Claude seeing double at Seabee (December 09, 2004)

Eyeing some newfound gold, Claude Resources (CRJ-T) plans to double the capacity of its Seabee mill, 125 km northeast of La Ronge, Sask., to 1,100 tonnes per day.

The company says the expansion could boost gold production at Seabee to between 75,000 and 100,000 oz. per year (from the current 45,000 to 50,000 oz.), for less than $2 million. The parts required for expansion will be trucked to the mill this winter.

Drilling by Claude during the first half of 2004 yielded some significant gold values from its Santoy Lake property, about 11.5 km to the east of Seabee. The drilling focussed on Zone 7, where 48 holes were sunk for a total of 6,164 metres. Nineteen of those contained at least one assay exceeding 10 grams gold per tonne over widths generally less than 1 metre (T.N.M., Nov. 15-21/04).

Some 21 holes totalling 2,797 metres were sunk on Zone 8, 3 km to the northwest, with six returning 10.5-39.7 grams gold over 0.3-1.1 metres. Another five holes on Zone 6 (1 km to the south of Zone 7) failed to intersect the structure seen at surface.

Claude says the gold mineralization strikes over 4 km, and has so far pinned down a preliminary indicated resource estimate for Zone 7 of 190,000 tonnes grading 8.4 grams gold; another 10,000 tonnes running 10 grams gold is classified as inferred. Both estimates employ a cutoff grade of 3 grams gold and a cutting factor of 30 grams gold.

At Porky Lake, 2 km to the north, Claude has outlined three gold-bearing zones. The West zone is home to an indicated mineral resource of 90,000 tonnes averaging 7.3 grams gold; the Porky Lake Main zone contains an indicated 160,000 tonnes grading 7.5 grams gold, with another 70,000 tonnes of inferred material running 10.4 grams. Both zones remain open at depth and are only loosely constrained laterally.

A 6.8-km all-weather road has been constructed between the Porky Lake West zone and the Seabee mill. Permitting for a bulk sample is expected in a few months.

In 2003, Seabee produced 50,800 oz. gold from 209,000 tonnes grading 7.95 grams gold per tonne. Reserves at Seabee amount to 674,700 tonnes grading 7.48 grams gold, plus 2 million inferred tonnes running 8.5 grams.

Claude ended the latest third quarter with net earnings of $200,000 (or nil per share) on revenue of $7.6 million, compared with year-ago restated earnings of $900,000 (2 a share) on $9.1 million. For the first three stanzas of 2004, the company’s loss piles up to $300,000 (a penny a share) on $23.4 million in revenue, compared with restated earnings of $1.5 million (3 a share) on $26.8 million a year earlier.

News of the expansion sent share in Claude a dime, or 9%, higher to $1.21 in late afternoon trading in Toronto on Dec. 8.