Post by Franko10 ™ on Oct 7, 2004 11:14:22 GMT -5
THIRD QUARTER REPORT
For The Nine Months Ended September 30, 2001
Overview
Gold prices improved during the third quarter, averaging US $8.00 per ounce higher than the first six months of 2001. The events of September 11th led to a modest increase in gold prices and while the impact was not as dramatic as many expected, it does appear to be more sustainable than previous rallies.
The lower gold grades experienced at Seabee during the first six months of the year continued unexpectedly through most of the third quarter, resulting in lower than planned gold production. The grade began to improve significantly in late September, prompting optimism that the Company will achieve its annual production target of approximately 50,000 ounces.
During the third quarter, the Company initiated deeper drilling at the Seabee mine with excellent results. Five consecutive holes, between 450 and 650 metres below surface, yielded ore grades, cut to 75 grams across true widths, as follows:
46.0 grams per tonne over 4.20 metres
14.6 grams per tonne over 3.44 metres
20.9 grams per tonne over 1.97 metres
35.0 grams per tonne over 2.25 metres
25.0 grams per tonne over 1.80 metres
These grades are superior to the historical milled grades at Seabee, which average 8.5 grams per tonne. The ore, expected to be accessible for milling by late 2002, supports continued confidence in the immense potential for longevity of the Seabee mine.
Prudent restraints on expenditures and anticipated improvement in mine operating results in the fourth quarter, has the Company optimistic that it will enter the annual mine re-supply season during the first quarter of 2002 with a solid working capital base.
Financial Highlights
Nine Months Ended
September 30, 2000
Nine Months Ended
September 30, 1999
Revenue ($ millions) 22.3 23.6
Net earnings (loss) ($ millions) (1.9) 1.1
Earnings (loss) per share ($) (.05) .03
Cash provided by operations ($ millions) 2.6 5.1
Cash from operations per share ($) .06 .13
Average realized gold price for theperiod (US$/ounce) 270 285
Total cash operating costs per ounce (US$/ounce) 224 197
Working capital ($ millions) 8.7 8.1
Financial
Three months
For the three months ended September 30, 2001, the Company recorded a net loss of $0.7 million ($0.02 per share) compared to net earnings of $1.0 million ($0.03 per share) for the same period in 2000. This decrease was a combination of higher depreciation and depletion charges and lower than expected contribution from the Seabee mine operations. As well, third quarter 2001 gross oil and gas revenues fell 18% from the 2000 period due to third quarter declines in petroleum prices realized. Cash flow provided from operations for the third quarter was $0.6 million compared to $2.0 million last period.
Year to date
Claude recorded a net loss of $1.9 million ($0.05 per share) for the first three quarters of 2001, compared to net earnings of $1.1 million ($0.03 per share) for the same period last year.
Sales revenues decreased by 6% to $22.3 million for the nine months ended September 30, 2001, from $23.6 million in 2000. A period to period drop in gold revenues, due mainly to decreased production, was partially offset by an increase in gross oil and gas revenues, largely a result of higher average petroleum prices realized in 2001.
Gold revenues dropped 20% from $17.5 million for the first nine months of 2000 to $14.0 million in 2001. Gold production fell from 41,800 ounces poured in 2000 to 33,600 ounces poured this period. These revenues were also affected by a slightly lower average realized price (2001- CDN $416/US $270; 2000-CDN $419/US $285).
Gross oil, natural gas liquids and gas revenues increased by 36% from $6.1 million in 2000 to $8.3 million in 2001. This significant increase was the result of higher average realized prices, particularly in the NGL and gas sectors.
Total operating and administrative costs fell from $14.9 million for the first three quarters of 2000 to $14.3 million for the same period in 2001. This reduction is largely a function of decreased operating costs at the Seabee mine, together with a reduction in interest charges.
Total mine cash costs for the nine month period were $11.6 million in 2001 compared to $12.1 million in 2000. Cash operating costs increased from US $197 per ounce for the first three quarters of 2000 to US $224 per ounce for the current period, a result of lower production.
Depreciation and depletion of the Company’s gold assets was $4.1 million for the first nine months of 2001, compared with $2.9 million for the corresponding 2000 period. This is largely attributable to the smaller calculated reserve base, a result of regulatory changes, at the Seabee mine. Amortization and depreciation costs per ounce for the period were US $80 compared to US $48 in the 2000 period.
Cash flow provided from operations for the period was $2.6 million ($0.06 per share) compared to $5.1 million ($0.13 per share) in 2000. The lower cash flow is due to a combination of lower gold production, partially offset by reduced production costs at the Seabee mine, and a $0.4 million increase in operating cash flow contributed by our oil and gas properties.
Currency & Commodity Hedging
To manage risks associated with gold prices and changes in foreign currency, the Company may use commodity and foreign currency instruments. At September 30, 2001, Claude had outstanding forward gold contracts related to future production of 5,000 ounces at an average price of US $288 per ounce, with a market value loss inherent in these contracts of US $18,000.
At September 30, 2001 the Company had outstanding foreign exchange contracts to sell US $3.1 million at an average contract exchange rate of 1.5647 $CDN/$US, with a market value loss inherent of US $28,000.
Operations
Gold
During the nine month period, the Seabee mine processed 202,600 tonnes of ore (averaging 5.99 grams per tonne) and produced 33,600 ounces of gold. This compares to 177,900 tonnes (averaging 8.27 grams per tonne) and 41,800 ounces produced during the same period in 2000.
The mill feed grade is 23% lower than the 7.8 grams per tonne average grade of Seabee’s proven and probable reserves. However, a 14% improvement in throughput reduced the impact of the lower grade ore.
The last quarter will focus on accessing the Claude 2B zone on the 495 level and a ramp extension to the 650 level. Mining and development on the Currie Rose 2A and 2D zones continues on the 60 and 400 levels.
As indicated earlier, drilling below the 500 level on the Claude 2B zone has been very promising. This zone is open along strike and at depth, and additional drilling is slated throughout the remainder of the year.
Oil & Gas
For the nine months ended September 30, 2001, oil and NGL production was 67,000 barrels, 12% lower than the 76,000 barrels produced in the 2000 period. The average realized price was US $25.93 (CDN $39.89) per barrel versus US $26.69 (CDN $39.29) last year. Gas production improved 1% from 740 MMCF in 2000 to 751 MMCF this period. The average realized price was US $4.10 (CDN $6.31) per MCF compared to the US $2.58 (CDN $3.80) per MCF realized in last period.
For The Nine Months Ended September 30, 2001
Overview
Gold prices improved during the third quarter, averaging US $8.00 per ounce higher than the first six months of 2001. The events of September 11th led to a modest increase in gold prices and while the impact was not as dramatic as many expected, it does appear to be more sustainable than previous rallies.
The lower gold grades experienced at Seabee during the first six months of the year continued unexpectedly through most of the third quarter, resulting in lower than planned gold production. The grade began to improve significantly in late September, prompting optimism that the Company will achieve its annual production target of approximately 50,000 ounces.
During the third quarter, the Company initiated deeper drilling at the Seabee mine with excellent results. Five consecutive holes, between 450 and 650 metres below surface, yielded ore grades, cut to 75 grams across true widths, as follows:
46.0 grams per tonne over 4.20 metres
14.6 grams per tonne over 3.44 metres
20.9 grams per tonne over 1.97 metres
35.0 grams per tonne over 2.25 metres
25.0 grams per tonne over 1.80 metres
These grades are superior to the historical milled grades at Seabee, which average 8.5 grams per tonne. The ore, expected to be accessible for milling by late 2002, supports continued confidence in the immense potential for longevity of the Seabee mine.
Prudent restraints on expenditures and anticipated improvement in mine operating results in the fourth quarter, has the Company optimistic that it will enter the annual mine re-supply season during the first quarter of 2002 with a solid working capital base.
Financial Highlights
Nine Months Ended
September 30, 2000
Nine Months Ended
September 30, 1999
Revenue ($ millions) 22.3 23.6
Net earnings (loss) ($ millions) (1.9) 1.1
Earnings (loss) per share ($) (.05) .03
Cash provided by operations ($ millions) 2.6 5.1
Cash from operations per share ($) .06 .13
Average realized gold price for theperiod (US$/ounce) 270 285
Total cash operating costs per ounce (US$/ounce) 224 197
Working capital ($ millions) 8.7 8.1
Financial
Three months
For the three months ended September 30, 2001, the Company recorded a net loss of $0.7 million ($0.02 per share) compared to net earnings of $1.0 million ($0.03 per share) for the same period in 2000. This decrease was a combination of higher depreciation and depletion charges and lower than expected contribution from the Seabee mine operations. As well, third quarter 2001 gross oil and gas revenues fell 18% from the 2000 period due to third quarter declines in petroleum prices realized. Cash flow provided from operations for the third quarter was $0.6 million compared to $2.0 million last period.
Year to date
Claude recorded a net loss of $1.9 million ($0.05 per share) for the first three quarters of 2001, compared to net earnings of $1.1 million ($0.03 per share) for the same period last year.
Sales revenues decreased by 6% to $22.3 million for the nine months ended September 30, 2001, from $23.6 million in 2000. A period to period drop in gold revenues, due mainly to decreased production, was partially offset by an increase in gross oil and gas revenues, largely a result of higher average petroleum prices realized in 2001.
Gold revenues dropped 20% from $17.5 million for the first nine months of 2000 to $14.0 million in 2001. Gold production fell from 41,800 ounces poured in 2000 to 33,600 ounces poured this period. These revenues were also affected by a slightly lower average realized price (2001- CDN $416/US $270; 2000-CDN $419/US $285).
Gross oil, natural gas liquids and gas revenues increased by 36% from $6.1 million in 2000 to $8.3 million in 2001. This significant increase was the result of higher average realized prices, particularly in the NGL and gas sectors.
Total operating and administrative costs fell from $14.9 million for the first three quarters of 2000 to $14.3 million for the same period in 2001. This reduction is largely a function of decreased operating costs at the Seabee mine, together with a reduction in interest charges.
Total mine cash costs for the nine month period were $11.6 million in 2001 compared to $12.1 million in 2000. Cash operating costs increased from US $197 per ounce for the first three quarters of 2000 to US $224 per ounce for the current period, a result of lower production.
Depreciation and depletion of the Company’s gold assets was $4.1 million for the first nine months of 2001, compared with $2.9 million for the corresponding 2000 period. This is largely attributable to the smaller calculated reserve base, a result of regulatory changes, at the Seabee mine. Amortization and depreciation costs per ounce for the period were US $80 compared to US $48 in the 2000 period.
Cash flow provided from operations for the period was $2.6 million ($0.06 per share) compared to $5.1 million ($0.13 per share) in 2000. The lower cash flow is due to a combination of lower gold production, partially offset by reduced production costs at the Seabee mine, and a $0.4 million increase in operating cash flow contributed by our oil and gas properties.
Currency & Commodity Hedging
To manage risks associated with gold prices and changes in foreign currency, the Company may use commodity and foreign currency instruments. At September 30, 2001, Claude had outstanding forward gold contracts related to future production of 5,000 ounces at an average price of US $288 per ounce, with a market value loss inherent in these contracts of US $18,000.
At September 30, 2001 the Company had outstanding foreign exchange contracts to sell US $3.1 million at an average contract exchange rate of 1.5647 $CDN/$US, with a market value loss inherent of US $28,000.
Operations
Gold
During the nine month period, the Seabee mine processed 202,600 tonnes of ore (averaging 5.99 grams per tonne) and produced 33,600 ounces of gold. This compares to 177,900 tonnes (averaging 8.27 grams per tonne) and 41,800 ounces produced during the same period in 2000.
The mill feed grade is 23% lower than the 7.8 grams per tonne average grade of Seabee’s proven and probable reserves. However, a 14% improvement in throughput reduced the impact of the lower grade ore.
The last quarter will focus on accessing the Claude 2B zone on the 495 level and a ramp extension to the 650 level. Mining and development on the Currie Rose 2A and 2D zones continues on the 60 and 400 levels.
As indicated earlier, drilling below the 500 level on the Claude 2B zone has been very promising. This zone is open along strike and at depth, and additional drilling is slated throughout the remainder of the year.
Oil & Gas
For the nine months ended September 30, 2001, oil and NGL production was 67,000 barrels, 12% lower than the 76,000 barrels produced in the 2000 period. The average realized price was US $25.93 (CDN $39.89) per barrel versus US $26.69 (CDN $39.29) last year. Gas production improved 1% from 740 MMCF in 2000 to 751 MMCF this period. The average realized price was US $4.10 (CDN $6.31) per MCF compared to the US $2.58 (CDN $3.80) per MCF realized in last period.