Claude Resources Inc. 6K March, 2004


SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of March, 2004
 
 
Claude Resources Inc.
(Translation of registrant’s name into English)
 
 
200 - 224 - 4th Ave S., Saskatoon, SK, S7K 5M5
(Address of principal executive offices)
 
    Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
 
    Form 20-F x Form 40-F ¨
 
    Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
    Yes ¨ No x
 
    If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-___________

 
     
 



 
SIGNATURE

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant, Claude Resources Inc. , has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 

 
 Date:  March 5, 2004
   Claude Resources Inc.
   
   
 By:  /s/ Val Michasiw
 
   Val Michasiw
   Secretary/Treasurer
    
 


 
     
 
 

News release via Canada NewsWire, Montreal 514-878-2520 -ME-

Attention Business/Financial Editors:
Claude Reports 2003 Financial Results

MONTREAL, March 5 /CNW Telbec/ -

Year End

As a result of improved gold sales volume and average prices realized in both gold and natural gas, Claude reported net earnings of $1.9 million, or $0.04 per share, for the year ended December 31, 2003. This compared to a net loss of $1.6 million, or $0.03 per share, in 2002. Cash flow from operations, before net change in non-cash working capital items of $7.8 million, or $0.14 per share, compares to $3.8 million, or $0.08 per share, for the same period in 2002.

Gold sales of 50,800 ounces in 2003 represents a 22% increase over the 41,500 ounces sold in 2002. This was largely a result of successful development between the 510 metre and 650 metre levels. The average realized gold price per ounce in 2003 of CDN $508 (US $362) versus CDN $490 (US $312) in 2002 also contributed to revenue growth.

The $2.0 million increase in Seabee mine operating costs was largely a function of the mine operating below the 510 metre level prior to the extension of the shaft to 600 metres. Despite increased volumes, total cash operating costs per ounce increased slightly from US $246 in 2002 to US $253 this year as the Canadian dollar significantly strengthened against the US dollar.

The Company's oil, natural gas liquids and gas properties continue to positively affect cash flow with sales volumes of 224,000 barrels of oil equivalent (boe) in 2003 relatively unchanged from last year. However, average prices realized increased 37% from CDN $28.25 (US $17.99) per boe in 2002 to CDN $38.73 (US $27.60) per boe this year.

During the year, the Company commissioned the shaft extension from the 395 metre level to 600 metre level and increased its underground diamond drilling concurrent with underground mine development. As a result it is expected that both gold sales volume and mining costs will continue to track historic averages.

Fourth Quarter

Claude reported net earnings of $.3 million, or $0.01 per share, in the fourth quarter of 2003 compared to net earnings of $1.7 million, or $0.03 per share, in the comparable quarter of 2002. Cash flow from operations before net change in non-cash working capital items of $2.1 million, or $0.04 per share compares to $3.3 million, or $0.07 per share, for the same period in 2002.

Gold sales volume dropped in the fourth quarter to 13,500 ounces this quarter from 15,000 ounces in 2002. This was partially offset by an increase in the average gold price realized from CDN $506 (US $322) in the fourth quarter of 2002 to CDN $517 (US $393) for the fourth quarter of 2003. Total mine operating costs were relatively unchanged period over period at $4.4 million however total cash operating costs per ounce rose by 32% from US $187 in 2002 to US $248 in the fourth quarter of this year. This increase was partially a result of lower sales however the strengthening Canadian vs. US dollar was primarily responsible for the unit cost increase.

Oil, natural gas liquids and gas production fell slightly in the fourth quarter from 59,576 boe in 2002 to 55,867 boe this quarter.

Claude's balance sheet is free of long-term debt obligations and the Company continues to have limited exposure to gold derivative contracts.
 
     
 
Consolidated Statements of Earnings (Loss)
(Canadian Dollars in Thousands)

 
  
Three Months Ended
Years ended
 
  

December 31 
December 31
   
 
 
 
    
2003

 

 
2002

 

 
2003

 

 
2002
 
   
 
 
 
 
Revenues
   
 
    
 
    
 
    
 
  
Gold
 
$
6,970
 
$
7,576
 
$
25,807
 
$
20,363
 
Oil and gas:
   
 
    
 
    
 
    
 
  
Gross revenue
   
1,407
   
2,219
   
9,368
   
7,043
 
Crown royalties
   
(261
)
 
(516
)
 
(2,346
)
 
(1,748
)
Alberta Royalty Tax Credit
   
125
   
126
   
539
   
440
 
Overriding royalties
   
(724
)
 
(1,058
)
 
(4,077
)
 
(2,929
)
   
 
 
 
 
Net oil and gas revenue
   
547
   
771
   
3,484
   
2,806
 
   
 
 
 
 
 
    
7,517
   
8,347
   
29,291
   
23,169
 
Expenses
   
 
    
 
    
 
    
 
  
Gold
   
4,389
   
4,394
   
18,041
   
16,070
 
Oil and gas
   
375
   
(17
)
 
1,260
   
1,138
 
General and administrative
   
678
   
640
   
2,057
   
2,218
 
Interest and other
   
9
   
138
   
101
   
(84
)
Provision for income taxes
   
5
   
(70
)
  
63
   
31
 
   
 
 
 
 
 
    
5,456
   
5,085
   
21,522
   
19,373
 
   
 
 
 
 
Earnings before the undernoted items
   
2,061
   
3,262
   
7,769
   
3,796
 
Depreciation, depletion and accretion:
   
 
    
 
    
 
    
 
  
Gold
   
1,593
   
1,406
   
5,369
   
4,934
 
Oil and gas
   
149
   
176
   
507
   
469
 
   
 
 
 
 
Net earnings (loss)
 
$
319
 
$
1,680
 
$
1,893
 
$
(1,607
)
   
 
 
 
 
Net earnings (loss) per share
   
 
    
 
    
 
    
 
  
Basic and diluted
 
$
0.01
 
$
0.03
 
$
0.04
 
$
(0.03
)
   
 
 
 
 
Weighted average number of shares outstanding (000's)
    
55,299
   
48,742
    
53,851
   
46,919
 
   
 
 
 
 


 
     
 

 
Consolidated Statements of Cash Flows
(Canadian Dollars in Thousands)


 
  
Three Months Ended
Years ended
 
  
December 31
December 31
   
 
 
 
    
2003

 

 
2002

 

 
2003

 

 
2002
 
   
 
 
 
 
Cash provided from (used in):
   
 
    
 
    
 
    
 
  
Operations:
   
 
    
 
    
 
    
 
  
Net earnings (loss)
 
$
319
 
$
1,680
 
$
1,893
 
$
(1,607
)
Non cash items:
   
 
    
 
    
 
    
 
  
Depreciation, depletion and accretion
   
1,742
   
1,582
   
5,876
   
5,403
 
Net change in non-cash working capital:
   
 
    
 
    
 
    
 
  
Receivables
   
(1,499
)
 
(160
)
 
(338
)
 
(1,475
)
Inventories
   
1,546
   
1,641
   
(435
)
 
1,280
 
Shrinkage stope platform costs
   
(497
)
 
(954
)
 
(826
)
 
(3,021
)
Prepaids
   
(5
)
 
2
   
69
   
(78
)
Payables and accrued liabilities
   
918
   
(1,379
)
 
2,595
   
(174
)
   
 
 
 
 
Cash from operations
   
2,524
   
2,412
   
8,834
   
328
 
Investing:
   
 
    
 
    
 
    
 
  
Short-term investments
   
300
   
(300
)
 
300
   
(300
)
Investments
   
(962
)
 
116
   
(1,041
)
 
115
 
Mineral properties
   
(3,701
)
 
(2,351
)
 
(14,830
)
 
(8,180
)
Oil and gas properties
   
(1,009
)
 
(287
)
 
(1,862
)
 
(730
)
Deposit for reclamation costs
   
(283
)
 
(230
)
 
(525
)
 
(768
)
   
 
 
 
 
 
    
(5,655
)
 
(3,052
)
 
(17,958
)
 
(9,863
)
Financing:
   
 
    
 
    
 
    
 
  
Issue of common shares, net of issue costs
   
7,397
   
1,409
   
14,181
   
6,163
 
Demand loan repayment
   
-
   
(81
)
 
(110
)
 
(328
)
Obligations under capital lease
   
 
    
 
    
 
    
 
  
Proceeds
   
-
   
-
   
-
   
214
 
Repayment
   
(15
)
 
4
   
(60
)
 
(41
)
   
 
 
 
 
 
    
7,382
   
1,332
   
14,011
   
6,008
 
Increase (decrease) in cash position
   
4,251
   
692
   
4,887
   
(3,527
)
Cash position, beginning of period
   
(992
)
 
(2,320
)
 
(1,628
)
 
1,899
 
   
 
 
 
 
Cash position, end of period
 
$
3,259
 
$
(1,628
)
$
3,259
 
$
(1,628
)
   
 
 
 
 


 
     
 

Consolidated Statements of Retained Earnings
(Canadian Dollars in Thousands)
 

 
  
Three Months Ended
Years ended
 
  

December 31 
December 31
   
 
 
 
    
2003

 

 
2002

 

 
2003

 

 
2002
 
   
 
 
 
 
Retained earnings, beginning of period
   
 
    
 
    
 
    
 
  
    As previously reported
 
$
5,294
 
$
1,963
 
$
3,672
 
$
5,181
 
    Effect of change in accounting policy (Note 2)
   
947
   
1,024
   
995
   
1,093
 
   
 
 
 
 
As restated
   
6,241
   
2,987
   
4,667
   
6,274
 
Net earnings (loss)
   
319
   
1,680
   
1,893
   
(1,607
)
   
 
 
 
 
Retained earnings, end of period
 
$
6,560
 
$
4,667
 
$
6,560
 
$
4,667
 
   
 
 
 
 
 
Notes to Consolidated Financial Statements

Note 1 - General

The accompanying unaudited consolidated financial statements should be read in conjunction with the notes to the Company’s audited consolidated financial statements for the year ended December 31, 2003. The unaudited consolidated financial statements include the financial statements of the Company and its subsidiary. The unaudited 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.

Stock-based Compensation

Effective January 1, 2004, Claude will adopt the revised CICA Handbook Section 3870, “Accounting for Stock-Based Compensation and Other Stock-Based Payments”. Revised Section 3870 requires all transactions whereby goods and services are received in exchange for stock-based compensation and other stock- based payments to be recognized in the financial statements at fair value. This change effectively requires companies to expense the cost of stock options provided to employees. This requirement is effective for financial periods beginning on or after January 1, 2004. Adoption of this standard in 2003 would have reduced net earnings by $10,600.

Note 2 - Change in Accounting Policy

Effective January 1, 2003, the Company adopted the recommendations of CICA Handbook Section 3110, “Asset Retirement Obligations”. This standard addresses the accounting for the Company's legal obligations associated with the retirement of tangible long-lived assets resulting from the normal operation of those assets. The Company is required to record the fair value of the liability for the obligation when it is incurred and capitalize an equivalent amount as an asset to be depreciated over its useful life. An accretion component is charged each period and represents the interest on the fair value liability. The adoption of this policy has been applied retroactively. The effect on the 2003 and 2002 financial statements was as follows:
 
     
 

 

 
  

 2003

 

2002

 
   
 
Increase in mineral properties
 
$
95
 
$
130
 
Decrease in asset retirement obligations
   
834
   
865
 
Increase in retained earnings
   
995
   
1,093
 
Decrease in net earnings
   
66
   
98
 

    The effect on the fourth quarter 2003 & 2002 financial statements was to decrease net earnings by $18,000 and $29,000, respectively.

Note 3 - Shrinkage Stope Platform Costs

Shrinkage stope platform costs represent ore that is being used as a working stage, within the stope, to gain access to further ore. This ore is expected to be processed in the following 12 months. The processing of this broken ore occurs in accordance with a mine plan based on the known mineral reserves and current mill capacity. The timing of processing of ore has not been significantly affected by historic prices of gold.

Note 4 - Share Capital

At December 31, 2003 there were 58,341,627 common shares outstanding.

Options in respect of 2,425,000 common shares are outstanding under the stock option plan. These options have exercise prices ranging from $0.53 to $3.05 with expiration dates between April, 2006 and November, 2013.

On January 31, 2003, the Company completed a private placement offering of 2,500,000 units, each unit consisting of one common share and one half of one common share purchase warrant, at a price of $1.50 per unit, for gross proceeds of $3,750,000. Each whole purchase warrant will entitle the holder, upon exercise at any time up to and including January 31, 2004, and upon payment of $1.85, to subscribe for one common share. In partial consideration for the services provided to Claude in connection with the private placement, the Underwriters were issued 250,000 common share purchase warrants each of which entitles the holder, upon exercise at any time up to and including January 31, 2004, and upon payment of $1.85, to subscribe for one common share. At December 31, 2003, there were 1,362,750 warrants outstanding.

On December 12, 2003, the Company entered into a flow-through share agreement for the issue of 1,000,000 common shares at a price of $2.50 per share for gross proceeds of $2,500,000. The Company must expend $2,500,000 in qualifying Canadian Exploration Expenses as defined in the Income Tax Act (Canada) prior to December 31, 2004.

On December 23, 2003, the Company completed a private placement of 2,500,000 units, each unit consisting of one common share and one half of one common share purchase warrant, at a price of $2.00, for gross proceeds of $5,000,000. Each whole purchase warrant will entitle the holder, upon exercise at any time up to and including June 23, 2005, and upon payment of $2.50, to subscribe for one common share. In partial consideration for the services provided to Claude in connection with the private placement, the Underwriters were issued 150,000 common share purchase warrants each of which will entitle the holder, upon exercise at any time up to and including December 23, 2004 and upon payment of $2.10, to subsribe for one common share. At December 31, 2003, there were 1,400,000 warrants outstanding.

In 2004, 1,138,450 warrants outstanding pursuant to the January 31, 2003 private placement were exercised.

 
     
 
Note 5 - Guarantees

Effective January 1, 2003, the Company adopted the new CICA Accounting Guideline AcG-14 which requires certain disclosures of obligations under guarantees. There have been no material changes to the guarantees reported in the annual consolidated financial statements.

Note 6 - Comparative Figures

Certain prior year balances have been reclassified to conform to the current year financial statement presentation.

Note 7 - Differences from United States Accounting Principles

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada. See Note 19 of the Company's audited financial statements for the year ended December 31, 2002, for a narrative explanation of the differences in Canadian and US generally accepted accounting principles.

Consolidated Balance Sheets
(Canadian Dollars in Thousands)
 

 
  

 December 31 

 

December 31

 

 

 

2003

 

2002

 
   
 
 
Assets
   
 
    
 
  
Current assets:
   
 
    
 
  
 Cash
 
$
3,259
 
$
-
 
 Short-term investments
   
-
   
300
 
 Receivables
   
2,512
   
2,174
 
 Inventories
   
3,801
   
3,366
 
 Shrinkage Stope Platform Costs (Note 3)
   
6,678
   
5,852
 
 Prepaids
   
259
   
328
 
   
 
 
 
    
16,509
   
12,020
 
    Oil and gas properties
   
4,766
   
3,411
 
    Mineral properties
   
26,932
   
17,338
 
    Investments
   
1,660
   
619
 
    Deposits for reclamation costs
   
1,950
   
1,425
 
   
 
 
 
  
$
51,817
 
$
34,813
 
   
 
 
Liabilities and Shareholders' Equity
   
 
    
 
  
Current liabilities:
   
 
    
 
  
 Bank indebtedness
 
$
-
 
$
1,628
 
 Payables and accrued liabilities
   
4,535
   
1,940
 
 Demand loan
   
-
   
110
 
 Current portion of obligations under capital lease
    
54
   
51
  
   
 
 
 
    
4,589
   
3,729
 
    Obligations under capital lease
   
59
   
122
 
    Asset retirement obligations
   
1,903
   
1,770
 
    Shareholders' equity:
   
 
    
 
  
     Share capital (note 4)
   
38,706
   
24,525
 
                         Retained earnings
   
6,560
   
4,667
 
   
 
 
 
    
45,266
   
29,192
 
   
 
 
 
  
$
51,817
 
$
34,813
 
   
 
 

 
 
     
 
 
    %SEDAR: 00000498E
 
    -0-                         03/05/2004
 
/For further information: Neil McMillan, President & Chief Executive Officer, (306) 668-7505; Renmark Financial Communications: Edith English- eenglish(at)renmarkfinancial.com; Neil Murray-Lyon - nmurraylyon(at)renmarkfinancial.com; Media, Colette Saulnier - csaulnier(at)renmarkfinancial.com, (514) 939-3989/ (CRJ.)
 
 CO:  CLAUDE RESOURCES INC.
 ST:  Quebec
 IN:   MNG PCS
 SU:  ERN

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