Seabee output boosts Claude’s profit

Saskatoon-based gold and petroleum producer Claude Resources (CRJ-T) has turned in another profitable quarter, following a strong performance by its flagship Seabee gold mine in Saskatchewan.

In the three months ended March 31, Claude earned $1.23 million (or 4 cents per share) on revenue of $7.6 million, of which $6.8 million was derived from gold operations. During the comparable period of 1998, the company earned $579,000 (3 cents per share) on revenue of $6.3 million, of which $5.5 million was gold-derived.

Seabee produced 15,300 oz. gold during the recent first quarter, compared with 13,200 oz. a year ago. During the recent period, the Seabee mill processed 59,100 tonnes of ore with an average head grade of 8.4 grams gold per tonne.

Claude says the mine remains on track to meet its 1999 target of 57,000 oz. gold produced at a cash cost of US$200 or less.

Cash operating costs for Claude’s gold operations were $4.5 million (US$194 per oz.) during the first quarter, compared with $3.3 million (US$173 per oz.) a year ago. More than $300,000 of this increase is due to the company’s treating exploration expenditures on the Currie Rose property (adjacent to Seabee) as a period cost since Jan. 1, 1999. On that day, commercial production began on the property, providing Claude with a portion of its Seabee mill feed requirements.

St. Catharines, Ont.-based Currie Rose Resources (CUI-V) is entitled to a 30% net profits interest on any production from the Currie Rose property once Claude has recovered its partner’s share of expenditures.

Meanwhile, near Red Lake, Ont., at Claude’s advanced-stage Madsen gold project, an exploration and development program is providing the company with “increasing confidence” that the McVeigh zone will duplicate the success of previously mined Austin zone, which runs parallel to McVeigh.

A decline ramp collared on the West McVeigh zone is expected to reach the third level by the end of June; eventually, it will provide access to a minimum of five stopes at each level.

Claude is considering dewatering the Madsen shaft from the current 12th level to below the 16th level in order to reach an existing exploration drift and enable underground drilling of both the McVeigh and Austin zones.

During the first quarter, mill feed from Madsen, consisting mostly of development muck, yielded 4,000 oz. gold. The current mine plan calls for commercial production in the second half of 1999, with total gold production for the year targeted at more than 30,000 oz.