Trading Symbols: TSX: CRJ; OTCQB: CLGRF
SASKATOON, Aug. 6, 2014 /CNW/ - Claude Resources Inc. ("Claude" and or the "Company") today reported its 2014 second quarter
operating and financial results. All dollar amounts are in Canadian
dollars unless stated otherwise.
Financial Highlights:
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Revenue of $24.7 million, representing a 53% increase period over
period, from the sale of 17,690 ounces of gold.
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Total cash cost per ounce of gold (1) was $753 (U.S. $691), a 14% decrease from the second quarter in 2013.
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Cash flow from operations before net changes in non-cash operating
working capital (1) of $9.9 million, or $0.05 per share.
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Net profit of $3.3 million, or $0.02 per share.
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Debt reduction totaling $7.1 million during the first half of 2014.
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Production and cost guidance revised to reflect better than expected
operating performance.
Operating Highlights:
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Set new highs in safety and environment performance.
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Record production of 18,742 ounces of gold, a 51% increase period over
period.
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50% improvement on head grade from Q2 2013 of 7.7 grams per tonne.
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Santoy Gap initial production averaged 110 tonnes per day at
approximately 7.1 grams per tonne in May and June.
Mike Sylvestre, Interim President and Chief Executive Officer,
commented, "The increase in production and the decrease in unit costs
were driven by an increase in grade and the continued success of our
cash flow optimization plan. The Seabee and Santoy Mines have performed
consistently over the past four quarters by producing over 50,000
ounces and I expect that trend to continue. Based on our first half
performance, the Company has raised its production guidance to 50,000
to 54,000 ounces of gold for 2014."
"Not only did we improve operating performance, we are also ahead of
schedule in the development of the Santoy Gap and will begin long-hole
mining during the latter part of the third quarter. Santoy Gap provides
the Company with the ability to grow our production profile and margins
with minimal capital expenditures. In addition, since the start of this
year, we have been able to reduce our debt by over $7.0 million. With
improved production, lower unit costs and continued debt reduction, the
Company is well positioned to deliver shareholder value."
Financial Results
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Highlights of Financial Results of Operations
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Three Months Ended
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Six Months Ended
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June 30
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June 30
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June 30
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June 30
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2014
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2013
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2014
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2013
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Revenue
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$
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24,718
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$
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16,070
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$
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40,342
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$
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31,348
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Production costs
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$
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12,594
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$
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10,088
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$
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23,222
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$
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21,672
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Production royalty (NSR)
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$
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734
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$
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-
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$
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792
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$
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-
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Depreciation and depletion
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$
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6,644
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$
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5,794
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$
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12,237
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$
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10,343
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Gross profit (loss)
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$
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4,746
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$
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188
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$
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4,091
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$
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(667)
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Net profit (loss)
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$
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3,327
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$
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(9,915)
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$
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(1,784)
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$
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(12,452)
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Earnings (loss) per share (basic and diluted)
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$
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0.02
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$
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(0.06)
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$
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(0.01)
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$
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(0.07)
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Average realized price per ounce (CDN$)
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$
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1,397
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$
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1,393
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$
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1,413
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$
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1,505
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Total cash costs per ounce (CDN$)
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$
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753
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$
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875
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$
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841
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$
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1,040
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Net cash margin per ounce sold (CDN$)
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$
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644
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$
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518
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$
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572
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$
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465
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Gold revenue from the Company's Seabee Gold Operation for the quarter
increased 53% to $24.7 million from $16.1 million reported in the
second quarter of 2013. The increase in gold revenue period over period
was attributable to 53% higher gold sales volume (Q2 2014 - 17,690; Q2
2013 - 11,532 ounces). Year to date, the Company generated $40.3
million in revenue, a 29% increase over the first half of 2013.
During the quarter, mine production costs were $12.6 million (Q2 2013 -
$10.1 million). Total cash cost per ounce of gold (1) for the second quarter decreased 14% to $753 (U.S. $691) from $875
(U.S. $855) during the second quarter of 2013. Year to date, cash cost
per ounce of gold was $841 (U.S. $767), a 19% decrease from the cash
cost per ounce of $1,040 (U.S. $1,024) reported during the first half
of 2013.
Cash flow from operations before net changes in non-cash operating
working capital (1) of $9.9 million, or $0.05 per share, was significantly up from the $3.7
million, or $0.02 per share, reported in the second quarter of 2013.
Year to date, cash flow from operations before net changes in non-cash
working capital (1) of $11.6 million, or $0.06 per share was considerably higher than the
$5.0 million or $0.03 per share during the comparable period.
During the second quarter, the Company recorded net profit of $3.3
million, or $0.02 per share (Q2 2013 - net loss of $9.9 million, or
$0.06 per share). For the six months ended June 30, 2014, the Company
recorded a net loss of $1.8 million, or $0.01 per share (YTD 2013 - net
loss of $12.5 million, or $0.07 per share). The increase in net profit
is primarily related to an increase in gold sales volume, the
successful integration of the Company's cash flow optimization plan and
continued operational improvements.
Operations
During the second quarter of 2014, the Company milled 79,746 tonnes at a
grade of 7.70 grams of gold per tonne (Q2 2013 - 79,077 tonnes at a
grade of 5.13 grams of gold per tonne) for total production of 18,742
ounces of gold (Q2 2013 - production of 12,438 ounces of gold). This
51% increase in ounces produced is attributable to a 51% increase in
grade while tonnes milled were consistent with the comparable period in
2013. The increase in grade is mainly attributable to the L62 deposit
and the production ramp up of Santoy Gap. Year to date, the Company
milled 144,116 tonnes at a grade of 6.83 grams per tonne for total
production of 30,086 ounces of gold representing a 47% increase from
the first half of 2013.
In addition to record production, the Company set new highs in safety
and environment performance.
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Seabee Gold Operation Production Data
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Q2
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Q2
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YTD
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YTD
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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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79,746
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79,077
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144,116
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140,954
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Head Grade (grams per tonne)
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7.70
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5.13
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6.83
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4.77
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Recovery (%)
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95.0
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95.3
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95.0
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94.9
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Gold Produced (ounces)
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18,742
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12,438
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30,086
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20,520
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Gold Sold (ounces)
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17,690
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11,532
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28,555
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20,833
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Santoy Gap Update
In June, the Company completed the Santoy Gap ventilation raise to
surface ahead of schedule. This is a significant milestone as it allows
the Company to improve development rates by increasing the underground
activity to advance the ore body towards safe and sustainable
production.
During the quarter, development was ongoing in the eastern portion of
the ore body on four levels with long-hole production expected to begin
ahead of schedule during the third quarter. Ramp-up will continue
throughout 2014 with targeted production of 200 to 300 tonnes per day
by the end of the fourth quarter.
To support the production ramp-up, the Company is conducting a 27,000
metre infill drilling program to better define the Santoy Gap resource
and optimize mine design. To date, the results have been very positive
in terms of grade continuity and are above the current Mineral Reserve
grade.
Exploration
Drilling at the Seabee Gold Operation is anticipated to increase to
60,000 metres (formerly 52,000 metres). Focus will continue to be on
low cost per ounce targets, proximal to infrastructure with the
potential to materially impact near-term production, drive resource
growth and to positively impact the Company's Mineral Reserves and
Mineral Resources.
Outlook
Based on the production improvements during the first half of 2014, the
Company has increased its total 2014 gold production forecast to 50,000
to 54,000 ounces of gold (previously 47,000 to 51,000 ounces) from the
Seabee Gold Operation. The Company has also revised its unit cash cost
target for 2014 to be approximately 10% lower than 2013's unit cash
cost of $983 per ounce. Quarterly operating results are expected to
fluctuate throughout 2014; as such, they will not necessarily be
reflective of the full year average.
Conference Call and Webcast
We invite you to join our Conference Call and Webcast today at 1:30 PM
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 August 13, 2014 by calling 1-855-859-2056 and entering the
password 74718562.
To view and listen to the webcast please use the following URL in your
web browser: http://www.newswire.ca/en/webcast/detail/1386603/1538291
A copy of Claude's 2014 Q2 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 company based in Saskatoon, Saskatchewan, whose shares
trade on the Toronto Stock Exchange (TSX: CRJ) and the OTCQB (OTCQB:
CLGRF). Claude is a gold mining and exploration company with an asset
base located entirely in Canada. 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.
Footnotes
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(1)
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See description and reconciliation of non-IFRS financial measures in the
"Non-IFRS Financial Measures and Reconciliations" section in the
Company's 2014 Q2 MD&A available on the Company's website at www.clauderesources.com or on www.sedar.com.
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CAUTION REGARDING FORWARD-LOOKING INFORMATION
All statements, other than statements of historical fact, contained or
incorporated by reference in this news release and constitute
"forward-looking information" within the meaning of applicable Canadian
securities laws and "forward-looking statements" within the meaning of
the United States Private Securities Litigation Reform Act of 1995
(referred to herein as "forward-looking statements"). Forward-looking
statements include, but are not limited to, statements with respect to
the future price of gold, the estimation of mineral reserves and
resources, the realization of mineral reserve estimates, the timing and
amount of estimated future production, costs of production, capital
expenditures, costs and timing of the development of new deposits,
success of exploration activities, permitting time lines, currency
exchange rate fluctuations, requirements for additional capital,
government regulation of mining operations, environmental risks,
unanticipated reclamation expenses, title disputes or claims and
limitations on insurance coverage. Generally, these forward-looking
statements can be identified by the use of forward-looking terminology
such as "plans", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate" or "believes", or the negative
connotation thereof or variations of such words and phrases or state
that certain actions, events or results, "may", "could", "would",
"might" or "will be taken", "occur" or "be achieved" or the negative
connotation thereof.
All forward-looking statements are based on various assumptions,
including, without limitation, the expectations and beliefs of
management, the assumed long-term price of gold, that the Company will
receive required permits and access to surface rights, that the Company
can access financing, appropriate equipment and sufficient labour, and
that the political environment within Canada will continue to support
the development of mining projects in Canada.
Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of Claude to be
materially different from those expressed or implied by such
forward-looking statements, including but not limited to: actual
results of current exploration activities; environmental risks; future
prices of gold; possible variations in ore reserves, grade or recovery
rates; mine development and operating risks; accidents, labour issues
and other risks of the mining industry; delays in obtaining government
approvals or financing or in the completion of development or
construction activities; and other risks and uncertainties, including
but not limited to those discussed in the section entitled "Business
Risk" in the Company's Annual Information Form. These risks and
uncertainties are not, and should not be construed as being,
exhaustive.
Although Claude has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can be
no assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements.
Forward-looking statements in this news release are made as of the date
of this news release and accordingly, are subject to change after such
date. Except as otherwise indicated by Claude, these statements do not
reflect the potential impact of any non-recurring or other special
items that may occur after the date hereof. Forward-looking statements
are provided for the purpose of providing information about
management's current expectations and plans and allowing investors and
others to get a better understanding of our operating environment.
Claude does not undertake to update any forward-looking statements that
are incorporated by reference herein, except in accordance with
applicable securities laws.
CAUTIONARY NOTE TO US INVESTORS CONCERNING RESOURCES ESTIMATES
The resource estimates in this document were prepared in accordance with
National Instrument 43-101, adopted by the Canadian Securities
Administrators. The requirements of National Instrument 43-101 differ
significantly from the requirements of the United States Securities and
Exchange Commission (the "SEC"). In this document, we use the terms
"measured", "indicated" and "inferred" resources. Although these terms
are recognized and required in Canada, the SEC does not recognize them.
The SEC permits U.S. mining companies, in their filings with the SEC,
to disclose only those mineral deposits that constitute "reserves".
Under United States standards, mineralization may not be classified as
a reserve unless the determination has been made that the
mineralization could be economically and legally extracted at the time
the determination is made. United States investors should not assume
that all or any portion of a measured or indicated resource will ever
be converted into "reserves". Further, "inferred resources" have a
great amount of uncertainty as to their existence and whether they can
be mined economically or legally, and United States investors should
not assume that "inferred resources".
SOURCE Claude Resources Inc.