Claude Resources pours its one millionth ounce of gold at Seabee

1 of 3Gold is poured at the processing facility at Claude Resources' Seabee Gold Operation. — Photo courtesy Claude Resources

2 of 3This ore from the Santoy 8 Gold Mine at Seabee shows significant visible gold. — Photo courtesy Claude Resources

3 of 3The Seabee Gold Mine is about 125 kilometres northeast of the town of La Ronge. — Photo courtesy Claude Resources

Together with numerous other key players at Claude Resources Inc., founder Bill MacNeill has managed to bring the gold-mining company to the pinnacle of success in Saskatchewan, even after braving economic storms and a tough political atmosphere. Claude Resources was proud to announce the pouring of its one millionth ounce of gold in early August 2012—a significant accomplishment.

Neil McMillan, the company's president and CEO, said Claude Resources typically pours between 2,000 and 2,500 ounces every two weeks.

"The mine went into production in late 1991 and it's taken nearly 22 years to get to the one millionth ounce level," said McMillan. "So it's been a slow process, but the reality is it's a major accomplishment. I think it's a generally held view that one million-ounce gold deposits are world-class deposits—so it's an important milestone. In our case, maybe even more so, because we're the first gold mine in Saskatchewan to reach that level and no one else is even close. It's a result of a great deal of foresight and tenacity by the founders of our company."

Claude Resources has two separate ore bodies in production through its Seabee Gold Mining Project. Over 900,000 of the one million ounces has come from the original Seabee ore body and the balance has just come in the last two years from a related ore body in the camp.

The celebration of the million ounces will take place at the Seabee Mine site on August 7, where there will be a ceremony for about 30 to 40 guests. The guests will get to witness the pouring during the ceremony. Then on August 8, the company is putting on a reception by invitation for supporters, suppliers and friends of the company. A private dinner will follow for the founder's family, former board members, current board members and others.

"Our employees are justifiably proud of the accomplishment and the community has been terrifically supportive of it," said McMillan. "There's been an awful lot of interest shown in the celebration and what we're accomplishing, so we have a lot of pride in it. I'm thrilled more for the accomplishment of the founder of the company, Bill MacNeill, and others (who) in the face of a very challenging time with global prices didn't even think twice. They just kept their head down and went hard to keep this thing in production when almost no one else in the world stayed in the gold-producing business."

McMillan said things have gotten a lot easier since the price of gold went over $1,000 an ounce—but for the founders of the company, the employees and other key individuals to continue to run the mine when gold was under $300 an ounce speaks volumes about all these important people who kept the project going 365 days a year, 24 hours a day.

"There was a time when we went into production and there were a lot of doubters out there," said McMillan. "They've been so proved terribly wrong and I get a lot of satisfaction over that fact and what we have accomplished."

McMillan is not only the president and CEO of Claude Resources, he is also an executive with the Saskatchewan Mining Association and serves on the board of directors of Cameco, the world's largest uranium-mining company, which is located in Saskatchewan.

Uranium and potash mining are an exceptionally large part of Saskatchewan's economy but gold mining is not.

"We've had a very challenging environment over the last four years to develop our mining business, and that was largely a result of the political environment in Saskatchewan," said McMillan. "It was mostly Crown corporations that were encouraged to be in the mining business, with not much support for private corporations."

This is why, McMillan said, it was unusual to have a company—a junior company like Claude Resources—go into production, given the overall environment. McMillan said if you add to that a technically held view by some people that Saskatchewan wouldn't be a great place to mine gold long term, the whole gold-mining dream may not have seemed possible to most players in the industry.

"But of course two things have changed in Saskatchewan today," said McMillan. "Firstly, the political environment is dramatically better than it has been at any time over the last 50 years. Secondly, we've demonstrated the fact that the geology in Saskatchewan could host a major world-class precious metal ore body."

Claude Resources is currently one of two companies in the gold-production business in Saskatchewan, but there are now others currently exploring for gold, which McMillan hopes is partially because of what Claude Resources has accomplished.

"The other producing company is Golden Band Resources, which has assets about 50 to 60 miles west of us," said McMillan. "They've gone into production— which is very encouraging—and based on what we've been able to accomplish, we hope it sends a message out to other mining people that it is really worthwhile to explore the province."

Claude Resources is certainly a testament to the fact that gold is going big in Saskatchewan. McMillan said the generally held view was there were no large gold deposits in Saskatchewan—and if there was high-grade gold, it didn't extend to depth. But Claude Resources is now operating its principal ore body at 1,200 metres below surface.

"We've disproven most of those ideas on every account," said McMillan. "Our ore body is, in our view, just getting started. We are now getting in a position where we can start to expand. We've been producing at about a 50,000-ounces-a-year level for the last 20 years, and I can see that rate doubling over the next four or five years. For that reason, I expect the second one millionth ounce to be produced over a 10-year period instead of the 20-plus years the first million took."