Despite the GDX (Market Vectors Gold Mining ETF) posting an impressive run over the past year, it has significantly underperformed the shares of many gold stocks - such as Canadian-based Claude Resources (CRJ.TSX, CGR: AMEX) - which is not a component of the GDX gold stock ETF. While the GDX has increased 77% over the past 52 weeks, shares of Claude Resources have outpaced the GDX - soaring 263% over the past year. Shares of Claude have continued higher in 2010, displaying the leverage to the gold price that investors expect from the shares of gold producers. Based in Saskatchewan, Canada, Claude Resources is a gold mining and exploration company which has produced approximately 880,000 ounces of gold since 1991 from its Seabee gold mine. The company recently received an investment from former Kinross Gold (KGC) Chief Executive Officer, Robert Buchan, of roughly C$5.3 million.

This afternoon, Claude Resources announced news that contributed to its outperformance of the GDX, reporting fourth quarter 2009 gold production of approximately 14,300 ounces and 28,500 ounces in the second half of 2009. The company’s gold production figures represented a 12% increase versus the second half of 2008. Commenting on the results, Philip Ng, Vice President of Mining Operations for Claude, stated that 'these strong production results were delivered in conjunction with an improved safety record by our dedicated workforce. We will continue to pursue operational excellence by implementing and improving existing systems that improves health and safety programs, environmental compliance, and cost and grade control in 2010 and beyond.'

Claude also stated that it in 2010 it plans to mine from its Seabee gold mine, and pending permits and environmental approval, from the Santoy 8 deposit located near Seabee. Claude went on to reiterate that its underground exploration success at the Seabee Mine is expected to deliver higher grades and operating margins for 2010.

One of the chief reasons that Claude has significantly outperformed the GDX is the prospects at its 100%-owned and operated advanced exploration project, the Madsen Gold Mine in Red Lake, Ontario, Canada. In December 2009, Claude Resources announced an NI 43-101 gold resource from Madsen, which is located in one of the worlds highest grade gold districts. Based on historical production, the district ranks as the third largest gold producer in the Red Lake camp, behind only the Campbell and Dickinson gold mines - with a total of 2.45 million gold ounces produced in its 38-year mine life.

The 10,000-acre property contains a 4,125 foot shaft, 500 tonne per day mill, and a tailings pond, all of which are fully permitted. The Canadian gold miner also reported that dewatering of the Madsen Gold Mine is continuing and presently 137 feet above the 16th level. Rehabilitation of the 16th level and the construction of diamond drill chambers to support Phase II of underground drilling are expected to be completed by the second half of 2010.

The highlight of Claudes gold resource at the Madsen Gold Mine was the announcement of indicated resources of 928,000 ounces of gold at 8.93 grams per ton (g/t) and inferred resources of 328,000 ounces of gold at 11.74 g/t. The reported resource of 1.25 million ounces of gold came in higher than market expectations of approximately 500,000 ounces of gold. The Canadian gold miner also stated that mineral resources were reported at a cut-off grade of 5.0 grams of gold per ton. This material is amenable for underground extraction - at an assumed gold price of $1,000 per ounce and a gold metallurgical recovery of 94%. The effective date of the gold resource statement is November 30, 2009.

Claude Resources is led by President and CEO Neil McMillan, an industry veteran who also sits on the Boards of Cameco (CCJ) and Shore Gold (SGF.TSX). Describing the Madsen results, Mr. McMillan commented that With the support of a major rise in the gold price, strong working capital, improving economics at our Seabee Project and a significantly expanded resource base at Madsen, Claude is well positioned to execute on its strategy of discovering, developing and producing gold in established belts proximal to existing infrastructure.

Gold ETFs such as the GDX offer diversification to a basket of gold mining companies as well as exposure to the worlds largest gold mining producers. While this fact makes the GDX and other gold ETFs a less volatile investment, the possibility of outsized gains is lessened as well. Small-cap gold miners such as Claude Resources - while containing greater risk - generally provide more leverage to the price of gold and the potential for greater investment gains.

Shares of CRJ.TSX finished up C$.04 to S$1.32 while the GDX closed higher by $0.33 to $50.17 and the gold price rose $15.34 to $1,151.71 per ounce.