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Claude Resources Inc. Q4 2012 Conference Call and Webcast Presentation


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Claude Resources Inc. Q4 2012 Conference Call and Webcast Presentation

  1. 1. 2012 Financial& OperatingR esultsPresented By:N eil M cM illanPresident & CEOM arch 28, 2013 1
  2. 2. Cautionary StatementCautionary Note Regarding Forward-Looking InformationThis document contains certain forward-looking statements relating but not limited to the Company’s expectations, intentions, plans andbeliefs. 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 reser veand 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 todiffer materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reser ves,the grade and recover y of mined ore varying from estimates, capital and operating costs var ying significantly from estimates, delays inobtaining 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 torisks, 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 know n and unknown risks,uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-lookingstatements. Shareholders are cautioned not to place undue reliance on forward-looking information. By its nature, forward-lookinginformation involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibilitythat the predictions, forecasts, projections and various future events will not occur. Claude Resources undertakes no obligation to updatepublicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factorswhich affect this information, except as required by law.Cautionary Note to U.S. Investors Concerning Resource EstimateThe resource estimates in this document were prepared in accordance with National Instr ument 43-101, adopted by the CanadianSecurities Administrators. The requirements of National Instr ument 43-101 differ significantly from the requirements of the United StatesSecurities 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. miningcompanies, in their filings with the SEC, to disclose only those mineral deposits that constitute “reserves”. Under United Statesstandards, mineralization may not be classified as a reserve unless the determination has been made that the mineralization could beeconomically and legally extracted at the time the determination is made. United States investors should not assume that all or anyportion of a measured or indicated resource will ever be conver ted into “reserves”. Fur ther, “inferred resources” have a great amount ofuncertainty as to their existence and w hether they can be mined economically or legally, and United States investors should not assumethat “inferred resources” exist or can be legally or economically mined, or that they will ever be upgraded to a higher category. 2
  3. 3. 2012 Highlights Net profit of $5.6 million, or $0.03 per share, after a $3.0 million, or $0.02 per share, non- cash deferred income tax expense. (1) Cash flow from operations before net changes in non-cash operating working capital of $25.8 million, or $0.15 per share. Canadian dollar cash cost per ounce of gold (2) for 2012 of $997 (U.S. $998). Increased gold sales by 16% year over year with 48,672 ounces at an average realized price of $1,660 (U.S. $1,663) for revenue of $80.8 million. Produced 49,570 ounces after achieving a record mill throughput of 275,235 tonnes at 5.86 g/t in 2012. The Mineral Reserves at the Seabee Gold Operation grade increased by 14% but decreased by 44,500 ounces or 13% after producing 49,570 ounces. Measured and Indicated Resources increased to 344,200 ounces from 70,700 ounces and the grade increased 46% to 7.82 g/t from 5.35 g/t year over year. Expanded debt facilities with Canadian Western Bank and signed a non-binding term sheet with Crown Capital Partners for a debt facility of $25 million that is expected to close early in the second quarter. Surpassed one million ounces of total production at the Seabee Gold Operation. Shaft extension project was completed in January of 2013. 3
  4. 4. Positive Trends in Production & Cash Costs Cash Cost Per Ounce (2) Ounces Produced (CDN$ per ounce)16,000 $1,40014,000 $1,20012,000 $1,00010,000 $800 8,000 $600 6,000 $400 4,000 2,000 $200 0 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2011 2011 2011 2012 2012 2012 2012 2011 2011 2011 2011 2012 2012 2012 2012 Q4 2012: 12,757 ounces Q4 2012: CDN $822 4
  5. 5. Increasing Revenue & Continued Strong Gold Price Revenue Average Realized Gold Price (CDN$ per ounce) ($ millions)$25.0 $1,750 $1,700$20.0 $1,650 $1,600$15.0 $1,550 $1,500$10.0 $1,450 $1,400 $5.0 $1,350 $1,300 $0.0 $1,250 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2011 2011 2011 2012 2012 2012 2012 2011 2011 2011 2011 2012 2012 2012 2012 Q4 2012: $21.3 million Q4 2012: CDN $1,668 5
  6. 6. Increasing Cash Flow & Net Profit Cash Flow From Operations Before Net Changes in Non-Cash Net Profit (Loss) Operating Working Capital (1) ($ millions) ($ millions)$10.0 $6.0 $9.0 $5.0 $8.0 $7.0 $4.0 $6.0 $3.0 $5.0 $2.0 $4.0 $3.0 $1.0 $2.0 $0.0 $1.0 $0.0 -$1.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2011 2011 2011 2012 2012 2012 2012 2011 2011 2011 2011 2012 2012 2012 2012 Q4 2012: $9.4 million Q4 2012: $2.4 million 6
  7. 7. Financial Position December 31 2012Short term debt* (millions) $16.5Long term debt (millions) $0.3Common shares outstanding, basic (millions) 173.7Common share outstanding, fully diluted (millions) 182.4*Includes $9.8 of debentures outstanding which mature in May of 2013 7
  8. 8. Financial Capacity• During the first quarter of 2013, the Company expanded its debt facilities. – $25.0 million with Canadian Western Bank – $25.0 million with Crown Capital Partners Inc. (pending the closing of the transaction)• The transaction with Crown Capital Partners is expected to close in early Q2• The new debt facilities will permit the retirement of the Company’s outstanding debentures and fund the necessary expansion capital at the Seabee Gold Operation. 8
  9. 9. Operations and Projects 9
  10. 10. Seabee Gold Operation2012 Production• Met forecast production of 48,000 – 50,000 ounces of gold with 49,570 ounces• Unit cash costs of $997 CDN; 10% higher than 2011 unit cash costs of $908 CDN.• L62 Zone production tonnage began during the fourth quarter• Staked an additional 3,350 hectares (total land package of 17,750 ha)Exploration Program• 101,000 metres at Seabee Operation in 2012 o 60,000 metres underground o 41,000 metres regionally• 2013 exploration will focus on near-mine targets at Seabee and Santoy as well as infill drilling to convert additional ounces from the Inferred to Indicated category. 10
  11. 11. Santoy Gap• Indicated Mineral Resources of 281,000 ounces at 8.80 g/t (NI 43-101 compliant)• Inferred Mineral Resources of 357,000 ounces at 5.92 g/t (NI 43-101 compliant)• Initiated exploration ramp to the Santoy Gap from current mining infrastructure –currently 485 metres into the 800 metre ramp 11
  12. 12. Key Changes in New LOMP Increasing Production & Decreasing Cash Costs • Increased underground development100,000 $1,200 • New high grade deposits – L62 90,000 and Santoy Gap $1,000 80,000 • Third party consultant to aid in improved management systems, 70,000 $800 costs controls and productivity 60,000 Base • Shaft extension to increase Case 50,000 $600 tonnage reliability with less 40,000 maintenance and labour Costs 30,000 $400 • Strengthened mine site technical team 20,000 $200 • Life of Mine Plan was updated in 10,000 Q4 2012. 0 $0 2011 2012 2013 2014 2015 2016 2017 12
  13. 13. Seabee Reserve & Resource Update• Reserve grade increased to 6.14 g/t from 5.37 g/t or a 14% increase year over year. Reserves decreased marginally by 44,500 or 13% after mining 49,570 ounces in 2012• Anticipate significant reserve growth in 2013 from the conversion of the Santoy Gap Measured & Indicated Resources• Measured and Indicated Mineral Resources increased to 344,200 ozs from 70,700 ozs and the grade increased by 46% to 7.82 g/t from 5.35 g/t year over year• Inferred Resources decreased 31% as 270,000 ounces from Santoy Gap was upgraded into the Measured and Indicated category 13
  14. 14. Amisk Gold ProjectProject Overview:• 100% ownership• 1.56M oz resources (NI 43-101 compliant)• 40,400 hectare property• Open pit potentialExploration Program• 2,600 metres of regional drilling in 2012• Field work and extensive compilation in 2012 have resulted in an extensive list of exploration targets.• Advancement of a Preliminary Economic Assessment of the Amisk Gold Project will be ongoing during 2013. 14
  15. 15. Madsen Gold ProjectProject Overview:• 100% ownership• 1.23M oz resources (NI 43-101 compliant)• Historic production of 2.45 million ounces of gold from 1938 to 1976• 10,000 acre land package• Fully permitted mill, shaft and tailings management facility• Similar type of geology to that of Goldcorp’s Red Lake AssetsExploration Program• 19,000 metres completed in 2012• Results from the 2012 drill program extended the 8 Zone system at depth and confirmed conceptual potential beneath the Austin Tuff.• The Company will focus on a scoping level analysis of the Madsen Project in 2013. 15
  16. 16. 2013 Outlook• Forecast gold production of 50,000 to 54,0000 ounces – Approximately 60% from Seabee and 40% from the Santoy 8• Unit costs are estimated to improve modestly from 2012 cash costs of CDN $997• Q1 production expected to be lower than budgeted but annual guidance maintained• Winter road resupply program nearly complete• Exploration budget of $2.7 million mainly focused on the Seabee and Santoy regions• Budgeted capital expenditures decreased 25% year over year at approximately $31.9 million• Crown Capital Partner debt facility of $25 million is expected to close in early Q2 16
  17. 17. Claude Resources Inc. Experience. Stability. Potential. Creating the Capacity to Discover. Develop. Deliver.TSX: CRJ NYSE MKT: CGR 200, 224 - 4th Avenue South Saskatoon, Saskatchewan, S7K 5M5 Canada P. 306.668.7505 F. 306.668.7500 E: 17
  18. 18. Appendix A: Management TeamNeil McMillan President 17 years as President & CEO of Claude. 16 Chief Executive Officer years managing the RBC Dominion Securities Board Director operation in Saskatoon. Shore Gold Inc. and Cameco Corporation Board Director.Rick Johnson, Chief Financial Officer 16 years with Claude including 8 years as CFOC.A. Vice President Finance and VP Finance.Brian Chief Operating Officer 5 years with Claude leading the explorationSkanderbeg, Senior Vice President team. Appointed Sr. VP and COO SeptemberP.Geo. 1, 2012. Previously employed with Goldcorp, INCO and Helio Resources.Peter Longo, Vice President Operations Joined Claude in 2011 as Manager of CapitalP.Eng., MBA Projects and appointed VP Operations in 2012. Previously worked for Areva Resources, Cameco Corporation and INCO. 18
  19. 19. Appendix B: Board of DirectorsTed J. Nieman, Chairman Senior Vice-President, General Counsel and Corporate Secretary of Canpotex. A boardQ.C. member of all of Canpotex’s subsidiaries and affiliates. Joined the Board of Directors in 2007.Ronald J. Hicks, Director Spent 41 years with Deloitte where he was a partner. Has served as a Director withC.A. 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.J. Robert Director Held a number of senior positions with the Trane Company over the course of his 42Kowalishin, P.Eng. year career with the company. Joined the Board of Directors in 2007.Rita Mirwald, Director Held a number of senior positions with Cameco Corporation, including that of SeniorC.M. Vice President Corporate Services. Joined the Board of Directors in 2011.Mike Sylvestre, Director Currently the President and Chief Executive Officer for Castle Resources Inc. Holds anP.Eng. 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, Director Currently serves as the President and Chief Executive Officer of Pembrook MiningP.Geo. 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 17 years as President & CEO of Claude. 16 years managing the RBC Dominion Director Securities operation in Saskatoon. Serves on the Board of Shore Gold Inc. and Cameco Corporation. 19
  20. 20. Appendix C: Footnotes(1) See description and reconciliation of this performance measure in the “Other Performance Measures” section of the Company’s MD&A.(2) See description and reconciliation of non-IFRS performance measures in the “Non-IFRS Performance Measures and Reconciliations” section of the Company’s MD&A. 20