Gold miner, Claude Resources (CGR), reported financial and operating results for the third quarter of 2009, and provided an update on its plans for the remainder of 2009. The company recorded a net loss of $0.4 million, or $0.00 per share, compared to a net loss of $1.7 million, or $0.02 per share, for the third quarter of 2008. Cash flow from mining operations rose to $5.3 million, or $0.05 per share, from $1.6 million, or $0.02 per share, for the comparable period in 2008.
Cash operating costs per ounce of gold declined 22.9% to $560 from $727 in the third quarter of 2008 versus the previous quarter. Gold production rose 83.3% to 14,180 ounces of gold from 7,735 ounces of gold in the second quarter of 2008, and the company reiterated its full-year 2009 gold production of 46,000 – 48,000 ounces. After a mill shutdown and grade issues in the second quarter, the company’s gold production is back on-line.
At the end of the quarter, Claude completed Phase I of its deep drilling program of the 8 Zone at Madsen, which according to the company was successful in proving down plunge continuity of the 8 Zone to 450 feet below the 27th level of the mine. Results from the program consist of 127.12 grams of gold per ton over 0.75 meters, 33.39 grams of gold per ton over 2.49 meters and 25.77 grams of gold per ton over 7.90 meters. Claude also stated that it intends on continuing its exploration of the high grade 8 Zone from a 16 level diamond drill chamber in the second half of 2010. In the meantime, it will be drilling the prospective Madsen project and 8 Zone trends from surface.
Claude went on to say that its gold exploration activities at Seabee Deep continue to yield impressive results located near existing infrastructure. Recently released drill results at Seabee Deep consisted of 10.16 grams of gold per ton over 1.6 meters, 20.13 grams of gold per ton over 1.3 meters and 8.68 grams of gold per ton over 4.5 meters and 10.71 grams of gold per ton over 2.9 meters true width. According to the company, “these intercepts demonstrate grade above the historical average and are in close proximity to existing development and infrastructure.“
Neil McMillan, Claude’s President and CEO, commented that “the company is very pleased with the success of the Phase I underground drill program at Madsen. During the remainder of 2009 we will remain focused on defining the surface targets associated with the Madsen Mine and 8 Zone trends. Furthermore, the Seabee Operation continues to benefit from a positive gold price environment, increasing production, improved operating margins and success with its exploration program.“
Going forward the company stated that it will concentrate on advancing the surface exploration program of the prospective Madsen Target and 8 Zone Trends and shaft de-watering at Madsen, as well as completing a National Instrument 43-101 resource estimate at Madsen. Furthermore, Claude said that it will focus on Seabee Deep exploration and development to increase reserves and resources, further develop the Santoy 8 satellite deposit and, pending environmental approval and permits, move the project towards commercial production. Finally, the company will invest in capital projects and equipment to increase production and lower unit operating costs at the Seabee Operation.
Grades at Santoy 8 are 15% higher than what is being mined currently at Seabee. Operating costs of the ore at Santoy are 42% less than Seabee ore. As this higher-grade ore is introduced, Claude’s cash costs may decline as much as 30% over the next year. The company is actively looking at ways to increase shareholder value to bring their valuation more in line with many of their peers in the prolific Red Lake gold district.
Claude Resources is a gold exploration and mining company located in Canada. Since 1991, Claude has produced approximately 865,000 ounces of gold from its Seabee Operation, located in northeastern Saskatchewan. The company also owns 100% of the 10,000 acre Madsen property in the Red Lake gold camp of northwestern Ontario. In morning trading shares of CGR were up $0.01 to $0.88 while the gold price was up $3.65 to $1,094.61 per ounce.
