In 2004, gold sales volume at Claude’s Seabee mine was 41,200 ounces from 187,000 tonnes milled at a grade of 7.15 grams per tonne. This compares to 2003 volumes of 50,800 ounces from 209,000 tonnes milled at a grade of 7.95 grams per tonne.

Production in 2004 was 22% below budget as a result of reduced tonnes broken and milled, as well as grade below the mine’s long-term average. Grade decline was due primarily to drill results from certain stoping blocks not translating when mined and milled. These lower head grades resulted in fewer working places and, correspondingly, fewer tonnes broken.

Development expenditures, which comprise most of the capital costs incurred in 2004, were higher than average as the lower head grades of certain stoping blocks necessitated additional development. The Company developed two new structures, the 161 and 162 zones at the 395 to 495 levels.

The mine plan for 2005 forecasting sales volumes of 46,000 ounces, is closer to historic levels. Most of the ore will be accessed from the 2B and 2C sections of the mine between the 570 metre level and the 730 metre level, as well as the newly developed 161 and 162 zones on the 395 and 495 level. Development costs should return to historical levels as the long haulage drives of 2004 are not required in the near term.

The Company has budgeted $2 million to expand the Seabee mill from its current rate of 550 tonnes per day to 1,100 tonnes per day. The increased capacity allows greater flexibility when developing stoping blocks and ore bodies.

Reserves and resources at Seabee are independently reviewed annually. At February 1, 2005, reserves stood at 732,700 tonnes at 6.89 grams per tonne, or 162,400 ounces. An additional 1,406,200 tonnes at 8.16 grams per tonne, or 369,100 ounces, is in the resource category. Over the past 13 years, the Company has successfully upgraded over 100% of its resources to reserves.

Claude expects to run two underground drills at Seabee for most of 2005 to ensure orderly mine development and to upgrade resources to reserves to replace 2005 production. Total underground drilling will likely exceed 40,000 metres.

Seabee Area

Porky Lake lies three kilometres north of the Seabee mine. The Porky Main and West Zones are located in or close to the hinge area of the regional Porky Lake anticline. Mineralization is hosted by shear zones near the contact between mafic metavolcanic rocks and underlying feldspathic arenite. Both lithologies are extensively altered and quartz flooded. Pyrite, pyrrhotite, arsenopyrite and visible gold were routinely found in multiple lenses in the drill holes.

Drilling in 2004 in the Porky Main Zone consisted of 22 in-fill holes totaling 3,047 metres. The holes were collared on a grid of approximately 25 by 25 metres. Based on these and previously drilled holes, a resource estimation has identified 160,000 tonnes grading 7.50 grams per tonne (gpt) in the Indicated Mineral Resource category, with an additional 70,000 tonnes grading 10.43 gpt in the Inferred Mineral Resource category. This resource estimation was done using the sectional method, with a 3.0 gpt cut-off grade and a 42.5 gpt cutting factor.

The Porky West Zone is located approximately 1.5 kilometres northwest of the Porky Main Zone, in the northwest limb of the Porky Lake anticline. Mineralization in this structure is similar to that in the Main Zone, but is largely hosted in the feldspathic arenite. Thirty-one delineation holes totaling 5,027 metres were drilled in 2004 on the West Zone, also on a grid of approximately 25 by 25 metres. Using a cut-off grade of 3.0 gpt and a 30.0 gpt cutting factor and sectional method, the West Zone is estimated to contain a total of 90,000 tonnes grading 7.33 gpt in the Indicated Mineral Resource category, and an additional 130,000 tonnes grading 5.0 gpt in the Inferred Mineral Resource category.The zone is open along strike further to the northwest, as indicated by surface exploration that has returned high-grade grab samples.

A 6.8 kilometre all-weather road has been constructed between the Porky Lake West Zone and the Seabee mill. Environmental sampling and evaluation for bulk sampling on the zones have been completed. Application for bulk sampling for the two zones has been filed with the regulatory government agencies. Permitting is expected to be granted, with a bulk sample portal planned to start in the second quarter of 2005.

In addition to the delineation drills in the Main and West Zones, 25 exploratory holes totaling 5,710 metres were drilled on the eastern limb of the Porky Lake anticline, also targeting the contact between the mafic metavolcanic rocks and feldspathic arenite. This phase of the drill program identified a wide mineralized corridor (10 to 20 metres) that routinely returned assays of 1 to 2 gpt. Within this corridor and associated with carbonate and chloritic alteration, drilling returned multiple high-grade sulfide-quartz vein intercepts, up to 31.87 gpt over 6.3 metres.

The Santoy Lake property is located about 11.5 kilometres from Seabee. The property is underlain by the Pine Lake greenstone belt of metamorphosed mafic volcanic, volcaniclastic and sedimentary rocks, which have been intruded by granitoid sills. Seven gold zones had been discovered on the property during the Company’s previous prospecting programs. The 2004 holes were drilled in Zone 7 (48 holes totaling 6,164 metres), Zone 8 (21 holes totaling 2,797 metres), Zone 6 (5 holes totaling 598 metres), and in the area between these zones (23 holes totaling 2,678 metres).

The zones are hosted in a 4 kilometre long, northwest trending and northeast dipping sheared and mineralized corridor in mafic volcaniclastic rocks and granitoid sills. Gold mineralization occurs in gold-sulfide-chlorite-quartz veins in the shear zones, near or in the granodiorite and granite sills. Gold-bearing chlorite quartz veins 1 to 7 metres thick were routinely intercepted in the holes drilled in Zones 7 and 8. In addition, a number of holes drilled between Zones 7 and 8 also intercepted sporadic high-grade gold values.

Delineation of the structures in the Santoy property is still in the early stages, but focused drilling on Zone 7 has proven adequate for a preliminary resource estimation. Using the sectional method with a 3.0 gpt cut-off grade and a 30.0 gpt cutting factor, Zone 7 is estimated to have an Indicated Mineral Resource of 190,000 tonnes grading 8.42 gpt and an additional 10,000 tonnes grading 10.0 gpt in the Inferred Mineral Resource category. Permit applications for an all-weather access road and bulk sampling have been submitted to the government. Permitting is expected to be granted with a bulk sample portal planned to start in the third quarter of 2005. Meanwhile, further drilling is continuing on this structure.

Exploration drill programs in 2004 also took place elsewhere on the Claude property (11 holes, 1,960 metres) and on the Claude and Shane Resources Ltd. jointly owned Shane property (2 holes, 251 metres). The two properties are both within 10 kilometres of the Seabee mine. On the Claude property previous surface prospecting programs discovered samples with gold values up to 120 gpt while several holes during the 2004 drill program intercepted values up to 44 gpt over 2 metres. The planned all-weather road to Santoy, Zone 7 from Seabee passes large portions of the two properties. Follow-up prospecting and exploration programs are planned for these properties in 2005 once easier access is available.