Third-quarter production results from Claude Resources’ (CRJ-T, CGR-X) Seabee gold mine in northern Saskatchewan are in, and the results are better than expected.
Claude turned out 15,100 oz. gold from Seabee in the quarter by milling 66,173 tonnes of ore at a head-grade of 7.27 grams gold per tonne.
The production total represents a 24% increase over second-quarter results, and the company says it is on target to meet its production guidance of 48,000 to 50,000 oz. gold for the year.
“Higher third-quarter production comes as a surprise, as we had expected lower production with the tie-in of the Seabee shaft and a planned mill shut down,” CIBC analysts Cosmos Chiu and Barry Cooper write in a research report.
The shaft tie-in is part of Claude’s plan to extend its 600-metre shaft down to 980 metres, hopefully boosting operating efficiency.
The company beat production expectations and stayed on track for its annual guidance by pushing shaft closure to the fourth quarter. The company will keep the shaft closed for five weeks, but plans to keep milling.
Once the shaft extension is finished, the access to deeper rock could usher in more production and lower unit costs.
Chiu and Cooper say the construction could make for a challenging quarter due to the shaft tie-in exercise, but that the company will gain the flexibility it needs to meet guidance.
“At this time, we continue to view Claude Resources as a wait-and-see story, but are encouraged by some of the progress made in the third quarter, including accessing higher-grade ore from Seabee Deep and [zone] L62,” the report reads. “Meeting on production guidance and the fourth-quarter shaft tie-in remain key.”
The analysts expect cash costs for the quarter to be US$750 per oz., which would be a big improvement on the US$1,143 per oz. costs realized in the first half of the year.
Claude says that full operating and financial results from the third quarter will be released on Nov. 14.
Be the first to comment on "Claude’s Seabee production impresses"