**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**


**FORM
      20-F**







o
              REGISTRATION STATEMENT PURSUANT TO
                SECTION
                12(b) OR 12 (g) OF THE SECURITIES EXCHANGE ACT OF
                1934.
  OR
  x
                  ANNUAL REPORT PURSUANT TO SECTION
                    13 OR 15(d)
                    OF THE SECURITIES EXCHANGEACT
                    OF 1934.For
                      the fiscal year ended: December
                      31, 2004OR
  o
                  TRANSITION REPORT PURSUANT TO
                    SECTION 13 OR
                    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For
                    the transition period from __________ to
                    _______________





**Commission
      file number:** **0-49823**





**CLAUDE
      RESOURCES INC.**





(Exact
      name of Registrant as specified in its charter)





**CANADA**





(Jurisdiction
      of incorporation or organization)





**224
      4** **th** **AVENUE SOUTH, SUITE 200, SASKATOON, SASKATCHEWAN S7K 5M5
      CANADA**





(Address
      of principal executive offices)





**Securities
      registered or to be registered pursuant to Section 12(b) of the
      Act:**




Title
                of each class
            Name
                of each exchange on which
                registered**Common
                Shares**
            **American
                Stock
                Exchange**





**Securities
      registered or to be registered pursuant to Section 12(g) of the
      Act:**




**None**


(Title
      of Class)





Securities
      for which there is a reporting obligation pursuant to Section 15(d) of the
      Act.





**None**





(Title
      of Class)





**Indicate
      the number of outstanding shares of each of the issuer's classes of capital
      or
      common stock as of**


December
      31, 2004: 61,691,707 Common shares.





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been




subject to such filing requirements
              for
              the past 90 days.
            x
                Yes o
                No




Indicate
      by check mark which financial statement item the registrant has elected to
      follow.





x
      Item 17 o
      Item 18




Page
      1 of
      67


Index
      to
      Exhibits on Page 67





**Table
      of Contents**





**Claude
      Resources Inc.**


**Form
      20-F**





**Page**


Statement
                Regarding Forward-Looking Information
            4Glossary
                of Terms
            
            5**Part
                I:**Item
                1:
            Identity
                of Directors, Senior Management and Advisors
            12Item
                2:
            Offer
                Statistics and Expected Timetable
            12Item
                3:
            Key
                InformationA.
            Selected
                Financial Data
            12B.
            Capitalization
                and Indebtedness
            14C.
            Reasons
                for the Offer and Use of Proceeds
            14D.
            Risk
                Factors
            14Item
                4:
            Information
                on the CompanyA.
            History
                and Development of the Company
            19B.
            Business
                Overview
            20C.
            Organizational
                Structure
            21D.
            Property,
                Plants and Equipment
            22Item
                5:
            Operating
                and Financial Review and ProspectsA.
            Operating
                Results
            44B.
            Liquidity
                and Capital Resources
            47C.
            Research
                and Development, Patents and Licenses, etc
            49D.
            Trend
                Information
            49E.
            Off-Balance
                Sheet Arrangement
            50F.
            Tabular
                Disclosure of Contractual Obligations
            51G.
            Safe
                Harbor
            51Item
                6:
            Directors,
                Senior Management and EmployeesA.
            Directors
                and Senior Management
            51B.
            Compensation
            53C.
            Board
                Practices
            54D.
            Employees
            54E.
            Share
                Ownership
            54Item
                7:
            Major
                Shareholders and Related Party TransactionsA.
            Major
                Shareholders
            56B.
            Related
                Party Transactions
            56C.
            Interests
                of Experts and Counsel
            57Item
                8:
            Financial
                InformationA.
            Consolidated
                Statements and Other Financial Information
            58B.
            Significant
                Changes
            58





2


Item
                  9:
              The
                  Offer and ListingA.
              Offer
                  and Listing Details
              58B.
              Plan
                  of Distribution
              58C.
              Markets
              58D.
              Selling
                  Shareholders
              58E.
              Dilution
              59F.
              Expenses
                  of the Issue
              59Item
                  10:
              Additional
                  InformationA.
              Share
                  Capital
              59B.
              Memorandum
                  and Articles of Association
              59C.
              Material
                  Contracts
              59D.
              Exchange
                  Controls
              59E.
              Taxation
              60F.
              Dividends
                  and Paying Agents
              64G.
              Statement
                  by Experts
              64H.
              Documents
                  on Display
              64I.
              Subsidiary
                  Information
              64Item
                  11:
              Quantitative
                  and Qualitative Disclosures About Market Risk
              64Item
                  12:
              Description
                  of Securities Other Than Equity Securities
              65**Part
                  II:**Item
                  13:
              Defaults,
                  Dividend Arrearages and Delinquencies
              65Item
                  14:
              Material
                  Modifications to the Rights of Securities Holders and Use of
                  Proceeds
              65Item
                  15:
              Controls
                  and Procedures
              65Item
                  16A:
              Audit
                  Committee Financial Expert
              66Item
                  16B:
              Code
                  of Ethics
              66Item
                  16C:
              Principal
                  Accountant Fees and Services
              66Item
                  16D:
              Exemption
                  from the Listing Standards for Audit Committees
              66Item
                  16E:
              Purchases
                  of Equity Securities by the Issues and Affiliated
                  Purchases
              66**Part
                  III:**Item
                  17:
              Financial
                  Statements
              66Item
                  18:
              Financial
                  Statements
              66Item
                  19:
              Exhibits
              
              67





3





**STATEMENT
      REGARDING FORWARD-LOOKING INFORMATION**





Certain
      statements in this Annual Report under the captions “Risk Factors”, “Business
      Overview”, “Operating and Financial Review and Prospects” and “Quantitative and
      Qualitative Disclosures about Market Risk” and elsewhere in this Annual Report
      and the documents incorporated herein by reference constitute “forward-looking
      statements” within the meaning of the Private Securities Litigation Reform Act
      of 1995. Some forward-looking statements may be identified by such terms as
      “believes”, “anticipates”, “intends”, or “expects”. These forward-looking
      statements are based on the Claude Resources Inc.’s (the Company’s) current
      expectations and projections about future events and financial trends affecting
      the financial condition of its business and the industry in which it operates.
      Such forward-looking statements involve known and unknown risks, uncertainties
      and other factors, which may cause the actual results, performance or
      achievements of the Company, or industry results to be materially different
      from
      any future results, performance, or achievements expressed or implied by such
      forward-looking statements. Such factors include, among others, the following:
      general economic and business conditions; industry capacity; the ability of
      the
      Company to implement its business strategy; changes in, or the unintentional
      failure to comply with,government regulations (especially safety and
      environmental laws and regulations); changes in the uses of gold; gold and
      oil
      and gas price volatility; increased competition; inherent mining and oil and
      gas
      production risks; exploration programs not being successful; inability to obtain
      financing; actual reserves being lower than those estimated; inability to obtain
      or, cancellation of, government permits; changes to regulations and mining
      law;
      increased reclamation obligations; title defects with respect to properties;
      and
      foreign currency exchange rate fluctuations.





**METRIC
      EQUIVALENTS**





For
      ease of reference, the following factors for converting metric measurements
      into
      imperial equivalents are provided:





**To
                Convert from Metric**
            **To
                Imperial**
            **Multiply
                by**Hectares
            Acres
            2.471Metres
            Feet
                (ft.)
            3.281Kilometres
                (km)
            Miles
            0.621Tonnes
            Tons
                (2,000 pounds)
            1.102Grams/tonne
            Ounces
                (troy/ton)
            0.029





4


**GLOSSARY
      OF TERMS**





**S.E.C
                Industry Guide**
            
            **National
                Instrument 43-101****Reserve:**That
                part of a mineral deposit which could be economically and legally
                extracted or produced at the time of the reserve determination. The
                United
                States Securities and Exchange Commission requires a final or full
                Feasibility Study to support either Proven or Probable Reserves and
                does
                not recognize other classifications of mineralized deposits.
            
            **Mineral
                Reserve:**The
                economically mineable part of a Measured or Indicated Mineral Resource
                demonstrated by at least a Preliminary Feasibility Study. This study
                must
                include adequate information on mining, processing, metallurgical,
                economic and other relevant factors that demonstrate, at the time
                of
                reporting, that economic extraction can be justified.**Proven
                Reserves:**Reserves for which a quantity is computed from dimensions revealed
                in
                outcrops, trenches, workings or drill holes, grade and/or quality
                are
                computed from the results of detailed sampling and measurement, are
                spaced
                so closely and the geologic character is so well defined that size,
                shape,
                depth, and mineral content of reserves are well established.
            
            **Proven
                Mineral Reserve:**The
                economically mineable part of a Measured Mineral Resource demonstrated
                by
                at least a Preliminary Feasibility Study. This study must include
                adequate
                information on mining, processing, metallurgical, economic and other
                relevant factors that demonstrate, at the time of reporting, that
                economic
                extraction is justified.**Probable
                Reserves:**For
                which quantity and grade and/or quality are computed from information
                similar to that used for proven reserves, but the sites for inspection,
                sampling and measurement are farther apart or are otherwise less
                adequately spaced. The degree of assurance, although lower than that
                for
                proven reserves, is high enough to assume continuity between points
                of
                observation.
            
            **Probable
                Mineral Reserve:**The
                economically mineable part of an Indicated, and in some circumstances,
                a
                Measured Mineral Resource, demonstrated by at least a Preliminary
                Feasibility Study. This study must include adequate information on
                mining,
                processing, metallurgical, economic and other relevant factors that
                demonstrate, at the time of reporting, that economic extraction can
                be
                justified.








**ARTC
      -** Alberta
      Royalty Tax Credit.





**Alteration
      -** any
      change in the mineral composition of a rock brought about by physical or
      chemical means.





**Amphibolite** -
      a metamorphic rock that may have originated as a basalt lava flow or mafic
      dike/sill.





**Arsenopyrite** -
      the most common arsenic mineral and principal ore of arsenic; occurs in many
      sulfide ore deposits, particularly those containing lead, silver, and
      gold.





**Assaying
      -** laboratory
      examination that determines the content or proportion of a specific metal (ie:
      silver) contained within a sample. Technique usually involves
      firing/smelting.





**Bbls
      -** barrels;
      34.972 Imperial gallons per barrel or 42 U.S. gallons per barrel.





**Boudinage** -
      a structure common in strongly deformed sedimentary and metamorphic rocks,
      in
      which an original continuous competent layer or bed has been stretched, thinned
      and broken at regular intervals into bodies resembling boudins or
      sausages.





**BQ
      Drill** -
      a drill having a core diameter of 36.5 mm and a hole diameter of 60
      mm.





**Bulk
      Sample** -
      a collection of representative mineralized material whose location, geologic
      character and metal assay content can be determined and then used for
      metallurgical or geotechnical testing purposes.





5


**Carbon-in-pulp** -
      a method of recovering gold and silver from pregnant cyanide solutions by
      absorbing the precious metals within the solution onto granules of activated
      carbon.





**Care
      and Maintenance Basis -** in
      reference to mining means the indefinite suspension of all operations except
      those services and personnel necessary to insure the safeguarding of mining
      property and assets against controllable acts.





**Chalcopyrite** -
      a sulphide mineral of copper and iron.





**Clastic** -
      f ragments
      of minerals and rocks that have been moved individually from their places of
      origin.





**Core
      Samples -** the
      cylindrical form of rock called “core” that is extracted from a diamond drill
      hole. Mineralized sections are separated and these samples are sent to a
      laboratory for analysis.





**Cross-cut** -
      a horizontal opening driven from a shaft or haulage drift at an oblique or
      right
      angle to the strike of a vein or other orebody.





**Cut-off
      Grade -** the
      lowest grade of mineralized material that qualifies as reserve in a deposit
      (ie:
      contributing material of the lowest assay that is included in a reserve
      estimate).





**Cut
      Value** -
      applies to assays that have been reduced by a statistically determined maximum
      to prevent erratic high values from inflating the average.





**“Developed”**  **or**  **“Development”
      -** in
      oil and gas refers to land to which proved or probable reserves have been
      assigned, with any wells drilled in a developed area specified as development
      wells.





**Diamond
      Drilling** -
      a type of rotary drilling in which diamond bits are used as the rock-cutting
      tool to produce a recoverable drill core sample of rock for observation and
      analysis.





**Dip** -
      the angle that a structural surface, a bedding or fault plane, makes with the
      horizontal, measured perpendicular to the strike of the structure.





**Disseminated** -
      where minerals occur as scattered particles in the rock.





**Dore** -
      the final saleable product from a gold mine.





**Drift** -
      a horizontal underground opening that follows along the length of a vein or
      rock
      formation.





**Dry
      Well** -
      a well found to be incapable of producing hydrocarbons in quantities sufficient
      to justify completion of the well.





**Electrowinning** -
      the process of recovering metal from solution by electrolysis.





**Environmental
      Baseline Study -** a
      geotechnical study that monitors and establishes the numerous naturally
      occurring base levels present within a specific area/environment. These can
      include: water chemistry, flora and fauna.





**Exploration
      -** work
      involved in searching for ore, from prospecting to diamond drilling or driving
      a
      drift.





**Exploration
      Wells** -
      wells drilled to find hydrocarbons in an unproved area.





**Face** -
      the end of a drift, crosscut or stope in which work is taking
      place.





**Facies** -
      the character and composition of sedimentary deposits.





**Fault** -
      a fracture or break in rock along which there has been movement.




6


**Feasibility
      Study** -
      is a definitive study of the viability of a mineral project by a qualified
      professional that defines: (1) mining methods, pit configuration, mine
      scheduling, mine equipment and all related costing, (2) method of mineral
      processing and all related plant, equipment and costing, (3) necessary
      determination of all infrastructure required and relevant costs and (4) all
      requirements of government and markets for mine operation. A definitive
      financial analysis of the mineral project taking into consideration all relevant
      factors, which will establish the presence of a Mineral Reserve and the details
      of its economic viability.





**Felsic
      -** an
      adjective describing an igneous rock having mostly light colored minerals and
      rich in silica, potassium and/or sodium rich aluminosilicated
      minerals.





**Fire
      Assay** -
      the assaying of metallic minerals by use of a miniature smelting procedure
      with
      various agents.





**Footwall** -
      the rock on the underside of a vein or ore structure.





**Fracture** -
      a break or crack in rock.





**Fracture-controlled
      -** a
      type of mineralization where circulating fluids deposit minerals preferentially
      upon fracture planes within a rock mass.





**Gabbro** -
      a coarse-grained, crystalline, dark igneous rock.





**Geochemistry** -
      the study of the chemical properties of rocks.





**Geophysical
      Survey** -
      a scientific method of prospecting that measures the physical properties of
      rock
      formations. Common properties investigated include magnetism, specific gravity,
      electrical conductivity and radioactivity.





**Gneiss** -
      a layered or banded crystalline metamorphic rock, the grains of which are
      aligned or elongated into a roughly parallel arrangement.





**Grade** -
      the metal content of rock with precious metals, grade can be expressed as troy
      ounces or grams per tonne of rock.





**Gross
      -** in
      reference to land or wells means a 100% interest. When referring to the
      Company’s natural gas, crude oil, and natural gas liquids production, it means
      total projected production or reserves from the property.





**Gross
      Reserves** -
      total remaining projected production from a 100% interest in the applicable
      property.





**Head
      Grade** -
      the average grade of ore fed into a mill.





**Highwall** -
      the unexcavated face of ore in an underground stope.





**Hydrothermal** -
      the products or the actions of heated waters in a rock mass such as a mineral
      deposit precipitating from a hot solution.





**Hydrothermal
      Alteration -** the
      process by which heated or superheated water/solutions alter the chemistry
      of
      the rocks they circulate through.





**ICA
      -** *Investment
      Canada Act (Canada)*





**Igneous
      -** a
      primary type of rock formed by the cooling of molten material.





**Indicated
      Mineral Resource -** is
      that part of a Mineral Resource for which quantity, grade or quality, densities,
      shape and physical characteristics can be estimated with a level of confidence
      sufficient to allow the appropriate application of technical and economic
      parameters and to support mine planning and evaluation of the economic viability
      of the deposit. The estimate is based on detailed and reliable exploration
      and
      testing information gathered through appropriate techniques from locations
      such
      as outcrops, trenches, pits, workings and drill holes that are spaced closely
      enough for geological and grade continuity to be reasonably
      assumed.





7


**Inferred
      Mineral Resource -** is
      that part of a Mineral Resource for which quantity and grade or quality can
      be
      estimated on the basis of geological evidence and limited sampling and
      reasonably assumed, but not verified, geological and grade continuity. The
      estimate is based on limited information and sampling gathered through
      appropriate techniques from locations such as outcrops, trenches, pits, workings
      and drill holes.





**Intrusion;
      Intrusive -** molten
      rock that is intruded (injected) into spaces that are created by a combination
      of melting and displacement.





**ITA** ***-*** *Income
      Tax Act (Canada)*





**Lens** -
      a body of ore that is thick in the middle and tapers towards the
      ends.





**LT
      -** long
      tons.





**Mafic** -
      igneous rocks composed mostly of dark, iron-and magnesium-rich
      minerals.





**MCF
      -** thousand
      cubic feet.





**MMCF
      -** millions
      of cubic feet.





**MSTB
      -** thousands
      of stock tank barrels.





**Mesothermal
      -** a
      hydrothermal mineral deposit formed at considerable depth and in the temperature
      range of 200 to 300 degrees C (Celsius).





**Measured
      Resources -** in
      reference to minerals, means a quantity is computed from dimensions revealed
      in
      outcrops, trenches, workings, or drill holes; grade and (or) quality are
      computed from the results of detailed sampling. The sites for inspection,
      sampling, and measurement are spaced so closely and the geological character
      is
      so well defined that size, shape, depth and mineral content of the resource
      are
      well established.





**Metamorphosed
      Rocks -** rocks
      that are changed in character by processes of intense heat and pressure deep
      within the earth’s crust.





**Metallurgy
      -** the
      study of the extractive processes which produce minerals from their host
      rocks.





**Metallurgical
      Tests -** scientific
      examinations of rock/material to determine the optimum extraction of metal
      contained. Core samples from diamond drill holes are often used as
      representative samples of the mineralization for this test work.





**Mineral
      -** a
      naturally formed chemical element or compound having a definitive chemical
      composition and usually a characteristic crystal form.





**Mineralization
      -** a
      natural concentration in rocks or soil of one or more metalliferous
      minerals.





**Mineral
      Reserve -** the
      economically mineable part of a Measured or Indicated Mineral Resource
      demonstrated by at least a Preliminary Feasibility Study. This study must
      include adequate information on mining, processing, metallurgical, economic
      and
      other relevant factors that demonstrate, at the time of reporting, that economic
      extraction can be justified.





**Mineral
      Resource** -
      a concentration or occurrence of natural, solid, inorganic, or fossilized
      organic material in or on the Earth’s crust in such form and quantity and of
      such a grade or quality that it has reasonable prospects for economic
      extraction. The location, quantity, grade, geological characteristics, and
      continuity of a Mineral Resource are known, estimated or interpreted from
      specific geological evidence and knowledge.





8


**Muck** -
      ore or rock that has been broken by blasting.





**Muskeg** -
      a thick deposit of decayed vegetable matter forming swampy areas.





**Natural
      Gas Liquids or NGLs** -
      primarily consist of propane, butane and condensate.





**Net
      Profit Interest -** a
      phrase used to describe a royalty payment made by a producer of metals based
      on
      a percentage of revenue from production, less the deduction of the equivalent
      percentage of costs of commercial production, including exploration, capital
      and
      operating costs.





**Net
      Smelter Return Royalty/ NSR Royalty -** a
      phrase used to describe a royalty payment made by a producer of metals based
      on
      a percentage of gross metal production from the property, less deduction of
      certain limited costs including smelting, refining, transportation and insurance
      costs.





**Pillar** -
      a block of solid ore or other rock left in place to structurally support the
      shaft, walls or roof of a mine.





**Plunge** -
      the vertical angle a linear geological feature makes with the horizontal
      plane.





**Porphyry** -
      any igneous rock in which relatively large crystals are set in a fine-grained
      groundmass.





**Prefeasibility
      Study** -
      a comprehensive study of the viability of a mineral project that has advanced
      to
      a stage where the mining method, in the case of underground mining, or the
      pit
      configuration, in the case of an open pit, has been established, and where
      an
      effective method of mineral processing has been determined. This study must
      include a financial analysis based on reasonable assumptions of technical
      engineering, operating, and economic factors, which are sufficient for a
      Qualified Person acting reasonably, to determine if all or part of the Mineral
      Resource may be classified as a Mineral Reserve.





**Probable
      Mineral Reserve -** the
      economically mineable part of an indicated, and in some circumstances, a
      Measured Mineral Resource, demonstrated by at least a Preliminary Feasibility
      Study. This study must include adequate information on mining, processing,
      metallurgical, economic and other relevant factors that demonstrate, at the
      time
      of reporting, that economic extraction can be justified.





**Proven
      Mineral Reserve -** the
      economically mineable part of a Measured Mineral Resource demonstrated by at
      least a Preliminary Feasibility Study. This study must include adequate
      information on mining, processing, metallurgical, economic and other relevant
      factors that demonstrate, at the time of reporting, that economic extraction
      is
      justified.





**Pulp** -
      a mixture of ground ore and water.





**Pyrite
      -** an
      iron sulphide mineral (FeS 2 ),
      the most common naturally occurring sulphide mineral.





**Pyrrhotite** -
      a bronze-colored, often magnetic iron sulphide mineral.





**Raise
      -** a
      vertical or inclined underground working that has been excavated from the bottom
      upward.





**Qualified
      Person -** an
      individual who is an engineer or geoscientist with at least five (5) years
      of
      experience in mineral exploration, mine development, mine operation, project
      assessment or any combination of these; has experience relevant to the subject
      matter of the mineral project and technical report; and is a member in good
      standing of a professional association.





**Quartz** -
      crystalline silica; often forming veins in fractures and faults within older
      rocks.





**Quartz
      Monzonite -** a
      coarse grained, quartz rich igneous rock usually occurring as a smaller rock
      mass associated with major granitic bodies.





9


**Recovery
      Rate** -
      the percentage of valuable metal in the ore that is recovered by metallurgical
      treatment.





**Refractory** -
      ore that resists the action of chemical reagents in the normal treatment
      processes and which may require pressure leaching or other means to affect
      the
      full recovery of the valuable minerals.





**Resource** -
      a concentration of mineral material in such form and amount that economic
      extraction of a commodity from the concentration is currently or potentially
      feasible. Locations, grade, quality or quantity are estimated from specific
      geologic evidence.





**Reverse
      Circulation Drilling (RC) -** a
      drilling method used in geological appraisals whereby the drilling fluid passes
      inside the drill stem to a down-the-hole percussion bit and returns to the
      surface outside the drill stem carrying the drill chip samples.





**Roasting** -
      to heat a refractory ore to drive off volatile substances or oxidize the ore.
      The oxidation of the ore liberates the gold.





**Sericite** -
      a fine-grained potassium mica found in various metamorphic rocks.





**Shear
      Zone** -
      a zone in which shearing has occurred on a large scale so that the rock is
      crushed and brecciated.





**Showing** -
      s urface
      occurrence of mineral.





**Shrinkage
      Stoping** -
      any mining method in which broken ore is temporarily retained in the stope
      to
      provide a working platform and/or to offer temporary support to the stope walls
      during active mining.





**Silification** -
      the insitu alteration of a rock, which involves an increase in the proportion
      of
      silica minerals.





**Sill** -
      an intrusive sheet of igneous rock of roughly uniform thickness that has been
      forced between the bedding planes of existing rock; the initial horizontal
      drift
      along the strike of the ore vein.





**Specific
      Gravity** -
      the ratio between the weight of a unit volume of a substance and that of water.





**Splay** -
      one of a series of divergent small faults or fractures at the extremities of
      a
      major fault.





**STB** -
      stock tank barrels equals 34.972 Imperial gallons or 42 U.S.
      gallons.





**Stope** -
      an underground excavation from which ore has been extracted, either above or
      below a level. Access to stopes is usually by way of adjacent
      raises.





**Stratigraphy** -
      the sequence of bedded rocks in a particular area.





**Supergene
      Effects -** the
      near surface effect of the water/solutions percolating down from the earth’s
      surface (weathering); these solutions can dissolve minerals at the surface
      and
      then reconcentrate at depth.





**Synform
      -** a
      fold whose limbs close downward in strata for which the stratigraphic sequence
      is unknown.





**Tailings
      Pond** -
      a low-lying depression used to confine tailings, the prime function of which
      is
      to allow enough time for heavy metals to settle out or for cyanide to be
      destroyed before water is discharged into the local watershed.





**Tonne** -
      a metric ton or 2,204 pounds.





**Tourmaline** -
      a complex, crystalized silicate containing boron.





**Trenching** -
      the process of exploration by which till is removed from a trench cut from
      the
      earth’s surface.





10


**Undeveloped
      Acreage -** in
      reference to oil and gas reserves, means land to which no proven or probable
      reserves have been assigned.





**Unitized
      -** the
      consolidation of several producing leases into one operating unit; is usually
      undertaken to enable greater recovery of natural gas, crude oil and liquids
      because it allows for more economical operations.





**Vein
      -** a
      thin, sheet-like, cross-cutting body of hydrothermal mineralization, principally
      quartz.





**Volcanics
      -** those
      originally molten rocks, generally fine grained, that have reached or nearly
      reached the Earth’s surface before solidifying.





**Waste** -
      barren rock in a mine, or mineralized material that is too low in grade to
      be
      mined and milled at a profit.





**Waterflood** -
      a method of secondary recovery in which water is injected into an oil reservoir
      to force additional oil out of the reservoir rock and into the well bore of
      producing wells.





**Weighted
      Average Exercise Price** -
      the average price calculated when the grant price of each employee’s stock
      option is multiplied by the number of options for each option grant price.
      The
      result is summed and the total divided by the sum of the options
      granted.





**Weighted
      Average Remaining Life** -
      the average remaining life of employee stock options outstanding calculated
      when
      the remaining life of each employee’s stock options are multiplied by the number
      of options for each grant price. The result is summed and the total divided
      by
      the sum of the options granted.





**Working
      interest**  **or**  **WI
      -** in
      reference to oil and gas reserves, means the interest held by Claude in land
      or
      wells. This interest normally bears its proportionate share of capital and
      operating costs as well as royalties or other production burdens. The working
      interest percentage is expressed before royalty interests.





**Working
      Interest Reserves -** in
      reference to oil and gas reserves, means the remaining reserves of the property
      multiplied by the Company’s percentage working interest.





11


**Part
      I**





**Item
      1. Identity of Directors, Senior Management and
      Advisers**





This
      Form 20-F is being filed as an Annual Report under the Exchange Act and, as
      such, there is no requirement to provide any information under this
      section.





**Item
      2. Offer Statistics and Expected Timetable**





This
      Form 20-F is being filed as an Annual Report under the Exchange Act and, as
      such, there is no requirement to provide any information under this
      section.





**Item
      3. Key Information**





**A.** **Selected
      Financial Data**





The
      following table summarizes selected consolidated financial data for the Company
      (stated in thousands of Canadian dollars, except per share amounts) prepared
      in
      accordance with Canadian generally accepted accounting principles (“Canadian
      GAAP”). The table also summarizes certain corresponding information prepared in
      accordance with United States generally accepted accounting principles (“U.S.
      GAAP”). The information in the table was extracted from the more detailed
      consolidated financial statements for the years presented. Information for
      the
      2002 through 2004 financial years should be read in conjunction with the
      consolidated financial statements of the Company included in this annual report
      and with the information appearing under the heading Item 5 - “Operating and
      Financial Review and Prospects”. Reference is made to Note 21 of the December
      31, 2004 consolidated financial statements of the Company included herein for
      a
      discussion of the material differences between Canadian GAAP and U.S. GAAP,
      and
      their effect on the Company’s financial position and results of operations.





**2004**
            
            
            **2003***
            
            
            **2002***
            
            
            **2001**
            
            
            **2000****Canadian
                Dollar Thousands****(except
                number of common shares and per share
                amounts)**Revenue
            
            
            32,215
            
            
            35,175
            
            
            27,406
            
            
            28,548
            
            
            33,466Net
                earnings (loss) from operations
            
            
            (598
            )
            
            1,798
            
            
            (1,911
            )
            
            (2,227
            )
            
            2,848Net
                earnings (loss)Canadian
                GAAP
            
            
            (598
            )
            
            1,798
            
            
            (1,911
            )
            
            (2,227
            )
            
            (48,759
            )U.S.
                GAAP
            
            
            (4,309
            )
            
            1,426
            
            
            (3,041
            )
            
            (1,697
            )
            
            (25,615
            )Wtd.
                Average Shares Outstanding
            
            
            59,768,983
            
            
            53,850,694
            
            
            46,919,331
            
            
            40,622,346
            
            
            38,963,975Share
                CapitalCanadian
                GAAP
            
            
            43,966
            
            
            38,850
            
            
            24,525
            
            
            18,362
            
            
            56,893U.S.
                GAAP
            
            
            97,668
            
            
            93,036
            
            
            94,080
            
            
            79,899
            
            
            73,736


*
      Effective January 1, 2004, the Company adopted the new Handbook Section 3870,
      “Stock-based Compensation and other Stock-based Payments”. This section requires
      that a fair-value based method of accounting be applied for all stock-based
      compensation plans. The Company adopted the fair-value method of accounting
      for
      employee stock options and other stock-based payments with retroactive
      reinstatement to January 1, 2002.




12


Earnings
                  (loss) per share(1)Canadian
                    GAAP
                
                
                (0.01
                )
                
                0.03
                
                
                (0.04
                )
                
                (0.05
                )
                
                (1.25
                )U.S.
                    GAAP
                
                
                (0.07
                )
                
                0.03
                
                
                (0.06
                )
                
                (0.04
                )
                
                (0.66
                )Total
                    AssetsCanadian
                    GAAP
                
                
                64,901
                
                
                51,817
                
                
                34,813
                
                
                28,670
                
                
                30,973U.S.
                    GAAP
                
                
                59,857
                
                
                48,885
                
                
                32,718
                
                
                27,421
                
                
                29,644LiabilitiesCanadian
                    GAAP
                
                
                15,042
                
                
                6,581
                
                
                5,621
                
                
                4,034
                
                
                5,579U.S.
                    GAAP
                
                
                15,443
                
                
                6,589
                
                
                6,926
                
                
                5,116
                
                
                6,716Net
                    AssetsCanadian
                    GAAP
                
                
                49,859
                
                
                45,236
                
                
                29,192
                
                
                24,636
                
                
                25,394U.S.
                    GAAP
                
                
                44,414
                
                
                42,296
                
                
                25,792
                
                
                22,305
                
                
                22,928
  (1)
                    No material difference between basic and diluted
                    amounts.





**Exchange
      Rate Data**





Unless
      otherwise indicated, all monetary references herein are denominated in Canadian
      dollars.





The
      following table sets forth the average rates of exchange for one U.S. dollar
      expressed in terms of Canadian dollars in effect on the last day of the month
      in
      each of the last five years, and the range of high and low exchange rates for
      such periods:





**For
                the Years ended December 31,****2004**
            
            
            **2003**
            
            
            **2002**
            
            
            **2001**
            
            
            **2000**Average
                ($)
            
            
            1.30
            
            
            1.40
            
            
            1.57
            
            
            1.55
            
            
            1.49High
                ($)
            
            
            1.40
            
            
            1.57
            
            
            1.62
            
            
            1.60
            
            
            1.43Low
                ($)
            
            
            1.18
            
            
            1.29
            
            
            1.50
            
            
            1.49
            
            
            1.44Year
                End Rate ($)
            
            
            1.20
            
            
            1.29
            
            
            1.58
            
            
            1.59
            
            
            1.56








13




The
      following table sets forth the high and low exchange rates for one U.S. dollar
      expressed in terms of Canadian dollars for each of the last six
      months:





**For
                the Periods
                ended****May**
            
            
            **April**
            
            
            **March**
            
            
            **February**
            
            
            **January**
            
            
            **December****2005**
            
            
            **2005**
            
            
            **2005**
            
            
            **2005**
            
            
            **2005**
            
            
            **2004**High
                for the month ($)
            
            
            1.27
            
            
            1.26
            
            
            1.25
            
            
            1.26
            
            
            1.24
            
            
            1.24Low
                for the month ($)
            
            
            1.24
            
            
            1.21
            
            
            1.20
            
            
            1.23
            
            
            1.20
            
            
            1.19





Exchange
      rates are based upon the noon buying rate in New York City for cable transfers
      in Canadian dollars as certified for customs purposes by the Federal Reserve
      Bank of New York. As of May 31, 2005, the noon buying rate, as quoted by the
      Federal Reserve Bank of New York was CDN$/US$ 1.2510.





**B.**
            **Capitalization
                and Indebtedness**





This
      Form 20-F is being filed as an Annual Report under the Exchange Act and, as
      such, there is no requirement to provide any information under this
      section.





**C.**
            **Reasons
                for the Offer and Use of
                Proceeds**





This
      Form 20-F is being filed as an Annual Report under the Exchange Act and, as
      such, there is no requirement to provide any information under this
      section.





**D.**
            **Risk
                Factors**





An
      investment in the common shares of the Company must be considered speculative
      due to the nature of the Company’s business and the present stage of exploration
      and development of its mineral deposit properties. In addition to the other
      information contained in the Company’s 2004 annual report, the following risk
      factors should be considered in evaluating the Company.





**The
      Company is Involved in the Resource Industry which has Certain Inherent
      Exploration and Operating Risks**





The
      level of profitability of the Company in future years will depend mainly on
      gold
      prices, the costs of production at the Seabee mine and whether any of the
      Company’s exploration stage properties can be brought to production. The
      exploration for and development of mineral deposits involves significant risks,
      which even a combination of careful evaluation, experience and knowledge may
      not
      eliminate. It is impossible to ensure that the current and future exploration
      programs on the Company’s mineral properties will establish reserves. Whether an
      ore body will continue to be commercially viable depends on a number of factors,
      some of which are the particular attributes of the deposit, such as size, grade
      and proximity to infrastructure, as well as metal prices, which cannot be
      predicted and which have been highly volatile in the past, mining costs, and
      government regulations, including regulations relating to prices, taxes,
      royalties, land tenure, land use, importing and exporting of minerals,
      environmental protection and reclamation and closure obligations. The effect
      of
      these factors cannot be accurately predicted, but the combination of these
      factors may cause a mineral deposit that has been mined profitably in the past,
      such as the Seabee mine, to become unprofitable. The Company is subject to
      the
      risks normally encountered in the mining industry, such as unusual or unexpected
      geological formations, cave-ins or flooding. The Company may become subject
      to
      liability for pollution, cave-ins or other hazards against which it cannot
      insure or against which it may elect not to insure.





14


The
      development of gold and other mineral properties is affected by many factors,
      including the cost of operations, variations in the grade of ore, fluctuations
      in metal markets, costs of processing equipment and other factors such as
      government regulations, including regulations relating to royalties, allowable
      production, importing and exporting of minerals and environmental protection.
      Depending on the price of gold, the Company may determine that it is impractical
      to commence or, if commenced, to continue commercial production.





**Non-Operator
      Status of Oil and Gas Properties**





All
      of the Company’s oil and gas properties in Alberta are operated by others.
      Accordingly, the Company has little or no control over the operation of these
      assets. The Company relies on the operators to ensure they are following best
      industry practices and thereby mitigating potential risks. The risk factors
      found in the Company’s oil and gas properties are similar to those found for its
      gold assets. These include, inherent exploration and operating risks, volatility
      of crude oil and natural gas prices, fluctuations in the U.S. dollar vs.
      Canadian dollar exchange rate, environmental regulation and risk, uncertainty
      of
      reserve and resource estimates, governmental regulations, competition and
      insurance risks.





**Persistent
      Low Gold Prices Could Cause Mine Operations to be Suspended or Shutdown and
      Negatively Affect the Company’s Profitability**





Gold
      prices may fluctuate widely and are affected by numerous industry factors,
      such
      as demand for precious metals; forward selling by producers; central bank sales
      and purchases of gold. Moreover, gold prices are also affected by macro-economic
      factors such as expectations for inflation, interest rates, currency exchange
      rates and global or regional political and economic situations. The current
      demand for and supply of gold affects gold prices, but not necessarily in the
      same manner as current demand and supply affect the prices of other commodities.
      The potential supply of gold consists of new mine production plus existing
      stocks of bullion and fabricated gold held by governments, financial
      institutions, industrial organizations and individuals.. The price of gold
      has
      fluctuated in recent years. During the year ended December 31, 2004, the market
      price for gold ranged from a low of U.S. $375 to a high of U.S. $453 with an
      average price of U.S. $410.





Any
      significant drop in the price of gold adversely impacts the Company’s revenues,
      profitability and cash flows. Also, sustained low gold prices
      could:





1.
            Reduce
                production revenues as a result cutbacks caused by the cessation
                of mining
                operations involving deposits or portions of deposits that have become
                uneconomic at the prevailing price of
                gold;


2.
            Cause
                the stoppage or deferral of new mining
                projects;


3.
            Decrease
                the amount of capital available for exploration
                activities;


4.
            Reduce
                existing reserves by removing ore from reserves that cannot be
                economically mined at prevailing prices;
                and/or,


5.
            Cause
                the write-off of an asset whose value is impaired by the low price
                of
                gold.





There
      can be no assurance that the price of gold will remain stable or that such
      price
      will be at a level that will prove feasible to continue the Company’s
      exploration activities, or if applicable, begin development of its properties,
      or commence or, if commenced, continue commercial production.





**Fluctuations
      in the U.S. Dollar vs Canadian Dollar Exchange Rate Could Negatively Impact
      Operating Results**





The
      price of gold and oil and gas is denominated in U.S. dollars and, accordingly,
      the Company’s proceeds from operations from the Seabee mine and its oil and gas
      properties will be denominated and received in U.S. dollars. As a result,
      fluctuations in the U.S. dollar against the Canadian dollar could result in
      unanticipated fluctuations in the Company’s financial results, which are
      reported in Canadian dollars.





15




**Unfavorable
      Government Regulatory Changes may Cause Reduced Profitability or Cessation
      of
      Mining Operations and Exploration Activities**





The
      Company’s mining and exploration operations are affected to varying degrees by
      government regulations relating to mining operations, the acquisition of land,
      pollution control and environmental protection, safety, production and
      expropriation of property. Currently, all of the Company’s properties are
      subject to the jurisdiction of the federal laws of Canada, the provincial laws
      of Manitoba, Alberta, Saskatchewan, and Ontario as well as local laws where
      they
      are located. Changes in these regulations or in their application are beyond
      the
      control of the Company and may adversely affect its operations, business and
      results of operations. Failure to comply with the conditions set out in any
      permit or failure to comply with the applicable statutes and regulations may
      result in orders to cease or curtail operations or to install additional
      equipment.





Operations
      may also be affected in varying degrees by government regulations with respect
      to restrictions on production, price controls, export controls, foreign exchange
      controls, income taxes, expropriation of property, environmental and mine safety
      legislation.





**Stricter
      Government Environmental Policies may Materially Affect Operating Results and/or
      Delay Projects**





In
      connection with its operations and properties, the Company is subject to
      extensive and changing environmental legislation, regulation and actions. The
      Company cannot predict what environmental legislation, regulation or policy
      will
      be enacted or adopted in the future or how future laws and regulations will
      be
      administered or interpreted. The recent trend in environmental legislation
      and
      regulation generally is toward stricter standards and this trend is likely
      to
      continue in the future. The recent trend includes, without limitation, laws
      and
      regulations relating to air and water quality, mine reclamation, waste handling
      and disposal, the protection of certain species and the preservation of certain
      lands. These regulations may require obtaining permits or other authorizations
      for certain activities. These laws and regulations may also limit or prohibit
      activities on certain lands lying within wetland areas - areas providing for
      habitat for certain species and other protected areas. Compliance with more
      stringent laws and regulations, as well as potentially more vigorous enforcement
      policies or stricter interpretation of existing laws, may necessitate
      significant capital outlays, may materially affect the Company’s results of
      operations and business, or may cause material changes or delays in the
      Company’s intended activities.





The
      Company has estimated the total obligations associated with the retirement
      of
      the Seabee, Madsen and Tartan properties at December 31, 2004 to be $3.4
      million.





**Imprecise
      Ore Reserves and Ore Grade Estimates may Negatively Impact Gold Production
      and
      Operating Profitability**





Although
      the Company has assessed the mineral reserve and mineral resource estimates
      contained in this document and believes that the methods used to estimate such
      mineral reserves and mineral resources are appropriate, such figures are
      estimates. As well, estimates of mineral reserves and mineral resources are
      inherently imprecise and depend to some extent on statistical inferences drawn
      from limited drilling, which may prove unreliable. This risk is mitigated to
      some extent, by utilizing consultants to annually provide independent
      assessments of the Company’s estimates. Furthermore, the indicated level of
      recovery of gold may not be realized. Market price fluctuations of gold may
      render reserves and deposits containing relatively lower grades of
      mineralization uneconomic. Moreover, short-term operating factors relating
      to
      the mineral reserves, such as the need for orderly development of the deposits
      or the processing of new or different grades, may cause mining operations to
      be
      unprofitable in any particular period.





**Inability
      to Raise Required Funding Could Cause Deferral of Projects and/or Dilution
      of
      Property Interests**





As
      of December 31, 2004, the Company had bank indebtedness of approximately $0.3
      million and working capital of $9.3 million. The Company’s ability to continue
      its production, exploration (Management estimates that $2.0-$2.5 million is
      the
      annual expenditure required to fulfill the Company’s intended exploration
      programs) and development activities depends in part on its ability to generate
      revenues from its operations or to obtain financing through joint ventures,
      debt
      financing, equity financing, and production sharing arrangements or other
      means.There can be no assurance that the Company will generate sufficient
      revenues from its operations to meet its obligations as they become due or
      to
      obtain financing on acceptable terms, if at all.





16


At
      the end of Fiscal 2004 (December 31 st ),
      the Company had a net loss of approximately $0.6 million; at the end of Fiscal
      2003 (December 31 st ),
      the Company had net earnings of approximately $1.8 million; at the end of Fiscal
      2002 (December 31 st ),
      the Company had a net loss of approximately $1.9 million.





The
      failure of the Company to meet its ongoing obligations on a timely basis could
      result in the loss or substantial dilution of its interest (as existing or
      as
      proposed to be acquired) in its properties.





**Negative
      Market Response to Potential Shareholder Dilution Could Impact Share Price
      and
      New Equity Issues**





As
      of December 31, 2004, there were employee options outstanding to purchase
      2,660,000 common shares and 2,400,033 share purchase warrants outstanding.
      These
      options and warrants, if fully exercised, would constitute approximately 7.6%
      of
      the Company’s resulting share capital. The exercise of such options or warrants
      and the subsequent resale of such shares in the public market could adversely
      affect the prevailing share market price and the Company’s ability to raise
      equity capital in the future at a time and price which it deems appropriate.
      The
      Company may also enter into commitments in the future which would require the
      issuance of additional common shares and the Company may grant additional share
      purchase warrants and stock options. Any share issuances from the Company’s
      treasury will result in immediate dilution to existing
      shareholders.





**Industry
      Competition may Hinder the Company’s Growth or
      Profitability**





The
      Company’s business is intensely competitive, and the Company competes with other
      mining and oil and gas companies, some of which have greater resources and
      experiences. Competition in the precious metals mining industry is primarily
      for
      mineral rich properties which can be developed and produced economically; the
      technical expertise to find, develop, and produce such properties; the labor
      to
      operate the properties; and, the capital for the purpose of financing
      development of such properties. Many competitors not only explore for and mine
      precious metals, but also conduct refining and marketing operations on a
      worldwide basis and some of these companies have much greater financial and
      technical resources than the Company. Such competition may result in the Company
      being unable to acquire desired properties, to recruit or retain qualified
      employees or to acquire the capital necessary to fund its operations and develop
      its properties. The Company’s inability to compete with other mining companies
      for these mineral deposits could have a material adverse effect on the Company’s
      results of operation and business.





**Extreme
      and Persistent Weather Conditions could cause Operating and Exploration
      Difficulties**





The
      Seabee mine, certain of the Company’s oil and gas properties and the Company’s
      exploration properties are all located in the northern portions of either
      Saskatchewan, Alberta, Ontario or Manitoba. Access to these properties and
      the
      ability to conduct work on them can be affected by adverse weather conditions.
      Adverse weather conditions can also increase the costs of both access and work
      on the Company’s properties.





**Title
      to Company Properties could be Challenged with Potential Loss of
      Ownership**





Acquisition
      of title to mineral properties is a very detailed and time-consuming process.
      The Company has investigated title to all of its mineral claims and has obtained
      title opinions with respect to its most significant properties and, to the
      best
      of its knowledge, titles to all properties are in good standing. For the Madsen
      properties, the Company has searched title records for any and all encumbrances.
      For the Seabee Property, the Company has examined disposition search abstracts
      from the Saskatchewan Department of Industry and Resources, made inquiries
      to
      Saskatchewan Industry and Resources, reviewed lease files at Saskatchewan
      Industry and Resources, and received confirmation from Saskatchewan
      Environment.





Nevertheless,
      the title to the Company’s properties could be challenged or impugned. The
      properties may have been acquired in error from parties who did not possess
      transferable title, may be subject to prior unregistered agreements or transfers
      and title may be affected by undetected defects. Loss of title to any of the
      Company’s properties could have a negative affect on the Company’s results of
      operations. Additionally, any challenge to title, whether or not successful,
      could result in diversion Company resources and adversely affect the Company’s
      results of operations.





17


**Uninsured
      Risks could Negatively Impact Profitability**





In
      the course of exploration, development and production of mineral properties,
      certain risks, and in particular, unexpected or unusual geological operating
      conditions including rock bursts, cave-ins, fire and flooding and earthquakes
      may occur. It is not always possible to fully insure against such risks and
      the
      Company may decide not to take out insurance against such risks as a result
      of
      high premiums or other reasons. Should such liabilities arise, they could reduce
      or eliminate any future profitability and result in increased costs and a
      decline in the value of the securities of the Company.





**Issuance
      of Flow-Through Securities and the Potential Liabilities Associated with the
      Failure to Incur Defined Exploration Expenditures within a Certain Time
      Frame**





Flow-through
      securities are securities of the Company which meet certain criteria and qualify
      for flow-through tax treatment for the purposes of the Income Tax Act (Canada).
      Qualification as a “flow-through share” enables the Company to renounce certain
      eligible resource expenditures incurred by the Company for the benefit of any
      investor who is a Canadian taxpayer. Once issued, the shares are common shares
      of the Company and are not differentiated from shares which were not
      flow-through shares on issue.





The
      Company has financed certain mining exploration activities primarily through
      the
      issuance of equity, including flow-through shares. As a result of flow-through
      shares agreements entered into in 2004, the Company is required to expend $3.2
      million in qualifying Canadian Exploration Expenses, as defined by the ITA,
      prior to December 31, 2005.





Under
      the ITA, companies are permitted to issue flow-through shares pursuant to a
      written agreement under which the issuer agrees to incur certain eligible
      Canadian exploration expenses within the time frame specified in the agreement
      (generally, 12 to 24 months) and to flow-through or “renounce” the related tax
      deduction to the investor. The proceeds from the issuance of flow-through shares
      must be expended on “qualifying expenditures,” which are related to mineral
      exploration in Canada.





In
      the event that the Company is unable to make the renunciation or fails to expend
      the funds on qualifying exploration expenditures, the investor may be subject
      to
      reassessment for any related tax deduction taken by the investor and the Company
      could be liable to the investor for damages in an action for breach of contract.
      However, there is no right of rescission of the subscription contract that
      would
      result in a reversal of the share issuance. The investor may be entitled to
      damages (based on a breach of contract claim), which may include amounts related
      to the increased tax liability that the shareholder experienced resulting from
      the failure of the Company to renounce the contracted qualifying expenditures.
      In addition, the Company could be required to pay a penalty and interest to
      the
      Government of Canada for failure to make and renounce such qualifying
      expenditures, within prescribed time limits.





Although
      the Company believes it will make the qualifying expenditures and renounce
      the
      related tax deduction for the benefit of the purchasers of its flowthrough
      shares, there can be no assurance that the Company will make the qualifying
      expenditures or renounce such deductions in a timely manner. The failure to
      make
      the qualifying expenditures or to renounce such deductions in a timely manner
      could have a material adverse effect on the Company’s business or its ability to
      raise additional financing through the issuance of flow-through
      shares.








18


**Due
      to the Company’s Canadian Jurisdiction, Investors may be Deterred from Trading
      Company Stock as it may be Difficult for U.S. Investors to Effect Service of
      Process Against the Company**





The
      Company is incorporated under the laws of Canada. All of the Company’s directors
      and officers are residents of Canada and all of the Company’s assets and its
      subsidiary are located outside of the United States. Consequently, it may be
      difficult for United States investors to effect service of process in the United
      States upon the Company’s directors or officers or to realize in the United
      States upon judgments of United States courts predicated upon civil liabilities
      under the United States Securities Exchange Act of 1934, as amended. A judgment
      of a U.S. court predicated solely upon such civil liabilities may be enforceable
      in Canada by a Canadian court if the U.S. court in which the judgment was
      obtained had jurisdiction, as determined by the Canadian court, in the matter.
      There is substantial doubt whether an original action could be brought
      successfully in Canada against any of such persons or the Company predicated
      solely upon such civil liabilities.





**Conflicts
      of Interest**





Certain
      of the directors of the Company are also directors and officers of other
      companies engaged in mineral exploration and development and mineral property
      acquisitions. Accordingly, mineral exploration opportunities or prospects of
      which such persons become aware will not necessarily be made available to the
      Company. Although such persons have been advised of their fiduciary duties
      to
      the Company, there exist actual and potential conflicts of interest among these
      persons and situations could arise in which their obligations to or interests
      in
      other companies could detract from their efforts on behalf of the
      Company.





**Item
      4. Information on the Company**





**A.**
            **History
                and Development of the
                Company**





Claude
      Resources Inc. was incorporated as a private corporation under the *Canada
      Business Corporations Act* (the “CBCA”) on March 26, 1980 and was converted to a public company by Articles
      of Amendment dated September 16, 1980. The Articles of the Company were restated
      by Restated Articles of Incorporation dated November 14, 1988. Articles of
      Reorganization dated November 8, 1993 were filed by the Company pursuant to
      the
      CBCA, which resulted in all then issued and outstanding 7.5% Convertible
      Redeemable First Preferred Shares, Series I in the capital of the Company being
      converted into Common Shares. By Articles of Amendment dated October 23, 1996,
      the Company’s Articles were amended to give the directors the ability to appoint
      additional directors to the board, not to exceed one-third of the number of
      directors elected at the previous annual meeting of shareholders.





During
      1998, the Company acquired 100% of the issued and outstanding common shares
      of
      Madsen Gold Corp. ("Madsen") pursuant to a take-over bid offer made by the
      Company on March 13, 1998 (the "Take-over Offer").




During
      1998, the Company also acquired all of the outstanding shares of 3377474 Canada
      Inc., owner of the mineral property, mill and equipment related to the Tartan
      Lake gold mine.





19


The
      Company amalgamated, effective January 1, 2000, with its subsidiaries Madsen
      Gold Corp. and 3377474 Canada Inc. The amalgamated company continues to carry
      on
      business under the name Claude Resources Inc. Prior to the amalgamation, the
      Company dissolved three of its remaining subsidiaries. The subsidiaries
      dissolved were Centaur Mining Contractors Corp., Jael Explorations Limited
      (“Jael”) and RSGM Exploration Limited (“RSGM”), both Jael and RSGM were
      wholly-owned subsidiaries of Madsen. Following dissolution, the remaining assets
      of these subsidiaries were transferred to the Company. The amalgamation and
      dissolutions were intended to reduce the administrative and corporate governance
      requirements and expense associated with maintaining a number of different
      corporations.





The
      registered office of the Company is located at 1500, 410 - 22 nd Street East, Saskatoon, Saskatchewan S7K 5T6. Its principal executive office
      is
      located at 200, 224 - 4 th Avenue South, Saskatoon, Saskatchewan S7K 5M5, Telephone: (306)668-7505.





During
      the last three years ended December 31, 2004, the Company spent approximately
      $40.9 million on principal capital expenditures related to its properties,
      plant
      and equipment including $15.3 million spent during the year ended December
      31,
      2004. Details of these principal capital expenditures are set forth in the
      table
      below:





**2004**
            
            
            **2003**
            
            
            **2002****Canadian
                Dollar Thousands**Mineral
                PropertiesMine
                development
            
            
            8,566
            
            
            5,926
            
            
            5,749Exploration
                expenditures
            
            
            3,744
            
            
            2,022
            
            
            1,419Plant
                and equipment additions
            
            
            1,020
            
            
            10,960
            
            
            1,01213,330
            
            
            14,864
            
            
            8,180Oil
                & Gas PropertiesProperty
                acquisition and drilling costs
            
            
            1,130
            
            
            584
            
            
            203Gas
                plant & production equipment
            
            
            834
            
            
            1,244
            
            
            5271,964
            
            
            1,828
            
            
            730**Total
                Capital Expenditures**
            
            
            15,294
            
            
            16,692
            
            
            8,910





Further
      details concerning the principal capital expenditures currently in progress
      are
      set forth under the Company’s description of each project under 4D. “Property,
      Plants and Equipment”.





**B.** **Business
      Overview**





The
      Company is engaged in the acquisition, exploration, and development of precious
      metal properties, the acquisition and development of oil and gas properties,
      and
      the production and marketing of minerals and the production of oil, NGLs and
      natural gas. The majority of Claude's mineral properties are in northern
      Saskatchewan, northern Manitoba and northwestern Ontario. The majority of
      Claude’s oil and gas properties are in Alberta, with some property interests in
      southeastern Saskatchewan.





Claude
      Resources is the sole owner and operator of the Seabee mine located 125
      kilometres northeast of LaRonge, Saskatchewan. This operation has been in
      production since December 1991 producing nearly 675,000 ounces of gold to
      December 31, 2004.





In
      2004, gold sales from the Seabee mine were approximately 41,200 ounces compared
      to 50,800 ounces in 2003 and 41,500 ounces in 2002.





20


For
      the last three fiscal years ended December 31, 2004, gold sales accounted for
      70%, 73% and 74% of the Company’s revenues while oil, liquids and gas sales
      accounted for 30%, 27% and 26%.





During
      1998, the Company acquired all the issued and outstanding share capital of
      Madsen Gold Corp. which owned the Madsen mine and properties located in the
      Red
      Lake district of northwestern Ontario.





In
      December 2000, Claude entered into an option/joint venture agreement with Placer
      Dome (“Placer”) whereby Placer could earn a 55% interest in the Madsen project
      by spending $8.2 million within three years and delivering a positive
      feasibility study by the end of 2005. This option agreement was amended
      effective January 1, 2002 to provide Placer until the end of 2006 to earn a
      55%
      working interest in the Madsen properties under the same terms and conditions
      as
      described above. By December 31, 2004, Placer had met its exploration
      expenditure requirement of $8.2 million. Placer’s remaining obligation to vest
      in the Madsen Joint Venture is to deliver a bankable feasibility study by the
      end of 2006.





The
      Company, through its wholly-owned subsidiary, 574095 Alberta Ltd. (“574095”),
      operated by others, owns and administers its oil, natural gas liquids & gas
      property interests in Alberta. These properties, combined with oil interests
      in
      southeastern Saskatchewan, produced 90,900 barrels of oil and liquids (2003
      -
      91,200 barrels; 2002 - 83,200 barrels) and 796,000 MCF of gas (2003 - 800,000
      MCF; 2002 - 886,200 MCF) in 2004.





A
      description of the Company’s properties and its operations at certain properties
      is found under 4D. “Property, Plants and Equipment”.





Operations
      are not seasonal as both gold and oil and gas are produced year round. The
      Company’s products are commodities for which there is an active market and are
      not differentiated from the products of other competitors. Therefore, the
      Company conducts no special marketing for its products and its revenue is
      largely determined by prevailing market prices. The Company’s oil and gas
      interests are in wells operated by others and the Company has no active
      management in the production of or the marketing of the oil and gas
      produced.





The
      Company is not dependent upon any patents, licenses or new manufacturing
      processes, nor is it dependent upon any financial contracts other than those
      entered into in the ordinary course of its business.





A
      statement regarding the Company’s competitive position is disclosed in Item 3 -
“Key Information”, under “Industry Competition may Hinder Corporate Growth” of
      the section titled “Risk Factors”.




A
      description of the material effects of government regulations on the Company’s
      business is disclosed in Item 3 -“Key Information”, under “Unfavorable
      Government Regulatory Changes may Cause Cessation of Mining Operations and
      Exploration Activities” and “Stricter Government Environmental Policies may
      Materially Affect Operating Results and/or Delay Projects” in the section titled
“Risk Factors”.





**C.** **Organizational
      Structure**





The
      following chart illustrates Claude's subsidiaries, together with the
      jurisdiction of incorporation of each Company and the percentage of voting
      securities held:










21


**D.** **Property,
      Plants and Equipment**





**Mineral
      Properties**





The
      Company’s mineral property portfolio includes Seabee, a producing gold mine, and
      a portfolio of exploration properties in Canada, most of which are located
      in
      the Provinces of Saskatchewan, Manitoba and Ontario. The Company has assembled
      the majority of its property portfolio around three areas - the Seabee mine
      in
      Saskatchewan, the formerly producing Tartan Lake mine in Manitoba and the
      formerly producing Madsen mine in Ontario. At each of the three sites, Claude
      owns a mill and equipment that could potentially be used to process ore from
      any
      economic ore body found within the portfolio of properties clustered around
      it;
      either by relocating the mill and equipment to the economic ore body or by
      transporting the ore to the current mill site. At the present time, only the
      Seabee mine contains an economic body of ore and is producing gold. The other
      two properties are at the exploration stage and the mills and equipment are
      presently shutdown and not in operation.





**CLAUDE
      ASSET LOCATIONS**








Except
      for the Seabee mine, all of the Company’s mineral properties are at the
      exploration stage and do not contain any proven ore bodies. Among the Company’s
      exploration projects, several are considered “core projects” and will receive
      the majority of the Company’s exploration budget and focus for the foreseeable
      future.




**SEABEE
      MINE AND SURROUNDING PROPERTY**








22


The
      Seabee mine is located at Laonil Lake, Saskatchewan, approximately 125
      kilometres northeast of the town of La Ronge. Claude commenced commercial
      production at the mine in December, 1991. Since start-up, the mine has produced
      nearly 675,000 ounces of gold including 41,200 ounces sold in 2004.





**SEABEE
      AREA**








**Property
      Description and Access**





The
      Seabee mine produces gold from two different but contiguous properties. The
      original ten quartz claims covering the mine site were consolidated into a
      single mineral lease (ML 5519) of approximately 201 hectares granted by the
      Crown on November 25, 1999. In November 1994, the Company entered into an option
      agreement to acquire a 100% working interest, subject to a 30% Net Profits
      Interest, in the surrounding Currie Rose property. After fulfilling the
      conditions in the option agreement and obtaining a 100% interest in the
      property, a portion of the claims were converted to a mineral lease (ML 5520)
      on
      January 1, 1999. The mining leases were renegotiated with the Province of
      Saskatchewan in June of 2002 and expire in 2025.





The
      mine is located in the La Ronge Mining District at the north end of Laonil
      Lake
      approximately 125 kilometres northeast of the town of La Ronge, Saskatchewan
      and
      about 150 kilometres northwest of Flin Flon, Manitoba.





Topography
      of the region is characterized by low rocky ridges interspersed with lakes
      and
      muskeg. Temperature in the region typically ranges from -13 degrees Fahrenheit
      (-25 degrees Celsius) in January to 62 degrees Fahrenheit (17 degrees Celsius)
      in July. Mean annual precipitation is approximately 20 inches per year which
      includes snowfall from late October to mid-April.





Access
      to the minesite is by fixed wing aircraft from La Ronge or Flin Flon to a 1,280
      metre airstrip located on the property. Equipment and bulky or heavier supplies
      are trucked to the site via a 60 kilometre winter road from Brabant Lake on
      Highway 102. The winter road is typically in use from January through
      March.





The
      Seabee operation directly supports a workforce of 160 employees with permanent
      camp facilities. Electrical power is provided by a transmission line to the
      mine
      by the provincial power authority while backup power is provided by diesel
      generators.





23


**Property
      Royalties**





The
      Company has a 100% interest in both the Seabee and Currie Rose properties.
      However, production from the Currie Rose is subject to a 30% Net Profits
      Interest (NPI) in favor of Currie Rose for the first $1,000,000 of profits
      received by Claude from the property in a fiscal year, which is reduced to
      a 25%
      NPI for any additional profits received by Claude during that fiscal year.
      Prior
      to Currie Rose receiving any of the NPI, Claude is entitled to first recover
      from the NPI the Currie Rose portion of capital, development and operating
      costs
      related to the production of that ore. Claude is also entitled to subtract
      the
      interest on Currie Rose’s operating costs which is charged at prime plus 1.5%
      based upon the previous month’s outstanding balance. As at December 31, 2004,
      the cumulative deficiency of Currie Rose's share of these capital and operating
      costs totaled approximately $9.2 million. Since commencing commercial gold
      production, a total of 582,677 tonnes of ore have been processed from the Currie
      Rose property, from which a total of 120,306 ounces of gold have been
      recovered.





In
      2004, the Company sold a production royalty, on both the Seabee and Currie
      Rose
      properties, to Red Mile Resources No. 3 Limited Partnership (“Red Mile”) for
      approximately $7.1 million. As part of the transaction, approximately $7.0
      million of the sales price was deposited with a financial institution and has
      been pledged to secure the Company’s obligations under the royalty arrangement.
      During the term of the agreement, up to 10 years, any royalty obligation will
      be
      paid from amounts deposited with the financial institution. In certain
      circumstances, but in no event later than December 2014, the Company has the
      right to repurchase the royalty interest at no greater than its fair market
      value at the time of repurchase. The repurchase price will be paid from the
      balance on deposit with the financial institution. Annual royalties, dependent
      upon sales volume, will be payable at rates ranging from $1.00 to $24.53 per
      ounce. In addition to the royalty, the Company has granted a net profits
      interest (“NPI”) for the years 2011 to 2014. The NPI ranges from 2.5% to 4.0%
      payable only when gold prices exceed CDN $800 per ounce. No NPI is payable
      until
      the Company recovers capital, development, reserve and interest charges. For
      the
      purposes of the NPI, these costs accumulate beginning December 29,
      2004.





Royalties
      to the Crown of 5% on the first million ounces of production escalating to
      10%
      thereafter on net operating profits become payable once capital and exploration
      costs are recovered. At current and anticipated production rates, Crown royalty
      payments are not expected to be required for several more years. To date, there
      have been no royalty taxation payments made on this property to the
      Crown.





**History**





Gold
      was first discovered around Laonil Lake in 1947 by prospectors acting on behalf
      of Cominco. Between 1947 and 1950, Cominco conducted an extensive program of
      prospecting, trenching, geological mapping and diamond drilling. The latter
      activity involved 79 holes totaling 4,414 metres and identified four
      gold-bearing structures or zones on the property.





The
      property remained dormant until 1974, although in 1958 Cominco applied for
      and
      was granted 10 Quartz Mining Leases covering the property. In 1961, Cominco
      drilled 2 shallow holes of 41 metres as part of an overall review of the known
      property data. This review allowed Cominco to estimate the property contained
      a
      small gold resource. Cominco resumed exploration in 1974 and drilled 16 holes
      totaling 458 metres to test additional vein structures. In 1982-83, Cominco
      resumed work and drilled 3,776 metres in 20 holes, but they did not complete
      the
      entire program as Cominco sold the property to BEC International Corporation
      who
      subsequently reached an agreement with Claude Resources Inc. who became the
      beneficial owner.





After
      its acquisition of the Seabee property, Claude drilled 3 holes totaling 226
      metres to corroborate Cominco’s prior work and property estimates. In June 1985,
      Claude optioned the property to Placer Dome. Placer carried out an extensive
      exploration program, which included geologic mapping, trenching and stripping,
      geophysical, geochemical, environmental and metallurgical studies, as well
      as
      both surface and underground drilling: 95 surface drill holes were completed;
      72
      underground drill holes were drilled from an underground exploration decline
      on
      Zone 2. The decline was 305 metres long and diamond drill stations were cut
      from
      one of two drives. At the completion of this program, Placer determined the
      property did not meet its criteria for development and allowed its option on
      the
      Seabee property to expire in June 1988 and returned the property to
      Claude.





24


After
      the return of the property, Claude initiated geological compilation and
      analytical studies designed to correlate and substantiate the work done by
      Placer Dome. The Company engaged Cominco Engineering Services Limited to conduct
      bulk sampling and drilling as part of a feasibility study. A.C.A. Howe
      International Limited (“A.C.A. Howe”) completed a reserve estimate for the
      property in December 1988 and Cominco Engineering submitted a positive
      Feasibility Study in August, 1989 and subsequently revised the study in May,
      1990. At that time, Claude made the decision to put the deposit into production
      and construction of the mine began in the summer of 1990. Mining commenced
      at
      Seabee in December, 1991.





**Regional
      and Property Geology**





Northern
      Saskatchewan forms part of the Churchill Province of the Canadian Shield. It
      has
      been subdivided into a series of lithostructural crystal units and the section
      containing the Seabee mine has been termed the Glennie Lake domain. This domain
      includes both sediment-and volcanic-derived rocks. The mine is located within
      the eastern contact area of the Laonil Lake Intrusive Complex, a roughly
      triangular shaped metagabbroic intrusive body. All rocks are deformed and have
      been regionally metamorphosed at conditions of middle amphibolite
      facies.





The
      Seabee property is underlain by the Laonil Lake metagabbro. Numerous
      quartz-tourmaline bearing mineralized shear structures traverse the complex
      forming a complicated shear system. The vein structures dip steeply, generally
      strike at 70 degrees and exhibit extreme splay structures. Although the
      predominant trend is around 70 degrees, sub-parallel to the Laonil Lake Shear
      Zone, northwesterly structures have also been encountered. Vein mineralogy
      is
      dominantly quartz with pyrite, pyrrhotite and chalcopyrite with accessory
      tourmaline and carbonate. Silicification is the most common alteration type.
      Gold mainly occurs in the free form as flakes and films replacing pyrite or
      at
      sulphide boundaries. The higher grade gold values are often associated with
      sections rich in sulphides or at vein junctions.





**Mine
      Details**





Construction
      of the Seabee mine began in 1990, the mill was completed in late 1991 with
      gold
      production commencing in December of that year. The mine hosts permanent
      facilities to support all mining operations and personnel. Seabee employs
      approximately 160 workers of whom approximately 100 are on site at any given
      time, subject to seasonal adjustments. Approximately 80 persons are employed
      in
      the mill, maintenance, electrical, catering, surface, diamond drilling and
      technical services areas, on a two week-in and two week-out rotation. The
      remaining 80 people are employed in the underground operations, the majority
      on
      a 28 day-in and 14 day-out rotation. Camp facilities on site are capable of
      accommodating in excess of 110 people and are supported by a full complement
      of
      dining and recreation facilities.




Underground
      mining is conducted by Centaur Mining Contractors ("Centaur"), a division of Claude Resources Inc. The Company utilizes the shrinkage stope mining method to mine its ore body
      at
      the Seabee mine. Shrinkage or shrinkage stoping refers to any mining method
      in
      which broken ore is temporarily retained in the stope to provide a working
      platform and/or to offer temporary support to the stope walls during active
      mining. Since ore “swells” when broken (blasted ore increases its occupied
      volume by approximately 70%), it is necessary to shrink the muck pile a
      corresponding amount by drawing some of the broken ore out as the stope is
      advanced upward.





25


The
      illustration below describes the general approach to shrinkage
      stoping:








The
      Company maintains a fleet of underground and surface equipment including 3
      and 2
      boom jumbos, scooptrams, ore trucks, personnel carriers, loaders, dozers and
      rock trucks. Most of the equipment is 10 to 15 years old and is rebuilt as
      required, or, if necessary, traded in on newer equipment.





The
      zones currently being mined are accessed by a 3.4 by 4.5 metre ramp to the
      730
      metre level. Mining efforts are currently being focused on the 2b and 2c zones
      at depth and the 161 and 162 structures on the 395 to 495 levels. The shaft
      and
      hoisting facility, commissioned in the fourth quarter of 1997 (with an extension
      to the 700 level commissioned in November, 2003), provides ore and waste
      transport to surface as deep as the 700 metre level. Approximately 850 tonnes
      per day of ore and waste are moved to the ore and waste pass system and hoisted
      to surface with the ore then conveyed to the mill. The milling capacity of
      the
      Seabee mill was increased in 1997 to its current processing capability that
      exceeds 750 tonnes per day. The mill process consists of a three stage crushing
      circuit, a two stage grinding circuit, followed by cyanide leaching. The leached
      gold is collected in a carbon-in-pulp circuit, stripped using mild caustic
      and
      collected on stainless steel mesh cathodes by electrowinning. The product from
      electrowinning is refined into dore bars in a bullion furnace. Power is supplied
      by line from Saskatchewan Power Corporation’s provincial power
      grid.





The
      following table details the operations data of the Seabee mine and mill for
      the
      last 5 years:





**Seabee
                Mine Operating Data****2004**
            
            
            **2003**
            
            
            **2002**
            
            
            **2001**
            
            
            **2000**Ore
                Milled (tonnes)
            
            
            186,900
            
            
            208,900
            
            
            201,900
            
            
            274,800
            
            
            237,500Ore
                Grade (grams per tonne)
            
            
            7.15
            
            
            7.95
            
            
            6.59
            
            
            6.13
            
            
            8.58Mill
                Recoveries (%)
            
            
            95.2
            
            
            94.7
            
            
            93.7
            
            
            88.8
            
            
            87.9Gold
                Sales (ounces)
            
            
            41,200
            
            
            50,800
            
            
            41,500
            
            
            46,300
            
            
            58,300Cash
                Cost (U.S.$/ounce)*
            
            $
            297
            
            $
            253
            
            $
            246
            
            $
            221
            
            $
            190





*
      The Company reports its operating, depreciation and depletion costs on a
      per-ounce basis based on uniform standards developed by the Gold Institute.
      Management uses this measure to analyze the profitability, compared to average
      realized gold prices, of the Seabee mine. When evaluating this profitability
      measure investors should be aware that no provision has been made for
      exploration or development costs and the above measures may not be comparable
      to
      similarly titled measures of other companies. A reconciliation to the cash
      costs
      in the above table is provided below:





26


**Consolidated
      Total Cash Costs**


**Per
      Gold Ounce Sold**




**Years
                ended December 31,****2004**
              
              
              **2003**
              
              
              **2002**
              
              
              **2001**
              
              
              **2000****U.S.
                  Dollars**Direct
                  mining cost
              
              $
              297
              
              $
              253
              
              $
              246
              
              $
              221
              
              $
              190Other
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Cash
                  operating costs
              
              $
              297
              
              $
              253
              
              $
              246
              
              $
              221
              
              $
              190Less:
                  Royalties
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Total
                  cash costs
              
              $
              297
              
              $
              253
              
              $
              246
              
              $
              221
              
              $
              190Gold
                  ounces sold
              
              
              41,200
              
              
              50,800
              
              
              41,500
              
              
              46,300
              
              
              58,300Mine
                operating
                costs(U.S.
                  $ millions)
              
              $
              12.2
              
              $
              12.8
              
              $
              10.3
              
              $
              10.2
              
              $
              11.1(CDN
                  $ millions)
              
              $
              15.9
              
              $
              18.0
              
              $
              16.1
              
              $
              15.8
              
              $
              16.4





Readers
      are cautioned that the above measures may not be comparable to other similarly
      titled measures of other companies should these companies not follow Gold
      Institute Standards.





Since
      commencement of production in 1991, the mill has processed more than 2.7 million
      tonnes of ore at an average head grade of 8.2 grams per tonne producing 661,759
      ounces of gold to December 31, 2004.





**Seabee
      mine - Currie Rose**





Claude's
      11,000 acre (4,500 hectare) Currie Rose property surrounds the Seabee property
      with most of the ground under disposition lying to the west, north and east.
      In
      1994, Claude entered into an option agreement with Currie Rose Resources Inc.,
      a
      non-affiliated public company traded on the TSX Venture Exchange. The Company
      has earned a 100% interest in the Currie Rose property subject to a 30% Net
      Profits Interest (NPI) in favour of Currie Rose Resources. See “ Property
      Royalties” on page 24, for further detail.





**Geology**





The
      geology of Currie Rose is largely similar to that prevailing at Seabee as
      described above, as the Laonil Lake Intrusive Complex underlies much of the
      property. Outside the core of the property, the Laonil Lake Intrusive Complex
      is
      flanked by a volcanic-sedimentary rock sequence. Limited drilling in these
      volcanics has returned anomalous gold values. As reported above, gold-bearing
      shears traverse this sequence. The West Porky discovery indicates that gold
      does
      occur in concentrations sufficient to warrant follow-up. See “Recent Exploration
      Results” on pages 28-29.





27


**Property
      History**





The
      Currie Rose property was originally staked by prospector David Partridge in
      1980
      to cover gold occurrences discovered by his father, Eric Partridge, during
      the
      mid 1960s and early 1970s. The property was optioned to Currie Rose the same
      year and purchased outright by Currie Rose in 1983. Currie Rose conducted
      exploration on the property from 1980 to 1984 before optioning the property
      to
      Placer Development Limited. Placer and its successor company Placer Dome Inc.
      were the exploration operators from 1981 to 1990. Approximately $2.6 million
      was
      spent on various exploration activities on the property.





Placer’s
      option on the property expired in 1991 and Currie Rose Resources retained a
      100%
      interest. No exploration work was conducted until 1994 when Claude entered
      into
      the option agreement and carried out a prospecting program. This program
      identified at least 9 gold bearing structures that warranted drill testing.
      In
      1995, Claude conducted a drill program of 3,458 metres in 27 holes to test
      the
      structures identified during the prior year. In 1996, Claude drilled a total
      of
      2,566 metres in 23 holes to define the 10 Zone which was adjacent to the western
      boundary of the Seabee property claims.





In
      1997, Claude drilled a total of 1,395 metres in 6 holes, including one that
      straddled the Seabee property boundary. The holes encountered veins that were
      interpreted as extensions of the Seabee’s 10 and 2c structures. Work programs in
      1999 involved 60 holes totaling 7,346 metres of diamond drilling. This targeted
      showings discovered by prospecting in the two preceding years and focused on
      an
      area of the Currie Rose property to the south and west of the mine trend. This
      drilling produced some remarkable intersections on a structure (R and S Vein
      intersection) that proved to have a very limited strike length. Additional
      structures returned low-grade intersections that require follow-up
      drilling.





The
      2000 work program included the winter drilling of 23 surface holes totaling
      5,397 metres. As a follow-up to the preceding year’s program, most of the holes
      were collared to the west of the ML 5520 in the Bird Lake area, exploring for
      mineralized structures parallel to the 2 Vein shoots. Other targets in the
      Porky
      Lake and Pine Lake areas were also tested. Drilling succeeding in confirming
      the
      existence of strong shear structures, but produced only modest gold
      values.





In
      2001, Claude explored six more remote target areas with a program that involved
      42 holes that totaled 5,037 metres of diamond drilling. Testing splays and
      parallel structures, this drilling encountered only nominally anomalous gold
      values within variably sheared host rocks. Target areas included the Scoop,
      Porky, Herb, Pine, East and West Bird Lakes.





In
      2002, Claude focused its attention on a laterally extensive geochemical soil
      anomaly on the west shore of Porky Lake and on a series of quartz-bearing shear
      structures north and east of the No. 5 ramp access. 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.  Eighteen
      holes totaling 3,355 metres targeted the former and 31 holes totaling 6,743
      metres targeted the latter. The Porky Lake drilling resulted in the discovery
      of
      the West Porky zone, a ‘calc-silicate’ second order shear structure that
      returned gold grades in the 3-15 grams per tonne range over widths from one
      to
      three metres. Additional drilling east of the No. 5 mine access produced
      isolated high gold values over narrow widths.





Drilling
      in 2003 on the West Porky zone had as its goal, the delineation of this
      mineralized structure to depth and along strike. The program consisted of 28
      holes totaling 5,775 metres on 50-metre centres on the main zone. An additional
      13 holes totaling 2,913 metres tested the structure’s potential along strike to
      the west. This drilling resulted in the discovery of an arenite-hosted
      high-grade lens named the west zone. Follow-up induced polarization geophysical
      surveys suggest the Porky Lake mineralized system is more pervasive than
      previously imagined with greater continuity of the associated sulfide
      phases.





**Recent
      Exploration Results**





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.





28


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 mainly 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 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 5.00 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 2nd
      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
      core from this program was logged and split at the Company's core logging
      facility at the Seabee mine. Assaying has been done by TSL Laboratories of
      Saskatoon with random checks of pulps and rejects performed by Chemex Labs
      of
      Vancouver. All core intervals have been fire assayed with a gravimetric finish,
      with samples that assayed greater than 10 grams per tonne checked by a total
      metallics assay.





**Seabee
      Mine Reserves**





Claude
      originally commissioned Cominco Engineering Services to provide a feasibility
      study on the Seabee mine in 1989. A positive feasibility study was prepared
      and
      presented to the Company in August 1989, and a revised study was presented
      in
      May 1990. The reserve estimates for the property were prepared by A.C.A. Howe
      International Limited (“A.C.A. Howe”). Since the original estimates in 1990,
      A.C.A. Howe visits the mine regularly and receives all technical, developmental
      and production reports concerning the mine. Using this information, A.C.A.
      Howe
      then checks the reserve estimates developed by the Company’s own mining
      staff.





A.C.A.
      Howe’s methodology for estimating reserves and resources is a manual
      interpolation and extrapolation between sill sampling and diamond drill holes.
      Resource blocks are measured from planned stope dimensions, excluding any
      pillars that will not be extracted within a 12 month period. Surface drill
      intersections are cut to a statistically determined 75 grams per tonne and
      chip
      samples in stopes and development headings are routinely cut to 50 grams per
      tonne.





Proven
      Reserves are sampled in two dimensions by a sill and a raise, or are sampled
      by
      silling and projected to no more than one mine level to diamond drill holes
      on
      the same structure. Probable Reserves include blocks that have either been
      sampled by silling and projected beyond diamond drilling to a maximum one mine
      level, or have been sampled by closely spaced diamond drill holes of usually
      less than 25 metres laterally and up to 50 metres down dip on structures with
      a
      previous production history, or have been mapped and sampled at
      surface.





The
      major portion of the Proven and Probable Reserves occur within the well-defined
      shoots currently being mined. The following mining and economic factors are
      well
      established and have been applied to those resources which have then been
      converted to Proven and Probable Reserves.





A
      block cut off grade of 4.10 grams per tonne is applied to reserves. This is
      the
      current break-even grade following the application of dilution, mining losses
      and mill recovery. It may be necessary on occasion to mine and haul lower grade
      ore to access reserves, but if this lower grade material averages greater than
      4.10 grams per tonne, it is stockpiled for blending. Similarly, ore grading
      higher than 4.10 grams per tonne that is already broken will be hauled and
      processed.





29


The
      walls within the stopes at the mine are supported by rock bolts prior to the
      ore
      being pulled to minimize external dilution, which is currently estimated to
      average 10% at zero grade.





The
      use of a remotely operated scoop to empty highwalls from within the stopes
      keeps
      average mining losses to an estimated 3%.





Based
      upon regular test work at the mine, a Specific Gravity of 2.8 is utilized in
      tonnage estimates on the less sulphide-rich zones; the 2d structure has a
      measured density of 2.9.





All
      samples at the Seabee mine are assayed on site in a fire assay gold laboratory.
      Sample size is 30 grams (one assay tonne). Surface and underground drill core
      is
      assayed in-house. Underground drill and chip samples are assayed on a daily
      basis and checked by internal standards, though currently there are no external
      checks. The accuracy of the assaying at the mine is confirmed by bullion
      production.





As
      reported by Daniel C. Leroux, B.SC., P.GEO. of A.C.A. Howe in his report dated
      February 1, 2005, the Proven and Probable Reserves at the Seabee mine and the
      Currie Rose Sector are as follows:




Seabee mine:Proven Mineral Reserves:
            357,700 tonnes @ 6.27 grams per
              tonneProbable Mineral Reserves:
            315,250 tonnes @ 7.50 grams per
              tonneCurrie Rose Sector:Proven Mineral Reserves:
            42,788 tonnes @ 7.18 grams per
              tonneProbable Mineral Reserves:
            16,975 tonnes @ 8.00 grams per
              tonne





Total
      Proven plus Probable Mineral Reserves: 732,713 tonnes @ 6.89 grams per
      tonne





For
      the above table of reserves, the following mining and economic factors have
      been
      applied to those resources:





(a)
            A
                block cut-off grade of 4.10 grams per tonne is applied to resources.
                This
                is the break-even grade at a gold price of U.S. $450 following the
                application of dilution, mining losses and mill
                recovery;


(b)
            External
                dilution is estimated to average 10% at zero
                grade;


(c)
            Average
                mining losses are estimated at 3%;


(d)
            A
                Specific Gravity of 2.8 is utilized in tonnage estimates on the less
                sulphide rich zones.





The
      following table details the Seabee mine’s total Mineable Reserves for the last 3
      fiscal years as calculated by A.C.A. Howe using a long-term gold price of U.S.
      $450 per ounce in 2004, U.S. $375 per ounce in 2003 and U.S. $343 per ounce
      in
      2002:





**2004**
              **Tonnes**
            
            
            **2004**
              **Grade**
              **g/tonne**
            
            
            **2004**
              **Gold**
              **Ounces**
            
            
            **2003**
              **Tonnes**
            
            
            **2003**
              **Grade**
              **g/tonne**
            
            
            **2003**
              **Gold**
              **Ounces**
            
            
            **2002**
              **Tonnes**
            
            
            **2002**
              **Grade**
              **g/tonne**
            
            
            **2002**
              **Gold**
              **Ounces****Proven**
            
            
            400,500
            
            
            6.37
            
            
            82,000
            
            
            187,400
            
            
            7.72
            
            
            46,500
            
            
            284,600
            
            
            7.63
            
            
            69,800**Probable**
            
            
            332,200
            
            
            7.53
            
            
            80,400
            
            
            487,300
            
            
            7.39
            
            
            115,800
            
            
            376,600
            
            
            8.33
            
            
            100,900**Total****Mineral****Reserves**
            
            
            732,700
            
            
            6.89
            
            
            162,400
            
            
            674,700
            
            
            7.48
            
            
            162,300
            
            
            661,200
            
            
            8.03
            
            
            170,700





30


The
      areas of the mine being worked currently are primarily in the eastern portion
      of
      the Seabee sector. At Seabee, the 395 haulage and 730 level decline is being
      driven to access newly defined zones in the area.





**Seabee/Currie
      Rose Future Work Programs**





Mine
      production during 2004 originated from the 2b and 2c sections of the mine
      between the 500 metre and 600 metre levels. The Company developed these levels
      as well as the 161 and 162 zones at the 395 to 495 levels. Both are new
      structures. During 2005, mining will continue to focus on the 2b and 2c
      sections, on the 550 level thru 730 levels, as well as on the 161 and 162
      structures. Seabee will continue to operate under a three year mine plan which
      will focus on the 2b and 2c zones at depth and laterally to the east. Further,
      the Company will re-access the 2d zone from the west on the 60 level to 290
      level.





A
      $2 million capital project to double the Seabee mine milling capacity to 1,100
      tonnes per day will commence early in 2005. The increased mill capacity is
      intended to lessen the impact of grade variations at the mine as well as provide
      for potential throughput from gold discoveries at Porky Lake and Santoy
      Lake.





Mineralization
      is known to extend below the current lowest working levels at both Seabee and
      Currie Rose in addition to known veins not yet mined. Delineation drilling
      of
      the 2b zone between the 630 and 780 metre levels proved successful in replacing
      reserves mined out during the year with a modest decrease in proven reserve
      grade. The Company plans to significantly increase underground exploration
      drilling, both at depth, as well as testing possible strike length extensions
      to
      the west and east. Delineation drilling on the main 2c and 2b zones at depth,
      as
      well as westerly extensions on the 162 zone, previously undefined, will also
      continue, as these areas are considered highly prospective for additional
      reserves. An additional exploration drill chamber has been planned to test
      the
      formerly producing structures in the 5-1 mine, below the lowest mining level
      to
      a depth of 1,000 metres.





Exploration
      will continue to focus on Porky Lake with exploration drilling of approximately
      2,000 metres planned to follow the mafic volcanic-feldspathic arenite contact
      to
      the northeast and northwest around the Porky Lake anticline. Delineation
      drilling of approximately 3,000 metres will follow if these exploratory holes
      return positive results. The Company expects to begin the bulk sample extraction
      upon receipt of permitting.





**Santoy
      Lake Property**





Santoy
      Lake is a 11,400 acre (4,566 hectares) gold exploration property located in
      Saskatchewan 133 kilometres north-northeast of La Ronge, Saskatchewan and
      approximately 11.5 kilometres northeast of the Company’s operating Seabee mine.
      Claude holds a 100% interest in the property subject to a 5% NPI and there
      are
      no underlying royalties. Access to the property is via air from La Ronge or
      via
      the Company’s winter exploration ice road from the Seabee mine.





In
      1998, work crews conducted basic prospecting and mapping and discovered several
      new veins. In the first quarter of 2002, these targets were drill-tested.
      Results were not consistent with historic assay values indicated from surface
      sampling and shallow diamond drilling and became the subject of an ongoing
      review.





**Recent
      Exploration Results**





Seven
      gold zones had been discovered on the Santoy 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 four 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, again by the sectional method using a 3.0 gpt cut-off grade and
      a
      30.0 gpt




31


cutting
      factor, 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 towards
      the
      end of the third quarter of 2005. Meanwhile, further drilling is continuing
      on
      this structure.




The
      core from this program was logged and split at the Company's core logging
      facility at the Seabee mine. Assaying has been done by TSL Laboratories of
      Saskatoon with random checks of pulps and rejects performed by Chemex Labs
      of
      Vancouver. All core intervals have been fire assayed with a gravimetric finish,
      with samples that assayed greater than 10 grams per tonne checked by a total
      metallics assay.





**Santoy
      Lake Property Future Work Programs**





During
      2005, approximately 8,000 metres of in-fill drilling are planned in Zone 7,
      Zone
      8 and Zone 6. An all-weather road of approximately 18 kilometres is being
      constructed from the Santoy Lake Zone 7 to the Seabee mill. The Company expects
      to begin the bulk sample extraction upon receipt of permitting.





**Madsen
      Properties**





The
      Madsen property comprises six contiguous claim blocks totaling approximately
      10,000 acres (4,047 hectares) located in the Red Lake Mining District of
      northwestern Ontario. The properties are: the Buffalo property, the
      Starratt-Olsen property, the Aiken-Russett property, the Redaurum property,
      the
      Hagar Option property and the Madsen property. They are collectively referred
      to
      as the “Madsen properties”. Included on the southwestern part of the Madsen
      properties is the Madsen gold mine, currently on care and maintenance. Claude
      acquired the properties through its acquisition of Madsen Gold Corp. in 1998.





Claude
      and Placer Dome signed an option agreement (the “Placer Dome Option Agreement”)
      on the Madsen properties dated December 15, 2000. The option allows Placer
      Dome
      to earn a 55% working interest in the Madsen property, Starratt-Olsen property,
      Aiken-Russet property and Hager Option property by spending $8.2 million on
      exploration and delivering a bankable feasibility study prior to the fifth
      anniversary of the Placer Dome Option Agreement. The Redaurum property is
      covered by a separate agreement in which Placer Dome can earn a 50% working
      interest in that property from its majority interest holder, Sabina Resources
      Limited (“Sabina”). Should Placer Dome successfully earn-in to the Redaurum
      option agreement, Claude’s interest will increase from 20% to 25%. The Buffalo
      property is not included in the Placer Dome Option Agreement. Placer Dome may
      abandon the option at any time after spending $1.2 million. Upon Placer Dome
      fulfilling its obligations in respect of the option phase, Placer Dome and
      Claude will be deemed to have formed a joint venture with interests of 55%
      and
      45%, respectively. At Claude's election, Placer Dome may earn an additional
      5%
      of the project by funding Claude's share of infrastructure costs associated
      with
      any mine development on the property. Under the Placer Dome Option Agreement,
      Claude's interests cannot be reduced below 40%.





The
      option agreement was amended effective January 1, 2002 whereby Placer now has
      until the end of December 15, 2006 to earn the 55% working interest in the
      Madsen property under the same terms and conditions as described above. The
      Company does not incur any costs in maintaining the agreement.





The
      Company considers the Madsen properties to be an advanced exploration stage
      project. Although the Madsen mine is a former gold producer, the Company has
      not
      to date conducted enough exploration or prepared a feasibility study to
      determine if the property contains any economic ore reserves. Therefore, the
      current operations on the properties consist of an exploratory search for
      mineable deposits of ore.





**Location
      and Access**





The
      properties are located in the Red Lake Mining District of northwestern Ontario
      approximately ten kilometres southwest of the town of Red Lake. Access to the
      property is via Ontario Highway 618 to a number of both paved and gravel roads.
      An all-weather road from Highway 618 leads directly to the headframe of the
      Madsen mine on the property.




32


**MADSEN
      PROPERTY**





**MADSEN
      PROPERTIES**





**How
      Acquired**





Claude
      acquired the Madsen mine and the other properties comprising the Madsen
      properties through the takeover of Madsen Gold Corporation, a publicly traded
      company, in 1998. The Company’s ownership of each property is listed in the
      table below:




33





**Property**
            **Claude’s
                Ownership Percentage**Madsen
                mine
            100%,
                subject to Placer Dome’s right to earn a 55% interest under the option
                agreement.Starratt-Olsen
            100%,
                subject to Placer Dome’s right to earn a 55% interest under the option
                agreement.Aiken-Russett
            100%,
                subject to Placer Dome’s right to earn a 55% interest under the option
                agreement.The
                property is also subject to a 2% net smelter return royalty, to a
                maximum
                of $2.0 million, held by previous property holders United Reef Limited
                and
                Canhorn Mining Corporation.Hagar
                Option
            100%,
                subject to Placer Dome’s right to earn a 55% interest under the option
                agreement.Redaurum
            20%,
                with the right to an additional 5% if Placer Dome fulfills its exploration
                expenditure requirements as outlined in the Redaurum option agreement
                amongst Placer Dome, Claude and Sabina Resources. The additional
                5% will
                be granted to Claude by Sabina in return for Claude waiving its first
                right of refusal. The property is subject to a 0.4% NSR in favor
                of
                Redaurum Limited.Buffalo
            100%.





**Regional
      and Property Geology**





The
      Red Lake District is situated at the western end of the Archean Uchi Subprovince
      which comprises a series of metasedimentary and metavolcanic rocks essentially
      surrounded by granitic and gneissose rocks. Several volcanic cycles have been
      distinguished in the area, evolving from ultramafic, through mafic and
      intermediate phases to a felsic cycle with abundant clastic and chemical
      metasediments. The rocks trend northeast and are affected by regional and local
      scale folding accompanied by restricted zones of intense shearing.





The
      Madsen mine, when operational, worked a series of stacked, en echelon ore lenses
      consisting of gold-bearing pyritic shoots with subordinate pyrrhotite and
      arsenopyrite. The mineralization is hosted within two parallel micaceous units
      termed the Austin and McVeigh "tuffs". These tuffs are interpreted to be an
      alteration/deformation corridor within basalts, with pillowed through
      volcaniclastic facies. The alteration corridor occurs at the contact of the
      underlying Balmer assemblage with the much younger Confederation assemblage.
      The
      host rocks dip to the southeast. The McVeigh horizon lies approximately 90
      metres to the north of the Austin tuff. The latter was the most prolific
      producer in the past. Workings extended to a depth of 1,275 metres and the
      mineralized zone has been traced for 2,308 metres along strike.





The
      McVeigh tuff contains variably altered, auriferous pyrite-bearing lenses that
      occur within the Flat Lake-Howey Bay deformation zone hosted by massive and
      pillowed basalts overlain by a thin mafic to ultramafic sill, highly altered
      mafic volcanic and volcaniclastic rocks (the Austin tuff) and a quartz feldspar
      porphyry that marks the base of the Confederation assemblage. The mineralization
      is semi-conformable to stratigraphy and dips at a slightly steeper angle than
      the host formations.





High-grade
      gold pods were also historically worked at depth in a zone of highly altered
      ultramafic rocks, in the footwall of the main mine workings. Some of this
      high-grade mineralization (No. 8 zone) occurs in blue quartz veins near the
      contact of an altered basalt with an ultramafic unit. This mineralized contact
      is located stratigraphically below the main sulfide replacement mineralized
      zones on the north side of the shaft, approximately 600 metres in the
      footwall.





34


**History
      and Previous Work**





The
      Madsen property was originally owned by Madsen Red Lake Gold Mines Ltd. ("Madsen
      Red Lake"). Madsen Red Lake commenced production from the mine in 1938 at 272
      tonnes per day and increased production to 726 tonnes per day in 1949. From
      1966
      to 1974, production gradually decreased as the last 5 years of Madsen Red Lake’s
      ownership averaged production of 363 tonnes per day at a grade of 8.38 grams
      per
      tonne. Gold production fell from 44,497 ounces in 1971 to 29,163 ounces in
      1973.
      Total production by Madsen Red Lake from 1938 to 1974 totaled 7.25 million
      tonnes at an average grade of 9.93 grams per tonne, or over 2.6 million ounces
      of gold.





In
      1974, the mine was acquired by Bulora Corporation Ltd. (“Bulora”). Bulora
      continued production until June 1976 when the mine was closed due to a lack
      of
      new development and millfeed. The operation was petitioned into bankruptcy
      and
      was purchased from Bulora’s trustee by Madsen-Rowland Mines Ltd.
      (“Madsen-Rowland”). Noranda Exploration Limited (“Noranda”) optioned the
      property from Madsen-Rowland. Noranda re-estimated the now flooded mine’s
      reserves and conducted a limited surface drill program before allowing their
      option to expire.





In
      1988, Madsen Gold Corp. acquired the Madsen property from Madsen-Rowland. Madsen
      acquired the adjacent Buffalo property in the prior year. Subsequent to these
      acquisitions, Madsen acquired interests in the Madsen Properties referred to
      above.





Madsen
      initiated a nine hole surface drill program totaling approximately 1,200 metres
      to test identified lenses of gold mineralization above the 2nd level in the
      2-30
      area near the 2-30 raise. A second surface drill program totaling 1,310 metres
      was carried out in 1990. That program discovered further gold mineralization
      in
      the McVeigh zone that the previous operators had largely ignored.





In
      January 1993, Madsen engaged Watts, Griffis and McOuat, consulting geologists
      and engineers ("WGM") to check the ore reserves at the Madsen mine. A subsequent
      review was carried out in December 1996 by Micon International Inc. ("Micon").





Madsen
      reopened the mine and carried out limited mining operations before placing
      the
      mine on a care and maintenance basis in November 1997. Before the suspension
      of
      mining operations, Madsen processed 46,000 tonnes of ore at an average grade
      of
      3.63 grams per tonne. The overall mill grade was substantially below Madsen’s
      expectations. Production came from stoping and development on various ore
      lenses, including 12,800 tonnes grading 3.95 grams per tonne from the Austin
      Tuff. The Austin Tuff material was of a lower grade than predicted due to
      excessive internal dilution and geological problems. Highly diluted development
      muck from the McVeigh Tuff was included in the total production figures that
      contributed to the lower overall grade. Study of development face assays
      demonstrated that continuous, high grade lenses actually occur as predicted
      from
      detailed drilling; however, the development muck passed to the mill included
      50%
      or more dilution.





Claude
      resumed exploration at the mine following its acquisition of Madsen in 1998.
      Claude conducted surface and underground exploration drilling in order to verify
      extensions of known gold zones which remained open at depth and along strike
      as
      well as to identify new sources of higher grade ore. Claude also conducted
      a
      small exploratory drill program at the Buffalo property. The Madsen mine was
      dewatered and shaft refurbishment was completed through the 12 th level. Air, water and electrical services were installed to the seventh level
      and mining in the old workings was restarted in June of 1998. The mill was
      started in July of 1998, but low gold prices and small, marginal grade stopes
      did not provide economic feedstock at 500 tonnes per day and the Madsen mine
      was
      not brought back into commercial production. The Madsen mine processed 209,357
      tonnes of ore at a mill feed grade of 4.15 grams per tonne from July of 1998
      to
      September of 1999 to produce 25,208 ounces of gold. Mining and mill operations
      were suspended on October 31, 1999 to enable Claude to undertake further
      exploration programs in an attempt to define economically mineable reserves
      at
      the Madsen mine.




In
      order to provide additional mill feed, Claude had commenced a surface
      exploration program on a largely untested section of the parallel McVeigh
      structure and based on encouraging drill results, established a portal and
      ramp
      to access the McVeigh mineralized system in October of 1998. While Claude was
      successful in discovering and developing mineralized shoots in the upper two
      levels of the McVeigh zone, it was not enough to provide economic feedstock
      for
      the mill at that time.





35


Claude
      retained A.C.A. Howe in early 2000 to undertake a review of the property’s
      mineral estimates. Working with mine personnel, A.C.A. Howe completed a mineral
      reserve/resource review for the Madsen mine. However, in the absence of
      additional exploration and data, the mine estimates are not considered to be
      reserves and will require additional exploration work in order to determine
      the
      economic potential of the mine.





After
      optioning the properties from Claude, Placer Dome initiated an exploration
      program at the mine in 2001. They drilled 8 holes totaling 8,568 metres to
      establish the mafic-ultramafic stratigraphy north of the Madsen mine and to
      test
      a segment of the up-plunge projection of the high grade No. 8 Zone as hosted
      by
      the mafic-ultramafic rock suite. The 2001 program encountered predictable
      stratigraphy, strong alteration and four zones containing elevated gold values.





In
      2002, Placer Dome’s exploration emphasis shifted to the mafic-ultramafic complex
      approximately three kilometres north of the Madsen mine. Placer geologists
      identified a very strong alteration zone with coincident geochemical and
      geophysical anomalies aligned on crosscutting structures as determined by
      digital terrain modeling. Placer interprets this group of targets to the north
      of the Madsen mine as lateral or stratigraphic equivalents of the high grade
      No.
      8 zone. Seventeen drill holes totaling 10,643 metres tested the three
      northernmost targets at a reconnaissance scale (250-metre centers). As reported
      in a March, 2003 press release, Placer intersected high grade gold values over
      narrow widths with this drilling.





In
      2003, Placer Dome drilled 49 holes totaling 29,047 metres on six targets in
      the
      Madsen area. Most of the drilling targeted a high-grade, quartz-tourmaline
      vein
      swarm known as the ‘Treasure Box’. Most of the veinlets encountered had visible
      gold present and returned assays from one to 116 grams per tonne over widths
      generally less than 0.30 metres. Infill drilled on 50-metre centers, the vein
      swarm showed good continuity.





**Recent
      Exploration Results**





During
      the first half of 2004, Placer Dome concentrated its efforts in the Russet
      North
      area, drilling 27 holes for a total of 5,012 metres. Key activities included
      infill drilling of the “Treasure Box” and reconnaissance drilling of a similar
      structure 1,000 metres to the southwest called “Anomaly 2”. Both of these
      targets appear associated with mafic/ultramafic contacts occurring as swarms
      of
      high-grade, narrow quartz-tourmaline veinlets. Concurrent with this drilling,
      Placer geologists continued to develop the Datamine 3D model for the Madsen
      property. This modelling identified 19 separate targets requiring
      follow-up.





During
      the second half of 2004, Placer Dome drilled 14 holes totaling 5,315 metres.
      The
      primary target was the “Fork” area, approximately one kilometre southwest of the
      Madsen mine. Drilling of this target resulted in the discovery of three new
      mineralized zones that appear visually similar to the 8 Zone. Intersected at
      shallow depths, these zones are interpreted to be the upper portions of a
      high-grade mineralized system.





**Planned
      Exploration**





By
      year-end of 2004, Placer Dome has met its exploration expenditure requirement
      of
      $8.2 million for the Madsen property. Placer Dome’s remaining obligation to vest
      in the Madsen Joint Venture is to deliver a bankable feasibility study by
      year-end 2006. Negotiations between Placer Dome and Claude are now underway
      to
      develop a mutually beneficial strategy to advance the Madsen
      project.





**Mine
      Details**





Madsen
      purchased the Dona Lake mill including the carbon-in-pulp circuit and
      semi-autogenous grinding circuit from Placer Dome in 1994, and in 1996 moved
      the
      equipment and erected the mill on a new site situated on the Madsen
      property.





The
      mill consists of a single stage crushing circuit; a two stage grinding circuit,
      which is then followed by cyanide leaching. The leached gold is collected in
      a
      carbon-in-pulp circuit which is subsequently stripped using mild caustic and
      collected on stainless steel mesh cathodes by electrowinning. The product from
      electrowinning is refined into dore bars in an induction furnace. Ontario Hydro
      supplies power via overhead lines at 44KV to a step-down transformer on the
      Madsen property.





36


**Tartan
      Lake Property**





Tartan
      Lake is a 6,675 acre property located in northwestern Manitoba about 12 kilometres northeast of Flin Flon.
      The
      property consists of 20 claims, three quarry leases and contains the Tartan
      Lake
      mine, a former gold operation that produced 48,000 ounces of gold before
      production was suspended in 1989.





The
      property also contains a mill and tailings pond. Although the mill and equipment
      are currently mothballed, the tailings pond is fully permitted. Since the
      property is located in close proximity to Claude’s Amisk-Laural properties, the
      present mill could be refurbished and used to process ore transported from
      Amisk
      Lake or other properties nearby.





**How
      Acquired**





Claude
      acquired the property, mill and equipment at Tartan Lake from Vista Gold Corp,
      an arms-length public company, in exchange for 999,444 common shares of Claude.
      The acquisition included a 440 tonne per day mill, mining equipment and related
      parts, all related mine operating infrastructure, a permitted tailings pond
      and
      6,675 acres of mineral and land leases in the area. Claude owns 100% of the
      property and there are no underlying royalties.





**Location
      and Access**





Access
      to the property is via road from Flin Flon, approximately 12 kilometres
      southwest of the property.





**TARTAN
      LAKE PROPERTY LOCATION**





**Regional
      and Property Geology**





The
      Tartan Lake deposit is a mesothermal lode gold deposit of Aphebian age. The
      region is underlain by the Tartan Lake Gabbroic Complex. The mineralization
      on
      the property occurs within quartz-tourmaline veins hosted by a gabbroic complex
      in contact with intermediate to mafic volcanic rocks of the Amisk group. The
      mineralizing system is dominated by early quartz-tourmaline veins that have
      been
      reactivated by a subsequent shearing event with attendant offset and quartz
      flooding. Mineralization in these zones is associated with shear zones
      transecting the Tartan Lake Gabbroic Complex and all have some outcrop exposure.
      Gold appears to be focused near the intersection of crosscutting vein sets.





37


**Exploration
      History**





Gold
      was first discovered in the Tartan Lake area in 1931. Between 1931 and 1947,
      previous operators completed several trenches and drill holes on what are now
      referred to as the South, West Baseline, East Baseline and Ruby Lake
      zones/showings. The Main Zone, which is the largest deposit discovered on the
      property to date, was discovered by Granges Inc. in 1984 by drilling a VLF
      conductor.





The
      deposit was brought into production by Granges Inc. in 1987. A decline was
      driven to the 315 metre level between the Main Zone and the South Zone,
      providing access to both. A drift was started to access the Southeast Zone
      but
      was stopped 75 metres from the zone due to the suspension of mining. Ore was
      mined using undercut-and-fill and cut-and-fill methods, and hauled to surface
      by
      trucks and stockpiled for milling with equipment on site.





The
      mine produced 48,000 ounces of gold during its 2.5 years of operation. All
      underground workings such as ventilation, electrical and pumping systems were
      removed and the workings were allowed to flood in 1993, but sporadic exploration
      continued from surface in an attempt to define additional mineable reserves.
      The
      Southeast Zone was discovered under Tartan Lake and, in 1995, drill testing
      discovered the West Zone.





**Recent
      Exploration Results**





In
      July of 1998, an exploration crew employed by Claude visited the Tartan Lake
      minesite and remapped the host structures observed on surface. This program
      focused on the structural setting and style of mineralization. In 2002, field
      crews selectively mapped and explored for lode structures near the minesite.
      In
      2003, mapping crews traced a strong shear system west of the mine workings
      for
      over one kilometre of strike length. Follow-up diamond drilling confirmed the
      presence of strong shearing to the west and produced an encouraging intersection
      from the West Zone.





In
      2004, permitting was granted to dewater the mine to the 280-metre level at
      which
      a diamond drill station will be established. From this location, the Company
      will conduct a 4,500-metre drill program to evaluate the West Zone.





**Jojay
      Property**





The
      Jojay property is located approximately 120 kilometres northeast of La Ronge,
      Saskatchewan. The property is eight kilometres north of the Jolu mill and 15
      kilometres north of Provincial Road 102 and is therefore easily accessible.
      Claude holds 75% working interest and Shore Gold Inc. holds a 25% working
      interest in the property. The property hosts a historic Mineral Resource of
      280,000 tonnes grading 8.9 grams per tonne Au (Colborne, 1986). Two thirds
      of
      this total is in the inferred category.





Gold
      mineralization at Jojay is associated with disseminated sulfides and is hosted
      by siliceous interlayers within a volcano-sedimentary sequence. The mineralized
      zone is interpreted to occur within a faulted and failed ancient
      caldera-collapse structure. The numerous interpreted fault offsets offer the
      possibility of structural repetitions of the mineralized zone.





In
      2004 permanent road access to the property was completed and will enable a
      drill
      program to be initiated in 2005.





**Amisk-Laural
      Property**





The
      Amisk-Laural property, totaling 13,800 hectares, is a gold exploration property
      located in the province of Saskatchewan 20 kilometres southwest of Flin Flon,
      Manitoba, Canada. The property consists of 87 mineral dispositions in the Amisk
      Lake area. Through an option agreement with property owners Husky Oil and Cameco
      Corporation, Claude has earned a 35% participatory interest in the property
      and
      can earn up to a 70% interest in the property. Some of the mineral dispositions
      have immaterial Net Profits Interest royalties.





38


The
      property is at the exploration stage and is currently without economic ore
      reserves. Therefore, the current operations on the properties consist of an
      exploratory search for mineable deposits of ore.





**Location
      and Access**





The
      property lies within Saskatchewan near the border with Manitoba. The nearest
      town is Flin Flon, Manitoba, which is approximately 20 kilometres to the
      northeast. Access is via bush plane from La Ronge or by road from La Ronge
      or
      Flin Flon through a series of paved and gravel roads.




**AMISK/TARTAN
      LOCATION**





**How
      Acquired**





Husky
      Oil (“Husky”) and a predecessor company of Cameco Corporation ("Cameco") entered
      into a joint venture agreement effective November 1, 1987 whereby a joint
      venture (the "Amisk Joint Venture") was established to prospect for and locate
      minerals within the Amisk-Laural property. Each of Husky and Cameco had a 50%
      participating interest in the Amisk Joint Venture.





In
      October of 1995, Claude entered into an option agreement (the "Amisk Lake Option
      Agreement") with Husky and Cameco, whereby it may earn and acquire a 35%
      participating interest in the Amisk Joint Venture by spending an aggregate
      of
      $2.5 million on the property by October, 1999 and an additional 35%
      participating interest by spending a further $14.0 million by October, 2005,
      or
      by bringing the property into commercial production within 3 months after
      October, 2005. At any time after Claude has earned its initial 35% participating
      interest, it may present a feasibility study to Cameco and Husky that will
      become an "Approved Development Program" upon its approval by Cameco and Husky.
      Upon such approval, each of Cameco and Husky must elect to participate in the
      project and repurchase a 5% interest in the property at a predetermined price
      of
      $2,357,500 or sell its 15% interest to Claude for $800,000. If Claude does
      not
      ultimately earn an additional 35% participating interest, then any election
      made
      by Cameco or Husky to participate and repurchase a 5% interest may be revoked
      retroactively. Claude also issued 62,500 Common Shares to each of Husky and
      Cameco pursuant to the Amisk Lake Option Agreement. For fiscal years 2000 and
      2001, Claude had applied for and been granted extensions to fulfill its minimum
      annual work commitments.





39


To
      date, Claude has spent approximately $3.4 million on this property and thereby
      is qualified, although has not yet elected, to receive a 35% participating
      interest under the Amisk Lake Option Agreement. Further expenditures on this
      project are contingent upon successful renegotiation of the aforementioned
      option agreement with Cameco and Husky.





**Regional
      and Property Geology**





The
      area lies within the Laural Lake Rhyolite Complex within the Flin Flon-Snow
      Lake
      Greenstone Belt. The known mineralization on the property is confined to the
      complex where deformation has influenced its present distribution and
      orientation.





Precious
      metal mineralization is part of a synergistic hydrothermal event. The observed
      vein mineralogy consists of pyrite and quartz, along with copper, lead, zinc,
      and antimony sulphides, small quantities of bismuth and antimony tellurides
      with
      quartz and carbonate minerals. Sericite-muscovite alteration occurs in the
      wallrock, forming an envelope about the sulphide dominant mineralization. Quartz
      veins on the property have been observed to be deformed, boudinaged and folded,
      which is consistent with the overall deformation style.





**Previous
      Exploration History**





Free
      gold was discovered in quartz veins on the northwest shore of Amisk Lake in
      1913. Since then, many claims have been staked at different times covering
      various parts of the area. Exploration activity in the area remained somewhat
      sporadic and geophysically-oriented for base metals until Saskatchewan Mining
      Development Corporation (a predecessor of Cameco) began assembling a land
      package through staking and options in the late 1970s. Cameco continued with
      geophysical and geochemical programs which resulted in the discovery of gold
      on
      the Laural Lake property and on a number of other significant gold showings
      in
      the area prior to the programs being suspended in 1989.





In
      the first three years of its option, Claude completed four phases of diamond
      drilling totaling 18,000 metres in 57 holes as well as geological mapping during
      the summers of 1997 through 1999. In 2000, Claude conducted mapping and
      prospecting of those claims to fulfill assessment obligations. This field
      program resulted in the discovery of a gold-bearing shear system on Lookout
      Island that requires follow-up.





**Recent
      Exploration Results**





In
      2001, work programs on the Amisk-Laural property focused on meeting assessment
      requirements as part of the option agreement obligations. In 2002, field crews
      mapped and resampled the margins of the Laural Lake rhyolite dome. The work
      confirmed the existence of elevated gold values as discontinuous stockwork
      fractures proximal to the rhyolite’s margins. The program also included further
      stripping/sampling of the Lookout Island gold-bearing shear system and two
      silicified/pyritized corridors south of the Laural Lake zone on Hyslin
      Bay.





Late
      in 2002, the Company initiated discussions with Cameco Corporation on the status
      and future direction of the Amisk/Laural Lake project. The narrow discontinuous
      nature of the stockwork veins recorded during the summer of 2002 effectively
      undermined the Company’s confidence in the deposit’s mineral resource. Similar
      continuity problems were reported during Cameco’s bulk sampling program in 1989.
      With the integrity of the underlying resources in question, Claude’s management
      deems it prudent to revisit the earn-in schedule of the option agreement. The
      Company’s options include triggering the joint venture and/or renegotiating the
      option under terms that more accurately reflect the property value.





There
      was no field work done in 2003 or 2004.





40


**Other
      Mineral Properties**





The
      Company currently holds interests in several other exploration properties
      located in northern Saskatchewan. The majority of these properties are in close
      proximity to the Company’s core properties around the Seabee and Amisk
      properties. The Company considers these properties to be secondary to those
      described above and has planned little or no expenditures on these properties
      in
      the foreseeable future. None of these properties contain an economic body of
      ore. As the properties remain in good standing, management intends to retain
      their interest and will re-evaluate their exploration plans for them as market
      conditions warrant and as funds become available.





**Oil
      and Gas Properties**





Claude
      produces crude oil, liquids, and natural gas from properties situated in Alberta
      and Saskatchewan. Alberta properties represent 87% of Claude’s gross oil and
      NGLs reserves (69% of net before royalty reserves) and 92% of total production.
      Saskatchewan properties represent 13% of Claude’s gross oil reserves (31% of net
      before royalty reserves), and 8% of total production. Alberta properties
      represent 100% of Claude’s natural gas reserves and production. The Company’s
      Alberta oil and gas properties are operated by others.





**OIL
      AND GAS**







**Property
      Descriptions**





The
      following are descriptions of the most significant oil and gas properties in
      which Claude has an interest:





Edson,
      Alberta





The
      Company holds a 7.8921168% interest in the Edson Gas Unit No. 1 and a 7.1808666%
      interest in the Edson Gas Plant. The unit covers about five townships 125
      kilometres northwest of Calgary, Alberta.





The
      production comes from the Elkton and Shunda formations at a depth of 10,000
      feet. Production commenced in April, 1963 and contains 69 wells (5.45 net wells)
      of which 61 (4.81 net wells) have produced in recent months. The Edson Gas
      Unit
      No. 1 is operated by Talisman Energy Inc. The Edson Unit reserves represent
      more
      than 97% of the Company’s proved natural gas reserves.





41


Production
      for the year ending December 31, 2004 averaged approximately 2,004 MCF of
      natural gas per day.





Nipisi
      Gilwood Unit No. 1, Alberta





The
      Company holds a 2.73003% interest in the Nipisi Gilwood Unit No. 1 (the "Nipisi
      Unit") located 110 kilometres northwest of Edmonton, Alberta. The unit is an
      oil
      field operated by Canada Natural Resources Limited. The Nipisi Unit reserves
      represent nearly 70% of the Company’s proved oil and NGLs reserves.





The
      Nipisi Unit began oil production in 1965 and by 1967 the unit area was developed
      on about 320 acres well spacing with 134 wells within the unit area. A
      waterflood was implemented in January 1969. An in-fill drilling program with
      the
      goal to reduce the well spacing from 320 acres to 160 acres with a new flood
      scheme was initiated in 1983. Three of the four stages of this program were
      initiated by 1988 but there are no current plans to implement the fourth stage.
      In 1997, the operator initiated a new project to improve field efficiencies
      by
      drilling new in-fill wells and converting certain producing wells to injection
      wells. The Nipisi Unit contains 394 wells (10.75 net wells) of which 172 (4.70
      net wells) have recently produced.





Production
      for the year ending December 31, 2004 averaged approximately 158 barrels of
      crude oil per day (including natural gas liquids). Oil is produced from the
      Gilwood sandstone at an approximate depth of 5,600 feet. Production is currently
      achieved by primary, secondary and tertiary methods.





Gainsborough,
      Saskatchewan





Claude
      has a 75% interest in six producing vertical oil wells in the Gainsborough
      area
      of southeastern Saskatchewan (the "Gainsborough Property") and two former
      producing wells that have been converted to injector wells. Oil production
      comes
      from two zones in the Frobisher/Alida formation at a depth of 3,500
      feet.





During
      1996, Claude together with the other partners in the Gainsborough Property,
      entered into a Farm-in Letter Agreement with Provident Energy Ltd. ("Provident")
      whereby Provident was granted the right to earn a 55% interest in the
      Gainsborough Property, excluding the seven vertical wells then producing. In
      order to earn its interest, Provident was required to complete a horizontal
      test
      well on the Gainsborough Property. Provident has fulfilled its obligations
      and
      has thereby earned a 55% interest in the Gainsborough Property, excluding the
      seven vertical wells then producing. Subsequently, Provident drilled an
      additional four horizontal (three are currently producing) wells in which Claude
      owns a 33.75 percent working interest. A fourth horizontal well was successfully
      drilled towards the end of 2004.





**Production**





The
      following table lists Claude’s total oil, NGLs and gas production for the last 3
      fiscal years:





**Year**
            
            
            **Average
                Oil**
              **NGLs
                Production**
              **(Barrels
                Per Day**
            **)**
            
            **Total
                Oil &**
              **NGLs**
              **Production
                (Barrels**
            **)**
            
            **Average**
              **US
                $ Price**
              **(barrel**
            **)**
            
            **Average
                Gas**
              **Production****(MMCF
                per Day**
            **)**
            
            **Total
                Gas**
              **Production**
              **(MMCF**
            **)**
            
            **Average
                US $**
              **Gas
                price**
              **(MCF**
            **)**2004
            
            
            249
            
            
            90,900
            
            
            36.06
            
            
            2.18
            
            
            796
            
            
            5.002003
            
            
            250
            
            
            91,200
            
            
            27.43
            
            
            2.19
            
            
            800
            
            
            4.622002
            
            
            228
            
            
            83,200
            
            
            23.83
            
            
            2.43
            
            
            886
            
            
            2.47





42


The
      following table provides proved reserves by property, estimated using constant
      prices and costs, as well as the net present value of future net revenue before
      and after deducting future income tax expense, calculated using a discount
      rate
      of 10%:





Net
              Present
            
            Net
                PresentValue
            
            ValueOil
                and NGLs
            Gas
            
            Before
                taxes
            
            After
                taxesGross
            
            
            Net
            
            
            Gross
            
            
            Net
            
            
            10
            %
            10%mbbl
            
            
            Mbbl
            
            
            MMcf
            
            
            MMcf
            
            
            ($
                000
            )
            ($
                000)**Proved
                reserves**Developed
                ProducingAlberta
            
            
            454.8
            
            
            148.8
            
            
            7,028.0
            
            
            1,636.0
            
            
            10,578.0
            
            9,055.0Saskatchewan
            
            
            66.2
            
            
            64.7
            
            
            -
            
            
            -
            
            
            396.0
            
            242.0521.0
            
            
            213.5
            
            
            7,028.0
            
            
            1,636.0
            
            
            10,974.0
            
            9,297.0Developed
                Non-ProducingAlberta
            
            
            5.1
            
            
            1.1
            
            
            139.0
            
            
            28.0
            
            
            187.0
            
            126.0Saskatchewan
            
            
            -
            
            
            -
            
            
            
            
            
            -
            
            
            -
            
            -**Total
              proved reserves**
            
            
            526.1
            
            
            214.6
            
            
            7,167.0
            
            
            1,664.0
            
            
            11,161.0
            
            9,423.0




The
      following table discloses elements of future net revenue for oil, NGLs and
      gas
      estimated using constant prices and costs and calculated with a 10%
      discount:





Revenue
              ($
                000)
            
            
            Royalties
              ($
                000
            )
            
            Operating
              Costs
              ($
                000
            )
            
            Development
              Costs
              ($
                000
            )
            
            Well
              Abandonment
              Costs
              ($
                000
            )
            
            Future
                net
              revenue
                before Income taxes
              ($
                000
            )
            
            Income
                Taxes
              ($
                000
            )
            
            Future
                net
              Revenue
                after Income taxes
              ($
                000
            )Proved
                Reserves
            
            
            42,112
            
            
            25,609
            
            
            5,026
            
            
            152
            
            
            162
            
            
            11,161
            
            
            1,738
            
            
            9,423





**Reconciliation
      of Reserves**





The
      following table sets forth the Company’s reconciliation of its working interest
      proved oil and gas reserves from January 1, 2004 to December 31,
      2004:





**WORKING
                INTEREST PROVED OIL AND GAS RESERVES (BEFORE
                ROYALTIES)****Additions**
            
            
            **Revisions****January
                1**
            
            
            **and**
            
            
            **And**
            
            
            **Production**
            
            
            **December
                31****2004**
            
            
            **Extensions**
            
            
            **Transfers**
            
            
            **During
                2004**
            
            
            **2004****Oil
                and NGLs (mbbl)**
            
            
            150.0
            
            
            113.4
            
            
            42.1
            
            
            (90.9
            )
            
            214.6**Natural
                Gas (MMCF)**
            
            
            1,328.0
            
            
            -
            
            
            1,132.0
            
            
            (796
            )
            
            1,664.0





43


**Pricing
      Assumptions**





Constant
      prices and costs





Constant
      prices and costs are defined in NI 51-101 as the Company’s prices and costs as
      at the evaluation effective date. The Company’s prices and costs are defined as
      the posted price for oil and the spot price for gas, after historical
      adjustments for transportation, gravity and other factors.





The
      preceding tables and reconciliation used the following constant price
      forecasts:






Oil
            Edmonton Par
            $46.51/bblNatural Gas
            Crown Medium
            $32.10/bblAlberta AECO-C
            $6.78/McfNatural Gas By-Products
            Butanes
            $39.78/bblSulphur
            $30.00/litre





Annual
      Economic Evaluation Reports of Claude’s oil and gas interests in Alberta and
      Saskatchewan have been prepared by Sproule Associates Limited, Calgary, Alberta.
      The most recent Economic Evaluations are effective December 31, 2004, with
      a
      preparation date of February 17, 2005.





**Item
      5. Operating and Financial Review and Prospects**





**A.** **Operating
      Results**





The
      Company's financial statements are stated in Canadian Dollars and are prepared
      in accordance with Canadian Generally Accepted Accounting Principles (GAAP),
      the
      application of which, in the case of the Company, conforms in all material
      respects for the periods presented with United States GAAP except as noted
      in
      Note 21 to the 2004 audited financial statements.





**Year
      Ended December 31, 2004 compared to Year Ended December 31,
      2003**





For
      the year ended December 31, 2004, Claude recorded a net loss of $0.6 million,
      or
      $0.01 per share, compared to restated net earnings due to a change in accounting
      policy of $1.8 million, or $0.03 per share, in 2003.





Cash
      flow from operations, before net change in non-cash working capital items for
      the year ended December 31, 2004 was $6.2 million, or $0.10 per share, compared
      to restated cash flows of $7.7 million, or $0.14 per share, for the same period
      in 2003.





Gross
      revenue for the year fell 8% from $35.2 million in 2003 to $32.2 million in
      2004. Gold revenues fell 13% year-over-year from $25.8 million in 2003 to $22.5
      million in 2004. Much of this was due to a 19% decline in sales volume, from
      50,800 ounces sold in 2003 to 41,200 ounces in 2004. Partially offsetting the
      volume decline was the improvement in average gold price realized: 2004 - $545
      (US $419); 2003 - $508 (US $362). Excluding the impact of the strengthening
      Canadian versus US dollar exchange rate, revenue growth would have increased
      an
      additional $1.8 million, or $0.03 per share.





Seabee
      gold production in 2004 was 22% below budget as a result of reduced tonnes
      broken and milled and grade below the mine’s long-term average. Grade decline
      was due primarily to drill results from certain stoping blocks not translating
      when milled. As a result of development delays due to the above, tonnage
      suffered.





Gross
      revenues from the Company’s oil, NGLs and natural gas properties improved 4%
      over last year. This was largely due to improved production and average prices
      realized year-over-year. A decline in third party processing revenues and an
      increase in the Alberta properties’ overriding royalty mitigated gross revenue
      improvement, as net oil and gas revenues remained relatively constant. The
      2004
      oil and NGLs sales volume of 90,900 barrels was relatively unchanged from the
      91,200 barrels sold last year. This improvement, considering the properties’
      average production declines of 10-15%, was due to drilling success at the Nipisi
      properties. The average realized price per barrel was $46.92 (US $36.06) in
      2004
      versus of $38.49 (US $27.43) last year. Excluding the foreign exchange rate
      impact of the strengthening Canadian dollar compared to the US dollar, oil
      and
      NGLs revenue growth would have improved by an additional 8% in 2004 compared
      to
      2003.





44


Gas
      volumes fell less than 1% from 800 MMCF in 2003 to 796 MMCF in 2004. Although
      the average US dollar price realized improved 8%, the strengthening Canadian
      dollar resulted in little dollar value increase: 2004 - $6.51 (US $5.00); 2003
      -
      $6.48 (US $4.62).





As
      expected, the 12% improvement in mine operating costs from $18.0 million in
      2003
      to $15.9 million in 2004 was partially a result of the commissioning of the
      shaft extension in November of 2003 and increased capitalization of costs due
      to
      the development of larger stopes. Lower sales volume and the strengthening
      Canadian dollar resulted in increases in total cash operating costs per
      ounce 1   from
      US $253 in 2003 to US $297 this year. The strengthening Canadian dollar was
      responsible for US $22 of this year’s unit cost total.





**For
                the years ended December 31,**
            
            
            **2004**
            
            
            **2003**
            
            
            **2002****Production
                cost per ounce (US $)**Cash
                operating costs1
            
            $
            297
            
            $
            253
            
            $
            246Royalties
                and production taxes
            
            
            -
            
            
            -
            
            
            -Total
                cash costs
            
            
            297
            
            
            253
            
            
            246Depreciation
                and depletion
            
            
            112
            
            
            75
            
            
            76Total
                production costs
            
            $
            409
            
            $
            328
            
            $
            322





Oil
      and gas operating costs increased slightly from $1.3 million in 2003 to $1.6
      million. This increase is attributed to the age of the Alberta property
      infrastructures.





General
      and administrative costs increased 8% from 2003 to 2004 due largely to costs
      related to the Company’s US listing. Interest and other income improved slightly
      and the provision for income tax, which represents large capital tax, improved
      to changes in federal tax treatment. The Company has significant tax losses
      and
      pools available and does not expect to pay income taxes for several
      years.





Depreciation,
      depletion and accretion of the Company’s gold assets was $6.0 million in 2004
      compared to $5.4 million in 2003. This variance is a result of using a larger
      asset base in the calculation offset by fewer tonnes broken in the year. Largely
      a result of the fewer ounces poured, depreciation, depletion and accretion
      costs
      per ounce in 2004 was US $112 versus US $75 last year.





Depreciation,
      depletion and accretion of the Company’s oil and gas assets increased 29% from
      $.5 million in 2003 to $.7 million in 2004. This was due to the larger asset
      base used in the calculation.





**Year
      Ended December 31, 2003 compared to Year Ended December 31,
      2002**





For
      the year ended December 31, 2003, Claude recorded net earnings of $1.8 million,
      or $0.03 per share. This compares to a restated loss due to a change in
      accounting policy of $1.9 million, or $0.04 per share, in 2002.





The
      Company’s cash flows from operations before net change in non-cash working
      capital items more than doubled in 2003, from $3.7 million, or $0.08 per share,
      to $7.7 million, or $0.14 per share, this year.





Total
      revenues for the year increased by 28%, from $27.4 million in 2002 to $35.2
      million in 2003.





The
      Seabee mine was the main contributor to this improvement with a $5.4 million,
      or
      27%, increase in gold sales year over year. Excluding the strengthening Canadian
      versus US dollar exchange rate, revenue growth would have increased an
      additional $3.1 million.







1
      The Company reports its operating costs on a per-ounce basis based on uniform
      standards developed by the Gold Institute. See Page 27 for further
      details.


45


Gold
      sales increased from 41,500 ounces in 2002 to 50,800 ounces this year. This
      22%
      improvement in sales volume was the result of improved mine planning and
      increased mine development undertaken in 2002 and 2003. A 16% increase in
      average US dollar gold prices realized per ounce (2003 - CDN $508, US $362;
      2002
      - CDN $490, US $312) combined with increased sales volume helped minimize the
      negative impact of the exchange rate.





The
      mine fell short of its 2003 production target by 2%, or 1,200 ounces, due
      largely to lower than expected grade from two stopes being mined in November
      and
      December. For 2004, the mine plan calls for gold production of approximately
      51,000 ounces. Prices are expected to be consistent or better than those
      realized in 2003.





Gross
      oil, NGLs and gas revenues totaled $9.4 million in 2003, a 34% increase from
      the
      $7.0 million recorded in 2002. 2003 oil and NGLs sales volumes were 91,200
      barrels, 10% higher than the 83,200 barrels sold in 2002. This volume
      improvement was a result of drilling success on the Zama and Nipisi properties.
      The average realized price per barrel in 2003 was US $27.43 (CDN $38.49) versus
      US $23.83 (CDN $37.42) last year. Excluding the impact of the exchange rate,
      oil
      and NGLs revenue growth would have improved by an additional 12%.





As
      a result of normal production decline rates, gas sales volume fell 10% from
      886
      MMCF in 2002 to 800 MMCF in 2003. The average US dollar price realized nearly
      doubled, from US $2.47 (CDN $3.88) per MCF in 2002 to US $4.62 (CDN $6.48)
      this
      year. Excluding the impact of the exchange rate, gas revenues would have
      improved by an additional 12%.





Total
      mine operating costs rose 11% from $16.2 million in 2002 to $18.0 million this
      year. Much of this increase can be attributed to mining smaller stoping blocks
      at lower levels of the mine. This situation began to improve towards the end
      of
      the third quarter as the development of larger stopes was completed and the
      shaft extension was commissioned.





Improved
      gold sales volume was offset by increased mine operating costs and a stronger
      Canadian dollar. This resulted in an increase in total cash cost per
      ounce 2  from US $249 in 2002 to US $253 this year. The strengthening Canadian dollar
      was
      responsible for US $27 of this year's cash cost per ounce total.





**For
                the years ended December 31,**
            
            
            **2003**
            
            
            **2002**
            
            
            **2001****Production
                cost per ounce (US $)**Cash
                operating costs3
            
            $
            253
            
            $
            249
            
            $
            221Royalties
                and production taxes
            
            
            -
            
            
            -
            
            
            -Total
                cash costs
            
            
            253
            
            
            249
            
            
            221Depreciation
                and depletion
            
            
            75
            
            
            76
            
            
            73Total
                production costs
            
            $
            328
            
            $
            325
            
            $
            294





As
      a result of the shaft commissioning, operating costs in 2004 are expected to
      return to historic levels of $16 million to $16.5 million, with total cash
      costs
      per ounce (
      3) of approximately US $240.





Oil
      and gas operating costs increased slightly from $1.1 million in 2002 to $1.3
      million in 2003. General and administrative costs remained relatively constant
      at $2.1 million. Interest and other costs increased by $.2 million while the
      provision for income taxes rose slightly.





Depreciation
      and depletion of the Company’s gold assets was $5.4 million in 2003 compared to
      a restated $4.9 million in 2002. This variance is the result of using a larger
      asset base in the calculation offset by fewer tonnes broken. Depreciation and
      depletion cost per ounce in 2003 was US $75 versus US $76 last year. The dollar
      exchange rate was responsible for US $8 of this year’s per ounce figure.







2
          The Company reports its operating costs on a per-ounce basis based on uniform
          standards developed by the Gold Institute. See Page 27 for further
          details.
 3
          The Company reports its operating costs on a per-ounce basis based on uniform
          standards developed by the Gold Institute. See Page 27 for further
          details.


46


**B.** **Liquidity
      and Capital Resources**





**Year
      Ended December 31, 2004**





Cash
      flow from operations before net change in non-cash working capital items fell
      19% year-over-year to $6.2 million. This was due to decreased contribution
      from
      gold and oil & gas properties.





Mineral
      property expenditures were $13.3 million in 2004 compared to $14.9 million
      in
      2003. This expenditures for 2004 includes $8.6 million (2003 - $5.9 million)
      in
      development costs at the Seabee mine. The 46% increase was largely due to grade
      issues and the resultant requirement to expedite development. Other costs in
      the
      above include $3.2 million in exploration - financed from flow-through share
      issue; $1.0 million in property, plant and equipment charges at the Seabee
      mine;
      and, $.5 million incurred at the Tartan Lake project.





Oil
      and gas capital expenditures of $2.0 million during 2004 increased by 11% over
      the $1.8 incurred in 2003. $1.3 million relates to in-fill drilling costs on
      both the Alberta and Saskatchewan properties as well as $.7 million in
      infrastructure costs, primarily at the Edson Gas Plant.





Pursuant
      to a production royalty agreement entered into at year end, $7.0 million of
      the
      royalty sales proceeds were pledged, in the forms of a promissory note, to
      secure the Company’s obligations.





During
      the year, the Company redeemed $1.0 million of its long-term investments. The
      Company’s investment portfolio includes $1.0 million common shares of Shore Gold
      Inc., a diamond exploration company with significant upside potential. These
      shares, recorded at a cost of $.4 million, have a fair market value of $3.4
      million at year end.





In
      the year, an additional $.1 million was incurred to fund certain of the
      Company’s reclamation requirements. The Company has fully funded the financial
      assurance requirements for its Seabee and Madsen mining properties.





Financing
      activities in 2004 included a flow-through share 4  agreement for the issue of 1,000,000 common shares at a price of $1.50 per
      share
      for gross proceeds of $1.5 million; a flow-through share agreement for the
      issue
      of 1,150,033 common shares at a price of $1.50 per share for gross proceeds
      of
      $1.7 million; and, the exercise of 1,138,450 common share purchase warrants,
      pursuant to a 2003 private placement, for gross proceeds of $2.1
      million.





Pursuant
      to an agreement entered into at December 31, 2004, the Company sold a production
      royalty for gross proceeds of $8.0 million. Of this, $7.1 million related to
      the
      royalty obligation itself while $.9 million related to cash received by the
      Company for fees and services and will be deferred over certain
      periods.





At
      December 31, 2004, working capital was $9.3 million versus $11.9 million at
      December 31, 2003. This was a result of share issuance proceeds offset by
      decreased contributions from producing assets and certain capital expenditures
      financed through operating cash flows.





The
      Company believes that in 2005 additional working capital will be required,
      in
      the form of debt and/or equity, to finance the mill expansion and proposed
      bulk
      sample programs. See Item 5D. - “Trend Information”.





**Year
      Ended December 31, 2003**





Cash
      flow from operations before net change in non-cash working capital items more
      than doubled, increasing to $7.7 million in 2003 from $3.7 million in 2002.
      This
      was due to greater contributions from both gold and oil & gas operations.







4
        See “Key Information - Risk Factors” for complete flow-through share discussion.
        While the cash proceeds are combined with general corporate funds, as disclosed
        in Note 21 (i) of the 2004 consolidated financial statements, U.S. GAAP requires
        cash amounts restricted against future use as a result of commitments related
        to
        flow-through share agreements to be separately classified in the financial
        statements.


47


During
      the year, the Company redeemed $.3 million of its short-term investments while
      acquiring an additional $1.0 million long-term investments largely through
      proceeds from common share warrants exercised during the year.





Mineral
      property expenditures reached levels not seen since 1998: $14.9 million in
      2003
      (2002 - $8.2 million). This includes $5.9 million in development expenditures
      at
      the Seabee mine (2002 - $5.7 million); $6.2 million in infrastructure additions
      at the mine, including the shaft extension and tailings dam upgrade; and $1.7
      million in exploration (2002 - $1.4 million).





Oil
      and gas capital expenditures of $1.8 million, more than twice that incurred
      in
      2002, largely consist of drilling costs at the Nipisi and infrastructure costs
      on the Edson unit and Edson gas plant.





In
      2004, oil and gas capital expenditures are expected to be the same or slightly
      higher, a result of increased drilling planned on the Nipisi property.





During
      the year, Claude purchased $.5 million in investment certificates for use as
      collateral for reclamation requirements at the Seabee mine. The Company has
      fully satisfied the financial assurance requirements for its Seabee and Madsen
      mining properties.





Financing
      activities in 2003 included the issue of 2,500,000 common share units at a
      price
      of $1.50 per unit for gross proceeds of $3,750,000; 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 issue of 2,500,000 common share units
      at a
      price of $2.00 per unit for gross proceeds of $5,000,000; and, the exercise
      of
      2,688,020 warrants, pursuant to 2002 and 2003 private placements, for gross
      proceeds of $3.4 million.





During
      2003, the Company repaid a $110,000 demand loan originally issued to secure
      reclamation requirements at the Madsen property. Claude also paid down $60,000
      of a capital lease obligation. At December 31, 2003, working capital was $11.9
      million, an increase of $3.6 million from 2002. This was a combination of
      increased contribution margins from producing assets and share issuance
      proceeds, offset by certain capital expenditures financed through operating
      cash
      flows.





**Year
      Ended December 31, 2002**





Cash
      flow from operations before net change in non-cash working capital items was
      $3.7 million in 2002 compared to $3.4 million in 2001. This decrease was due
      to
      higher contributions from both gold and oil & gas properties, which in turn
      was partially offset by higher administrative costs as well as increases in
      receivables, inventories and shrinkage stope platform costs.





In
      2002, Claude temporarily invested $.3 million from the proceeds of a
      flow-through share issue in short-term investments.





Capital
      expenditures increased from $4.8 million in 2001 to $8.9 million in 2002. Much
      of this reflects increased development expenditures at the Seabee mine (2002
      -
      $5.7 million; 2001 - $3.3 million) and an aggressive exploration program funded
      by a flow-through share issue at the end of 2002 (2002 - $1.4 million; 2001
      -
      $.1 million).





Investments
      of $1.3 million reflected a $.7 million increase in security purchases to
      satisfy financial assurance requirements at the Seabee mine.





During
      2002, Claude repaid $328,000 of a demand loan originally issued to secure
      reclamation requirements at the Madsen property. Claude also purchased a capital
      asset, which was financed via a capital lease. At December 31, 2002, Claude
      had
      $8.3 million in working capital, a decrease of $.2 million from
      2001.





During
      the year ending December 31, 2002 the Company issued a total of 6,405,624
      shares: 227,931 of these shares were issued pursuant to the Company’s Employee
      Stock Purchase Plan as described in Note 10 to the 2002 consolidated financial
      statements; 90,000 common shares were issued pursuant to the exercise of
      employee share purchase options; 75,000 common shares were issued pursuant
      to
      the Company acquiring rights on mineral









48




properties;
      and, in April 2002, the Company completed the Private Placement of 5,000,000
      units at a price of $1.00 per unit for gross proceeds of $5,000,000. Each unit
      consists of one common share and one-half of one common share purchase warrant.
      Each whole common share purchase warrant entitles the holder to acquire one
      common share at an exercise price of $1.25 until April 23, 2003. The Company
      intends to use the proceeds for general corporate purposes. Concurrent with
      the
      offering, the Company issued the underwriters 63,463 common share purchase
      warrants in consideration for services provided in connection with the offering.
      The exercise terms of the underwriter warrants are the same as the warrants
      issued with the units in the underwriting (as at December 31, 2002, 12,693
      of
      these common share purchase warrants had been exercised). The Company also
      entered into a flow-through share5agreement for the issue of
      1,000,000 common shares at a price of $1.50 per share for proceeds of
      $1,500,000.




**C.** **Research
      and Development, Patents and Licenses, etc.**





The
      Company is not involved in any research, development, patenting or licensing
      activities.





**D.** **Trend
      Information**





Production
      in 2005 expected to improve to approximately 46,000 ounces with average realized
      prices expected to be consistent or better than those realized in 2004. Mine
      operating costs are forecast to increase by 10% to $17.5 million. Depreciation
      and depletion should increase by 20% if targeted tonnes broken is attained.
      Capital expenditures for mineral properties should remain the same with
      development costs falling 20% to $6.9 million. However, infrastructure costs
      should more than double with the proposed construction of the mill expansion.
      Exploration costs, primarily funded by flow-through share issues will be
      approximately $4 - $5 million. This amount is larger than historical averages
      as
      the Company prepares for the extraction of two separate bulk samples at the
      Porky Lake and Santoy properties.





Oil
      and gas revenues are expected to remain unchanged as production and price are
      forecast to remain strong. Operating costs for 2005 are also expected to remain
      constant. In 2005, oil and gas capital expenditures should begin to fall back
      to
      $1.2 million to $1.3 million.





By
      the end of the third quarter, the Company will have doubled its existing milling
      capacity to 1,100 tonnes per day. This will enable the Seabee mine to process
      throughput from additional ore bodies. In the latter half of the year the
      Company expects to be in position to extract two separate bulk samples at our
      Porky and Santoy properties. Success at either or both of these projects could
      lead to production increase as early as 2006.





In
      February 2005, the Company borrowed $5.0 million in the form of a demand loan
      bearing interest at 5.99%, repayable in monthly principal and interest payments
      of $96,514 and maturing in February 2010. Proceeds from this loan will be to
      finance the mill expansion and for general working capital
      purposes.





The
      statements made in this Item 5D. are forward-looking statements which are
      subject to numerous risks. For a discussion involving in making forward-looking
      statements, see “Statement Regarding Forward - Looking Information” on page 4 of
      this annual report.





Accounting
      Estimates





The
      Company’s significant accounting policies are contained in Note 1 to the
      consolidated financial statements. The following is a discussion of the
      accounting estimates that are critical in determining the Company’s financial
      results.




5 See “Key Information - Risk Factors” for complete flow-through share discussion.
          While the cash proceeds are combined with general corporate funds, as disclosed
          in Note 21 (i) of the 2004 consolidated financial statements, U.S. GAAP
          requires
          cash amounts restricted against future use as a result of commitments related
          to
          flow-through share agreements to be separately classified in the financial
          statements.




49





Reserves





The
      Company engages independent professional consultants to evaluate its mineral
      reserves as well as its proved and probable oil, NGLs and natural gas reserves.
      The estimation of reserves involves the exercise of judgment. Forecasts are
      based on geological, geophysical, engineering and economic data, all of which
      are subject to many uncertainties and interpretations. The Company expects
      that
      over time its reserve estimates will be revised upward or downward based on
      updated information. Such information may include revisions to geological data
      or assumptions, a change in economic data, and the results of drilling and
      exploration activities. Reserve estimates can have a significant impact on
      net
      earnings, as they are a key component in the calculation of depreciation and
      depletion. In addition, changes in reserve estimates, gold or petroleum prices
      and future operating and capital costs can have a significant impact on the
      impairment assessments of the assets.





Asset
      Retirement Obligations





Claude’s
      mining, exploration and development activities are subject to various levels
      of
      federal and provincial law as well as regulations relating to the protection
      of
      the environment, including requirements for closure and reclamation. Management
      judgment and estimates are made when estimating reclamation and closure costs.
      In some cases, these costs will be incurred many years from the date of
      estimate. Estimates may be revised as a result of changes in government
      regulations or assumptions.





Shrinkage
      Stope Platform Costs





The
      Company utilizes the shrinkage stope mining method to mine its orebody at the
      Seabee mine. Under this method, ore used as a working platform to access and
      mine further ore is valued at the lower of cost and net realizable value, and
      recorded as shrinkage stope platform costs on the balance sheet. This broken
      ore
      is reclassified to inventory once removed from the stope and taken to surface.
      If actual tonnage and grade of this broken ore vary significantly from estimates
      or should the price of gold decline such that the timing of processing of this
      ore is affected, there could be a material impact on the profitability of the
      mining operations.





**E.** **Off
      -Balance Sheet Arrangements**





To
      mitigate the effects of price fluctuations in revenues, the Company undertakes
      hedging transactions, from time to time, in respect of foreign exchange rates
      and the price of gold. Financial assets which are subject to credit risks
      include cash and receivables and commodity and currency instruments. The Company
      minimizes risks on its financial assets by holding instruments with credit
      worthy entities. Sales of commodities are to entities considered to be credit
      worthy.





The
      following have been the Company’s hedge positions over the past three
      years:





At
      December 31, 2004, the Company had outstanding forward gold contracts related
      to
      2005 production of 4,000 ounces at an average price of US $417 per ounce with
      a
      market value loss inherent in these contracts of US $74,000. At December 31,
      2003, the Company had outstanding forward gold contracts related to 2004
      production of 6,000 ounces at an average price of US $388 per ounce with a
      market value loss inherent in these contracts of US $175,000. At December 31,
      2002, the Company had outstanding forward gold contracts related to 2003
      production of 8,750 ounces at an average price of US $307 per ounce with a
      market value loss inherent in these contracts of US $310,000.





At
      December 31, 2004, the Company had outstanding foreign exchange contracts to
      sell US $5.5 million at an average exchange rate of 1.2611 CDN$/US$ with a
      market value gain inherent in these contracts of US $263,000. At December 31,
      2003, the Company had outstanding foreign exchange contracts to sell US $9.8
      million at an average exchange rate of 1.3446 CDN$/US$ with a market value
      gain
      inherent in these contracts of US $342,000. At December 31, 2002, the Company
      had outstanding foreign exchange contracts to sell US $5.3 million at an average
      exchange rate of 1.5871 CDN$/US$ with a market value gain inherent in these
      contracts of US $25,000.





50








**F.**
            **Tabular
                Disclosure of Contractual
                Obligations**





The
      Company’s contractual and other obligations as at December 31, 2004 are
      summarized as follows:





Payments
                due by periodTotal
            
            
            Less
                than
              1
                year
            
            
            2-3
              years
            
            
            4-5
              years
            
            
            More
                than
              5
                years**Contractual
                Obligation**Capital
                Lease Obligation
            
            
            54,000
            
            
            54,000Office
                Lease
            
            
            540,000
            
            
            120,000
            
            
            360,000
            
            
            60,000Flow-ThroughExpenditure(1)
            
            
            3,200,000
            
            
            3,200,000CommitmentOther
                Long-Term
              Liabilities
            
            
            562,500
            
            
            62,500
            
            
            125,000
            
            
            125,000
            
            
            250,0004,356,500
            
            
            3,436,500
            
            
            485,000
            
            
            185,000
            
            
            250,000





(1) See
      Item 3C - “Risk Factors” for additional discussion on flow-through
      shares .





**G.** **Safe
      Harbor**





The
      safe harbor provided in Section 27A of the *Securities
      Act* and Section 21E of the *Exchange
      Act* applies to forward looking information provided pursuant to Item 5.E and F
      above.





**Item
      6. Directors, Senior Management and Employees**





**A.**
            **Directors
                and Senior Management**





The
      names, municipality of residence, positions with the Company of all directors
      and executive officers are set forth below:





**Name
                  and Municipality of Residence**
              **Positions
                  Held**
              **Director
                  / Officer Since**William
                  R. MacNeill
                Saskatoon,
                  SK
              Director,
                  Chairman of the Board
              1980Arnie
                  E. Hillier(1,2,3)
                
                Saskatoon,
                  SK
              Director,
                  Vice-(4)Chairman
              1996A.
                  Neil McMillan
                Saskatoon,
                  SK
              Director,
                  President and CEO
              1996Jon
                  R. MacNeill
                Calgary,
                  AB
              Director
              1983Ronald
                  G. Walker(1,2,3)
                Victoria,
                  B.C.
              Director
              1984Robert
                  W. Termuende(1,2,3)
                Fort
                  Steele, B.C.
              Director
              2003
  51
 Raymond
                  G. Gagnon
                Saskatoon,
                  SK
              Chief
                  Operating Officer
              2002Richard
                  G. Johnson
                Saskatoon,
                  SK
              Chief
                  Financial Officer
              2004Philip
                  E. Olson
                Saskatoon,
                  SK
              Vice-President,
                  Corporate Development
              1997Val
                  L. Michasiw
                Saskatoon,
                  SK
              Secretary-Treasurer
              2000





Note:
              (1)
              Audit Committee.
 (2)
              Compensation Committee.
 (3)
              Oil
                  & Gas Committee


(4)
            On
                March 1, 2004, Arnie E. Hillier retired from his role as CEO and
                CFO. A.
                Neil McMillan will assume the responsibilities of CEO; Richard G.
                Johnson
                will assume the responsibilities of
                CFO.





All
      of the directors and officers of Claude have been engaged for more than five
      years in their present principal occupations or executive positions except
      for:
      Mr. Arnie Hillier, who on March 1, 2004, retired from his role as CEO and CFO
      of
      Claude (retained his Director status); Mr. A. Neil McMillan, who from April,
      1996 to March, 2004, was President of the Company; Mr. Richard Johnson, who
      from
      January, 1998, to March, 2004, was Controller of the Company; Mr. Raymond
      Gagnon, who from November, 1999 to March, 2002 was a mining consultant to Claude
      and who was Vice-President of Operations of Claude from 1994 to November, 1999;
      and, Mr. Robert Termuende who joined the Board of Directors in June,
      2003.





William
      R. MacNeill, current Chairman of the Board and Director of the Company since
      September, 1980, retired April 27, 2005; Phil Olson, Vice-President Corporate
      Development resigned effective March 31, 2005; and, Raymond Gagnon, Chief
      Operating Officer retired effective May 31, 2005.





The
      directors of the Company are elected annually and hold office until the next
      annual general meeting of the shareholders of the Company or until their
      successors in office are duly elected or appointed.





Certain
      of the directors serve as directors of other public companies and if a conflict
      of interest arises at a meeting of the Board of Directors, any director in
      conflict will declare his interest and abstain from voting on such
      matter.





Executive
      officers are appointed by the Board of Directors to serve until terminated
      by
      the Board of Directors or until their successors are appointed.





There
      are no arrangements or understandings between any two or more Directors or
      Executive Officers, pursuant to which he was selected as a Director or Executive
      Officer. Two members of the Board of Directors were related. William R. MacNeill
      is the father of Jon R. MacNeill. Except as disclosed above, there are no family
      relationships between any Directors or Executive Officers.





**Principal
      Occupation**





**Jon
      MacNeill** is a Director of Claude Resources Inc. since 1982. He was an executive with
      the
      Company from 1982 to 1993, and is currently a consultant to the resource
      industry.





**Ronald
      G. Walker** is a Directors of Claude Resources Inc. since 1980. He is the Founder and
      Chairman of the Great Canadian Dollar Store, a company he founded in 1993.
      From
      1980 until 1992 he was the President of Pacific & Western Trust, a company
      that he also founded. Mr. Walker is also a Director of Shore Gold Inc.





**Robert
      W. Termuende** is a Director of Claude Resources Inc. since 2003. Mr. Termuende holds a B.A.
      in
      geological sciences from the University of British Columbia in 1956. In his
      career, he has served as Director and Chief Executive Officer of various
      exploration and production companies including Rio Alto Exploration, Kenton
      Natural Resources, and Delaware Resources. Mr. Termuende is also a Director
      of
      Eagle Plains Resources.





52


**Arnie
      E. Hillier** is a graduate of the University of Saskatchewan and received his designation
      as
      a Chartered Accountant in 1965. He held the positions of President, Chief
      Executive Officer and Vice Chairman of the Company since 1994 until his
      retirement in February 2004. From 1965 until 1971 he was the Controller of
      Saskatchewan Government Insurance in Regina, Saskatchewan. From 1971 through
      1980 he was the Vice President Finance of Manitoba Public Insurance Corporation
      in Winnipeg, Manitoba. From 1980 until 1989 he was the Vice President Finance
      of
      Cameco, the successor to Saskatchewan Mining Development Corporation, in
      Saskatoon, Saskatchewan. In addition to his position as a Director of the
      Company, he is also a Director of Pacific & Western Credit, Pacific &
      Western Trust, Shore Gold Inc., and Wescan Goldfields Ltd.





**Neil
      McMillan** is
      the Chief Executive Officer and President of the Company a position he has
      held
      since 2004. Prior to that he was the President of the Company since 1996. He
      held the position of Vice President of Corporate Development for the Company.
      Until 1995, Mr. McMillan was the Vice President/Manager of RBC Dominion
      Securities Inc., an investment banking and retail stock brokerage firm located
      in Canada. Mr. McMillan also serves as a Director of Cameco Corporation and
      Shore Gold Inc.





**Rick
      Johnson** is the Chief Financial Officer and Vice President of Finance since 2004. Prior
      to that he was the Controller since 1996. Mr. Johnson holds a Bachelor of
      Commerce degree from the University of Saskatchewan and is a member of the
      Canadian Institute of Chartered Accountants.





**Val
      Michasiw** is the Corporate Secretary-Treasurer since 2000. Ms. Michasiw joined Claude
      Resources Inc. in 1984 and has been with the Company for most of her career
      working in the areas of Investor Relations and Corporate Development. Ms.
      Michasiw is a Director of Wescan Goldfields Inc.





**B.** **Compensation**





**Compensation
      to Directors**




The
      Corporation pays each of its directors who are not also officers a yearly
      stipend of $10,000 as well as $500 per day for attendance personally or by
      telephone conference at board and/or committee meetings. In addition, outside
      directors may be entitled to receive stock options of the Corporation. The
      exercise prices of such options, when granted, are in accordance with the
      Corporation’s Stock Option Incentive Plan. During the year ended December 31,
      2004, 10,000 stock options were granted to three directors. Directors are
      entitled to be reimbursed for expenses incurred in attending board meetings.
      During the year ended December 31, 2004, the Corporation paid directors' fees
      totalling $47,000. Jon MacNeill was on a special assignment regarding oil &
      gas and was paid additional fees totalling $15,945.





**Compensation
      to Executive Officers**





The
      compensation paid to the executive officers and incentive options granted are
      detailed in the Management Information Circular of the Company under the section
      entitled “Report on Executive Compensation” prepared for the 2004 annual general
      meeting, which is an exhibit to this report and incorporated herein by
      reference.





The
      Company grants stock options to Directors, Executive Officers and employees;
      refer to Item 6.E - “Share Ownership” below.





Except
      for the stock option program discussed in Item 6.E - “Share Ownership”, the
      Company has no material bonus or profit sharing plans pursuant to which cash
      or
      non-cash compensation is or may be paid to the Company's Directors or Executive
      Officers.





No
      funds were set aside or accrued by the Company during the year ended December
      31, 2004, to provide pension, retirement or similar benefits for Directors
      or
      Executive Officers.





53





**C.** **Board
      Practices**





The
      Directors of the Company are elected annually and hold office until the next
      annual general meeting of the shareholders of the Company or until their
      successors in office are duly elected or appointed. All directors are elected
      for a one year term.





There
      were no directors’ service contracts outstanding with the Company or its
      subsidiaries during 2004.





**Committees**





There
      are three standing Board committees as at April 30, 2005:





1.
      The Audit Committee is comprised of Mr. Termuende, Mr. Walker and Mr. Hillier.
      The Committee is comprised entirely of unrelated directors. The Committee is
      responsible for overseeing corporate governance standards as well as reviewing
      the Company’s financial reporting procedures, internal controls and the
      performance of the Company’s external auditors. The Committee is also
      responsible for reviewing the annual financial statements prior to their
      approval by the full Board of Directors. The Committee also meets with
      management on a quarterly basis to review and approve interim financial
      statements and to discuss financial performance compared to
      forecast.





2.
      The Compensation Committee is comprised of Mr. Hillier, Mr. Termuende, and
      Mr.
      Walker. The Compensation Committee administers the Company’s executive
      compensation programs and specifically approves the compensation of the
      Executive Officers and other senior managers. In addition, the Compensation
      Committee reviews and approves compensation plans in effect or proposed for
      the
      Company’s employees and reviews the adequacy and form of Directors’
      compensations. The Committee met three times during 2004.





3.
      The Oil & Gas Committee is comprised of Mr. Hillier, Mr. Termuende and Mr.
      Walker. The Committee is responsible for the review and recommendation to the
      Board of Directors of reserves data prepared by an independent qualified
      reserves evaluator.





**D.**
            **Employees**





The
      Company had approximately 171 employees (11 at head office, 160 at the Seabee
      mine) as of December 31, 2004. See Item 4.D - “Seabee mine - Mine
      Details”.





**E.**
            **Share
                Ownership**





The
      following table sets forth, as of April 30, 2005, the number of the Company’s
      common shares beneficially owned by a) the directors and executive officers
      of
      the Company individually, and as a group and (b) the percentage ownership of
      the
      outstanding common shares represented by such shares. The security holders
      listed below are deemed to be the beneficial owners of common shares underlying
      options which are exercisable within 60 days from the above date.





**Shareholdings
      of Directors and Executive Officers**





**Title
                of Class**
            **Name
                of**
              **Beneficial
                Owner**
            **Percent
                of**
              **Ownership**
            **Class
                ****Common
            A.E.
                Hillier
            1.2%
            747,800Common
            A.N.
                McMillan
            1.3%
            776,250Common
            R.
                Walker
            <1%
            50,000Common
            J.
                MacNeill
            <1%
            95,000Common
            V.
                Michasiw
            <1%
            88,319Common
            R.
                Gagnon
            <1%
            265,000Common
            R.
                Johnson
            <1%
            90,700**Total
                Directors/Officers**
            
            **3.4%**
            **2,113,069**




**
      Based on 61,796,314 shares outstanding as of April 30, 2005.





54


The
      following table sets forth the outstanding stock options granted to directors,
      officers and other employees as of April 30, 2005:





**Stock
      Options Outstanding**





**Name**
            **Number
                of**
              **Shares
                of**
              **Common
                Stock**
            **CDN
                $**
              **Exercise
                Price**
            **Expiration**
              **Date**A.E.
                Hillier,
              Director
            200,000
              200,000
              200,000
            $0.53
              $1.32
              $1.30
            12/27/11
              12/15/08
              07/26/09Jon
                R. MacNeill,
              A.Director
            50,000
              20,000
              5,000
              10,000
              10,000
            $3.05
              $1.32
              $2.10
              $2.10
              $1.25
            04/23/06
              12/15/08
              11/28/13
              01/12/14
              01/5/15Ronald
                G. Walker,
              B.Director
            20,000
              5,000
              5,000
              10,000
              10,000
            $1.32
              $0.90
              $2.10
              $2.10
              $1.25
            12/15/08
              11/29/12
              11/28/13
              01/12/14
              01/5/15C.Robert
                W. Termuende
              D.Director
            5,000
              10,000
              10,000
            $2.10
              $2.10
              $1.25
            11/28/13
              01/12/14
              01/5/15E.A.
                Neil McMillan,
              President
                and CEO
            200,000
              150,000
              50,000
              200,000
            $0.53
              $1.85
              $1.32
              $1.30
            12/27/11
              08/04/07
              12/15/08
              07/26/09Raymond
                G. Gagnon,
              COO
            10,000
              10,000
              30,000
              200,000
            $0.53
              $1.32
              $1.71
              $0.90
            12/27/11
              12/15/08
              05/21/12
              11/29/12Richard
                Johnson
              CFO
            50,000
              30,000
              10,000
            $1.80
              $0.53
              $0.90
            01/05/08
              12/27/11
              11/29/12Val
                Michasiw
              Secretary/Treasurer
            20,000
              25,000
              5,000
              10,000
              10,000
              10,000
            $0.53
              $1.32
              $0.53
              $0.90
              $2.10
              $1.38
            12/27/11
              12/15/08
              07/31/10
              11/29/12
              11/28/13
              11/26/14TOTAL
            1,790,000





55


Stock
      options to purchase securities from Registrant can be granted to Directors
      and
      employees of the Company on terms  and conditions acceptable to the
      regulatory authorities in Canada, notably the Toronto Stock Exchange and the
      Ontario Securities Commission.





Stock
      options for up to 10% of the number of issued and outstanding common shares
      may
      be granted from time to time, provided that stock options in favor of any one
      individual may not exceed 5% of the issued and outstanding common shares. No
      stock option granted under the stock option program is transferable by the
      optionee other than by the laws of descent and distribution, and each stock
      option is exercisable during the lifetime of the optionee only by such
      optionee.





The
      exercise prices for stock options are determined in accordance with Toronto
      Stock Exchange guidelines and reflect the closing price of the Registrant's
      common shares immediately preceding the day on which the Directors grant the
      stock options. The maximum term of each stock option does not exceed ten
      years.





**Item
      7.Major Shareholders and
      Related Party Transactions**





**A.**
            **Major
                Shareholders**





The
      Company is aware of one person who beneficially owns 5% or more of the
      Registrant's voting securities. The following table sets forth, as of April
      30,
      2005, persons and/or companies holding 5% or more beneficial interest in the
      Company’s outstanding common stock:





**Title
                of Class**
            
            
            **Name
                and Address of Owner**
            
            
            **Amount
                and Nature of Beneficial Ownership**
            
            
            **Percent
                of Class****(1)**Common
                Shares
            
            
            W.R.
                MacNeill, Saskatoon, SK
            
            
            3,718,800(2
            )
            
            6.0
            %








(1)
              Based on 61,796,314 shares outstanding as of April
                30,
                2005.
 (2)
              These
                  shares are owned, directly or indirectly, by BEC International
                  Corporation, a private corporation controlled by William R. MacNeill.
                  Of
                  these shares, 600,000 represent currently exercisable share purchase
                  options.





There
      have been no significant changes in beneficial ownership of the major
      shareholders during the past three years. No shareholders of the Company have
      different voting rights from any other shareholder.





To
      the best of the Company’s knowledge, the Company is not directly owned or
      controlled by another company or by any foreign government.





As
      at April 30, 2005, there were 61,796,314 common shares of the Company issued
      and
      outstanding. Based on the records of the Company’s transfer agent, Valiant Trust
      Company, #310, 606 - 4 th Street SW,, Calgary, AB T2P 1T1, as at such date there were 653 shareholders
      of
      record. To the best of the Company’s knowledge, as of April 30, 2005 there were
      454 registered Canadian shareholders, 12 registered international shareholders,
      and 154 shareholders registered in the United States holding approximately
      3,573,027 shares respectively. This represents 94.2%, .39% and 5.41%,
      respectively, of the Company’s common shares then outstanding.





There
      are no arrangements known to the Company, which may at a subsequent date result
      in a change in control of the Company.





**B.** **Related
      Party Transactions**





No
      director, senior officer, principal shareholder, or any associate or affiliate
      thereof, had any material interest, direct or indirect, in any transaction
      since
      the beginning of the last financial year of the Corporation that has materially
      affected the Corporation, or any proposed transaction that would materially
      affect the Corporation, except for an interest arising from the ownership of
      shares of the Corporation where the member will receive no extra or special
      benefit or advantage not shared on a pro rata basis by all holders of shares
      in
      the capital of the Corporation.





56


**C.** **Interests
      of Experts and Counsel**





This
      Form 20-F is being filed as an Annual Report under the Exchange Act and, as
      such, there is no requirement to provide any information under this
      section.





**Item
      8. Financial Information**





**A.**
            **Consolidated
                Statements and Other Financial
                Information**





This
      Annual Report contains the consolidated financial statements for the Company
      for
      the year ended December 31, 2004 which contains:





Auditors’
      Report dated March 14, 2005,


Consolidated
      Balance Sheets as at December 31, 2004 and 2003,


Consolidated
      Statements of Earnings (loss) and Retained Earnings for the years ended December
      31, 2004, 2003 and 2002,


Consolidated
      Statements of Cash Flows for the years ended December 31, 2004, 2003 and
      2002,


Notes
      to the Consolidated Financial Statements for the years ended December 31, 2004,
      2003 and 2002.





**Legal
      Proceedings**





Pursuant
      to a Notice of Contravention issued by Saskatchewan Labour, Occupational Health
      and Safety Division, dated March 17, 2003, the Company was ordered to reinstate
      three workers and reimburse them for lost pay and benefits. The contravention
      alleges that the Company dismissed these employees contrary to the Occupational
      Health and Safety Act. The contravention was appealed to the Executive Director
      and subsequently to an adjudicator. The matter is currently under appeal to
      the
      Court of Queen’s Bench, where a decision is pending. Management is of the
      opinion these claims are unwarranted. The amount of potential loss, if any,
      may
      involve payment of approximately 18 months in back pay to each of the employees
      and will be recognized in earnings at the time of settlement.





**Dividends**





The
      Company has not paid dividends on its common shares in the past and does not
      expect to pay dividends in the near future.





**B.**
            **Significant
                Changes**





There
      have been no significant changes of financial condition since the most recent
      financial statements dated December 31, 2004 other than described
      below:





In
      February 2005, the Company borrowed $5.0 million in the form of a demand loan
      bearing interest at 5.99%, repayable in monthly principal and interest payments
      of $96,514 and maturing in February 2010. The loan is secured by a general
      security agreement covering all assets of the Company, excluding oil and gas
      assets in Alberta.





In
      June 2005 the Company completed a private placement offering consisting of
      a
      total of 4,203,100 units, issued at a price of $1.00 per unit, and a total
      of
      4,547,273 common shares, issued on a flow-through basis at a price of $1.10
      per
      common share. Gross proceeds from the offering were approximately $9,025,000.
      Each unit consists of one common share and one-half common share purchase
      warrant. Each whole purchase warrant entitles the holder, upon exercise at
      any
      time within 24 months following the closing date and upon payment of $1.20,
      to
      subscribe for one common share.





57


**Item
      9. The Offer and Listing**





**A.** **Offer
      and Listing Details**





The
      following table sets forth the reported high and low closing bid prices of
      the
      Company’s common shares on the TSX and AMEX for (a) the five most recent fiscal
      years; (b) each quarterly period for the past two fiscal years; and (c) for
      the
      last six months ending April 30, 2005:





**Toronto
                Stock Exchange**
              **Common
                Shares Trading Activity****TSX**
            **AMEX****Canadian
                Dollars**
            **US
                Dollar****Period**
            **High**
            **Low**
            **High**
            **Low**April,
                2005
            $1.27
            $106
            $1.08
            $.84March,
                2005
            $1.33
            $1.17
            $1.09
            $.92February,
                2005
            $1.23
            $1.07
            $1.01
            $.86January,
                2005
            $1.28
            $1.11
            $1.05
            $.90December,
                2004
            $1.29
            $1.11
            $1.13
            $.91November,
                2004
            $1.44
            $1.26
            $1.22
            $1.10Fiscal
                Year Ended 12/31/04
            $2.30
            $1.10
            $1.79
            $.83Fiscal
                Year Ended 12/31/03
            $2.20
            $1.10
            $1.73
            $1.39Fiscal
                Year Ended 12/31/02
            $2.45
            $0.54
            -
            -Fiscal
                Year Ended 12/31/01
            $0.88
            $0.47
            -
            -Fiscal
                Year Ended 12/31/00
            $1.00
            $0.42
            -
            -Quarter
                Ended 12/31/2004
            $1.51
            $1.10
            $1.22
            $.93Quarter
                Ended 9/30/2004
            $1.43
            $1.10
            $1.14
            $.83Quarter
                Ended 6/30/2004
            $1.90
            $1.12
            $1.46
            $.87Quarter
                Ended 3/31/2004
            $2.30
            $1.52
            $1.79
            $1.14Quarter
                Ended 12/31/2003
            $2.20
            $1.54
            $1.73
            $1.39Quarter
                Ended 9/30/2003
            $1.79
            $1.19
            -
            -Quarter
                Ended 6/30/2003
            $1.52
            $1.10
            -
            -Quarter
                Ended 3/31/2003
            $1.80
            $1.19
            -
            -





The
      closing price of the common shares on May 31, 2005 was $1.96 on the TSX and
      US
      $.82 on the AMEX.





**B.**
            **Plan
                of Distribution**





This
      Form 20-F is being filed as an Annual Report under the Exchange Act and, as
      such, there is no requirement to provide any information under this
      section.





**C.**
            ******Markets**





The
      Company's common shares began trading on the Toronto Stock Exchange (“TSX”) in
      Toronto, Ontario, Canada on September 14, 1987. The Company’s common shares are
      quoted on the TSX under the symbol “CRJ”. The common shares of the Company were
      listed on the American Stock Exchange on December 15, 2003, under the symbol
      “CGR”.





**D.**
            **Selling
                Shareholders**





This
      Form 20-F is being filed as an Annual Report under the Exchange Act and, as
      such, there is no requirement to provide any information under this
      section.





58





**E.**
            **Dilution**





This
      Form 20-F is being filed as an Annual Report under the Exchange Act and, as
      such, there is no requirement to provide any information under this
      section.





**F.**
            **Expenses
                of the Issue**





This
      Form 20-F is being filed as an Annual Report under the Exchange Act and, as
      such, there is no requirement to provide any information under this
      section.





**Item
      10. Additional Information**





**A.**
            **Share
                Capital**





This
      Form 20-F is being filed as an Annual Report under the Exchange Act and, as
      such, there is no requirement to provide any information under this
      section.





**B.**
            **Memorandum
                and Articles of
                Association**





The
      information called for by this item is contained in an Exhibit 1.1 to the
      Company’s Registration statement on Form 20-F for the year ended December 31,
      2001, on file with the Commission, and is incorporated here in by
      reference.





**C.** **Material
      Contracts**





The
      Company has not entered into any material contracts in the past two years other
      than the ordinary course of business.





**D.** **Exchange
      Controls**





There
      are currently no restrictions on the export or import of capital out of or
      into
      Canada, nor are there foreign exchange controls or other laws, decrees or
      regulations of Canada or the province of Saskatchewan restricting remittance
      of
      dividends or other payments to non-resident holders of the Company’s common
      shares, other than any applicable withholding taxes. However, no assurance
      can
      be given that legislation enacted in the future will not have an adverse impact
      on non-Canadian shareholders.





Except
      as provided in the *Investment
      Canada Act* (the “Investment Act”), there are no limitations under the laws of Canada, the
      province of Saskatchewan or in the charter or any other constituent documents
      of
      the Company on the right of foreigners to hold or vote the Company’s common
      shares.





The
      Investment Act generally prohibits implementation of a reviewable investment
      by
      an individual, government (or agency thereof), corporation, partnership, trust
      or joint venture that is not a “Canadian” as defined in the Investment Act (a
“non-Canadian), unless after review the minister responsible for the Investment
      Act is satisfied that the investment is likely to be of net benefit to Canada.
      An investment in the Company’s common shares by a non-Canadian (other than an
“American” as defined in the Investment Act) would be reviewable under the
      Investment Act if it was an investment to acquire control of the Company and
      the
      value of the assets of the Company was $5 million or more. A non-Canadian (other
      than an American) would be deemed to acquire control of the Company for the
      purposes of the Investment Act if he acquired a majority of the common shares
      outstanding (or less than a majority but controlled the Company in fact through
      the ownership of one-third or more of the common shares outstanding) unless
      it
      could be established that, on the acquisition, the Company was not controlled
      in
      fact by the acquirer through the ownership of such shares. Certain transactions
      in relation to the Company’s common shares would be exempt from review under the
      Investment Act, including, among others, the following:





(a)
            acquisition
                of shares by a person in the ordinary course of that person’s business as
                trader or dealer in securities;







59


(b)
            acquisition
                of control of the Company in connection with the realization of security
                granted for a loan or other financial assistance and not for any
                purpose
                related to the provision of the Investment Act;
                and





(c)
            acquisition
                of control of the Company by reason of any amalgamation, merger,
                consolidation or corporate reorganization following which the ultimate
                direct or indirect control of the Company, through the ownership
                of voting
                interests, remains unchanged.





The
      Investment Act was amended with the Canada-United States Free Trade Agreement
      to
      provide for special review thresholds for Americans (including
“American-controlled entities” as defined in the Investment Act). Under the
      Investment Act, as amended, an investment in the Company’s common shares by an
      American would be reviewable only if it was an investment to acquire control
      of
      the Company and the value of the assets of the Company was equal to or greater
      than a specified amount (the “Review Threshold”), which increases in stages. The
      Review Threshold is currently $150 million, and remains at $150 million in
      constant 1992 dollars (calculated as prescribed in the Investment Act) after
      1992.





The
      provisions of the Investment Act and Free Trade Agreement may have an
      anti-takeover effect as they may operate to prevent U.S. or other non-Canadian
      persons from directly or indirectly acquiring control of the
      Company.





**(E)** **Taxation**





**Certain
      Canadian Federal Income Tax Consequences**





The
      discussion under this heading summarizes the material Canadian federal income
      tax consequences of acquiring, holding and disposing of shares of Common Stock
      of the Company for a shareholder of the Company who is not resident in Canada
      but is resident in the United States and who will acquire and hold shares of
      Common Stock of the Company as capital property for the purpose of the *Income
      Tax Act* (Canada) (the “Tax Act”). This summary does not apply to a shareholder who
      carries on business in Canada through a “permanent establishment” situated in
      Canada or performs independent personal services in Canada is the shareholder’s
      holding in the Company is effectively connected with such permanent
      establishment or fixed base. This summary is based on the provisions of the
      Tax
      Act and the regulations thereunder and on the Company’s understanding of the
      administrative practices of Canada Customs and Revenue Agency, and takes into
      account all specific proposals to amend the Tax Act or regulations made by
      the
      Minister of Finance of Canada to May 3, 2002. It has been assumed that there
      will be no other relevant amendment of any governing law although no assurance
      can be given in this respect. The existing tax treaty between the United States
      and Canada essentially calls for taxation of shareholders by the shareholder’s
      country of residence. In those instances in which a tax may be assessed by
      the
      other country, a corresponding credit against the tax owed in the country of
      residence is generally available, subject to limitations. This discussion is
      general only and is not a substitute for independent advice from a shareholder’s
      own Canadian and U.S. tax advisor.





The
      provisions of the Tax Act are subject to income tax treaties to which Canada
      is
      a party, including the Canada-United States Income Tax Convention (1980) (the
      “Convention”) and the Protocol to the Convention.





**Dividends
      on Shares of Common Stock**





Under
      the Tax Act, a non-resident of Canada is generally subject to Canadian
      withholding tax at the rate of 25% on dividends paid or deemed to have been
      paid
      to him by a corporation resident in Canada. The Convention limits the rate
      to
      15% if the shareholder is resident in the United States and the dividends are
      beneficially owned by and paid to him, and to 5%, if the shareholder is also
      a
      corporation that beneficially owns at least 10% of the voting stock of the
      payor
      corporation.





The
      Convention generally exempts from Canadian income tax, dividends paid to a
      religious, scientific, literary, educational or charitable organization or
      to an
      organization constituted and operated exclusively to administer a pension,
      retirement or employee benefit fund or plan, if the organization is resident
      in
      the United States and is exempt from income tax under the laws of the United
      States.





60


**Disposition
      of Shares of Common Stock**





Under
      the Tax Act, a taxpayer’s capital gain (or capital loss) from a disposition of
      Common Stock of the Company is the amount, if any, by which his proceeds of
      disposition exceed (or are exceeded by) the aggregate of his adjusted cost
      base
      of the Common Stock and reasonable expenses of disposition.





A
      non-resident of Canada is not subject to tax under the Tax Act in respect of
      a
      capital gain realized upon the disposition of shares unless the shares represent
      “taxable Canadian property.” In general, shares of Common Stock of the Company
      will constitute taxable Canadian property of a non-resident shareholder at
      a
      particular time if the shareholder used the shares in carrying on business
      in
      Canada, or if at any time in the 60 months immediately preceding the
      disposition, 25% or more of the issued shares of any class of the capital stock
      of the Company, which were shares on a prescribed stock exchange [Canadian
      and
      foreign listed stock exchanges (i.e., United States, U.K., Germany, Japan,
      etc.)] were owned by the non-resident and persons with whom the non-resident
      shareholder did not deal at arm’s length.





Where
      a United States resident realizes a capital gain on a disposition of shares
      that
      constitute taxable Canadian property, the Convention relieves the United States
      resident from liability for Canadian tax on such capital gains
      unless:





a)
            the
                value of the shares is derived principally from “real property” in Canada,
                including the right to explore for or exploit natural resources and
                rights
                to amounts computed by reference to
                production,


b)
            the
                shareholder was resident in Canada for 120 months during any period
                of 20
                consecutive years preceding, and at any time during the 10 years
                immediately preceding, the disposition and the shares were owned
                by him
                when he ceased to be resident in Canada,
                or


c)
            the
                shares formed part of the business property of a “permanent establishment”
                or pertained to a fixed base used for the purpose of performing
                independent personal services that the shareholder has or had in
                Canada
                within the 12 months preceding the
                disposition.





A
      the present time, it appears that the value of the shares of Common Stock of
      the
      Company is derived principally from real property in Canada. Accordingly, the
      exemption from Canadian tax for capital gains on a disposition of these shares
      would not appear to be available. However, should the activities of the Company
      change or expand into other areas in the future, the exemption from Canadian
      tax
      may be available at that time.





Notwithstanding
      the potential exemption from Canadian tax provided under the Convention, where
      a
      non-resident of Canada disposes of shares of Common Stock of the Company that
      are “taxable Canadian property”, the non-resident is required to file a Canadian
      income tax return in respect of any such dispositions.





Assuming
      that no exemption is available under the Convention, a shareholder who is a
      non-resident of Canada to whom the Company’s shares of Common Stock represent
      taxable Canadian property will include one-half of the amount of the capital
      gain (the “taxable capital gain”) on the disposition of the Company’s shares as
      taxable income for purposes of computing Canadian tax payable. Where a
      non-resident shareholder realizes a capital loss on the disposition of “taxable
      Canadian property”, one half of the loss (the “allowable capital loss”) may be
      deducted from taxable capital gains from the disposition of taxable Canadian
      property realized by the shareholder in the same year. Alternatively, where
      the
      non-resident shareholder cannot apply the allowable capital loss against taxable
      capital gains realized in the same year, subject to certain adjustments for
      years when the capital gains inclusion rate was greater than one-half, the
      allowable capital loss can be deducted from taxable capital gains realized
      by
      the non-resident shareholder in respect of taxable Canadian property in the
      three previous years or any subsequent year.





If
      a share of the Common Stock of the Company is disposed of by the Shareholder
      to
      the Company other than in the open market in the manner in which shares would
      normally be purchased by the public, the proceeds of disposition will, in
      general terms, be limited to the paid-up capital of the share and the balance
      of
      the price paid will be deemed to be a dividend. The amount of such dividend
      will
      be subject to Canadian withholding tax as previously described.





61


**Certain
      United States Federal Income Tax Considerations**





The
      following discussion summarizes the material United States federal income tax
      consequences, under current law, generally applicable to a U.S. Holder (as
      defined below) of the Company’s Common Stock who holds the Common Stock as a
      capital asset. This discussion does not address consequences peculiar to persons
      subject to special provisions of United States federal income tax law, such
      tax-exempt organizations, qualified retirement plans, financial institutions,
      insurance companies, real estate investment trusts, regulated investment
      companies, broker-dealers, non-resident alien individuals or foreign
      corporations, shareholders owning Common Stock representing 10% of the voting
      power of the Company or shareholders who acquired their Common Stock through
      the
      exercise of employee stock options or otherwise as compensation. In addition,
      this discussion does not cover any state, local or foreign tax
      consequences.





The
      following discussion is based upon the sections of the Internal Revenue Code
      of
      1986, as amended (the “Code”), Treasury regulations, published Internal Revenue
      Services (“IRS”) rulings, published administrative positions of the IRS and
      court decisions that are currently applicable, any or all which could be
      materially and adversely changed, possibly on a retroactive basis, at any time.
      The following discussion is for general information only and is not intended
      to
      be, nor should it be construed to be, legal or tax advice to any holder or
      prospective holder of the Company’s Common Stock and no opinion or
      representation with respect to the United States federal income tax
      consequences, to any such holder or prospective holders is made. Accordingly,
      holders and prospective holders of the Company’s Common Stock should consult
      their own tax advisors about the United States federal, state, local and foreign
      tax consequences of purchasing, owning and disposing of shares of Common Stock
      of the Company.





**U.S.
      Holders**





As
      used herein, a “U.S. Holder” is defined as (i) a citizen or resident of the
      United States, (ii) a corporation or other entity treated as a corporation
      for
      United States federal income tax purposes created or organized under the laws
      of
      the United States or any political subdivision thereof, (iii) an estate the
      income of which is subject to United States federal income tax regardless of
      source or that is otherwise subject to United States federal income tax on
      a net
      income basis in respect of the Common Stock, or (iv) a trust whose
      administration is subject to the primary supervision of a United States court
      and which has one or more United States persons who have the authority to
      control all substantial decisions of the trust.





**Distribution
      on Shares of Common Stock**





Subject
      to the discussion under “Passive Foreign Investment Company Rules” below, U.S.
      Holders receiving dividend distributions (including constructive dividends)
      with
      respect to the Company’s Common Stock are required to include in gross income
      for United States federal income tax purposes the gross amount of such
      distributions to the extent that the Company has current or accumulated earnings
      and profits, calculated pursuant to United States federal income tax principles,
      without reduction for any Canadian income tax withheld from such distributions.
      Such Canadian tax withheld may be credited, subject to certain limitations,
      against the U.S. Holder’s United States federal income tax liability or,
      alternatively, may be deducted in computing the U.S. Holder’s United States
      federal taxable income by those who itemize deductions. (See more detailed
      discussion at “Foreign Tax Credit” below).





Subject
      to certain limitations, dividends paid to non-corporate U.S. Holders may be
      eligible for a reduced rate of taxation if the Company is a “qualified foreign
      corporation” for United States federal income tax purposes. A qualified foreign
      corporation includes a foreign corporation that is eligible for the benefits
      of
      a comprehensive income tax treaty with the United States that includes an
      exchange of information program and that the United States Treasury Department
      has determined is satisfactory for purposes of the qualified dividend provisions
      of the Code. The United States Treasury Department has determined that the
      income tax treaty between the United States and Canada (the “Convention”) is
      satisfactory for purposes of the qualified dividend provisions of the Code.
      A
      foreign corporation that otherwise meets this qualification will not be a
      qualified foreign corporation if it is a passive foreign investment company
      (“PFIC”) for either the taxable year during which the dividend is paid or the
      preceding taxable year. The Company believes that it will be a qualified foreign
      corporation for so long as it is not a PFIC and it is eligible for the benefits
      of the Convention. Its status as a qualified foreign corporation, however,
      may
      change.





62


To
      the extent that distributions exceed current or accumulated earnings and profits
      of the Company, calculated pursuant to United States federal income tax
      principles, they will be treated first as a return of capital up to the U.S.
      Holder’s adjusted basis in the Common Stock and thereafter as gain from the sale
      or exchange of such shares. Preferential tax rates for long-term capital gains
      are applicable to a non-corporate U.S. Holder. Dividends paid on the Company’s
      Common Stock will not generally be eligible for the dividends received deduction
      provided to corporations receiving dividends from certain United States
      corporations.





**Foreign
      Tax Credit**





A
      U.S. Holder who pays (or had withheld from distributions) Canadian income tax
      with respect to the ownership of the Company’s Common Stock may be entitled, at
      the option of the U.S. Holder, to either a tax credit or a deduction for such
      foreign tax paid or withheld. Generally, it will be more advantageous to claim
      a
      credit because a credit reduces United States federal income taxes on a
      dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s income
      subject to tax. This election is made on a year-by-year basis and applies to
      all
      foreign taxes paid by (or withheld from) the U.S. Holder during that year.
      Subject to certain limitations, Canadian taxes withheld will be eligible for
      credit against the U.S. Holder’s United States federal income taxes. Under the
      Code, the limitation on foreign taxes eligible for credit is calculated
      separately with respect to specific classes of income. Dividends paid by the
      Company will be treated as foreign source income. For taxable years beginning
      on
      or before December 31, 2006, such dividends generally will be either “passive”
      income or “financial services” income, depending on the particular U.S. Holder’s
      circumstances. For taxable years beginning after December 31, 2006, such
      dividends generally will be either “passive category” income or “general
      category” income, depending on the particular U.S. Holder’s circumstances.
      Foreign tax credits allowable with respect to each class of income cannot exceed
      the United States federal income tax otherwise payable with respect to such
      class of income. The consequences of the separate limitations will depend on
      the
      nature and sources of each U.S. Holder’s income and the deductions appropriately
      allocated or apportioned thereto. The availability of the foreign tax credit
      and
      the application of the limitations on the credit are fact specific and holders
      and prospective holders of Common Stock should consult their own tax advisors
      regarding their individual circumstances.





**Disposition
      of Shares of Common Stock**





Subject
      to the discussion under “Passive foreign Investment Company Rules” below, a U.S.
      Holder will recognize a gain or loss upon the sale of shares of Common Stock
      equal to the difference, if any, between (i) the amount of cash plus the fair
      market value of any property received; and (ii) the shareholder’s tax basis in
      the Common Stock. Such gain or loss will be long-term capital gain or loss
      if
      the U.S. Holder has held the Common Stock for more than one year. Gains and
      losses are netted and combined according to special rules in arriving at the
      overall capital gain or loss for a particular tax year. Deductions for net
      capital losses are subject to significant limitations but, in general,
      non-corporate U.S. Holders may deduct net capital losses, whether short-term
      or
      long-term, of up to US$3,000 per year (US$1,500 in the case of a married
      individual filing separately). For Non-corporate U.S. Holders any unused portion
      of such net capital loss may be carried over to be used in later tax years
      until
      such net capital loss is thereby exhausted. For U.S. Holders which are
      corporations (other than corporations subject to Subchapter S of the Code),
      an
      unused net capital loss may be carried back three years from the loss year
      and
      carried forward five years from the loss year to be offset against capital
      gains
      until such net capital loss is thereby exhausted. Gain or loss recognized upon
      the sale of shares of Common Stock generally will be treated as United States
      source income or loss for foreign tax credit purposes.





**Passive
      Foreign Investment Company Rules**




The
      Company does not believe that it was a PFIC for the 2004 taxable year and does
      not expect to become a PFIC for the current taxable year, although there can
      be
      no assurance that it will not become a PFIC for the current or any future
      taxable year. In general, the Company will be a PFIC for a taxable year if
      (i)
      75% or more of the Company’s gross income consists of “passive” income or (ii)
      50% or more of the average quarterly value of the Company’s assets consists of
      assets that produce, or are held for the production of, such passive income.
      Gains from transactions in commodities such as gold, oil and gas generally
      are
      treated as passive income unless the gains arise from the sale of the
      commodities in the active conduct of a commodities business by a foreign
      corporation and certain other requirements are met.




63


If
      the Company were to be a PFIC, then a U.S. Holder would be required to pay
      an
      interest charge together with tax calculated at a maximum tax rate on certain
      “excess distributions” (defined to include gain on the sale of stock) unless
      such U.S. Holder made an election to mark to market his or her Company Common
      Stock at the end of each taxable year as set forth in Section 1296 of the Code.
      If the Company is a PFIC for any taxable year during which a U.S. Holder holds
      Common Stock, the Company generally will continue to be treated as a PFIC for
      that U.S. Holder for succeeding years.




U.S.
      Holders should consult their tax advisors about making a mark-to-market election
      and about the United States federal income tax consequences that would result
      if
      the Company were to become a PFIC.




**Information
      Reporting and Backup Withholding**





United
      States information reporting requirements may apply with respect to the payment
      of dividends to U.S. Holders of the Company’s Common Stock and the payment of
      proceeds from the sale of Common Stock. A non-corporate U.S. Holder may be
      subject to backup withholding at a 28% rate with respect to dividends when
      such
      U.S. Holder (1) fails to furnish or certify a correct taxpayer identification
      number to the payor in the required manner, (2) is notified by the IRS that
      it
      has failed to report payments of interest or dividends properly or (3) fails,
      under certain circumstances, to certify that it has been notified by the IRS
      that it is subject to backup withholding for failure to report interest and
      dividend payments. U.S. Holders should consult their own tax advisors regarding
      the application of the U.S. information reporting and backup withholding
      rules.





**F.**
            **Dividends
                and Paying Agents**





This
      Form 20-F is being filed as an Annual Report under the Exchange Act and, as
      such, there is no requirement to provide any information under this
      section.





**G.** **Statements
      by Experts**





This
      Form 20-F is being filed as an Annual Report under the Exchange Act and, as
      such, there is no requirement to provide any information under this
      section.





**H.** **Documents
      on Display**





Any
      documents referred to in this Annual Report may be inspected at the head office
      of the Company, Suite 200-224 - 4 th Avenue South, Saskatoon, SK S7K 5M5, during normal business hours.





**I.**
            **Subsidiary
                Information**





Not
      Applicable.





**Item
      11. Quantitative and Qualitative Disclosures About Market
      Risk**





The
      following discusses the Corporation’s exposure to market risk related to changes
      in gold prices, U.S./Canada dollar exchange rates and interest rates. This
      discussion contains forward looking statements that are exposed to risks and
      uncertainties, many of which are out of the Company’s control. The Company’s
      primary market risks are related to fluctuations in gold, oil, NGLs and gas
      prices and fluctuations in U.S./Canada dollar exchange rates. To a lesser
      extent, the Company is subject to market risk related to interest rates. The
      Company has established policies to manage sensitivity to both fluctuations
      in
      gold price risks and fluctuations in foreign currency exchange rates risk.
      These
      policies include the monitoring of the Company’s net exposure to each risk and
      include the use of forward, spot deferred and options contracts to hedge
      fluctuations in the price of gold and forward contracts to hedge exposure to
      fluctuations in foreign currency exchange rates.





Earnings
      of the Company’s gold and oil & gas operations are sensitive to fluctuations
      in both commodity and currency prices. The key factors and their approximate
      effect on earnings, earnings per share and cash flow, based on assumptions
      comparable to 2004 actuals, are as follows:





64


Gold





For
      a US $10 price movement in gold price per ounce, earnings and cash flow will
      have a corresponding movement of CDN $.5 million, or $0.01 per share; for a
      $0.01 movement in the US$/CDN$ exchange rate, earnings and cash flow from gold
      sales will have a corresponding movement of $.3 million.





Oil
      & NGLs





For
      a US $5 price movement in oil price per barrel, earnings and cash flow will
      have
      a corresponding movement of $.6 million, or $0.01 per share; for a $0.01
      movement in the US$/CDN$ exchange rate, earnings and cash flow from oil and
      NGLs
      will have a corresponding movement of $.05 million.





Gas





For
      a US $1 price movement in gas price per MCF, earnings and cash flow will have
      a
      corresponding movement of $1.0 million, or $0.02 per share; for a $0.01 movement
      in the US$/CDN$ exchange rate, earnings and cash flow from gas will have a
      corresponding movement of $.07 million.





See
      Item 5E. “Off-Balance Sheet” arrangements for further discussion of derivative
      items.





**Interest
      Rate Sensitivities**





The
      Corporation holds cash balances in Canadian currencies which earn interest
      income. Most of the Corporation’s cash balances are held in short-term money
      market and cash deposits with maturities of under 90 days. These deposits are
      exposed to interest rate risk. The Company believes that a possible 5% change
      in
      market interest rates would not materially impact the earnings or market value
      of these balances. The Corporation incurs the majority of its expenditures
      in
      Canadian dollars.





**Item
      12. Description of Securities Other than Equity
      Securities**





Not
      Applicable





**Part
      II**





**Item
      13. Defaults, Dividend Arrearages and Delinquencies**





Not
      Applicable





**Item
      14. Material Modifications to the Rights of Securities Holders and Use of
      Proceeds**





Not
      Applicable





**Item
      15. Controls and Procedures**





The
      Company’s principal executive officer and its principal financial officer, after
      evaluating the effectiveness of the Company’s disclosure controls and procedures
      (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) on December 31,
      2004,
      concluded that, as of such date, the Company’s disclosure controls and
      procedures were adequate and effective to ensure that material information
      relating to the Company and its consolidated subsidiaries would be made known
      to
      them by others within those entities.





There
      were no significant changes in the Company’s internal control over financial
      reporting or in other factors that could significantly affect the Company’s
      internal control over financial reporting during 2004.





65


**Item
      16A. Audit Committee**





The
      Board of Directors has determined that Mr. Robert Termuende is the Company’s
      audit committee financial expert and is independent.





**Item
      16B. Code of Ethics**





The
      Company has adopted a Code of Ethics that applies to all directors, officers
      and
      employees of the Company. The Code of Ethics has been posted on the Company’s
      website at www.clauderesources.com.





**Item
      16C. Principal Accountant Fees and Services**





Payments
      to the Company’s external auditors, KPMG LLP ,
      Saskatoon, SK for audit and non-audit services for the years ended December
      31,
      2004 and 2003 were as follows:





**2004**
            
            
            **2003**Audit
                Fees
            
            $
            87,563
            
            $
            77,731Audit
                - Related Fees
            
            
            -
            
            
            13,500Tax
                Fees
            
            
            19,400
            
            
            17,550All
                Other Fees
            
            
            -
            
            
            -**TOTAL**
            
            $
            106,963
            
            $
            108,781





The
      Company’s Audit Committee Mandate incorporates the Company’s pre-approval
      policies and procedures. The policy includes prohibitions or restrictions on
      services that may be provided by the Company’s external auditors and requires
      that all services by external auditors be pre-approved by the audit committee.





All
      of the services rendered by the Company’s auditors during 2004 were pre-approved
      by the Company’s Audit Committee.





**Item
      16D. Exemptions from Listing Standards for Audit
      Committee**





Not
      Applicable





**Item
      16E. Purchases of Equity Securities By the Issuer and Affiliated
      Purchasers**





The
      Company did not repurchase any of its shares during 2004.





**Item
      17. Financial Statements**





The
      Company's financial statements are stated in Canadian Dollars (CDN$) and are
      prepared in accordance with Canadian Generally Accepted Accounting Principles
      (GAAP), the application of which, in the case of the Company, conforms in all
      material respects for the periods presented with United States GAAP, except
      as
      disclosed in Note 21 to the 2004 audited financial statements.





The
      financial statements as required under Item 17 are attached hereto and found
      immediately following the text of this Annual Report. The audit report of
      KPMG LLP ,
      independent Chartered Accountants, is included herein immediately preceding
      the
      financial statements and schedules.





**Item
      18. Financial Statements**





The
      Company has elected to provide financial statements pursuant to Item
      17.





66


**Item
      19. Exhibits**





1.1
            Certificate
                of Incorporation, Certificates of Name Change, Articles of Incorporation,
                Articles of Amalgamation and By-Laws (incorporated by reference to
                Exhibit
                1.1 of Claude Resource Inc.’s Registration Statement on Form 20-F for the
                fiscal year ended December 31,
                2001).


4.1
            Currie
                Rose Agreement dated August 1, 1994 between Claude Resources Inc.
                and
                Currie Rose Resources Inc. (incorporated by reference to Exhibit
                4.1 of
                Claude Resource Inc.’s Registration Statement on Form 20-F for the fiscal
                year ended December 31, 2001).


4.2
            Madsen
                property Option Agreement dated December 15, 2000 between Claude
                Resources
                Inc. and Placer Dome (CLA) Ltd. (incorporated by reference to Exhibit
                4.2
                of Claude Resource Inc.’s Registration Statement on Form 20-F for the
                fiscal year ended December 31, 2001).


4.3
            Amisk
                Lake Option Agreement dated October 1, 1995 between Claude Resources
                Inc.
                and Husky Oil Operations Ltd. and Cameco Gold Inc. (incorporated
                by
                reference to Exhibit 4.3 of Claude Resource Inc.’s Registration Statement
                on Form 20-F for the fiscal year ended December 31,
                2001).


4.4
            Seabee
                Surface Lease Agreement between Claude Resources Inc. and the Government
                of Saskatchewan (incorporated by reference to Exhibit 4.5 of Claude
                Resources Inc.’s Registration Statement on Form 20-F for the fiscal year
                ended December 31, 2001).


4.5
              Underwriting
                  Agreement with Canaccord Capital dated April 23, 2002 (incorporated
                  by
                  reference to exhibit 4.5 of Claude Resources Inc.’s Registration Statement
                  on Form 20-F for the fiscal year ended December 31,
                  2001).
 4.6
                Seabee
                    Surface Lease Agreement Amendment with
                    the Government of Saskatchewan dated June 4, 2002 (incorporated
                    by
                    reference to exhibit 4.6 of Claude Resources Inc.’s Form 20-F for the
                    fiscal year ended December 31,
                    2002).
 4.7
                Madsen property Option Agreement Amendment with
                  Placer
                  Dome (CLA) Ltd. dated December 5, 2002 (incorporated by reference
                  to
                  exhibit 4.7 of Claude Resources Inc.’s Form 20-F for the fiscal year ended
                  December 31, 2002).


12.1
              CEO
                  Certification pursuant to rule 13a-15(e) or 15d-15(e), as enacted
                  pursuant
                  to section 302 of the Sarbanes-Oxley Act of
                  2002.
 12.2
              CFO
                  Certification pursuant to rule 13a-15(e) or 15d-15(e), as enacted
                  pursuant
                  to section 302 of the Sarbanes-Oxley Act of
                  2002.


13.1
              CEO
                  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
                  to
                  Section 906 of the Sarbanes-Oxley Act of
                  2002.
 13.2
              CFO
                  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
                  to
                  Section 906 of the Sarbanes-Oxley Act of
                  2002.


15.1
            Management
                Information Circular dated April 27,
                2005.





67








**SIGNATURE**





The
      Registrant hereby certifies that it meets all of the requirements for filing
      on
      Form 20-F and that it has duly caused and authorized the undersigned to sign
      this Annual Report on its behalf.





**CLAUDE
              RESOURCES INC.**(Registrant)Date: June
              27, 2005
            By:
            /s/ Neil
              McMillanNeil
              McMillanPresident
              & CEO


68


**Management
      Responsibility for Consolidated Financial Statements**





The
      accompanying consolidated financial statements of Claude Resources Inc. are
      the
      responsibility of management and have been approved by the Board of
      Directors.





The
      consolidated financial statements have been prepared by management in conformity
      with Canadian generally accepted accounting principles. The consolidated
      Canadian financial statements include some amounts that are based on best
      estimates and judgments. Financial information used elsewhere in the annual
      report is consistent with that in the financial statements.





The
      management of the Company, in furtherance of the integrity and objectivity
      of
      data in the financial statements, has developed and maintains a system of
      internal accounting controls. Management believes the internal accounting
      controls provide reasonable assurance that financial records are reliable and
      form a proper basis for preparation of financial statements and that assets
      are
      properly accounted for and safeguarded. The internal accounting control process
      includes management’s communication to employees of policies which govern
      ethical business conduct.





The
      Board of Directors carries out its responsibility for the consolidated financial
      statements in this annual report principally through its audit committee,
      consisting primarily of outside directors. The audit committee reviews the
      Company’s annual consolidated financial statements and recommends their approval
      to the Board of Directors. The shareholders’ auditors have full access to the
      audit committee, with and without management being present.





These
      consolidated financial statements have been examined by the shareholders’
      auditors, KPMG LLP, Chartered Accountants, in accordance with Canadian generally
      accepted auditing standards and their independent professional opinion on the
      fairness of the financial statements is attached.





(signed)





Rick
      Johnson


Vice
      President Finance &


Chief
      Financial Officer


Saskatoon,
      Canada


March
      14, 2005





69


Report
      of Independent Registered Public Accounting Firm





**Auditors'
      Report to the Shareholders**





We
      have audited the consolidated balance sheets of Claude Resources Inc. as at
      December 31, 2004 and 2003 and the consolidated statements of earnings (loss),
      retained earnings and cash flows for each of the years in the three-year period
      ended December 31, 2004. These financial statements are the responsibility
      of
      the Company’s management. Our responsibility is to express an opinion on these
      financial statements based on our audits.





We
      conducted our audits in accordance with Canadian generally accepted auditing
      standards and the standards of the Public Company Accounting Oversight Board
      (United States). Those standards require that we plan and perform an audit
      to
      obtain reasonable assurance whether the financial statements are free of
      material misstatement. An audit includes examining, on a test basis, evidence
      supporting the amounts and disclosures in the financial statements. An audit
      also includes assessing the accounting principles used and significant estimates
      made by management, as well as evaluating the overall financial statement
      presentation.





In
      our opinion, these consolidated financial statements present fairly, in all
      material respects, the financial position of the Company as at December 31,
      2004
      and 2003 and the results of its operations and its cash flows for each of the
      years in the three-year period ended December 31, 2004 in accordance with
      Canadian generally accepted accounting principles.





Canadian
      generally accepted accounting principles vary in certain significant respects
      from accounting principles generally accepted in the United States of America.
      Information relating to the nature and effect of such differences is presented
      in Note 21 to the consolidated financial statements.





(signed)





KPMG LLP





Chartered
      Accountants





Saskatoon,
      Canada


March
      14, 2005





**Comments
      by Auditor for U.S. Readers on Canada-U.S. Reporting
      Difference**





In
      the United States, reporting standards for auditors require the addition of
      an
      explanatory paragraph following the opinion paragraph when there is a change
      in
      accounting principles that has a material effect on the comparability of the
      Company’s financial statements, such as the change described in Note 21 to the
      consolidated financial statements. Our report to the shareholders dated March
      14, 2005 is expressed in accordance with Canadian reporting standards which
      do
      not require a reference to such change in accounting principles in the auditors'
      report when the change is properly accounted for and adequately disclosed in
      the
      financial statements.





(signed)





KPMG LLP





Chartered
      Accountants





Saskatoon,
      Canada


March
      14, 2005




70


**Consolidated
      Balance Sheets**


DECEMBER
      31 (CANADIAN DOLLARS IN THOUSANDS)





**2004**
            
            
            2003(restated-
                Note2)**Assets**Current
                assets:Cash
            
            $
            -
            
            $
            3,259Receivables
            
            
            1,667
            
            
            2,512Inventories(Note
                3)
            
            
            4,828
            
            
            3,801Shrinkage
                stope platform costs(Note
                4)
            
            
            7,903
            
            
            6,678Prepaids
            
            
            364
            
            
            25914,762
            
            
            16,509Oil
                and gas properties(Note
                5)
            
            
            6,101
            
            
            4,766Mineral
                properties(Note
                6)
            
            
            34,327
            
            
            26,932Investments(Note
                7)
            
            
            668
            
            
            1,660Promissory
                note(Note
                8)
            
            
            6,982
            
            
            -Deposits
                for reclamation costs(Note12)
            
            
            2,061
            
            
            1,950$
            64,901
            
            $
            51,817**Liabilities
                and Shareholders’ Equity**Current
                liabilities:Bank
                indebtedness
            
            $
            343
            
            $
            -Payables
                and accrued liabilities
            
            
            4,580
            
            
            4,565Other
                current liabilities(Note10)
            
            
            528
            
            
            545,451
            
            
            4,619Obligations
                under capital lease(Note
                11)
            
            
            -
            
            
            59Royalty
                obligation(Note
                8)
            
            
            6,982
            
            
            -Deferred
                revenue(Note
                8)
            
            
            563
            
            
            -Asset
                retirement obligations(Note
                12)
            
            
            2,046
            
            
            1,903Shareholders’
                equity:Share
                capital(Note
                13)
            
            
            43,966
            
            
            38,850Contributed
                surplus
            
            
            330
            
            
            225Retained
                earnings
            
            
            5,563
            
            
            6,16149,859
            
            
            45,236Commitments
                and contingencies(Note
                17 and Note 18)Subsequent
                event(Note
                19)$
            64,901
            
            $
            51,817





*See
      accompanying notes to consolidated financial statements.*




On
      behalf of the Board:





(Signed)
            (Signed)William R. MacNeill
            Jon
              R. MacNeill*Chairman*
            *Director*





71


**Consolidated
      Statements of Earnings (Loss)**


YEARS
      ENDED DECEMBER 31 (CANADIAN DOLLARS IN THOUSANDS)





**2004**
            
            
            2003
            
            
            2002(restated
            
            
            (restated-
                Note 2
            )
            
            -
                Note 2
            )**Revenues:**Gold
            
            $
            22,470
            
            $
            25,807
            
            $
            20,363Oil
                and gas:Gross
                revenue
            
            
            9,745
            
            
            9,368
            
            
            7,043Crown
                royalties
            
            
            (2,209
            )
            
            (2,346
            )
            
            (1,748
            )Alberta
                Royalty Tax Credit
            
            
            442
            
            
            539
            
            
            440Overriding
                royalties
            
            
            (4,618
            )
            
            (4,077
            )
            
            (2,929
            )Net
                oil and gas revenue
            
            
            3,360
            
            
            3,484
            
            
            2,80625,830
            
            
            29,291
            
            
            23,169**Expenses:**Gold
            
            
            15,904
            
            
            18,041
            
            
            16,211Oil
                and gas
            
            
            1,574
            
            
            1,260
            
            
            1,138General
                and administrative
            
            
            2,332
            
            
            2,152
            
            
            2,381Interest
                and other(Note
                14)
            
            
            (58
            )
            
            101
            
            
            (84
            )Provision
                for income taxes(Note
                15)
            
            
            -
            
            
            63
            
            
            3119,752
            
            
            21,617
            
            
            19,677Earnings
                before the undernoted items
            
            
            6,078
            
            
            7,674
            
            
            3,492Depreciation,
                depletion and accretion:Gold
            
            
            6,023
            
            
            5,369
            
            
            4,934Oil
                and gas
            
            
            653
            
            
            507
            
            
            469Net
                earnings (loss)
            
            $
            (598
            )
            $
            1,798
            
            $
            (1,911
            )Net
                earnings (loss) per share(Note
                16)Basic
                and diluted
            
            $
            (0.01
            )
            $
            0.03
            
            $
            (0.04
            )




*See
      accompanying notes to consolidated financial statements.*








**Consolidated
      Statements of Retained Earnings**


YEARS
      ENDED DECEMBER 31 (CANADIAN DOLLARS IN THOUSANDS)**





**2004**
            
            
            **2003**
            
            
            **2002****(restated**
            ****
            ****
            **(restated**
            ********
            ****
            ****
            ****
            ****
            **-
                Note 2**
            **)**
            ****
            **-
                Note 2**
            **)**Retained
                earnings, beginning of yearAs
                previously reported
            
            $
            6,560
            
            $
            4,667
            
            $
            6,274Effect
                of change in accounting policy(Note
                2)
            
            
            (399
            )
            
            (304
            )
            
            -As
                restated
            
            
            6,161
            
            
            4,363
            
            
            6,274Net
                earnings (loss)
            
            
            (598
            )
            
            1,798
            
            
            (1,911
            )Retained
                earnings, end of year
            
            $
            5,563
            
            $
            6,161
            
            $
            4,363




*See
      accompanying notes to consolidated financial statements.*


72


**Consolidated
      Statements of Cash Flows**


YEARS ENDED
      DECEMBER 31 (CANADIAN DOLLARS IN THOUSANDS)





**2004**
            
            
            2003
            
            
            2002(restated
            
            
            (restated-
                Note 2
            )
            
            -
                Note 2
            )Cash
              provided from (used in):**Operations:**Net
                earnings (loss)
            
            $
            (598
            )
            $
            1,798
            
            $
            (1,911
            )Non-cash
                items:Depreciation
                and depletion
            
            
            6,533
            
            
            5,743
            
            
            5,279Accretion
                of asset retirement obligation
            
            
            143
            
            
            133
            
            
            124Stock-based
                compensation
            
            
            136
            
            
            65
            
            
            163Net
                change in non-cash working capital:Receivables
            
            
            845
            
            
            (338
            )
            
            (1,475
            )Inventories
            
            
            (1,027
            )
            
            (435
            )
            
            1,280Shrinkage
                stope platform costs
            
            
            (1,225
            )
            
            (826
            )
            
            (3,021
            )Prepaids
            
            
            (105
            )
            
            69
            
            
            (78
            )Payables
                and accrued liabilities
            
            
            15
            
            
            2,625
            
            
            (174
            )Cash
                from operations
            
            
            4,717
            
            
            8,834
            
            
            187**Investing:**Mineral
                properties
            
            
            (13,330
            )
            
            (14,864
            )
            
            (8,180
            )Oil
                and gas properties
            
            
            (1,964
            )
            
            (1,828
            )
            
            (730
            )Promissory
                note
            
            
            (6,982
            )
            
            -
            
            
            -Investments
            
            
            992
            
            
            (1,041
            )
            
            115Short-term
                investments
            
            
            -
            
            
            300
            
            
            (300
            )Increase
                in reclamation deposits
            
            
            (111
            )
            
            (525
            )
            
            (768
            )(21,395
            )
            
            (17,958
            )
            
            (9,863
            )**Financing:**Issue
                of common shares, net of issue costs
            
            
            5,116
            
            
            14,181
            
            
            6,304Proceeds
                on sale of royalty
            
            
            7,113
            
            
            -
            
            
            -Deferred
                revenue
            
            
            906
            
            
            -
            
            
            -Demand
                loan repayment
            
            
            -
            
            
            (110
            )
            
            (328
            )Obligations
                under capital lease:Proceeds
            
            
            -
            
            
            -
            
            
            214Repayment
            
            
            (59
            )
            
            (60
            )
            
            (41
            )13,076
            
            
            14,011
            
            
            6,149Increase
                (decrease) in cash position
            
            
            (3,602
            )
            
            4,887
            
            
            (3,527
            )Cash
                position, beginning of year
            
            
            3,259
            
            
            (1,628
            )
            
            1,899Cash
                position, end of year
            
            $
            (343
            )
            $
            3,259
            
            $
            (1,628
            )Supplemental
                cash flow disclosure:Interest
                paid
            
            
            98
            
            
            111
            
            
            102Income
                taxes paid
            
            
            18
            
            
            63
            
            
            31





73


**Notes
      To Consolidated Financial Statements**


YEARS
      ENDED DECEMBER 31


TABULAR
      DOLLAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS, EXCEPT AS OTHERWISE
      NOTED





**Operations:**





SEABEE
      GOLD MINE





The
      Seabee gold mine, owned 100% by the Company, is located 125 kilometres northeast
      of La Ronge, Saskatchewan. Mining of the ore reserves commenced in
      1991.





OIL
      & GAS





The
      Company, through its wholly-owned subsidiary, 574095 Alberta Ltd., has an
      interest in the Nipisi Gilwood No. 1 oil field and the Edson Gas Unit No. 1
      gas
      field and associated gas plant and gathering lines. Both areas are operated
      by
      others. In addition to these properties, the Company has interests in producing
      oil and gas wells at a number of other Alberta locations. The Alberta properties
      are subject to an overriding royalty.





In
      the Gainsborough area of southeastern Saskatchewan, the Company owns a 75%
      working interest in six vertical producing oil wells, one water disposal well
      and a 33.75% working interest in four producing horizontal wells.





**1.
      Significant Accounting Policies:**





The
      consolidated financial statements have been prepared in accordance with Canadian
      generally accepted accounting principles. Generally accepted accounting
      principles require that management make estimates and assumptions that affect
      the reported amounts of assets and liabilities and disclosure of contingent
      assets and liabilities at the date of the financial statements and the reported
      amount of revenues and expenses during the year. Actual amounts could differ
      from those estimates.





A
      summary of significant accounting policies is as follows:





CONSOLIDATION
      PRINCIPLES





The
      consolidated financial statements include the accounts of the Company and its
      subsidiaries. Interests in joint ventures are accounted for by the proportionate
      consolidation method.





CASH





Cash
      and cash equivalents include cash and short-term investments which, on
      acquisition, have a term to maturity of three months or less. Cash position
      consists of cash and cash equivalents less bank indebtedness.





SHORT-TERM
      INVESTMENTS





Short-term
      investment certificates are carried at the lower of cost and market
      value.





INVESTMENTS





Investments
      are carried at cost or at cost less amounts written-off to reflect an impairment
      in value that is other than a temporary decline.





DEPOSITS
      FOR RECLAMATION COSTS





Deposits
      for reclamation costs consist of investment certificates held as security for
      reclamation requirements and are carried at the lower of cost and
      market.





74


INVENTORIES





Gold
      inventory, which includes gold bullion, gold contained in the milling circuit
      and in stockpiled ore on surface, is valued at the lower of cost and net
      realizable value. Costs include labour, equipment costs and operating overhead.
      Material and supplies inventory is valued at the lower of cost and net
      realizable value.





SHRINKAGE
      STOPE PLATFORM COSTS





The
      Company utilizes the shrinkage stope mining method to mine its ore body at
      the
      Seabee mine. Under this method, ore used as a working platform to access and
      mine further ore is valued at the lower of cost and net realizable value. Costs
      include labour, equipment costs and operating overhead. This broken ore is
      reclassified to inventory once transported to surface.





OIL
      & GAS OPERATIONS





The
      Company follows the full-cost method of accounting whereby all costs relating
      to
      the exploration for and development of oil and gas reserves are capitalized.
      Such costs include land acquisition costs, geological and geophysical expenses,
      engineering fees, related direct administrative expenses, the costs of drilling
      both productive and non-productive wells, including production equipment, the
      fair value of retirement obligations and the cost of constructing processing
      facilities. Also capitalized are identifiable carrying charges on undeveloped
      properties. Proceeds received from disposal of property interests are credited
      against accumulated costs except when the disposition results in a significant
      change in the depletion rate, in which case a gain or loss on disposal is
      recognized.





The
      carrying values of the Company’s oil and gas properties are compared annually to
      an estimate of undiscounted future net cash flow from the production of proved
      reserves, based on future prices. If the carrying value is not fully
      recoverable, the amount of impairment is measured by comparing the carrying
      amount of the oil and gas properties to an amount equal to the estimated net
      present value of future cash flows from proved plus probable reserves. Any
      excess carrying value above the net present value of the future cash flows
      would
      be recorded as a permanent impairment and charged to earnings.





The
      costs related to petroleum and natural gas properties are depleted on the unit
      of production method based on the estimated proved reserves as determined by
      independent consultants, before deduction of royalties and after conversion
      to
      units of common measure based on relative energy content.





The
      Company is engaged in oil and gas exploration and production in Canada and
      substantially all of these activities are conducted with others. The accounts
      reflect only the Company’s proportionate interest in such
      activities.





MINERAL
      PROPERTIES





All
      costs related to the acquisition, exploration, development and retirement of
      mineral properties and the development and retirement of milling assets are
      capitalized. Development costs at our producing property include only those
      historical expenditures incurred to extend reserves by converting mineralized
      material to reserves or for further delineation of existing reserves. Interest
      on debt associated with the acquisition of mineral properties is capitalized
      until commencement of commercial production. There have been no interest costs
      capitalized to date. Amounts reflected for mineral properties not in commercial
      production represent costs incurred to date, net of write-downs, and are not
      intended to reflect present or future values. The recoverability of the costs
      is
      dependent upon the discovery of economically recoverable ore reserves, the
      ability to obtain necessary financing to complete development and the
      development of future profitable production from the properties or realization
      of sufficient proceeds from the disposition of the properties.





Upon
      commencement of commercial production, the related historical accumulated costs
      are amortized against future income of the project using the unit of production
      method over estimated recoverable ore reserves. Estimated recoverable ore
      reserves include proven and probable mineral reserves. Costs which are not
      considered economically recoverable through mining operations, through sale
      of
      reserves, or are related to projects which are allowed to lapse, are expensed.
      Mining equipment is depreciated over its estimated useful life of three years
      on
      a straight-line basis.





75


The
      Company holds various positions in mining interests, including exploration
      rights, mineral claims, mining leases, unpatented mining leases and options
      to
      acquire mining claims or leases. All of these positions are classified as
      mineral properties for financial statement purposes.





When
      options are granted on mineral properties or properties are sold, proceeds
      are
      credited to the cost of the property. If no future capital expenditure is
      required and proceeds exceed costs, the amount is reported as a
      gain.





ASSET
      RETIREMENT OBLIGATIONS





The
      fair value of the liability for the Company’s asset retirement obligation is
      recorded in the period in which it is incurred, discounted to its present value
      using the Company’s credit adjusted risk-free interest rate and the
      corresponding amount is recognized by increasing the carrying amount of the
      related long-lived asset. The liability is accreted each period, and the
      capitalized cost is depreciated over the useful life of the related
      asset.





REVENUE
      RECOGNITION





Revenue
      from gold sales are recognized when the rights and obligations of ownership
      pass
      to the buyer. Settlement adjustments arising from final determination of metal
      weights and assays are reflected in sales when determined. Revenue associated
      with the sale of oil, NGLs and gas represents the Company’s share of the sale
      value of production during the year (Entitlement Method). Revenue is recognized
      when the rights and obligations of ownership pass to the buyer.





FOREIGN
      CURRENCY TRANSLATION





Revenue
      and expense transactions denominated in foreign currencies are translated in
      Canadian dollars at the rate of exchange prevailing at the date of the
      transaction. Monetary assets and liabilities denominated in foreign currencies
      are translated in Canadian dollars at the rate of exchange in effect at the
      balance sheet date. Exchange gains and losses on these transactions are included
      in earnings.





HEDGING
      TRANSACTIONS





Derivative
      financial instruments are utilized by the Company in the management of its
      foreign currency and commodity price exposures. The Company may enter into
      foreign exchange and gold derivative contracts to hedge anticipated sales
      denominated in US dollars. The Company assesses whether the derivatives that
      are
      used in hedging transactions are highly effective in offsetting changes in
      fair
      values or cash flows of hedged items.





The
      Company formally documents relationships between hedging instruments and hedged
      items, including linking all derivatives to specific assets and liabilities
      or
      to specific commitments or anticipated transactions. The Company formally
      assesses, both at the hedge's inception and on an ongoing basis, whether the
      derivatives that are used in hedging transactions are highly effective in
      offsetting changes in fair value or cash flows of hedged items .





Gains
      and losses on foreign currency denominated derivative financial and commodity
      instruments used to hedge anticipated US dollar denominated gold sales are
      recognized as an adjustment of revenue when the sale is recorded.





Realized
      and unrealized gains or losses associated with derivative instruments, which
      have been terminated prior to maturity, are deferred under other current, or
      non-current, assets or liabilities on the balance sheet and recognized in income
      in the period in which the underlying hedged transaction is recognized. In
      the
      event a designated hedged item is sold or extinguished prior to the termination
      of the related derivative instrument, the hedge is no longer effective, or
      it is
      no longer probable that the anticipated transaction will occur substantially
      as
      and when identified on the inception of the hedging relationship, any realized
      or unrealized gain or loss on such derivative instrument is recognized in
      income.





76


INCOME
      TAXES





Future
      income tax assets and liabilities are recognized for the future tax consequences
      attributable to differences between the financial statement carrying value
      of
      existing assets and liabilities and their respective tax bases. Future income
      tax assets and liabilities are measured using enacted or substantively enacted
      tax rates expected to apply to taxable income in the years in which those
      temporary differences are expected to be recovered or settled.





FLOW-THROUGH
      SHARES





The
      Company finances a portion of its exploration activities through the issue
      of
      flow-through shares. The Company records the tax cost of expenditures renounced
      to subscribers on the date the deductions are renounced to the subscribers.
      Share capital is reduced and future income tax liabilities are increased by
      the
      estimated income tax benefits renounced by the Company to the subscribers,
      except to the extent that the Company has unrecorded loss carryforwards and
      tax
      pools in excess of book value available for deduction.





PER
      SHARE AMOUNTS





Basic
      per share amounts are calculated using the weighted average number of shares
      outstanding during the period. Diluted per share amounts are calculated based
      on
      the treasury-stock method, which assumes that any proceeds obtained on exercise
      of options and warrants would be used to purchase common shares at the average
      market price during the period. The weighted average number of shares
      outstanding is then adjusted by the net change.





STOCK-BASED
      COMPENSATION PLANS





The
      Company has two stock-based compensation plans which are described in Note
      13.
      The Company accounts for all stock option awards using the fair-value method
      of
      accounting. Under this method the Company recognizes a compensation expense
      for
      all stock options awarded since January 1, 2002 based on the fair value of
      the
      options at the date of the grant which is determined using an option pricing
      model. Prior to January 1, 2002, the date of implementation of the fair-value
      method of accounting for stock-based compensation, the Company recognized the
      fair value of stock-based compensation issued to non-employees. The fair value
      of the options is expensed over the vesting period with a corresponding amount
      recorded as contributed surplus. Under the Employee Share Purchase Plan,
      compensation expense is recognized for the value of the Company's contribution
      to the plan. Consideration received on the exercise of stock options and the
      employee share purchase plan is recorded as share capital and the related
      contributed surplus is transferred to share capital.





**2.
      Changes in Accounting Policies:**





Effective
      January 1, 2004, the Company adopted the new Handbook Section 3870, "Stock-based
      Compensation and other Stock-based Payments". This section requires that a
      fair-value based method of accounting be applied for all stock-based
      compensation plans. The Company has adopted the fair-value method of accounting
      for employee stock options and other stock-based payments with retroactive
      reinstatement to January 1, 2002. The cumulative effect of the change in policy
      on the balance sheet at January 1, 2004 was to increase payables and accrued
      liabilities by $30,000, increase contributed surplus by $225,000, increase
      share
      capital by $144,000 and decrease opening retained earnings by $399,000. The
      effect of the change in policy on the statement of earnings for the year ended
      December 31, 2003 was a reduction in earnings of $95,000 (2002 - $304,000).





Effective
      January 1, 2004, the Company adopted the new Canadian Accounting Guideline,
      Hedging Relationships, which established new criteria for hedging relationships
      in effect on or after January 1, 2004. To qualify for hedge accounting, the
      hedging relationship must be appropriately documented and there must be
      reasonable assurance, both at the inception and throughout the term of the
      hedge, that the hedging relationship will be effective. Effectiveness requires
      a
      high degree of correlation of changes in fair values or cash flows between
      the
      hedged item and the hedge. The adoption of this accounting guideline had no
      material impact on the consolidated financial statements.





Effective
      January 1, 2004, the Company adopted Accounting Guideline 16 “Oil and Gas
      Accounting - Full Cost”. Under this guideline, impairment is recognized if the
      carrying amounts of the oil and gas assets exceed the sum of the undiscounted
      cash flows expected to result from the Company’s proved reserves. If the
      carrying value is not




77


fully
      recoverable, the amount of impairment is measured by comparing the carrying
      amount of the capital assets to an amount equal to the estimated net present
      value of future cash flows from both proved plus probable reserves (using a
      Company risk-free interest rate discount factor and future prices and costs).
      In
      prior years, the impairment test was based on the sum of the undiscounted future
      cash flows from proved reserves (using year-end prices) after deducting all
      expected future financing, administration, site restoration and tax costs.
      The
      adoption of this guideline had no material impact on the consolidated financial
      statements.





In
      March 2004, the Emerging Issues Committee clarified that the tax costs of
      expenditures renounced on flow-through shares should be recorded when the
      deductions on the expenditures are renounced to subscribers. Prior to this,
      the
      Company recorded the tax costs of renounced expenditures when the shares were
      issued. As the Company has unrecorded tax benefits, this change in policy had
      no
      material impact on the consolidated financial statements.





**3.
      Inventories:**




**2004**
            
            
            2003Bullion
                in-circuit
            
            $
            347
            
            $
            446Stockpiled
                ore
            
            
            364
            
            
            419Materials
                and supplies
            
            
            4,117
            
            
            2,936$
            4,828
            
            $
            3,801





**4.
      Shrinkage Stope Platform Costs:**





**2004**
            
            
            2003Stope
                Platform Costs
            
            $
            7,903
            
            $
            6,678





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.





**5.
      Oil & Gas Properties:**





Details
      of the Company’s oil and gas property, plant and equipment are as
      follows:




**Accumulated**
                
                
                
                
                
                
                
                
                Accumulated**depreciation,**
                
                
                
                
                
                
                
                
                depreciation,**depletion
                  and**
                
                
                **2004**
                
                
                
                
                
                depletion
                    and
                
                
                2003**Cost**
                
                
                **write-down**
                
                
                **Net**
                
                
                Cost
                
                
                write-down
                
                
                NetProperty
                    acquisition and drilling costs
                
                $
                12,434
                
                $
                9,994
                
                $
                2,440
                
                $
                11,304
                
                $
                9,775
                
                $
                1,529Gas
                    plant and production equipment
                
                
                8,762
                
                
                5,101
                
                
                3,661
                
                
                7,940
                
                
                4,703
                
                
                3,237$
                21,196
                
                $
                15,095
                
                $
                6,101
                
                $
                19,244
                
                $
                14,478
                
                $
                4,766
  The
      Alberta oil and gas properties are subject to an overriding royalty. This
      obligation will cease when approximately $147,500,000 has been paid or when
      the
      properties cease to produce.





Amounts
      of the cumulative overriding royalty paid or accrued are as
      follows:





December
      31, 2004   $118,217,000


December
      31, 2003   $113,599,000




78


**6.
      Mineral Properties:**




Details
      of the Company’s mineral related property, plant and equipment are as
      follows:




**Accumulated**
              
              
              
              
              
              
              
              
              Accumulated**depreciation,**
              
              
              
              
              
              
              
              
              depreciation,**depletion
                  and**
              
              
              **2004**
              
              
              
              
              
              depletion
                  and
              
              
              2003**Cost**
              
              
              **write-down**
              
              
              **Net**
              
              
              Cost
              
              
              write-down
              
              
              NetProperty
                  acquisition and mine development costs
              
              $
              61,309
              
              $
              43,974
              
              $
              17,335
              
              $
              52,743
              
              $
              40,644
              
              $
              12,099Buildings,
                  plant and equipment
              
              
              63,349
              
              
              54,158
              
              
              9,191
              
              
              62,340
              
              
              51,614
              
              
              10,726Exploration
                  properties
              
              
              12,610
              
              
              4,809
              
              
              7,801
              
              
              8,866
              
              
              4,759
              
              
              4,107$
              137,268
              
              $
              102,941
              
              $
              34,327
              
              $
              123,949
              
              $
              97,017
              
              $
              26,932





On
      December 15, 2000, Claude entered into an option agreement with Placer Dome
      (CLA) Limited (“Placer”) in respect of the Madsen gold exploration property.





This
      option agreement entitled Placer to earn a 55% working interest in the Madsen
      property by expending $8.2 million over three years and delivering to Claude
      a
      bankable feasibility study by the end of 2005. Placer may abandon the option
      at
      any time after spending $1.2 million. The option agreement was amended effective
      January 1, 2002 whereby Placer now has until the end of 2006 to earn a 55%
      working interest in the Madsen property under the same terms and conditions
      as
      described above.





Upon
      Placer fulfilling its obligations in respect of the option agreement, Placer
      and
      Claude will form a joint venture with respective interests of 55% and 45%.
      At
      Claude’s request, Placer may earn an additional 5% of the project by funding
      Claude’s share of infrastructure costs associated with any mine development on
      the property. Under the agreement, Claude’s interests cannot be reduced below
      40%.





**7.
      Investments:**





**2004**
            
            
            2003Investments
            
            $
            668
            
            $
            1,660





At
      December 31, 2004, the quoted market value of the investments was $3.9 million
      (2003 - $3.4 million).





**8.
      Promissory Note and Royalty Obligation:**





In
      December 2004, the Company sold a production royalty for proceeds of $7.1
      million. As part of the transaction, $7.0 million of the sales price was loaned
      to a financial institution and has been pledged to secure the Company's
      obligations under the royalty agreement. Pursuant to the agreement, the Company
      received $.9 million in fees and interest including $.6 million for the
      indemnification provided to third parties for any breach of the royalty
      agreement by the Company and $.3 million for interest prepayments. The funds
      received pursuant to the indemnification have been presented as deferred revenue
      and will be recognized over the expected remaining life of the royalty
      agreement. The funds received for the interest prepayment will be recognized
      in
      2005.





During
      the term of the royalty arrangement, up to 10 years, the Company is entitled
      to
      have amounts held under the promissory note used to make royalty payments under
      the royalty obligations. In certain circumstances, but in no event later than
      December 2014, the Company will have the right to repurchase the royalty
      interest at no greater than the fair market value thereof at the time of
      repurchase. The repurchase price will be paid from the balance owing to the
      Company under the promissory note.





Annual
      royalties, dependent upon sales volume, will be payable at rates ranging from
      CDN $1.00 to $24.53 per ounce.





79


In
      addition to the royalty, the Company has granted a net profits interest (“NPI”)
      for the years 2011 to 2014. The NPI ranges from 2.5% to 4% payable only when
      gold prices exceed CDN $800 per ounce. No NPI is payable until the Company
      recovers capital, development, reserve and interest charges. These costs
      accumulate beginning December 29, 2004.





**9.
      Operating Line of Credit:**





The
      Company has a $3,500,000 operating line of credit which bears interest at prime
      plus 1%. These funds are available for general corporate purposes. At December
      31, 2004, the unused portion of the bank line was $2.1 million.





**10.
      Other Current Liabilities:**





**2004**
            
            
            2003Deferred
                revenue (Note 8)
            
            $
            343
            
            $
            -Royalty
                payable (Note 8)
            
            
            131
            
            
            -Current
                portion of obligations under capital lease (Note 11)
            
            
            54
            
            
            54$
            528
            
            $
            54





**11.
      Obligations under Capital Lease:**





The
      obligation under capital lease bears interest at 5.4%, is due in 2006 and is
      secured by leased equipment. The capital lease will be repaid in
      2005.





**12.
      Asset Retirement Obligations:**





The
      Company has accrued estimated future site reclamation costs for the following
      business segments:





**2004**
            
            
            2003Mineral
                properties
            
            $
            1,530
            
            $
            1,423Oil
                and gas properties
            
            
            516
            
            
            480$
            2,046
            
            $
            1,903





Potential
      changes in regulatory requirements as well as the continuing process of
      evaluating reclamation alternatives result in an element of uncertainty in
      estimating these amounts.





As
      required by regulatory authorities, the Company has provided letters of credit
      as security for reclamation related to the Madsen, Seabee and Tartan properties
      in the amounts of $658,000 (2003 - $658,000), $1,315,000 (2003 - $1,292,000)
      and
      $40,000 (2003 - $0) respectively. As security for these letters of credit,
      the
      Company has provided investment certificates in the amount of $2,013,000 (2003
      -
      $1,950,000). The Company has also deposited $48,000 towards its reclamation
      obligations on certain of its Saskatchewan oil properties.


The
      Company has estimated the total obligations associated with the retirement
      of
      the Seabee, Madsen and Tartan properties at December 31, 2004 to be $3.4
      million. The fair value of these obligations was determined using a 7.5%
      discount rate and expected payment of obligations ranging over the next 10
      to 15
      years.





The
      Company has estimated the total obligations associated with the retirement
      of
      its oil and gas assets at December 31, 2004 to be $1.4 million. The fair value
      of these obligations was determined using a 7.5% discount rate and an expected
      payment of obligations ranging over the next 8 to 21 years.





**13.
      Share Capital** :





**AUTHORIZED**





The
      authorized share capital of the Company consists of unlimited common shares
      and
      two classes of unlimited preferred shares issuable in series.





80


The
      common shares of the Company are entitled to dividends pro rated and, when
      declared by the Board of Directors, to one vote per share at meetings of the
      shareholders and, upon dissolution or any other distribution of assets, to
      receive pro rated such assets of the Company as are distributable to the holders
      of the common shares.





The
      first preferred shares are issuable in series and rank ahead of the second
      preferred shares and the common shares in respect of dividend payment,
      dissolution or any other distribution of assets. The other rights, privileges,
      restrictions and conditions attached to each series of the first preferred
      shares are fixed by the Board of Directors at the time of creation of such
      series.





The
      second preferred shares are issuable in series and rank ahead of the common
      shares in respect of dividend payment, dissolution or any other distribution
      of
      assets. The other rights, privileges, restrictions and conditions attached
      to
      each series of the second preferred shares are fixed by the Board of Directors
      at the time of creation of such series.





**ISSUED
      AND OUTSTANDING COMMON SHARES**




**2004**
              
              
              
              2003
              
              
              
              2002**Number**
              
              
              **Amount**
              
              Number
              
              Amount
              
              Number
              
              AmountBeginning
                  of year
              
              
              58,341,627
              
              
              $38,850
              
              49,459,477
              
              $ 24,525
              
              43,053,853
              
              $ 18,362ESPP
                  (a)
              
              
              61,597
              
              
              120
              
              159,130
              
              230
              
              227,931
              
              121Exercise
                  of stock options (b)
              
              
              -
              
              
              -
              
              35,000
              
              23
              
              90,000
              
              74Issued
                  for mineral properties (c)
              
              
              -
              
              
              -
              
              -
              
              -
              
              75,000
              
              68Private
                  placement (d)
              
              
              -
              
              
              -
              
              -
              
              -
              
              5,000,000
              
              5,000Issue
                  costs
              
              
              -
              
              
              -
              
              -
              
              -
              
              -
              
              (509
              )Exercise
                  of warrants (d)
              
              
              -
              
              
              -
              
              2,550,770
              
              3,176
              
              12,693
              
              13Flow-through
                  shares (e)
              
              
              -
              
              
              -
              
              -
              
              -
              
              1,000,000
              
              1,500Issue
                  costs
              
              
              -
              
              
              -
              
              -
              
              -
              
              -
              
              (104
              )Private
                  placement (f)
              
              
              -
              
              
              -
              
              2,500,000
              
              3,750
              
              -
              
              -Issue
                  costs
              
              
              -
              
              
              -
              
              -
              
              (223
              )
              -
              
              -Exercise
                  of warrants (f)
              
              
              1,138,450
              
              
              2,106
              
              137,250
              
              254
              
              -
              
              -Flow-through
                  shares (g)
              
              
              -
              
              
              -
              
              1,000,000
              
              2,500
              
              -
              
              -Issue
                  costs
              
              
              -
              
              
              -
              
              -
              
              (49
              )
              -
              
              -Private
                  placement (h)
              
              
              -
              
              
              -
              
              2,500,000
              
              5,000
              
              -
              
              -Issue
                  costs
              
              
              -
              
              
              (119
              )
              -
              
              (336
              )
              -
              
              -Flow-through
                  shares (i)
              
              
              1,000,000
              
              
              1,500
              
              -
              
              -
              
              -
              
              -Issue
                  costs
              
              
              -
              
              
              (107
              )
              -
              
              -
              
              -
              
              -Flow-through
                  shares (j)
              
              
              1,150,033
              
              
              1,725
              
              -
              
              -
              
              -
              
              -Issue
                  costs
              
              
              -
              
              
              (109
              )
              -
              
              -
              
              -
              
              -End
                  of year
              
              
              61,691,707
              
              
              $43,966
              
              58,341,627
              
              $ 38,850
              
              49,459,477
              
              $ 24,525


(a)
      EMPLOYEE SHARE PURCHASE PLAN (“ESPP”)





The
      ESPP was established to encourage employees to purchase Company common shares.
      Under the plan, eligible employees may contribute up to 5% of their basic annual
      salary and the Company shall contribute common shares in an amount equal to
      50%
      of the employee’s contribution. Shares of the Company are issued to employees
      based on a weighted average market price over a specific period. During 2004,
      the Company issued 61,597 common shares (2003 - 159,130; 2002 - 227,931) for
      $120,000 (2003 - $230,000; 2002 - $121,000) pursuant to this plan. The Company
      has reserved for issuance 1,750,000 common shares pursuant to this plan of
      which
      1,216,947 shares have been issued.





(b)
      SHARE OPTION PLAN





The
      Company has established a share option plan under which options may be granted
      to directors, officers and key employees to purchase up to an aggregate of
      5,000,000 common shares. Options granted have an exercise price of not less
      than
      the market price of the common shares on the stock exchange on which the shares
      are traded. The majority of the options granted vest immediately and expire
      10
      years from the date of the grant of the option.





81


For
      options outstanding at December 31, 2004 and 2003 weighted average exercise
      prices are as follows:





**2004**
            
            
            Average
            
            
            2003
            
            
            Average**Options**
            
            
            Price
            
            
            Options
            
            
            PriceBeginning
                of year
            
            
            2,425,000
            
            $
            1.13
            
            
            2,430,000
            
            $
            1.11Options
                granted
            
            
            235,000
            
            
            1.40
            
            
            30,000
            
            
            1.94Options
                exercised
            
            
            -
            
            
            -
            
            
            (35,000
            )
            
            .58End
                of year
            
            
            2,660,000
            
            $
            1.15
            
            
            2,425,000
            
            $
            1.13





For
                options outstanding at December 31, 2004 the range of exercise prices,
                the
                weighted average exercise price and the weighted average remaining
                contractual life are as follows:




Options
                  Price
              
              
              Weighted
                  Average
              
              
              
              Weighted
                  AveragePer ShareNumber
              
              
              
              Exercise
                  Price
              
              
              Remaining
                  Life$0.53-$0.90
              
              
              1,051,000
              
              
              $
              0.61
              
              
              7.04
                  years$1.16-$1.38
              
              
              1,224,000
              
              
              
              1.30
              
              
              5.24
                  years$1.71-$3.05
              
              
              385,000
              
              
              
              2.13
              
              
              3.67
                  years2,660,000
              
              
              $
              1.15
              
              
              5.72
                  years





The
      fair value of stock options issued in the year was estimated using the
      Black-Scholes option pricing model with assumptions of 6 year weighted average
      expected option life, no expected forfeiture rate, 63% to 67% volatility (2003
      -
      67.5%; 2002 - 72.8%) and interest rates ranging from 3.92% to 4.07% (2003 -
      3.6%
      to 4.07%; 2002 - 4.39% to 4.9%). In 2004, the compensation cost recorded in
      respect of stock options issued was $136,000 (2003 - $35,000; 2002 -
      $163,000).





(c)
      ISSUED FOR MINERAL PROPERTIES





During
      2002, the Company acquired rights on mineral properties in exchange for 75,000
      common shares of the Company having an attributed value of $67,500 ($0.90 per
      share).





(d)
      PRIVATE PLACEMENT





During
      2002, the Company completed a private placement for the issue of 5,000,000
      units
      at a price of $1.00 per unit for aggregate gross proceeds of $5,000,000. Each
      unit consists of one common share and one-half of one common share purchase
      warrant. Each whole common share purchase warrant entitles the holder to acquire
      one common share at an exercise price of $1.25 for a period of twelve months
      from the closing date. In partial consideration for the services provided to
      Claude in connection with the Offering, the Underwriters were issued an
      aggregate of 63,463 common share purchase warrants, each of which entitles
      the
      holder to acquire one common share at an exercise price of $1.00 for a period
      of
      twelve months from the closing date. All warrants have been
      exercised.





(e)
      FLOW-THROUGH SHARES





During
      2002, the Company entered into a flow-through share agreement for the issue
      of
      1,000,000 common shares at a price of $1.50 per share for proceeds of
      $1,500,000. The Company was required to expend $1,500,000 in qualifying Canadian
      Exploration Expenses as defined in the Income Tax Act (Canada) prior to December
      31, 2003.





(f)
      PRIVATE PLACEMENT





During
      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




82


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, 2004,
      there
      were no warrants outstanding.





(g)
      FLOW-THROUGH SHARES





During
      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 proceeds of
      $2,500,000. The Company was required to expend $2,500,000 in qualifying Canadian
      Exploration Expenses as defined in the Income Tax Act (Canada) prior to December
      31, 2004.





(h)
      PRIVATE PLACEMENT





During
      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 subscribe for one common share. At December 31, 2004, there were
      1,250,000 warrants outstanding.





(i)
      FLOW-THROUGH SHARES





During
      2004, the Company entered into a flow-through share agreement for the issue
      of
      1,000,000 common shares at a price of $1.50 per share for proceeds of
      $1,500,000. The Company must expend $1,500,000 in qualifying Canadian
      Exploration Expenses as defined in the Income Tax Act (Canada) prior to December
      31, 2005.





(j)
      FLOW-THROUGH SHARES





During
      2004, the Company entered into a flow-through share agreement for the issue
      of
      1,150,033 units, each unit consisting of one flow-through common share and
      one
      common purchase warrant, at a price of $1.50 per unit, for gross proceeds of
      $1,725,000. Each warrant entitles the holder, upon exercise, to purchase one
      common share for a two year period following the date of issue at a price of
      $2.00 up to and including December 31, 2005 and $3.00 up to and including
      December 31, 2006. The Company must expend $1,725,000 in qualifying Canadian
      Exploration Expenses as defined in the Income Tax Act (Canada) prior to December
      31, 2005. At December 31, 2004, there were 1,150,033 warrants
      outstanding.





**14.
      INTEREST AND OTHER:**





**2004**
            
            
            2003
            
            
            2002Interest
                expense
            
            $
            98
            
            $
            111
            
            $
            102Less:
                interest and other income
            
            
            (156
            )
            
            (10
            )
            
            (186
            )Interest
                and other
            
            $
            (58
            )
            $
            101
            
            $
            (84
            )







83


**15.
      INCOME TAXES:**





The
      significant components of future income tax assets at December 31 are as
      follows:





**2004**
            
            
            2003Future
                income tax assets:Mineral
              properties
            
            $
            29,250
            
            $
            31,055Non-capital
                loss carryforwards
            
            
            3,941
            
            
            5,690Asset
                retirement obligations
            
            
            777
            
            
            723Share
                issue costs
            
            
            525
            
            
            343Royalty
                obligation
            
            
            2,702
            
            
            -Deferred
                revenue
            
            
            344
            
            
            -Future
                income tax assets before valuation allowance
            
            
            37,539
            
            
            37,811Valuation
                allowance
            
            
            (37,539
            )
            
            (37,811
            )Future
                income tax assets
            
            $
            -
            
            $
            -




The
      provision for income taxes differs from the amount computed by applying the
      combined expected federal and provincial income tax rate to earnings before
      income taxes. The reasons for these differences are as follows:




**2004**
              
              
              2003
              
              
              2002(restated
              
              
              (restated-
                  Note 2)
              
              
              -
                  Note 2)Earnings
                  (loss) before income taxes
              
              $
              (598
              )
              $
              1,798
              
              $
              (1,911
              )Combined
                  federal and provincial tax rate
              
              
              42
              %
              
              44
              %
              
              45
              %Expected
                  tax expense (recovery)
              
              
              (251
              )
              
              791
              
              
              (860
              )Increase
                  (decrease) in taxes resulting from:Crown
                  royalties
              
              
              696
              
              
              929
              
              
              787Alberta
                  Royalty Tax Credit
              
              
              (155
              )
              
              (224
              )
              
              (198
              )Resource
                  allowance
              
              
              (751
              )
              
              (1,121
              )
              
              (395
              )Other
                  permanent differences
              
              
              770
              
              
              419
              
              
              577Effect
                  of change in effective tax rates
              
              
              (37
              )
              
              7,049
              
              
              -Valuation
                  allowance
              
              
              (272
              )
              
              (7,843
              )
              
              89-
              
              
              -
              
              
              -Large
                  corporations tax
              
              
              -
              
              
              63
              
              
              31Provision
                  for income taxes
              
              $
              -
              
              $
              63
              
              $
              31





At
      December 31, 2004, the Company and its subsidiaries had operating losses for
      income tax purposes approximating $10,400,000, which are available to reduce
      taxes in future years and expire over the period to the year 2010.





**16.
      PER SHARE AMOUNTS:**





Basic
      loss per common share is computed by dividing net loss applicable to common
      shares by the weighted average number of common shares issued and outstanding
      for the relevant period. Diluted loss per common share is computed by dividing
      net loss applicable to common shares by the sum of the weighted average number
      of common shares issued and outstanding and all additional common shares that
      would have been outstanding if potentially dilutive common shares had been
      issued. The calculation of loss per share amounts is based on the following:
      per
      share amounts have been calculated based on the weighted average number of
      shares outstanding during the year ended December 31, 2004 of 59,768,983 shares
      (2003 - 53,850,694 shares; 2002 - 46,919,331 shares).





**2004**
              
              
              2003
              
              
              2002(restated
              
              
              (restated-
                  Note 2)
              
              
              -
                  Note 2
              )Basic
                  earnings (loss) per share:Net
                    earnings (loss) available tocommon shareholders
              
              $
              (598
              )
              $
              1,798
              
              $
              (1,911
              )Weighted
                    average number ofcommon shares outstanding
              
              
              59,769
              
              
              53,851
              
              
              46,919$
              (0.01
              )
              $
              0.03
              
              $
              (0.04
              )Diluted
                earnings (loss) per share:Net
                  earnings (loss) available to common shareholders
              
              $
              (598
              )
              $
              1,798
              
              $
              (1,911
              )Weighted
                average number of common shares outstanding
              
              
              59,769
              
              
              54,727
              
              
              46,919$
              (0.01
              )
              $
              0.03
              
              $
              (0.04
              )
  84
 Excluded
        from the computation of diluted loss per share were:





i)
      Options outstanding on 385,000 shares with an average exercise price of $2.13
      (2003 - 355,000 @ 2.13; 2002 - 1,344,000 @ $1.51) as the options exercise prices
      were greater than the average market price of the Company’s common
      shares.





ii)
      In 2004, options outstanding on 2,275,000 shares with an average exercise price
      of $0.98 (2002 - 1,086,000 @ $0.61) as they were anti-dilutive.





iii)
      Warrants outstanding for 2,400,033 common shares with an average exercise price
      of $2.50 (2003 - 2,762,750 common shares with an average exercise price of
      $2.16; 2002 - 2,500,000 common shares with an exercise price of $1.25) as the
      exercise price was greater than the average market price of the Company’s common
      shares. In 2002, warrants outstanding for 50,770 common shares with a $1.00
      exercise price as they were anti-dilutive.





**17.
      FINANCIAL INSTRUMENTS:**





The
      Company’s financial results are affected by the normal risks and capital
      expenditure requirements associated with exploration, development and production
      of mineral and oil and gas properties. Financial results are also affected
      by
      market prices for gold and oil & gas, changes in foreign currency exchange
      rates, interest rates and other operating risks.





To
      manage risks associated with prices for gold, oil and gas and changes in foreign
      currency, the Company may use commodity and foreign currency derivative
      instruments. Financial assets which are subject to credit risks include cash
      and
      receivables and commodity and currency instruments. The Company minimizes risks
      on its financial assets by holding instruments with credit worthy entities.
      Sales of commodities are to entities considered to be credit worthy.





Except
      as discussed below, the fair market value of the Company’s financial assets and
      liabilities approximate net book value.





At
      December 31, 2004, the Company had outstanding forward gold contracts related
      to
      2005 production of 4,000 ounces at an average price of US $417 per ounce with
      a
      market value loss inherent in these contracts of US $74,000. At December 31,
      2003, the Company had outstanding forward gold contracts related to 2004
      production of 6,000 ounces at an average price of US $388 per ounce with a
      market value loss inherent in these contracts of US $175,000. At December 31,
      2002, the Company had outstanding forward gold contracts related to 2003
      production of 8,750 ounces at an average price of US $307 per ounce with a
      market value loss inherent in these contracts of US $310,000.





At
      December 31, 2004, the Company had outstanding foreign exchange contracts to
      sell US $5.5 million at an average exchange rate of 1.2611 CDN$/US$ with a
      market value gain inherent in these contracts of US $263,000. At December 31,
      2003, the Company had outstanding foreign exchange contracts to sell US $9.8
      million at an average exchange rate of 1.3446 CDN$/US$ with a market value
      gain
      inherent in these contracts of US $342,000. At December 31, 2002, the Company
      had outstanding foreign exchange contracts to sell US $5.3 million at an average
      exchange rate of 1.5871 CDN$/US$ with a market value gain inherent in these
      contracts of US $25,000.








85


**18.
      COMMITMENTS AND CONTINGENCIES:**





(a)
      COMMITMENTS





i)
      During 1995, the Company entered into an agreement with Cameco and Husky Oil
      to
      explore the Amisk Lake region located 15 kilometres west of Flin Flon, Manitoba.
      Under this option agreement, the Company was required to spend $2.5 million
      by
      October, 1999, to earn a 35% working interest in the property. The Company
      has
      the option to earn an additional 35% interest by either spending a further
      $14
      million on exploration and development or by bringing the property into
      production by October, 2007. Should the Company successfully complete this
      earn-in, the optionors must either elect to participate in the project and
      each
      repurchase a 5% interest for $2,357,500 or each sell 15% to the Company for
      $800,000. The Company can, at any time, lock in its working interest and elect
      to participate in the Amisk Lake Joint Venture. The Company has earned the
      rights to acquire 35% of the property and has initiated the process to
      participate in the Amisk Joint Venture.





ii)
      To satisfy its commitments pursuant to the issuance of flow-through shares,
      the
      Company is required to expend $3.2 million of qualifying Canadian Exploration
      Expenses as defined in the Income Tax Act (Canada) prior to December 31,
      2005.





(b)
      CONTINGENCIES





Pursuant
      to a Notice of Contravention issued by Saskatchewan Labour, Occupational Health
      and Safety Division, dated March 17, 2003, the Company was ordered to reinstate
      three workers and reimburse them for lost pay and benefits. The contravention
      alleges that the Company dismissed these employees contrary to the Occupational
      Health and Safety Act. The contravention was appealed to the Executive Director
      and subsequently to an adjudicator. The matter is currently under appeal to
      the
      Court of Queen’s Bench, where a decision is pending. Management is of the
      opinion these claims are unwarranted. The amount of potential loss, if any,
      may
      involve payment of approximately 18 months in back pay to each of the employees
      and will be recognized in earnings at the time of settlement.





**19.
      SUBSEQUENT EVENT:**





In
      February 2005, the Company borrowed $5.0 million in the form of a demand loan
      bearing interest at 5.99%, repayable in monthly principal and interest payments
      of $96,514 and maturing in February 2010. The loan is secured by a general
      security agreement covering all assets of the Company, excluding oil and gas
      assets in Alberta.





**20.
      COMPARATIVE FIGURES:**





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





**21.
      DIFFERENCES FROM UNITED STATES ACCOUNTING PRINCIPLES:**





These
      consolidated financial statements have been prepared in accordance with
      accounting principles generally accepted in Canada. The Company monitors
      differences between generally accepted accounting principles (“GAAP”) in Canada
      and the United States (“U.S.”), none of which have a material effect on the
      financial statements except as summarized below:





**a)
                  Balance Sheets**
              
              
              **2004**
              
              
              2003(restated
                  - Note 2)Mineral
                  Properties - under Canadian GAAP
              
              $
              34,327
              
              $
              26,932Cumulative
                  exploration expenditures expensed under U.S. GAAP (ii)
              
              
              (7,797
              )
              
              (4,107
              )Cumulative
                  depreciation and depletion adjustment (iii)
              
              
              1,364
              
              
              1,239Cumulative
                  write-down adjustment (iii)
              
              
              (1,825
              )
              
              (1,825
              )Mineral
                  Properties - under U.S. GAAP
              
              
              26,069
              
              
              22,239Investments
                  - under Canadian GAAP
              
              
              668
              
              
              1,660
   86
  Unrealized
                  gain on available-for-sale securities (v)
              
              
              3,214
              
              
              1,761Investments
                  - under U.S. GAAP
              
              
              3,882
              
              
              3,421Payables
                  and accrued liabilities - under Canadian GAAP
              
              
              4,580
              
              
              4,565Adjustment
                  to reverse the Canadian GAAP restatement (x(b))
              
              
              -
              
              
              (30
              )Cumulative
                  unrealized gain on derivative instruments (viii)
              
              
              (227
              )
              
              (215
              )Cumulative
                  liability for flow-through shares (ix)
              
              
              628
              
              
              253Payables
                  and accrued liabilities - under U.S. GAAP
              
              $
              4,981
              
              $
              4,573Shareholders’
                  equityShare
                  capital - under Canadian GAAP
              
              $
              43,966
              
              $
              38,850Adjustment
                  to reverse Canadian GAAP restatement (x(b))
              
              
              -
              
              
              (144
              )Reduction
                  of stated capital (vii)
              
              
              55,000
              
              
              55,000Adjustment
                  for flow-through share premiums (ix)
              
              
              (1,298
              )
              
              (670
              )Share
                  capital - under U.S. GAAP
              
              
              97,668
              
              
              93,036Contributed
                  SurplusContributed
                  Surplus - Under Canadian GAAP
              
              
              330
              
              
              225Cumulative
                  stock compensation costs (vi)
              
              
              374
              
              
              374Adjustment
                  to reverse Canadian GAAP restatement (x(b))
              
              
              -
              
              
              (225
              )Contributed
                  Surplus - under U.S. GAAP
              
              
              704
              
              
              374Retained
                  earnings - under Canadian GAAP
              
              
              5,563
              
              
              6,161Reduction
                  of stated capital (vii)
              
              
              (55,000
              )
              
              (55,000
              )Cumulative
                  exploration expenses (ii)
              
              
              (7,797
              )
              
              (4,107
              )Cumulative
                  depreciation and depletion adjustment (iii)
              
              
              1,364
              
              
              1,239Cumulative
                  write-down adjustment (iii)
              
              
              (1,825
              )
              
              (1,825
              )Adjustment
                  to reverse Canadian GAAP adjustment (x(b))
              
              
              -
              
              
              399Cumulative
                  stock compensation costs (vi)
              
              
              (374
              )
              
              (374
              )Cumulative
                  renunciation of tax deductions on flow-through shares (ix)
              
              
              670
              
              
              417Deficit
                  - under U.S. GAAP
              
              
              (57,399
              )
              
              (53,090
              )Other
                  comprehensive incomeUnrealized
                  gain on available-for-sale securities (v)
              
              
              3,214
              
              
              1,761Derivative
                  instruments (viii)
              
              
              227
              
              
              215Shareholders’
                  equity - under U.S. GAAP
              
              $
              44,414
              
              $
              42,296




**b)
                  Statements of Earnings (Loss)**
              
              
              **2004**
              
              
              2003
              
              
              2002(restated
                  - Note 2
              )
              
              (restated
                  - Note 2
              )Net
                  earnings (loss) - under Canadian GAAP
              
              $
              (598
              )
              $
              1,798
              
              $
              (1,911
              )Adjustment
                  to reverse Canadian GAAP restatement (x(a))
              
              
              -
              
              
              -
              
              
              98Adjustment
                  to reverse Canadian GAAP restatement (x(b))
              
              
              -
              
              
              95
              
              
              304Net
                  earnings applicable to U.S. GAAP
              
              
              (598
              )
              
              1,893
              
              
              (1,509
              )Exploration
                  expenditures (ii)
              
              
              (3,690
              )
              
              (2,603
              )
              
              (1,419
              )Depreciation
                  and depletion adjustment (iii)
              
              
              125
              
              
              284
              
              
              338Derivative
                  instruments (viii)
              
              
              -
              
              
              440
              
              
              (451
              )Renunciation
                  of tax deductions on flow-through shares (ix)
              
              
              253
              
              
              417
              
              
              -Net
                  earnings (loss) before cumulative effect of change in accounting
                  principle
              
              
              (3,910
              )
              
              431
              
              
              (3,041
              )Cumulative
                  effect of change in accounting principle (x)
              
              
              (399
              )
              
              995
              
              
              -Net
                  earnings (loss) - under U.S. GAAP
              
              
              (4,309
              )
              
              1,426
              
              
              (3,041
              )Available-for-sale
                  securities (v)
              
              
              1,453
              
              
              1,352
              
              
              365
   87
  Derivative
                  instruments (viii)
              
              
              12
              
              
              215
              
              
              -Comprehensive
                  earnings (loss) under U.S. GAAP
              
              
              (2,844
              )
              
              2,993
              
              
              (2,676
              )Net
                  earnings (loss) per share under U.S. GAAPBasic
                  and diluted
              
              $
              (0.07
              )
              $
              0.03
              
              $
              (0.06
              )Earnings
                    (loss) for the year in accordance with U.S. GAAP
              
              $
              (4,309
              )
              $
              1,426
              
              $
              (3,041
              )Pro-forma
                  effect of application of:Asset
                  retirement obligations (x(a))
              
              
              -
              
              
              (995
              )
              
              -Stock-based
                  compensation (x(b))
              
              
              399
              
              
              -
              
              
              -Pro-forma
                  earnings(loss) in accordance with U.S.GAAP
              
              
              (3,910
              )
              
              431
              
              
              (3,041
              )Proforma
                  earnings (loss) per share in accordance with U.S. GAAPBasic
                  and diluted
              
              $
              (0.07
              )
              $
              0.01
              
              $
              (0.06
              )





i)
      Cash





Under
      U.S. GAAP, cash and short-term investment amounts restricted against future
      use
      as a result of commitments related to flow-through share agreements must be
      separately classified in the financial statements. As a result, unexpended
      proceeds of $2.4 million from two 2004 flow-through share issues ($2.5 million
      from a 2003 flow-through share issue) would be classified separately as reserved
      cash.





ii)
      Mineral Property Exploration Expenditures





Mineral
      property exploration expenditures are accounted for in accordance with Canadian
      GAAP as disclosed in Note 1. For U.S. GAAP purposes, the Company expenses,
      as
      incurred, exploration expenditures relating to unproven mineral properties.
      When
      proven and probable reserves are determined for a property and a final
      feasibility study determines the economic recoverability of these reserves,
      subsequent development costs of the property are capitalized.





iii)
      Write-down of Mineral Properties





Under
      both Canadian and U.S. GAAP, property, plant and equipment must be assessed
      for
      potential impairment. If the cash flows are less than the carrying value of
      the
      asset, under Canadian GAAP and U.S. GAAP, the impairment loss is calculated
      as
      the amount by which the carrying value of the asset exceeds its fair value.
      Fair
      value is calculated as the present value of estimated future net cash flows.
      Under both Canadian and U.S. GAAP, impairment tests are calculated with cash
      flows determined using only proven and probable reserves. Previously, under
      Canadian GAAP, the impairment loss was calculated as the difference between
      the
      carrying value of the asset and its recoverable amount calculated on an
      undiscounted future cash flow basis. The resulting difference in the previous
      period write-down between Canadian and U.S. GAAP also results in a difference
      in
      the amount of depreciation and depletion charged to earnings.





iv)
      Oil and Gas Properties





Under
      both Canadian and U.S. GAAP, property, plant and equipment must be assessed
      for
      potential impairment. Under both Canadian and U.S. GAAP if undiscounted cash
      flows are less than the carrying value of the asset, the impairment loss is
      calculated as the amount by which the carrying value of the asset exceeds its
      fair value. Fair value is calculated as the net present value of estimated
      future net cash flows. In 2004, the impairment test was modified for the
      adoption of Accounting Guideline 16, Oil and Gas Accounting - Full Cost. Under
      the guideline the net present value is calculated using a risk-free discount
      rate, future prices and costs and both proved and probable reserves. Previously,
      the impairment test was based on the sum of undiscounted cash flows from proved
      reserves using year-end prices. Under U.S. GAAP the net present value is
      calculated using a 10% discount rate, year end prices and using only proved
      reserves.





88


v)
      Available-for-Sale Securities





Under
      Canadian GAAP, investments are accounted for using the cost method. Under U.S.
      GAAP, investments classified as available-for-sale securities are carried at
      market values with unrealized gains or losses reflected as a separate component
      of shareholders’ equity and included in comprehensive income.





vi)
      Stock-Based Compensation





Prior
      to January 1, 2002, Canadian GAAP did not require transactions in which equity
      instruments issued for consideration of services performed to be accounted
      for
      based on the fair value of the consideration received or the fair value of
      the
      equity instruments issued, whichever is more reliably measurable. Under U.S.
      GAAP, the Company continues to account for stock-based compensation pursuant
      to
      APB25. U.S. GAAP did require the measurement of such consideration and $374,000
      of stock-based compensation was expensed prior to 2002.





vii)
      Reduction of Stated Capital





Under
      Canadian GAAP and by special resolutions of the shareholders, the Company
      reduced its stated capital account by $55,000,000. This reduction in stated
      capital is not permitted under U.S. GAAP and accordingly, has resulted in a
      cumulative increase in the share capital account of $55,000,000 with a
      corresponding increase in the Company’s deficit balance.





viii)
      Accounting for Derivative Instruments and Hedging Activities





In
      accordance with Financial Accounting Standards Board (“FASB”) Statement 133,
      Accounting for Derivative Instruments and Hedging Activities, the Company is
      required to recognize all derivatives on the balance sheet at fair value. Prior
      to January 1, 2003, the derivatives had not been documented as hedges under
      U.S.
      GAAP and accordingly, gains and losses were recorded in earnings. For amounts
      included in other comprehensive income for the year ended December 31, 2004,
      a
      gain of $316,000 relates to hedging of foreign currency risk and a loss of
      $89,000 relates to the hedging of gold price risk. Of these amounts, a gain
      of
      $227,000 is expected to be recorded in earnings during 2005.





For
      amounts included in other comprehensive income for the year ended December
      31,
      2003, a gain of $441,000 relates to hedging of foreign currency risk and a
      loss
      of $226,000 relates to the hedging of gold price risk. Of these amounts, a
      gain
      of $215,000 was recorded in earnings during 2004.





ix)
      Flow-through Share Premiums





Under
      U.S. GAAP, the difference between the issue price of flow-through shares and
      the
      fair value of the shares at the date of issuance is recorded as a liability.
      To
      the extent that the Company has available tax pools for which a full valuation
      allowance has been provided, the premium is recognized in earnings as a
      reduction in the valuation allowance at the time of renunciation of the tax
      pools. The comparative figures for 2003 and 2002 have been adjusted to reflect
      the liability and earnings affect for the flow-through shares issued in prior
      years.





x)
      Cumulative Effect of a Change in Accounting Policy





(a)
      In June of 2001, the FASB issued Statement 143, Accounting for Asset Retirement
      Obligations, which addresses financial accounting and reporting for obligations
      associated with the retirement of tangible long-lived assets and the associated
      asset retirement costs. The standard, which is effective for fiscal years after
      June 15, 2002, applies to legal obligations associated with the retirement
      of
      long-lived assets that result from the acquisition, construction, development
      and use of the asset. Statement 143 requires that the fair value of a liability
      for an asset retirement obligation be recognized in the period in which it
      is
      incurred if a reasonable estimate of fair value can be made. The fair value
      is
      added to the carrying amount of the associated asset. The liability is accreted
      at the end of each period through charges to operating expenses.





The
      Canadian Institute of Chartered Accountants issued section 3110, Asset
      Retirement Obligations effective for fiscal years beginning on January 1, 2004.
      The Company implemented the Canadian standard effective January 1,




89


2003
      for the purposes of harmonization. For Canadian GAAP, the cumulative effect
      of
      the change in policy on the balance sheet at December 31, 2002 is to increase
      mineral properties by $130,000, decrease asset retirement obligation by $865,000
      and increase opening retained earnings by $1,093,000. Under U.S. GAAP no
      restatement of prior periods is required. The effect on the change in policy
      for
      the year ended December 31, 2003 was to increase earnings under U.S. GAAP by
      $995,000.





(b)
      Statement of Financial Accounting Standards No. 123, Accounting for Stock-based
      Compensation establishes financial accounting and reporting standards for
      stock-based employee compensation plans. This statement defines a fair-value
      based method of accounting for employee stock options, but also allows an entity
      to measure compensation costs related to stock-based compensation plans using
      the intrinsic value method with pro-forma disclosure. The latter application
      was
      allowed by Canadian GAAP prior to January 1, 2004 after which the Company
      adopted the fair-value method of accounting for employee compensation plans
      for
      Canadian GAAP. Pursuant to the transitional rules, a company that adopted the
      section effective January 1, 2004 may retroactively restate prior periods to
      include expenses for awards that were included in the pro forma note disclosure
      for prior periods.





For
      Canadian GAAP, the cumulative effect of the change in policy on the balance
      sheet at December 31, 2003 is to increase liabilities by $30,000, increase
      share
      capital by $144,000, increase contributed surplus by $225,000 and increase
      opening retained earnings by $399,000. Under U.S. GAAP no restatement of prior
      periods is required. The effect of the change in policy for the year ended
      December 31, 2004 was to decrease earnings under U.S. GAAP by
      $399,000.





xi)
      New Accounting Pronouncements





In
      2004, the FASB issued Statement 151, Inventory Costs, which clarifies the
      accounting for abnormal amounts of idle facility expense, freight, handling
      costs and wasted materials (spoilage). This statement requires that these items
      be recognized as current-period charges. Claude will adopt this standard on
      a
      prospective basis beginning January 1, 2005 and does not expect it will have
      material impact on its consolidated financial statements.





In
      2004, the FASB issued Statement 123R, Share Based Payment, which focuses
      primarily on accounting for transactions in which an entity obtains employee
      services in share-based payment transactions. This statement requires that
      the
      cost of employee services received in exchange for an award of liability
      instrument be initially measured based on its current fair value; the fair
      value
      of that award will be remeasured subsequently at each reporting date through
      the
      settlement date. Changes in fair value during the requisite service period
      will
      be recognized as compensation cost over that period. Claude will adopt this
      standard on a prospective basis beginning January 1, 2005 and does not expect
      it
      will have a material impact on its consolidated financial
      statements.





In
      2004, the FASB issued Statement 153, Exchanges of Nonmonetary Assets, which
      amends Opinion 29 to eliminate the exception for nonmonetary exchanges of
      similar productive assets and replaces it with a general exception for exchanges
      of nonmonetary assets that do not have commercial substance. A nonmonetary
      exchange has commercial substance if the future cash flows of the entity are
      expected to change significantly as a result of the exchange. Claude will adopt
      this standard on a prospective basis beginning January 1, 2005 and does not
      expect it will have a material impact on its consolidated financial
      statements.





90