In 2006, gold sales volume at Claude’s Seabee mine was 47,400 ounces from 246,000 tonnes milled at a grade of 6.16 grams per tonne. This compares to 2005 volumes of 42,200 ounces from 236,400 tonnes milled at a grade of 6.32 grams per tonne.

Mine production during 2006 originated from the 2B and 2C zones at depth between the 680 metre and 850 metre levels. During 2007, mining will continue to focus on the 2B and 2C zones, on the 680 level thru 850 levels.  Seabee will continue to operate under a three year mine plan which will focus on the 2B and 2C zones at depth and laterally to the east and west.  Further, the Company may re-access the 2D zone in the western portion of the mine, below the 340 level.

Mineralization is known to extend below the current lowest working levels at both Seabee and Currie Rose, in addition to known veins not yet mined. The development of the 2B zone to the 880 metre level and additional delineation drilling proved successful in replacing reserves mined out during the year with a modest decrease in proven reserve grade.

Claude is planning in excess of 50,000 metres of underground drilling at Seabee to replace 2007 production and expand reserves and resources. Drilling will be focused on the 2B and 2C veins laterally to the west.  As well, an 800 metre level diamond drill chamber will be driven during the first quarter to test the down dip plunge of the 2B and 2C veins to the 1,200 metre level (more than 400 metres below the existing workings).

Each year, reserves and resources at the Seabee mine are independently reviewed. At December 31, 2006, reserves were at 692,500 tonnes at 6.59 grams per tonne or 146,700 ounces. Resources were 1,293,300 tonnes at 8.96 grams per tonne or 372,600 ounces.  Over the past 15 years, the Company has successfully converted its posted resources to reserves. 

Porky Lake lies three kilometres north of the Seabee mine. The Porky Main and West Zones are located in or close to the hinge area of the regional Porky Lake anticline.  Mineralization is hosted by shear zones near the contact between mafic metavolcanic rocks and underlying feldspathic arenite. Both lithologies are extensively altered and quartz flooded. Pyrite, pyrrhotite, arsenopyrite and visible gold were routinely found in multiple lenses in the drill holes.   

Drilling in 2004 in the Porky Main Zone consisted of 22 in-fill holes totaling 3,047 metres. The holes were collared on a grid of approximately 25 by 25 metres. Based on these and previously drilled holes, a resource estimation has identified 160,000 tonnes grading 7.50 grams per tonne (gpt) in the Indicated Mineral Resource category, with an additional 70,000 tonnes grading 10.43 gpt in the Inferred Mineral Resource category. This resource estimation was done using the sectional method, with a 3.0 gpt cut-off grade and a 42.5 gpt cutting factor.

The Porky West Zone is located approximately 1.5 kilometres northwest of the Porky Main Zone, in the northwest limb of the Porky Lake anticline. Mineralization in this structure is similar to that in the Main Zone, but is largely hosted in the feldspathic arenite. Thirty-one delineation holes totaling 5,027 metres were drilled in 2004 on the West Zone, also on a grid of approximately 25 by 25 metres. Using a cut-off grade of 3.0 gpt and a 30.0 gpt cutting factor and sectional method, the West Zone is estimated to contain a total of 90,000 tonnes grading 7.33 gpt in the Indicated Mineral Resource category, and an additional 130,000 tonnes grading 5.0 gpt in the Inferred Mineral Resource category.  The zone is open along strike further to the northwest, as indicated by surface exploration that has returned high-grade grab samples.

A 6.8 kilometre all-weather road has been constructed between the Porky Lake West Zone and the Seabee mill. Approval to conduct bulk sampling of the Porky West zone was granted during 2005 and an underground bulk sampling program was carried out during the last quarter of 2006 to confirm grade, continuity and metallurgy of the gold mineralization.  Results of this bulk test and concurrent metallurgical work were reported together with the results from the Santoy chip and muck samples in the first quarter of 2007 in a news release entitled Claude Resources Inc. Reports Additional Drill Results at Santoy 7.

In addition to the delineation drills in the Main and West Zones, 25 exploratory holes totaling 5,710 metres were drilled on the eastern limb of the Porky Lake anticline, also targeting the contact between the mafic metavolcanic rocks and feldspathic arenite. This phase of the drill program identified a wide mineralized corridor (10 to 20 metres) that routinely returned assays of 1 to 2 gpt. Within this corridor and associated with carbonate and chloritic alteration, drilling returned multiple high-grade sulfide-quartz vein intercepts, up to 31.87 gpt over 6.3 metres.

Porky Lake Exploration Program (click to enlarge)

Santoy Lake Area

The Santoy Lake property, accessible by a permanent road completed in 2006, is located about 11 kilometres from Seabee. The property is underlain by the Pine Lake greenstone belt of metamorphosed mafic volcanic, volcaniclastic and sedimentary rocks, which have been intruded by granitoid sills.  Seven gold zones had been discovered on the property during the Company’s previous prospecting programs.

The Santoy 7 zone and 8 and 8 East zones deposits are hosted in a four kilometre long, northwest trending and northeast dipping sheared and mineralized corridor in mafic volcaniclastic rocks and granitoid sills. The 7 zone is an isolated deposit about 400 metres long and 40 to 60 metres wide, situated at the north end of the trend.  The 8 and 8 East zones start about 2.5 kilometres south of the 7 zone, and extend for at least 2,000 metres further south. Gold mineralization occurs in gold-sulfide-chlorite-quartz veins in the shear zones, near or in the granodiorite and granite sills. Gold-bearing chlorite quartz veins 1 to 7 metres thick were routinely intercepted in the holes drilled in the 7 and 8 zones. In addition, a number of holes drilled between the 7 and 8 zones also intercepted sporadic high-grade gold values.

At Santoy 7, mineralization is hosted in dilation zones within a metavolcanic – metasedimentary rock sequence, a result of fault movement in the area.  The dilation zones have been infilled by quartz, carrying varying amounts of sulphides, chlorite, carbonate and visible gold.  Santoy 7 lies in an area of thrust faulting with shallow to moderately dipping lenses of mineralized rock.  The main horizon outlined to date measuring 400 metres by 150 metres and 1.5 metres to 12 metres thick.  This lense remains open in two directions. 

The Santoy 8 dilation structure, two kilometres to the southeast of Santoy 7, shows a more steeply-dipping attitude and may be related to normal faulting within the rock sequence.  Two similar, en enchelon drag fold structures occur at Santoy 8.  The north structure is about 380 metres long on surface and varies from 1.5 metres to 2 metres thick along its arms to 30 metres along the nose structure.  This fold remains open at depth along its eastern limb.   The fold structure to the south is similar and is also open to the east. 

Total indicated and inferred mineral resources for Santoy 7 and 8 are 1,110,000 tonnes grading 6.53 grams per tonne (top cut of 30 grams per tonne).  The bottom cut-off grade used by Claude is 3.0 grams per tonne over 1.2 metres true width.  A specific gravity of 2.8 is used. 

With completion of the all-weather road from the Seabee minesite to Santoy in the fourth quarter of 2006, and the extension of the ramp down to the mineralized zone, the extraction of the bulk sample material was initiated. Late in the first quarter of 2007, the bulk sample was processed through the Seabee mill. Also during the first quarter of 2007, the Company received approval to test an additional 20,000 tonnes of the Santoy 7 ore. This Phase 2 began as development crews drove the decline to the next level.  The bulk samples completed by the Company are expected to provide a more complete understanding of the best mine process to be used as well as the gold content of the rock. 

Core drill programs carried out on Santoy 8 during the third and fourth quarters of 2006 were designed as in-fill drilling in preparation for ramp design at this second site in order to extract material for a bulk sample.

The Company has committed to further surface exploration during the year in order to both understand the structure of Santoy 8 and to extend the area of mineralization. Core drill programs carried out on Santoy 8 continued to provide information for ramp and eventual mine design as well as test the eastern extent of the mineralized lense.

Winter drilling tested down-dip and southeastern strike continuity of the Santoy 8 mineralized system.  Preliminary results show the mineralization remains open along strike to the northwest and on a number of sections at depth. 

The 25,000 metre summer drill program in the Santoy area prioritized 25 metre infill drilling of the Santoy 7 and 8 structures.  This will allow for the calculation of an indicated resource in the fourth quarter of 2007 and provide information for mine development.  Total Santoy 8 drilling in the second quarter of 2007 was 3,175 metres in 18 hoes.  Samples have been dispatched and are expected in the third quarter.  Santoy 8 drilling is expected to continue until the end of the third quarter.

Shane Property

The Shane property is located approximately five kilometres east of Claude’s operating Seabee gold mine along the permanent road to the Santoy 7 area, making any deposit defined in the area easily accessible as mill-feed.  Claude owns a 75% interest in the property and Shane Resources Ltd. holds the remaining 25%. 

The eight-hole winter drill program completed in 2007 tested the western continuity of the mineralized system. Results of the program indicate a second mineralized lense was intercepted in two of the holes, returning 26.06 grams per tonne over 1.1 metres and 11.42 grams per tonne over 1 metre within pyritic quartz veins.   In order to understand the structural and stratigraphic setting of the mineralization, a 1:2,500 mapping program is being undertaken.  Results will be compiled with drilling in order to plan further exploration.

During the 2006 summer program, prospecting and soil geochemistry results proved a horizon both east and west to a total length of 1,300 metres, open at both ends.  Drill programs to the end of 2006 revealed mineralization along this structure is in the form of moderately to steep, west-plunging lense hosting intercepts of 23.88 grams per tonne over 3.74 metres and  12.16 grams per tonne over 8.43 metres. 

The 2006 winter drill program delineated a horizon containing gold mineralization hosted by quartz-tourmaline-sulphide veins within metavolcanic rocks. During the summer, Claude followed this program up with a comprehensive grassroots exploration program, results of which detailed one main mineralized horizon, traceable through drilling and prospecting for approximately 1,300 metres.  This east-trending horizon typically contains 1 to 3 metres of gold bearing quartz-tourmaline-sulphide flooding.  It has been drill-tested along approximately 500 to 600 metres of this length.

Drill core intercepts from this horizon contain the following notable grades:  12.16 grams per tonne over 8.43 metres (6.46 metres true width) and 23.88 grams per tonne over 3.74 metres (2.86 metres true width).  Mineralization along this structure is in the form of west-plunging lenses. The anomalous intersection of 23.88 grams per tonne over 3.74 metres is the down-plunge extension of the 12.16 grams per tonne over 8.43 metres, reflecting the strong mineral lineation measured in the field during the mapping program.    

The Shane mineralization lies within 200 metres of the Santoy 7 permanent road and is well-positioned to provide mill feed for Seabee.  Exploration will continue in the coming year with core drill programs to test the horizon both east and west of the zone defined to date.

Quality Assurance and Quality Control Procedures

Rigorous quality assurance and quality control practices have been implemented on all Company core drill programs including blank, reference and duplicate samples with each batch of assays.   Madsen and Santoy 8 samples are analyzed by fire assay with a combination of atomic absorption and gravimetric finish at an independent ISO approved facility.   Santoy 7 samples were analyzed by fire assay with a gravimetric finish at the Seabee Mine laboratory, with check samples sent to an independent ISO approved facility.

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