Overview

Continued weakness in the spot price of bullion is generating growing pressure on the gold mining industry. Notwithstanding that gold consumption has exceeded gold mine production by a wide margin for more than eight years, the commodity price has refused to move up in a material fashion.

While Claude is not immune to the pressures created by the narrow margins currently being realized in the gold mining business, the Company is well positioned to survive continued weakness in gold prices.

Claude’s diversification into oil and gas in the early 1980’s continues to serve Company shareholders well. Further, the Company is free of long term debt and has a substantial working capital position.

The Seabee mine is among the most productive and lowest cost of all narrow vein underground operations. Claude believes it can sustain cash operating costs under US $200 per ounce for the foreseeable future. Seabee’s mineral reserves total 579,000 tonnes and the operation has an additional inferred mineral resource that exceeds 1,600,000 tonnes as extensions to depth of the current mine workings.

Claude’s Madsen Red Lake project is progressing as planned with the project operator, Placer Dome, carrying all costs associated with an aggressive exploration program. Phase I, involving four stratigraphic exploration holes, is complete and Placer has commenced Phase II with a plan to drill the area hosting the high-grade #8 zone. Phase II drilling should be complete by mid-year 2001.

Financial Highlights

Financial Results

For the three months ended March 31, 2001, Claude recorded a net loss of $.4 million ($.01 per share) compared to break-even net earnings for the first quarter of 2000.

Total revenue generated for the three months was $7.9 million, unchanged from that reported for the first quarter of 2000. Gold revenues decreased 26% over the comparative quarter last year as a result of lower production and a decrease in the average realized price per ounce of gold. Gross oil and gas revenues increased substantially from 2000 due to increases in petroleum prices realized.

The Seabee mine contributed $4.4 million to revenue, a decrease of $1.5 million from the $5.9 million recorded a year ago. Production at the Seabee mine decreased 23% from 14,500 ounces in 2000 to 11,100 ounces this year. This reflects a delay in completion of the high grade 2d2901 stope, due to its larger than expected size, with the result that blending with lower grade ore could not be achieved. The Company believes this stope will be available for free-pull during the latter half of the second quarter and expects to achieve budget of 54,800 ounces for full year 2001. As well, there was a decrease in the average realized gold price for the period (2001 – CDN $396/US $259; 2000 – CDN $409/US $281).

Total mine cash costs were $3.7 million for this quarter versus $4.4 million last period. This decrease in costs is a direct result of the cost-cutting measures associated with the mine plan undertaken at Seabee for the year. Cash operating costs per ounce increased slightly from US $208 in 2000 to US $217 for the current quarter.

Gross oil, natural gas liquids and gas revenues totaled $3.5 million for the current period compared to $2.0 million last year. However, the comparative net contribution to overall corporate results was affected by an adjustment processed to the oil and gas operations in the first quarter of 2000.

Cash flow provided from operations for the period was $.8 million ($.02 per share) compared to $1.4 million ($.04 per share) last year. This reduction in cash flow was a combination of lower gold production and gold prices realized, offset by decreases in Company operating costs.

Write-down of Mineral Properties

During the fourth quarter of 2000, the Company reviewed the carrying values of certain of its mineral properties and determined that, as a result of current gold prices and the absence of economically recoverable mineral reserves at the time, the values should be reduced. The December 31, 2000 retained earnings deficit reflects the $51.1 million write-down of mineral properties recorded in 2000.

Currency and Commodity Hedging

To manage risks associated with prices for gold and changes in foreign currency, the Company may use commodity and foreign currency instruments. At March 31, 2001, Claude had no outstanding gold derivative contracts. At March 31, 2001, the Company had outstanding foreign exchange contracts to sell US $4.0 million at an average exchange rate of 1.5626 CDN $/US $.

Operations

Gold

Year to date the mine has processed 63,500 tonnes of ore grading 6.43 grams per tonne yielding 11,100 net ounces of gold. During the quarter ore from the lower grade 2c1900 stope was expected to be blended with higher-grade ore from the 2d2901 stope. The 2d2901 stope proved to be much larger than originally contemplated resulting in a longer completion period. While this has caused a production shortfall in the near term, the scheduled move to this higher production area during the second quarter is expected to enable the Company to achieve its production target for the year. Production forecast for the Seabee mine is 54,800 ounces this year at a total cash operating cost of under US $200 per ounce and total production costs of approximately US $240 per ounce.

Definition drilling and development has further outlined the 2c & 2d structures between the 340 and 400 levels. Both structures remain open along strike and depth. Exploration and development will concentrate on both of these zones throughout the remainder of the year. A deep drilling program is slated for the second half of the year.

An independent audit of the Seabee mine’s reserves by ACA Howe International Limited in March of this year confirmed the following reserves:

In addition, this audit documented 19,250 tonnes grading 8.30 grams per tonne and 1,680,000 tonnes grading 8.0 grams per tonne in the Indicated Mineral Resource and Inferred Mineral Resource categories, respectively.

Oil & Gas

Oil and gas operations continue to positively impact cash flows as strong petroleum prices continued in 2001. During the period, the Company’s oil and gas holdings provided $.5 million ($.01 per share) in net cash flow, relatively unchanged from last year.

Exploration

First quarter exploration activities were directed at the claims within a four kilometre envelope of the Seabee mine’s two mineral leases. Winter diamond drilling targeted four quartz-filled shear structures to the west, north-northwest and east-northeast of the mine and totaled 5,037 metres in 42 holes. This drilling was successful in extending a number of moderate to strong shear structures, generally cutting narrow widths with anomalous, but low, gold values. Results support the Company’s confidence in the existence of additional economic reserves within trucking distance of the Seabee mill.

For further information please contact:
Neil McMillan, President
Phone: (306) 668-7505

Notes to Consolidated Financial Statements

Note 1 - General

The accompanying unaudited consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2000.
The unaudited consolidated financial statements include financial statements of the Company
and its subsidiary.

The unaudited interim consolidated financial statements reflect all normal and recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the respective
interim periods presented.

Note 2 - Share Capital

a) At March 31, 2001, there were 40,553,853 common shares outstanding.
b) Options in respect of 1,550,000 shares are outstanding under the stock option plan.
These options have exercise prices ranging from $.53 to $3.05 with expiration
dates between April, 2006 and August, 2010.