Claude squeezes costs, maintains earnings

Gold producer Claude Resources (CRJ-T) finished the third quarter of 2000 with net earnings of $1 million and is on-track to turn a modest profit at year-end.

Claude earned 3 per share on revenue of $5 million in the quarter, up from a loss of $537,000 (or 2 per share) on revenue of $5.4 million in the third quarter of 1999. Direct mining costs and depreciation charges were both substantially lower in the recent quarter than they were a year ago.

During the first nine months of 2000, Claude earned $1.1 million on revenue of $17.5 million. In the first nine months of 1999, earnings amounted to $1.3 million on revenue of $17.4 million.

Production from the company’s Seabee mine, in northern Saskatchewan, was down slightly, at 41,750 oz., compared with the previous year’s nine-month figure of 41,840 oz. A slightly higher realized price for gold — US$285 per oz., as opposed to US$279 last year — increased revenue slightly, and cash operating costs at Seabee were US$197 per oz., down US$2 from the corresponding period of 1999.

Claude also saw increased revenues from its portfolio of oil and gas properties.

Current assets fell to $13.6 million from $14.4 million at year-end, and current debt grew to $5.5 million from the year-end figure of $3.3 million.

At the Madsen project in Red Lake, Ont., Claude has inked a deal with Placer Dome (PDG-T) under which the major can earn a 55% interest in the Madsen property by spending $8.2 million on exploration. The work must be done over a 3-year period, and Placer must deliver a bankable feasibility study on the Madsen mine by the fifth anniversary of the agreement.

The deal came with a cash infusion for Claude, with Placer subscribing for 1 million shares at 75 each.

Claude also has exploration projects under way in the Pine Lake-Munro Lake area, northeast of Seabee, where some mine site exploration drilling is planned this winter, and in the Amisk Lake area, southwest of Creighton, Sask.