Claude Finds More High-Grade At Seabee Deeps

VANCOUVER —Claude Resources (CRJ-T, CGR-X) is being rewarded for its effort to find new mineralization to feed its Seabee mine in central Saskatchewan.

The Seabee mine, 125 km northeast of La Ronge, has been producing gold since late 1991, averaging close to 45,000 oz. each year. The underground mine taps into a narrow vein. In late 2007, Claude started mining a second deposit, known as Santoy 7. And the company hopes to add Santoy 8 to its mine count by the end of the year.

But the resource at the main Seabee deposit is far from depleted, according to recent results from an underground drill program. Intercepts from Seabee Deeps returned short, high-grade hits. Hole 605 cut 2.2 metres grading 59.19 grams gold per tonne, hole 605 hit 2.5 metres of 43.13 grams gold, and hole 609 intercepted 2.6 metres averaging 23.64 grams gold. Other promising results include 212.34 grams gold over 2.3 metres in hole 607 and 18.28 grams gold over 1.6 metres in hole 610.

Claude says the new high-grade area is close enough to existing underground development that it will be incorporated into the mine plan for 2009 and will likely raise the average head grade.

With Seabee Deeps and Santoy 7 providing feed for the Seabee mill, Claude plans to continue with a bulk-sampling program at Porky West, another nearby satellite deposit, and to move Santoy 8 towards commercial production. Production at Santoy 8 is still subject to environmental approval and permitting.

According to an April resource estimate, Santoy 8 is home to 727,500 indicated tonnes grading 8.98 grams gold and 391,500 inferred tonnes averaging 8.08 grams gold.

In 2008, Claude produced 45,466 oz. gold from the Seabee deposits. For the first nine months of 2008, the company recorded a net loss of $2.1 million, likely due to the cost of dewatering an old mine at its other exploration property, the Madsen mine near Red Lake, Ont.

An underground mine on the 40.5-sq.-km Madsen property produced some 2.4 million oz. gold between 1938 and 1976 and the operation left behind a 550-tonne-per-day mill, a 4,000-ft. operating shaft, and a tailings pond. All three are still permitted facilities.

In mid-2008, Claude embarked on dewatering the old mine and by December reached the 12th level. The company then embarked on underground drilling at Madsen for the first time. Phase one of the underground program will target the 8 zone, which was discovered in 1969 and mined between the 23rd and 27th levels until mine closure.

The 12,000-metre 8-zone drill program will first test the zone’s plunge extension within 150 metres of infrastructure with closely spaced drilling, probe its plunge for another 250 metres with widely spaced drilling, and assess a few conceptual targets along the zone shear system. Underground mapping and historic documentation show a series of high-grade quartz-vein systems and silicification associated with a folded package of mafic and ultramafic lithologies. Historic drilling below the 27th level returned intercepts such as 25 grams gold over 4.4 metres and 86 grams gold over 2 metres.

In addition to the underground program, Claude is planning a 10,500-metre surface drill program testing three targets. A 15-hole infill program at Fork, a zone 500 metres south of the Madsen mine, will continue to probe the two sub-parallel, moderately dipping shear systems that host southwest-plunging ore-shoots. Last year, drills at Fork hit 17.3 grams gold over 10.3 metres and 25.5 grams gold over 2.7 metres; the work program traced the shear systems for more than 450 metres and both remain open along strike and at depth.

The other two surface drilling targets are Starratt Olsen, located 2.2 km south of the mine, and the up-plunge extension of 8 zone. Starratt Olsen will see 20 drill holes, to follow up on last year’s discovery of several narrow, high-grade vein systems. Early results from the new area included 186 grams gold over 0.4 metre and 24.4 grams gold over 0.6 metre; results from another 13 holes are pending.

To support its exploration efforts, in December Claude sold its working interests in the Edson No. 1 gas unit and the Edson gas plant to a private Canadian company for $11.23 million. The company also raised $18 million in June through a debenture offering.

In the days following news of the Seabee Deeps drill results Claude’s share price gained 12¢ to 73¢. The company has a 52-week trading range of 15¢-$1.39 and has 97 million shares outstanding.