Claude Resources
News
Gold prices realized remained steady during the fourth quarter averaging US $620 per ounce. Gold production during the quarter was 10,700 ounces, slightly below forecast; total 2006 production was 47,400 ounces, 12% above 2005 production.
Bulk sampling of Claude’s Porky Lake and Santoy 7 projects, near the Seabee mine, continued during the fourth quarter. If successful, one or both of these projects could provide feedstock to the Seabee mill as early as the second half of 2007.
Claude Resources commenced surface exploration at the Madsen project in Red Lake, Ontario in early December 2006. The Company expects to conduct extensive surface exploration at Madsen in 2007 while dewatering the Madsen shaft in preparation for underground drilling.
The Company would like to take this opportunity to thank retired Chairman Arnie Hillier for his many years of outstanding service to the Company. Since 1992, Arnie served as President, CEO and finally as Chairman. All shareholders have been well served by his skill, experience and commitment.
Financial Highlights
| Three Months Ended | Year Ended | |||
| December 31 | December 31 | |||
|
| 2006
| 2005 | 2006 | 2005 |
| Revenue ($ millions) | 9.5 | 11.4 | 41.4 | 34.3 |
| Net earnings (loss) ($ millions) | (0.4) | 1.0 | 6.4 | (3.5) |
| Earnings (loss) per share ($) | (0.01) | 0.01 | 0.09 | (0.05) |
| Cash from operations ($ millions)* | 0.5 | 2.1 | 9.2 | 4.5 |
| Cash from operations per share ($)* | 0.01 | 0.03 | 0.13 | 0.07 |
| Average realized gold price (US $/ounce) | 620 | 485 | 604 | 452 |
| Total cash operating costs (US $/ounce) | 468 | 355 | 396 | 358 |
| Working capital ($ millions) | 7.7 | 6.9 | 7.7 | 6.9 |
* before net change in non-cash working capital
OPERATIONS
Gold
During the quarter ended December 31, 2006, Claude Resources Inc. mined and milled 59,300 tonnes at the Seabee mine. Grade processed for the quarter was down 24% to 5.74 grams per tonne due to sequencing issues. As a result, produced ounces for this quarter were 10,300, down 32% from the same period in 2005. Tonnage in the fourth quarter was impacted by the Porky Bulk Sample program which went from October 23 to November 2, 2006. Seabee mine management is focusing on improving equipment availability and reducing dilution to improve production volumes and unit costs.
| Operating Statistics | Three Months Ended | Year Ended | |||||
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| 2006 | 2005 | % Change | 2006 | 2005 | % Change |
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| Tonnes milled | 59,300 | 66,400 | -11% | 246,000 | 236,00 | +4% | |
| Grade processed (grams per tonne) | 5.74 | 7.60 | -2.4% | 6.16 | 6.32 | -3% | |
| Recovery (%) | 93.47 | 92.98 | +1% | 93.62 | 92.86 | +1% | |
| Sales volume (ounces) | 10,700 | 13,900 | -23% | 47,400 | 42,200 | +12% | |
| Production volume (ounces) | 10,300 | 15,100 | -32% | 46,300 | 44,600 | +4% | |
Claude is planning in excess of 50,000 metres of underground drilling at Seabee to replace 2007 production and expand or sustain reserves and resources. Drilling will be focused on the 2B and 2C zones 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 upgraded 100% of its posted resources to reserves.
Seabee Mine – Mineable Reserves and Mineral Resources
| 2006 | 2005 | 2004 | |||||||
| Tonnes | g/t | Ounces | Tonnes | g/t | Ounces | Tonnes | g/t | Ounces | |
| Proven | 520,900 | 6.44 | 107,900 | 395,600 | 6.18 | 78,600 | 400,500 | 6.37 | 82,000 |
| Probable | 171,600 | 7.03 | 38,800 | 288,800 | 7.07 | 65,600 | 332,200 | 7.53 | 80,400 |
| Total Mineable Reserves | 692,500 | 6.59 | 146,700 | 684,400 | 6.56 | 144,200 | 732,700 | 6.90 | 162,400 |
| Inferred Mineral Resrcs.(1) | 1,293,300 | 8.96 | 372,600 | 1,499,700 | 8.86 | 427,200 | 1,406,200 | 8.16 | 368,900 |
(1) Mineral resources, all in the inferred category, stated after applying historic mining dilution factors.
Oil and Gas
Oil and natural gas liquids (NGLs) sales volume for the quarter ended December 31, 2006 was 17,280 barrels, 10% lower than the 19,200 barrels sold in the same period of 2005. Oil and NGLs sales volume fell from 83,000 barrels in 2005 to 66,600 barrels this year, a 20% decline. Natural gas volume decreased marginally to 154 MMCF in 2006 from 156 MMCF in the fourth quarter of 2005. Year over year, volumes decreased 8%, to 616 MMCF in 2006 from 669 MMCF in 2005.
Each year, the Company has its proven and probable oil, NGLs and natural gas reserves evaluated independently. Crude oil and NGLs proved and probable reserves decreased by 17% to 917,000 barrels at the end of this year from 1,099,000 barrels at the end of 2005. Natural gas reserves also decreased compared to the prior year, to 8,000 MMCF in 2006 from 8,900 MMCF in 2005.
| Reserves (1) | 2006 | 2005 | 2004 | ||||
| Crude oil and NGLs (mbbl) | | | | | | ||
| Proved | | | | ||||
| Alberta | 578 | | 806 | | 455 | ||
| Saskatchewan | 45 | 60 | 66 | ||||
| 623 | 866 | 521 | |||||
| Probable | |||||||
| Alberta | 278 | 215 | 174 | ||||
| Saskatchewan | 16 | 18 | 7 | ||||
| 294 | 233 | 181 | |||||
| Total | 917 | 1,099 | 702 | ||||
| ====== | ====== | | ====== | ||||
| Natural gas (MMCF) | |||||||
| Proved | |||||||
| Alberta | 6,419 | 7,539 | 7,167 | ||||
| Probable | |||||||
| Alberta | 1,533 | 1,313 | 1,775 | ||||
| Total | 7,952 | 8,852 | 8,942 | ||||
| ====== | ====== | ====== | |||||
| Barrels of oil equivalent (mboe) | |||||||
| Proved | 1,693 | 2,123 | 1,716 | ||||
| Probable | 550 | 452 | 477 | ||||
| Total | 2,243 | 2,575 | 2,193 | ||||
| ====== | ====== | ====== | |||||
| 1 Reserves at December 31, 2006, reviewed by Sproule Associates Limited using constant prices. 2 Conversion: 6 mcf = 1 boe | |||||||
During the fourth quarter, the Company completed its fall exploration program in the Seabee area with the continued definition drilling of the Santoy 8 zone. As well, assay results received during the fourth quarter from the Shane property fall drill program were reported in a news release dated November 23, 2006 and are included in the Shane property discussion.
Work at the Madsen area progressed during the fourth quarter with continued preparations for mine shaft dewatering and initiation of a core drill program on the Treasure Box area of gold mineralization. The zone was discovered in 2002 and given the name due to nuggety visible gold present in the drill core.
All exploration programs are carried out under the direction of Qualified Person, Judy Stoeterau, P.Geo., Vice President of Exploration for Claude.
Santoy Area
The Santoy area lies 12 kilometres east of the Seabee mine. The area hosts numerous occurrences of gold mineralization – of these, Zones 7 and 8 have been sufficiently drill-tested to support the calculation of an estimated indicated and inferred mineral resource of 1,110,000 tonnes of 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.
In October 2005, the Company received permits from the necessary regulatory agencies to proceed with bridge/road work to the site and to bulk sample Santoy 7. With completion of the all-weather road from the minesite to Santoy in the fourth quarter, and the extension of the ramp down to the mineralized zone, the extraction of the bulk sample material was initiated. The process to remove and mill approximately 5,000 to 7,000 tonnes of Zone 7 material is expected to continue through to the end of the first quarter of 2007.
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. Further surface exploration will be necessary during the coming year in order to both understand the structure of Santoy 8 and to extend the area of mineralization.
Porky West Zone
The Porky Lake area lies three kilometres north of the Seabee mine and contains an extensive, 7.5 kilometre long, gold mineralized shear horizon at the contact of volcanic and sedimentary rocks. Four significant zones have been identified along this horizon to date, one of which (Porky West) has been sufficiently drill-tested to support the calculation of an estimated indicated mineral resource of 90,000 tonnes of 7.33 grams per tonne and an estimated inferred mineral resource of 130,000 tonnes of 5.00 grams per tonne.
The necessary permits were received in 2005 and by the end of the third quarter, the Company had ramped down and accessed the vein system in three places, collecting a 5,000 tonne bulk sample. Mill and metallurgical tests are currently being assessed and will be reported in the first quarter of 2007.
Shane Property
The Shane area lies five kilometres east of the Seabee mine and directly on the all-season Santoy road, making any deposit defined in the area easily accessible as mill-feed. During the third quarter Claude had carried out an extensive summer exploration and core drill program. Results were announced in the November 2006 press release, “Claude Resources Discovers more Gold on Shane Property.” The main mineralized horizon contains the following notable grades: 12.16 grams per tonne over 8.43 metres (6.46 metres true width) intersected in hole SHA 06-27 and 23.88 grams per tonne over 3.74 metres (2.86 metres true width) in hole SHA 06-31.
Prospecting and soil geochemistry results have extended this horizon both east and west to a total length of 1,300 metres, open at both ends. This horizon has yet to be drill-tested along half of this length. The prospecting program also exposed a number of new zones, one of which is a 62 metre-long shear in metavolcanics containing a gold bearing quartz-tourmaline vein system up to three metres wide. This new zone is parallel to the known horizon and remains open at both ends. It will be drill-tested during the 2007 exploration program.
Madsen Property
On September 1, 2006, Claude reacquired control of its 100% owned Madsen gold project in the prolific Red Lake area of northwestern Ontario. The property had been under an option agreement with Goldcorp Canada Ltd. Claude’s land holdings in the area comprise approximately 4,000 hectares (10,000 acres).
During the fourth quarter of 2006, Claude acquired the necessary permits to begin dewatering the Madsen shaft to the 1,600 foot level to provide underground access for drill definition of extensions to the historic high grade No. 8 zone in addition to other zones. This dewatering process is expected to be completed by the fourth quarter of 2007.
A surface drill program was initiated during the latter part of the fourth quarter and was designed to focus on definition drilling of the main stringer envelope of mineralization intersected in the Treasure Box zone, 2.4 kilometres north of the Madsen mine complex.
The Treasure Box zone is characterized by quartz-tourmaline-sulphide stringers and veins 1 to 20 centimetres wide. These appear to have been emplaced as late-stage brittle fracture fillings in unaltered mafic metavolcanic rocks and are considered to represent the uppermost brittle deformation portion of an Archean gold system. Further targets will be defined once the data from the last five years of exploration is received and reviewed.
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. All core samples are analyzed by fire assay with a gravimetric finish and atomic absorption finish at independent, ISO approved facilities.
FINANCIAL
For the quarter ended December 31, 2006, the Company recorded a net loss of $0.4 million, or $0.01 per share, after the gain on sale of assets of $2.0 million. This compares to net earnings of $1.0 million, or $0.01 per share, after a $1.4 million gain on sale of investments for the same period last year.
For the year ended December 31, 2006, the Company recorded net earnings of $6.4 million, or $0.09 per share, after a $5.9 million gain realized on the sale of certain assets and a $2.7 million non-cash recovery related to income tax benefits arising from the issuance of flow-through shares. This compares to a net loss of $3.5 million, or $0.05 per share in 2005, after a $1.4 million gain realized on the sale of certain portfolio investments and a $1.3 million non-cash recovery related to income tax benefits arising from the issuance of flow-through shares. The earnings improvement for the year was largely attributable to higher gold revenues combined with the gain on sale of assets, interest and other income and income tax recovery, offset by higher mine operating costs.
Revenue
Total revenue generated for the fourth quarter was $9.5 million, a 17% decline from the $11.4 million reported for the same period in 2005. The Seabee mine contributed $7.5 million to revenue during the last quarter of 2006 compared to $7.9 million reported for the same period in 2005. This was due to lower gold sales volume (Q42006 – 10,700 ounces; Q42005 – 13,900 ounces) offset by a 24%, or $138 per ounce, increase in Canadian dollar gold prices realized: Q42006 - $707 (US $620); Q42005 - $569 (US $485).
Gross revenue for the year improved 21%, from $34.3 million in 2005 to $41.4 million in 2006. The Seabee mine contributed $32.5 million to revenue, a 41% improvement from the $23.1 million reported in 2005. This result was due to a 12% improvement in gold sales (2006 – 47,400 ounces; 2005 – 42,200 ounces) combined with a 25% increase in average Canadian dollar gold price realized: 2006 - $685 (US $604); 2005 - $548 (US $452).
Oil, NGLs and natural gas revenue for the three months ended December 31, 2006 decreased significantly to $2.0 million in 2006 from $3.4 million in 2005. This decrease is attributable to production declines, decreased petroleum prices (Q42006 - CDN $59.29; Q42005 - CDN $63.77) and decreased natural gas prices (Q42006 - CDN $6.51; Q42005 - CDN $12.14). Alberta crown and overriding royalties had corresponding decreases in Q42006 compared to Q42005.
Gross oil, NGLs and natural gas revenues for the year ended December 31, 2006 totaled $8.9 million, a 20% decrease from the $11.1 million noted for the year ended December 31, 2005. This decrease is attributable to lower average realized natural gas prices and production declines. Corresponding decreases in both Alberta crown royalties and overriding royalties partially mitigated the decrease in net oil and natural gas revenue.
Oil and NGLs sales volume was 66,600 barrels in 2006, 20% lower than the 83,000 barrels sold in the previous year. The average realized price per barrel of oil in Canadian dollar terms increased 33% to CDN $66.04 (US $58.22) in 2006 from CDN $49.55 (US $40.94) in the prior year.
Natural gas volumes fell 8% to 616 MMCF in 2006 from 669 MMCF in 2005. The average realized price in Canadian dollar terms decreased by 24% from CDN $8.74 (US $7.22) in 2005 to CDN $6.68 (US $5.89) this year.
Expenditures
For the quarter ended December 31, 2006, total mine operating costs were $5.7 million, down slightly from the $5.8 million reported in 2005. This was a result of fewer tonnes mined during the quarter offset by milling of higher cost stockpiled ore. As well, these operating costs were offset by lower gold sales volume and appreciating Canadian versus US dollar exchange resulting in a 32% increase in cash operating cost per ounce (Q42006 – US $468; Q42005 – US $355).
For the year, the Company recorded mine operating costs of $21.3 million, a 16% increase from the $18.3 million reported for 2005. This was largely a result of a general increase in costs combined with the expensing of higher cost broken-ore stockpile inventory. Total cash cost per ounce increased from US $358 in 2005 to US $396 in 2006. The US dollar ounce increase was due to a combination of higher mine operating costs and stronger Canadian versus US dollar exchange rate partially offset by improved sales volume.
Oil, natural gas liquids and natural gas operating costs increased by 17% in the fourth quarter, to $0.7 million in 2006 from $0.6 million in 2005, and by 21% for the year, to $2.3 million in 2006 from $1.9 million in 2005. The Company is experiencing the same cost pressures with respect to its oil and natural gas assets as it is currently experiencing with its mining assets.
For the fourth quarter of 2006, depreciation, depletion and accretion of the Company’s gold assets increased 5% from $2.2 million in 2005 to $2.3 million this quarter. For the year ended December 31, 2006, the increase was 3%, from $9.7 million in 2005 to $10.0 million this year. The increase was due to a combination of more tonnes milled offset by less tonnes mined and the amortization of a larger asset base.
Depreciation and depletion of the Company’s oil and gas assets fell slightly, year over year, largely due to lower production offset by a declining reserve base.
Administrative Expense
For the fourth quarter of 2006, general and administrative costs were 60% higher, rising to $0.8 million this period from $0.5 million in 2005. Year to date costs increased by 29% from $2.1 million in 2005 to $2.7 million in 2006. This was largely a result of the added focus on investor relations.
Gain on Sale of Assets
During the year, the Company realized a $4.8 million gain on the sale of certain of its portfolio investments and a $1.1 million gain on the sale of an exploration property.
Stock Compensation
Stock-based compensation was $0.5 million in 2006 compared with $0.2 million in 2005. This non-cash expense was lower in 2005 as fewer options were granted.
Income Taxes
The income tax recovery of $2.7 million was the estimated income tax benefit arising from the issuance of flow-through shares in 2005 and the subsequent renouncement of those expenditures in 2006. A similar benefit of $1.3 million was recorded in 2005.
Liquidity & Financial Resources
Cash flow from operations before net changes in non-cash working capital items was $9.2 million in 2006, or $0.13 per share, compared to $4.5 million, or $0.07 per share, in 2005. This year’s sizable improvement from 2005 was attributable to increased contributions from the Seabee mine.
Investing
Mineral property expenditures were $20.5 million in 2006, an increase from $17.7 million in 2005. This year’s expenditures were comprised of the following: Seabee mine development of $8.6 million (2005 - $7.6 million); exploration costs, focusing on the Porky and Santoy Lake bulk sample projects of $7.6 million (2005 - $4.4 million); property, plant and equipment charges of $3.0 million (2005 - $5.0 million); Seabee mine tailings project of $1.1 million; and the Tartan Lake project of $0.2 million. Property, plant and equipment charges include mining equipment, mill expansion costs and camp infrastructure.
Oil and gas capital expenditures were $2.2 million during the year, a decrease from $2.3 million in 2005. Of the capital invested in 2006, $0.7 million relates to drilling on both the Nipisi and Edson Units and $1.5 million relates to infrastructure costs on the Nipisi unit and Edson gas plant.
Pursuant to the sale of a production royalty, the Company received a promissory note in the amount of $35.0 million as part of the Red Mile transaction. The Company received a similar promissory note at the end of 2005 for $14.0 million. This transaction is detailed in Note 4 to the unaudited consolidated financial statements.
During the year, the Company disposed of a portion of its portfolio investment for proceeds of $5.0 million. The Company holds several investments in publicly traded entities which have a book value of $1.4 million and fair market value of $1.9 million at December 31, 2006.
Financing
In November, the Company completed a private placement offering for the issue of 3,333,028 common shares, issued on a flow-through basis for $1.65 per share, for gross proceeds of $5.5 million. These proceeds will be used to partially fund exploration programs at both Madsen and Seabee properties.
The proceeds on sale of royalty relates to the $35.0 million payment received on the Red Mile transaction. The Company sold a similar production royalty at the end of 2005.
The Company borrowed $5.0 million in the form of a demand loan bearing interest at prime plus 1.5%, payable in monthly installments of $83,333 plus interest and due December 2007. The Company also borrowed $5.0 million in the form of a demand loan in 2005. During the year, the Company repaid $1.3 million on its demand loans.
The proceeds and repayments on capital lease obligations relate primarily to equipment acquired for the Porky and Santoy Lake bulk sample projects.
OUTLOOK
For 2007, the Company will focus on the following:
| i advance the Madsen exploration property - investing in both surface and underground drilling programs; ii advance Seabee area exploration properties – completing the Santoy 7 bulk sample and targeting Santoy 8 for proposed pre-feasibility study; iii continue Seabee mine exploration and development to increase or sustain reserves and resources; iv invest in capital projects to increase productivity, efficiency and effectiveness of the Seabee mine operations. | |
Seabee mine gold production is forecast at 48,000 ounces with mine operating costs similar to 2006. Capital investment is expected to increase as a result of added investment at Madsen and the Seabee mine and area.
Oil and gas revenues are expected to remain at 2006 levels or decline slightly – a result of normal production declines combined with similar petroleum and natural gas pricing. Operating costs should remain consistent or increase slightly to $2.5 million. Capital expenditures should remain similar to 2006 actuals.
KEY SENSITIVITIES
Earnings from Claude’s gold and oil & gas operations are sensitive to fluctuations in both commodity and currency prices. The key factors and their approximate effect on earnings, earnings per share and cash flow, based on assumptions comparable to 2006 actuals, are as follows:
Gold
For a US $10 price movement in gold price per ounce, earnings and cash flow will have a corresponding movement of CDN $0.5 million, or $0.01 per share. For a $0.01 movement in the US$/CDN$ exchange rate, earnings and cash flow will have a corresponding movement of $0.4 million.
Oil & Natural Gas
For a US $5 price movement in oil price per barrel, earnings and cash flow will have a corresponding movement of $0.4 million ($0.00 per share). For a US $1 price movement in natural gas price per MCF, earnings and cash flow will have a corresponding movement of $0.7 million ($0.01 per share). A $0.01 movement in the US$/CDN$ exchange rate does not have a material effect on earnings and cash flow.
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
To mitigate the effects of price fluctuations on revenues, the Company may undertake hedging transactions, from time to time, in respect of foreign exchange rates and the price of gold. At December 31, 2006, the Company had no outstanding foreign exchange or forward gold contracts.
Balance Sheet
The Company’s total assets were $145.7 million at December 31, 2006, compared to $94.9 million at year-end 2005. The increase is mostly attributable to investments at the Seabee mine as well as the promissory note received on the sale of a production royalty.
The Company has an $8.0 million loan outstanding. As it is a demand loan, the entire amount has been classified as a current liability for accounting purposes. Working capital improved by 12% from $6.9 million at December 31, 2005 to $7.7 million at December 31, 2006. The long-term debt amounting to $56.6 million relates to the Red Mile royalty obligations and capital lease obligations.
Shareholders’ equity for the year ended December 31, 2006 increased by $9.8 million. The increase reflects net earnings of $6.4 million, an increase to share capital of $2.9 million that was due primarily to a private placement during the year (offset by the renunciation of the tax benefit from the prior year’s flow-through shares), and a $0.5 million increase to contributed surplus that relates to the accounting for stock options.
Outstanding Share Data
At December 31, 2006, there were 76.3 million common shares outstanding. In addition, there were 3.4 million employee stock options and 2.3 million warrants outstanding, with exercise prices ranging from $0.53 to $2.10 per share and $1.10 to $1.30 per share, respectively.
Disclosure Controls And Procedures
As of December 31, 2006, the Company evaluated its disclosure controls and procedures as defined under Multilateral Instrument 52-109. This evaluation was performed by the Chief Executive Officer and the Chief Financial Officer with the assistance of other Company employees to the extent necessary or appropriate. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective.
Internal Controls Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Management assessed the effectiveness of its internal control over financial reporting as at December 31, 2006, and based on that assessment determined that its internal control over financial reporting was effective.
No changes were made in the Company’s internal control over financial reporting during the year ended December 31, 2006, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
Non-Gaap Performance Measures
The Company reports its operating, depreciation and depletion costs on a per-ounce basis, based on uniform standards developed by the Gold Institute. Management uses this measure to analyze the profitability, compared to average realized gold prices, of the Seabee mine. Investors are cautioned that the above measures may not be comparable to similarly titled measures of other companies, should these companies not follow the Gold Institute standards.
Cash flow from operations is cash from operations before the net change in non-cash working capital items. Cash flow from operations per common share is determined by dividing the cash flow from operations by the weighted average number of common shares outstanding during the year. Management uses this measure to analyze the cash generated by its operations. These measures are not necessarily indicative of operating profit or cash from operations as determined under Canadian GAAP. Investors are cautioned that the above measures may not be comparable to similarly titled measures of other companies.
Caution Regarding Forward-Looking Information
This Press Release contains “forward-looking statements” that are based on Claude Resources Inc.’s expectations, estimates and projections as of the dates the statements were made. Generally, these forward-looking statements can be identified by the use of terminology such as “outlook”, “anticipate”, “project”, “forecast”, “target”, “believe”, “estimate”, “expect”, “intent”, “should”, “could” and similar expressions. These forward-looking statements are subject to known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Such factors include, but are not limited to, gold price and foreign currency exchange rate volatility and to uncertainties and costs related to: exploration and development activities, production rates, cash and total costs of production, or the ability to obtain necessary permitting or financing.
A discussion of these and other factors that may affect Claude Resources Inc.’s actual results, performance, achievements or financial position is contained in the filings by Claude Resources with the Canadian provincial securities commissions and the United States Securities and Exchange Commission.
This list is not exhaustive of the factors that may affect Claude Resources Inc.’s forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on forward-looking statements. Claude Resources Inc. does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities law.
NOTICE OF AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS
Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements,they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The Management of Claude Resources Inc. is responsible for the preparation of the accompanying unaudited interim consolidated financial statements. The unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada and are considered by Management to present fairly the financial position, operating results and cash flows of the Company.
The Company's independent auditor has not performed a review of these financial statements in accordance with standards establishedby the Canadian Institute of Chartered Accountants. These unaudited financial statements include all adjustments, consisting of normal and recurring items that Management considers necessary for a fair presentation of the consolidated financial position, resultsof operations and cash flows.
 |  | |
| Neil McMillan Chief Executive Officer | Rick Johnson Chief Financial Officer |
Date: March 21, 2007
| CONSOLIDATED BALANCE SHEETS | |||||||
| (Canadian Dollars in Thousands)(unaudited) | |||||||
| December 31, 2006 | | | December 31, 2005 | ||||
| Assets | |||||||
| Current assets: | |||||||
| Cash | $ | 5,331 | $ | 1,448 | |||
| Receivables | | 1,824 | 4,359 | ||||
| Inventories and stockpiled ore | | 6,288 | 5,953 | ||||
| Shrinkage stope platform costs (Note 2) | 9,987 | 8,941 | |||||
| Prepaids | 425 | 397 | |||||
| | 23,855 | 21,098 | |||||
| | |||||||
| Oil and gas properties | | 9,198 | 7,681 | ||||
| Mineral properties | | 52,984 | 42,471 | ||||
| Investments (Note 3) | | 1,428 | 549 | ||||
| Restricted promissory note (Note 4) | 55,982 | 20,982 | |||||
| Deposits for reclamation costs | | 2,270 | 2,097 | ||||
| | |||||||
| $ | 145,717 | | $ | 94,878 | |||
| | ======= | | | ======= | |||
| | |||||||
| Liabilities & Shareholders' Equity | | ||||||
| Current liabilities: | | ||||||
| Bank indebtedness | $ | - | $ | 2,543 | |||
| Payables and accrued liabilities | | 7,294 | 6,380 | ||||
| Demand loan (Note 5) | 8,000 | 4,261 | |||||
| Other current liabilities | | 911 | 1,010 | ||||
| | 16,205 | 14,194 | |||||
| | |||||||
| Obligation under capital lease | | 502 | 156 | ||||
| Royalty obligation (Note 4) | 56,112 | 21,112 | |||||
| Deferred revenue (Note 4) | 4,834 | 1,316 | |||||
| Asset retirement obligations | | 2,486 | 2,311 | ||||
| | |||||||
| Shareholders' equity: | | ||||||
| Share capital (Note 6) | | 56,036 | 53,109 | ||||
| Contributed surplus | | 1,062 | 622 | ||||
| Retained earnings | | 8,480 | 2,058 | ||||
| | 65,578 | 55,789 | |||||
| | |||||||
| Contingency (Note 9) | | ||||||
| | |||||||
| $ | 145,717 | $ | 94,878 | ||||
| ======= | ======= | ||||||
| The accompanying notes form an integral part of these unaudited consolidated financial statements | |||||||
| CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) | |||||||||||
| (Canadian Dollars in Thousands) (unaudited) | |||||||||||
| Three Months Ended | Year Ended | ||||||||||
| December 31 | December 31 | ||||||||||
| 2006 | | 2005 | | | 2006 | | 2005 | ||||
| Revenues: (Note 11) | |||||||||||
| Gold | $ | 7,538 | $ | 7,934 | $ | 32,495 | $ | 23,121 | |||
| Oil and gas (net) | 753 | 1,147 | 3,184 | 3,779 | |||||||
| 8,291 | 9,081 | 35,679 | 26,900 | ||||||||
| Expenses | |||||||||||
| Gold | 5,688 | 5,815 | 21,296 | 18,296 | |||||||
| Oil and gas | 715 | 583 | 2,330 | 1,946 | |||||||
| Depreciation, depletion and accretion: | |||||||||||
| Gold | 2,295 | 2,238 | 9,968 | 9,704 | |||||||
| Oil and gas | 260 | 152 | 729 | 746 | |||||||
| 8,958 | 8,788 | 34,323 | 30,692 | ||||||||
| (667) | 293 | 1,356 | (3,792) | ||||||||
| Other expense (income) | |||||||||||
| General and administrative | 768 | 490 | 2,651 | 2,133 | |||||||
| Interest and other | 603 | 85 | 229 | 20 | |||||||
| Grain on sale of assets | (2,028) | (1,386) | (5,925) | (1,386) | |||||||
| Write-down of exploration properties | 155 | - | 155 | 109 | |||||||
| Stock compensation expense | 238 | 74 | 523 | 157 | |||||||
| (264) | (737) | (2,367) | 1,033 | ||||||||
| Earnings (loss) before income taxes | (403) | 1,030 | 3,723 | (4,825) | |||||||
| Income tax recovery (Note 7) | - | - | 2,699 | 1,320 | |||||||
| Net earnings (loss) | $ | (403) | $ | 1,030 | | $ | 6,422 | $ | (3,505) | ||
| ====== | | ====== | | | ====== | | ====== | ||||
| | | | | | | | | ||||
| Net earnings (loss) per share | | | | | | | | | |||
| Basic and diluted | $ | (0.01) | $ | 0.01 | | $ | 0.09 | $ | (0.05) | ||
| ====== | | ====== | | | ====== | | ====== | ||||
| Weighted average number of shares outstanding (000's) | |||||||||||
| Basic | 74,566 | 70,476 | 73,184 | 66,342 | |||||||
| Diluted | 74,566 | 70,835 | 74,113 | 66,342 | |||||||
| CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (Canadian Dollars in Thousands)(unaudited) | |||||||||||
| Three Months Ended | Year Ended | ||||||||||
| December 31 | December 31 | ||||||||||
| 2006 | 2005 | 2006 | 2005 | ||||||||
| Retained earnings, beginning of period | $ | 8,883 | $ | 1,028 | $ | 2,058 | $ | 5,563 | |||
| Net earnings (loss) | (403) | 1,030 | 6,422 | (3,505) | |||||||
| Retained earnings, end of period | $ | 8,480 | $ | 2,058 | $ | 8,480 | $ | 2,058 | |||
| ====== | ====== | ====== | ====== | ||||||||
| The accompanying notes form an integral part of these unaudited consolidated financial statements | |||||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||||
| (Canadian Dollars in Thousands)(unaudited) | |||||||||||
| Three Months Ended | | | Year Ended | ||||||||
| December 31 | | | December 31 | ||||||||
| 2006 | | 2005 | | | 2006 | | 2005 | ||||
| Operations: | |||||||||||
| Net earnings (loss) | $ | (403) | $ | 1,030 | $ | 6,422 | $ | (3,505) | |||
| Non-cash items: | |||||||||||
| Depreciation, depletion and accretion | 2,555 | 2,390 | 10,697 | 10,450 | |||||||
| Stock-based compensation | 238 | 74 | 523 | 157 | |||||||
| Write down of exploration properties | 155 | - | 155 | 109 | |||||||
| Gain on sale of assets | (2,028) | (1,386) | (5,925) | (1,386) | |||||||
| Income tax recovery | - | - | (2,699) | (1,320) | |||||||
| Net change in non-cash working capital: | |||||||||||
| Receivables | 1,906 | (848) | 2,535 | (1,852) | |||||||
| Inventories and stockpiled ore | 2,883 | 1,161 | (355) | (1,125) | |||||||
| Shrinkage stope platform costs | (152) | 997 | (1,046) | (1,038) | |||||||
| Prepaids | (25) | 6 | (28) | (33) | |||||||
| Payables and accrued liabilities | (227) | 680 | 914 | 1,800 | |||||||
| Cash from operations | 4,902 | 4,104 | 11,213 | 2,257 | |||||||
| Investing: | |||||||||||
| Mineral properties | (6,095) | (4,228) | (20,507) | (17,731) | |||||||
| Oil and gas properties | (121) | (853) | | | (2,204) | | (2,287) | ||||
| Restricted promissory note | (35,000) | (14,000) | | | (35,000) | | (14,000) | ||||
| Investments | 747 | 1,458 | | | 5,046 | | 1,505 | ||||
| Increase in reclamation deposits | (10) | (3) | | | (173) | | (36) | ||||
| (40,237) | (17,626) | | | (52,838) | | (32,549) | |||||
| Financing: | |||||||||||
| Issue of common shares, net of issue costs | 5,240 | 2,025 | 5,547 | 10,598 | |||||||
| Sale of production royalties | |||||||||||
| Proceeds | 35,000 | 14,000 | 35,000 | 14,000 | |||||||
| Receivable | - | (840) | - | (840) | |||||||
| Deferred revenue | 3,907 | 1,594 | 3,212 | 1,336 | |||||||
| Bank indebtedness | (3,495) | (1,815) | (2,543) | 1,155 | |||||||
| Demand loan | |||||||||||
| Proceeds | - | - | 5,000 | 5,000 | |||||||
| Repayment | (487) | (224) | (1,261) | (739) | |||||||
| Obligations under capital lease: | |||||||||||
| Proceeds | 365 | 269 | 841 | 269 | |||||||
| Repayment | (112) | (39) | | | (288) | | (84) | ||||
| 40,418 | 14,970 | 45,508 | 30,695 | ||||||||
| Increase in cash | 5,083 | 1,448 | 3,883 | 403 | |||||||
| Cash, beginning of period | 248 | - | 1,448 | 1,045 | |||||||
| Cash, end of period | $ | 5,331 | $ | 1,448 | $ | 5,331 | $ | 1,448 | |||
| ====== | | ====== | | | ====== | | ====== | ||||
| The accompanying notes form an integral part of these unaudited consolidated financial statements | |||||||||||
| Notes to Consolidated Financial Statements (Canadian Dollars in Thousands, except as otherwise noted) Note 1 - General These unaudited interim consolidated financial statements have been prepared by the Company in accordance with Canadian generallyaccepted accounting principles (Canadian GAAP). The preparation of financial data is based on accounting policies and practices consistent with those used in the preparation of the audited annual consolidated financial statements. The accompanying unauditedinterim consolidated financial statements should be read in conjunction with the notes to the Company's audited consolidated financial statements for the year ended December 31, 2005, as they do not contain all disclosures required by Canadian GAAP for annualfinancial statements. In the opinion of management, all adjustments (including reclassifications and normal recurring adjustments) necessary to present fairly thefinancial position, results of operations and cash flows at December 31, 2006, and for comparative periods presented, have been made. Note 2 - Shrinkage Stope Platform Costs Shrinkage stope platform costs represent ore that is being used as a working stage, within the stope, to gain access to furtherore. This ore is expected to be processed in the following 12 months. The processing of this broken ore occurs in accordance with a mine plan based on the known mineral reserves and current mill capacity. Note 3 - Investments At December 31, 2006, the quoted market value of the investments was $1.9 million (2005 - $6.7 million). Note 4 - Promissory Notes and Royalty Obligations: a) In December 2006, the Company entered into a Royalty Agreement ("2006 Agreement") with Red Mile Resources No. 8Limited Partnership ("Red Mile No. 8") whereby the Company sold a "Royalty" on a portion of the gold production at its Seabee mine; this agreement lasts the shorter of 10 years or life of the Seabee mine. The Company received cash of $39,200,000 which included royaltyincome of $35,000,000, indemnity fees of $436,000 and interest income of $3,764,000. Under the terms of the 2006 Agreement, the Company is required to make Royalty payments at fixed amounts per ounce of gold produced;these amounts can vary between CDN $40.82 to $115.00 per ounce over the term of the agreement. In addition, the Company granted Red Mile a Net Profits Interest (NPI) of 3.75%, 4.00% or 4.25% in years 2012 through 2016, payable only if each day's price of gold in anyof those calendar years is greater than CDN $975, $1,175 or $1,375 per ounce, respectively. $35,000,000 of the cash received was placed with a financial institution; in return, the Company received a restricted promissory note.The restricted promissory note earns interest at 7%, payable annually, and matures on February 16, 2016. Interest earned from the restricted promissory note will be sufficient to fund the expected basic royalty payments during the first four years of the 2006 Agreement.Interest and principal from the restricted promissory note will be sufficient to fund the expected basic royalty payments over the remaining years of the 2006 Agreement. Under certain circumstances the Company has the right, by way of a call option, to acquire the partnership units of Red Mile No. 8,effectively terminating the 2006 Agreement, for the lower of market value or for the outstanding amount of the restricted promissory note at the end of the tenth year of the 2006 Agreement. On the balance sheet, the royalty received from Red Mile is included in "Royalty Obligation". These amounts are treated as debt and attract interest which is included in interest expense. The indemnity fee and interest income received of $436,000 and $3,764,000, respectively was deferred and is included in "Deferred Revenue" on the balance sheet and is being recognized inincome as earned over the life of the 2006 Agreement. b) In December 2005, the Company entered into a Royalty Agreement ("2005 Agreement") with Red Mile Resources No. 7 LimitedPartnership ("Red Mile No. 7") whereby the Company sold a "Royalty" on a portion of the gold production at its Seabee mine; this agreement lasts the shorter of 10 years or life of the Seabee mine. The Company received cash of $15,680,000 which includedroyalty income of $14,000,000, indemnity fees of $907,000 and prepaid interest of $773,000. Under the terms of the 2005 Agreement, the Company is required to make Royalty payments at fixed amounts per ounce of gold produced;these amounts can vary between CDN $3.00 to $65.00 per ounce over the term of the 2005 agreement. In addition, the Company granted Red Mile No. 7 a Net Profits Interest (NPI) of 1.00%, 2.00% or 3.00% in years 2011 through 2015, payable only if each day'sprice of gold in any of those calendar years is greater than CDN $875, $1,075 or $1,275 per ounce, respectively. $14,000,000 of the cash received was placed with a financial institution; in return, the Company received a restricted promissorynote. The restricted promissory note earns interest at 6%, payable annually, and matures on February 15, 2015. Interest earned from the restricted promissory note will be sufficient to fund the expected basic royalty payments during the first four years of the 2005 Agreement. Interest and principal from the restricted promissory note will be sufficient to fund the expected basic royalty payments over the remaining years of the 2005 Agreement. Under certain circumstances the Company has the right, by way of a call option, to acquire the partnership units of Red Mile No. 7,effectively terminating the 2005 Agreement, for the lower of market value or for the outstanding amount of the restricted promissory note at the end of the tenth year of the 2005 Agreement. On the balance sheet, the royalty received from Red Mile No. 7 is included in "Royalty Obligation". These amounts are treated as debtand attract interest which is included in interest expense. Of the indemnity fees received, $907,000 was deferred and as at December 31, 2006, $816,000 is still outstanding and is included in "Deferred Revenue". The prepaid interest received, $773,000,was deferred and recorded as income in 2006. c) In December 2004, the Company entered into a Royalty Agreement ("the 2004 Agreement") with Red Mile Resources No. 3 LimitedPartnership ("Red Mile No. 3") whereby the Company sold a "Royalty" on a portion of the gold production at its Seabee mine; this agreement lasts the shorter of 10 years or life of the Seabee mine. The Company received cash of $8,018,000 which included royaltyincome of $7,112,000, indemnity fees of $625,000 and prepaid interest of $281,000. Under the terms of the 2004 Agreement, the Company is required to make Royalty payments at fixed amounts per ounce of goldproduced; these amounts can vary between CDN $1.00 to $14.18 per ounce over the term of the 2004 Agreement. In addition, the Company granted Red Mile No. 3 a Net Profits Interest (NPI) of 2.50%, 3.00% or 4.00% in years 2010 through 2014, payable only if eachday's price of gold in any of those calendar years is greater than CDN $800, $900 or $1,200 per ounce, respectively. $6,982,000 of the cash received was placed with a financial institution; in return, the Company received a restricted promissory note.The restricted promissory note earns interest at 6%, payable annually, and matures on December 10, 2014. Interest earned from the restricted promissory note will be sufficient to fund the expected basic royalty payments during the first four years of the 2004 Agreement.Interest and principal from the restricted promissory note will be sufficient to fund the expected basic royalty payments over the remaining years of the 2004 Agreement. Under certain circumstances the Company has the right, by way of a call option, to acquire the partnership units of Red Mile No. 3,effectively terminating the 2004 Agreement, for the lower of market value or for the outstanding amount of the restricted promissory note at the end of the tenth year of the 2004 Agreement. On the balance sheet, the royalty received from Red Mile No. 3 is included in "Royalty Obligation". These amounts are treated asdebt and attract interest which is included in interest expense. Of the indemnity fees received, $625,000 was deferred and as at December 31, 2006, $500,000 is still outstanding and is included in "Deferred Revenue". The prepaid interest received, $281,000,was deferred and recorded as income in 2005. d) In accordance with AcG 15 - "Consolidation of Variable Interest Entities" and EIC 157 - "Implicit Variable Interests under AcG 15",the Company has determined that these Red Mile Limited Partnerships are variable interest entities for which the Company holds variable interests. However, as the Company is not the primary beneficiary under these arrangements it is not required to consolidatethese entities. The following supplemental schedules present the effects of the 2006, 2005, and 2004 Red Mile agreements on the RestrictedPromissory Note, Royalty Obligation and Deferred Revenue balances presented on the Company's balance sheet:
Note 6 - Share Capital At December 31, 2006 there were 76,272,791 common shares outstanding. a) Issue of shares In November 2006, the Company entered into a flow-through share agreement for the issue of 3,333,028 common shares at a price of $1.65 per share for proceeds of $5,500,000. The Company is required to expend $5,500,000 in qualifying Canadian Exploration Expenses as defined in the Income Tax Act (Canada) prior to December 31, 2007. During the year ended December 31, 2006, the Company issued 108,000, 230,000 and 140,000 common shares pursuant to the Company's Employee Share Purchase Plan, employee stock option plan and warrants exercised pursuant to a June 2005 private placement, respectively. b) Share Option Plan The Company has established a share option plan under which options may be granted to directors, officers and key employees to purchase up to an aggregate of 5,000,000 common shares. Options granted have an exercise price of the prior days closing price of the common shares on the stock exchange on which the shares are traded. The majority of the options granted vestimmediately and expire ten years from the date of the grant of the option. For options outstanding at December 31, 2006 weighted average exercise prices are as follows:
For options outstanding at December 31, 2006, the range of exercise prices, the weighted average exercise price and the weightedaverage remaining contractual life are as follows:
The fair value of stock options issued in the year was estimated using the Black-Scholes option pricing model with assumptions of six yearweighted average expected option life, no expected forfeiture rate, 59.88% to 60.82% volatility and interest rates ranging from 3.90% to 4.20%. For 2006, the compensation cost recorded in respect of stock options issued was $523,000. Note 7 - Income taxes The Company finances a portion of its exploration activities through the issue of flow-through shares. The Company records the tax costof expenditures renounced to subscribers on the date the deductions are renounced to the subscribers. Share capital is reduced and future income tax liabilities are increased by the estimated tax benefits renounced by the Company to the subscribers. Because the Company has unrecorded loss carryforwards and tax pools in excess of book value, future income tax liabilities are reduced with a corresponding credit to income tax recovery of $2.7 million (2005 - $1.3 million). Note 8 - Financial Instruments The Company's financial results are affected by the normal risks and capital expenditure requirements associated with exploration,development and production of mineral and oil & gas properties. Financial results are also affected by market prices for gold and oil & gas, changes in foreign currency exchange rates, interest rates and other operating risks. To manage risks associated with pricesfor gold and changes in foreign currency, the Company may use commodity and foreign currency derivative instruments. At December 31, 2006, the Company had no outstanding forward gold or foreign exchange contracts. Note 9 - Contingency Pursuant to a Notice of Contravention issued by Saskatchewan Labour, Occupational Health and Safety Division, dated March 17, 2003, the Company was ordered to reinstate three workers and reimburse them for lost pay and benefits. The contravention alleges that the Company dismissed these employees contrary to the Occupational Health and Safety Act. The contraventionwas appealed to the Executive Director, an adjudicator and subsequently to the Court of Queen's Bench. In September 2005, the Court of Queen's Bench agreed with the Company's position, allowing the appeal and setting aside the contravention. ThisCourt's decision was subsequently appealed by the plaintiffs and was subsequently dismissed by the Court of Appeal. This Court's decision is currently under appeal by the plaintiffs to the Supreme Court of Canada. The amount of potential loss may involve paymentof approximately 18 months in back pay to each of the employees and will be recognized in earnings at the time of settlement, if any. Management is of the opinion these claims are without merit. Note 10 - Comparative Figures Certain prior period balances have been reclassified to conform to the current financial statement presentation. Note 11 - Segmented Information The Company has two reportable industry segments: (1) gold mining and (2) oil, natural gas liquids and natural gas production. These segments are differentiated by differences in end products. All assets within the Company's reportable segments are located in Canada. The Company's producing gold mine, the Seabee mine, is located in northern Saskatchewan. Mineral exploration properties are located in Saskatchewan, Manitoba and Ontario. The Company's oil and gas assets are located in Alberta and Saskatchewan. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | ||||
| | | | | ||||||||
| Three Months Ended December 31, 2006 | |||||||||||
| Gold | | Oil & Gas | | | All Others | | Total | ||||
| | | | | | | | | ||||
| Revenues | $ | 7,538 | $ | 1,954 | | $ | - | $ | 9,492 | ||
| Crown royalties | - | | (371) | | | - | | (371) | |||
| Alberta Royalty Tax Credit | - | | 125 | | | - | | 125 | |||
| Overriding royalties | - | | (955) | | | - | | 955 | |||
| Net Revenue | 7,538 | | 753 | | | - | | 8,291 | |||
| Operating expense | 5,688 | | 715 | | | - | | 6,403 | |||
| Depreciation, depletion and accretion | 2,295 | | 260 | | | - | | 2,555 | |||
| Write-down of exploration properties | 155 | | - | | | - | | 155 | |||
| Non-segmented income | - | | - | | | (419) | | (419) | |||
| Net earnings (loss) | $ | (600) | $ | (222) | | $ | 419 | $ | (403) | ||
| ===== | | ===== | | | ===== | | ===== | ||||
| | | | | | | | | ||||
| Three Months Ended December 31, 2005 | |||||||||||
| Gold | Oil & Gas | All Others | Total | ||||||||
| Revenues | $ | 7,934 | $ | 3,449 | $ | - | $ | 11,383 | |||
| Crown royalties | - | | (831) | | - | | (831) | ||||
| Alberta Royalty Tax Credit | - | 125 | - | 125 | |||||||
| Overriding royalties | - | (1,596) | - | (1,596) | |||||||
| Net Revenue | 7,934 | 1,147 | - | 9,081 | |||||||
| Operating expense | 5,815 | 583 | - | 6,398 | |||||||
| Depreciation, depletion and accretion | 2,238 | 152 | - | 2,390 | |||||||
| Non-segmented income | - | - | (737) | (737) | |||||||
| Net earnings (loss) | $ | (119) | $ | 412 | $ | 737 | $ | 1,030 | |||
| ===== | ===== | ===== | ===== | ||||||||
| | | | | | | | | ||||
| | | | | ||||||||
| Year Ended December 31, 2006 | |||||||||||
| Gold | | Oil & Gas | | | All Others | | Total | ||||
| | | | | | | | | ||||
| Revenues | $ | 32,495 | $ | 8,893 | | $ | - | $ | 41,388 | ||
| Crown royalties | - | | (1,979) | | | - | | (1,979) | |||
| Alberta Royalty Tax Credit | - | | 500 | | | - | | 500 | |||
| Overriding royalties | - | | (4,230) | | | - | | (4,230) | |||
| Net Revenue | 32,495 | | 3,184 | | | - | | 35,679 | |||
| Operating expense | 21,296 | | 2,330 | | | - | | 23,626 | |||
| Depreciation, depletion and accretion | 9,968 | | 729 | | | - | | 10,697 | |||
| Write-down of exploration properties | 155 | | - | | | - | | 155 | |||
| Non-segmented income | - | | - | | | (5,221) | | (5,221) | |||
| Net earnings (loss) | $ | 1,076 | $ | 125 | | $ | 5,221 | $ | 6,422 | ||
| ===== | | ===== | | | ===== | | ===== | ||||
| | | | | | | | | ||||
| Year Ended December 31, 2005 | |||||||||||
| Gold | Oil & Gas | All Others | Total | ||||||||
| Revenues | $ | 23,121 | $ | 11,142 | $ | - | $ | 34,263 | |||
| Crown royalties | - | | (2,616) | | - | | (2,616) | ||||
| Alberta Royalty Tax Credit | - | 500 | - | 500 | |||||||
| Overriding royalties | - | (5,247) | - | (5,247) | |||||||
| Net Revenue | 23,121 | 3,779 | - | 26,900 | |||||||
| Operating expense | 18,296 | 1,946 | - | 20,242 | |||||||
| Depreciation, depletion and accretion | 9,704 | 746 | - | 10,450 | |||||||
| Write-down of exploration properties | 109 | - | - | 109 | |||||||
| Non-segmented income | - | - | (396) | (396) | |||||||
| Net earnings (loss) | $ | (4,988) | $ | 1,087 | $ | 396 | $ | (3,505) | |||
| ===== | ===== | ===== | ===== | ||||||||
Note 12 - Differences from United States Accounting Principles
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada. See Note 21 of the Company's audited financial statements for the year ended December 31, 2005 for an explanation of the differences in Canadian and US GAAP.
ADDITIONAL INFORMATION
Additional information related to the Company is available at www.sedar.com and www.claudresources.com.
For further information please contact:
Neil McMillan
President and CEO
or
Rick Johnson
CFO
Telephone: 1-306-668-7505
Facsimile: 1-306-668-7500
E-mail: clauderesources@clauderesources.com