Trading Symbol
TSX - CRJ
OTCQB - CLGRF
SASKATOON,
Nov. 13, 2013 /PRNewswire/ -
Claude Resources Inc. ("Claude" and or the "Company") (TSX:
CRJ; OTCQB: CLGRF) today reported its 2013 third quarter financial
and operating results. All dollar amounts are in Canadian dollars
unless stated otherwise.
Highlights Include:
- Santoy Gap contributed 243,000 ounces of gold to a 78 percent
increase in Seabee total Mineral Reserves.
- Production of 10,541 ounces of gold.
- Revenue of $15.0 million from the
sale of 10,781 ounces of gold.
- Total cash cost per ounce of gold (1) was
$919 (U.S. $885).
- Net cash margin of $470 per
ounce.
- Cash flow from operations before net changes in non-cash
operating working capital (1) of $4.3 million, or $0.02 per share.
- Adjusted net loss (1) of $1.2
million, or $0.01 per
share.
- Net loss of $33.9 million, or
$0.19 per share, after an impairment
charge of $45.2 million partially
offset by a $12.5 million deferred
income tax recovery.
"Gold production for the quarter was below
forecast as a result of lower than budgeted grades. Our narrow vein
mining operation at Seabee is subject to relatively volatile grade
changes and we expect the third quarter grade will not be
indicative of production grades going forward. Our operating team
continues to make great strides in rationalizing and controlling
expenditures, reducing operating costs by over $200 per ounce. Our focus remains on adding the
Santoy Gap deposit into the production profile at the Seabee Gold
Operation; we expect to start processing development ore in the
first half of 2014. In addition, we are actively pursuing a number
of opportunities to strengthen the Company's Balance Sheet and
expect to do so before the end of the first quarter of 2014,"
stated Neil McMillan, President and
Chief Executive Officer.
Financial Results
Gold revenue from the Company's Seabee Gold
Operation for the three months ended September 30, 2013 decreased 36 percent to
$15.0 million from the $23.4 million reported during the third quarter
of 2012. The decrease in gold revenue period over period was
attributable to a 16 percent decline in Canadian dollar gold prices
realized and 23 percent lower gold sales volume which was impacted
by a 28 percent decrease in grade (Q3 2013 - 10,781 ounces; Q3 2012
- 14,088 ounces sold). Year to date, gold revenue was $46.3 million, a 22 percent decrease from the
same period in 2012.
For the three months ended September 30, 2013, mine production costs of
$9.9 million (Q3 2012 - $13.0 million) were 24 percent lower period over
period. Year to date, mine production costs were $31.6 million (YTD 2012 - $38.1 million), an improvement of 17 percent.
Third quarter total cash cost per ounce of gold
(1) of $919 (U.S.
$885) was comparable to the third
quarter in 2012. Year to date, cash costs per ounce of gold
(1) of $999 (U.S.
$976) was six percent lower than the
cash cost per ounce of $1,059 (U.S.
$1,057) reported during the first
nine months of 2012.
Period over period and year to date, the
significant improvement in operating costs are an example of how
hard the Company's operating team has worked. Additionally, the
Company is experiencing the financial benefits associated with the
shaft extension, such as transportation efficiencies, lower diesel
consumption, decreased labour and equipment usage and improved
ventilation. The Company will continue to take a disciplined
financial approach and is determined to find new initiatives with
the intention of lowering these costs even further during the
remainder of 2013 and beyond.
During the third quarter of 2013, cash flow from
operations before net changes in non-cash operating working capital
(1) of $4.3 million, or
$0.02 per share was down from
$8.6 million, or $0.05 per share, for the comparable 2012 period.
Year to date, cash flow from operations before net changes in
non-cash operating working capital (1) was $9.3 million, or $0.05 per share (YTD 2012 - $16.4 million, or $0.09 per share).
For the three months ended September 30, 2013, the Company recorded a net
loss of $33.9 million, or
$0.19 per share (Q3 2012 - net profit
of $3.0 million, or $0.02 per share), after an impairment charge of
$45.2 million which was offset by a
$12.5 million deferred income tax
recovery. Year to date, the Company recorded a net loss of
$46.3 million, or $0.26 per share, after impairment charges of
$56.0 million which were partially
offset by $16.8 million deferred
income tax recovery (YTD 2012 - net profit of $3.1 million, or $0.02 per share, after a deferred income tax
expense of $1.7 million).
The total impairment charges of $45.2 million in the third quarter were mainly
related to the Madsen Gold Project of $37.3
million, or $0.21 per share,
which was classified as held for sale and reflects re-measurement
(required by this classification) of this asset at the lower of its
carrying amount and fair value less costs to sell. The remaining
impairment charge of $7.9 million, or
$0.04 per share, was related to the
Seabee Gold Operation, due to revised assumptions relating to
future production and unit cost analysis.
During the third quarter of 2013, adjusted net
loss (1) was $1.2 million,
or $0.01 per share (September 30, 2012 - adjusted net profit of
$4.4 million, or $0.01 per share). Year to date, adjusted net loss
(1) of $6.8 million, or
$0.04 per share (YTD 2012 - adjusted
net profit of $4.3 million, or
$0.03 per share). Table 1 reconciles
the third quarter and year to date adjusted net (loss) profit with
the Company's net (loss) profit as determined under International
Financial Reporting Standards (IFRS).
|
Table 1: Adjusted Net (loss)
Profit Reconciliation |
|
|
|
|
Three Months |
|
|
|
Nine Months |
|
|
|
|
Ended September 30 |
|
|
|
Ended September 30 |
|
|
|
|
2013 |
|
2012 |
|
|
|
2013 |
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) profit |
|
|
$ |
(33,871) |
$ |
2,958 |
|
|
$ |
(46,323) |
$ |
3,146 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment charge |
|
|
|
45,187 |
|
- |
|
|
|
56,034 |
|
- |
|
Loss (gain) on investments |
|
|
|
- |
|
174 |
|
|
|
262 |
|
(620) |
|
Deferred income tax (recovery) expense |
|
|
|
(12,531) |
|
1,274 |
|
|
|
(16,773) |
|
1,728 |
Adjusted Net (loss) Profit |
|
|
$ |
(1,215) |
$ |
4,406 |
|
|
$ |
(6,800) |
$ |
4,254 |
Weighted Average shares outstanding
(basic) |
|
|
|
175,811 |
|
173,746 |
|
|
|
175,478 |
|
172,660 |
Weighted Average shares outstanding
(diluted) |
|
|
|
175,811 |
|
173,819 |
|
|
|
175,478 |
|
173,094 |
Per share adjusted net
(loss) profit (basic and diluted) |
|
|
$ |
(0.01) |
$ |
0.03 |
|
|
$ |
(0.04) |
$ |
0.02
|
Operations
During the third quarter of 2013, the Company
milled 64,642 tonnes at a grade of 5.30 grams of gold per tonne (Q3
2012 - 66,173 tonnes at a grade of 7.34 grams of gold per tonne)
for total production of 10,541 ounces of gold (Q3 2012 - production
of 15,073 ounces of gold). This decrease in ounces produced is
attributable to a 28 percent decrease in grade, period over
period.
Year to date, the Company has milled 205,596
tonnes at a grade of 4.94 grams of gold per tonne (YTD 2012 -
205,537 tonnes at a grade of 5.83 grams of gold per tonne). Year to
date, produced ounces were 31,061 (YTD 2012 - 36,813); with mill
recoveries and milled tonnes relatively unchanged period over
period, the decrease in ounces is attributable to a 15 percent
decline in grade.
|
|
|
|
|
|
|
|
Table 2: Seabee Gold Operation
Production and Cost Statistics |
|
|
Three Months Ended
September 30 |
|
|
Nine Months Ended
September 30 |
|
|
|
|
|
|
|
|
|
|
2013 |
2012 |
|
|
2013 |
2012 |
Operating Data |
|
|
|
|
|
|
|
Tonnes Milled |
|
64,642 |
66,173 |
|
|
205,596 |
205,537 |
Head Grade (grams per tonne) |
|
5.30 |
7.34 |
|
|
4.94 |
5.83 |
Recovery (%) |
|
95.8 |
96.5 |
|
|
95.2 |
95.5 |
Gold Produced (ounces) |
|
10,541 |
15,073 |
|
|
31,061 |
36,813 |
Gold Sold (ounces) |
|
10,781 |
14,088 |
|
|
31,614 |
35,941 |
Financial Data |
|
|
|
|
|
|
|
Revenues (CDN$ million) |
|
$15.0 |
$23.4 |
|
|
$46.3 |
$59.6 |
Production Costs (CDN$ million) |
|
$9.9 |
$13.0 |
|
|
$31.6 |
$38.1 |
Cash Operating Costs (CDN$/oz) (1) |
|
$919 |
$920 |
|
|
$999 |
$1,059 |
Cash Operating Costs (U.S.$/oz)
(1) |
|
$885 |
$924 |
|
|
$976 |
$1,057 |
|
|
|
|
|
|
|
|
Exploration
Claude has elected to reduce its exploration
spending during 2013 to $1.6 million
from the $2.7 million budgeted and
the $14.2 million incurred in
2012.
At the Seabee Gold Operation, exploration
expenditures focused on low cost per ounce targets, proximal to
infrastructure with the potential to materially impact near-term
production, drive resource growth and positively impact the
Company's Mineral Reserves and Mineral Resources. The 2013 summer
regional target program was completed during the third quarter and
successfully outlined a number of new targets in the Seabee and
Santoy regions.
Mineral Reserves and Mineral Resources
Update
The Company updated its December 31, 2012 Seabee Gold Operation National
Instrument 43-101 ("NI 43-101") resource statement by upgrading
243,000 ounces of gold in to reserves from the Santoy Gap deposit.
The Santoy Gap deposit was initially discovered in 2011 and is
located approximately 500 metres from the Santoy 8 Mine, which is
currently in production. Based on infill and exploration drilling,
the Santoy Gap deposit currently hosts Proven and Probable Mineral
Reserves of 243,000 ounces of gold at 6.24 grams per tonne,
Measured and Indicated Mineral Resources of 14,000 ounces of gold
at 4.65 grams per tonne and an Inferred Mineral Resource of 356,900
ounces of gold at 5.92 grams per tonne. The addition of the Santoy
Gap deposit represents an increase of 78 percent in Mineral
Reserves, reflecting the Company's ongoing plans of moving the
Santoy Gap deposit towards a production scenario in 2014.
Currently, the Company expects to process development ore from the
Santoy Gap deposit in the first half of 2014 and reach commercial
production beginning in 2015. Infill or exploration drilling
completed in 2013 was not incorporated in this update. An updated
NI 43-101 is planned to be released in the first quarter of
2014.
Outlook
Year to date, the Company is on track to meet
budgeted mill throughput. However, due to lower than
anticipated grade, production is short of Management's forecast and
as a result, for fiscal 2013, Management has lowered its production
forecast to 45,000 to 47,000 ounces from 50,000 to 54,000
ounces.
Notwithstanding the production shortfall, Claude
has effected a significant reduction in total Company expenditures
for fiscal 2013 which is largely attributable to improved planning
and procurement practices, increased productivities, a decrease in
labour costs and major capital expenditures associated with Seabee
Shaft Extension completed during the first half. Unit costs for
2013 are expected to improve from 2012's unit cash costs of
$997 per ounce.
In light of current market conditions and gold
price volatility, the Company is in the process of divesting its
Madsen Gold Project in Red Lake,
Ontario. The Company expects to complete the transaction by
the end of 2013 or early 2014. The divestiture of the asset will
strengthen the Company's Balance Sheet and reduce the risk in its
capital expenditure requirements for the upcoming 2014 winter
re-supply program.
Conference Call and
Webcast
We invite you to join our Conference Call and
Webcast on November 14, 2013 at
11:00 AM Eastern Standard 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 21, 2013 by calling 1-855-859-2056 and
entering the password 92875787.
To view and listen to the webcast on
November 14, 2013 please use the
following URL in your web browser:
http://www.newswire.ca/en/webcast/detail/1248899/1376077.
A copy of Claude's 2013 third quarter
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 EDGAR and may be
viewed at www.sedar.com or www.sec.gov/.
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 exploration and mining
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 10,000 acre Madsen Property in
the prolific Red Lake gold camp of
northwestern Ontario and owns 100
percent of the Amisk Gold Project in northeastern Saskatchewan.
Footnotes
|
|
|
(1) |
See description and reconciliation of non-IFRS financial
measures in the "Non-IFRS Financial Measures and Reconciliations"
section of the Company's Q3 2013 MD&A available on
www.sedar.com and www.sec.gov/. |
|
|
|
|
|
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.