Trading Symbols: TSX: CRJ; OTCQB: CLGRF
Q3 and Year-to-date Highlights:
- Record quarterly gold production of 20,614 ounces, nearly doubled (96% increase) from Q3 2013
- Mill head grade of 8.88 grams per tonne for the quarter, a 68% increase from Q3 2013
- Total cash cost per ounce of gold (1) of $735(2) (U.S. $675), a 20% decrease from Q3 2013
- All in sustaining cost per ounce of gold (1) of $1,063 (U.S. $976), a 32% decrease from Q3 2013
- Santoy Gap year to date production of over 28,000 tonnes at approximately 8.60 grams of gold per tonne
- Debt reduction totaling $9.7 million during the first nine months of 2014
- Increased gold production guidance to 61,000 to 64,000 ounces (previously 50,000 to 54,000 ounces)
SASKATOON, Nov. 3, 2014 /CNW/ - Claude Resources Inc. ("Claude" and or the "Company") today reported third-quarter net profit of $6.9 million ($0.04 per share), which compared to a net loss of $33.9 million ($0.19 per share) in the same period last year. The improvement in financial performance reflected a significant increase in gold production and sales volumes, improved ore grades and operational efficiencies that reduced our cost per ounce on both a cash and all in sustaining cost basis. Year-to-date net profit grew to $5.1 million ($0.03 per share), up from a net loss of $46.3 million ($0.26 per share) in the first nine months of 2013.
"Higher than budgeted grades from the L62 and Santoy Gap deposits resulted in a strong third quarter performance that exceeded the top end of our guidance," stated Mike Sylvestre, Interim President and Chief Executive Officer. "Our commitment in 2014 was to deliver consistent operating results while staying focused on improving margins. Strong production and improved cost performances over consecutive quarters has allowed us to reduce debt and increase our cash on hand. With a strengthened balance sheet, increased confidence in our production profile and strategies in place to manage gold price volatility, we are well positioned to continue delivering strong consecutive quarters."
Financial Review
Third-quarter gold revenue of $24.3 million was 62% higher than the $15.0 million reported in the third quarter of 2013. The increase was attributable to a 63% increase in gold sales volumes, which reached 17,578 ounces compared to 10,781 ounces in the same period last year. Year-to-date revenue of $64.7 million grew 40% from the first nine months of 2013, as a 46% increase in gold sales volume – 46,133 ounces compared to 31,614 ounces – more than offset a 4% decline in the average gold price realized.
With continued operational improvements, our total cash cost per ounce of gold (1) decreased by 20% for both the quarter and year to date – to $735 per ounce (U.S. $675) for the third quarter and $801 (U.S. $732) for the first nine months. The increase in production from mining more tonnes at higher grades decreased our all in sustaining cost per ounce of gold (1) by 32% for the quarter to $1,063 (U.S. $976) and by 35% for first nine months to $1,265 (U.S. $1,155).
Cash flow from operations before net changes in non-cash operating working capital (1) of $10.4 million, or $0.06 per share, was up significantly from the $4.3 million, or $0.02 per share, reported in the third quarter of 2013. Year to date, cash flow from operations before net changes in non-cash operating working capital (1) of $22.0 million, or $0.12 per share, more than doubled the $9.3 million or $0.05 per share reported during the comparable period and allowed us to reduce debt by $9.7 million through the first nine months of 2014.
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Q3
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Q3
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YTD
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YTD
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Highlights of Financial Results
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2014
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2013
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2014
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2013
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Revenue
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$24,323
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$14,976
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$64,665
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$46,324
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Production costs
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$12,021
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$9,909
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$35,243
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$31,581
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Impairment charge
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-
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$45,187
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-
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$56,034
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Gross profit (loss)
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$6,796
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($293)
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$10,887
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($960)
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Net profit (loss)
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$6,852
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($33,871)
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$5,068
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($46,323)
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Earnings (loss) per share (basic and diluted)
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$0.04
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($0.19)
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$0.03
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($0.26)
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Average realized price per ounce
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$1,384
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$1,389
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$1,402
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$1,465
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Average realized price per ounce ($U.S)
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$1,270
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$1,338
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$1,281
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$1,432
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Total cash cost per ounce (1)
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$735
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$919
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$801
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$999
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Total cash cost per ounce ($U.S.) (1)
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$675
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$885
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$732
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$976
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All-in sustaining cost per ounce (1)
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$1,063
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$1,574
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$1,265
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$1,957
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All-in sustaining cost per ounce ($U.S.) (1)
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$976
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$1,516
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$1,156
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$1,912
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Operations Review
Record third-quarter gold production of 20,614 ounces was 96% more than was produced in the same period in 2013 – a product of higher-than-budgeted ore grades and increased mill throughput. The 74,930 tonnes fed to the mill was up 16% from last year as our Santoy Gap deposit ramped up ahead of schedule, which also contributed to a 68% improvement in ore grade, measured at 8.88 grams per tonne.
Year to date, the Company milled 219,046 tonnes at a grade of 7.53 grams per tonne for total gold production of 50,700 ounces. The key drivers of the 63% increase in production and 52% increase in grade over the first nine months of 2013 were positive reconciliation on tonnes, grade and ounces from the L62 deposit and the replacement of the lower margin Santoy 8 ore with higher margin Santoy Gap ore.
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Q3
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Q3
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YTD
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YTD
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Seabee Gold Operation Production Highlights
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2014
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2013
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2014
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2013
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Tonnes milled
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74,930
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64,642
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219,046
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205,596
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Head grade (grams per tonne)
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8.88
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5.30
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7.53
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4.94
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Recovery (%)
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96.4
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95.8
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95.6
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95.2
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Gold produced (ounces)
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20,614
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10,541
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50,700
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31,061
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Gold sold (ounces)
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17,578
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10,781
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46,133
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31,614
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Santoy Gap Update
Production ramp up at the Santoy Gap is well ahead of schedule and is expected to be the main contributor of tonnes and ounces from the Santoy Mine Complex for the remainder of 2014. To date, the Santoy Gap deposit has produced over 28,000 tonnes at approximately 8.60 grams per tonne which is significantly higher than the current Mineral Reserve grade of 6.40 grams per tonne. Santoy Gap production during the fourth quarter is expected to be 250 to 350 tonnes per day. The increase in tonnes mined from Santoy Gap is expected to have a positive impact on margins going forward.
The Company continues to achieve excellent results from its 27,000-metre infill drilling program. The program is intended to better define the Santoy Gap resource and support mine plan optimization. Results from the program, which include an intersection of 26.77 grams of gold per tonne over 8.7 metres true width, have demonstrated that all three structures that are hosted within the Santoy Gap continue to show significant grades and widths.
Outlook
Based on our improved operating performance, the Company has increased its total 2014 gold production forecast at the Seabee Gold Operation to 61,000-64,000 ounces (previously 50,000-54,000 ounces). During the fourth quarter, gold production from L62 deposit will be reduced while throughput from Santoy Gap deposit is expected to increase. Based on year to date performance and the addition of higher-margin tonnes from Santoy Gap, the Company has revised our unit cash cost target for 2014 to be approximately 20% lower than 2013's unit cash cost of $983 per ounce.
"The strong performance of the past two quarters is a measure of the fundamental improvements in our operations and the higher-quality ore bodies we are now mining," said Sylvestre. "We believe we can continue to build on these results and deliver greater value to our shareholders."
Conference Call and Webcast
We invite you to join our Conference Call and Webcast today at 11:00 AM Eastern Time.
To participate in the conference call please dial 1-647-427-7450 or 1-888-231-8191. A replay of the conference call will be available until November 10, 2014 by calling 1-855-859-2056 and entering the password 21337581.
To view and listen to the webcast please use the following URL in your web browser: https://www.newswire.ca/en/webcast/detail/1427494/1585874
A copy of Claude's 2014 Q3 Management's Discussion & Analysis, Financial Statements and Notes thereto (unaudited) can be viewed at www.clauderesources.com. Further information relating to Claude Resources Inc. has been filed on SEDAR and may be viewed at www.sedar.com.
Claude Resources Inc. is a public gold exploration and mining company based in Saskatoon, Saskatchewan, with an asset base located entirely in Canada. Its shares trade on the Toronto Stock Exchange (TSX: CRJ) and the OTCQB (OTCQB: CLGRF). Since 1991, Claude has produced over 1,000,000 ounces of gold from its Seabee Gold Operation in northeastern Saskatchewan. The Company also owns 100 percent of the Amisk Gold Project in northeastern Saskatchewan.