Claude completes friendly takeover of Madsen Gold

Saskatoon-based Claude Resources (CRJ-TA) has successfully acquired a majority ownership in Madsen Gold (MGF-T).

The two companies signed a friendly takeover agreement in mid-February that involved the exchange of 1 share of Claude for every 3.5 shares of Madsen. Claude has so far acquired 80% of the issued and outstanding shares of Madsen and has extended the deal’s deadline to April 20 in order to acquire the remainder.

The deal requires Claude to use some of the net proceeds from a recently closed $13-million private placement to begin an underground development program at Madsen’s namesake gold mine in northern Ontario. The mine’s yearly output of 50,000 oz. gold increases Claude’s total production to 110,000 oz. annually; the company’s other producing gold mine is Seabee in northern Saskatchewan.

Cash costs at the Madsen mine are US$230 per oz., whereas those at Seabee are US$210 per oz.

Proven and probable reserves at the Madsen mine stand at 1.1 million tonnes grading 9.26 grams gold per tonne, enough for seven years of production at current levels. Reserves at the Seabee mine stand at 960,000 tonnes grading 9.86 grams gold.

Claude also plans to further explore the high-grade No. 8 zone at the Madsen mine.