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TGR: Are there other names you would like to discuss?
JF:Claude Resources Inc. (CRJ:TSX) has performed very well on the back of a turnaround at its Seabee mine in Saskatchewan. The company began generating meaningful cash flows after it changed its mining methods and focused on higher-grade portions of the deposit. As a result, Claude has been able to pay down debt while repeatedly beating its own production and cost guidance.
TGR: The company recently increased 2015 guidance to 68–72 Koz a year, an increase of roughly 4 Koz. Is that meaningful?
JF: We consider the increase in guidance to be meaningful and totally achievable.
TGR: Claude recently added 3,000 hectares to its land position in Saskatchewan. What's the thinking behind that move?
JF: The ground around the Santoy mine complex is important for Claude. Santoy has good grade and from an exploration perspective, it's quite prospective ground. The company wanted to lock up those claims and given it acquired the land for very little money, we think the move was prudent.
TGR: And your target on Claude?
JF: $1 with a Buy rating.
TGR: What's your advice to retail gold investors during this summer of global economic discontent?
JF: Everything comes back to quality. Investors should focus on quality. Don't buy the high-risk names in the hopes of outsized returns. Buy companies with strong balance sheets, solid production assets and responsible management teams.