Post by Franko10 ™ on Oct 7, 2004 18:25:59 GMT -5
FIRST QUARTER REPORT
For the Three Months Ended March 31, 2004
Overview
The bullion market was firm throughout the first quarter, averaging US $408 per ounce. However, investors seemed to lose enthusiasm for gold shares over this period and most gold companies saw reduced trading volumes and share prices.
As forecast in the 2003 mine plan, gold production during the quarter at Claude Resources’ Seabee mine was below the life of mine average. The Company remains confident that the 51,000 ounces forecast for 2004 will be achieved.
The Company had an active first quarter as exploration efforts in and around the Seabee area saw two drills turning and generating nearly 15,000 metres of drill core. The annual review of Seabee reserves and resources by ACA Howe International was very positive with reserves remaining stable and resources increasing by more than 175,000 ounces. Under the Madsen option agreement, Placer Dome continued phase III drilling on the Treasure Box target at the Madsen, Red Lake project.
The Company’s balance sheet remains strong, free of long-term debt, with substantial working capital and adequate cash reserves.
Financial Highlights
Three Months Ended March 31,2004 Three Months Ended March 31,2003
Revenue ($ millions) 7.6 8.9
Net earnings (loss) ($ millions) (0.4) 0.5
Earnings (loss) per share ($) (0.01) 0.01
Cash provided by operations ($ millions) * 1.0 1.6
Cash from operations per share ($) * 0.02 0.03
Average realized gold price for the period (US$/ounce) 412 336
Total cash operating costs per ounce (US$/ounce) 324 272
Working capital ($ millions) 10.6 8.7
* before net change in non-cash working capital.
Operations
Gold
For the quarter the mine processed 46,700 tonnes of ore grading 7.11 grams per tonne yielding 9,900 ounces of gold. As expected the lower production was largely a result of lower grade mill throughput originating from the 2C5107 stope and from the 162/550 level sill. The lower grade ore from these headings was partially offset by swell from the 2B6309 stope.
Operating Statistics
Quarter Ended Mar 31, 2004 Mar 31, 2003
Tonnes milled 46,700 47,501
Grade processed (g/t) 7.11 8.60
Recovery (%) 94.88% 94.00%
Operating efficiency 99.89% 99.11%
Sales volume 9,900 11,700
Towards the end of the second quarter the mine plan will focus on accessing stoping blocks on the 550, 650 and 680 metre levels. As a result, both grade and tonnages are expected to increase in the second half of the year.
The annual ACA Howe International Limited independent review of Seabee reserves was finalized at the end of February. The mine’s current mineral reserves total 674,700 tonnes grading 7.48 grams per tonne.
Tonnes Grade
g/tonne Gold
Ounces
Proven 187,400 7.72 46,500
Probable 487,300 7.39 115,800
Total Mineable Reserves(1) 674,700 7.48 162,300
Inferred Mineral Resources(2) 1,987,000 8.45 539,800
(1) Mineable reserves and mineral resources at February 29, 2004, reviewed by ACA Howe International Limited using a long-term gold price of US $375 per ounce.
(2) Mineral resources, all in the inferred category, stated after applying historic mining dilution factors.
Largely as a result of increased underground diamond drilling, the mine’s inferred mineral resources have increased to 1,987,000 tonnes and grade 8.45 grams per tonne. This equates to a gain of 175,900 ounces, or three years of mill-feed at current production levels.
Oil and Gas
Oil, natural gas liquids (NGLs) and gas operations continue to positively impact corporate earnings and cash from operations before net change in non-cash working capital. Solid production and prices resulted in contributed cash flows in the first quarter of $.4 million ($0.01 per share) compared to $1.0 million ($0.02 per share) for the same period in 2003.
Exploration
During the first quarter of 2004, the Company drilled 89 holes totaling 14,540 metres as the main thrust of its surface exploration program. Five targets or mineralized trends hosted within the contiguous Seabee area claims were tested.
One drill was dedicated to infill drilling of the West Porky Main Zone as well as following this mineralized structure north to Pigeon Lake around the Porky Lake anticlinal fold closure. Infill drilling on the main zone returned widths and grades consistent with those of past programs. A sample for metallurgical testing is currently being processed.
Another drill was mobilized to the Shane/Munro and Santoy properties where mineralized trends in the Munro monzonite and metavolcanic rocks north of Santoy Lake returned spotty gold values. Follow-up drilling in this area will continue during the summer program.
Early in the new year, Claude successfully consummated an earn-in option agreement on Pioneer Metals’ Nokomis property. By committing to a combination of work and cash payments, the Company can earn a 50% working interest in this gold property located near Sherridon, Manitoba. Upon signing the option agreement, Claude gridded the property and performed a geophysical survey over the zone of known mineralization. The Company then initiated a 2,000 metre diamond drill program to assess and extend the property’s known mineral resource. Unsafe ice conditions forced an early demobilization of the drill. The program has been deferred until this summer.
Elsewhere in Manitoba, the Company has applied for permits to dewater the Tartan Lake mine near Flin Flon to facilitate a 4,500 metre underground delineation drill program of a largely untested structure to the west of the mine.
During the quarter, Placer Dome delivered its 2003 year-end report for the Madsen property in the Red Lake camp of northwestern Ontario. In 2003, Placer drilled 28,647 metres in 48 holes outlining a 25 metre to 50 metre wide quartz-tourmaline vein swarm that returned numerous high grade assays over narrow widths. A twelve hole follow-up infill drill program was completed on this zone (the “Treasure Box”) in the first quarter. Results are pending.
For the Three Months Ended March 31, 2004
Overview
The bullion market was firm throughout the first quarter, averaging US $408 per ounce. However, investors seemed to lose enthusiasm for gold shares over this period and most gold companies saw reduced trading volumes and share prices.
As forecast in the 2003 mine plan, gold production during the quarter at Claude Resources’ Seabee mine was below the life of mine average. The Company remains confident that the 51,000 ounces forecast for 2004 will be achieved.
The Company had an active first quarter as exploration efforts in and around the Seabee area saw two drills turning and generating nearly 15,000 metres of drill core. The annual review of Seabee reserves and resources by ACA Howe International was very positive with reserves remaining stable and resources increasing by more than 175,000 ounces. Under the Madsen option agreement, Placer Dome continued phase III drilling on the Treasure Box target at the Madsen, Red Lake project.
The Company’s balance sheet remains strong, free of long-term debt, with substantial working capital and adequate cash reserves.
Financial Highlights
Three Months Ended March 31,2004 Three Months Ended March 31,2003
Revenue ($ millions) 7.6 8.9
Net earnings (loss) ($ millions) (0.4) 0.5
Earnings (loss) per share ($) (0.01) 0.01
Cash provided by operations ($ millions) * 1.0 1.6
Cash from operations per share ($) * 0.02 0.03
Average realized gold price for the period (US$/ounce) 412 336
Total cash operating costs per ounce (US$/ounce) 324 272
Working capital ($ millions) 10.6 8.7
* before net change in non-cash working capital.
Operations
Gold
For the quarter the mine processed 46,700 tonnes of ore grading 7.11 grams per tonne yielding 9,900 ounces of gold. As expected the lower production was largely a result of lower grade mill throughput originating from the 2C5107 stope and from the 162/550 level sill. The lower grade ore from these headings was partially offset by swell from the 2B6309 stope.
Operating Statistics
Quarter Ended Mar 31, 2004 Mar 31, 2003
Tonnes milled 46,700 47,501
Grade processed (g/t) 7.11 8.60
Recovery (%) 94.88% 94.00%
Operating efficiency 99.89% 99.11%
Sales volume 9,900 11,700
Towards the end of the second quarter the mine plan will focus on accessing stoping blocks on the 550, 650 and 680 metre levels. As a result, both grade and tonnages are expected to increase in the second half of the year.
The annual ACA Howe International Limited independent review of Seabee reserves was finalized at the end of February. The mine’s current mineral reserves total 674,700 tonnes grading 7.48 grams per tonne.
Tonnes Grade
g/tonne Gold
Ounces
Proven 187,400 7.72 46,500
Probable 487,300 7.39 115,800
Total Mineable Reserves(1) 674,700 7.48 162,300
Inferred Mineral Resources(2) 1,987,000 8.45 539,800
(1) Mineable reserves and mineral resources at February 29, 2004, reviewed by ACA Howe International Limited using a long-term gold price of US $375 per ounce.
(2) Mineral resources, all in the inferred category, stated after applying historic mining dilution factors.
Largely as a result of increased underground diamond drilling, the mine’s inferred mineral resources have increased to 1,987,000 tonnes and grade 8.45 grams per tonne. This equates to a gain of 175,900 ounces, or three years of mill-feed at current production levels.
Oil and Gas
Oil, natural gas liquids (NGLs) and gas operations continue to positively impact corporate earnings and cash from operations before net change in non-cash working capital. Solid production and prices resulted in contributed cash flows in the first quarter of $.4 million ($0.01 per share) compared to $1.0 million ($0.02 per share) for the same period in 2003.
Exploration
During the first quarter of 2004, the Company drilled 89 holes totaling 14,540 metres as the main thrust of its surface exploration program. Five targets or mineralized trends hosted within the contiguous Seabee area claims were tested.
One drill was dedicated to infill drilling of the West Porky Main Zone as well as following this mineralized structure north to Pigeon Lake around the Porky Lake anticlinal fold closure. Infill drilling on the main zone returned widths and grades consistent with those of past programs. A sample for metallurgical testing is currently being processed.
Another drill was mobilized to the Shane/Munro and Santoy properties where mineralized trends in the Munro monzonite and metavolcanic rocks north of Santoy Lake returned spotty gold values. Follow-up drilling in this area will continue during the summer program.
Early in the new year, Claude successfully consummated an earn-in option agreement on Pioneer Metals’ Nokomis property. By committing to a combination of work and cash payments, the Company can earn a 50% working interest in this gold property located near Sherridon, Manitoba. Upon signing the option agreement, Claude gridded the property and performed a geophysical survey over the zone of known mineralization. The Company then initiated a 2,000 metre diamond drill program to assess and extend the property’s known mineral resource. Unsafe ice conditions forced an early demobilization of the drill. The program has been deferred until this summer.
Elsewhere in Manitoba, the Company has applied for permits to dewater the Tartan Lake mine near Flin Flon to facilitate a 4,500 metre underground delineation drill program of a largely untested structure to the west of the mine.
During the quarter, Placer Dome delivered its 2003 year-end report for the Madsen property in the Red Lake camp of northwestern Ontario. In 2003, Placer drilled 28,647 metres in 48 holes outlining a 25 metre to 50 metre wide quartz-tourmaline vein swarm that returned numerous high grade assays over narrow widths. A twelve hole follow-up infill drill program was completed on this zone (the “Treasure Box”) in the first quarter. Results are pending.