Claude Resources Inc. (Claude) released its third quarter results for the 2012 year on Nov. 14 and maintains that the Madsen Mine property is in good standing and awaiting drill results and an economic assessment which will help determine how its future direction will unfold.
“We completed, at the end of September, our Phase II Deep Drilling program at Madsen designed to understand the down plunge continuity of the high grade number 8 Zone and the continuity of the original Bay Zones (McVeigh and Austin Tuffs) that produced most of the gold in the Red Lake camp,” said Neil McMillan, Claude’s President and Chief Executive Officer.
The drilling program included two underground rigs and one surface rig with 19,000 metres having been completed as of last week. Visible gold was noted in several of the drill targets. The assay results from the drilling program were still coming in on the morning of Nov. 13 and will be released in full in the coming weeks.
“The next step for us here is to do an economic assessment on Madsen,” he continued. “Once we have all the drill information back we will have a good look at it as to its potential to go into production and try to get a handle on some of the costs that might be associated with that.”
McMillan went on to say that the Madsen project is “excellent” – comparing it to Claude’s “robust” Seabee Mine (150 km Northwest of Flin Flon, MB – in Saskatchewan).
The Madsen project is also an attractive one as the capital costs associated with its start-up are relatively low. The site still has a fully functioning 500 tonne per day mill (which would likely need to be expanded), a 1,257 metre timbered shaft that has been undergoing dewatering over the past few years and is now about two thirds to three quarters of the way down and a fully permitted tailings pond.
“My observation is it costs about 5 thousand dollars in capital for every ounce of annual production if you go to start up a new mine,” said McMillan. “The thing about Seabee that’s so compelling is that we expect to be able to substantially increase our production probably for 1,500 – 2,000 dollars per ounce in capital. Madsen has that same potential – only with even higher grade (about 50 per cent higher).”
Claude will continue to do exploration work at Madsen but the company will first focus on what the mine is actually capable of from a production point of view.
“We will do whatever we have to on the Madsen and Amisk (Claude exploration project in northeastern Saskatchewan) projects and we don’t rule out any options…We’re going to get a much better idea through this year and in the first two quarters of next year as to what both these projets look like,” concluded McMillan.
Claude Resources Inc. became the owner of 100 per cent of the 10,000 acre Madsen Mine property and its shares in 1998. From 1938 until the mine closed in 1976, gold production exceeded 2.4 million ounces at an average grade of 0.28 ounces per tonne (9.02 grams per tonne). Historic production exceeded 100,000 ounces per year and was derived from both the ‘Tuff’ and ‘8 Zone’ Trends.