|UNITED STATES  SECURITIES AND
EXCHANGE COMMISSION  WASHINGTON, D.C. 20549  FORM 20-F
|------------------------------------------------------------------------------------



|[   ] |  | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
      OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934.
|----- |  | -----------------------------------------------------------------------------------------------------



|OR
|--

|[X] |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
      OF THE SECURITIES EXCHANGE ACT OF 1934.
|--- |  | -------------------------------------------------------------------------------------------





|For the fiscal year ended:
December 31, 2002
|--------------------------------------------



|OR
|--

|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
      OF THE SECURITIES EXCHANGE ACT OF 1934
|----- |  | ----------------------------------------------------------------------------------------------
|      |  | For 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 4th 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
|------------------- | -----------------------------------------
|                    |                                          
|None                | N/A                                      
|                   





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



|Common Shares
|-------------

|(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:
|--------------------------------------------------------------------------------------------------------

|December 31, 2002:  49,459,477 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      [   ] No
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



|[X]  Item 17      [   ]
      Item 18
|-------------------------------------



| | Page 1 of 68  Index to Exhibits on Page 68 | 
| | ------------------------------------------ | 



---





|Table of Contents
|-----------------



|Claude Resources Inc.  Form 20-F
|--------------------------------

|                                                                    | Page
|------------------------------------------------------------------- | ----
|Statement Regarding Forward-Looking Information                     | 4   
|                                                                    |     
|                                                                    |     
|Glossary of Terms                                                   | 5   
|                                                                    |     
|                                                                    |     
|Part I:                                                             |     
|                                                                    |     
|Item 1: Identity of Directors, Senior Management
      and Advisors | 12  
|                                                                    |     
|                                                                    |     
|Item 2: Offer Statistics and Expected Timetable                     | 12  
|                                                                    |     
|                                                                    |     
|Item 3: Key Information                                             |     
|A. Selected
      Financial Data                                    | 12  
|B. Capitalization
      and Indebtedness                            | 14  
|C. Reasons
      for the Offer and Use of Proceeds                  | 14  
|D. Risk
      Factors                                               | 14  
|                                                                    |     
|                                                                    |     
|Item 4: Information on the Company                                  |     
|A. History
      and Development of the Company                     | 20  
|B. Business
      Overview                                          | 21  
|C. Organizational
      Structure                                   | 22  
|D. Property,
      Plants and Equipment                             | 22  
|                                                                    |     
|                                                                    |     
|Item 5: Operating and Financial Review and
      Prospects          |     
|A. Operating
      Results                                          | 44  
|B. Liquidity
      and Capital Resources                            | 46  
|C. Research
      and Development, Patents and Licenses, etc.       | 48  
|D. Trend
      Information                                          | 48  
|                                                                    |     
|                                                                    |     
|Item 6: Directors, Senior Management and
      Employees            |     
|A. Directors
      and Senior Management                            | 49  
|B. Compensation                                                     | 50  
|C. Board
      Practices                                            | 51  
|D. Employees                                                        | 51  
|E. Share
      Ownership                                            | 52  
|                                                                    |     
|                                                                    |     
|Item 7: Major Shareholders and Related Party
      Transactions     |     
|A. Major
      Shareholders                                         | 53  
|B. Related
      Party Transactions                                 | 54  
|C. Interests
      of Experts and Counsel                           | 54  
|                                                                    |     
|                                                                    |     
|Item 8: Financial Information                                       |     
|A. Consolidated
      Statements and Other Financial Information    | 54  
|B. Significant
      Changes                                        | 55  
|                                                                    |     
|                                                                    |     
|Item 9: The Offer and Listing                                       |     
|A. Offer
      and Listing Details                                  | 55  
|B. Plan
      of Distribution                                       | 56  
|C. Markets                                                          | 56  



| |  | 
| |  | 



---





|                                                                                              | Page
|--------------------------------------------------------------------------------------------- | ----
|D. Selling
      Shareholders                                                                 | 56  
|E. Dilution                                                                                   | 56  
|F. Expenses
      of the Issue                                                                | 56  
|                                                                                              |     
|                                                                                              |     
|Item 10: Additional Information                                                               |     
|A. Share
      Capital                                                                        | 56  
|B. Memorandum
      and Articles of Association                                               | 56  
|C. Material
      Contracts                                                                   | 56  
|D. Exchange
      Controls                                                                    | 57  
|E. Taxation                                                                                   | 59  
|F. Dividends
      and Paying Agents                                                          | 64  
|G. Statement
      by Experts                                                                 | 64  
|H. Documents
      on Display                                                                 | 65  
|I.
       Subsidiary Information                                                              | 65  
|                                                                                              |     
|                                                                                              |     
|Item 11: Quantitative and Qualitative Disclosures
      About Market Risk                     | 65  
|                                                                                              |     
|                                                                                              |     
|Item 12: Description of Securities Other
      Than Equity Securities                         | 66  
|                                                                                              |     
|                                                                                              |     
|Part II:                                                                                      |     
|                                                                                              |     
|                                                                                              |     
|Item 13: Defaults, Dividend Arrearages and
      Delinquencies                                | 66  
|                                                                                              |     
|                                                                                              |     
|Item 14: Material Modifications to the Rights
      of Securities Holders and Use of Proceeds | 66  
|                                                                                              |     
|                                                                                              |     
|Item 15: Controls and Procedures                                                              | 66  
|                                                                                              |     
|                                                                                              |     
|Item 16: [Reserved]                                                                           | 67  
|                                                                                              |     
|                                                                                              |     
|Part III:                                                                                     |     
|                                                                                              |     
|                                                                                              |     
|Item 17: Financial Statements                                                                 | 67  
|                                                                                              |     
|                                                                                              |     
|Item 18: Financial Statements                                                                 | 67  
|                                                                                              |     
|                                                                                              |     
|Item 19: Exhibits                                                                             | 67  

|The financial  statements and exhibits  listed
referred to herein are filed with  this  report on Form 20-F in the  United  States.
This  report is also filed in  Canada as an Annual  Information Form - the Canadian
filing does not include the  consolidated  financial  statements and exhibits  listed
below herein.  Canadian  investors should refer to the annual  consolidated  financial
statements of the  Company at December 31, 2002 as filed with the Canadian securities
regulators.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|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 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, which will, among other things,
impact  demand for the Companys products; 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 exchange 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              | 2.471      
|Metres                 | Feet (ft.)         | 3.281      
|Kilometres (km)        | Miles              | 0.621      
|Tonnes                 | Tons (2000 pounds) | 1.102      
|Grams/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.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Autoclave - a high pressure and temperature
vessel for oxidizing refractory ore. Ore or concentrate is fed into the strong vessel
and placed under high pressure and temperature conditions with elevated oxygen levels
to liberate the gold or base metals.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



|BCF - billion cubic feet.
|-------------------------



|BOPD - barrels of oil per day.
|------------------------------



|Batholith - a very large intrusive mass of
igneous rock.
|--------------------------------------------------------



| | 5 | 
| | - | 



---





|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.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Carried Interest - the Companys working
interest share of capital and operating costs are paid by another party for a
specified period of time or until a specific event occurs.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



|Clastic - fragments 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.
|-------------------------------------------------------------------------------



| | 6 | 
| | - | 



---





|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.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Epithermal - low temperature hydrothermal
process or product.
|-------------------------------------------------------------



|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.
|------------------------------------------------------------------------



|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.
|---------------------------------------------------------------



| | 7 | 
| | - | 



---





|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
|---------------------------



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



|Indicated Resource - in reference to minerals,
means quantity and grade and (or) quality are computed from information similar to
that used for measured resources, 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 resources, is high enough to assume
continuity between points of observation.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Inferred Resource - in reference to minerals, means
      estimates are based on an assumed continuity beyond measured and (or) indicated
      resources, for which there is geological evidence. Inferred resources may
      or may not be supported by samples or measurements.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



|Liquids - natural gas liquids, which primarily
consist of propane, butane and condensate.
|-----------------------------------------------------------------------------------------



|LT - long tons.
|---------------



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



|MCF - thousand cubic feet.
|--------------------------



|MLT - thousands of long tons.
|-----------------------------



|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.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 8 | 
| | - | 



---





|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.
|------------------------------------------------------------------------------------------------



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



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



|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 deduction of the 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 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.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



|Pyrite - an iron sulphide mineral (FeS2), 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.
|--------------------------------------------------------------------------------------------------



|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.
|---------------------------------------------------------------------------------------------------------------------------------------------



|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.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 9 | 
| | - | 



---





|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 - surface 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.
|-----------------------------------------------------------------------------------------------------------



|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.
|-------------------------------------------------------------------------------------------------------------------



| | 10 | 
| | -- | 



---





|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 20F 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 20F 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  2000  through  2002  financial  years
should  be read in  conjunction  with  the  consolidated  financial  statements  of the
Corporation  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 19 of the December 31, 2002  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.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                | 2002                                                                                   |  | 2001       |  | 2000       |  | 1999       |  | 1998      
|------------------------------- | -------------------------------------------------------------------------------------- |  | ---------- |  | ---------- |  | ---------- |  | ----------
|                                | Canadian Dollar Thousands
      (except number of common shares and per share amounts)
|                                |                                                                                       
|Revenue ($)                     | 27,406                                                                                 |  | 28,548     |  | 33,466     |  | 28,746     |  | 32,452    
|                                |                                                                                        |  |            |  |            |  |            |  |           
|Net earnings (loss)             |                                                                                        |  |            |  |            |  |            |  |           
|                                |                                                                                        |  |            |  |            |  |            |  |           
|Canadian GAAP ($)               | (1,509)                                                                                |  | (2,183)    |  | (48,723)   |  | 2,260      |  | 2,654     
|                                |                                                                                        |  |            |  |            |  |            |  |           
|U.S. GAAP ($)                   | (3,041)                                                                                |  | (1,697)    |  | (25,615)   |  | N/A        |  | N/A       
|                                |                                                                                        |  |            |  |            |  |            |  |           
|Wtd. Average Shares Outstanding | 46,919,331                                                                             |  | 40,622,346 |  | 38,963,975 |  | 31,309,553 |  | 25,432,418
|                                |                                                                                        |  |            |  |            |  |            |  |           
|Share Capital                   |                                                                                        |  |            |  |            |  |            |  |           
|                                |                                                                                        |  |            |  |            |  |            |  |           
|Canadian GAAP ($)               | 24,525                                                                                 |  | 18,362     |  | 56,893     |  | 55,996     |  | 46,982    
|                                |                                                                                        |  |            |  |            |  |            |  |           
|U.S. GAAP ($)                   | 79,899                                                                                 |  | 73,736     |  | 72,211     |  | N/A        |  | N/A       
|                                |                                                                                        |  |            |  |            |  |            |  |           
|Earnings (loss) per share(1)    |                                                                                        |  |            |  |            |  |            |  |           
|                                |                                                                                        |  |            |  |            |  |            |  |           
|Canadian GAAP ($)               | (0.03)                                                                                 |  | (0.05)     |  | (1.25)     |  | 0.07       |  | 0.10      
|                                |                                                                                        |  |            |  |            |  |            |  |           
|U.S. GAAP ($)                   | (0.06)                                                                                 |  | (0.04)     |  | (0.66)     |  | N/A        |  | N/A       



| | 12 | 
| | -- | 



---





|                  | 2002                                                                                   |  | 2001   |  | 2000   |  | 1999   |  | 1998  
|----------------- | -------------------------------------------------------------------------------------- |  | ------ |  | ------ |  | ------ |  | ------
|                  | Canadian Dollar Thousands
      (except number of common shares and per share amounts)
|                  |                                                                                       
|Total Assets      |                                                                                        |  |        |  |        |  |        |  |       
|                  |                                                                                        |  |        |  |        |  |        |  |       
|Canadian GAAP ($) | 34,683                                                                                 |  | 28,670 |  | 30,973 |  | 78,817 |  | 72,875
|                  |                                                                                        |  |        |  |        |  |        |  |       
|U.S. GAAP ($)     | 32,718                                                                                 |  | 27,421 |  | 29,644 |  | N/A    |  | N/A   
|                  |                                                                                        |  |        |  |        |  |        |  |       
|Liabilities       |                                                                                        |  |        |  |        |  |        |  |       
|                  |                                                                                        |  |        |  |        |  |        |  |       
|Canadian GAAP ($) | 6,486                                                                                  |  | 5,127  |  | 6,716  |  | 6,734  |  | 12,066
|                  |                                                                                        |  |        |  |        |  |        |  |       
|U.S. GAAP ($)     | 6,926                                                                                  |  | 5,116  |  | 6,716  |  | N/A    |  | N/A   
|                  |                                                                                        |  |        |  |        |  |        |  |       
|Net Assets        |                                                                                        |  |        |  |        |  |        |  |       
|                  |                                                                                        |  |        |  |        |  |        |  |       
|Canadian GAAP ($) | 28,197                                                                                 |  | 23,543 |  | 24,257 |  | 72,083 |  | 60,809
|                  |                                                                                        |  |        |  |        |  |        |  |       
|U.S. GAAP ($)     | 25,792                                                                                 |  | 22,305 |  | 22,928 |  | N/A    |  | N/A   
|                  |                                                                                        |  |        |  |        |  |        |  |       

|
|

|(1) |  | No
material difference between basic and diluted amounts.
|--- |  | ---------------------------------------------------------



|Quarterly Information
|---------------------



|Selected  unaudited  consolidated  financial
information  for  the  last  eight  quarters  ended December 31, 2002 in thousands of
Canadian  dollars  (except per  share amounts) is set forth below:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                 |  | Dec. 31, |  | Sept. 30, |  | June 30, |  | Mar. 31, |  | Dec. 31, |  | Sept. 30, |  | June 30, |  | Mar. 31,
|-------------------------------- |  | -------- |  | --------- |  | -------- |  | -------- |  | -------- |  | --------- |  | -------- |  | --------
|                                 |  | 2002     |  | 2002      |  | 2002     |  | 2002     |  | 2001     |  | 2001      |  | 2001     |  | 2001    
|                                
|                                 |  |          |  |           |  |          |  |          |  |          |  |           |  |          |  |         
|Revenue ($)                      |  | 9,795    |  | 6,956     |  | 5,486    |  | 5,169    |  | 6,295    |  | 6,522     |  | 7,843    |  | 7,888   
|                                 |  |          |  |           |  |          |  |          |  |          |  |           |  |          |  |         
|                                 |  |          |  |           |  |          |  |          |  |          |  |           |  |          |  |         
|Net earnings (loss) ($)          |  | 1,709    |  | (200)     |  | (1,044)  |  | (1,974)  |  | (284)    |  | (698)     |  | (778)    |  | (423)   
|                                 |  |          |  |           |  |          |  |          |  |          |  |           |  |          |  |         
|Earnings (loss) per share ($)(1) |  | 0.04     |  | -         |  | (0.02)   |  | (0.05)   |  | (0.01)   |  | (0.02)    |  | (0.02)   |  | (0.01)  
|                                 |  |          |  |           |  |          |  |          |  |          |  |           |  |          |  |         

|(1) |  | No
difference between basic and diluted amounts.
|--- |  | ------------------------------------------------



|The Company has paid no dividends on its common
shares since  incorporation  and  does not anticipate doing so for the foreseeable future.
|------------------------------------------------------------------------------------------------------------------------------------------



|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:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 13 | 
| | -- | 



---





|                  | For the Years
      ended December 31,
|----------------- | --------------------------------------
|                  | 2002                                  
|                 
|                  |                                       
|Average           | 1.57                                  
|                  |                                       
|                  |                                       
|High ($)          | 1.62                                  
|                  |                                       
|                  |                                       
|Low ($)           | 1.50                                  
|                  |                                       
|                  |                                       
|Year End Rate ($) | 1.58                                  

|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
|---------------------- |  |  | ---------------------
|                       |  |  | March 
      2003    
|                      
|                       |  |  |                      
|High for the month ($) |  |  | 1.50                 
|                       |  |  |                      
|Low for the month ($)  |  |  | 1.46                 



|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 15, 2003, the noon buying
rate, as quoted by  the Federal Reserve Bank of New York was CDN$/U.S. $1.3761.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|B.   Capitalization and Indebtedness
|------------------------------------



|This Form 20F 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 20F 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 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
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 14 | 
| | -- | 



---





|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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 Claudes  oil and gas  properties  are
operated by others,  as such,  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
|-------------------------------------------------------------------------------------------------------------------------------------------



|The economics of developing gold and other metal
properties are affected by many  factors  including the cost of operations,  variations
in the grade of ore mined  and the  price of gold or other  metals.  Depending  on the
price of gold,  the  Company may determine that it is impractical to commence or continue
commercial  production.  The price of gold has  fluctuated in recent years.  During the
year  ended  December  31,  2002,  the market price for gold ranged from a low of U.S.
$277 to a high of U.S. $349 with an average price of U.S. $310.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| | 1. | Reduce production revenues as a result cutbacks
      caused by the stoppage 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; or,                                                                                       
| | 5. | Cause the write-off of an asset whose value is
      impaired by the low price of gold.                                                                                                                        



|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.  If gold
prices  remain at low market
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 15 | 
| | -- | 



---





|levels for a  sustained  period or further
decline,  the Company could  determine that it is not  economically  feasible to
continue mining operations or exploration activities.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Unfavorable Government Regulatory Changes may
Cause Cessation of Mining Operations and Exploration Activities
|-------------------------------------------------------------------------------------------------------------



|The  Companys  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.  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.  The Company may be required to
compensate those suffering  loss or damage by reason of its operating or exploration
activities.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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. Mineral  exploration  and  mining  may be  affected  in  varying  degrees  by
government  regulations  relating  to the mining  industry.  Any changes in  regulations
or  shifts in  political  conditions  are beyond the  control of the Company and may
adversely affect its business.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Operations  may 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.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Currently,  the Company has estimated $3.0
million in reclamation for certain of  its properties as follows:  Seabee mine - $1.3
million;  Tartan Lake mine - $1.0  million;  and Madsen  mine -  $700,000.  As of
December  31 2002,  $767,000  of  Seabees  assurance  requirements  have been funded and
it is expected  that the  remaining $500,000 will be funded in 2003. The Madsen
properties  assurance has  been funded via letters of credit as detailed in Note 9 in
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 16 | 
| | -- | 



---





|the Companys audited  December 31, 2002
Financial  Statements.  There are no funding  requirements for  the Tartan Lake mine.
|------------------------------------------------------------------------------------------------------------------------------



|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.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During the first half of 2002 the Company
completed  production from the mines  2d  structure.  Gold  recovery  on the 2d
structure  had been  less  than  that  predicted in prior years reserve estimates. The
overstating of the reserve grade  had led to the mining of inappropriate widths and
mining losses were higher than  usual.  This led to a decline in production  and
profitability  in 2002 despite  accessing higher grade ore from the B zone during the
latter half of the year.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



|As of December 31, 2002, the Company had bank
indebtedness of approximately $1.6  million and working capital of $9.0 million. At the
end of Fiscal 2002 (December  31st), the Company had a net loss of approximately  $1.5
million;  at the end of  Fiscal 2001 (December 31st),  the Company had a net loss of
approximately  ($2.2  million).  The Companys  ability to continue its  production,
exploration  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  obligation  as they
become  due or to obtain  financing on acceptable terms, if at all.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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. In addition,
management estimates  that $1 - $1.5  million  is the  annual  expenditure  required  to
fulfill  the  Companys intended exploration programs.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Departures of Key Personnel may cause
Managerial and Technical Difficulties
|---------------------------------------------------------------------------



|The Company  strongly  depends on the  business
and  technical  expertise of its  management  including:  William R.  MacNeill,  Chairman
of the Board;  Arnie E.  Hillier, Vice Chairman, CEO and CFO; Neil McMillan,  President;
Ray Gagnon, COO;  and, Philip Olson, Vice-President Exploration.  There is little
possibility that  this  dependence  will decrease in the near term.  Investors  must be
willing to  rely to a great extent on their  discretion  and judgment.  The Company does
not  maintain key man  insurance on any of its  employees,  nor does the Company have
employment contracts with any of its employees.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



|As of December 31, 2002,  there were employee
options  outstanding  to purchase  2,430,000 common shares and 2,550,770 share purchase
warrants outstanding. These  options and warrants, if fully exercised, would constitute
approximately 9.1% 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
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 17 | 
| | -- | 



---





|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 Corporate
Growth
|------------------------------------------------



|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 believes it 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.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 18 | 
| | -- | 



---





|The Company has financed certain  exploration
activities  primarily through the  issuance of equity, including flow-through shares. See
Item 5.B - Operating and  Financial Review and Prospects.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Under the Income Tax Act (Canada), 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  flow-through  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.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company is Classified as a Penny
Stock with Rules that may Defer Trading Activity
|---------------------------------------------------------------------------------------



|The  Companys  stock is  subject  to
penny  stock  rules as  defined  in 1934  Securities  and Exchange Act rule
3a51-1.  The Commission has adopted rules that  regulate  broker-dealer  practices  in
connection  with  transactions  in penny  stocks.  The  Companys  common  shares are
subject to these penny stock  rules.  Transaction costs associated with purchases and
sales of penny stocks are likely  to be higher than those for other securities.  Penny
stocks generally are equity  securities  with a  price  of  less  than  U.S.  $5.00
(other  than  securities  registered  on certain  national  securities  exchanges  or
quoted on the NASDAQ  system,  provided  that  current  price and volume  information
with respect to  transactions in such securities is provided by the exchange or system).
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The penny stock rules require a broker-dealer,
prior to a transaction in a penny  stock not  otherwise  exempt  from the  rules,  to
deliver a  standardized  risk  disclosure document that provides  information about penny
stocks and the nature  and  level of risks in the  penny  stock  market.  The
broker-dealer  also must  provide the customer with current bid and offer  quotations for
the penny stock,  the  compensation of the  broker-dealer  and its salesperson in the
transaction,  and monthly account statements showing the market value of each penny stock
held  in the customers account.  The bid and offer quotations,  and the broker-dealer
and salesperson compensation  information,  must be given to the customer orally  or in
writing  prior  to  effecting  the  transaction  and must be given to the  customer in
writing before or with the customers confirmation.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In  addition,  the penny stock rules  require
that prior to a  transaction  in a  penny stock not otherwise exempt from such rules, the
broker-dealer  must make a  special written  determination that the penny stock is a
suitable investment for  the purchaser and receive the purchasers  written agreement to
the transaction.  These  disclosure  requirements  may have the  effect of  reducing  the
level of  trading  activity in the secondary market for the Companys common shares in
the  United States and shareholders may find it more difficult to sell their shares.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 19 | 
| | -- | 



---





|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 Claude were restated by Restated Articles of
Incorporation dated November 14,  1988.  Articles of  Reorganization  dated  November 8,
1993 were filed by Claude  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 changed 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  Claude on March 13, 1998 (the Take-over
Offer).
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During  1998,  the Company  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.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Claude amalgamated, effective January 1, 2000,
with its subsidiaries Madsen Gold  Corp. and 3377474 Canada Inc. The amalgamated  company
will continue to carry on  business under the name Claude Resources Inc. Prior to the
amalgamation,  Claude  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 Claude.  The  amalgamation and
dissolutions are 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 - 22nd Street East, Saskatoon, Saskatchewan S7K 5T6. Its principal
executive office is located at 200, 224 - 4th Avenue South, Saskatoon, Saskatchewan
S7K 5M5, Telephone: (306)668-7505.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During  the last  three  years  ended  December
31,  2002,  the  Company  spent  approximately  $22.5 million on principal  capital
expenditures  related to its  properties,  plant and  equipment  including  $8.9 million
spent during the year  ended December 31, 2002. Details of these principal capital
expenditures are set  forth in the table below:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 20 | 
| | -- | 



---





|                                    |  | 2002                            |  | 2001  |  | 2000 
|----------------------------------- |  | ------------------------------- |  | ----- |  | -----
|                                    |  | Canadian
      Dollar Thousands
|                                    |  |                                
|                                    |  |                                 |  |       |  |      
|Seabee mine development ($)         |  | 5,749                           |  | 3,280 |  | 4,001
|Exploration expenditures ($)        |  | 1,419                           |  | 113   |  | 137  
|Plant and equipment additions ($)   |  | 1,742                           |  | 1,408 |  | 1,421
|Madsen exploration expenditures ($) |  | -                               |  | -     |  | 3,258
|                                    |  |                                
|Total
      ($)                     |  | 8,910                           |  | 4,801 |  | 8,817
|                                    |  |                                

|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,  oil,  liquids 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  600,000  ounces of gold to  December 31, 2002.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In 2002, gold sales from the mine were
approximately  41,500 ounces compared to  46,300 ounces in 2001 and 58,300 ounces in 2000.
|---------------------------------------------------------------------------------------------------------------------------------



|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 whereby  Placer  could earn a 55%
interest in the Madsen  project by  spending  CDN  $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 whereby Placer now has until the end
of 2006 to earn a  55%  working  interest  in the  Madsen  properties  under  the  same
terms  and  conditions as described above.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company through its wholly-owned subsidiary,
574095 Alberta Ltd. (574095),  operated by others,  owns and  administers
its oil,  liquids & gas property  interests  in  Alberta.  These  properties
combined  with  oil  interests  in  southeastern  Saskatchewan  produced  83,200  barrels
of oil and liquids (2001 -  87,500 barrels;  2000 - 100,300  barrels) and 886,200 MCF of
gas (2001 - 951,400  MCF; 2000 - 1,005,000 MCF) in 2002.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|A  description  of the  Companys  properties
and  its  operations  at  certain  properties is found under 4D. Property, Plants
and Equipment.
|------------------------------------------------------------------------------------------------------------------------------------------------



|For the last three fiscal years ended  December
31, 2002,  gold sales  accounted  for 74%, 68% and 72% of the Companys  revenues while
oil, liquids and gas sales  accounted for 26%, 32% and 28%.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 21 | 
| | -- | 



---





|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
subsidiary,  together  with  the  jurisdiction  of  incorporation  of each  Company and
the  percentage  of voting  securities held:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                             | 
| | ------------------------------------------- | 
| | CLAUDE RESOURCES
      INC. 
      (Canada) | 
| |                                             | 
| | 100%                                        | 
| |                                             | 
| | 574095 Alberta
      Ltd. 
      (Alberta)  | 
| |                                             | 



|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 Tartan Lake mine in Manitoba  and
the 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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 22 | 
| | -- | 



---





|CLAUDE ASSET LOCATIONS
|----------------------





|Except  for  the  Seabee  mine,  all  of  the
Companys  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
|-----------



|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  570,289 ounces of gold including 41,500 ounces sold in 2002.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | SEABEE PROPERTY
| | ---------------





| | 23 | 
| | -- | 



---





|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 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  3,000 foot  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.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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, 2002,  the
cumulative  deficiency of Currie Roses share of these capital and operating  costs
totaled  approximately  $7.4 million.  Since  commencing  commercial  gold  production, a
total of 577,695 tonnes of ore have been processed from the Currie  Rose property, from
which a total of 120,306 ounces of gold have been recovered.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 24 | 
| | -- | 



---





|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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 zones  currently  being mined are accessed
by a 3.4 by 4.5 metre ramp to the  600 metre level.  Mining  efforts are  currently
being focused on the 2b and 2c  zones at depth and to a lesser  extent on the Currie
Rose  property  (described  separately). The shaft and hoisting facility, commissioned in
the fourth quarter  of 1997,  provides  ore and waste  transport to surface as deep as
the 395 metre  level.  Approximately  750  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
|--------------------------

|                            | 2002    | 2001    | 2000    | 1999    | 1998   
|--------------------------- | ------- | ------- | ------- | ------- | -------
|                           
|Ore Milled (tonnes)         | 201,900 | 274,800 | 237,500 | 245,300 | 224,600
|Ore Grade (grams per tonne) | 6.59    | 6.13    | 8.58    | 7.34    | 9.27   
|Mill Recoveries (%)         | 93.7    | 88.8    | 87.9    | 92.3    | 92.2   
|Gold Sales (ounces)         | 41,500  | 46,300  | 58,300  | 54,100  | 60,200 
|Cash Cost (U.S.$/ounce)*    | $246    | $221    | $190    | $193    | $168   



| | 26 | 
| | -- | 



---





|* The Company  reports its operating 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,  before  depreciation  and  depletion.  When
evaluating  this  profitability  measure investors should be aware that no provision has
been made  for exploration or development  costs. A reconciliation to the cash costs in
the  above table is provided below:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Consolidated Total Cash Costs  Per Gold Ounce
Sold
|--------------------------------------------------



|Years ended December 31, |              |        |        |        |       
|------------------------ | ------------ | ------ | ------ | ------ | ------
|                         | 2002         | 2001   | 2000   | 1999   | 1998  
|                         | U.S. Dollars
|                        
|Direct mining cost       | $246         | $221   | $190   | $193   | $168  
|Other                    | -            | -      | -      | -      | -     
|                         |             
|Cash operating costs     | $246         | $221   | $190   | $193   | $168  
|                         |              |        |        |        |       
|Less: Royalties          | -            | -      | -      | -      | -     
|                         |             
|Total cash costs         | $246         | $221   | $190   | $193   | $168  
|                         |              |        |        |        |       
|Gold ounces sold         | 41,500       | 46,300 | 58,300 | 54,100 | 60,200
|Mine operating costs     |              |        |        |        |       
|(U.S. $ millions)        | $10.3        | $10.2  | $11.1  | $10.4  | $10.5 
|(CDN $ millions)         | $16.1        | $15.8  | $16.4  | $15.5  | $15.5 



|Investors 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 2.3  million  tonnes of ore at an average head grade of 8.31
grams per tonne.  With a  recovery rate of 92.22%,  the Seabee mine has produced 570,289
ounces of gold to  December 31, 2002.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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,  whereupon  Claude  could  earn a 100%  interest
in the  Currie  Rose  property subject to a 30% Net Profits Interest (NPI).
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 - page 30.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.  They were  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
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 27 | 
| | -- | 



---





|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 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.
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. Drilling
east of the No. 5 ramp access produced a few isolated high gold values over very  narrow
widths.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 28 | 
| | -- | 



---





|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 3.73 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 3.73 grams per tonne, it is stockpiled for blending.
Similarly, ore grading  higher  than 3.73  grams per tonne  that is  already  broken
will be hauled and  processed.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 around 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 D. J.  Patrick,  PhD of A.C.A.
Howe in his report dated March 6,  2003,  the Proven and  Probable  Reserves at the
Seabee mine and the Currie Rose  Sector are as follows:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Seabee mine:               |                                      
|-------------------------- | -------------------------------------
|                           |                                      
|Proven Mineral Reserves:   | 236,910 tonnes @ 8.03 grams per tonne
|Probable Mineral Reserves: | 359,623 tonnes @ 8.35 grams per tonne
|                           |                                      
|Currie Rose Sector:        |                                      
|                           |                                      
|Proven Mineral Reserves:   | 47,642 tonnes @ 5.66 grams per tonne 
|Probable Mineral Reserves: | 16,967 tonnes @ 7.98 grams per tonne 



|Total Proven plus Probable Mineral Reserves:
661,141 tonnes @ 8.03 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 3.73 grams
      per tonne is applied to resources. This is the break-even grade at a gold
      price of U.S. $343 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 around 3%;                                                                                                                                                                                      
| | (d) | A Specific Gravity of 2.8 is utilized
      in tonnage estimates on the less sulphide rich zones.                                                                                                                         





| | 29 | 
| | -- | 



---





|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. $343 per ounce in 2002, U.S. $295 per ounce in 2001 and
2000:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                     | 2002 
      Tonnes | 2002 
      Grade 
      g/tonne | 2002 
      Gold 
      Ounces | 2001 
      Tonnes | 2001 
      Grade 
      g/tonne | 2001 
      Gold 
      Ounces | 2000 
      Tonnes | 2000 
      Grade 
      g/tonne | 2000 
      Gold 
      Ounces
|------------------------------------ | ------------------ | -------------------------------- | ------------------------------ | ------------------ | -------------------------------- | ------------------------------ | ------------------ | -------------------------------- | ------------------------------
|                                    
|Proven                               | 284,600            | 7.63                             | 69,800                         | 123,400            | 5.76                             | 22,800                         | 299,000            | 7.64                             | 73,500                        
|                                     |                    |                                  |                                |                    |                                  |                                |                    |                                  |                               
|Probable                             | 376,600            | 8.33                             | 100,900                        | 486,600            | 8.49                             | 132,780                        | 280,300            | 7.43                             | 67,000                        
|                                     |                    |                                  |                                |                    |                                  |                                |                    |                                  |                               
|Total 
      Mineral 
      Reserves | 661,200            | 8.03                             | 170,700                        | 610,000            | 7.93                             | 155,500                        | 579,300            | 7.54                             | 140,500                       

|The areas of the mine  being  worked  currently
are  primarily  in the  eastern  portion of the Seabee  sector.  At Seabee,  the 6509
decline is being driven to  access a newly defined high-grade zone in the area.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Recent Exploration Results
|--------------------------



|During the 2002 winter  exploration  season, the
Company drilled 3,355 metres of  BQ core drilling in 18 holes on the West Porky area of
the Currie Rose property.  The area  lies  approximately  2  kilometres  north of the
Seabee  mine and was  designed to test a two  kilometre-long  geochemical  anomaly
coincident  with a  visible gold in outcrop.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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. The project is overseen by Vice-President
Exploration,  Philip  E. Olson P.Geo.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has  drill-tested  approximately
600 metres of this targets strike  length for that  portion  that  substantially
parallels  a major  metamorphosed  volcano-sedimentary rock contact. Gold values have
been recorded in several rock  types, with significant  intersections encountered in both
a feldspathic arenite  (sedimentary  unit) and a  calc-silicate  (altered  mafic
volcanic  rock)  over  two-thirds of the strike length tested.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Significant assay results from the program are
detailed below:
|--------------------------------------------------------------

|Hole No. | From (m) | To (m) | Length (m) | Au (g/t) | Host Rock
|-------- | -------- | ------ | ---------- | -------- | ---------
|         |          |        |            |          |          
|        
|PKY02-01 | 69.25    |        | 72.30      |          | 3.05     
|         | 122.70   |        | 125.70     |          | 3.00     
|PKY02-02 | 35.00    |        | 36.70      |          | 1.70     
|PKY02-03 | 36.50    |        | 39.30      |          | 2.80     
|         | 50.95    |        | 52.30      |          | 1.35     
|         | 62.20    |        | 64.40      |          | 2.20     
|PKY02-04 | 37.90    |        | 39.80      |          | 1.90     
|         | 73.55    |        | 77.40      |          | 3.85     
|PKY02-05 | 15.30    |        | 16.40      |          | 1.10     
|         | 18.30    |        | 19.50      |          | 1.20     
|PKY02-06 | 12.00    |        | 13.00      |          | 1.00     
|         | 67.20    |        | 70.70      |          | 3.50     
|PKY02-07 | 128.80   |        | 130.20     |          | 1.40     
|         | 152.60   |        | 155.00     |          | 2.40     
|PKY02-08 | 107.10   |        | 111.40     |          | 4.30     



| | 30 | 
| | -- | 



---





|Hole No. | From (m) | To (m) | Length (m) | Au (g/t) | Host Rock
|-------- | -------- | ------ | ---------- | -------- | ---------
|        
|PKY02-09 | 64.95    |        | 66.80      |          | 1.85     
|         | 117.10   |        | 118.70     |          | 1.60     
|PKY02-10 | 25.40    |        | 26.50      |          | 1.10     
|PKY02-11 | 37.00    |        | 37.50      |          | 0.50     
|         | 101.30   |        | 104.90     |          | 3.60     
|PKY02-12 | 87.50    |        | 88.20      |          | 0.70     
|PKY02-14 | 179.60   |        | 182.00     |          | 2.40     
|         | 188.90   |        | 191.75     |          | 2.85     
|PKY02-15 | 239.80   |        | 241.20     |          | 1.40     
|         | 246.90   |        | 248.50     |          | 1.60     
|PKY02-16 | 202.15   |        | 204.10     |          | 1.95     
|         | 227.70   |        | 229.45     |          | 1.75     
|PKY02-17 | 191.10   |        | 191.60     |          | 0.50     
|         | 257.10   |        | 257.80     |          | 0.70     
|PKY02-18 | 333.55   |        | 335.20     |          | 1.65     
|         | 338.70   |        | 340.70     |          | 2.00     

|The  mineralized  intervals  coincide with a SSE
trending,  steeply  dipping (75  degrees  SW) shear  structure.  This shear  system
appears to diverge  from the  arenite  contact near the closure of the Porky Lake
synform.  The limited on-ice  winter drill season did not permit  sufficient  time to
evaluate the mineralized  systems continuity to the southeast.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In the first quarter of 2003, the Company
implemented a fill-in drill program on  the West  Porky  discovery,  completing  28 holes
totaling  5,775  metres of BQ  diamond  drilling.  This second  drill  campaign was
intended to test the zones  approximate  400  metres of strike  length to a depth of 250
metres on 50 metre  centers. Results from this program are pending.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As an adjunct of the same program,  a prospect
1,200 metres to the northwest of  the West Porky showing was also drilled.  Thirteen
holes  totaling 2,913 metres  were drilled on this target. Results are pending.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Seabee/Currie Rose Future Work Programs
|---------------------------------------



|Development and mining during the first quarter
of 2002 came from the 2d zone on  the Currie Rose property.  In the remaining three
quarters,  emphasis shifted to  the 2b zone below the 390-metre  level.  Seabee will
continue to operate under a  three year mine plan which will focus on the 2b zones at
depth and  laterally to  the west of the Seabee boundary.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 400 and
600 metre levels proved  successful  in  replacing  reserves  mined  out  during  the
year  with a modest  increase  in grade.  The Company  plans to continue to explore and
define  these  areas  as they  are  considered  highly  prospective  for  additional
reserves.  Additional  drill stations have been  established  and an  underground
drilling  program  will  continue  to test the areas  beneath  the  current  workings.
In  particular,  recent  drilling  on  the  2b  structure  has  demonstrated  the
continuation of this major zone beneath the current mine workings.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As a result of the Companys  success in
identifying  and developing  high-grade  reserves  below the 400 metre  level,  a
decision  was made to extend the Seabee  mineshaft to the 600 metre level. This $2
million project commenced in the first  quarter of 2003 and is expected to be completed
by the fourth quarter of 2003.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Based  on  lineaments  observed  from  satellite
imagery  and  air  photo  interpretation,  the Company is exploring a four kilometre
wide,  substantially  east-west trending shear corridor centrally disposed about the mine
workings. As  an integral  part of a $1.4 million  flow-through  funded  exploration
program,  diamond  drilling  (14,500  metres) in 2002 was  directed  at the  northern
and  eastern  segments of this  corridor.  In 2003,  the Company has  committed  $1.5
million in flow-through  funding for exploration.  In addition to the West Porky
discovery,  three targets to the east of the mine will be drill-tested.  Targets  to the
east of the mine  include a series of  silicified  and  sulfidized  zones  aligned along
the northern contact of an altered quartz monzonite unit.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 31 | 
| | -- | 



---





|In addition to the area around the Seabee  mine,
a large  portion of the Seabee  property  remains  unexplored and the Company intends to
conduct  exploration on  these portions at an undetermined future date.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 on the Madsen properties dated  December 15, 2000.  The option allows  Placer
to earn a 55% working  interest in  the Madsen property,  Starratt-Olsen  property,  the
Aiken-Russet  property, the  Hager Option and Claudes 20% interest in the Redaurum
property by spending $8.2  million on exploration and delivering a bankable  feasibility
study prior to the  fifth anniversary of the option agreement.  The Buffalo property is
not included  in the Placer Dome option  agreement.  Placer may abandon the option at any
time  after spending $1.2 million.  Upon Placer  fulfilling its obligations in respect
of the option  phase,  Placer and Claude  will be deemed to have  formed a joint  venture
with  interests  of 55% and 45%,  respectively.  At Claudes  election,  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 can not 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
|-----------------





| | 33 | 
| | -- | 



---





|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:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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. The additional 5% earn-in may
      make this a 0.5% NSR.
|Buffalo        |  | 100%, subject to a 12 1/2% net proceeds production
      royalty held by a previous property holder.                                                                                                                                                                                                                                                                                                                                                                              





|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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 34 | 
| | -- | 



---





|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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 12th
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.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 35 | 
| | -- | 



---





|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.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Planned Exploration
|-------------------



|The  presence  of  visible  gold  superimposed
on  pervasive  quartz-carbonate  alteration has prompted Placer to commit to an expanded
exploration program for  2003.  Placer has indicated they will employ two drills and
spend  approximately  $3 million on the Madsen property this year. One of the drills will
be dedicated  to infill  drilling  north of Russet  Lake.  The second drill will focus on
more  generative targets.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 36 | 
| | -- | 



---





|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.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 37 | 
| | -- | 



---





|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.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 is 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.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 38 | 
| | -- | 



---





|Although  the  property is a former gold
producer,  Claude has not  conducted a  sufficient  amount of  exploration at the
property to determine if there remains  an economic  body of ore.  Therefore,  the
property is  considered  to be at the  exploration  stage and  without  mineable  gold
reserves.  Current  work at the  property is limited to the search for an economic body
of ore.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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  stock. 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
MINE 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.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 39 | 
| | -- | 



---





|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 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.  This work will be followed up in 2003,  with the goal to
identify  drill targets  for  testing.  As market  conditions  allow and  exploration
financing  becomes  available,  Claude intends to carry out a comprehensive  hydraulic
stripping and  mapping program of known veins on the margins of the known mineralized
system in  order to define targets for subsequent diamond drilling.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|A brief description of the most recent work
conducted on the non-core properties  is given below:
|-------------------------------------------------------------------------------------------------



|Amisk-Pamon Property
|--------------------



|Amisk-Pamon is a 4,200 acre (1,688 hectares)
gold  exploration  property located  in the province of Saskatchewan 20 kilometres
southwest of Flin Flon, Manitoba.  Claude  holds a 100%  interest  in the  property  and
there  are no  underlying  royalties.  Access to the property is primarily via boat from
the  settlement of  Denare Beach, Saskatchewan.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Companys most recent  exploration  work at
Amisk-Pamon  was in 1998.  Crews  re-established  a  grid  over  the  property  and
conducted  magnetic  and  electromagnetic  surveys  on the grid.  Follow-up  diamond
drilling  identified  strongly carbonatized  alteration with minor quartz veining. No
significant gold  values were returned.  At this time, the Company has no exploration
planned for  the property.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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  8 kilometres  northeast of the Companys
operating  Seabee mine.  Claude  holds a 100%  interest  in the  property  and  there
are no  underlying  royalties.  Access to the property is via air from La Ronge or via
the Companys  annual winter ice road off of Saskatchewan Highway 102.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 40 | 
| | -- | 



---





|The Companys most recent exploration work at
Santoy Lake was conducted in 1998.  Work crews  conducted basic  prospecting and mapping
and discovered  several new  veins. Future exploration work will include geochemical
sampling and testing of  the vein structures identified on the property and may include
diamond drilling.  In the first  quarter of 2002,  these  targets were  drill-tested.
Results were  disappointing  and not  consistent  with  historic  assay  values  from
surface  sampling  and shallow  diamond  drilling.  This  disparity  is the subject of an
ongoing review.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In addition to the Amisk-Pamon and Santoy Lake
exploration  properties discussed  above,  the Company  also holds  interests in various
gold,  copper and diamond  exploration properties totaling in excess of 10,000 hectares.
Claudes interest  in these properties  ranges from 30%-100%.  The Company has expended
no funds on  exploring  these  properties in the last 3 fiscal years and has no work
programs  planned for any of these other properties in the current year.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Oil and Gas Properties
|----------------------



|Claude produces crude oil, liquids,  and natural
gas from properties situated in  Alberta and Saskatchewan.  Alberta properties  represent
88% of Claudes oil and  liquids reserves and 87% of total production.  Saskatchewan
properties represent  12% of Claudes oil reserves,  and 13% of total production.
Alberta  properties  represent  100% of Claudes  natural gas  reserves  and  production.
All of the  Companys oil and gas properties are operated by others.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|OIL AND GAS
|-----------





|Annual  Economic  Evaluation  Reports of
Claudes  oil and gas  interests  in Alberta and  Saskatchewan  have been  prepared by
R.K. Agrawal, P. Eng. of NRG Engineering Ltd., Calgary,  Alberta.  The most recent
Economic Evaluations  are effective January 1, 2003.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 41 | 
| | -- | 



---





|Production
|----------



|The following table lists Claudes total oil,
liquids and gas production for the  last 3 fiscal years:
|------------------------------------------------------------------------------------------------------

|Year | Average Oil 
      Production 
      (Barrels Per Day) | Total Oil 
      Production 
      (Barrels) | Average Gas 
      Production 
      (MMCF per Day) | Total Gas 
      Production 
      (MMCF)
|---- | ------------------------------------------------------ | -------------------------------------------- | --------------------------------------------------- | -----------------------------------------
|    
|2002 | 228                                                    | 83,200                                       | 2.43                                                | 886                                      
|2001 | 240                                                    | 87,500                                       | 2.61                                                | 951                                      
|2000 | 275                                                    | 100,300                                      | 2.75                                                | 1,005                                    



|The decrease of oil and gas production volumes
has been due to normal production  decline rates on existing wells.
|------------------------------------------------------------------------------------------------------------------



|Reserve Estimates
|-----------------



|The following  table lists  Claudes  proven oil
and gas reserves as of December  31, 2002. All figures are based upon constant price
economics:
|------------------------------------------------------------------------------------------------------------------------------------------------

|                          |                |  |                        |  |                |  |                        |  |                |  |                  |  |        |  |        |  |        |  |         |  |        |  |       
|------------------------- | -------------- |  | ---------------------- |  | -------------- |  | ---------------------- |  | -------------- |  | ---------------- |  | ------ |  | ------ |  | ------ |  | ------- |  | ------ |  | ------
|                          | 2002           |  | 2001                   |  | 2000          
|                          |                |  |                        |  |                |  |                        |  |                |  |                  |  |        |  |        |  |        |  |         |  |        |  |       
|                          | Gross Reserves |  | Working
      Interest |  | Gross Reserves |  | Working
      Interest |  | Gross Reserves |  | Working Interest
|                          |                |  |                        |  |                |  |                        |  |                |  |                  |  |        |  |        |  |        |  |         |  |        |  |       
|                          |                |  |                        |  |                |  |                        |  |                |  |                  |  |        |  |        |  |        |  |         |  |        |  |       
|                         
|                          | Oil            |  | Gas                    |  | Oil            |  | Gas                    |  | Oil            |  | Gas              |  | Oil    |  | Gas    |  | Oil    |  | Gas     |  | Oil    |  | Gas   
|                          | (MSTB)         |  | (MMCF)                 |  | (MSTB)         |  | (MMCF)                 |  | (MSTB)         |  | (MMCF)           |  | (MSTB) |  | (MMCF) |  | (MSTB) |  | (MMCF)  |  | (MSTB) |  | (MMCF)
|Province                  |                |  |                        |  |                |  |                        |  |                |  |                  |  |        |  |        |  |        |  |         |  |        |  |       
|                          |                |  |                        |  |                |  |                        |  |                |  |                  |  |        |  |        |  |        |  |         |  |        |  |       
|Alberta                   |                |  |                        |  |                |  |                        |  |                |  |                  |  |        |  |        |  |        |  |         |  |        |  |       
|Edson                     | 1,823          |  | 94,093                 |  | 154            |  | 7,708                  |  | 1,401          |  | 94,865           |  | 118    |  | 7,773  |  | 1,670  |  | 112,405 |  | 143    |  | 9,217 
|Nipisi                    | 8,896          |  | 5,084                  |  | 243            |  | 139                    |  | 2,660          |  | 1,300            |  | 73     |  | 36     |  | 9,880  |  | 2,805   |  | 270    |  | 77    
|Zama                      | 44             |  | 0                      |  | 4              |  | 0                      |  | 34             |  | 0                |  | 3      |  | 0      |  | 125    |  | 84      |  | 11     |  | 8     
|Viking Kinsella           | 0              |  | 97                     |  | 0              |  | 8                      |  | 0              |  | 0                |  | 0      |  | 0      |  | 0      |  | 876     |  | 0      |  | 89    
|Saskatchewan Gainsborough | 90             |  | 0                      |  | 57             |  | 0                      |  | 38             |  | 0                |  | 20     |  | 0      |  | 137    |  | 0       |  | 79     |  | 0     
|                          |                |  |                        |  |                |  |                        |  |                |  |                  |  |        |  |        |  |        |  |         |  |        |  |       
|                          |               
|                          | 10,853         |  | 99,274                 |  | 458            |  | 7,855                  |  | 4,133          |  | 96,165           |  | 214    |  | 7,809  |  | 11,812 |  | 116,170 |  | 503    |  | 9,391 



|Oil Reserves are given in Thousands of Stock
Tank Barrels  (MSTB).  Gas Reserves  are given in  Millions  of Cubic  Feet  (MMcf).  All
reserves  are from  Proved  Producing reservoirs.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 42 | 
| | -- | 



---





|Reconciliation of Reserves
|--------------------------

|The following table sets forth the Companys reconciliation
      of its working interest proved oil and gas reserves from December 31, 2001
      to December 31, 2002:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|WORKING INTEREST PROVED OIL AND
GAS RESERVES (BEFORE ROYALTIES)
|---------------------------------------------------------------

|                       | Year End  
      2001 | Additions 
      and 
      Extensions | Revisions 
      and 
      Transfers | Production 
      During 
      2002 | Year End 
      2002
|---------------------- | --------------------- | -------------------------------------- | ------------------------------------- | ------------------------------------ | --------------------
|                      
|Oil and Liquids (MSTB) | 214                   |                                        | -                                     |                                      | 327                 
|                       |                       |                                        |                                       |                                      |                     
|Natural Gas (MMCF)     | 7,809                 |                                        | -                                     |                                      | 932                 



|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 5 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 of which 54  wells have  produced in recent  months.  The Edson Gas
Unit No. 1 is operated by  Talisman  Energy Inc. and the gas is contracted  with
TransCanada  Gas Services  Limited.  The Edson Unit reserves  represent nearly 100% of
Claudes natural gas  reserves.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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  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 infill
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 infill wells and converting  certain  producing  wells to
injection  wells.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Production  for the year ending  December 31,
2002  averaged  approximately  132  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.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Nipisi Unit represents approximately 53% of
Claudes total oil reserves.
|----------------------------------------------------------------------------



|Zama, Alberta
|-------------



|The Company holds various interests in the
8-25-116-5 W6M well (two zones),  and  a 3.75  percent  working  interest  in the
shut-in  Sulphur  Point  gas well at  5-13-119-4 W6M. The well was producing from the Keg
River formation from 1967 to  1997  when it was shut in due to high  water  production.
In 2000,  it was dual  completed as a Sulpher Point/Keg River well.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 43 | 
| | -- | 



---





|Viking Kinsella/Birch Lake, Alberta
|-----------------------------------



|The Company owns a 6.2439 percent  interest in
the 7-31-49-11 well and a 12.4875  percent  interest in the 7-10-50-11 W4M/2 well located
in the Birch Lake area of  Alberta.  The Company also owns a 3.5949 percent  interest in
the Birch Lake Gas  Plant operated by Signalta Resources Limited. Both wells are near
their economic  limit.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Gainsborough, Saskatchewan
|--------------------------



|Claude  has  a  75%  interest  in  six
producing  vertical  oil  wells  in  the  Gainsborough area of southeastern Saskatchewan
(the Gainsborough Property) and  2 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  wells in which Claude owns a 33.75 percent
working  interest.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 5.  Operating and Financial Review and
Prospects
|-----------------------------------------------------



|A.       Operating Results
|--------------------------



|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  noted in Note 19 to the 2002 audited financial statements.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Year Ended December 31, 2002 compared to
December 31, 2001
|----------------------------------------------------------



|Total  revenues in 2002 decreased by 4% to $27.4
million from $28.5 million last  year.
|---------------------------------------------------------------------------------------



|The Seabee mine  contributed  $20.4 million to
revenues,  a 5% increase from the  $19.5  million  recorded in 2001.  Gold sales fell
from 46,300 ounces in 2001 to  41,500 ounces this year.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|This 10%  reduction  in sales  volume was due to
the lower grade ore milled from  the  mines D zone  during  the early  part of the year
and the  necessary  time  required  to  develop  and  access  the  higher  grade ore in
the B zone.  A 16%  increase in the average gold price realized (2002 - CDN $490,  U.S.
$312; 2001 -  CDN $422, U.S. $272) more than offset volume decline.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Gross oil,  liquids and gas revenues totaled
$7.0 million in 2002, a 22% decline  from  the  $9.0  million  in 2001.  This  result
was a  combination  of  normal  production declines and lower averaged realized prices in
2002.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The 2002 oil and liquids  sales  volume of
83,200  barrels was 5% lower than the  87,500 barrels sold the previous year. The average
realized price per barrel was  U.S. $23.83 (CDN $37.42) versus U.S. $24.67 (CDN $38.21)
last year.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Gas sales volume fell 7% from 951 MMCF in 2001
to 886 MMCF in 2002.  The average  realized price was U.S. $2.47 (CDN $3.88) per MCF in
2002 compared to U.S. $3.67  (CDN $5.68) per MCF in 2001.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 44 | 
| | -- | 



---





|Total operating and  administrative  costs
increased slightly from $19.2 million  in 2001 to $19.4 million this year.  Total mine
cash costs  increased from $15.8  million in 2001 to an increase  in cash  operating
costs per ounce1,  from U.S.  $221 in 2001 to U.S. $246 in 2002.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Oil and gas  operating  costs fell from $1.5
million in 2001 to $1.1 million in  2002. This change is a combination of reduced
processing costs at the Edson gas  plant and lower operating costs at the Nipisi property.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Administrative  costs  increased to $2.2 million
from $1.9 million in 2001.  The  increase is largely  attributable to the settlement of a
prior year property tax  assessment at the Madsen property.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Depreciation  and  depletion  of the  Companys
gold  assets  was $4.9  million  compared to $5.2 million in 2001. This  favourable
variance is a combination of  increased  Seabee  ore  reserves  and a  reduction  in
tonnes  broken and tonnes  milled.  Depreciation and depletion costs per ounce in 2002
remained  relatively  unchanged at U.S. $75.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Year Ended December 31, 2001 compared to
December 31, 2000
|----------------------------------------------------------



|Total  revenue  generated  in 2001 was  $28.5
million  down 15% from the  $33.5  million recorded in the previous year. Gold revenue
decreased 19% from 2000 as a  result of lower  production,  but was offset by a slight
increase  in  Canadian  dollar average realized gold prices.  Oil and gas revenues
decreased by 3% from  2000, a combination  of lower  production  offset by higher
realized  petroleum  prices.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Seabee  mine  contributed  $19.5  million to
revenues,  down from the $24.2  million  recorded in 2000. Gold production  decreased
from 58,300 ounces in 2000  to 48,500 ounces in 2001. The average  realized gold price in
2001 was U.S. $272  (CDN $422) per ounce, compared with U.S. $279 (CDN $414) realized in
2000.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Gross oil,  natural gas liquids (NGLs) and gas
revenues totaled $9.0 million in  2001  compared  to $9.3  million in 2000.  Oil and
NGLs  production  in 2001 of  87,500  barrels was 13% lower than the 100,300  barrels
produced  the  previous  year. The average  realized price was U.S. $24.67 (CDN $38.21)
per barrel versus  an average price per barrel of U.S.  $27.70 (CDN $41.14) in 2000. Gas
production  fell 5% from 1,005 MMCF in 2000 to 951 MMCF in 2001. The average  realized
price  was U.S.  $3.67 (CDN $5.68) per MCF  compared to the U.S.  $3.17 (CDN $4.71) per
MCF realized in 2000.  Total crown royalties and overriding  royalties  remained
relatively  unchanged  year  over  year  as  revenues  were  constant  and  the
percentages used to calculate these royalties remained relatively unchanged. The  Alberta
Royalty Tax Credit increased slightly, largely due to increased eligible  crown royalties
paid in 2001 upon which the Tax Credit is based.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Total  operating and  administration  costs
decreased 4% from the $19.9 million  recorded  in 2000 to  $19.2  million  in  2001.
Interest  and  other  decreased  significantly as gold and foreign  currency  derivative
trading account,  which  gave rise to interest charges,  was eliminated during the third
quarter of 2000.  Total mine cash costs  dropped  from $16.4  million in 2000 to $15.8
million in  2001, the result of concerted  efforts to lower  operating  costs at the
Seabee.  These  savings were  negatively  impacted by a reduction in broken ore stockpile
inventory,  reflecting the lower than expected ore grades from the D zone at the  Seabee
mine.  When a large  reduction in grade  occurs,  as was the case in 2001  with  the D
zone,  all  accumulated  costs  related  to those  inventory  ounces  stockpiled are
immediately  expensed in the current  period.  The decreased gold  production led to an
increase in cash operating costs per ounce1, from U.S. $190  per ounce in 2000 to U.S.
$221 in 2001.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Oil and gas operating costs decreased  slightly
from the $1.6 million in 2000 to  $1.5 million in 2001.
|-------------------------------------------------------------------------------------------------------



|Depreciation  and  depletion  of the  Companys
gold assets was $5.2 million in  2001,  an  increase  of 24% over  the $4.2  million
recorded  in 2000.  This is  attributable to the smaller calculated reserve base.
Depreciation and depletion  costs per ounce for the year were U.S. $69 compared to U.S.
$48 in 2000.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|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 discussion.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 45 | 
| | -- | 



---





|B.       Liquidity and
      Capital Resources
|----------------------------------------------



|Year Ended December 31, 2002
|----------------------------



|Cash flow from  operations  was $.3 million in
2002  compared to $4.5 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  $9.0 million in working capital, an increase of $.5 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  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  share2 agreement  for the  issue of  1,000,000
common  shares  at a price of $1.50  per share for  proceeds of $1,500,000.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|For the  period  ending  April  30,  2003,  the
Company  has  issued a total of  5,214,831  common  shares:  159,061 of these shares were
issued  pursuant to the  Companys Employee Stock Purchase Plan as described  elsewhere
in this document;  5,000  common  shares were issued  pursuant  to the  exercise of
employee  share  purchase  options;  2,550,770 common shares were issued pursuant to
common share  purchase warrants  outstanding  (described in detail above);  and in
January 31,  2003,  the  Company  completed  a non  brokered  private  placement
offering of  2,500,000  units,  each unit  consisting of one common share and one half of
one  common share  purchase  warrant at a price of $1.50 per unit, for gross proceeds  of
$3,750,000.  Each whole  purchase  warrant  will  entitle the  holder,  upon  exercise at
any time up to and including  January 31, 2004,  and upon payment of  $1.85,  to
subscribe  for one  common  share.  The  Company  intends to use the  proceeds to finance
its Seabee gold mineshaft  extension project and for general  corporate purposes.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has a $2,500,000  operating  line of
credit which bears  interest at  prime plus 1.5%. These funds are available for general
corporate  purposes.  At  December 31, 2002,  the unused  portion of the bank line was
$1.1
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|2 |  | 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 19 (i) of the 2002 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.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 46 | 
| | -- | 



---





|million.  The  operating  line is  secured by a
general  security  agreement  excluding  assets  associated with the Alberta oil and gas
properties.
|----------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has provided letters of credit
totaling $657,736 as security for the  Madsen property reclamation assurance
requirements.  The Company has contingent  cash obligations totaling $283,000. This
represents a demand loan and obligation  under capital lease of $110,000 ($110,000
current portion) and $173,000 ($51,000  current portion), respectively.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Year Ended December 31, 2001
|----------------------------



|Cash flow provided from  operations  decreased
from $9.1 million in 2000 to $4.5  million in 2001. The decline was due to lower gold
production,  which was offset  to some extent by reductions in Company operating costs.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Capital expenditures  declined 45% in 2001, as
$4.8 million was spent on capital  additions compared to $8.8 million in 2000. At the
Seabee mine, spending focused  on underground  development and preparatory  work for the
Triangle Lake tailings  dam expansion.  The majority of spending within the oil and gas
division went to  injection wells and tie-in at the Nipisi as well as expansion and
upgrade of the  Edson gas plant.  Capital  expenditures  were  funded by cash flows
provided by  operations.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During the latter half of the year the Company
issued 2.5 million common shares  for $1,375,000  pursuant to a flow-through  share
agreement.  A further 328,987  shares were issued in  conjunction  with the Companys
Employee  Stock Purchase  Plan as described in Note 10 to the 2002 consolidated
financial  statements for  consideration of $176,000.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Short-term  investments  of  $657,000  were
purchased  and  corresponding  debt  proceeds, in the form of a demand loan, were
received as a requirement to secure  reclamation  assurance  at  the  Madsen  property.
As  required  by  regulatory  authorities,  the Company has provided letters of credit of
$657,000 as security  for reclamation at the Madsen property. The demand loan bears
interest at prime,  is repayable in monthly principal payments of $27,406 plus interest,
and matures  on May 15, 2002. The loan is secured by a general  security  agreement
covering  all assets of the Company, excluding the Companys Alberta oil and gas assets.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As at December 31, 2001, Claude had $8.5 million
in working capital,  relatively  unchanged  from the $8.4 million  recorded in 2000.
This slight  increase was a  combination of reduced working capital from operations
offset by share issuance  proceeds  as well as  capital  expenditures  continuing  to be
financed  out of  operating cash flows.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Year Ended December 31, 2000
|----------------------------



|Cash flow provided from operations  increased by
78% from $5.1 million in Fiscal  1999 to  $9.1  million  in  Fiscal  2000.  This
increase  in  cash  flow  was a  combination of improved gold production offset by
increases in Company operating  costs.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Capital expenditures declined by 34% in Fiscal
2000 as $8.8 million was spent on  capital additions compared to $13.3 million in Fiscal
1999. Capital expenditures  in Fiscal 2000 focused  primarily on the Seabee mine and the
Madsen  exploration  property.  Capital  spending  at  the  Seabee  mine  totaled  $5.0
million  for  underground development, mill leach circuit enhancement and work on the
Triangle  Lake  tailings  dam  expansion.  The $3.3  million  spent at Madsen was
largely  focused on shaft  rehabilitation  and  de-watering.  Capital  expenditures  were
financed  from  proceeds of a 1999 public  offering  and cash flows  provided by
operations.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During  Fiscal  2000 the  Company  issued a
total of  1,874,153  common  shares.  245,567 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  for  proceeds of  $211,000;  628,586  were issued as
payment for the  purchase of a 1.35% NSR from Metal  Royalties  Corporation  at a deemed
price of  $1,100,025;  and,  1,000,000  common  shares were  issued  pursuant to an
option  agreement with Placer Dome (described  elsewhere in this document) who purchased
the shares for $0.75 per share.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As at December 31,  2000,  the Company had $9.1
million in working  capital,  a  decrease  of $2.0  million  from the prior year.  This
decrease  resulted  from  capital expenditures being financed out of operating cash
flows.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 47 | 
| | -- | 



---





|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 2003 is expected to increase
slightly as the Company continues to  produce from the higher grade B zone, at depth, at
the Seabee mine. Accordingly,  cash  operating  costs per ounce are  expected to
decrease,  due largely to the  increased  ounces  poured.  Higher  expected net earnings
may also be negatively  impacted by the strengthening Canadian dollar versus the U.S.
dollar.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Contribution  margins  from our oil and gas
assets  should  increase  as higher  realized  crude oil and natural  gas prices are
expected  throughout  the first  quarter.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Further,  to finance the Seabee shaft  extension
project,  in January 2003, the  Company completed a non-brokered 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 $1.50 per unit, for gross  proceeds of
$3,750,000.  Each  whole purchase warrant will entitle the holder, upon exercise, at any
time up to  and including  January 31, 2004, and upon payment of $1.85, to subscribe for
one  common share.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|By the end of the first four  months  ended
April 2003,  the  remainder  of the  warrants were exercised pursuant to the April, 2002
private placement. See Item  5.B - Liquidity and Capital Resources - Year Ended
December 31, 2002.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Critical Accounting Policies
|----------------------------



|The Company  prepares its consolidated
financial  statements in accordance with  Canadian Generally Accepted  Accounting
Principles.  In doing so, management is  required to make various  estimates  and
judgments in  determining  the reported  amounts  of assets and  liabilities  and
revenues  and  expenses  for each year  presented,  and in the disclosure of commitments
and  contingencies.  Management  believes the following critical accounting policies
reflect its more significant  estimates and judgments used in the  preparation of the
consolidated  financial  statements:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 and  recorded as Shrinkage  Stope  Platform Costs on the balance sheet
(see Note 3 to  the December 31, 2002  consolidated  financial  statements).  This broken
ore is  reclassified  to inventory  once removed from the stope.  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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Depreciation  and  depletion on mineral and oil
and gas  properties is primarily  calculated using the unit of production  method.  This
method allocates the cost  of an asset to each period based on current  period
production  as a portion of  estimated  recoverable ore or oil and gas reserves.
Although these reserves are  classified  as Proven  reserves and the Company
expects to recover them under  existing  economic and  operating  conditions,  if actual
reserves  prove to be  significantly different than the estimates,  there could be a
material impact on  the amounts of depreciation and depletion charged to earnings.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company  offsets  proceeds from its
byproduct  sales  (silver)  against the  refining costs of its gold bars. During 2002,
the Company poured 2,468 ounces of  silver  (2001 - 3,274;  2000 - 3,267  ounces) for
gross  proceeds of CDN $11,352  (2001 -  $22,145;  2000 -  $24,009).  Due to the  nominal
amounts  of  proceeds  received,  the sale of byproducts does not impact our
determination of costs to  produce.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 48 | 
| | -- | 



---





|Significant  decommissioning  activities  are
often  not  undertaken  until  substantial  completion  of  the  useful  lives  of
productive  assets.  Future  decommissioning  and reclamation  costs are estimated and
accrued using the unit  of  production  method  so that the  estimated  future  liability
will be fully  provided  when  decommissioning  and  reclamation  activities  are
undertaken.  Regulatory  requirements and alternatives  with respect to  decommissioning
and  reclamation  activities  are  subject  to  change  over  time.  The  amount  of
reclamation  charged to earnings is also dependent  upon  estimated  recoverable
reserves.  A  significant  change to either the estimated  costs or  recoverable
reserves may result in a material change in the amount of reclamation charged to
earnings.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|If it is  determined  that carrying  values of
assets  cannot be recovered,  the  unrecoverable  amounts are written off against current
earnings.  Recoverability  is dependent upon assumptions and judgments  regarding  future
prices,  costs of  production, sustaining capital requirements and economically
recoverable ore and  oil and gas reserves.  A material change in assumptions may
significantly impact  the potential impairment of these assets.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Access to the Seabee mines ore deposit is not
under any time  constraints  as a  result of our mineral  lease.  The proven and
probable  reserve  life at Seabee  indicates  a mine life of 3.0 years  based upon
current  mill  throughput.  The  existing  surface  lease as of December  31, 2001
expired in 2023.  The Company  renegotiated with the Government of Saskatchewan and
entered into a new lease on  June 4, 2002 which expires in 2025.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 6.  Directors, Senior Management and
Employees
|---------------------------------------------------



|A.       Directors and
      Senior Management
|----------------------------------------------



|The names,  municipality of residence,
positions with the Company and principal  business  activities outside the Company of all
directors and executive officers  are set forth below:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Name and Municipality of Residence                    | Positions Held                        | Director 
      /Officer 
      Since | Principal Occupation                                                                                 
|----------------------------------------------------- | ------------------------------------- | ------------------------------------- | -----------------------------------------------------------------------------------------------------
|                                                     
|William R. MacNeill(2) (3)
      
      Saskatoon, SK | Director, Chairman of the Board       | 1980                                  | President of BEC International 
      Corporation, a private investment 
      company               
|                                                      |                                       |                                       |                                                                                                      
|Arnie E. Hillier(1) (2)
      
      Saskatoon, SK    | Director, Vice-Chairman, CEO, and CFO | 1996                                  | Chief Executive Officer of Claude                                                                    
|                                                      |                                       |                                       |                                                                                                      
|A. Neil McMillan(2)
      Saskatoon, SK               | Director, President                   | 1996                                  | President of Claude                                                                                  
|                                                      |                                       |                                       |                                                                                                      
|Jon R. MacNeill(1) (3)
      Calgary, AB              | Director                              | 1983                                  | Consultant specializing in the oil and gas
      industry                                            
|                                                      |                                       |                                       |                                                                                                      
|Ronald G. Walker(1) (3)
      Victoria, BC            | Director                              | 1984                                  | President of Great Canadian Dollar Store Franchising
      Ltd., a franchisor of retail store outlets
|                                                      |                                       |                                       |                                                                                                      
|Raymond G. Gagnon 
      Saskatoon, SK                | Chief Operating Officer               | 2002                                  | Chief Operating Officer of Claude                                                                    
|                                                      |                                       |                                       |                                                                                                      
|Philip E. Olson 
      Saskatoon, SK                  | Vice-President, Exploration           | 1997                                  | Vice-President, Exploration of Claude                                                                
|                                                      |                                       |                                       |                                                                                                      
|Val L. Michasiw 
      Saskatoon, SK                  | Secretary-Treasurer                   | 2000                                  | Secretary-Treasurer of Claude                                                                        



| | 49 | 
| | -- | 



---





|Note: |  | (1) |  | Member of the Audit Committee.
|----- |  | --- |  | ------------------------------
|      |  | (2) |  | Executive Committee.          
|      |  | (3) |  | Compensation Committee.       



|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. Jon  MacNeill,  who prior to February,  1998 was
Secretary and Treasurer of  Claude;  Mr. Gagnon,  who prior to March, 2002 was a mining
consultant to Claude  since November 1999 and prior to that Vice-President of Operations,
since 1994,  of Claude.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Certain of the directors serve as directors of
other reporting  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.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------



|Directors and officers of the Company and
corporations  controlled by them, as a  group,  beneficially  own,  directly or
indirectly,  approximately  9.7% of the  issued and outstanding common shares of Claude
as at the date hereof.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|No  Director  and/or  Executive  Officer  has
been  the  subject  of any  order,  judgment,  or decree of any governmental agency or
administrator or of any court  or competent jurisdiction,  revoking or suspending for
cause any license, permit  or  other  authority  of such  person  or of any  corporation
of  which he is a  Director and/or Executive  Officer,  to engage in the securities
business or in  the sale of a particular  security or temporarily or permanently
restraining or  enjoining  any such  person  or any  corporation  of which he is an
officer  or  director from engaging in or continuing any conduct,  practice, or
employment in  connection with the purchase or sale of securities, or convicting such
person of  any felony or  misdemeanor  involving a security or any aspect of the
securities  business or of theft or of any felony.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 are
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.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|B.       Compensation
|---------------------



|Compensation to Directors
|-------------------------



|The  compensation  paid to the  directors  of
the  Company  is  detailed  in the  Management  Information  Circular  of the Company
prepared  for the 2002 annual  general  meeting which is an exhibit to this report and
incorporated  herein by  reference.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Board of  Directors  has awarded  special
remuneration  to one Director for  undertaking  a  specific  service  on  behalf  of the
Company  in  addition  to  remuneration for services ordinarily required of a Director.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 2002 annual  general meeting,  which is an exhibit to
this report and incorporated  herein by  reference.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company  compensated  Jon  MacNeill  $21,600
(2001 - $35,000)  for specific  consulting services with respect to its Alberta oil and
gas properties. No other  director received any compensation for services.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 50 | 
| | -- | 



---





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



|Total  compensation  accrued  and/or paid
(directly  and/or  indirectly) to all  Officers/Directors during the year ended 2002 was
$635,674 (2001 - $630,065).
|--------------------------------------------------------------------------------------------------------------------------------------------------------------



|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, 2002, to provide  pension,  retirement or
similar  benefits for Directors or  Executive Officers.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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  subsidiary during 2002.
|--------------------------------------------------------------------------------------------------------



|Committees
|----------



|There are three standing Board committees:
|------------------------------------------



|1. The  Executive  Committee is  comprised  of
the  Chairman and two  management  directors:  Mr. MacNeill, Mr. Hillier, and Mr.
McMillan. The Executive Committee  was formed to deal with  issues  which were  either
not  significant  enough to  require full Board consideration or required timely action
which would not allow  full  Board  consideration.  This  committee  is  mandated  for
the  review  and  recommendation  to the Board of  Directors  of:  strategic
orientation,  future  direction and  objectives of the Company,  (as prepared by
management);  annual  business plan, investor relations programs and capital and
divestiture programs;  major financial  strategies;  monthly financial and operating
results;  all news  releases;  and, all matters related to environmental and safety
activities.  The  Executive Committee meets as required.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2. The Audit Committee  members as at April 30,
2003 were Mr. Jon MacNeill,  Mr.  Walker and Mr.  Hillier.  The Committee is not
comprised  entirely of unrelated  directors  - a member  of the  Audit  Committee
provides  specified  consulting  services for a fee to the Company.  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.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. The  Compensation  Committee is comprised of
Mr.  William  MacNeill,  Mr. Jon  MacNeill,  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 once during 2002.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|D.       Employees
|------------------



|The Company had  approximately  173  employees
(13 at head  office,  160 at the  Seabee  mine) as of  December  31,  2002.  See
Item  4.D - Seabee  mine - Mine  Details.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 51 | 
| | -- | 



---





|E.       Share Ownership
|------------------------



|The  following  table  sets  forth,  as of April
30,  2003,  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 | Class ** | Percent of 
      Ownership
|------------------ | ------------------------------- | -------- | ---------------------------
|                   |                                 |          |                            
|                   |                                 |          |                            
|                  
|Common             | W.R. MacNeill                   | 6.1%     |                            
|Common             | A.E. Hillier                    | 1.4%     |                            
|Common             | A.N. McMillan                   | 1.3%     |                            
|Common             | R. Walker                       | <1%      |                            
|Common             | J. MacNeill                     | <1%      |                            
|Common             | V. Michasiw                     | <1%      |                            
|Common             | R. Gagnon                       | <1%      |                            
|Common             | P. Olson                        | <1%      |                            
|                   |                                 |          |                            
|Total              |                                 | 9.7%     |                            
|Directors/Officers |                                 |          |                            



|** Based on 54,674,308  shares  outstanding  as
of 04/30/03 and 2,425,000  stock  options held by each beneficial holder exercisable
within sixty days as detailed  below:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The  following  table  sets  forth the
outstanding  stock  options  granted  to  directors, officers and other employees as of
April 30, 2003:
|----------------------------------------------------------------------------------------------------------------------------------------------



|Stock Options Outstanding
|-------------------------

|Name                   | Number of 
      Shares of 
      Common Stock | CDN $ 
      Exercise Price | Expiration 
      Date
|---------------------- | ---------------------------------------------- | --------------------------- | ----------------------
|                      
|W.R. MacNeill,         | 200,000                                        | $0.53                       | 12/27/11              
|Chairman               | 289,000                                        | $1.30                       | 06/22/09              
|                       | 111,000                                        | $0.53                       | 07/31/10              
|                       |                                                |                             |                       
|A.E. Hillier,          | 200,000                                        | $0.53                       | 12/27/11              
|CEO, CFO and Director  | 200,000                                        | $1.32                       | 12/15/08              
|                       | 200,000                                        | $1.30                       | 07/26/09              
|                       |                                                |                             |                       
|A. Neil McMillan,      | 200,000                                        | $0.53                       | 12/27/11              
|President and Director | 150,000                                        | $1.85                       | 08/04/07              
|                       | 50,000                                         | $1.32                       | 12/15/08              
|                       | 200,000                                        | $1.30                       | 07/26/09              
|                       |                                                |                             |                       
|Raymond G. Gagnon,     | 10,000                                         | $0.53                       | 12/27/11              
|COO                    | 10,000                                         | $1.32                       | 12/15/08              
|                       | 30,000                                         | $1.71                       | 05/21/12              



| | 52 | 
| | -- | 



---





|Name                                              | Number of 
      Shares of 
      Common Stock | CDN $ 
      Exercise Price | Expiration 
      Date
|------------------------------------------------- | ---------------------------------------------- | --------------------------- | ----------------------
|                                                 
|                                                  | 200,000                                        | $0.90                       | 11/29/12              
|                                                  |                                                |                             |                       
|Philip E. Olson,                                  | 50,000                                         | $0.53                       | 12/27/11              
|Vice-President Exploration                        | 50,000                                         | $2.65                       | 12/03/06              
|                                                  |                                                |                             |                       
|Jon R. MacNeill,                                  | 50,000                                         | $3.05                       | 04/23/06              
|Director                                          | 20,000                                         | $1.32                       | 12/15/08              
|                                                  |                                                |                             |                       
|Ronald G. Walker,                                 | 20,000                                         | $1.32                       | 12/15/08              
|Director                                          | 5,000                                          | $0.90                       | 11/29/12              
|                                                  |                                                |                             |                       
|Val Michasiw                                      | 20,000                                         | $0.53                       | 12/27/11              
|Secretary/Treasurer                               | 25,000                                         | $1.32                       | 12/15/08              
|                                                  | 25,000                                         | $0.53                       | 07/31/10              
|                                                  | 10,000                                         | $0.90                       | 11/29/12              
|                                                  |                                                |                             |                       
|Other Employees                                   | 50,000                                         | $1.80                       | 01/05/08              
|                                                  | 40,000                                         |                             |                       
|                                                  | 10,000                                         | $0.53                       | 12/27/11              
|                                                  |                                                |                             |                       
|                                                  | 2,425,000                                      | $0.90                       | 11/29/12              
|                                                  |                                                |                             |                       
|Total Officers and Directors                      | 2,325,000                                      |                             |                       
|                                                  |                                                |                             |                       
|Total Other Employees                             | 100,000                                        |                             |                       
|                                                  |                                                |                             |                       
|Total Officers/Directors/ Other
        Employees | 2,425,000                                      |                             |                       
|                                                  |                                                |                             |                       

|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 04/30/03,  persons and/or companies holding 5% or more beneficial
interest in the Companys  outstanding common stock:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 53 | 
| | -- | 



---





|Title of Class | Name and Address of Owner    | Amount and Nature of 
      Beneficial Ownership | Percent of Class
|-------------- | ---------------------------- | ------------------------------------------------ | ----------------
|              
|Common Shares  | W.R. MacNeill, Saskatoon, SK | 3,718,800 (1)                                    | 6.1%            

|Based on 54,674,308  shares  outstanding  as of
04/30/2003  and 2,425,000  stock  options held by each beneficial holder exercisable
within sixty days.
|-------------------------------------------------------------------------------------------------------------------------------------------------------



|(1) | 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  as  detailed  in  the  preceding
Stock  Options  Outstanding table.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|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, 2003, there were 54,674,308
common shares of the Company issued  and outstanding.  Based on the records of the
Companys transfer agent,  Valiant  Trust Company,  #510, 550 - 6th Avenue SW, Calgary,
AB T2P 0S2, as at such date  there were 653 shareholders of record.  To the best of the
Companys  knowledge,  as of April  30,  2003  there  were 487  registered  Canadian
shareholders,  12  registered  international  shareholders,  and 154 shareholders
registered in the  United  States  holding  approximately  3,038,527  shares
respectively.  This  represents 93.08%, 5.55% and 1.37%, 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
|-----------------------------------------



|Except as otherwise  disclosed  herein, 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.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|C.       Interests of
      Experts and Counsel
|-----------------------------------------------



|This Form 20F 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, 2002 which
contains:
|---------------------------------------------------------------------------------------------------------------------------------------------



|Auditors  Report as at February 28,  2003, 
Consolidated  Balance  Sheets as at  December 31, 2002 and 2001,  Consolidated
Statements  of Loss and Deficit for the years ended  December  31,  2002, 2001 and 2000, 
Consolidated  Statements of Cash Flows for the years ended  December 31, 2002, 2001 and
2000,  Notes to the Consolidated Financial Statements  for the years ended December 31,
2002, 2001 and 2000.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 54 | 
| | -- | 



---





|Legal Proceedings
|-----------------



|The Company knows of no material,  active or
pending,  legal proceedings against  them. The Company knows of no active or pending
proceedings against anyone that  might materially adversely affect an interest of the
Company.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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, 2002
other than described below:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------



|On January 31,  2003,  the Company  completed  a
private  placement  offering of  2,500,000  units,  each unit  consisting of one common
share and one half of one  common share purchase warrant,  at a price of $1.50 per unit,
for gross proceeds  of  $3,750,000.  Each whole  purchase  warrant  will  entitle the
holder,  upon  exercise at any time up to and including  January 31, 2004,  and upon
payment of  $1.85, to subscribe for one common share.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|By the end of the first  quarter of 2003,  the
remainder of the  warrants  were  exercised  pursuant  to the  April,  2002  private
placement.  See  Item 5.B -  Liquidity and Capital Resources - Year Ended December
31, 2002.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 TSE 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, 2003:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Toronto Stock Exchange  Common
Shares Trading Activity
|------------------------------------------------------

|                           | Canadian Dollars
|-------------------------- | ----------------
|Period                     | High            
|                           |                 
|                           |                 
|                          
|April, 2003                | $1.48           
|March, 2003                | $1.53           
|February, 2003             | $1.42           
|January, 2003              | $1.69           
|December, 2002             | $1.51           
|November, 2002             | $0.96           
|                           |                 
|                           |                 
|Fiscal Year Ended 12/31/02 | $2.45           
|Fiscal Year Ended 12/31/01 | $0.88           
|Fiscal Year Ended 12/31/00 | $1.00           
|Fiscal Year Ended 12/31/99 | $2.40           
|Fiscal Year Ended 12/31/98 | $3.00           
|                           |                 
|                           |                 
|Quarter Ended 12/31/2002   | $1.59           
|Quarter Ended 9/30/2002    | $2.45           
|Quarter Ended 6/30/2002    | $2.24           
|Quarter Ended 3/31/2002    | $1.03           
|Quarter Ended 12/31/2001   | $0.58           
|Quarter Ended 9/30/2001    | $0.70           
|Quarter Ended 6/30/2001    | $0.83           
|Quarter Ended 3/31/2001    | $0.88           

|The closing price of the common shares on May 15, 2003 was
      $1.34 on the TSE.
|----------------------------------------------------------------------------------



| | 55 | 
| | -- | 



---







|B.       Plan of Distribution
|-----------------------------



|This Form 20F 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 (TSE)  in Toronto,  Ontario,  Canada on Sept. 14,
1987. The Companys common shares are  quoted on the TSE under the symbol
CRJ. The CUSIP number is #182873109.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|D.       Selling Shareholders
|-----------------------------



|This Form 20F 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.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------



|E.       Dilution
|-----------------



|This Form 20F 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 20F 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 20F 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  to the  Companys  Registration  statement  on Form 20F for
the year ended  December 31,  2001, on file with the Commission.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|C.       Material Contracts
|---------------------------



|Set forth is a list of each material contract,
other than the contracts entered  into in the  ordinary  course of the  Companys
business,  to which the Company  entered into during the past two years.  Each such
contract is further described  in the section cross referenced below:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Description of Contract                                                                                                            | Section in which Contract is Described                                                            
|---------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------
|                                                                                                                                  
|Underwriting Agreement with Canaccord Capital 
      Corporated dated April 23, 2002                                               | Operating and Financial Review Prospects  Liquidity
      
      and Capital Resources  Item 5B.
|                                                                                                                                  
|Madsen property Option Agreement Amendment 
      between Claude Resources Inc. and Placer 
      Dome Inc. dated December 5, 2002 | Property, plants and equipment  Madsen 
      properties  Item 4D.                              
|                                                                                                                                  
|Seabee Surface Lease Agreement Amendment  
      dated June 4, 2002                                                                | Operating and Financial Review and Prospects  Critical
      
      Accounting Policies  Item 5.
|                                                                                                                                  



| | 56 | 
| | -- | 



---





|D.       Exchange Controls
|--------------------------



|Exchange Controls and Investment Canada Act
|-------------------------------------------



|Canada has no system of exchange controls. There
are no exchange restrictions on  borrowing from foreign  countries nor on the remittance
of dividends,  interest,  royalties and similar payments, management fees, loan
repayments,  settlement of  trade debts, or the repatriation of capital.  However, any
dividends remitted to  U.S.  Holders,  as defined below,  will be subject to withholding
tax. See Item  10.E - Taxation.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|There are no limitations  under the laws of the
Province of  Saskatchewan  or in  the  memorandum  and articles of the Company on the
rights of  non-Canadians  to  hold or vote the shares of the Company.  Under the
provisions of the Investment  Canada  Act (the  ICA),  as  amended by the
Canada-United  States  Free Trade  Implementation Act (Canada),  and the Canada-United
States Free Trade Agreement,  review  and  approval  of  the  transaction  by  the
Investment  Canada  Agency  (Investment  Canada), the federal agency created
by the ICA are required where  a U.S. person directly  acquires  control of a Canadian
business with assets of  more  than  $184  million.  The term  control  is
defined  as any one or more  non-Canadian  persons  acquiring all or substantially  all
of the assets used in  the Canadian  business,  or the  acquisition  of the voting shares
of a Canadian  corporation  carrying on the Canadian  business or the acquisition of the
voting  interest of an entity  controlling  or carrying on the  Canadian  business.  The
acquisition  of the  majority  of the  outstanding  shares  is  deemed  to be an
acquisition of control of a corporation  unless it can be established that
the  purchaser will not, in fact, control the Canadian corporation.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Subject to the comments  contained in the
following  paragraph  regarding  World  Trade Organization  (WTO) investors,
investments  requiring  notification and  review  are  all  direct  acquisitions  of
Canadian  business  with  assets  of  $5,000,000 or more; all indirect acquisitions of
Canadian businesses with assets  between $5,000,000 and $50,000,000 which represent more
than 50% of the value of  the total international transaction. (Indirect acquisition
means the acquisition  of the voting  rights of an entity  controlling  the Canadian
corporation.)  In  addition,  specific  acquisitions  or new  businesses  in  designated
types  of  business  activities related to Canadas cultural heritage or national
identity,  which would normally only be notifiable,  could be reviewed if the Government
of  Canada considers it in the public interest to do so.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The ICA was amended with the  implementation  of
the agreement  establishing the  WTO to provide for special review
thresholds for WTO investors,  as defined  in the Act.  WTO
investor  generally  means (i) an  individual,  other than a  Canadian,  who is a
national of a WTO member (such as, for  example,  the United  States),  or who has the
right of  permanent  residence  in relation to that WTO  member,  (ii)  governments  of
WTO  members,  and  (iii)  entities  that are not  Canadian  controlled,  but which are
WTO investor  controlled,  as determined by  rules  specified in the Act. The special
review  thresholds for WTO investors do  not apply, and the general rules described above
do apply, to the acquisition of  control  of  certain  types of  businesses  specified
in the Act,  including  a  business  that is a cultural  business.  If the
WTO Investor  rules apply,  an  investment  in the  shares  of the  Company  by or from a
WTO  investor  will be  reviewable only if it is an investment to acquire control of the
Company and the  value of the  assets of the  Company  is equal to or  greater  than a
specified  amount  (the WTO  Review  Threshold).  The WTO Review  Threshold
is  adjusted  annually  by a formula  relating to  increases  in the  nominal  gross
domestic  product of Canada. The 2002 WTO Review Threshold is $218,000.000.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|If any  non-Canadian,  whether or not a WTO
investor,  acquires  control of the  Company by the  acquisition of shares,  but the
transaction is not reviewable as  described above, the non-Canadian is required to notify
the Canadian  government  and  to  provide  certain  basic  information  relating  to
the  investment.  A  non-Canadian,  whether  or not a WTO  investor,  is also  required
to provide a  notice to the government on the establishment of a new Canadian business.
If the  business of the Company is then a prescribed type of business  activity relating
to  Canadas  cultural  heritage  or  national  identity,  and if  the  Canadian
government considers it to be in the public interest to do so, then the Canadian
government  may give a notice in writing within 21 days requiring the investment  be
reviewed.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 57 | 
| | -- | 



---





|For  non-Canadians  (other  than WTO
investors),  an  indirect  acquisition  of  control,  by the  acquisition of voting
interests of an entity that directly or  indirectly  controls the Issuer, is reviewable
if the value of the assets of the  Company is then $50,000,000 or more. If the WTO
investor rules apply,  then this  requirement  does not  apply to a WTO  investor,  or to
a person  acquiring  the  entity from a WTO  investor.  Special  rules  specified  in the
ICA apply if the  value of the  assets of the  Company is more than 50% of the value of
the entity  so acquired.  By these special rules, if the non-Canadian  (whether or not a
WTO  investor) is acquiring control of an entity that directly or indirectly controls
the Issuer,  and the value of the assets of the  Company and all other  entities
carrying on business in Canada, calculated in the manner provided in the ICA and  the
regulations under the Act, is more than 50% of the value,  calculated in the  manner
provided in the ICA and the  regulations  under the Act, of the assets of  all entities,
the control of which is acquired,  directly or indirectly,  in the  transaction  of which
the  acquisition  of control of the Company  forms a part,  then the thresholds for a
direct  acquisition of control as discussed above will  apply.  That is, a WTO  Review
threshold  of  $218,000,000  (in 2002) for a WTO  investor or a threshold of $5,000,000
(in 1999) for a non-Canadian  other than a  WTO investor.  If the value  exceeds that
level,  then the  transaction  must be  reviewed in the same manner as a direct
acquisition  of control by the purchase  of shares of the Issuer.  If an investment is
reviewable,  an  application  for  review in the form  prescribed by regulations  is
normally  required to be filed  with the agency  established by the ICA (the
Agency)  prior to the investment  taking place and the investment may not be
consummated until the review has been  completed.  There are,  however,  certain
exceptions.  Applications  concerning  indirect  acquisition  may be  filed  up to 30
days  after  the  investment  is  consummated  and  applications  concerning  reviewable
investments  in  culture-sensitive  sectors  are  required  upon  receipt of a notice for
review.  There is,  moreover,  provision  for the Minister (a person  designated  as such
under the Act) to permit an investment to be consummated  prior to completion of  review,
if he is satisfied that delay would cause undue hardship to the acquiror  or jeopardize
the operation of the Canadian business that is being acquired. The  Agency will submit
the  application  to the  Minister,  together  with any other  information or written
undertakings given by the acquiror and any representation  submitted  to the  Agency  by
a  province  that is  likely  to be  significantly  affected by the investment.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Minister will then  determine  whether the
investment is likely to be of net  benefit to Canada,  taking into  account  the
information  provided  and having  regard for other  factors  where they are  relevant.
Some of the  factors to be  considered  are the effect of the investment on the level and
nature of economic  activity in Canada, including the effect on employment,  on resource
processing,  on the utilization of parts,  components and services produced in Canada,
and on  exports from Canada.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Additional  factors of  assessment  include (i)
the degree and  significance  of  participation  by  Canadians  in the  Canadian
business  and in any industry in  Canada  of  which  it  forms  a part;  (ii)  the
effect  of the  investment  on  productivity,  industrial  efficiency,  technological
development,  product  innovation and product variety in Canada;  (iii) the effect of the
investment on  competition within any industry or industries in Canada;  (iv) the
compatibility  of the  investment  with  national  industrial,  economic and cultural
policies  taking  into  consideration  industrial,  economic  and  cultural  objectives
enunciated  by the  government  or  legislature  of any  province  likely  to be
significantly  affected  by the  investment;  and  (v) the  contribution  of the
investment to Canadas ability to compete in world markets.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|To insure prompt  review and decision,  the ICA
sets certain time limits for the  Agency and the Minister.  Within 45 days after a
completed  application has been  received,  the Minister must notify the acquiror  that
(a) he is satisfied  that  the investment is likely to be of net benefit to Canada,  or
(b) he is unable to  complete his review,  in which case he shall have 30 additional days
to complete  his review  (unless the acquiror  agrees to a longer  period),  or (c) he is
not  satisfied that the investment is likely to be of net benefit to Canada.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Where the Minister has advised the acquiror
that he is not  satisfied  that the  investment is likely to be of net benefit to Canada,
the acquiror has the right  to make  representations  and submit  undertakings within 30
days of the date of  the notice (or any further  period that is agreed upon  between the
acquiror and  the Minister). On the expiration of the 30-day period (or the agreed
extension),  the Minister must quickly  notify the acquiror (a) that he is now satisfied
that  the investment is likely to be of net benefit to Canada or (b)  confirming  that
he is not  satisfied  that the  investment  is  likely to be of net  benefit  to  Canada.
In the latter case, the acquiror may not proceed with the investment or,  if the
investment has already been consummated,  must relinquish  control of the  Canadian
business.  The ICA authorizes  the Minister to give written  opinions,  binding the
Minister, on the application of the ICA or regulations to the person  seeking  the
opinions  to the  Agency or a  designated  official.  The ICA also  authorizes the
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 58 | 
| | -- | 



---





|Minister to issue guidelines and interpretations
with respect to  the  application  and  administration  of  any  provision  of  the  ICA
or  the  regulations.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------



|The ICA provides  for civil  penalties  for
non-compliance  with any  provision  except breach of confidentiality  or provision of
false  information,  for which  there are criminal penalties.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|E.       Taxation
|-----------------



|A brief  description of certain  provisions of
the tax treaty between Canada and  the United  States is included  below,  together with
a brief outline of certain  taxes, including withholding provisions, to which United
States security holders  are subject under existing laws and regulations of Canada. The
consequences,  if  any, of provincial, state and local taxes are not considered.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The following information is general and
security holders should seek the advice  of their own tax  advisors,  tax  counsel  or
accountants  with  respect to the  applicability  or effect on their own  individual
circumstances  of the matters  referred to herein and of any provincial, state or local
taxes.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Certain Canadian Federal Income Tax
Consequences
|------------------------------------------------



|The  discussion  under this heading  summarizes
the principal  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 a resident of  Canada but is a  resident  of the United  States and who will
acquire  and hold  shares of common  stock of the Company as capital  property  for the
purposes of  the Income Tax Act  (Canada)  (the  Canadian  Tax Act).  This
summary does not  apply to a  shareholder  who carried on business in Canada  through a
permanent  establishment  situated in Canada or performs  independent
personal services in  Canada  through  a fixed  base in  Canada if 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  Canadian  Tax Act
or  regulations  thereunder and on an understanding of the administrative  practices  of
Canada  Custom  & Revenue  Agency,  and takes into  account all specific  proposals
to amend the Canadian Tax Act and the regulations thereunder and on an  understanding of
the  administrative  practices of Canada Customs & Revenue  Agency,  and takes into
account all specific proposals to amend the Canadian Tax  Act or  regulations  made by
the  Minister  of  Finance of Canada as of the date  hereof.  It has been  assumed  that
there will be no relevant  amendment  of any  governing  law  although  no  assurance
can be  given  in  this  respect.  This  discussion is general only and is not a
substitute for independent advice from a  shareholders own Canadian and U.S. tax
advisors.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The  provisions  of the  Canadian  Tax Act are
subject to income tax treaties to  which  Canada  is  a  party,  including  the
Canada-United  States  Income  Tax  Convention (1980), as amended (the
Convention).
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Dividends on Common Shares and Other Income
|-------------------------------------------



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



|The amount of a stock  dividend (for tax
purposes)  would  generally be equal to  the amount by which the paid up or stated
capital of the Company had  increased  by reason of the payment of such dividend.  The
Company will furnish  additional  tax information to  shareholders in the event of such a
dividend.  Interest paid  or deemed  to be paid on the  Companys  debt  securities  held
by  non-Canadian  residents may also be subject to Canadian  withholding  tax,  depending
upon the  terms and provisions of such securities and any applicable tax treaty.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 59 | 
| | -- | 



---





|pension,  retirement or employee  benefit fund
or plan, if the  organization is a resident  of the United  States and is exempt from
income tax under the laws of the United  States.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Disposition of Common Shares
|----------------------------



|Under the  Canadian  Tax Act, a  taxpayers
capital gain or capital loss from a  disposition of a share of common stock of the
Company is the amount,  if any, by  which  his  or  her  proceeds  of  disposition
exceed  (or  are  exceeded  by,  respectively)  the  aggregate or his or her adjusted
cost base of the share and  reasonable expenses of disposition. The capital gain or loss
must be computed in  Canadian  currency  using a weighted  average  adjusted  cost base
for identical  properties.  The capital gains net of losses  included in income are as
follows.  For gains net of losses  realized before February 28, 2000, as to 75%. For
gains  net of losses  realized  after February 27, 2000 and before October 18, 2000, as
to 66-2/3%.  For gains net of losses realized after October 17, 2000, as to 50%.  There
are special  transitional  rules to apply capital losses  against  capital  gains  that
arose in  different  periods.  The  amount by which a  shareholders  capital loss
exceeds the capital gain in a year may be deducted  from a capital  gain realized by the
shareholder  in the three previous years or any subsequent  year, subject to certain
restrictions in the case of a corporate shareholder.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Under the Canadian Tax Act, a non-resident  of
Canada is subject to Canadian tax  on taxable capital gains, and may deduct allowable
capital losses, realized on a  disposition  of  taxable  Canadian  property.
Shares of  common  stock of the  Company  will  constitute  taxable  Canadian  property
of  a  shareholder  at a  particular  time if the  shareholder  used the shares in
carrying on business in  Canada,  or if  at  any  time  in  the  five  years  immediately
preceding  the  disposition  of 25% or more of the  issued  shares of any class or series
in the  capital  stock  of the  Company  belonged  to one or  more  persons  in a  group
comprising the shareholder and persons with whom the shareholder did not deal at  arms
length and in certain other circumstances.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Convention  relieves Untied States residents
from liability for Canadian tax  on capital gains derived on a disposition of shares
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 or she ceased to be resident in Canada; or
| |     |                                                                                                                                                                                                                                                                                            
| | (c) | the shares formed part of the business property
      of a permanent establishment that the holder has or had in Canada
      within the 12 months preceding the disposition.                                                                                                            



|U.S.  Federal Income Tax Consequences
|-------------------------------------



|The following is a general  discussion of
certain  possible U.S.  federal  income tax  consequences,  under current  law,
generally  applicable  to a U.S.  Holder (as  hereinafter  defined)  of common  shares of
the  Company.  This  discussion  is of a general  nature only and does not take into
account the  particular  facts and  circumstances,  with respect to U.S.  federal income
tax issues,  of any  particular  U.S.  Holder.  In addition,  this  discussion  does not
cover  any  state,  local or  foreign  tax  consequences.  (See  Taxation--Canadian
Federal  Income  Tax  Consequences above).
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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 of which could be  materially and adversely  changed,  possibly
on a retroactive basis, at any time  and which are subject to differing  interpretations.
This  discussion  does not  consider the potential  effects,  both adverse and
beneficial,  of any proposed  legislation  which,  if  enacted,  could be applied,
possibly on a  retroactive  basis, at any time.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|This discussion is for general information
only and it is not intended to be, nor should it be construed to be, legal or tax
advice to any U.S. Holder or prospective U.S. Holder of common shares of the
Company, and no
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 60 | 
| | -- | 



---





|opinion or representation with respect to the
U.S. federal income tax consequences to any such U.S. Holder or prospective U.S. Holder
is made. Accordingly, U.S. Holders and prospective U.S. Holders of common shares of
the Company should consult their own tax advisors and U.S. federal, state,
local and foreign tax consequences of purchasing, owning and disposing of
common shares of the Company.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|U.S. Holders
|------------



|As used herein,  a U.S.  Holder
means a holder of common  shares of the Company who is (i) a U.S.  citizen or an
individual  resident in the U.S.,  (ii) a corporation or  partnership  created or
organized in or under the laws of  the  U.S.  or of any  political  subdivision  thereof;
(iii)  an  estate  whose  income  is  taxable  in the  U.S.  irrespective  of source;  or
(v) a trust subject to the primary  supervision of a court within the U.S. and control
of a U.S. fiduciary as described in Section 7701(a)(30) of the Code.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Persons Not Covered
|-------------------



|This  summary  does not  address the U.S.
federal  income tax  consequences  to  persons  (including  persons who are U.S. Holders)
subject to special provisions  of U.S.  federal income tax law,  including (i) tax-exempt
organizations,  (ii)  qualified  retirement  plans,  (iii)  individual  retirement
accounts and other  tax-deferred  accounts,  (iv) financial  institutions,  (v) insurance
companies,  (vi) real estate investment trusts, (vii) regulated investment companies,
(viii)  broker-dealers, (ix) persons or entities that have a functional
currency other  than the U.S. dollar,  (x) persons subject to the alternative
minimum tax, (xi)  persons  who own  their  common  shares  of the  Company  as part of a
straddle  hedging,  conversion  transaction,  constructive  sale  or  other  arrangement
involving more than one position, (xii) persons who acquired their common shares  of the
Company  through the exercise of employee  stock  options or otherwise as  compensation
for services, (xiii) persons that own an interest in an entity that  owns common shares
of the Company, (xiv) persons who own, exercise or dispose of  any options,  warrants or
other rights to acquire  common shares of the Company,  or (xv)  persons  who own their
common  shares of the  Company  other than as a  capital asset within the meaning of
Section 1221 of the Code.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Distribution of Common Shares of the Company
|--------------------------------------------



|U.S. Holders receiving distributions (including
constructive distributions) with  respect to common  shares of the Company are required
to include in gross income  for U.S.  Federal  income tax purposes  the gross amount of
such  distributions,  equal to the U.S.  dollar  value of such  distributions  on the
date of  receipt  (based on the  exchange  rate on such date),  to the extend that the
Company has  current or accumulated earnings and profits,  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 U.S. federal
income tax  liability or,  alternatively,  may be deducted in computing the U.S.
Holders U.S. federal taxable income.  (See more detailed discussion at Foreign
Tax Credit  below).  To the extent that  distributions  from the Company exceed
current or accumulated  earnings and profits of the Company,  such distributions  will be
treated first as a return of capital, to the extent of the U.S. Holders  adjusted  basis
in the common  shares,  and  thereafter as gain from the sale or  exchange of the common
shares of the Company.  (See more detailed  discussion at  Disposition of the
Common Shares of the Company below.)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In the case of foreign currency received as a
distribution that is not converted  by the recipient into U.S.  dollars on the date of
receipt,  a U.S.  Holder will  have a tax basis in the foreign  currency equal to its
U.S.  dollar value on the  date of receipt. Generally any gain or loss recognized upon a
subsequent sale or  other  disposition  of the foreign  currency,  including  the
exchange for U.S.  dollars,  will be ordinary income or loss. However, an individual
whose realized  gain does not exceed $200 will not recognize that gain, to the extent
that there  are no expenses  associated with the transaction  that meet the requirements
for  deductibility  as a trade or business  expense  (other  than travel  expenses in
connection with a business trip) or as an expense for the production of income.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Dividends  paid on the  common  shares  of the
Company  generally  will  not be  eligible  for  the  dividends  received
deduction  allowed  to  corporate  shareholders receiving dividends from certain
U.S.  corporations.  Under certain  circumstances,  a U.S.  Holder  that  is a
corporation  and  that  owns  shares  representing  at least 10% of the total  voting
power and the total value of the  Companys  outstanding  shares may be entitled to a 70%
deduction  of the U.S.  source  portion of  dividends  received  from the
Company  (unless the Company  qualifies  as  a  Foreign  Personal  Holding
Company  or a  Passive  Foreign  Investment  Company  as  defined
below).  The  availability  of the
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 61 | 
| | -- | 



---





|dividends  received  deduction is subject to
several complex  limitations  which are beyond  the scope of this  discussion,  and U.S.
Holders of common shares of the Company  should  consult  their  own  tax  advisors
regarding  the  dividends  received  deduction.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Certain information reporting and backup
withholding rules may apply with respect to certain payments related to the
Companys common shares. In particular, a payor or middleman within the U.S., or
in certain cases outside the U.S., will be required to withhold 30% (which rate is
scheduled for periodic adjustment) of any payments to a U.S. Holder of the Companys
common shares of dividends on, or proceeds from the sale of, such common shares within
the U.S., if a U.S. Holder fails to furnish its correct taxpayer identification number
or otherwise fails to comply with, or establish an exemption from, the backup
withholding tax requirements. Any amounts withheld under the U.S. backup
withholding tax rules will be allowed as a refund or a credit against the U.S.
Holders U.S. federal income tax liability, provided the required information is
furnished to the IRS.  U.S. Holders are urged to consult their own tax advisors
regarding the information reporting and backup withholding rules applicable to the
Companys common shares.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Foreign Tax Credit
|------------------



|A U.S.  Holder who pays (or has withheld from
distributions)  Canadian or other  foreign income tax with respect to the ownership of
common shares of the Company  may be entitled, at the option of the U.S. Holder, to
either receive a deduction  or a tax  credit  for U.S.  federal  income tax  purposes
with  respect to such  foreign tax paid or withheld. Generally, it will be more
advantageous to claim a  credit because a credit reduces U.S. federal income taxes on a
dollar-for-dollar  basis,  while a deduction  merely reduces the taxpayers  income
subject to U.S.  federal income tax. This election is made on a year-by-year basis and
applies to  all foreign taxes paid by (or withheld from  distributions  to) the U.S.
Holder  during that year.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|There are  significant  and  complex
limitations  that apply to the foreign tax  credit,  among which is the general
limitation that the credit cannot exceed the  proportionate share of the U.S. Holders
U.S. income tax liability that the U.S.  Holders  foreign source income
bears to his or its worldwide  taxable income.  In applying this  limitation,  the
various items of income and deduction must be  classified as either  foreign
source or U.S.  source.  Complex rules govern  this  classification
process.  In  addition,  this  limitation  is  calculated  separately with respect to
specific classes of income such as passive  income,  high withholding
tax interest, financial services income, shipping income,
and  certain  other  classifications  of income.  Dividends  distributed  by the  Company
will  generally  constitute  foreign  source  income,  and  will  be
classified  as  passive  income  or,  in the  case of  certain  U.S.
Holders,  financial services income for these purposes.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In addition, U.S. Holders that are corporations
and that own 10% or more of the voting stock of the Company may be entitled to an
indirect foreign tax credit under Section 902 of the Code with respect to
the payment of dividends by the Company under certain circumstances and subject
to complex rules and limitations.  The availability of the foreign tax credit and
the application of the limitations on the credit are fact specific, and U.S.
Holders of common shares of the Company should consult their own tax advisors
regarding their particular circumstances.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Disposition of Common Shares of the Company
|-------------------------------------------



|A U.S.  Holder  will  recognize  gain or loss
upon the  sale or  other  taxable  disposition  of common  shares of the Company 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
shares of the  Company. This gain or loss will be capital gain or loss if the common
shares are  a capital asset in the hands of the U.S. Holder, which will be long-term
capital  gain or loss if the  common  shares  of the  Company  are held for more than one
year.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Preferential tax rates apply to long-term
capital gains of U.S. Holders that are  individuals,  estates or trusts.  There are
currently no preferential  tax rates  for long-term capital gains for a U.S. Holder that
is a corporation  (other than  a corporation  subject to Subchapter S of the Code).
Deductions for net capital  losses are subject to  significant  limitations.  For U.S.
Holders that are not  corporations, 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  that  are  corporations  (other  than  corporations
subject  to  Subchapter S of the Code),  an unused net capital loss may be carried
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 62 | 
| | -- | 



---





|back three  years and  carried  forward  five
years from the loss year to be offset  against  capital gains until such net capital loss
is thereby exhausted.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------



|Other Considerations for U.S. Holders
|-------------------------------------



|In the following  circumstances,  the above
sections of this  discussion may not  describe the U.S. federal income tax consequences
to U.S. Holders resulting from  the ownership and disposition of common shares of the
Company:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Foreign Personal Holding Company
|--------------------------------



|If at any time during a taxable year (i) more
than 50% of the total voting power  or the total value of the  Companys  outstanding
shares is owned,  directly or  indirectly,  by five or fewer  individuals  who are
citizens or residents of the  U.S.  and (ii) 60% (or 50% in  certain  cases)  or more of
the  Companys  gross  income for such year is foreign  personal holding company
income as defined in  Section 553 of the Code (e.g.,  dividends,  interest,
royalties,  certain gains  from the sale of stock  and  securities,  and  certain  gains
from  commodities  transactions),  the  Company  may be  treated  as a  Foreign
Personal  Holding  Company  (FPHC) In that event,  U.S.  Holders of
common shares of the Company  would be  required  to  include in gross  income  for such
year their  allocable  portions of such foreign  personal  holding  company
income to the extent the  Company does not actually distribute such income.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company  does not believe that it  currently
qualifies as a FPHC.  However,  there can be no assurance that the Company will not be
considered a FPHC for the  current or any future taxable year.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Foreign Investment Company
|--------------------------



|If (i) 50% or more of the total voting power or
the total value of the Companys  outstanding shares is owned, directly or indirectly, by
citizens or residents of  the U.S.,  U.S.  partnerships  or  corporations,  or U.S.
estates or trusts (as  defined by the Code  Section  7701(a)(30)),  and (ii) the Company
is found to be  engaged  primarily  in the  business of  investing,  reinvesting,  or
trading in  securities,  commodities, or any interest therein, the Company may be treated
as  a Foreign  Investment  Company (FIC) as defined in Section
1246 of the Code,  causing all or part of any gain realized by a U.S.  Holder selling or
exchanging  common  shares of the  Company to be  treated as  ordinary  income  rather
than  capital gain.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company  does not believe that it  currently
qualifies as an FIC.  However,  there can be no assurance that the Company will not be
considered an FIC for the  current or any future taxable year.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Controlled Foreign Corporation
|------------------------------



|If more than 50% of the total voting  power or
the total value of the  Companys  outstanding shares are owned,  directly or indirectly,
by citizens or residents  of the U.S., U.S.  partnerships or  corporations,  or U.S.
estates or trusts (as  defined  by the Code  Section  7701(a)(30)),  each of  which  own,
directly  or  indirectly,  10% or more of the total voting power of the Companys
outstanding  shares (each a 10% Shareholder), the Company could be treated as
a Controlled  Foreign Corporation (CFC) under Section 957 of the
Code.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The  classification  of the Company as a CFC
would effect many complex  results,  including that such 10%  Shareholders  would
generally (i) be treated as having  received a current  distribution  of the Companys
Subpart F income, and (ii)  would  also be  subject to  current  U.S.
federal  income tax on their pro rata  shares of the Companys  earnings invested in
U.S.  property.  The foreign tax  credit may  reduce the U.S.  federal
income tax on these  amounts  for such 10%  Shareholders  (see more detailed  discussion
at Foreign Tax Credit above).  In  addition,  under  Section 1248 of the
Code,  gain from the sale or other taxable  disposition  of common  shares of the Company
by a U.S.  Holder that is or was a  10%  Shareholder at any time during the five year
period ending with the sale is  treated as ordinary  income to the extent of earnings and
profits of the Company  attributable to the common shares sold or exchanged.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|If the Company is classified  as both a Passive
Foreign  Investment  Company as  described  below and a CFC,  the  Company  generally
will not be  treated  as a  Passive Foreign  Investment  Company with respect to the 10%
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 63 | 
| | -- | 



---





|Shareholders.  This  rule  generally  will be
effective  for taxable  years of the 10%  Shareholders  beginning  after 1997 and for
taxable years of the Company ending with or within  such taxable years of the 10%
Shareholders.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company does not believe that it currently
qualifies as a CFC. However, there can be no assurance that the Company will not be
considered a CFC for the current or any future taxable year.  Because of the complexity
of the CFC rules, a more detailed review of these rules is beyond the scope of this
discussion, and U.S. Holders are urged to consult with their own tax advisors with
respect to how the CFC rules impact their tax situation.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Passive Foreign Investment Company
|----------------------------------



|Certain U.S. income tax legislation  contains
rules governing  Passive  Foreign  Investment  Companies  (PFIC)
which can have  significant tax effects on U.S.  Holders of foreign  corporations.
Section  1297 of the Code defines a PFIC as a  corporation that is not formed in the U.S.
and, for any taxable year, either (i)  75% or more of its gross income is passive
income (e.g.  dividends,  interest,  certain  rents  and  royalties,  certain
gains  from the  sales  of  stock  and  securities and certain gains from commodities
transactions), or (ii) the average  percentage,  by fair market value (or, if the
corporation is not publicly traded  and either is a controlled foreign corporation or
makes an election, by adjusted  tax  basis),  of its  assets  that  produce  or are held
for the  production  of  passive  income is 50% or more.  If a foreign
corporation  owns,  directly or  indirectly, at least 25% by value of the stock of a
second corporation, then for  purposes  of the PFIC  tests  described  above,  the first
corporation  will be  treated as owning a  proportionate  share of the assets of, and as
receiving  a  proportionate share of the income of, the second corporation.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|U.S.  Holders  owning common shares of a PFIC
are subject to the highest rate of  tax on  ordinary  income in effect  for the
applicable  taxable  year and to an  interest  charge  based on the value of  deferral
of tax for the period  during  which the common  shares of the PFIC are owned with
respect to certain  excess  distributions on and dispositions of PFIC stock
under Section 1291 of the Code.  However,  if the  U.S.  Holder  makes a  timely
election  to  treat a PFIC as a  qualified  electing  fund (QEF)  with  respect to
such  shareholders  interest  therein,  the above  described  rules  generally  will not
apply.  Instead,  the  electing  U.S.  Holder would  include  annually in his gross
income his pro rata  share of the PFICs ordinary earnings and net capital gain
regardless of whether  such  income  or gain was  actually  distributed.  A U.S.  Holder
of a QEF can,  however,  elect to defer the payment of U.S.  federal  income tax on such
income  inclusions.  In addition,  subject to certain limitations,  U.S. Holders owning,
actually or constructively, marketable (as specifically defined) stock in a PFIC  will be
permitted to elect to mark that stock to market annually, rather than be  subject to the
tax regime of Section  1291 of Code as described  above.  Amounts  included in or
deducted from income under this alternative (and actual gains and  losses  realized  upon
disposition,  subject  to certain  limitations)  will be  treated as ordinary gains or
losses.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company  believes that it was not a PFIC for
its fiscal year ended  December  31, 2002 and does not believe  that it will be a PFIC
for the fiscal year ending  December 31, 2003.  There can be no assurance  that the
Companys  determination  concerning its PFIC status will not be challenged by the IRS,
or that it will be  able to satisfy record keeping requirements that will be imposed on
QEFs in the  event that it qualifies as a PFIC.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Each U.S.  Holder of common  shares  of the
Company  is urged to  consult a tax  advisor with respect to how the PFIC rules affect
their tax situation.
|-------------------------------------------------------------------------------------------------------------------------------------------------------



|F.       Dividends and
      Paying Agents
|------------------------------------------



|This Form 20F 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 20F 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.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 64 | 
| | -- | 



---





|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 - 4th 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 the  gold  price  and  fluctuations  in U.S./Canada  dollar  exchange  rates.  To a
lesser extent,  the  Company is subject to market  risk  related to  interest  rates as
it  currently  holds cash balances.  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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Gold Hedging and Sensitivity to Gold Price:
|-------------------------------------------



|In order to manage  its  exposure  to
fluctuations  in the  price of gold,  the  Company may enter into fixed forward, spot
deferred and options contracts within  the course of its  business.  Forward sales
agreements  obligate the Company to  sell gold at a specified price on a specified date.
Spot deferred  contracts are  forward  sales  agreements  that allow the Company to defer
the delivery of gold  under the  contracts  to a later date at the  original  contract
price plus the  prevailing premium (contango) at the time of the deferral,  thereby
allowing the  Company to participate in current market price increases while providing
future  downside protection.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Executive Committee of the Board of
Directors administers hedging activities  and reviews the Companys hedge position
periodically:
|----------------------------------------------------------------------------------------------------------------------------------------



|As at December 31, 2002,  the  Corporation  had
entered into the following  gold  contracts:
|--------------------------------------------------------------------------------------------

|                       |  | Ounces |  | Average PricePer Ounce |  | AnticipatedDelivery/Expiry |  | Fair Valuein C$000
|---------------------- |  | ------ |  | ---------------------- |  | -------------------------- |  | ------------------
|                      
|Spot deferred contract |  | 3,000  |  | U.S.$303               |  | 2003                       |  | (189)             
|Spot deferred contract |  | 3,750  |  | U.S.$298               |  | 2003                       |  | (268)             
|Spot deferred contract |  | 2,000  |  | U.S.$332               |  | 2003                       |  | (34)              



|As at December 31, 2002 the estimated  fair
value of the net gold hedge position  was an  unrealized  loss of CDN $491,000.  Fair
value  estimates are made at the  balance sheet date, based upon relevant market
information and information about  the financial instrument.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The  sensitivity to changes in gold price on the
Companys  earnings at December  31, 2002 was approximately CDN $800,000 per U.S.$10
change in the gold price.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------



|Foreign Currency Hedging and Exchange Rate
Sensitivity:
|-------------------------------------------------------



|The Corporations  mineral revenues are
denominated in U.S. dollars. In order to  manage its exposure to currency  fluctuations,
the Companies  from time to time  enters into currency forward sales or options
contracts. The Executive Committee  of the  Board of  Directors  administers  hedging
activities  and  reviews  the  Companys hedge position  periodically.  As at December
31, 2002 the Corporation  had outstanding contracts totaling U.S. $5.3 million at an
average exchange rate  of 1.5871 CDN$/U.S.$ with a market value gain inherent in these
contracts of CDN
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 65 | 
| | -- | 



---





|$39,000.  The sensitivity to changes in
U.S./Canada dollar exchange rates on the  Corporations  earnings  and cash flow at
December  31,  2002 is  approximately  $400,000 per U.S.$0.01 change in the average
U.S./Canada dollar exchange rate.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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
|---------------------------------



|Based on their evaluation as of a date within 90
days of the filing date of this  Annual  Report on Form 20-F,  the  principal  executive
officer  and  principal  financial officer of the Company have concluded that the
disclosure controls and  procedures  of  the  Company  as  defined  in  §240.13a-15(c)
and  §240.15d-15(c)  of the  Securities  Exchange Act of 1934 (the Exchange Act)
are effective to ensure that information required to be disclosed by the Company  in
reports  that it  files or  submits  under  the  Exchange  Act is  recorded,  processed,
summarized  and  reported  within  the  time  periods  specified  in  Securities and
Exchange Commissions rules and forms.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|There were no  significant  changes in internal
controls or in other factors of  the Company that could  significantly  affect these
controls  subsequent to the  date of their evaluation and up to the filing date of this
Annual Report on Form  20-F.  There  were no  significant  deficiencies  or  material
weaknesses,  and  therefore no corrective actions were taken.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The  Companys  management,  including  the
principal  executive  officer  and  principal  financial officer,  does not expect that
its disclosure  controls and  procedures or internal  controls and  procedures  will
prevent all error and all  fraud. A control system, no matter how well conceived and
operated,  can provide  only  reasonable,  not absolute,  assurance  that the  objectives
of the control  system are met.  Further,  the design of a control  system must reflect
the fact  that there are  resource  constraints,  and the  benefits  of  controls  must
be  considered  relative  to their  costs.  Because of inherent  limitations  in all
control systems,  no evaluation of controls can provide absolute  assurance that  all
control issues and instances of fraud,  if any, within the Company have been  detected.
These  inherent  limitations  include the realities that judgments in  decision-making
can be faulty,  and that breakdowns can occur because of simple  error or mistake.
Additionally,  controls can be circumvented by the individual  acts of some  persons,  by
collusion of two or more  people,  or by  management  override of the control.  The
design of any system of controls  also is based in  part upon certain  assumptions about
the likelihood of future events,  and there  can be no assurance  that any design will
succeed in achieving  its stated goals  under all potential future conditions;  over
time, control may become inadequate  because of changes in conditions,  or the degree of
compliance with the policies  or  procedures  may  deteriorate.  Because  of  the
inherent  limitations  in a  cost-effective control system, misstatements due to error or
fraud may occur and  not be detected.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 66 | 
| | -- | 



---





|Item 16.  [Reserved]
|--------------------



|Part III
|--------



|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 19 to the 2002 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 KPMGLLP, 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.
|----------------------------------------------------------------------------



|Item 19.  Exhibits
|------------------



|A) Financial Statements:
|------------------------



|Managements Responsibilities for Financial
Reporting
|-----------------------------------------------------



|Auditors Report, dated February 28, 2003
|-----------------------------------------



|Consolidated Balance Sheets at December 31, 2002
and 2001
|---------------------------------------------------------



|Consolidated Statements of  Loss for the years
ended December 31, 2002, 2001 and 2000
|-------------------------------------------------------------------------------------



|Consolidated Statements of Cash Flows for the
years ended December 31, 2002, 2001 and 2000
|------------------------------------------------------------------------------------------



|Consolidated  Statements  of  Retained  Earnings
(Deficit)  for the years ended  December 31, 2002, 2001 and 2000
|-----------------------------------------------------------------------------------------------------------------



|Notes to the Consolidated Financial Statements
|----------------------------------------------



|(B) 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).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | 67 | 
| | -- | 



---





|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.
|--- | ------------------------------------------------------------------------------------------------





|4.7 | Madsen
property Option Agreement Amendment with Placer Dome (CLA) Ltd. dated December 5, 2002.
|--- | ----------------------------------------------------------------------------------------------





|10.1 | Geological
Consultants Consent
|---- | ------------------------------





|10.2 | Oil
and Gas Consultants Consent
|---- | -------------------------------





|99.1 | Certifications
pursuant  to  18  U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  906  of
the  Sarbanes-Oxley Act of  2002.
|---- | --------------------------------------------------------------------------------------------------------------------------------------





|99.2 | Management
Information Circular dated April 11, 2003.
|---- | -----------------------------------------------------





| | 68 | 
| | -- | 



---





|SIGNATURE
|---------



|The Registrants hereby certify that they meet
all of the requirements for filing  on Form 20-F and that they have duly caused and
authorized  the  undersigned to  sign this Annual Report on their behalf.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                     |     | CLAUDE RESOURCES INC.                      
|-------------------- | --- | -------------------------------------------
|                     |     |                                            
|                     |     |                                            
|                     |     | (Registrant)                               
|                     |     |                                            
|                     |     |                                            
|Dated: June 26, 2003 | By: | /s/ Arnie E. Hillier                       
|                     |     | Vice Chairman, CEO, CFO 
      And Director



| |  | 
| |  | 



---





|CERTIFICATION  Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002  (A separate certification is required for
each officer)
|---------------------------------------------------------------------------------------------------------------------------------



|I, Arnie Hillier, certify that:
|-------------------------------



|1. | I
have reviewed this annual report on Claude Resources Inc.;
|-- | ------------------------------------------------------------





|2. | Based
on my  knowledge,  this annual report does not contain any untrue  statement of a
material fact or omit to state a material fact necessary  to make the statements made, in
light of the circumstances  under which  such  statements  were made, not misleading
with respect to the period  covered by this annual report;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|3. | Based
on my knowledge,  the financial  statements,  and other financial  information  included
in this  annual  report,  fairly  present in all  material  respects the financial
condition,  results of operations and  cash flows of the  registrant as of, and for, the
periods  presented in  this annual report;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|4. | The
registrants  other  certifying  officers and I are responsible for  establishing  and
maintaining  disclosure  controls and procedures (as  defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and  we have:
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (a) | designed such disclosure controls and
      procedures to ensure the material information relating to the registrant,
      including its consolidated subsidiaries, is made known to us by others within
      those entities, particularly during the period in which this annual report
      is being prepared;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                    
| | (b) | evaluated the effectiveness of the registrants
      disclosure controls and procedures as of a date within 90 days prior to
      filing date of this annual report is being prepared;                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                    
| | (c) | presented in this annual report our
      conclusions about the effectiveness of the disclosure controls and procedures
      based on our evaluation as of the Evaluation Date;                                                                                                                                   





|5. | The
registrants other certifying officers and I have disclosed,  based  on our most recent
evaluation,  to the  registrants  auditors and the  audit  committee  of  registrants
board  of  directors  (or  persons  performing the equivalent function).
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | all significant deficiencies in the
      design or operation of internal controls which could adversely affect the
      registrants ability to record, process, summarize and report financial
      data and have identified for the registrants auditors any material
      weakness in internal controls; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                     
| | (b) | any fraud, whether or not material,
      that involves management or other employees who have significant role in
      the registrants internal controls; and                                                                                                                                                    





|6. | The
registrants other certifying officers and I have indicated in this  annual report
whether or not there were significant changes in internal  controls or in other factors
that could  significantly  affect internal  controls  subsequent  to  the  date  of  our
most  recent  evaluation,  including  any  corrective  actions  with  regard  to
significant  deficiencies and material weaknesses.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Dated: June 26, 2003 | By: | /s/ Arnie E. Hillier                       
|-------------------- | --- | -------------------------------------------
|                     |     | Vice Chairman, CEO, CFO 
      And Director





| |  | 
| |  | 



---





|MANAGEMENTS 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 judgements.  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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|/s/ Arnie E. Hillier                                                                                                                               
|---------------------------------------------------------------------------------------------------------------------------------------------------
|Arnie E. Hillier 
      Vice Chairman, Chief Executive Officer and 
      Chief Financial Officer 
      Saskatoon, Canada 
      February 28, 2003



| |  | 
| |  | 



---





|AUDITORS REPORT
|----------------



|To the shareholders of Claude Resources Inc.:
|---------------------------------------------



|We have audited the  consolidated  balance
sheets of Claude Resources Inc. as at  December 31, 2002 and 2001 and the  consolidated
statements  of loss,  retained  earnings  and cash  flows for each of the years in the
three year  period  ended  December 31, 2002.  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 auditing  standards  generally
accepted in the United  States of  America.  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, 2002  and 2001 and the  results of its  operations  and its
cash flows for each of the  years in the three year  period  ended  December  31,  2002
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.  Application  of accounting  principles  generally
accepted in the United States  would have  affected  results of  operations  for each of
the years in the three  year period ended December 31, 2002 and shareholders  equity as
at December 31,  2002 and 2001 to the extent summarized in Note 19 to the consolidated
financial  statements.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|/s/ KPMGLLP                                                            
|-----------------------------------------------------------------------
|Chartered Accountants 
      Saskatoon, Canada 
      February 28, 2003



| |  | 
| |  | 



---





|CONSOLIDATED BALANCE SHEETS 
      DECEMBER 31 (CANADIAN DOLLARS IN THOUSANDS)
|------------------------------------------------------------------------------

|                                                           |  |   | 2002   |  |   | 2001  
|---------------------------------------------------------- |  | - | ------ |  | - | ------
|Assets                                                     |  |   |        |  |   |       
|Current assets:                                            |  |   |        |  |   |       
|Cash                                                       |  | $ | -      |  | $ | 1,899 
|Short-term
        investments                             |  |   | 958    |  |   | 657   
|Receivables                                                |  |   | 2,174  |  |   | 699   
|Inventories
        (Note 2)                               |  |   | 3,366  |  |   | 4,646 
|Shrinkage
        stope platform costs (Note 3)            |  |   | 5,852  |  |   | 2,831 
|Prepaids                                                   |  |   | 378    |  |   | 300   
|                                                          
|                                                           |  |   | 12,728 |  |   | 11,032
|Oil and gas properties
        (Note 4)                    |  |   | 3,411  |  |   | 3,120 
|Mineral properties
        (Note 5)                        |  |   | 17,208 |  |   | 13,834
|Investments (Note 6)                                       |  |   | 1,336  |  |   | 684   
|                                                          
|                                                           |  | $ | 34,683 |  | $ | 28,670
|                                                          
|Liabilities and Shareholders Equity                       |  |   |        |  |   |       
|Current liabilities:                                       |  |   |        |  |   |       
|Bank
        indebtedness                                  |  | $ | 1,628  |  | $ | -     
|Payables
        and accrued liabilities                   |  |   | 1,940  |  |   | 2,114 
|Demand
        loan (Note 7)                               |  |   | 110    |  |   | 438   
|Current
      portion of obligations under capital lease   |  |   | 51     |  |   | -     
|                                                          
|                                                           |  |   | 3,729  |  |   | 2,552 
|                                                          
|Obligations under
        capital lease (Note 8)           |  |   | 122    |  |   | -     
|Future site reclamation
        costs (Note 9)             |  |   | 2,635  |  |   | 2,575 
|                                                           |  |   |        |  |   |       
|Shareholders equity:                                      |  |   |        |  |   |       
|Share
        capital (Note 10)                            |  |   | 24,525 |  |   | 18,362
|Retained
        earnings                                  |  |   | 3,672  |  |   | 5,181 
|                                                          
|                                                           |  |   | 28,197 |  |   | 23,543
|                                                          
|Commitments and contingencies
        (Note 9 and Note 15) |  |   |        |  |   |       
|Subsequent event (Note
        17)                         |  |   |        |  |   |       
|                                                           |  | $ | 34,683 |  | $ | 28,670
|                                                          

|See accompanying notes to consolidated financial statements.
|------------------------------------------------------------

|/s/ William R. MacNeill |  | /s/ Jon R. MacNeill | 
|----------------------- |  | ------------------- | 
|Director                |  | Director            | 



| |  | 
| |  | 



---





|CONSOLIDATED STATEMENTS OF LOSS 
      YEARS ENDED DECEMBER 31 (CANADIAN DOLLARS IN THOUSANDS)
|----------------------------------------------------------------------------------------------

|                                                    |  |   | 2002    |  |   | 2001    |  |   | 2000    
|--------------------------------------------------- |  | - | ------- |  | - | ------- |  | - | --------
|Revenues:                                           |  |   |         |  |   |         |  |   |         
|Gold                                                |  | $ | 20,363  |  | $ | 19,524  |  | $ | 24,166  
|Oil and gas:                                        |  |   |         |  |   |         |  |   |         
|Gross
        revenue                               |  |   | 7,043   |  |   | 9,024   |  |   | 9,300   
|Crown
        royalties                             |  |   | (1,748) |  |   | (2,672) |  |   | (2,516) 
|Alberta
        Royalty Tax Credit                  |  |   | 440     |  |   | 619     |  |   | 584     
|Overriding
        royalties                        |  |   | (2,929) |  |   | (3,885) |  |   | (4,061) 
|                                                   
|Net oil and gas revenue                             |  |   | 2,806   |  |   | 3,086   |  |   | 3,307   
|                                                   
|                                                    |  |   | 23,169  |  |   | 22,610  |  |   | 27,473  
|                                                    |  |   |         |  |   |         |  |   |         
|Expenses:                                           |  |   |         |  |   |         |  |   |         
|Gold                                                |  |   | 16,070  |  |   | 15,817  |  |   | 16,432  
|Oil and gas                                         |  |   | 1,138   |  |   | 1,498   |  |   | 1,582   
|General and administrative                          |  |   | 2,218   |  |   | 1,918   |  |   | 1,715   
|Interest and other
        (Note 11)                |  |   | (84)    |  |   | (30)    |  |   | 167     
|Provision for income
        taxes (Note 12)        |  |   | 31      |  |   | 26      |  |   | 32      
|                                                   
|                                                    |  |   | 19,373  |  |   | 19,229  |  |   | 19,928  
|                                                    |  |   |         |  |   |         |  |   |         
|Earnings before the undernoted items                |  |   | 3,796   |  |   | 3,381   |  |   | 7,545   
|Depreciation, depletion
        and reclamation:    |  |   |         |  |   |         |  |   |         
|Gold                                                |  |   | 4,866   |  |   | 5,217   |  |   | 4,194   
|Oil
        and gas                                 |  |   | 439     |  |   | 347     |  |   | 467     
|Write-down of mineral
        properties            |  |   | -       |  |   | -       |  |   | 51,078  
|Provision for foreign
        currency fluctuations |  |   | -       |  |   | -       |  |   | 529     
|                                                   
|Net loss                                            |  | $ | (1,509) |  | $ | (2,183) |  | $ | (48,723)
|                                                   
|Net loss per share (Note 13)                        |  |   |         |  |   |         |  |   |         
|Basic and diluted                                   |  | $ | (0.03)  |  | $ | (0.05)  |  | $ | (1.25)  

|See accompanying notes to consolidated financial statements.
|------------------------------------------------------------



|CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
      (DEFICIT) 
      YEARS ENDED DECEMBER 31 (CANADIAN DOLLARS IN THOUSANDS)
|---------------------------------------------------------------------------------------------------------------------------

|                                                 |  |   | 2002    |  |   | 2001     |  |   | 2000    
|------------------------------------------------ |  | - | ------- |  | - | -------- |  | - | --------
|                                                 |  |   |         |  |   |          |  |   |         
|Retained earnings (deficit), beginning of period |  | $ | 5,181   |  | $ | (32,636) |  | $ | 16,087  
|Reduction of stated capital (Note 10             |  |   | -       |  |   | 40,000   |  |   | -       
|Net loss                                         |  |   | (1,509) |  |   | (2,183)  |  |   | (48,723)
|                                                
|Retained earnings (deficit), end of period       |  | $ | 3,672   |  | $ | 5,181    |  | $ | (32,636)
|                                                



|See accompanying notes to consolidated
financial statements.
|------------------------------------------------------------



| |  | 
| |  | 



---





|CONSOLIDATED STATEMENTS OF CASH
FLOWS  YEARS ENDED DECEMBER 31 (CANADIAN DOLLARS IN THOUSANDS)
|----------------------------------------------------------------------------------------------

|                                                                 |  |   | 2002    |  |   | 2001    |  |   | 2000    
|---------------------------------------------------------------- |  | - | ------- |  | - | ------- |  | - | --------
|Cash provided from (used in):                                    |  |   |         |  |   |         |  |   |         
|                                                                 |  |   |         |  |   |         |  |   |         
|Operations:                                                      |  |   |         |  |   |         |  |   |         
|Net loss                                                         |  | $ | (1,509) |  | $ | (2,183) |  | $ | (48,723)
|Non-cash items:                                                  |  |   |         |  |   |         |  |   |         
|Depreciation,
        depletion and reclamation                  |  |   | 5,305   |  |   | 5,564   |  |   | 4,661   
|Write-down
        of mineral properties                         |  |   | -       |  |   | -       |  |   | 51,078  
|Provision
      for foreign currency fluctuations                |  |   | -       |  |   | -       |  |   | 529     
|                                                                
|                                                                 |  |   | 3,796   |  |   | 3,381   |  |   | 7,545   
|                                                                 |  |   |         |  |   |         |  |   |         
|Net change in non-cash
        working capital:                  |  |   |         |  |   |         |  |   |         
|Receivables                                                      |  |   | (1,475) |  |   | 1,676   |  |   | 1,271   
|Inventories                                                      |  |   | 1,280   |  |   | (528)   |  |   | 494     
|Shrinkage
        stope platform costs                           |  |   | (3,021) |  |   | 1,911   |  |   | 240     
|Prepaids                                                         |  |   | (78)    |  |   | 117     |  |   | (99)    
|Payables
        and accrued liabilities                         |  |   | (174)   |  |   | (2,087) |  |   | 2,027   
|Obligations
      relating to foreigncurrency
      fluctuations |  |   | -       |  |   | -       |  |   | (2,420) 
|                                                                
|                                                                 |  |   | 328     |  |   | 4,470   |  |   | 9,058   
|                                                                 |  |   |         |  |   |         |  |   |         
|Investing:                                                       |  |   |         |  |   |         |  |   |         
|Short-term investments                                           |  |   | (301)   |  |   | (657)   |  |   | -       
|Mineral properties                                               |  |   | (8,180) |  |   | (3,983) |  |   | (8,294) 
|Oil and gas properties                                           |  |   | (730)   |  |   | (818)   |  |   | (523)   
|Increase in investments                                          |  |   | (652)   |  |   | -       |  |   | (31)    
|                                                                
|                                                                 |  |   | (9,863) |  |   | (5,458) |  |   | (8,848) 
|                                                                 |  |   |         |  |   |         |  |   |         
|Financing:                                                       |  |   |         |  |   |         |  |   |         
|Issue of common shares,
        net of issue costs               |  |   | 6,163   |  |   | 1,469   |  |   | 897     
|Demand loan:                                                     |  |   |         |  |   |         |  |   |         
|Proceeds                                                         |  |   | -       |  |   | 657     |  |   | -       
|Repayment                                                        |  |   | (328)   |  |   | (219)   |  |   | -       
|Obligations under
        capital lease:                         |  |   |         |  |   |         |  |   |         
|Proceeds                                                         |  |   | 214     |  |   | -       |  |   | -       
|Repayment                                                        |  |   | (41)    |  |   | -       |  |   | -       
|Brokerage deposits                                               |  |   | -       |  |   | -       |  |   | 198     
|                                                                
|                                                                 |  |   | 6,008   |  |   | 1,907   |  |   | 1,095   
|                                                                 |  |   |         |  |   |         |  |   |         
|Increase (decrease) in cash position                             |  |   | (3,527) |  |   | 919     |  |   | 1,305   
|Cash position, beginning of period                               |  |   | 1,899   |  |   | 980     |  |   | (325)   
|                                                                
|Cash position, end of period                                     |  | $ | (1,628) |  | $ | 1,899   |  | $ | 980     
|                                                                
|Supplemental cash flow disclosure:                               |  |   |         |  |   |         |  |   |         
|                                                                 |  |   |         |  |   |         |  |   |         
|Interest
        paid                                            |  |   | 102     |  |   | 176     |  |   | 301     
|Income
        taxes paid                                        |  |   | 31      |  |   | 26      |  |   | 32      



|See accompanying notes to consolidated
financial statements.
|------------------------------------------------------------



| |  | 
| |  | 



---





|NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  
      YEARS ENDED DECEMBER 31 
      TABULAR DOLLAR AMOUNTS IN THOUSANDS OF CANADIAN DOLLARS, 
      EXCEPT AS OTHERWISE NOTED
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Operations:
|-----------



|The operations of the Company consist of the
following:
|-------------------------------------------------------



|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  November, 1991 with commercial production achieved in
December, 1991.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|OIL & GAS
|---------



|The Company,  through its wholly-owned
subsidiary 574095 Alberta Ltd., has a participating  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 considered mature and are operated by others. The areas are also
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  subsidiary.  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  consisting  of shares of other
companies  and bonds are carried at  cost or at cost less amounts  written off to reflect
an impairment in value that  is other than a temporary decline.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|INVENTORIES
|-----------



|Gold  inventory,  which  includes  gold bullion,
gold  contained in the milling  circuit and in stockpiled ore, 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 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 future net cash flow from
the  production  of proven  reserves, less future removal,  restoration and capital costs
as well as general  and administrative expenses,  financing costs and income taxes based
on year-end  prices and costs.  Should this  comparison  indicate an excess carrying
value, a  write-down is recorded.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Estimates  are made of  removal  and site
restoration  costs,  net of  expected  recoveries,  and are charged as additional
depletion  expense using the unit of  production  method.  The accumulated  charges,
less actual costs incurred,  are  reflected  on the balance  sheet as a reduction in the
net book value of oil and  gas properties.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The costs  related to petroleum and natural gas
properties  are depleted on the  unit of production  method based on the estimated
proven 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  and  development of mineral  properties and the  development 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.
|------------------------------------------------------------------------------------------------------------------------------------------



|Estimated future site reclamation costs are
based primarily on environmental and  regulatory  requirements  and are  accrued  on a
unit of  production  basis over  estimated recoverable proven and probable mineral
reserves.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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, liquids
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
|----------------------------



|Revenues  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s policy is  not to utilize  derivative  financial  or commodity  instruments
for trading or  speculative purposes.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Foreign exchange  transaction  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 the revenues  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,  extinguished
or matures 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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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  substantially enacted tax rates expected to apply to taxable income in the
years  in which those temporary differences are expected to be recovered or settled.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|LOSS PER SHARE
|--------------



|The Company  has  adopted  the  recommendations
of The  Canadian  Institute  of  Chartered  Accountants  (CICA)  in
calculating  loss  per  share.  Under  the  recommendations, the treasury stock method is
used to calculate diluted loss per  share.  Under the treasury method,  basic loss per
share is computed by dividing  income available to common shareholders by the weighted
average number of common  shares  outstanding  during the year. Diluted loss per share is
similar to basic  loss per share,  except that the  denominator is increased to include
the number  of additional  common shares that would have been  outstanding  if the
potential  dilutive common shares had been issued.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|STOCK BASED COMPENSATION PLANS
|------------------------------



|The Company has two stock based  compensation
plans which are described in Note  10. Under the share option plan,  no  compensation
expense is  recognized  when  stock options are issued to employees, officers or
directors. Under the Employee  Share  Purchase Plan  compensation  expense is  recognized
for the value of the  Companys  contribution to the plan. Under both plans any
consideration  paid by  employees,  officers or  directors  on exercise of stock  options
or purchase of  stock is credited to share capital.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2. Inventories:
|---------------

|                                   |  |   | 2002  |  |   | 2001  | 
|---------------------------------- |  | - | ----- |  | - | ----- | 
|                                   |  |   |       |  |   |       | 
|Bullion in-circuit                 |  | $ | 473   |  | $ | 1,113 | 
|Stockpiled ore                     |  |   | 417   |  |   | 503   | 
|Materials and supplies             |  |   | 2,476 |  |   | 3,030 | 
|                                   | 
|                                   |  | $ | 3,366 |  | $ | 4,646 | 
|                                   | 
|3. Shrinkage Stope Platform Costs: |  |   |       |  |   |       | 
|                                   |  |   | 2002  |  |   | 2001  | 
|                                   |  |   |       |  |   |       | 
|Stope Platform Costs               |  | $ | 5,852 |  | $ | 2,831 | 
|                                   | 



|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.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. Oil & Gas Properties:
|------------------------



|Details of the Companys property, plant and
equipment are as follows:
|----------------------------------------------------------------------

|                                       | Cost    | Accumulated
        depreciation,
        depletion and
        write down | 2002Net | Cost    | Accumulated
        depreciation,
        depletion and
        write down | 2001Net
|-------------------------------------- | ------- | -------------------------------------------------------------------------- | ------- | ------- | -------------------------------------------------------------------------- | -------
|                                      
|Property acquisition anddrilling costs | $ 2,683 | $ 1,578                                                                    | $ 1,105 | $ 2,481 | $ 1,457                                                                    | $ 1,024
|Gas plant and productionequipment      | 5,595   | 3,289                                                                      | 2,306   | 5,078   | 2,982                                                                      | 2,096  
|                                      
|                                       | $ 8,278 | $ 4,867                                                                    | $ 3,411 | $ 7,559 | $ 4,439                                                                    | $ 3,120
|                                      



|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, 2002 |  | $109,522,000 | 
| | ----------------- |  | ------------ | 
| | December 31, 2001 |  | $106,593,000 | 



| |  | 
| |  | 



---





|5. Mineral Properties:
|----------------------



|Details of the Companys property, plant and
equipment are as follows:
|----------------------------------------------------------------------

|                                               | Cost      | Accumulated
        depreciation,
        depletion and
        write down | 2002Net  | Cost      | Accumulated
        depreciation,
        depletion and
        write down | 2001Net 
|---------------------------------------------- | --------- | -------------------------------------------------------------------------- | -------- | --------- | -------------------------------------------------------------------------- | --------
|                                              
|Property acquisition andmine development costs | $ 65,057  | $ 55,670                                                                   | $ 9,387  | $ 59,103  | $ 52,278                                                                   | $ 6,825 
|Buildings, plant andequipment                  | 38,778    | 32,461                                                                     | 6,317    | 37,831    | 30,907                                                                     | 6,924   
|Exploration properties                         | 6,123     | 4,619                                                                      | 1,504    | 4,723     | 4,638                                                                      | 85      
|                                              
|                                               | $ 109,958 | $ 92,750                                                                   | $ 17,208 | $ 101,657 | $ 87,823                                                                   | $ 13,834
|                                              



|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%.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6. Investments:
|---------------

|            |  | 2002   |  | 2001 | 
|----------- |  | ------ |  | ---- | 
|            |  |        |  |      | 
|Investments |  | $1,336 |  | $684 | 
|            | 



|At December  31,  2002,  the quoted  market
value of the  investments  was $1.7  million (2001 - $.7 million).
|--------------------------------------------------------------------------------------------------------------



|7. Demand Loan:
|---------------



|The demand  loan bears  interest at prime,  is
repayable  in monthly  principal  payments  of $27,406  plus  interest  and matures on
May 15,  2003.  The loan is  secured by a general  security  agreement  covering  all
assets of the  Company,  excluding oil and gas assets in Alberta.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has a $2,500,000  operating  line of
credit which bears  interest at  prime plus 1.5%. These funds are available for general
corporate  purposes.  At  December 31, 2002, the unused portion of the bank line was $1.1
million.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8. Obligations under Capital Lease:
|-----------------------------------



|The obligation under capital lease bears
interest at 5.4%, is due in 2006 and is  secured by leased equipment. Estimated principal
repayments on the capital lease  are as  follows:  2003 -  $51,000,  2004 -  $54,000,
2005 - $57,000  and 2006 -  $11,000.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|9. Future Site Reclamation Costs:
|---------------------------------



|The  Company  has  accrued  estimated  future
site  reclamation  costs  for the  following properties:
|------------------------------------------------------------------------------------------------------

|            |  |   | 2002  |   | 2001 
|----------- |  | - | ----- | - | -----
|Seabee      |  | $ | 978   | $ | 918  
|Madsen      |  |   | 657   |   | 657  
|Tartan Lake |  |   | 1,000 |   | 1,000
|           
|            |  | $ | 2,635 | $ | 2,575
|           



|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 property in the amount  of $657,736 and has provided  certain  investments  as
security for  reclamation  related to the Seabee property in the amount of $767,100.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company estimates total future reclamation
costs on its mining properties to  be $3,000,000.
|------------------------------------------------------------------------------------------------



|10. 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.
|---------------------------------------------------------------------------------------------------------------------------------------------------



|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 Directors of the Company 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
Directors  of the  Company at the time of creation of such series.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ISSUED AND OUTSTANDING COMMON SHARES
|------------------------------------

|                                        |  | 2002       |  | 2001 |        | 2000
|--------------------------------------- |  | ---------- |  | ---- | ------ | ----
|                                        |  | Number     |  |      | Amount |     
|                                        |  |            |  |      |        |     
|Beginning of year                       |  | 43,053,853 |  | $    | 18,362 |     
|ESPP
      (a)                          |  | 227,931    |  |      | 121    |     
|Exercise
      of stock options (b)     |  | 90,000     |  |      | 74     |     
|Purchase
      of royalty interest (c)  |  | -          |  |      | -      |     
|Option
      agreement (d)              |  | -          |  |      | -      |     
|Issue
      costs                       |  | -          |  |      | -      |     
|Reduction
      in stated capital (e)   |  | -          |  |      | -      |     
|Flow-through
      shares (f)           |  | -          |  |      | -      |     
|Issue
      costs                       |  | -          |  |      | -      |     
|Issued
      for mineral properties (g) |  | 75,000     |  |      | 68     |     
|Private
      placement (h)             |  | 5,000,000  |  |      | 5,000  |     
|Issue
      costs                       |  | -          |  |      | (509)  |     
|Exercise
      of warrants (h)          |  | 12,693     |  |      | 13     |     
|Flow-through
      shares (i)           |  | 1,000,000  |  |      | 1,500  |     
|Issue
      costs                       |  | -          |  |      | (104)  |     
|                                       
|End of year                             |  | 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  2002,  the  Company  issued  227,931  common  shares
(2001-328,987;  2000-245,567) for $121,000 (2001-$176,000; 2000-$211,000) pursuant to
this plan.  The Company has reserved for issuance  1,250,000  common shares pursuant to
this  plan of which 996,220 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. Options granted expire 10 years from the date
of the grant of  the option.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|For options  outstanding at December 31, 2002
and 2001 weighted average exercise  prices are as follows:
|--------------------------------------------------------------------------------------------------------

|                  |  | 2002
      Options |  |   | Average
      Price |  | 2001
      Options |  |   | Average
      Price
|----------------- |  | ------------------ |  | - | ------------------- |  | ------------------ |  | - | -------------------
|Beginning of year |  | 2,260,000          |  | $ | 1.11                |  | 1,600,000          |  | $ | 1.35               
|Options granted   |  | 260,000            |  |   | .99                 |  | 760,000            |  |   | .53                
|Options exercised |  | (90,000)           |  |   | .82                 |  | -                  |  |   | -                  
|Options cancelled |  | -                  |  |   | -                   |  | (100,000)          |  |   | .60                
|                 
|End of year       |  | 2,430,000          |  | $ | 1.11                |  | 2,260,000          |  | $ | 1.11               
|                 
|Exercisable       |  | 2,430,000          |  | $ | 1.11                |  | 2,250,000          |  | $ | 1.11               
|                 



|For options  outstanding at December 31, 2002
the range of exercise prices,  the  weighted average exercise price and the weighted
average  remaining  contractual  life are as follows:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Options Price
      Per Share |  | Number    |  |  | Weighted Average
      Exercise Price |      | Weighted Average
      Remaining Life
|----------------------------- |  | --------- |  |  | ------------------------------------- | ---- | -------------------------------------
|$0.53-$0.90                   |  | 1,086,000 |  |  | $                                     | 0.61 |                                      
|$1.30-$1.32                   |  | 1,014,000 |  |  |                                       | 1.31 |                                      
|$1.71-$3.05                   |  | 330,000   |  |  |                                       | 2.13 |                                      
|                             
|                              |  | 2,430,000 |  |  | $                                     | 1.11 |                                      
|                             



|Effective  January 1, 2002, the Company adopted
new CICA Handbook  Section 3870,  Stock-based Compensation and other Stock-based
Payments. This section requires  that a fair value  based  method of  accounting
be applied to direct  awards of  stock to employees.  This  standard  allows the Company
to continue its existing  policy,  the intrinsic value based method,  of recording no
compensation cost on  the grant of stock  options to  employees.  However,  pro forma
information  is  required which reflects the difference between  compensation cost
recorded under  the  intrinsic  based method and costs that would have been  recorded
under the  fair value based method.  The fair value of stock options issued in the year
was  estimated  using the  Black-Scholes  option pricing model with  assumptions of 5
year weighted average  expected option life, no expected  forfeiture rate, 72.8%
volatility  and interest  rates ranging from 4.39% to 4.90%.  For the year ended
December 31, 2002, the Companys pro forma expense attributable to stock options  was
$52,000  and pro  forma  net loss  for the year  ended  December  31,  2002
incorporating  the fair value of stock  options  was  $1,561,000  with basic and  diluted
earnings per share of $0.03.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|(c) PURCHASE OF ROYALTY INTEREST
|--------------------------------



|By  agreement  dated June 24,  1999  between
the  Company  and Metal  Royalties  Corporation  (Metal  Royalties),  Claude
purchased a 1.35% net smelter royalty  from Metal  Royalties for  $1,100,025.  The
purchase  price was satisfied by the  issuance to Metal Royalties of 628,586 special
warrants each convertible, for no  additional consideration upon exercise, into one
common share of the Company. As  at December 31, 2000, 628,586 common shares were issued.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) OPTION AGREEMENT
|--------------------



|Pursuant to the  agreement  with Placer Dome
(CLA)  Limited (See Note 5), Placer  subscribed for 1,000,000 common shares at an issue
price of $.75 per share.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) REDUCTION IN STATED CAPITAL
|-------------------------------



|At the annual meeting of shareholders on May 23,
2001, a special  resolution was  passed reducing the stated capital of the Company by $40
million.
|---------------------------------------------------------------------------------------------------------------------------------------------------



|(f) FLOW-THROUGH SHARES
|-----------------------



|During 2001,  the Company  entered into a
flow-through  share  agreement for the  issue of  2,500,000  common  shares at a price of
$.55 per share for proceeds of  $1,375,000. The Company was required to expend $1,375,000
in qualifying Canadian  Exploration Expenses as defined in the Income Tax Act (Canada)
prior to December  31, 2002.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(g)  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).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(h) 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.  As at December 31, 2002,  there  were 2,550,770
warrants outstanding.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(i) 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  must  expend  $1,500,000  in
qualifying  Canadian  Exploration Expenses as defined in the Income Tax Act (Canada)
prior to December  31, 2003.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|11. INTEREST AND OTHER:
|-----------------------

|                                      |  |   | 2002  |  |   | 2001  |  |   | 2000 
|------------------------------------- |  | - | ----- |  | - | ----- |  | - | -----
|Interest expense                      |  | $ | 102   |  | $ | 176   |  | $ | 301  
|Less: interest and
      other income |  |   | (186) |  |   | (206) |  |   | (134)
|                                     
|Interest and other                    |  | $ | (84)  |  | $ | (30)  |  | $ | 167  
|                                     



| |  | 
| |  | 



---





|12. INCOME TAXES:
|-----------------



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

|                                                          |  |   | 2002     |  |   | 2001    
|--------------------------------------------------------- |  | - | -------- |  | - | --------
|Future income tax assets:                                 |  |   |          |  |   |         
|Mineral properties                                        |  | $ | 35,693   |  | $ | 36,009  
|Non-capital
      loss carryforwards                      |  |   | 8,892    |  |   | 8,485   
|Provision for
      reclamation                           |  |   | 1,186    |  |   | 1,159   
|Share issue
      costs                                   |  |   | 330      |  |   | 359     
|                                                         
|Future income
      tax assets before valuation allowance |  |   | 46,101   |  |   | 46,012  
|Valuation allowance                                       |  |   | (46,101) |  |   | (46,012)
|                                                         
|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:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                   |  |   | 2002    |  |   | 2001    |  |   | 2000    
|-------------------------------------------------- |  | - | ------- |  | - | ------- |  | - | --------
|                                                   |  |   |         |  |   |         |  |   |         
|Loss before income
      taxes                     |  | $ | (1,478) |  | $ | (2,157) |  | $ | (48,691)
|Combined federal
      and provincial tax rate     |  |   | 45%     |  |   | 45%     |  |   | 45%     
|Expected
      tax recovery                        |  |   | (665)   |  |   | (971)   |  |   | (21,911)
|Increase (decrease)
      in taxes resulting from: |  |   |         |  |   |         |  |   |         
|Crown
      royalties                              |  |   | 787     |  |   | 1,202   |  |   | 1,132   
|Alberta
      Royalty Tax Credit                   |  |   | (198)   |  |   | (279)   |  |   | (263)   
|Resource
      allowance                           |  |   | (395)   |  |   | (1,088) |  |   | (1,289  
|Valuation
      allowance                          |  |   | 471     |  |   | 1,136   |  |   | 22,331  
|                                                   |  |   | -       |  |   | -       |  |   | -       
|Large
      corporations tax                       |  |   | 31      |  |   | 26      |  |   | 32      
|                                                  
|Provision
      for income taxes                   |  | $ | 31      |  | $ | 26      |  | $ | 32      
|                                                  



|At December 31, 2002, the Company and its
subsidiary  had operating  losses for  income tax purposes  approximating  $19,800,000,
which are  available to reduce  taxes in future years and expire over the period to the
year 2009.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|13. PER SHARE AMOUNTS:
|----------------------



|Basic loss per common  share is  computed  by
dividing  net loss  applicable  to  common shares by the weighted 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, 2002 of 46,919,331 shares (2001 -
40,622,346 shares; 2000 - 38,963,975 shares).
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                |  |   | 2002    |  |   | 2001    |  |   | 2000    
|----------------------------------------------- |  | - | ------- |  | - | ------- |  | - | --------
|Basic loss per share                            |  |   |         |  |   |         |  |   |         
|Net
      loss available to common shareholders |  | $ | (1,509) |  | $ | (2,183) |  | $ | (48,723)
|Weighted
      average number of common         |  |   |         |  |   |         |  |   |         
|shares
      outstanding                        |  |   | 46,919  |  |   | 40,622  |  |   | 38,964  
|                                               
|                                                |  |   |         |  |   |         |  |   |         
|                                                |  | $ | (0.03)  |  | $ | (0.05)  |  | $ | (1.25)  
|                                               
|                                                |  |   |         |  |   |         |  |   |         
|Diluted loss per
      share                    |  |   |         |  |   |         |  |   |         
|Net
      loss available to common shareholders |  | $ | (1,509) |  | $ | (2,183) |  | $ | (48,723)
|Weighted
      average number of common         |  |   |         |  |   |         |  |   |         
|shares
      outstanding                        |  |   | 46,919  |  |   | 40,622  |  |   | 38,964  
|                                               
|                                                |  |   |         |  |   |         |  |   |         
|                                                |  | $ | (0.03)  |  | $ | (0.05)  |  | $ | (1.25)  
|                                               



| |  | 
| |  | 



---





|Excluded from the computation of diluted loss
per share were:
|-------------------------------------------------------------



|i) Options outstanding of 1,344,000 common
shares with an average exercise price  of $1.51  (2001 -  1,364,000  @ $1.49;  2000 -
1,414,000 @ $1.49) as the options  exercise  prices were  greater than the average
market  price of the  Companys  common shares.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ii) Options  outstanding  of 1,086,000  common
shares with an average  exercise  price of $0.61  (2001 -  896,000  @ $0.53;  2000 -
186,000 @ $0.55) as they were  anti-dilutive.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|iii) Warrants  outstanding  for  2,500,000
common shares with a  $1.25  exercise  price as the exercise price was greater than the
average market  price of the Companys  common  shares;  and,  warrants  outstanding  for
50,770  common shares with a $1.00 exercise price as they were anti-dilutive.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|14. 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 and 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  positions  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, 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,  2001,  the  Company  had  outstanding  forward  gold
contracts  related to 2002  production  of 2,250  ounces at an  average  price of US $292
per  ounce  with a  market value gain  inherent in these  contracts  of US $34,000.  At
December 31,  2000, the Company had no outstanding gold derivative contracts.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.  At December 31,  2001, the Company had  outstanding  foreign
exchange  contracts to sell US $5.3  million at an average  exchange rate of 1.5844
CDN$/US$ with a market value loss  inherent in these contracts of US $27,000. At December
31, 2000, the Company had  no outstanding foreign currency derivative contracts.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|15. COMMITMENTS:
|----------------



|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.  To December  31,  2002,  the  Company has
spent  approximately  $3.4 million on this property.The  Company has  earned the right to
acquire  35% of the  property,  but has not  exercised  that  option at December 31, 2002.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|To satisfy its commitments  pursuant to the
issuance of flow-through shares, the  Company is required to incur $1.5 million of
qualifying exploration expenditures  for tax purposes on or before December 31, 2003.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|16. RECENTLY ISSUED STANDARDS NOT YET
IMPLEMENTED:
|--------------------------------------------------



|i) Hedging relationships:
|-------------------------



|Effective  January 1, 2004,  the Company will
adopt the new Canadian  Accounting  Guideline,  Hedging  Relationships,  that
establishes  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 at the  inception  of the hedge  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  Company  does not believe that the adoption of this  accounting  guideline
will  have a material impact on its consolidated financial statements.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ii) Impairment of assets:
|-------------------------



|In  December  2002,  the  CICA  issued  Handbook
Section  3063,  Impairment  of  Long-Lived  Assets.  Section 3063  establishes  standards
for the  recognition,  measurement and disclosure of the impairment of long-lived  assets
held for use.  Under the new  standard,  an  impairment  loss is  recognized  when the
carrying  amount of an asset  held for use  exceeds  the sum of  undiscounted  cash
flows  expected from its use and eventual  disposition.  An impairment loss is measured
as the amount by which the assets  carrying amount exceeds its fair value.  The  new
accounting  recommendations  contained  in Section  3063 are required to be  applied for
fiscal years  beginning on or after April 1, 2003.  The Company does  not  believe  that
the  adoption of these  recommendations  will have a material  impact on its consolidated
financial statements.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|17. SUBSEQUENT EVENT:
|---------------------



|On January 31,  2003,  the Company  completed  a
private  placement  offering of  2,500,000  units,  each unit  consisting of one common
share and one half of one  common share purchase warrant,  at a price of $1.50 per unit,
for gross proceeds  of  $3,750,000.  Each whole  purchase  warrant  will  entitle the
holder,  upon  exercise at any time up to and including  January 31, 2004,  and upon
payment of  $1.85, to subscribe for one common share.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|
|



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



|19. 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
|-----------------

|                                                             |  |   | 2002    |  |   | 2001   
|------------------------------------------------------------ |  | - | ------- |  | - | -------
|                                                             |  |   |         |  |   |        
|Mineral Properties
       under Canadian GAAP               |  | $ | 17,208  |  | $ | 13,834 
|Cumulative
      exploration expenditures expensed           |  |   |         |  |   |        
|under
      U.S. GAAP (ii)                                   |  |   | (1,504) |  |   | (85)   
|Cumulative
      depreciation and depletion adjustment (iii) |  |   | 955     |  |   | 617    
|Cumulative
      write-down adjustment (iii)                 |  |   | (1,825) |  |   | (1,825)
|                                                            
|Mineral Properties
       under U.S. GAAP                   |  |   | 14,834  |  |   | 12,541 
|                                                            
|                                                             |  |   |         |  |   |        
|Investments 
      under Canadian GAAP                      |  |   | 1,336   |  |   | 684    



| |  | 
| |  | 



---





|                                                             |  |   | 2002     |  |   | 2001    
|------------------------------------------------------------ |  | - | -------- |  | - | --------
|                                                             |  |   |          |  |   |         
|Unrealized
      gain on available-for-sale securities (v)   |  |   | 409      |  |   | 44      
|                                                            
|Investments 
      under U.S. GAAP                          |  |   | 1,745    |  |   | 728     
|                                                            
|                                                             |  |   |          |  |   |         
|                                                             |  |   |          |  |   |         
|Payables and accrued
      liabilities  under Canadian GAAP |  |   | 1,940    |  |   | 2,114   
|Cumulative
      unrealized loss (gain)                      |  |   |          |  |   |         
|on
      derivative instruments (viii)                       |  |   | 440      |  |   | (11)    
|                                                            
|Payables and accrued
      liabilities  under U.S. GAAP     |  | $ | 2,380    |  | $ | 2,103   
|                                                            
|                                                             |  |   |          |  |   |         
|Shareholders
      equity                                   |  |   |          |  |   |         
|Share
      capital  under Canadian GAAP                    |  | $ | 24,525   |  | $ | 18,362  
|Reduction
      of stated capital (vii)                      |  |   | 55,000   |  |   | 55,000  
|Cumulative
      stock compensation costs (vi)               |  |   | 374      |  |   | 374     
|Share capital 
      under U.S. GAAP                        |  |   | 79,899   |  |   | 73,736  
|                                                            
|                                                             |  |   |          |  |   |         
|Retained earnings
       under Canadian GAAP                |  |   | 3,672    |  |   | 5,181   
|Reduction
      of stated capital (vii)                      |  |   | (55,000) |  |   | (55,000)
|Cumulative
      exploration expenses (ii)                   |  |   | (1,504)  |  |   | (85)    
|Cumulative
      depreciation and depletion                  |  |   |          |  |   |         
|adjustment
      (iii)                                       |  |   | 955      |  |   | 617     
|Cumulative
      write-down adjustment (iii)                 |  |   | (1,825)  |  |   | (1,825) 
|Cumulative
      unrealized gain (loss) on                   |  |   |          |  |   |         
|derivative
      instruments (viii)                          |  |   | (440)    |  |   | 11      
|Cumulative
      stock compensation costs (vi)               |  |   | (374)    |  |   | (374)   
|                                                            
|Deficit  under
      U.S. GAAP                              |  |   | (54,516) |  |   | (51,475)
|                                                             |  |   |          |  |   |         
|Other comprehensive
      income                             |  |   |          |  |   |         
|Unrealized
      gain on available-for-sale securities (v)   |  |   | 409      |  |   | 44      
|                                                            
|                                                             |  |   |          |  |   |         
|Shareholders
      equity  under U.S. GAAP                 |  | $ | 25,792   |  | $ | 22,305  
|                                                            

|b) Statements of Loss
|---------------------

|                                                  |  |   | 2002    |  |   | 2001    |  |   | 2000    
|------------------------------------------------- |  | - | ------- |  | - | ------- |  | - | --------
|                                                  |  |   |         |  |   |         |  |   |         
|Net loss - under
      Canadian GAAP              |  | $ | (1,509) |  | $ | (2,183) |  | $ | (48,723)
|Exploration
      expenditures (ii)               |  |   | (1,419) |  |   | (85)    |  |   | (3,447) 
|Write-down
      of mineral properties (iii)      |  |   | -       |  |   | -       |  |   | 26,604  
|Depreciation
      and depletion adjustment (iii) |  |   | 338     |  |   | 617     |  |   | -       
|Stock
      compensation costs (vi)               |  |   | -       |  |   | (57)    |  |   | (49)    
|Derivative
      instruments (viii)               |  |   | (451)   |  |   | 11      |  |   | -       
|                                                 
|Net loss - under
      U.S. GAAP                  |  |   | (3,041) |  |   | (1,697) |  |   | (25,615)
|Available-for-sale
      securities (v)           |  |   | 365     |  |   | (452)   |  |   | 794     
|                                                 
|Comprehensive loss-under
      U.S. GAAP          |  |   | (2,676) |  |   | (2,149) |  |   | (24,821)
|Net loss per share-under
      U.S. GAAP          |  |   |         |  |   |         |  |   |         
|Basic
      and diluted                           |  | $ | (0.06)  |  | $ | (0.04)  |  | $ | (0.66)  
|                                                 



|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, proceeds  of $1.5 million from a 2002 flow-through share issue
($1.375 million from a 2001  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.  Under
Canadian GAAP, the impairment loss is  the  difference  between  the  carrying  value of
the asset and its  recoverable  amount  calculated on an undiscounted  estimated  future
cash flow basis.  Under  U.S. GAAP, if the 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 has been  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.  The resulting  difference in the 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
Canadian GAAP, the impairment loss is  the  difference  between  the  carrying  value of
the asset and its  recoverable  amount  calculated on an undiscounted  estimated  future
cash flow basis.  Under  U.S. GAAP, the impairment loss is calculated as the amount by
which the carrying  value of the asset exceeds the present value of estimated  future net
cash flows  applying a discount rate of 10%. Under both Canadian and U.S.  GAAP,
impairment  tests are calculated using only proved producing  reserves with oil, liquids
and  gas prices at the year end date.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|v) Available-for-Sale Securities
|--------------------------------



|Under  Canadian  GAAP,  portfolio  investments
are accounted for using the cost  method. Under U.S. GAAP, portfolio 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
|----------------------------



|U.S. GAAP requires that all transactions in
which services are the consideration  received for the issuance of equity  instruments
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.  This
fair value was  estimated using the  Black-Scholes  option pricing model with assumptions
of a 5  to 10 year expected term, 54.7% to 57.4% volatility, no expected forfeiture rate
and interest rates ranging from 4.66% to 5.99%.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|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.
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|viii) Accounting for Derivative Instruments
and Hedging Activities
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|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.  Under  U.S. GAAP, the derivatives  have not been documented
as hedges and  accordingly,  gains and losses have been recorded in earnings.
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| |  | 
| |  | 



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|ix) New Accounting Pronouncements
|---------------------------------



|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  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 Company is required and plans to adopt the provisions of Statement  143 on a
prospective  basis  beginning  January 1, 2003. The Company has not yet  estimated the
impact of adopting this standard.
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|In October 2001, the FASB issued  Statement 144
Accounting for the Impairment or  Disposal of  Long-Lived  Assets,  which  retains the
fundamental  provisions of  Statement  121 for  recognizing  and measuring  impairment
losses of long-lived  assets  other than  goodwill.  Statement  144 also  broadens the
definition  of  discontinued  operations to include all distinguishable  components of an
equity  that will be eliminated from ongoing operations. This Statement is effective for
fiscal years commencing January 1, 2002, to be applied  prospectively.  Adoption  of this
standard did not result in any  differences  between  Canadian and U.S.  GAAP. In
December  2002,  the CICA approved new standards for the impairment and  disposal of
long-lived  assets that are  substantially  equivalent  to the U.S.  standards.  The
Company  will adopt  these  standards  for  Canadian  GAAP on a  prospective basis
beginning January 1, 2003.
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