Claude’s Seabee may be the next Saskatchewan mine

Based on the results of a final feasibility study, Claude Resources (TSE) says it has decided to place its Seabee gold project in northern Saskatchewan into production. A 400-ton-per-day mill is planned for the property 78 miles northeast of La Ronge. Mine development and mill construction, to be commenced this year, will cost an estimated $22 million. Claude anticipates entering commercial production during the third quarter of 1991.

The feasibility study, completed by Cominco Engineering Services, indicates a 5-year mine life based on current reserves. Claude reports reserves (all classes) of 1.14 million tons grading 0.4 oz. gold per ton. An additional one million tons grading 0.3 oz. have been indicated by drilling.

Annual gold production of 48,000 oz. is projected. Total mining and milling costs will average an estimated US$210 per oz.

The project recently underwent an underground program of drifting, raising, bulk sampling and drilling, the work aimed at confirming the reserve grade and upgrading ore reserve categories.

Meanwhile, Claude says its has acquired a 49% interest in Mantle Investments, a private Canadian investment company, for $1.6 million. Prior to this purchase, Mantle had agreed to provide $22 million in project financing for construction and development of the Seabee mine.

According to the terms of the financing, Claude will lease the mill complex from Mantle for three years at $2.2 million per year. Claude has the right to purchase the mill and related facilities, and Mantle has the right to sell these assets to Claude, at the end of the 3-year period for $22 million.