Corporate Presentation - Claude Resources Inc.

Corporate Presentation
October 2015
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
Corporate Summary
Canadian gold producer with over 20 years experience
• Produced over 1 million ounces from Seabee Gold Operation
• Each asset hosts +1 million ounces of gold
• Low risk and proven mining jurisdictions
Low cost and profitable
• 2015 Unit cash cost (1) guidance of $685-$750 (US $535-$600)
• 2015 All in sustaining cost (1) guidance $1,065-$1,175 (US $830-$920)
• H1 2015 net earnings of $15.4 million, $0.08 per share
Strong financial position
Seabee Gold Operation
(Seabee Mine and Santoy Mine
Complex)
Amisk Gold Project
• $27.0 million of cash & bullion (2) (at September 30, 2015)
• $20.3 million of long-term debt (at September 30, 2015)
(1)
See description and reconciliation of non-IFRS financial measures in the “Non-IFRS Financial Measures and Reconciliations” section of the Company’s most recent MD&A
(2)
Cash and bullion relates to current cash on hand of $24.5 million and $2.5 million of bullion (gold poured in dore bars, not yet been sold and valued at market prices)
3
The New Story
We recognized what we needed to improve…
0.9
0.8
Production
Growth
0.7
0.6
0.5
Deliver
Shareholder
Value
Strong
Balance
Sheet
Low Cost
0.4
0.3
0.2
Profitable
0.1
0
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
…and we are delivering results!
4
Operating Execution
P erform ance Driven by Better Ore Bodies and M ining M ethod
Ø Mine sequencing and higher grade Santoy Gap ore replacing low grade Santoy 8 ore
Ø Positive Alimak mining method results
Ø Future head grade to come more in-line with reserve grades
Ø Record safety and environmental performance
Q3 2015
Q3 2014
YTD 2015
YTD 2014
69,388
74,930
211,418
219,046
7.29
8.88
8.77
7.53
96.7%
96.4%
96.3%
95.6%
Produced
15,722
20,614
57,408
50,700
Sold
16,528
17,578
54,388
46,133
Production Results
Tonnes Milled
Head Grade (g/t)
Recovery
Gold Ounces
5
Delivering Record Earnings
A Profitable Gold Producer at Current Gold Prices
Financial Results
(all $ amounts in CDN$ unless otherwise stated)
Q2 2015
Q2 2014
YTD 2015
YTD 2014
Revenue (000’s)
$29,739
$24,718
$55,922
$40,342
Net earnings (loss) (000’s)
$10,245
$3,327
$15,367
($1,784)
$0.05
$0.02
$0.08
($0.01)
$15,645
$9,863
$24,913
$11,647
$0.08
$0.05
$0.13
$0.06
$623
$753
$647
$841
$507
$691
$524
$767
$954
$1,065
$1,146
$1,390
$776
$977
$928
$1,267
Earnings (loss) per share (basic and diluted)
Cash flow from operations
(1) (3)
(000’s)
Cash flow from operations
(1) (3)
per share
Total cash costs per ounce
(1)
Total cash costs per ounce
(1)
(US$)
All-in sustaining cost per ounce
(1)
All-in sustaining cost per ounce
(1)
(3) Cash
(US$)
flow from operations before net changes in non-cash operating working capital.
6
Stronger Balance Sheet
De-Risk ed Balance Sheet & I m proved Financial Structure
Ø
A $48.5 million improvement in financial position in 2 years
Ø
Debt reduction through $1.25 million/quarter principal payments ($5.0 million annually)
Ø
Strong liquidity position with cash and bullion
$35
of $27.0 million (at September 30, 2015)
Strong Financial Position
$33.2
$30
(2)
$27.2
(in CDN $millions)
$26.1
$23.5
$25
$22.6
$21.7
$20.8
$20
$18.9
$15
$27.0
$20.9
$20.3
Q2 2015
Q3 2015
$15.1
$10
$11.2
$5
$0
-$5
-$10
Q4 2013
$(8.6)
Q1 2014
Q2 2014
$(1.2)
$(5.6)
Q3 2014
Cash & bullion
Q4 2014
Q1 2015
Total Debt
7
A Compelling Story
Growing Production and Grades
80,000
Production
70,000
9
Valuation*
8
P/CF
P/E
CRJ
3.0X
5.5X
Jr. Gold Avg.
7.0X
15.0X
7
5.86
5.11
6
5
40,000
4
30,000
3
20,000
2
10,000
1
*Based on analyst consensus and share price as of October 1, 2015.
0
2011A
2012A
2013A
2014A
2015E
Peer Leading Cost Performance (1) YTD
P/CF 2015
In CDN$
Cash Costs/Oz
P/CF 2016
12
All in Sustaining/Oz
CDN Au $ - $1,475
$1,600
$1,400
10
8
P/CF
$1,200
$1,000
$800
6
4
$600
2
$400
$200
SAS
RIC
WDO
Average
RIC
KGI
♦P
AUQ
*KGI
DPM
CRJ
PRU
$0
AR
0
CRJ
$1,800
♦TGZ
$2,000
LSG
50,000
5.68
7.32
6.8 to 7.3
OGC
60,000
Grade
Source: Bloomberg, Cormark
8
Operations and Projects
(1)
See footnotes located on page 17
9
Prospective Gold Belt
•
Large land position – 19,950 Hectares
• Seabee
ControlProperty:
the entire greenstone belt
Hectares
• 17,200
Underexplored
gold camp
•
Well established infrastructure
Over 1 million ounces produced…..and much more to go
10
Key Drivers: Santoy Gap
Ø 2,000 ounces per vertical metre (Seabee: ~ 1,000 oz/vertical metre)
Ø Higher reserve grade with opportunity to increase
Ø Decreased production risk with the addition of multiple long-hole mining fronts
Ø Higher margin ounces displaced lower margin ounces and optimized mine plan for improved cash flow
Ø Time to production from discovery = 2.5 years
Higher Grade + Wider Veins = More Ounces Per Vertical Metre
3 years of production
developed by the end of 2015
Production Area
11
Key Drivers: Santoy Gap
60,000
feasibility design
50,000
ounces and below on tonnage
Ø Infrastructure upgrades on-going for 600-700
tpd profile in 2016
Quarterly Tonnage
Ø Reconciling above reserves and resources on
Budget T
Actual T
Budget Oz
Actual Oz
15,000
12,500
40,000
10,000
30,000
7,500
20,000
5,000
10,000
2,500
Quarterly Oz
Ø Production well-ahead of schedule and pre-
Santoy Gap Quarterly
Production Profile
Ø Forecast to be 60% of 2015 production
Ø ~10 year mine life at current reserves and
0
0
resources
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 2016 E
Total Mine Production by Type/Year
Sum of Tonnes Mined
Sum of Ounces
Grade
Development (May 2014 to June 2015)
79,220
19,798
7.77
Production (May 2014 to June 2015)
44,968
13,897
9.61
2014
47,594
12,182
7.96
2015
76,594
21,513
8.74
Total
124,188
33,695
8.44
12
Key Drivers: Seabee Mine
Ø Alimak mining method continues to perform well – dilution rates continue to be better than budget
Ø Reduced underground waste development and increased production rates :
Ø Ability to mine 100 metre high zone in 9 months vs 16-18 months
Ø Reduced annual development cost by approximately $5.0 million
Ø Forecast to be 40% of 2015 annual gold production tonnage
Faster, Cheaper à More Productive
Seabee Mine
Illustration of Alimak Mining process
Utilizing Alimak
Mining Method for
Improved Efficiency
13
Sustainable Grades and Resources
Focused on Delivering Higher M argin Ore to the M ill
Ø Change in mining method at Santoy Gap (Transverse vs. Long-hole) increased grade and reduced dilution
Ø Santoy Gap mineral reserve grade increased by 35% to 7.64 g/t from 5.68 g/t
Ø The 45% increase in Inferred ounces was driven by the significant expansion of the Santoy 8 ore body
Ø A significant 2015 underground drilling program of ~65,000 metres is expected to drive mineral reserve and
mineral resource growth
Seabee Gold Operation Mineral Reserves and Mineral Resources*(4) (as of November 30, 2014)
P&P Reserves
2014
2013
Change
Grade
7.03
5.70
23%
299,000
422,900
-29%
5.98
6.91
-13%
125,200
175,200
-29%
7.96
7.21
10%
847,300
582,900
45%
Ounces
M&I Resources
Grade
Ounces
Inferred Resources
Grade
Ounces
* See Appendix D for MRMR breakdown
14
2015 Exploration – Santoy Mine Complex
Ex cellent Grow th Opportunity
Ø 2014 underground drilling demonstrated economic grades and widths
Ø SUG-14-048 – 26.77 g/t over 8.7 m
Ø
Major step-out holes among the highest gram-metre product to date in the camp
Ø JOY-13-690 – 330.35 g/t over 1.6 m & JOY-13-692 – 30.08 g/t over 7.9 m
Ø Budgeted 6,000 metres of underground exploration drilling in 2015
2.5 km Strike Length
2016 Drill Target Area
2015 & 2016 Drill Target Area
SYSTEM REMAINS OPEN AT DEPTH
15
2015 Exploration - Seabee
Ø Seabee near-mine environment remains very prospective, underexplored and is a very low-cost
environment to explore (cost of drilling is approx. $20/metre )
Ø Targets identified and ranked based on specific criteria:
Ø Grade and Structure of historical drillhole intercepts vs. Grade Potential
Ø Structural Endowment and Accessibility of the overall structure
Ø 2015 drilling will test up to 7 priority UG targets totalling 10,000 metres
Ø Leveraging Seabee infrastructure:
Ø 50,000 to 100,000 ounces lenses can be economic
Priority Targets
Seabee Mine Infrastructure
L62 Deposit
2015 Targets
16
A Profitable Gold Miner
Our Strategies are Delivering R esults
ü Record Earnings: net earnings of $15.4 million, or $0.08 per share à a $17.2 million
improvement from H1 2014
ü Growing Production: YTD gold production of 57,408 à13% increase vs YTD 2014
ü Higher Grades: mill head grade of 8.77 g/t à 16% increase vs YTD 2014
ü Peer Leading Cost Performance:
ü Cash cost per ounce (1) of $647 (US $524) à 23% decrease vs H1 2014
ü All-in sustaining cost per ounce (1) of $1,146 (US $928) à 18% decrease vs H1 2014
ü Strong Balance Sheet: increased cash and bullion (2) to $27.0 million and decreased debt
to $20.3 million (at September 30, 2015)
17
2015 Outlook
Our focus remains on production grow th,
cost containm ent and m argins
ü Increased gold production guidance of 70,000 to 75,000
ounces (original 60,000 to 65,000 ozs)
ü Lowered unit cost guidance
ü Cash costs per ounce to $685 - $750 (US $535 - $600*)
ü AISC per ounce to $1,065 - $1,175 (US $830 - $920*)
ü FCF in 2015 @ CDN ~1,200 Au/oz (US $950 Au/oz*)
ü FCF margin of ~15% @ CDN $1,450/oz
*Forecast uses CDN$/U.S.$ exchange rate of $1.28, at CDN$ 1,470/oz and mid-point of production and cost guidance
18
TSX: CRJ
OTCQB: CLGRF
200, 219 Robin Cres.
Saskatoon, Saskatchewan, S7L 6M8
Canada
P. 306.668.7505
F. 306.668.7500
E: [email protected]
(1)
See footnotes located on page 17
19
Appendix A:
Corporate Summary
Stock Exchanges:
TSX
OTCQB
Financials:
(June 30, 2015) :
CRJ
CLGRF
EPS: $0.08
Share Structure:
CFPS: $0.13
Shares Outstanding (June 30, 2015):
Basic
194.9 million
Fully Diluted
204.1 million
Market Cap CDN ~$120 million
Total cash cost/oz (1) : C$647 (US $524)
52 Week High
52 Week Low
Avg. Volume
$0.78
$0.19
600,000
Analyst Coverage:
Richard Gray
Joe Mazumdar
Matt O’Keefe
Derek Macpherson
Adam Melnyk
Don Blyth
Philip Ker
Craig Johnston
All-in sustaining cost/oz (1) : C$1,146 (US $928)
Cash & bullion: $27.0
Debt: $20.3
(2) (at Sept. 30, 2015)
(at Sept. 30, 2015)
Outlook:
Cormark Securities
Canaccord Genuity
Dundee Securities
M Partners
National Bank
Paradigm Capital
PI Financial
Scotiabank
Gold Production: 70,000 – 75,000 ozs (was 68,00072,000 ozs)
Total cash cost/oz
(1)
: C$685-$750 (US $535-$600)
All-in sustaining cost/oz
$830-$920)
(1)
: C$1,065 - $1,175 (US
20
Appendix B:
Seabee Gold Operation
Project Overview
Ownership: 100%
Property Size:19,950 hectares
Property Location: Saskatchewan, Canada
History:(1991 – Present) +1,000,000 oz of gold production
Resources: See Appendix D
Status: Production from Seabee Mine and Santoy Mine
Complex
Production: Forecast 70,000 – 75,000 ozs of gold in 2015
Infrastructure:
Mill:900 tonnes per day (1,050 tpd peak)
Shaft: 1,000 metres
Tailings Facility: Permitted 6 year life
Key Notes:
• Santoy Gap ramp up ahead of scheduling reaching 584 tpd
in Q3 2015
• 2015 UG drill program 65,000 m
• Successful execution of Alimak mining method at Seabee
• Santoy Gap infrastructure upgrades on-going to reach 600700 tpd in 2016
21
Appendix C:
Amisk Gold Project
Project Overview
Ownership: 100%
Property Size: 40,373 hectares
Property Location: Saskatchewan, Canada
Resource:
Indicated Resources: 921,000 Au Eq ozs
Inferred Resources: 645,000 Au Eq ozs
Status: Greenfield exploration
Infrastructure: Exploration camp
Key Notes:
•
Large bulk mineable potential
•
Mineralization begins at surface and has been tested to
approximately 600 metres below surface
•
Close to provincial infrastructure and in proven mining district
and “mining friendly” community
22
Appendix D:
Mineral Reserves & Mineral Resources (4)
Seabee Gold Mine
Proven Reserves
Probable Reserves
Measured Resources
Indicated Resources
Inferred Resources
Santoy Gap
Proven Reserves
Probable Reserves
Measured Resources
Indicated Resources
Inferred Resources
Santoy 8
Proven Reserves
Probable Reserves
Measured Resources
Indicated Resources
Inferred Resources
Porky Main
Indicated Resources
Inferred Resources
Porky West
Indicated Resources
Inferred Resources
Total Gold
Proven & Probable Reserves
Measured & Indicated Resources
Inferred Resources
Tonnes
Grade (g/t)
Contained Gold (Oz)
217,700
192,600
17,400
88,500
403,300
6.05
6.91
8.26
6.49
8.09
42,400
42,800
4,600
18,500
104,900
105,000
694,600
34,800
147,900
1,319,100
5.49
7.96
5.85
5.65
7.50
18,500
177,800
6,500
26,900
318,100
15,300
97,900
34,700
67,000
1,344,300
4.91
4.79
8.71
4.13
8.56
2,400
15,100
9,700
8,900
369,900
160,000
70,000
7.50
10.43
38,600
23,500
100,700
174,800
3.57
5.48
11,600
30,800
1,323,100
651,000
3,311,400
7.03
5.98
7.96
299,000
125,200
847,300
23
Appendix E:
Executive Team
Brian Skanderbeg,
P.Geo.
President &
CEO, Director
Mr. Skanderbeg joined the Corporation in April
2007. He was appointed as President & CEO in
November 2014. Prior to his current position, he
was the Sr. VP and COO. He previously worked for
Goldcorp, Inco Ltd. and Helio Resources, holding
positions in both exploration and operations. He
holds a B.Sc. from the University of Manitoba, an
M.Sc. from Rhodes University, South Africa. Mr.
Skanderbeg brings extensive experience in gold
systems, operational management, cost and asset
optimization and strategic analysis.
Rick Johnson,
CPA, CA
Chief Financial Officer
Vice President Finance
Mr. Johnson joined Claude Resources in 1996. He
was appointed to his present position in 2004,
having previously served as Company Controller. Mr.
Johnson holds a Bachelor of Commerce degree
from the University of Saskatchewan and is a
member of CPA Canada.
24
Appendix F:
Board of Directors
Brian Booth,
P.Geo.
Chair
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.
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.
Patrick Downey,
P.Eng
Director
Has over 25 years of international experience in the resource industry. Most recently,
Mr. Downey was the President and CEO of Elgin Mining Inc., which was acquired by
Mandalay Resources Inc. He has held numerous senior engineering positions at several
large scale gold mining operations. He holds a B.Sc (Hon.) degree in Engineering from
Queen's University in Belfast, Ireland. Joined the Board of Directors in January 2015.
Arnold Klassen,
CA, CPA (Illinois)
Director
Has over 35 years of experience in accounting, audit and tax, with over 30 years of
experience in the Mining Industry. Mr. Klassen is currently President of AKMJK
Consulting Ltd. and prior to that was the Vice President of Finance for Dynatec
Corporation from 1988 to 2007. Mr. Klassen spent seven years with KPMG prior to
becoming Vice President of Finance with the Tonto Group of Companies from 1984 to
1998. Joined the Board of Directors in April 2015.
Brian Skanderbeg,
P.Geo.
President &
CEO, Director
Mr. Skanderbeg joined the Corporation in April 2007. He was appointed as President &
CEO in November 2014. Prior to his current position, he was the Sr. VP and COO. He
previously worked for Goldcorp, Inco Ltd. and Helio Resources, holding positions in
both exploration and operations. He holds a B.Sc. from the University of Manitoba, an
M.Sc. from Rhodes University, South Africa. Mr. Skanderbeg brings extensive
experience in gold systems, operational management, cost and asset optimization and
strategic analysis.
25
Appendix G: Footnotes
(1)
See description and reconciliation of non-IFRS financial measures in the “Non-IFRS Financial Measures and Reconciliations”
section of the Company’s Q2 2015 MD&A
(2)
Cash and bullion relates to current cash on hand of $24.5 million and $2.5 million of bullion (gold poured in dore bars, not
yet been sold and valued at market prices)
(3)
Cash flow from operations before net changes in non-cash operating working capital
(4)
Footnotes to the Mineral Resource Statement:
•
•
•
•
•
•
At November 30, 2014, Mineral Reserves and Mineral Resources were estimated by Claude personnel. The Mineral Resource
evaluation work was completed by a team of geologists and engineers under the supervision of Brian Skanderbeg, P.Geo.,
President and Chief Executive Officer. Mineral Reserves were conducted under the direction of Qualified Person Gordon Reed,
P.Eng., Seabee Gold Operation General Manager. Mr. Skanderbeg and Mr. Reed have sufficient experience, which is relevant to
the style of mineralization and type of deposit under consideration and to the activities undertaken to qualify as Qualified
Persons as defined by NI 43-101.
The Mineral Resources and reserves reported herein have been estimated in conformity with generally accepted CIM “Estimation
of Mineral Resource and Mineral Reserves Best Practices” guidelines and are reported in accordance with Canadian Securities
Administrators’ National Instrument 43-101.
Mineral Reserves and Mineral Resources for the Seabee deposit are reported at a cut-off of 4.5 grams of gold per tonne. Santoy
8 and Santoy Gap Mineral Reserves and Mineral Resources are reported at a cut-off of 3.6 grams of gold per tonne. Porky Main
and Porky West Mineral Resources are reported at a cut-off grade of 3.0 grams of gold per tonne. Assumptions include a price
of CDN $1,375 per ounce of gold using metallurgical and process recovery of 95.2 percent and overall ore mining and processing
costs derived from 2014 realized costs.
All figures are rounded to reflect the relative accuracy of the estimates. Summation of individual columns may not add-up due
to rounding.
Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or
any part of the Mineral Resource will be converted into Mineral Reserves.
The geological data in this table has been reviewed by Mr. Brian Skanderbeg, P.Geo, President and CEO of Claude Resources
Inc. Mr. Skanderbeg is a "qualified person" as defined by NI 43-101.
26