Q3 2013 Conference Call and Webcast

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Q3 2013 Conference Call and Webcast

  1. 1. 2013 Third Quarter Results P resented By: Neil M cM illan P resident & CEO Novem ber 14, 2013
  2. 2. Cautionary Statement Cautionary Note Regarding Forward-Looking Information This document contains certain forward-looking statements relating but not limited to the Company’s expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “intent”, “estimate”, “may” and “will” or similar words suggesting future outcomes or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information may include reserve and resource estimates, estimates of future production, unit costs, costs of capital projects and timing of commencement of operations, and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reserves, the grade and recovery of mined ore varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from expected results. Potential shareholders and prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Shareholders are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Claude Resources undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law. Cautionary Note to U.S. Investors Concerning Resource Estimate 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” exist or can be legally or economically mined, or that they will ever be upgraded to a higher category. 2
  3. 3. Q3 2013 Highlights ü Santoy Gap contributed 243,000 ounces of gold to a 78% increase in Seabee total Mineral Reserves. ü On pace for record mill throughput. ü Production of 10,541 ounces of gold. ü Revenue of $15.0 million from the sale of 10,781 ounces of gold. ü Total cash cost per ounce of gold (1) was $919 (U.S. $885). ü Net cash margin of $470 per ounce. ü Cash flow from operations before net changes in non-cash operating working capital (1) of $4.3 million, or $0.02 per share. ü Adjusted net loss (1) of $1.2 million, or $0.01 per share. ü 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. (1) See description and reconciliation of non-IFRS financial measures in the “Non-IFRS Financial Measures and Reconciliations” section of the Company’s Q3 MD&A. 3
  4. 4. Q3 Financial Results Metric Q3 2013 Q3 2012 Gold Production 10,541 15,073 Gold Sales 10,781 14,088 Gold Price $1,389 $1,663 Total Cash Costs(1) (CDN$/oz) $919 $920 Revenue (CDN$ million) $15.0 $23.4 Cash Flow(1) (CDN$ million) per share $4.3 $0.02 $8.6 $0.05 ($33.9) ($0.19) $3.0 $0.02 ($1.2) ($0.01) $4.4 $0.01 (All $ amounts in CDN $) Net (Loss) Profit per share (CDN$ million) Adj. Net (Loss) Profit(1) (CDN$ million) Per share (1) See description and reconciliation of non-IFRS financial measures in the “Non-IFRS Financial Measures and Reconciliations” section of the Company’s Q3 MD&A. 4
  5. 5. Q3 Accounting Impacts Impairment charge impacting earnings • Madsen considered held for sale. • Revised assumptions relating to future production and unit cost analysis at the Seabee Gold Operation. Adjusted Net (loss) Profit Reconciliation Three Months Nine Months Ended September 30 Ended September 30 2013 $ Net (loss) profit Adjustments: $ (46,323) $ 3,146 $ - 56,034 - 174 262 (620) (12,531) Deferred income tax (recovery) expense 1,274 (16,773) 1,728 (1,215) 175,811 $ 175,811 Weighted Average shares outstanding (diluted) (1) 2,958 - Loss (gain) on investments Per share adjusted net (loss) profit (basic and diluted) $ 2012 45,187 Impairment charge Adjusted Net (loss) Profit Weighted Average shares outstanding (basic) (33,871) 2013 2012 $ (0.01) 4,406 173,746 $ 0.03 $ 175,478 173,819 $ (6,800) 175,478 $ (0.04) 4,254 172,660 173,094 $ 0.02 See description and reconciliation of non-IFRS financial measures in the “Non-IFRS Financial Measures and Reconciliations” section of the Company’s Q3 MD&A. 5
  6. 6. Staying Competitive To manage the volatile gold environment, Claude has: Lowered Costs: üDecreased YTD PP&E by 23% vs. budget; YTD 50% vs. 2012 ü Decreased YTD Exploration by 38% vs. budget; YTD 83% vs. 2012 ü Decreased YTD overall corporate expenditures by 15% vs. budget; YTD 26% vs. 2012 Focused on adding lower risk and cost ounces at the Seabee Gold Operation: ü Increased Mineral Reserves by 78%, or 243,000 ounces from the Santoy Gap deposit ü Santoy Gap development ore expected in 1H 2014 Improve Operating Efficiencies: ü Improved safety record ü Decreased labour costs ü Improved supply chain management ü Improved development rates ü Reduced labour, diesel, ventilation and equipment usage at the Seabee Mine due to shaft extension 6
  7. 7. Operations and Projects (1) See footnotes located on page 17 7
  8. 8. Operating Results Metric Q3 2013 Q3 2012 Tonnes Milled 64,642 66,173 Grade (g/t) 5.30 7.34 Recovery (%) 95.8 96.5 Gold Production 10,541 15,073 8
  9. 9. Seabee Gold Operation • Revised forecast gold production of 45,000 to 47,000 ounces • Decrease in production is primarily due to lower than expected grades • Strong mill performance, recovery of 96% • Improved operating performance at the Seabee Mine due to shaft extension • Lower labour, diesel, ventilation, and equipment usage • Lower transportation and handling times • Unit costs are estimated to improve from 2012 cash costs of CDN $997 • New mining technique on the L62 Zone expected to: • Lower unit costs • Require less development • Reduce dilution 9
  10. 10. Santoy Gap • Preliminary results indicate the Santoy Gap will provide significant economic value Updated Mineral Reserve and Resource • Due to wider mining widths and high grade core, the Santoy Gap is expected to lower unit costs and increase production Ounces Grade (g/t) • Decrease operating risk with the addition of more mining faces P&P Reserves 243,000 6.24 • Minimal capital expenditures to begin mining Indicated Resources 14,000 4.65 • Expect to see development ore in 1H 2014 and steadily ramp up to 700 tpd over the next several years Inferred Resources 356,900 5.92 10
  11. 11. Updated Reserves and Resources • 78% increase in Mineral Reserves from the Santoy Gap deposit • Exploration results from the Santoy Mine Complex (Santoy 8 and Santoy Gap) indicated significant resource growth upside • Two of three step-out drill holes in 2013 returned 330.35 g/t over 1.55 metres and 18.80 g/t over 13.86 metres (Note included in updated Mineral Reserve and Mineral Resource statement) Proven and Probable M ineral R eserves, Decem ber 31, 2012 Projects Seabee Santoy 8 Santoy Gap Totals Tonnes 947,100 628,100 1,210,000 2,785,200 Grade (g/t) 7.26 4.45 6.24 6.19 Ozs 221,100 89,900 243,000 554,100 Projects Seabee Santoy 8 Santoy Gap Porky Main Porky West Totals Tonnes 45,400 59,300 94,000 160,000 111,000 469,600 Grade (g/t) 4.86 3.28 4.65 7.50 3.10 5.10 Ozs 7,100 6,200 14,000 38,600 11,000 77,000 Projects Seabee Santoy 8 Santoy Gap Porky Main Porky West Totals Tonnes 355,600 518,700 1,875,000 70,000 138,300 2,957,600 Grade (g/t) 8.55 5.91 5.92 10.43 6.03 6.35 Ozs 97,700 98,600 356,900 23,500 26,800 603,400 M easured and Indicated M ineral R esources Inferred M ineral R esources 11
  12. 12. Amisk Gold Project Project Overview: • 100% ownership • 1.57M oz Au Eq resources (NI 43-101 compliant) • 40,400 hectare property • Open pit potential • Deferred work plans for 2013 and 2014 12
  13. 13. Madsen Gold Project Decision to Divest: • In line with current strategy to focus on current and near term cash flow generating projects • Better ROI at Santoy Gap and near infrastructure targets at the Seabee Gold Operation • Improves balance sheet in the short term • Helps in reducing financing needs and risks in current volatile gold environment • Current lack of capital to move project forward • Reduced exploration and de-watering costs • Future capital requirements/needs in order to move project forward • The Company expects to maintain upside exposure to the Madsen project 13
  14. 14. Top Priorities Operational Improvement • • • • Improved Capital and Operational planning Improved grade forecasts New mining method at Seabee Gold Mine A continued focus on safety – over 40% decrease in safety incidents Strengthen Balance Sheet • Sale of Madsen Gold Project • Review other financing alternatives Cost Management • Continue to execute on the Cash Flow Optimization Plan • Improved supply chain management • Ensure lowered costs are sustainable Financial Discipline • PP&E decreased 23% YTD and by 50% vs. 2012 • Overall corporate expenditures decreased by 15% YTD and 26% vs. 2012 Focus on Low Cost and Risk Growth • Advance Santoy Gap • Displace lower grade ounces with higher grade ounces • Prioritize development budget and metres 14
  15. 15. Claude Resources Inc. Experience. Stability. Potential. Creating the Capacity to Discover. Develop. Deliver. TSX: CRJ OTCQB: CLGRF 200, 224 - 4th Avenue South Saskatoon, Saskatchewan, S7K 5M5 Canada P. 306.668.7505 F. 306.668.7500 E: ir@clauderesources.com (1) See footnotes located on page 17 15
  16. 16. Appendix A: Management Team Neil McMillan President Chief Executive Officer Board Director 17 years as President & CEO of Claude. 16 years managing the RBC Dominion Securities operation in Saskatoon. Chairs the Cameco Corporation Board and a Director on Shore Gold Inc. Rick Johnson, C.A. Chief Financial Officer Vice President Finance 16 years with Claude including 8 years as CFO and VP Finance. Brian Skanderbeg, P.Geo. Chief Operating Officer Senior Vice President 5 years with Claude leading the exploration team. Appointed Sr. VP and COO September 1, 2012. Previously employed with Goldcorp, INCO and Helio Resources. Peter Longo, P.Eng., MBA Vice President, Operations Joined Claude in 2011 as Manager of Capital Projects and appointed VP Operations in 2012. Previously employed with Areva Resources, Cameco Corporation and INCO. 16
  17. 17. Appendix B: Board of Directors Ted J. Nieman, Q.C. Chairman Senior Vice-President, General Counsel and Corporate Secretary of Canpotex. A Board member of all of Canpotex’s subsidiaries and affiliates. Joined the Board of Directors in 2007. Ronald J. Hicks, C.A. Director Spent 41 years with Deloitte where he was a partner. Has served as a Director with Dickenson Mines Ltd., Kam Kotia Mines Ltd., Saskatchewan Government Insurance and Prairie Malt Ltd. Joined the Board of Directors in 2007. Ray A. McKay Director Held numerous senior positions within the aboriginal business community, provincial government and in the education sector. Most recently retired as the CEO of Kitsaki Management, a business arm of the Lac La Ronge Indian Band. Joined the Board of Directors in 2007. J. Robert Kowalishin, P.Eng. Director Held a number of senior positions with the Trane Company over the course of his 42 year career with the company. Joined the Board of Directors in 2007. Rita Mirwald, C.M. Director Held a number of senior positions with Cameco Corporation, including that of Senior Vice President Corporate Services. Joined the Board of Directors in 2011. Mike Sylvestre, P.Eng. Director Currently the President and Chief Executive Officer for Castle Resources Inc. Holds a MSc and BSc in Mining Engineering from McGill University and Queen’s University. Previous experience with Inco Ltd. Over 35 years of mining experience. Joined the Board of Directors in 2011. Brian Booth, P.Geo. Director Currently serves as the President and Chief Executive Officer of Pembrook Mining Corp. Previous work experience includes Inco Ltd. and Lake Shore Gold Corp. Over 30 years of experience in mineral exploration. Joined the Board of Directors in 2012. Neil McMillan President & CEO Director 17 years as President & CEO of Claude. 16 years managing the RBC Dominion Securities operation in Saskatoon. Serves on the Board of Shore Gold Inc. and Cameco Corporation. 17

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