Claude posts improved earnings

Increased gold and sales and a higher gold price helped Claude Resources (CRJ-T) to net earnings of $1 million during the three months ended Sept. 30.

That translates into 2 per share, and compares with a year-ago net loss of $200,000 (nil per share). Revenue between the two periods jumped by 30% to $9.1 million. Cash flow from operations (before non-cash working capital items) more than doubled to $2.6 million.

For the first three quarter’s of the year, Claude’s earnings amount to $1.6 million (3 per share) on revenue of $26.8 million, compared with a net loss of $3.2 million (7 per share) on $17.6 million in the corresponding period of 2002. During the period, operations generated $5.7 million in positive cash flow, $700,000 better than a year earlier.

The Seabee mine contributed $6.9 million to quarterly revenue, and $18.8 million over the nine-month period, as sales rose 24% and 40%, respectively over the year earlier periods. The quarter’s total cash operating costs slipped US$4 per oz. to US$232 per oz., and US$24 per oz. to US$256 per oz. for the first nine months.

Mill feed from Seabee averaged 8.8 grams gold per tonne for the quarter and 8.4 grams for the first nine months, both up from the corresponding periods of 2003. So far this year, the mill has met its target throughput rate of 550 tonnes per day. The rate is expected to hit 700 tonnes per day in November, with the completion of the Seabee shaft extension.

The company realized US$381 per oz. of gold sold during the quarter (up from US$316 per oz.), and US$350 per oz. (US$306 per oz.) during the first three quarters.

Currently, mine development is ongoing on levels 510 and 630; plans to access level 650 have been postponed as a result of the success achieved on level 510, and the increase in size of the 5106 and 5107 stopes. Diamond drilling is also meeting with success on levels 325 and 550, which should lead to further development of the 161 and 162 veins.

Claude has initiated an expanded drill program designed to increase in the deposit’s mineral resource.

At the end of September, Claude was running a cash deficit of $992,000, compared with a year-ago deficit of $2.3 million. Long- and short-term investments were relatively unchanged at around $2.7 million in all.

Also at quarter’s end, Claude had 7,000 oz. of gold covered by forward gold contracts at an average price of US$363 per oz. representing a market value loss of US$200,000. The company’s foreign exchange contracts amounted to a US$1 million gain.

Looking ahead, Claude expects mining costs to continue to improve through the fourth quarter thanks to the initiation of production from larger, higher grade stopes, and commissioning of the shaft extension.

In the boardroom, Claude’s chief executive, Arnie Hillier, has announced his retirement effective March 1, 2004. Hillier will be replaced by Neil McMillan, currently the company’s president. Rick Johnson, corporate controller, will become vice president finance and chief financial officer.