 8 a.m. on 11 April 2012; and

(d) in the reasonable opinion of the Lead Managers there having been since the date of the Placing Agreement no material adverse change or development in the financial or trading position or results of the Company (or the Group taken as a whole).

If (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by the Lead Managers by the respective time or date where specified (or such later time or date as the Company and the Lead Managers may agree), (ii) any of such conditions becomes incapable of being fulfilled or (iii) the Placing Agreement is terminated in the circumstances specified below, the Placing in relation to the Placing Shares will lapse and the Purchaser's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Purchaser agrees that no claim can be made by the Purchaser in respect thereof.

The Lead Managers may, at their discretion and upon such terms as they think fit, waive, or extend the period for, compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that the condition relating to the allotment and issue of the Placing Shares (subject only to Admission) may not be waived. Any such extension or waiver will not affect Purchasers' commitments as set out in this Announcement.

Neither the Lead Managers nor the Company shall have any liability to any Purchaser (or to any other person whether acting on behalf of a Purchaser or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Purchaser agrees that any such decision is within the absolute discretion of the Joint Bookrunners.

Each of the Lead Managers is entitled, at any time before Admission, to terminate the Placing Agreement by giving notice to the Company in certain circumstances, including, inter alia, a breach of the warranties given to the Managers in the Placing Agreement, the failure of the Company to comply with obligations under the Placing Agreement or the occurrence of a material adverse change which, in the reasonable opinion of a Lead Manager, is likely to prejudice the success of the Placing. Following Admission, the Placing Agreement is not capable of termination to the extent that it relates to the Placing of the Placing Shares.

The rights and obligations of the Purchasers shall terminate only in the circumstances described in these terms and conditions and will not be subject to termination by the Purchaser or any prospective Purchaser at any time or in any circumstances. By participating in the Placing, Purchasers agree that the exercise by a Lead Manager of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of that Lead Manager, and that it need not make any reference to Purchasers and that it shall have no liability to Purchasers whatsoever in connection with any such exercise.

5. Relationship of the Managers

5.1 The obligations of each Manager in connection with the Offering (including any obligation to pay) are several, and not joint nor joint and several. A right of a Manager in connection with the Offering (including any rights under the Placing Agreement) is held by that Manager severally and each Manager may exercise its rights, powers and benefits in connection with the Offering separately and individually.

5.2 A Manager will not be responsible for the performance obligations of the other Managers and will not be liable for any claims, damages or liabilities arising out of the actions taken, omissions of or advice given by other Managers. Any breach, non-performance or default by a Manager will not constitute a breach, non-performance or default of the others.

5.3 Nothing contained or implied hereby or by acceptance of the Offering constitutes a Manager acting as the partner, agent or representative of the other Managers for any purpose or creates any partnership, agency or trust between the Managers, and no Manager has any authority to bind another Manager in any way.

5.4 None of the Managers will be liable for any loss, damage or claim arising out of the actions taken or advice given by the other Managers. In addition, the rights of a Manager and the Beneficiaries (as defined below) in respect of that Manager under the representations, warranties, acknowledgements and undertakings set out below will in no way be affected by the actions taken or alleged to have been taken or advice given or alleged to have been given by any of the other Managers or their Beneficiaries.

6. Offer personal

The offering of Shares and the agreement arising from acceptance of the Offering is personal to each Purchaser and does not constitute an offering to any other person or to the public. A Purchaser may not assign, transfer, or in any other manner, deal with its rights or obligations under the agreement arising from the acceptance of the Offering, without the prior written agreement of the Lead Managers in accordance with all relevant legal requirements.

7. No Prospectus

No offer document or prospectus has been or will be submitted to be approved by the FSA in relation to the Offering and a Purchaser's commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix) released by the Company today.

Each Purchaser, by accepting the Offering, agrees that the content of this Announcement (including the Appendix) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company or the Managers or any other person and none of the Company or the Managers nor any other person will be liable for any Purchaser's decision to participate in the Offering based on any other information, representation, warranty or statement which Purchasers may have obtained or received. Each Purchaser acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Offering. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

8. Registration and Settlement

Settlement of transactions in the Shares will, unless otherwise agreed, take place on a delivery versus payment basis within the CREST system administered by Euroclear UK and Ireland Limited ("CREST").

The Company will procure the delivery of the Shares to CREST accounts operated by the respective Managers for the Company and the Managers will enter their respective delivery (DEL) instructions into the CREST system. The input to CREST by each Purchaser of a matching or acceptance instruction will then allow delivery of the relevant Shares to that Purchaser against payment.

Each Purchaser allocated Shares in the Offering may be sent a conditional trade confirmation stating the number of Shares and the subscription amount payable to be allocated to it and will be required to provide the Managers with funds sufficient to purchase such securities prior to the Closing Date.

It is expected that settlement will take place on or about 21 March 2012 in CREST on a T+5 basis in accordance with the instructions set out in the conditional trade confirmation. Settlement will be either through CS against CREST ID 288 or through GMP against CREST ID 116.

The Company reserves the right to require settlement for and delivery of the Shares (or a portion thereof) to any Purchaser in any form it requires if, in the Managers' or the Company's opinion, delivery or settlement is not possible or practicable within CREST or would not be consistent with the regulatory requirements of the Purchaser's jurisdiction.

Each Purchaser agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the applicable registration and settlement procedures, including if applicable, CREST rules and regulations and settlement instructions that it has in place with the respective Manager.

If the Subscriber elects to receive any Shares in uncertificated form registered to the Subscriber's CREST member account, the Subscriber agrees that it shall not sell, assign or transfer any such shares in or through the TSX, or to a resident of Canada, for a period of four months and one day following the date the Shares are registered to the Subscriber's CREST member account.

If Shares are to be delivered to a custodian or settlement agent, Purchasers should ensure that the conditional trade confirmation is copied and delivered immediately to the relevant person within that organisation. Each Purchaser shall ensure that, insofar as Shares are registered in a Purchaser's name or that of its nominee or in the name of any person for whom a Purchaser is contracting as agent or nominee, such person shall not be a person who is or may be liable to any UK stamp duty or stamp duty reserve tax or securities transfer tax.

Interest is chargeable daily on payments to the extent that value is received after the due date at the rate per annum of 4 percentage points above the Barclays Bank plc base rate.
Trade date: 14 March 2012
Settlement date: 21 March 2012 (Electronic)
21 March 2012 (Certificated)
ISIN code for the Offering Shares: GB00B04M1L91

9. Representations and Warranties

By participating in the Offering and accepting the Offering of Shares, each Purchaser (and each person acting on its behalf) represents, warrants, acknowledges and undertakes for the benefit of the Company, each of the Managers and their respective officers, employees and advisers of the Company and of each of the Managers, and any person acting on behalf of any of them (together the "Beneficiaries") as follows:

(a) if it is a Purchaser in the United Kingdom it:

(i) is a "qualified investor" for the purposes of section 86(7) of FSMA who is purchasing the Shares as principal for its own account and not for others, except in circumstances, to section 86(2) of FSMA applies;

(ii) is also a person falling within one or more of the categories of persons referred to in article 19 (investment professionals) or 49 (high net worth companies, etc) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 or is a person to whom the Offering may otherwise be made or to whom the Shares may otherwise be directed without an approved prospectus having been made available to the public in the UK before the Shares are offered and without making an unlawful financial promotion; and

(iii) understands, recognises and acknowledges that no prospectus has been or will be approved in connection with the Offering by the Financial Services Authority in the United Kingdom under section 87A of FSMA; or

(iv) if it is not in the United Kingdom but is acting for the account of a purchaser in the United Kingdom, that (i), (ii) and (iii) applies in respect of each such purchaser;

(b) if it is a Purchaser in or otherwise subject to the laws of a member state of the European Economic Area (other than, for the avoidance of doubt, the UK), (i) it is a "qualified investor" (as defined in Article 2(1)(e) of the Prospectus Directive 2003/71 EC) acting as a principal for its own account to whom an invitation or Offering to subscribe for Shares in the manner contemplated by this agreement and any communication or correspondence in connection therewith is permitted by the laws of that member state or (ii) if it is not in any such member state but are acting for the account of such person then (i) applies in respect of each such purchaser;

(c) if it is a Purchaser in or otherwise subject to the laws of Switzerland it is a person to whom the Offering or an invitation to subscribe for the Shares in the manner contemplated by this Appendix and any communication or correspondence therewith is permitted by the laws of Switzerland and will not result in an 'public offer' under Swiss law;

(d) if it is in a jurisdiction outside Canada, the United States, the United Kingdom, Switzerland or other member states of the European Economic Area, it is a person to whom the Offering or an invitation to subscribe for the Shares in the manner contemplated by this Appendix and any communication or correspondence therewith is permitted by the laws of the jurisdiction in which it is situated or from where the Purchaser submitted its bid to subscribe for Shares and it is a person to whom the Shares can lawfully be offered and issued under all applicable laws, without the need for any approval, registration, filing or lodgement of any kind, including a prospectus or other disclosure document;

(e) if it is not in the United States, nor a U.S. Person, nor acting for the account or benefit of a person in the United States or a U.S. Person, and it is acquiring the Shares in an offshore transaction in accordance with Regulation S under the U.S. Securities Act as such term is defined in Rules 902 and 903 under the U.S. Securities Act;

(f) it understands that the Offering and sale to it of the Shares has not been and will not be registered under the U.S. Securities Act or the laws of any state of the United States; Therefore, it agrees that it will not offer, sell or pledge any Shares in the United States unless and until the Shares are registered under the U.S. Securities Act (which it acknowledges the Company has no obligation to do) or unless the Shares are offered, sold or pledged in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and the laws of any state of the United States;

(g) it is purchasing the Shares for its account or for the account of one or more persons for investment purposes only and not with the purpose of, or with a view to, the resale, transfer or distribution or granting, issuing or transferring of interests in, or options over, the Shares and, in particular, neither the Purchaser nor any other person for whose account it is purchasing the Shares has any intention to distribute either directly or indirectly any of the Shares in the United States;

(h) it has such knowledge and experience in financial and business matters and expertise in assessing credit and all other relevant risks that it is capable of evaluating independently, and has evaluated independently and conducted an in-depth detailed analysis on, the merits and risks of a purchase of the Shares for itself and each other person, if any, for whose account it is acquiring any Shares, and it has determined that the Shares are a suitable investment for itself and each other person, if any, for whose account it is acquiring any Shares, both in the nature and the number of the Shares being acquired;

(i) if applicable, it is, or any beneficial purchaser for whom it is contracting is, acquiring the Shares pursuant to and in compliance with an exemption from the prospectus requirements of securities laws of the jurisdiction of residence and will provide the Company and the Managers, on request, whether before or after the Closing Date, with evidence of such compliance;

(j) it has had access to all information that it believes is necessary or appropriate in connection with, and for an adequate time prior to, its purchase of the Shares. It acknowledges and agrees that it will not hold the Managers responsible for any misstatements in, or omissions from, any publicly available information concerning the Company;

(k) it has made and relied entirely upon its own assessment of the Company, and has conducted its own independent investigation with respect to the Shares and the Company;

(l) it shall obtain its own advice regarding the tax consequences in any jurisdiction of purchasing, owning or disposing of any Shares;

(m) it has not relied on any investigation that any Beneficiary may have conducted with respect to the Shares or the Company. No Beneficiary has made any representation to it, express or implied, with respect to the Shares or the Company;

(n) it acknowledges that the Offering does not constitute a securities recommendation or advice in relation to any securities, and that no securities recommendation or advice has been made or given to you by any Beneficiary in relation to the Offering;

(o) it acknowledges that an investment in the Shares involves a degree of risk;

(p) except to the extent that liability cannot by law be excluded, it acknowledges that none of the Beneficiaries accept any responsibility in relation to the Offering or for the accuracy or completeness of any information given to it in connection with the Offering;

(q) it acknowledges and agrees that it will accept the decisions and actions of the Lead Managers in respect of the Offering and the acceptance of any Offering of Shares does not oblige the Lead Managers to consult with it as to any matter or qualify the exercise or non-exercise of rights arising under or in relation to the Offering;

(r) it has been independently advised as to any resale restrictions under applicable securities laws in its own jurisdiction;

(s) it acknowledges and agrees that if a Manager takes title to the Shares it does so only as agent for Purchaser for the purposes of effecting settlement and it agrees to release such Manager from any liability incurred by it in acting in such capacity (whether arising out of any act or omission by the Company in relation to the Offering or to the Shares or otherwise);

(t) if it is acquiring any Shares for an account of one or more persons, it has full power to make the acknowledgements, representations, warranties and agreements hereunder on behalf of each such person and it will take reasonable steps to ensure that each such person will comply with its obligations hereunder;

(u) it acknowledges that the Beneficiaries will rely upon the truth and accuracy of the foregoing acknowledgements, representations, warranties and agreements in conducting and undertaking the Offering;

(v) it has read this Announcement, including this Appendix, in its entirety;

(w) the exercise by the Managers of any right of termination or any right of waiver exercisable by them contained in the Placing Agreement, without limitation, the right to terminate the Placing Agreement, is within their absolute discretion and no Manager will have any liability to any Purchaser whatsoever in connection with any decision to exercise or not exercise any such rights;

(x) if (i) any of the conditions in the Placing Agreement are not satisfied (or, where relevant, waived), or (ii) the Placing Agreement is terminated or does not otherwise become unconditional in all respects prior to the admission of the Shares, the Offering will lapse and its rights shall cease and determine at such time and no claim shall be made by any Purchaser in respect thereof;

(y) no offer document or prospectus has been, or will be, prepared in connection with the Offering and it represents and warrants that it has not received a prospectus or other offer document in connection therewith;

(z) the Shares are (and the Shares issued pursuant to the Offering will be) admitted to trading on AIM and listed on the TSX, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of AIM and the Canadian securities regulatory authorities and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other AIM or TSX quoted or listed company, without undue difficulty;

(aa) none of the Managers or the Company nor any of their affiliates nor any person acting on behalf of any of them has provided, and will not provide it, with any material regarding the Shares or the Company or any other person other than this Announcement; nor has it requested any of the Managers or the Company nor any of their affiliates or any person acting on behalf of any of them to provide it with any such information;

(bb) the content of this Announcement is exclusively the responsibility of the Company and none of the Managers nor any person acting on their behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company (except for any information or statements relating solely to the Managers and furnished by the Managers specifically for use in such documents) and will not be liable for any Purchaser's decision to participate in the Offering based on any information, representation or statement contained in this Announcement or otherwise. Each Purchaser further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Purchaser has relied in committing itself to subscribe for the Shares is contained in this Announcement and any information previously published by the Company, such information being all that it deems necessary to make an investment decision in respect of the Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of the Managers or the Company and none of the Managers or the Company will be liable for any Purchaser's decision to accept an invitation to participate in the Offering based on any other information, representation, warranty or statement. Each Purchaser further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Offering;

(cc) neither it, nor the person specified by it for registration as a holder of Shares is, or is acting as nominee or agent for, and that the Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services);

(dd) if in the United Kingdom, it has complied with its obligations in connection with the Criminal Justice Act 1993, money laundering and terrorist financing under the Anti Terrorism Crime and Security Act 2001, the Proceeds of Crime Act 2002, the Terrorism Act 2003, the Terrorism Act 2006, the Money Laundering Regulations 2007 and Part VIII of the Financial Services and Markets Act 2000 (the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations. If within a reasonable time after a request for verification of identity the Managers have not received such satisfactory evidence, the Managers may, in their absolute discretion, terminate your Offering Participation in which event all funds delivered by you to the Managers (if any) will be returned without interest to the account of the drawee bank from which they were originally debited;

(ee) it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Shares in, from or otherwise involving, the United Kingdom;

(ff) it and any person acting on its behalf is entitled to subscribe for and purchase the Shares under the laws of all relevant jurisdictions which would apply to it, and that it and any person acting on its behalf is in compliance with applicable laws in the jurisdiction of its residence, the residence of the Company, or otherwise;

(gg) it (and any person acting on its behalf) will make or procure payment for the Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Shares may be placed with other subscribers or sold as the Lead Managers may in their absolute discretion determine and without liability to such Purchaser;

(hh) the person whom it specifies for registration as holder of the Shares will be (i) itself or (ii) its nominee, as the case may be, and none of the Managers nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Purchaser and any person acting on behalf of such Purchaser agrees to participate in the Offering and it agrees to indemnify the Company and the Managers in respect of the same on the basis that the Shares will be allotted to the account of the Managers who will hold them as nominee on behalf of such Purchaser until settlement in accordance with its standing settlement instructions;

(ii) the Company and the Managers and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to each of the Managers on their own behalf and on behalf of the Company and are irrevocable;

(jj) it will indemnify and hold the Company and the Managers and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Offering;

(kk) its commitment to subscribe for Shares on the terms set out herein will continue notwithstanding any amendment that may in future be made to the terms of the Offering and the Purchaser will have no right to be consulted or require that its consent be obtained with respect to the Company's conduct of the Offering. The foregoing representations, warranties and confirmations are given for the benefit of the Company and the Managers. The agreement to settle a Purchaser's subscription (and/or the subscription of a person for whom such Purchaser is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to the subscription by it and/or such person direct from the Company for the Shares in question. Such agreement assumes, and is based on the warranty above from each Purchaser, that neither it, nor the person specified by it for registration as holder, of Shares is, or is acting as nominee or agent for, and that the Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services). If there are any such arrangements, or the settlement relates to any other dealing in the Shares, stamp duty or stamp duty reserve tax may be payable. In that event the Purchaser agrees that it shall be responsible for such stamp duty or stamp duty reserve tax, and neither the Company nor the Managers shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Purchaser should seek its own advice and notify the Managers accordingly;

(ll) no action has been or will be taken by any of the Company, the Managers or any person acting on behalf of the Company or the Managers that would, or is intended to, permit a public offering of the Shares in any country or jurisdiction where any such action for that purpose is required;

(mm) it will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the subscription by them of any Shares or the agreement by them to subscribe for any Shares;

(nn) the Managers or any of their affiliates may, at their absolute discretion, agree to become a purchaser in respect of some or all of the Shares;

(oo) when a Purchaser or person acting on behalf of the Purchaser is dealing with the Managers, any money held in an account with any of the Managers on behalf of the Purchaser and/or any person acting on behalf of the Purchaser will not be treated as client money within the meaning of the rules and regulations of the FSA made under FSMA;

(pp) it acknowledges that the money will not be subject to the protections conferred by the client money rules and as a consequence, this money will not be segregated from the relevant Managers' money in accordance with the client money rules and will be used by the relevant Manager in the course of its own business; and the Purchaser will rank only as a general creditor of the Manager;

(qq) it acknowledges that all times and dates in this Announcement may be subject to amendment and the Managers shall notify the Purchasers and any person acting on behalf of the Purchasers of any changes;

(rr) that past performance is no guide to future performance and persons needing advice should consult an independent financial adviser;

(ss) all obligations entered into by the Purchaser pursuant hereto with the Managers are entered into with them as agent for the Company and are therefore enforceable directly by the Company;

(tt) if a company, it is a valid and subsisting company and has all the necessary corporate capacity and authority to execute its obligations in connection with the Offering participation;

(uu) it irrevocably appoints any director of either of the Lead Manager as its agent for the purposes of executing and delivering to the Company's and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing shares offered to it; and

(vv) time shall be of the essence as regards obligations pursuant to this Appendix.

10. Entire Agreement

The terms set out in this Appendix and the allocation of Shares (including the subscription amount payable) as confirmed to a Purchaser, constitute the entire agreement to the terms of the Offering and a Purchaser's participation in the Offering to the exclusion of prior representations, understandings and agreements between them. Any variation of such terms must be in writing.

11. Governing Law and Jurisdiction

The agreement arising out of acceptance of the Offering and any dispute or claim arising out of or in connection with the Offering or formation thereof (including non-contractual disputes or claims) shall be governed by and construed in accordance with the laws of England. Each Purchaser irrevocably agrees to submit to the exclusive jurisdiction of the courts of England to settle any claim or dispute that arises out of or in connection with the agreement arising out of acceptance of the Offering or its subject matter or formation (including non-contractual disputes or claims).

The Toronto Stock Exchange neither approves nor disapproves the information contained in this News Release.


NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR PUBLICATION, RELEASE OR DISSEMINATION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN THE UNITED STATES, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF SUCH JURISDICTIONS.



Contact Information

Cluff Gold plc
Peter Spivey, Chief Executive
+44 (0)20 7340 9790

Cluff Gold plc
Pete Gardner, Finance Director
+44 (0)20 7340 9790

Cluff Gold plc
Carrie Lun, Investor Relations Manager
+44 (0)20 7340 9790

Collins Stewart Europe Limited
(Nominated Adviser & Broker, London)
Sebastian Jones / Joe Weaving / John Prior
+44 (0)20 7523 8350

GMP Securities Europe LLP
David Wargo / Richard Greenfield / Mitch Limb
+44 (0)20 7647 2800

Clarus Securities Inc.
John Jentz / April Cuadra / Joseph Riggio / Samuel Grauer
+1 416 343 2777

Pelham Bell Pottinger Investor Relations (Global)
Charlie Vivian / James MacFarlane / Philippe Polman
+44 (0)20 7861 3232

Farm Street Communications Ltd Press Relations (U.K.)
Simon Robinson
+44 (0) 7593 340 107