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Seabee resource estimate next major catalyst
Claude Resources released additional drill results from its 2011 Santoy Gap drill campaign.
Santoy Gap is located on Claude's 100%-owned Seabee property and is 300m away from the
Santoy 8 producing mine. The release contained several high grade and/or wide intersections
including 19.10 g/t over 20.48m, 35.00 g/t gold over 9.8m, and 12.79 g/t over 20.25m (Table 1).
We estimate an average weighted, uncut grade of 12.1 g/t over an average true width of
approximately 3.8m from the reported intersections that we consider to be economically
significant (minimum grade of 3.0 g/t over a minimum core width of 2.4m). The Santoy
Gap drill program suggests grades in the new zone may exceed the grade of around 6.0 g/t
currently being processed in the Seabee Mill. Management has indicated that Santoy Gap
may commence production towards the end of this year. Furthermore, we expect the
Santoy Gap drill programme to be reflected by increased tonnage at higher grades in the upcoming
(end of Q1) resource update on Seabee.
We expect upcoming exploration and development news (including the aforementioned Seabee
resource estimate update and the potential for the company to increase production from less
than 50,000 oz per year to 200,000 oz with the addition of the Amisk project by 2018) to
drive the share price higher, and we are maintaining our BUY rating and a 12-month price
target of C$2.60/share
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