Seabee’s grades improve

Claude Resources (CRJ-T) managed to cut its losses in the third quarter as grades continue to recover at its Seabee mine in Saskatchewan. During the quarter, Claude’s net loss came to $200,000 (or nil per share) on revenue of $7 million, compared with a year-ago loss of $700,000 (2 per share) on $6.5 million. Cash flow from operations doubled to $1.2 million. For the first nine months of the year, the net loss rang in at $3.2 million (7 a share) on revenue of $17.6 million, compared with a net loss of $1.9 million (a nickel a share) on $22.3 million. Operation generated $500,000, off from the year-ago $2.6 million.

The Seabee mine spat out 11,100 oz. of gold during the quarter, better than the 15,200 oz. produced during the first half of 2002. Grades between the periods climbed to 7.6 grams from 4.8 grams gold per tonne. The improvement comes compliments stope development on the higher-grade B and C zones between the 400- and 550-metre levels. Total cash operating costs climbed US$11 per oz. to US$236 per oz. The company’s average realized price for its production climbed US$40 to US$316 per oz.

For the nine-month period, gold production was 26,600 oz. at US$280 apiece, off from the year-ago 33,600 oz. produced US$224 each a year earlier, as the mill ran through lower grade material from levels 190 and 390 on the 2D zone. The company averaged US$306 for each oz. produced, up from the year-ago US$270 per oz.

The company expects the grade improvements at Seabee to continue into the fourth quarter and 2003, with annual production hitting around 50-55,000 oz.

At quarter’s end, Seabee’s proven reserves stood at 216,800 tonnes running 7.9 grams gold, for 53,600 oz. of golds. In the probable reserve category are another 392,800 tonnes of 9.4 grams gold, or 118,600 oz. gold.

On the exploration front, Claude expects operator Placer Dome (PDG-T) to finish up drilling on the Madsen property near Red Lake, Ontario, by the end of November. Placer is testing four target areas north of the past-producing mine. In early September, the partners turned up a high-grade gold system near the old mine. Eight holes, spaced 600-900 ft. apart, returned up to 48.3 grams gold over narrow widths.

Placer can grab a 55% interest in Madsen by spending $8.2 million by 2005 and delivering a bankable feasibility study by 2007.

At the end of September, Claude’s short-term investments totalled $657,000, unchanged from the end of 2001. The company’s hedge book contained forward gold contracts covering 8,250 oz. of 2002 production at an average of US$296 per oz., for a market-value loss of US$100,000.