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Gold/Mining/Energy : Claude Resources TSE.CRJ Undervalued Junior Gold Anyone? -- Ignore unavailable to you. Want to Upgrade?

To: Enigma who wrote (86)	1/7/1999 9:00:00 PM
From: Gord Bolton	Respond to of 359

A little dated but interesting. Claude Resources: Sustainable Cash Flow Provides Shelter In A Foul Market Claude Resources Inc. CRJ (TSE) November 7th, 1997 close $2.10 52 Week High/Low: $3.10/$1.61 Approx: 18M shares outstanding, 19.2 FD. Debt Free Contact: Neil McMillan (306) 668-7505 Email: clauderesources@clauderesources.com Today's selection is not a recommendation because we feel it lacks speculative appeal. It does however represent quality/cash flow and profits. Claude Resources is a diversified exploration company based in Saskatchewan. The company is currently building a base on two fronts; gold production and oil & gas. Gold In Saskatchewan, the company's main assets are the Seabee Mine and Amisk Lake prospect. The Seabee was explored by, what is now, Placer Dome, back in the early '80's. After spending $8.6 M, Placer elected to walk away in favour of open pit targets. In 1987, Claude acquired the property from Cominco and put another four million dollars into exploration. Mining commenced at the Seabee in December 1991 and has produced 249,057 ounces since then from 919,000 tonnes. Cash costs for the current year are expected to fall in around $230 U.S. per oz with significant reductions in '98 driven by reduced power costs, which just kicked in this past July, and a new hoist and shaft which was commissioned in October. Production for the year is estimated to be 50,000 oz, rising to 70,000 oz by 1999. The Seabee is accessible by float plane from LaRonge, Saskatchewan and by winter road from January to March. It is this road which is used to bring in supplies for the year consisting of fuel, chemicals and equipment. The mine's reserve estimate was performed in July by A.C.A. Howe International who estimated the mine to have reserves of 962,675 tonnes at an average grade of 9.86 g/t gold. Interestingly enough, the mine was commissioned in '91 with reserves of 952,000 tonnes of which 919,000 had been mined by the beginning of the year. Further reserves are expected to be indicated on the adjacent property held by Currie Rose. Claude has subsequently optioned this property. On the exploration side, Claude holds an interest in several prospects, but none are as advanced as Amisk Lake. To date, the company has identified resources of 1,420,000 tonnes at 13.4 g/t gold. Technical work is currently being carried out on the project to determine the best method of mining the property. Oil & Gas Claude holds oil and gas interests in Alberta and Saskatchewan where it generally uses industry partners like Tailsman. The company does however operate six of it's own wells. Current year participation is expected to average 1,000 barrels of oil and gas equivalent per day with current participation around 1,200 a day and rising. This part of the company provided over $900K in net profit for the first six months. Management Claude is run by an experienced and competent management team. In the Chairman's seat is William MacNeill. A former bush pilot, Mr. MacNeill has been active in exploration since 1972 and has been involved with Claude since 1983. Arnie Hillier is the CEO and CFO and has 13 years senior management experience. Neil McMillan serves as President and is a former VP of RBC Dominion Securities. Philip Olson serves as VP Exploration after serving as regional exploration manager for Battle Mountain in Ontario. Summary Claude Resources is a well run junior gold producer with the advantage of constant cash flows provided by oil and gas interest. Using their current base ,which will likely include cash flow of $0.50 per share for 1997 and profits of $0.13 to $0.17 per share, the company intends on increasing their oil and gas production three fold in three years and their gold production fourfold within three years. While the current market is not placing too much emphasis on junior gold producers, Claude offers an excellent medium to long term investment. The Scouting Report The Scouting Report returns this edition with a look at an oil service company.