##### 



EXHIBIT 1
 Claude Resources Inc.
 Annual Information Form
 March 31, 2007




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Table of Contents
 Claude Resources Inc. (Claude or the Company)  Annual Information Form  March 31, 2007
 PageStatement Regarding Forward-Looking Information
    
    
    4Glossary of Terms
    
    
    5Item 1: Corporate Structure1.1 Name, Address and Incorporation
    
    
    121.2 Subsidiary Corporations
    
    
    12Item 2: General Development of the Business2.1 Recent History
    
    
    12Item 3: Description of the Companys Business3.1 General
    
    
    133.2 Risk Factors
    
    
    143.3 Mineral Properties
    
    
    193.4 Statement of Reserves Data and Other Oil and Natural Gas Information
    
    
    42Item 4: Dividends
    
    
    58Item 5: Description of Capital Structure5.1 General Description of Capital Structure
    
    
    58Item 6: Market for Securities6.1 Trading Price and Volume
    
    
    58Item 7: Directors and Officers7.1 Name, Occupation and Security Holdings
    
    
    59Item 8: Transfer Agent and Registrar
    
    
    60Item 9: Material Contracts
    
    
    60Item 10: Interests of Experts10.1 Names of Experts
    
    
    6010.2 Interests of Experts
    
    
    60Item 11: Audit Committee
    
    
    60APPENDIX A            Report on Reserves DataAPPENDIX B            Report of Management and Directors on Reserves Data and Other InformationAPPENDIX C            Audit Committee Disclosure




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STATEMENT REGARDING FORWARD-LOOKING INFORMATION
   METRIC EQUIVALENTS
  To Convert from Metric
    
    To Imperial
    
    Multiply byHectares
    
    Acres
    
    
    2.471Metres
    
    Feet (ft.)
    
    
    3.281Kilometres (km)
    
    Miles
    
    
    0.621Tonnes
    
    Tons (2000 pounds)
    
    
    1.102Grams/tonne
    
    Ounces (troy/ton)
    
    
    0.029
 4




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GLOSSARY OF TERMS
 ARTC
 Alteration 
 Amphibolite
 Arsenopyrite
 Assaying
 Autoclave 
 Bbls 
 BCF
 BOPD
 Batholith
 Boudinage
 BQ Drill
 Brecciated
 Bulk Sample
 Carbon-in-pulp
 Care and Maintenance Basis
 Carried Interest
 Chalcopyrite
 Clastic
 Core Samples
 Cross-cut
 5




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Cut-off
Grade
 Cut Value
 Developed or Development
 Diamond Drilling
 Dip
 Disposition
 Disseminated
 Dore
 Drift
 Dry Well
 Electrowinning
 Environmental Baseline Study
 Epithermal
 Exploration
 Exploration Wells
 Face
 Facies
 Fault
 Feasibility Study
 Felsic 
 Fire Assay
 6




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Footwall
 Fracture
 Fracture-controlled
 Gabbro
 Geochemistry
 Geophysical Survey
 Gneiss
 Grade
 Gross
 Gross Reserves
 Head Grade
 Highwall
 Hydrothermal
 Hydrothermal Alteration
 ICA  Investment Canada Act (Canada).
 Igneous
 Indicated Mineral Resource 
 Inferred Mineral Resource 
 Intrusion; Intrusive
 ITA  Income Tax Act (Canada).
 7




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Lens
 LT
 Mafic
 MCF
 MLT
 MMCF
 MSTB
 Mesothermal
 Measured
Mineral Resource
 Metamorphosed Rocks
 Metallurgy
 Metallurgical Tests
 Mineral
 Mineralization
 Mineral Reserve
 Mineral Resource
 Muck
 Muskeg
 Natural Gas Liquids or NGLs
 Net Profit Interest
 8




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Net Smelter Return Royalty/ NSR Royalty 
 Pillar
 Plunge
 Porphyry
 Prefeasibility Study
 Probable Mineral Reserve 
 Proven Mineral Reserve 
 Pulp
 Pyrite 2
 Pyrrhotite
 Qualified Person 
 Quartz
 Quartz Monzonite
 Raise
 Recovery Rate
 Refractory
 Resource
 9




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Reverse Circulation Drilling (RC)
 Roasting
 Sericite
 Shear Zone
 Showing
 Shrinkage Stoping
 Silification
 Sill
 Specific Gravity
 Splay
 STB
 Stope
 Stratigraphy
 Supergene Effects
 Synform
 Tailings Pond
 Tonne
 Tourmaline
 Trenching
 Undeveloped
Acreage
 Unitized
 Vein
 Volcanics
 10




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Waste
 Waterflood
 Weighted Average Exercise Price
 Weighted Average Remaining Life
 Working
interest or WI
 Working
Interest Reserves
 11




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Item 1 Corporate Structure
  Canada Business Corporations Act
    nd th
   Item 2 General Development of the Business
    12




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Item 3 Description of the Companys Business
        13




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The Company is Involved in the Resource Industry which has Certain Inherent Exploration and
Operating Risks
   Non-Operator Status of Alberta Oil and Natural Gas Properties
  14




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Persistent Low Gold Prices Could Cause Mine Operations to be Suspended or Shutdown and Negatively
Affect the Companys Profitability
   1.
    
    Reduce production revenues as a result of cutbacks caused by the cessation of
mining operations involving deposits or portions of deposits that have become
uneconomic at the prevailing price of gold;2.
    
    Cause the cessation 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.
   Fluctuations in the U.S. Dollar vs Canadian Dollar Exchange Rate Could Negatively Impact Operating
Results
  Unfavorable Government Regulatory Changes may Cause Cessation of Mining Operations and Exploration
Activities
  15




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Stricter Government Environmental Policies may Materially Affect Operating Results and/or Delay
Projects
   Imprecise Ore Reserves and Ore Grade Estimates may Negatively Impact Gold Production and Operating
Profitability
  Inability to Raise Required Funding Could Cause Deferral of Projects and/or Dilution of Property
Interests
    16




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Negative Market Response to Potential Shareholder Dilution Could Impact Share Price and New Equity
Issues
  Industry Competition may Hinder Corporate Growth
  Extreme and Persistent Weather Conditions could cause Operating and Exploration Difficulties
  Title to Company Properties could be Challenged with Potential Loss of Ownership
   Personnel Risk
  17




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Uninsured Risks could Negatively Impact Profitability
  Issuance of Flow-Through Securities and the Potential Liabilities Associated with the Failure to
Incur Defined Exploration Expenditures within a Certain Time Frame
      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
  18




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Conflicts of Interest
    CLAUDE ASSET LOCATIONS
 
  Seabee Mine
  19




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SEABEE PROPERTY
 
 SEABEE AREA
 Property Description and Access
  
 20




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Property Royalties
   a)
    21




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b)
    c)
     Restricted Promissory Note Schedule
 2006
    
    
    2005
    
    
    2004Balance, beginning of year
    
    $
    20,982
    
    
    $
    6,982
    
    
    $
    Additions
    
    
    35,000
    
    
    
    14,000
    
    
    
    6,982Balance, end of year
    
    $
    55,982
    
    
    $
    20,982
    
    
    $
    6,982
 22




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Royalty Obligation Schedule
 2006
    
    
    2005
    
    
    2004Balance, beginning of year
    
    $
    21,112
    
    
    $
    7,112
    
    
    $
    Additions
    
    
    35,000
    
    
    
    14,000
    
    
    
    7,112Balance, end of year
    
    $
    56,112
    
    
    $
    21,112
    
    
    $
    7,112
 History
     Regional and Property Geology
   23




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Mine Details
       24




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Shrinkage
stoping in a large vertical ore body.
   25




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Seabee Mine Operating Data
 2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Ore Mined
    
    
    193,700
    
    
    
    228,900
    
    
    
    144,400
    
    
    
    189,200
    
    
    
    211,900Ore Milled (tonnes)
    
    
    246,000
    
    
    
    236,400
    
    
    
    186,900
    
    
    
    208,900
    
    
    
    201,900Grade processed (grams per tonne)
    
    
    6.16
    
    
    
    6.32
    
    
    
    7.15
    
    
    
    7.95
    
    
    
    6.59Mill Recoveries (%)
    
    
    93.6
    
    
    
    92.9
    
    
    
    95.2
    
    
    
    94.7
    
    
    
    93.7Gold Produced (ounces)
    
    
    46,300
    
    
    
    44,600
    
    
    
    40,900
    
    
    
    50,600
    
    
    
    40,100Gold Sold (ounces)
    
    
    47,400
    
    
    
    42,200
    
    
    
    41,200
    
    
    
    50,800
    
    
    
    41,500Cash Cost (US$/ounce)*
    
    $
    396
    
    
    $
    358
    
    
    $
    297
    
    
    $
    253
    
    
    $
    246
 
 *
    
    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, depletion and accretion.
When evaluating this profitability measure, investors should be aware that no provision has been
made for exploration or development costs. A reconciliation of the cash costs in the above table
is provided below: Consolidated Total Cash Costs
Per Gold Ounce Sold
 Years ended December 31,
 2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002U.S. DollarDirect mining cost
    
    $
    396
    
    
    $
    358
    
    
    $
    297
    
    
    $
    253
    
    
    $
    246Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash operating costs
    
    $
    396
    
    
    $
    358
    
    
    $
    297
    
    
    $
    253
    
    
    $
    246Less: Royalties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total cash costs
    
    $
    396
    
    
    $
    358
    
    
    $
    297
    
    
    $
    253
    
    
    $
    246Gold ounces sold
    
    
    47,400
    
    
    
    42,200
    
    
    
    41,200
    
    
    
    50,800
    
    
    
    41,500Mine operating costs(U.S. $ millions)
    
    $
    18.8
    
    
    $
    15.1
    
    
    $
    12.2
    
    
    $
    12.8
    
    
    $
    10.3(CDN $ millions)
    
    $
    21.3
    
    
    $
    18.3
    
    
    $
    15.9
    
    
    $
    18.0
    
    
    $
    16.1
   Seabee mine  Currie Rose Property
  26




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Geology
  Property History
        27




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Recent Exploration Results
  Seabee Mine Reserves
   28




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29




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##### 



Unbroken Ore Reserves as at December 31, 2006
 Tonnes
    
    
    g/t
    
    
    OuncesSeabee SectorProven Mineral Reserves
    
    
    341,500
    
    
    
    7.29
    
    
    
    80,000Probable Mineral Reserves
    
    
    158,300
    
    
    
    6.96
    
    
    
    35,400Currie Rose SectorProven Mineral Reserves
    
    
    38,000
    
    
    
    8.05
    
    
    
    9,800Probable Mineral Reserves
    
    
    17,500
    
    
    
    7.97
    
    
    
    4,500Less: 3% stope loss (both sectors)
    
    
    (17,000
    )
    
    
    7.26
    
    
    
    (4,000
    )Subtotal  Unbroken Reserves
    
    
    538,300
    
    
    
    7.26
    
    
    
    125,700Broken Ore Reserves (Development muck)Seabee Sector
    
    
    41,000
    
    
    
    6.27
    
    
    
    8,300Currie Rose Sector
    
    
    17,100
    
    
    
    5.60
    
    
    
    3,100Subtotal   Broken Ore Reserves
    
    
    58,100
    
    
    
    6.10
    
    
    
    11,400Surface stockpile
    
    
    500
    
    
    
    6.10
    
    
    
    100Low Grade Broken Ore ReservesUnderground
    
    
    78,400
    
    
    
    3.03
    
    
    
    7,600Surface
    
    
    17,200
    
    
    
    3.34
    
    
    
    1,900Subtotal  Low Grade Broken Ore Reserves
    
    
    95,600
    
    
    
    3.09
    
    
    
    9,500Total Proven, Probable and Broken Reserves (diluted)
    
    
    692,500
    
    
    
    6.59
    
    
    
    146,700
  (a)
    
    A block cut-off grade of 3.65 grams per tonne is applied to resources. This is the
break-even grade at a gold price of U.S.$500;(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.
  Seabee Mine  Mineable Reserves and Mineral Resources
 2006
    
    
    2005
    
    
    2004Tonnes
    
    
    g/tonne
    
    
    Ounces
    
    
    Tonnes
    
    
    g/tonne
    
    
    Ounces
    
    
    Tonnes
    
    
    g/tonne
    
    
    OuncesSeabee MineProven
    
    
    520,900
    
    
    
    6.44
    
    
    
    107,900
    
    
    
    395,600
    
    
    
    6.18
    
    
    
    78,600
    
    
    
    400,500
    
    
    
    6.37
    
    
    
    82,000Probable
    
    
    171,600
    
    
    
    7.03
    
    
    
    38,800
    
    
    
    288,800
    
    
    
    7.07
    
    
    
    65,600
    
    
    
    332,200
    
    
    
    7.53
    
    
    
    80,400Total Mineable Reserves
    
    
    692,500
    
    
    
    6.59
    
    
    
    146,700
    
    
    
    684,400
    
    
    
    6.56
    
    
    
    144,200
    
    
    
    732,700
    
    
    
    6.90
    
    
    
    162,400Inferred Mineral Resources
    
    
    1,293,300
    
    
    
    8.96
    
    
    
    372,600
    
    
    
    1,499,700
    
    
    
    8.86
    
    
    
    427,200
    
    
    
    1,406,200
    
    
    
    8.16
    
    
    
    368,900
 Seabee/Currie Rose Future Work Programs
  30




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Santoy Lake Property
   Recent Exploration Results
       31




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Santoy Lake Property Future Work Programs
   Resource Summary, Porky Lake and Santoy Areas
 Indicated
    
    
    g/t
    
    
    Ounces
    
    
    Inferred
    
    
    g/t
    
    
    OuncesPorky West
    
    
    90,000
    
    
    
    7.33
    
    
    
    21,200
    
    
    
    130,000
    
    
    
    5.00
    
    
    
    20,900Porky Main
    
    
    160,000
    
    
    
    7.50
    
    
    
    38,600
    
    
    
    70,000
    
    
    
    10.43
    
    
    
    23,500Santoy 7
    
    
    190,000
    
    
    
    8.42
    
    
    
    51,400
    
    
    
    10,000
    
    
    
    10.00
    
    
    
    3,200Santoy 8 and 8E
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    910,000
    
    
    
    6.10
    
    
    
    178,500TOTALS
    
    
    440,000
    
    
    
    7.86
    
    
    
    111,200
    
    
    
    1,120,000
    
    
    
    6.28
    
    
    
    226,100
 Madsen Properties
       32




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Location and Access
  MADSEN PROPERTIES
 
 
 33




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How Acquired
  Property
    
    Claudes Ownership PercentageMadsen mine
    
    100%Starratt-Olsen
    
    100%Aiken-Russett
    
    100%The property is subject to a 2% net smelter return royalty,to a maximum of $2.0 million, held by previous propertyholders United Reef Limited and Canhorn Mining Corporation.Hagar Option
    
    100%Redaurum
    
    20%, with the right to an additional 5% if Goldcorpfulfills its exploration expenditure requirements asoutlined in the Redaurum option agreement among Goldcorp,Claude and Sabina.  The additional 5% will be granted toClaude by Sabina in return for Claude waiving its firstright of refusal.  The property is subject to a 0.4% NSR infavour of Redaurum Limited.Buffalo
    
    100%.
 Regional and Property Geology
     34




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History and Previous Work
       th
  35




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Recent Exploration Results
  Planned Exploration
  
    
    De-watering of the Madsen shaft to provide underground access for drilling extensions of
the historic high grade No. 8 zone plus other zones.
    
    Further drilling from surface to pursue historic targets including those developed by
Goldcorp.
  36




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Mine Details
   Tartan Lake Property
   How Acquired
  Location and Access
  37




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TARTAN LAKE PROPERTY LOCATION
 
 Regional and Property Geology
  Exploration History
     38




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Recent Exploration Results
  Amisk-Laural Property
   Location and Access
  AMISK/TARTAN LOCATION
 
 39




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How Acquired
    Regional and Property Geology
   Previous Exploration History
   Recent Exploration Results
  40




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Jojay Property
  Other Mineral Properties
  Sampling and Analysis of Exploration Drill Holes
      41




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relative
 Security of Samples
    Reserves Data
   Data presented in the following tables contains estimates of future net revenue; it should not be
assumed that such estimates represent the fair market value of the reserves. There is no assurance
that the constant and forecast price and cost assumptions will be attained and variances could be
material. There is no guarantee that the estimated reserves presented herein will be recovered.
Actual oil, natural gas and natural gas liquid
reserves may be greater or less than there estimates provided below. Additional information as to
risks involved is presented within the Risk Factor section.
 42




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SUMMARY OF OIL AND GAS RESERVES
AND NET PRESENT VALUES OF FUTURE NET REVENUE
AS OF DECEMBER 31, 2006
CONSTANT PRICES AND COSTS
 Natural GasLight and Medium
    
    
    
    
    
    
    
    
    
    (non-associated &
    
    Natural Gas
    
    Natural GasOil
    
    Heavy Oil
    
    associated)
    
    (solution)
    
    LiquidsGross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    NetReserve Category
    
    (Mbbl)
    
    (Mbbl)
    
    (Mbbl)
    
    (Mbbl)
    
    (MMcf)
    
    (MMcf)
    
    (MMcf)
    
    (MMcf)
    
    (Mbbl)
    
    (Mbbl)Proved Developed
Producing
    
    
    464
    
    
    
    320
    
    
    
    0
    
    
    
    0
    
    
    
    6,134
    
    
    
    3,399
    
    
    
    284
    
    
    
    142
    
    
    
    160
    
    
    
    76Proved Developed
Non-Producing
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Proved Undeveloped
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Total Proved
    
    
    464
    
    
    
    320
    
    
    
    0
    
    
    
    0
    
    
    
    6,134
    
    
    
    3,399
    
    
    
    284
    
    
    
    142
    
    
    
    160
    
    
    
    76Probable
    
    
    251
    
    
    
    191
    
    
    
    0
    
    
    
    0
    
    
    
    1,429
    
    
    
    1,110
    
    
    
    104
    
    
    
    78
    
    
    
    44
    
    
    
    29Total Proved Plus
Probable
    
    
    715
    
    
    
    511
    
    
    
    0
    
    
    
    0
    
    
    
    7,563
    
    
    
    4,509
    
    
    
    388
    
    
    
    220
    
    
    
    204
    
    
    
    105
 constant prices and costs
 Net Present Value of Future Net RevenueBefore Income Taxes Discounted At (% / year)0%
    
    5%
    
    10%
    
    15%
    
    20%Reserves Category
    
    ($ 000)
    
    ($ 000)
    
    ($ 000)
    
    ($ 000)
    
    ($ 000)Proved Producing
    
    
    25,321
    
    
    
    17,072
    
    
    
    12,344
    
    
    
    9,435
    
    
    
    7,539Proved Non-Producing
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Proved Undeveloped
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Total Proved
    
    
    25,321
    
    
    
    17,072
    
    
    
    12,344
    
    
    
    9,435
    
    
    
    7,539Total Probable
    
    
    12,844
    
    
    
    6,456
    
    
    
    3,673
    
    
    
    2,286
    
    
    
    1,519Total Proved Plus Probable
    
    
    38,165
    
    
    
    23,528
    
    
    
    16,017
    
    
    
    11,721
    
    
    
    9,058
 Net Present Value of Future Net RevenueAfter Income Taxes Discounted At (% / year)0%
    
    5%
    
    10%
    
    15%
    
    20%Reserves Category
    
    ($ 000)
    
    ($ 000)
    
    ($ 000)
    
    ($ 000)
    
    ($ 000)Proved Producing
    
    
    17,134
    
    
    
    11,541
    
    
    
    8,337
    
    
    
    6,367
    
    
    
    5,084Proved Non-Producing
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Proved Undeveloped
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Total Proved
    
    
    17,134
    
    
    
    11,541
    
    
    
    8,337
    
    
    
    6,367
    
    
    
    5,084Total Probable
    
    
    8,698
    
    
    
    4,366
    
    
    
    2,478
    
    
    
    1,537
    
    
    
    1,016Total Proved Plus Probable
    
    
    25,832
    
    
    
    15,907
    
    
    
    10,815
    
    
    
    7,904
    
    
    
    6,100
 43




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##### 



TOTAL FUTURE NET REVENUE
(UNDISCOUNTED)
AS OF DECEMBER 31, 2006
CONSTANT PRICES AND COSTS
 Well
    
    
    Future net
    
    
    
    
    
    
    Future netOperating
    
    
    Development
    
    
    Abandonment
    
    
    revenue before
    
    
    Income
    
    
    revenue afterRevenue
    
    
    Royalties
    
    
    Costs
    
    
    Costs
    
    
    Costs
    
    
    Income taxes
    
    
    Taxes
    
    
    Income taxes($ 000)
    
    
    ($ 000)
    
    
    ($ 000)
    
    
    ($ 000)
    
    
    ($ 000)
    
    
    ($ 000)
    
    
    ($ 000)
    
    
    ($ 000)Proved Reserves
    
    
    78,691
    
    
    
    27,856
    
    
    
    24,848
    
    
    
    135
    
    
    
    531
    
    
    
    25,321
    
    
    
    8,187
    
    
    
    17,134Proved Plus Probable
    
    
    107,378
    
    
    
    34,137
    
    
    
    34,213
    
    
    
    309
    
    
    
    554
    
    
    
    38,165
    
    
    
    12,333
    
    
    
    25,832
 FUTURE NET REVENUE
BY PRODUCTION GROUP
AS OF DECEMBER 31, 2006
CONSTANT PRICES AND COSTS
 Future Net RevenueBefore Income Taxes(Discounted at10%/Year)Reserves Category
    
    Production Group
    
    (M$)Proved
    
    Light and Medium Crude Oil (including solution gas and associated by-products)
    
    
    4,452Heavy Oil (including solution gas and associated by-products)
    
    
    0Natural Gas (including associated by-products)
    
    
    7,892Coalbed Methane (including associated by-products)
    
    
    0Proved Plus Probable
    
    Light and Medium Crude Oil (including solution gas and associated by-products)
    
    
    6,600Heavy Oil (including solution gas and associated by-products)
    
    
    0Natural Gas (including associated by-products)
    
    
    9,417Coalbed Methane (including associated by-products)
    
    
    0
 44




---



##### 



SUMMARY OF OIL AND GAS RESERVES
AND NET PRESENT VALUES OF FUTURE NET REVENUE
AS OF DECEMBER 31, 2006
FORECAST PRICES AND COSTS
 Natural GasLight and Medium
    
    
    
    
    
    
    
    
    
    (non-associated &
    
    Natural Gas
    
    Natural GasOil
    
    Heavy Oil
    
    associated)
    
    (solution)
    
    LiquidsGross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    NetReserve Category
    
    (Mbbl)
    
    (Mbbl)
    
    (Mbbl)
    
    (Mbbl)
    
    (MMcf)
    
    (MMcf)
    
    (MMcf)
    
    (MMcf)
    
    (Mbbl)
    
    (Mbbl)Proved Developed
Producing
    
    
    439
    
    
    
    296
    
    
    
    0
    
    
    
    0
    
    
    
    6,135
    
    
    
    3,400
    
    
    
    267
    
    
    
    130
    
    
    
    157
    
    
    
    74Proved Developed
Non-Producing
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Proved Undeveloped
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Total Proved
    
    
    439
    
    
    
    296
    
    
    
    0
    
    
    
    0
    
    
    
    6,135
    
    
    
    3,400
    
    
    
    267
    
    
    
    130
    
    
    
    157
    
    
    
    74Probable
    
    
    235
    
    
    
    176
    
    
    
    0
    
    
    
    0
    
    
    
    1,492
    
    
    
    1,166
    
    
    
    95
    
    
    
    72
    
    
    
    43
    
    
    
    29Total Proved Plus
Probable
    
    
    674
    
    
    
    472
    
    
    
    0
    
    
    
    0
    
    
    
    7,627
    
    
    
    4,566
    
    
    
    362
    
    
    
    202
    
    
    
    200
    
    
    
    103
 forecast prices and costs
 Net Present Value of Future Net RevenueBefore Income Taxes Discounted At (% / year)0%
    
    5%
    
    10%
    
    15%
    
    20%Reserves Category
    
    ($ 000)
    
    ($ 000)
    
    ($ 000)
    
    ($ 000)
    
    ($ 000)Proved Producing
    
    
    27,755
    
    
    
    18,441
    
    
    
    13,219
    
    
    
    10,059
    
    
    
    8,024Proved Non-Producing
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Proved Undeveloped
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Total Proved
    
    
    27,755
    
    
    
    18,441
    
    
    
    13,219
    
    
    
    10,059
    
    
    
    8,024Total Probable
    
    
    15,104
    
    
    
    7,217
    
    
    
    3,960
    
    
    
    2,398
    
    
    
    1,561Total Proved Plus Probable
    
    
    42,859
    
    
    
    25,658
    
    
    
    17,179
    
    
    
    12,457
    
    
    
    9,585
 Net Present Value of Future Net RevenueAfter Income Taxes Discounted At (% / year)0%
    
    
    5%
    
    
    10%
    
    
    15%
    
    
    20%Reserves Category
    
    ($ 000)
    
    
    ($ 000)
    
    
    ($ 000)
    
    
    ($ 000)
    
    
    ($ 000)Proved Producing
    
    
    19,699
    
    
    
    13,046
    
    
    
    9,320
    
    
    
    7,067
    
    
    
    5,619Proved Non-Producing
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Proved Undeveloped
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Total Proved
    
    
    19,699
    
    
    
    13,046
    
    
    
    9,320
    
    
    
    7,067
    
    
    
    5,619Total Probable
    
    
    10,786
    
    
    
    5,147
    
    
    
    2,818
    
    
    
    1,701
    
    
    
    1,102Total Proved Plus Probable
    
    
    30,485
    
    
    
    18,193
    
    
    
    12,138
    
    
    
    8,768
    
    
    
    6,721
 45




---



##### 



TOTAL FUTURE NET REVENUE
(UNDISCOUNTED)
AS OF DECEMBER 31, 2006
FORECAST PRICES AND COSTS
 Well
    
    
    Future net
    
    
    
    
    
    
    Future netOperating
    
    
    Development
    
    
    Abandonment
    
    
    revenue before
    
    
    Income
    
    
    revenue afterRevenue
    
    
    Royalties
    
    
    Costs
    
    
    Costs
    
    
    Costs
    
    
    Income taxes
    
    
    Taxes
    
    
    Income taxes($ 000)
    
    
    ($ 000)
    
    
    ($ 000)
    
    
    ($ 000)
    
    
    ($ 000)
    
    
    ($ 000)
    
    
    ($ 000)
    
    
    ($ 000)Proved Reserves
    
    
    93,297
    
    
    
    34,396
    
    
    
    30,225
    
    
    
    152
    
    
    
    768
    
    
    
    27,755
    
    
    
    8,056
    
    
    
    19,699Proved Plus Probable
    
    
    131,078
    
    
    
    42,238
    
    
    
    44,748
    
    
    
    341
    
    
    
    890
    
    
    
    42,860
    
    
    
    12,375
    
    
    
    30,485
 FUTURE NET REVENUE
BY PRODUCTION GROUP
AS OF DECEMBER 31, 2006
FORECAST PRICES AND COSTS
 Future Net RevenueBefore Income Taxes(Discounted at10%/Year)Reserves Category
    
    Production Group
    
    (M$)Proved
    
    Light and Medium Crude Oil (including solution gas and associated by-products)
    
    
    3,626Heavy Oil (including solution gas and associated by-products)
    
    
    0Natural Gas (including associated by-products)
    
    
    9,593Coalbed Methane (including associated by-products)
    
    
    0Proved Plus Probable
    
    Light and Medium Crude Oil (including solution gas and associated by-products)
    
    
    5,634Heavy Oil (including solution gas and associated by-products)
    
    
    0Natural Gas (including associated by-products)
    
    
    11,564Coalbed Methane (including associated by-products)
    
    
    0
 46




---



##### 



Pricing Assumptions
   SUMMARY OF PRICING AND INFLATION ASSUMPTIONS
AS OF DECEMBER 31, 2006
CONSTANT PRICES AND COSTS
 Oil
    
    Natural Gas
    
    LiquidsCromerWTI
    
    Edmonton
    
    Medium
    
    Alberta
    
    PentanesCushing
    
    Par price
    
    29.30
    
    AECO-C
    
    FOB
    
    Butanes
    
    ExchangeOklahoma
    
    400API
    
    API
    
    Spot
    
    Fieldgate
    
    FOB Fieldgate
    
    RateYear
    
    ($US/bbl)
    
    ($Cdn/bbl)
    
    ($Cdn/bbl)
    
    ($Cdn/MMBTU)
    
    (CDN$/bbl)
    
    (CDN$/bbl)
    
    (US$/CDN$)2006
    
    
    61.05
    
    
    
    67.59
    
    
    
    62.45
    
    
    
    6.13
    
    
    
    71.51
    
    
    
    54.00
    
    
    
    0.858
  SUMMARY OF PRICING AND INFLATION ASSUMPTIONS
AS OF DECEMBER 31, 2006
FORECAST PRICES AND COSTS
 OIL
    
    
    
    
    
    LiquidsAlbertaEdmonton
    
    Cromer
    
    AECO-C
    
    PentanesWTI Cushing
    
    Par price
    
    Medium
    
    Spot
    
    FOB
    
    Butanes
    
    
    
    
    
    ExchangeOklahoma
    
    400API
    
    29.30API
    
    ($Cdn /
    
    Fieldgate
    
    FOB Fieldgate
    
    Inflation
    
    RateYear
    
    ($US/bbl)
    
    ($Cdn/bbl)
    
    ($Cdn/bbl)
    
    MMBTU)
    
    (CDN$ / bbl)
    
    (CDN$/bbl)
    
    Rate
    
    (US$/ CDN$)2007(1)
    
    
    65.73
    
    
    
    74.10
    
    
    
    63.72
    
    
    
    7.72
    
    
    
    75.88
    
    
    
    55.23
    
    
    
    5.0
    
    
    
    0.872008
    
    
    68.82
    
    
    
    77.62
    
    
    
    66.75
    
    
    
    8.59
    
    
    
    79.49
    
    
    
    57.85
    
    
    
    4.0
    
    
    
    0.872009
    
    
    62.42
    
    
    
    70.25
    
    
    
    60.41
    
    
    
    7.74
    
    
    
    71.94
    
    
    
    52.36
    
    
    
    3.0
    
    
    
    0.872010
    
    
    58.37
    
    
    
    65.56
    
    
    
    56.38
    
    
    
    7.55
    
    
    
    67.14
    
    
    
    48.87
    
    
    
    2.0
    
    
    
    0.872011
    
    
    55.20
    
    
    
    61.90
    
    
    
    53.24
    
    
    
    7.72
    
    
    
    63.40
    
    
    
    46.14
    
    
    
    2.0
    
    
    
    0.87Thereafter
    
    
    
    
    
    
    
    
    
    
    
    
    
    Various Escalation Rates
 
 (1)
    
    Pricing assumptions for 2007 and thereafter provided by Sproule Associates Limited, an
independent qualified reserves evaluator.  47




---



##### 



Reconciliation of Changes in Net Reserves and Net Future Net Revenue
  LIGHT ANDMEDIUM OIL (mmbl)
    
    
    NATURAL GAS LIQUIDS (mmbl)
    
    
    NATURAL GAS (MMcf)Net
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    
    
    
    
    NetProved
    
    
    
    
    
    
    
    
    
    
    Proved
    
    
    
    
    
    
    
    
    
    
    ProvedNet
    
    
    Net
    
    
    Plus
    
    
    Net
    
    
    Net
    
    
    Plus
    
    
    Net
    
    
    Net
    
    
    PlusFACTORS
    
    Proved
    
    
    Probable
    
    
    Probable
    
    
    Proved
    
    
    Probable
    
    
    Probable
    
    
    Proved
    
    
    Probable
    
    
    ProbableJanuary 1, 2006
    
    
    435.0
    
    
    
    165.7
    
    
    
    600.7
    
    
    
    121.5
    
    
    
    32.6
    
    
    
    154.1
    
    
    
    4,332.0
    
    
    
    957.0
    
    
    
    5,289.0Extensions
    
    
    
    
    
    
    49.9
    
    
    
    49.9
    
    
    
    
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    10.0
    
    
    
    10.0Improved Recovery
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Technical Revisions
    
    
    (34.2
    )
    
    
    (17.2
    )
    
    
    (51.4
    )
    
    
    (14.3
    )
    
    
    (0.8
    )
    
    
    (15.1
    )
    
    
    (40.0
    )
    
    
    (10.0
    )
    
    
    (50.0
    )Discoveries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Acquisitions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Economic Factors
    
    
    (86.6
    )
    
    
    (22.7
    )
    
    
    (109.3
    )
    
    
    (28.8
    )
    
    
    (2.8
    )
    
    
    (31.6
    )
    
    
    633.0
    
    
    
    281
    
    
    
    (352.0
    )Production
    
    
    (17.8
    )
    
    
    
    
    
    
    (17.8
    )
    
    
    (4.5
    )
    
    
    
    
    
    
    (4.5
    )
    
    
    (129.0
    )
    
    
    
    
    
    
    (129.0
    )December 31, 2006
    
    
    296.4
    
    
    
    175.7
    
    
    
    472.1
    
    
    
    73.9
    
    
    
    29.1
    
    
    
    103.0
    
    
    
    3,530.0
    
    
    
    1,238.0
    
    
    
    4,768.0
  (000s)Estimated Future Net Revenue, After Tax, Beginning of Year(1), (2)
    
    
    18,199Sales and Transfers of Oil and Gas Produced, Net of Production Costs and Royalties
    
    
    (392
    )Net Change in Prices, Production Costs and Royalties Related to Future Production (2)
    
    
    (7,910
    )Changes in Previously Estimated Development Costs Incurred During the Period (2)
    
    
    (1,819
    )Changes in Estimated Future Development Costs
    
    
    491Extensions and Improved Recovery
    
    
    Discoveries
    
    
    Acquisitions of Reserves
    
    
    Dispositions of Reserves
    
    
    Net Change Resulting from Revisions in Quantity Estimates (2)
    
    
    (1,249
    )Economic Factors(2)
    
    
    (4,460
    )Accretion of Discount (2)
    
    
    2,458Net Change in Income Taxes for Current Period
    
    
    922Net Change in Income Taxes for Future Forecast (2)
    
    
    3,642Miscellaneous Changes
    
    
    (1,544
    )Estimated Future Net Revenue, After Tax, End of Year
    
    
    8,338
 
  (1)
    
    Proved Reserves  Constant Prices(2)
    
    Discounted @ 10%
 48




---



##### 



Additional Information Relating to Reserves Data
    Undeveloped Reserves
 Proven Undeveloped Reserves
  Probable Undeveloped Reserves
  Significant Factors or Uncertainties
        49




---



##### 



Future Development Costs
   Forecast Prices and Costs
    
    Constant Prices and CostsProved Plus ProbableProved Reserves
    
    Reserves
    
    Proved ReservesYear
    
    ($ 000)
    
    ($ 000)
    
    ($ 000)2007
    
    
    8
    
    
    
    8
    
    
    
    82008
    
    
    9
    
    
    
    157
    
    
    
    82009
    
    
    9
    
    
    
    9
    
    
    
    82010
    
    
    9
    
    
    
    9
    
    
    
    82011
    
    
    9
    
    
    
    9
    
    
    
    82012
    
    
    10
    
    
    
    10
    
    
    
    8Total: Undiscounted
    
    
    152
    
    
    
    341
    
    
    
    135Total: Discounted at 10% / year
    
    
    77
    
    
    
    211
    
    
    
    67
  Other Oil and Gas Information
 Oil and Gas Properties
  The
estimates of reserves for individual properties may not reflect the same confidence level as
estimates of reserves and future net revenue for all properties, due to the effects of aggregation.
 50




---



##### 



Edson, Alberta
    Nipisi Gilwood Unit No. 1, Alberta
    Gainsborough, Saskatchewan
   Oil and Gas Wells
  51




---



##### 



Oil Wells
    
    
    Natural Gas WellsProducing
    
    
    Non-Producing
    
    
    Producing
    
    
    Non-ProducingGross
    
    
    Net
    
    
    Gross
    
    
    Net
    
    
    Gross
    
    
    Net
    
    
    Gross
    
    
    NetAlberta
    
    
    175
    
    
    
    4.94
    
    
    
    235
    
    
    
    6.65
    
    
    
    55
    
    
    
    4.38
    
    
    
    16
    
    
    
    1.30Saskatchewan
    
    
    10
    
    
    
    5.85
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    185
    
    
    
    10.79
    
    
    
    235
    
    
    
    6.65
    
    
    
    55
    
    
    
    4.38
    
    
    
    16
    
    
    
    1.30
 Properties with No Attributed Reserves
  Forward Contracts
  Abandonment and Reclamation Costs
  Abandonment and Reclamation
    
    Abandonment and ReclamationCosts Escalated at 2%
    
    Costs Escalated at 2%Undiscounted
    
    Discounted at 10%($ 000)
    
    ($ 000)Total as at December 31, 2006
    
    $
    814,000
    
    
    $
    102,000Anticipated to be paid in 2007
    
    
    
    
    
    
    Anticipated to be paid in 2008
    
    
    
    
    
    
    Anticipated to be paid in 2009
    
    
    
    
    
    
    
   Tax Horizon
  Costs Incurred
  52




---



##### 



Year ended
    
    Year endedDecember 31, 2006
    
    December 31, 2005($ 000)
    
    ($ 000)Property acquisition costs  Unproved properties
    
    
    
    
    
    
    Property acquisition costs  Proved properties
    
    
    
    
    
    
    Exploration costs
    
    
    
    
    
    
    Development costs
    
    $
    762.2
    
    
    $
    1,192.7
 Exploration and Development Activities
  Exploratory Wells
    
    
    Development WellsGross
    
    
    Net
    
    
    Gross
    
    
    NetOil wells
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gas wells
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Service wells
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dry holes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Statement of Reserves Data and Other Oil and Gas Information  Other Oil and Gas
Information Oil and Gas Properties
 Production Estimates
 Disclosure
of Reserves Data and Other Oil and Natural Gas Information
 SUMMARY OF PRODUCTION VOLUME ESTIMATED FOR 2007
 Natural GasLight and Medium
    
    
    
    
    
    
    
    
    
    (non-associated &
    
    Natural Gas
    
    Natural GasOil
    
    Heavy Oil
    
    associated)
    
    (solution)
    
    LiquidsGross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    NetReserve Category
    
    (Bbls/d)
    
    (Bbls/d)
    
    (Bbls/d)
    
    (Bbls/d)
    
    (Mcf/d)
    
    (Mcf/d)
    
    (Mcf/d)
    
    (Mcf/d)
    
    (Bbls/d)
    
    (Bbls/d)Proved Producing
    
    
    135.6
    
    
    
    48.2
    
    
    
    
    
    
    
    
    
    
    
    1,632.9
    
    
    
    334.2
    
    
    
    76.7
    
    
    
    8.2
    
    
    
    43.0
    
    
    
    7.9Total Proved
    
    
    135.6
    
    
    
    48.2
    
    
    
    
    
    
    
    
    
    
    
    1,632.9
    
    
    
    334.2
    
    
    
    76.7
    
    
    
    8.2
    
    
    
    43.0
    
    
    
    7.9Total Proved Plus
Probable
    
    
    137.5
    
    
    
    48.8
    
    
    
    
    
    
    
    
    
    
    
    1,638.4
    
    
    
    334.2
    
    
    
    76.7
    
    
    
    5.5
    
    
    
    43.0
    
    
    
    7.9
 Disclosure of Reserves Data and Other Oil and Natural Gas Information
 53




---



##### 



SUMMARY OF PRODUCTION VOLUME ESTIMATED FOR 2007 (EDSON)
 Natural GasLight and Medium
    
    
    
    
    
    
    
    
    
    (non-associated &
    
    Natural Gas
    
    Natural GasOil
    
    Heavy Oil
    
    associated)
    
    (solution)
    
    LiquidsGross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    NetReserve Category
    
    (Bbls/d)
    
    (Bbls/d)
    
    (Bbls/d)
    
    (Bbls/d)
    
    (Mcf/d)
    
    (Mcf/d)
    
    (Mcf/d)
    
    (Mcf/d)
    
    (Bbls/d)
    
    (Bbls/d)Proved Producing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,613.7
    
    
    
    328.8
    
    
    
    
    
    
    
    2.7
    
    
    
    31.2
    
    
    
    6.8Total Proved
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,613.7
    
    
    
    328.8
    
    
    
    
    
    
    
    2.7
    
    
    
    31.2
    
    
    
    6.8Total Proved Plus
Probable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,619.2
    
    
    
    328.8
    
    
    
    
    
    
    
    2.7
    
    
    
    31.2
    
    
    
    6.8
 SUMMARY OF PRODUCTION VOLUME ESTIMATED FOR 2007 (NIPISI)
 Natural GasLight and Medium
    
    
    
    
    
    
    
    
    
    (non-associated &
    
    Natural Gas
    
    Natural GasOil
    
    Heavy Oil
    
    associated)
    
    (solution)
    
    LiquidsGross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    Net
    
    Gross
    
    NetReserve Category
    
    (Bbls/d)
    
    (Bbls/d)
    
    (Bbls/d)
    
    (Bbls/d)
    
    (Mcf/d)
    
    (Mcf/d)
    
    (Mcf/d)
    
    (Mcf/d)
    
    (Bbls/d)
    
    (Bbls/d)Proved Producing
    
    
    101.4
    
    
    
    28.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71.2
    
    
    
    5.5
    
    
    
    11.8
    
    
    
    1.1Total Proved
    
    
    101.4
    
    
    
    28.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71.2
    
    
    
    5.5
    
    
    
    11.8
    
    
    
    1.1Total Proved Plus
Probable
    
    
    102.5
    
    
    
    28.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71.2
    
    
    
    5.5
    
    
    
    11.8
    
    
    
    1.1
 Production History
  Year EndedDecember 31, 2006
    
    
    Dec. 31
    
    
    Sept. 30
    
    
    June 30
    
    
    Mar. 31Average Daily Production(1)Light Oil (Bbls/d)
    
    
    35.0
    
    
    
    37.2
    
    
    
    33.6
    
    
    
    31.9
    
    
    
    37.3Heavy Oil (Bbls/d)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NGLs (Bbls/d)
    
    
    10.6
    
    
    
    10.2
    
    
    
    11.0
    
    
    
    9.5
    
    
    
    11.9Natural Gas (Mcf/d)
    
    
    421.7
    
    
    
    422.6
    
    
    
    446.8
    
    
    
    377.8
    
    
    
    439.5Oil and NGL Netback ($/BbL)(3) (4)Revenue
    
    
    66.34
    
    
    
    59.44
    
    
    
    73.16
    
    
    
    72.90
    
    
    
    61.25Royalties
    
    
    14.18
    
    
    
    13.23
    
    
    
    15.12
    
    
    
    15.45
    
    
    
    13.19Operating Expenses (2)
    
    
    33.61
    
    
    
    22.86
    
    
    
    33.09
    
    
    
    39.61
    
    
    
    39.38Transportation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Netback (4)
    
    
    18.54
    
    
    
    23.35
    
    
    
    24.95
    
    
    
    17.84
    
    
    
    8.68Natural Gas Netback ($/Mcf)(1) (3) (4)Revenue
    
    
    6.68
    
    
    
    6.51
    
    
    
    5.76
    
    
    
    6.09
    
    
    
    8.27
 54




---



##### 



Year EndedDecember 31, 2006
    
    
    Dec. 31
    
    
    Sept. 30
    
    
    June 30
    
    
    Mar. 31Royalties
    
    
    1.95
    
    
    
    1.83
    
    
    
    1.60
    
    
    
    1.59
    
    
    
    2.73Operating Expenses (2)
    
    
    3.75
    
    
    
    2.32
    
    
    
    2.94
    
    
    
    6.47
    
    
    
    3.61Transportation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Netbacks (4)
    
    
    0.98
    
    
    
    2.36
    
    
    
    1.22
    
    
    
    (1.97
    )
    
    
    1.93
 
 Notes:(1)
    
    before deduction of royalties(2)
    
    Operating expenses are allocated to the primary product. This allocation involves
several assumptions.(3)
    
    Operating recoveries associated with operated properties were excluded from operating
costs and accounted for as a reduction to general and administration costs.(4)
    
    Netbacks are calculated by subtracting royalties, operating expenses and transportation
from revenue.  Light Crude Oil,and NGLs
    
    Heavy Oil
    
    Gas
    
    Boe(Bbls / d)
    
    (Bbls / d)
    
    (Mcf / d)
    
    (Boe / d)Edson
    
    
    31.2
    
    
    
    
    
    
    
    1,591.7
    
    
    
    296.5Nipisi
    
    
    121.3
    
    
    
    
    
    
    
    72.6
    
    
    
    133.4Other Alberta
    
    
    12.4
    
    
    
    
    
    
    
    22.3
    
    
    
    16.1Total Alberta
    
    
    164.9
    
    
    
    
    
    
    
    1,686.6
    
    
    
    446.0Total Saskatchewan
    
    
    17.7
    
    
    
    
    
    
    
    
    
    
    
    17.7Total
    
    
    182.6
    
    
    
    
    
    
    
    1,686.6
    
    
    
    463.7
  Definitions and Other Notes
 1.
    
    Grossmeans:
 (a)
    
    in relation to our interest in production and reserves, our
interest (operating and non-operating) before deduction of royalties and
without including any of our royalty interests;(b)
    
    in relation to wells, the total number of wells in which we
have an interest; and(c)
    
    in relation to properties, the total area of properties in
which we have an interest.
 2.
    
    Netmeans:
 (a)
    
    in relation to our interest in production and reserves, our
interest (operating and non-operating) after deduction of royalties
obligations, plus our royalty interest in production or reserves;(b)
    
    in relation to wells, the number of wells obtained by
aggregating our working interest in each of our gross wells; and(c)
    
    in relation to our interest in a property, the total area in
which we have an interest multiplied by the working interest we own
 3.
    
    Definitions used for reserve categories are as follows:The following definitions apply to both estimates of individual reserves entities and the
aggregate of reserves for multiple entities.
 55




---



##### 



Reserve Categories
  (a)
    
    analysis of drilling, geological, geophysical and engineering data;(b)
    
    use of established technology; and(c)
    
    specified economic conditions
  (a)
    
    Proved reserves are those reserves that can be estimated with a high degree of
certainty to be recoverable. It is likely that the actual remaining quantities recovered
will exceed the estimated proved reserves.(b)
    
    Probable reserves are those additional reserves that are less certain to be recovered
than proved reserves. It is equally likely that the actual remaining quantities recovered
will be greater or less than the sum of the estimated proved plus probable reserves.
 Economic Assumptions will be the prices and costs used in the estimate, namely:
 (a)
    
    constant prices and costs as at the last day of our financial year; and(b)
    
    forecast prices and costs
 Development and Production Status
  (a)
    
    Developed reserves are those reserves that are expected to be recovered from existing
wells and installed facilities or, if facilities have not been installed, that would
involve a low expenditure (for example, when compared to the cost to drill a well) to put
the reserves into production. The developed category may be subdivided into producing and
non-producing.
 (i)
    
    Developed producing reserves are those reserves that are expected to be
recovered from completion intervals open at the time of the estimate. These reserves
may be currently producing or, if shut-in, they must have previously been in
production, and the date of resumption of production must be known with reasonable
certainty.(ii)
    
    Developed non-producing reserves are those reserves that either have not been
in production, or have previously been in production, but are shut-in, and the date of
resumption of production is unknown.
 (b)
    
    Undeveloped reserves are those reserves expected to be recovered from known
accumulations where a significant expenditure (for example, when compared to the cost of
drilling a well) is required to render them capable of production. They must fully meet
the requirements of the reserves classification (proved, probable) to which they are
assigned.
 4.
    
    Forecast prices and costs
  (a)
    
    generally acceptable as being a reasonable outlook of the future; and(b)
    
    if and only to the extent that, there are fixed or presently determinable future prices
or costs to which we are legally bound by a contractual or other obligation to supply a
physical product, including those for an extension period of a contract that is likely to
be extended, those prices or costs rather than the prices and costs referred to in
paragraph (a).
 Pricing Assumptions
 56




---



##### 



(a)
    
    our prices and costs as at the effective date of the estimation, held constant
throughout the estimated lives of the properties to which the estimate applies; and(b)
    
    if, and only to the extent that, there are fixed or presently determinable future
prices or costs to which we are legally bound by a contractual or other obligation to
supply a physical product, including those for an extension period of a contract that is
likely to be extended, those prices or costs rather than the prices and costs referred to
in paragraph (a)
  Development well
 Development costs
 (a)
    
    gain access to and prepare well locations for drilling, including surveying well
locations for the purpose of determining specific development drilling sites, clearing,
ground draining, road building, and relocating public roads, gas lines and power lines,
pumping equipment and wellhead assembly;(b)
    
    drill and equip development wells, development type statigraphic test wells and service
wells, including the costs of platforms and of well equipment such as casing, tubing,
pumping equipment and wellhead assembly;(c)
    
    acquire, construct and install production facilities such as flow lines, separators,
treaters, heaters, manifolds, measuring devices and production storage tanks, natural gas
cycling and processing plants, and central utility and waste disposal systems; and(d)
    
    provide improved recovery systems.
 Exploration well
 Exploration costs
 (a)
    
    costs of topographical, geochemical, geological and geophysical studies, rights of
access to properties to conduct those studies, and salaries and other expenses of
geologists, geophysical crews and others conducting those studies;(b)
    
    costs of carrying and retaining unproved properties, such as delay rentals, taxes
(other than income and capital taxes) on properties, legal costs for title defense, and the
maintenance of land and lease records;(c)
    
    dry hole contributions and bottom hole contribution;(d)
    
    costs of drilling and equipping exploratory wells; and(e)
    
    costs of drilling exploratory type stratigraphic test wells.
 Service well
 57




---



##### 



Item 4 Dividends
  Item 5 Description of Capital Structure
      Item 6 Market for Securities
   Toronto Stock Exchange
Common Shares Trading Activity
 Canadian DollarsPeriod
    
    High
    
    LowDecember, 2006
    
    $
    1.75
    
    
    $
    1.52November, 2006
    
    $
    1.67
    
    
    $
    1.29October, 2006
    
    $
    1.46
    
    
    $
    1.21September, 2006
    
    $
    1.62
    
    
    $
    1.28August, 2006
    
    $
    1.57
    
    
    $
    1.30July, 2006
    
    $
    1.57
    
    
    $
    1.23June, 2006
    
    $
    1.41
    
    
    $
    1.13May, 2006
    
    $
    1.84
    
    
    $
    1.20April, 2006
    
    $
    1.69
    
    
    $
    1.20March, 2006
    
    $
    1.30
    
    
    $
    1.03February, 2006
    
    $
    1.33
    
    
    $
    1.12January, 2006
    
    $
    1.25
    
    
    $
    1.07
 58




---



##### 



Item 7 Directors and Officers
   Name and Municipality
    
    
    
    Director/Officerof Residence
    
    Positions Held
    
    Since
    
    Principal OccupationJosef Spross(1)(2)(3)(4)Saskatoon, SK
    
    Director, Chairman of
the Board
    
    
    2006
    
    
    BusinesspersonA. Neil McMillan
Saskatoon, SK
    
    Director, President
and CEO
    
    
    1996
    
    
    President and CEO of ClaudeRonald J.
Hicks, CA(1)(2)(3)(4)
Saskatoon, SK
    
    Director
    
    
    2006
    
    
    Chartered AccountantJon R. MacNeill(4)Calgary, AB
    
    Director
    
    
    1982
    
    
    BusinesspersonTed Nieman(1)(2)Saskatoon, SK
    
    Director
    
    
    2007
    
    
    Senior Vice President, Canpotex
LimitedJ. Robert
Kowalishin, P.Eng(1)(2)(4)Saskatoon, SK
    
    Director
    
    
    2007
    
    
    BusinesspersonRick G. Johnson, CA
Saskatoon, SK
    
    Chief Financial Officer
    
    
    2004
    
    
    Chief Financial Officer of ClaudeBrian Groves 
Kamloops, BC
    
    Vice President,
Corporate Development
    
    
    2005
    
    
    Vice President, Corporate
Development of ClaudeJudy Stoteterau 
Calgary, AB
    
    Vice President,
Exploration
    
    
    2007
    
    
    Vice President, Exploration of ClaudePhilip Ng 
Saskatoon, SK
    
    Vice President,
Operations
    
    
    2007
    
    
    Vice President, Operations of Claude
 
 Note:
    
    
    (1
    )
    
    Member of the Audit Committee.(2
    )
    
    Member of the Nominating, Corporate Governance & Compensation Committee.(3
    )
    
    Member of the Reserves Committee.(4
    )
    
    Member of the Safety, Health & Environmental (SHE) Committee.
  59




---



##### 



Item 8 Transfer Agent and Registrar
 th
 Item 9 Material Contracts
  Item 10 Interests of Experts
      Item 11 Audit Committee
    60




---



##### 



Name
    
    Principal Occupation and BiographyRonald J. Hicks
(May 2006)
    
    Ronald J. Hicks, a resident of Saskatoon, is a member
of the Institute of Chartered Accounts of
Saskatchewan (ICAS). He joined Deloitte & Touche
LLP in 1959 and was admitted to partnership in 1977
until his retirement in August 2000. He is currently
a Director, the Treasurer and Chairman of the Audit
and Risk Committee of Ducks Unlimited Canada and is
also on the Corporate Governance Committee. Ron is a
member of the Audit and Finance Committee for Ducks
Unlimited, USA.Josef Spross
(August 2006)
    
    Josef Spross, a resident of Saskatoon, has extensive
experience in mining and has played an important role
in the development and operation of Cameco
Corporations uranium and gold properties. After
managing the Key Lake operation for 15 years, he was
appointed Vice President of Uranium Mining for Cameco
in 1993. In 1995 he was appointed Vice President of
Mining and in May 1996, Mr. Spross assumed the
position of Executive Vice President of Kumtor
Operating Company in the Kyrgyz Republic and managed
the successful transition of the Kumtor Gold project
from development to production. After his return to
Canada in April 1997, he was appointed as Camecos
Senior Vice President Operations and Chief Operating
Officer. Mr. Spross received a Masters degree in
Mine Engineering from Clausthal-Zellerfeld University
in Germany and completed a three-year post graduate
studies program with the Ministry of Economics and
Resources where he graduated as Bergassessor. At
the end of 1999, Mr. Spross retired and assumed the
position of President and Past President of the
Saskatchewan Mining Association in February 2000 (a
four-year term). He currently serves on the boards
of Centerra Gold Inc. and Titan Uranium Inc.Ted Nieman
(January 2007)
    
    Ted Nieman, a resident of Saskatoon, began his career
with the law firm of Estey, Robertson, Muzyka,
Beaumont, Barton & Bell in Saskatoon, Saskatchewan,
Canada in 1973. He spent almost 20 years with that
firm and its successor firm, Robertson Stromberg,
becoming a partner in 1977 and a senior partner in
1987. In 1993, Mr. Nieman joined Canpotex Limited
(Canpotex), the worlds largest exporter of potash,
as General Counsel and Corporate Secretary. In 1995,
he was appointed Vice President and in 2001 he was
appointed Senior Vice President. Mr. Nieman has held
several senior positions in Canpotex including Chief
Operating Officer (2001-2004) responsible for all
Canpotex operations. He is a current member of the
Canpotex Executive Management Group, and is a member
of the board of directors of all Canpotex
subsidiaries and affiliates. Mr. Nieman received his
Bachelor of Arts degree in 1971 and his Bachelor of
Laws degree in 1973, both from the University of
Saskatchewan. He is a member of the Law Society of
Saskatchewan and the Canadian Bar Association.
 61




---



##### 



Name
    
    Principal Occupation and BiographyJ. Robert Kowalishin
(March 2007)
    
    J. Robert Kowalishin, a resident of Saskatoon,
recently retired after a 42 year career with the
Trane Company, a division of American Standard. He
has held senior management positions in Canada and
the United States, most recently District Manager of
Tranes Ontario operations based in Toronto.
Previous to that, he served as Franchise Holder in
Saskatoon (1972-1995), and Regional Manager
responsible for Canada and North Eastern United
States. Since retirement, he has been a consultant
and adviser to Tranes Leadership Development
Program. Mr. Kowalishin received his Bachelor of
Science (Mechanical Engineering) from the University
of Saskatchewan in 1962 and is a Life Member of the
American Society of Heating, Refrigeration, and Air
Conditioning Engineers and a Life Member of
Association of Professional Engineers and
Geoscientists of Saskatchewan.
     2006
    
    
    2005Audit fees
    
    $
    110,500
    
    
    $
    92,616Audit related fees (1)
    
    
    7,000
    
    
    
    39,000Tax fees (2)
    
    
    14,430
    
    
    
    3,750All other fees
    
    
    
    
    
    
    Total
    
    $
    131,930
    
    
    $
    135,366
 
 (1)
    
    Audit related fees are comprised of KPMG llp services in
respect of section 404 requirements of the Sarbanes-Oxley Act of 2002.(2)
    
    Tax fees are comprised of KPMG llp services in respect of tax
compliance and tax planning. Item 12 Additional Information
  www.clauderesources.com www.sedar.com
 62




---



##### 



APPENDIX A
 REPORT ON RESERVES DATA
BY
INDEPENDENT QUALIFIED RESERVES EVALUATOR OR AUDITOR
 Form 51-101F2
  1.
    
    We have evaluated the Companys Reserves Data as at December 31, 2006. The reserves data
consist of the following:
 (a)
    
    (i)
    
    proved and proved plus probable oil and gas reserves estimated as at December
31, 2006 using forecast prices and costs; and(ii)
    
    the related estimated future net revenue; and(b)
    
    (i)
    
    proved oil and gas reserve quantities were estimated as a December 31, 2006
using constant prices and costs; and(ii)
    
    the related estimated future net revenue.
 2.
    
    The Reserves Data are the responsibility of the Companys management. Our responsibility is
to express an opinion on the Reserves Data based on our evaluation.We carried out our evaluation in accordance with standards set out in the Canadian Oil and Gas
Evaluation Handbook (the COGE Handbook), prepared jointly by the Society of Petroleum
Evaluation Engineers (Calgary Chapter) and the Canadian Institute of Mining Metallurgy &
Petroleum (Petroleum Society).3, Those standards require that we plan and perform an evaluation to obtain reasonable assurance
as to whether the reserves data are free of material misstatement. An evaluation also
includes assessing whether the reserves data are in accordance with principles and definitions
presented in the COGE Handbook.4.
    
    The following table sets forth the estimated future net revenue attributed to proved plus
probable reserves, estimated using forecast prices and costs on a before tax basis and
calculated using a discount rate of 10%, included in the reserves data of the Company
evaluated by us as of December 31, 2006, and identifies the respective portions thereof that
we have audited, evaluated and reviewed and reported on to the Companys management and Board
of Directors:




---



##### 



Independent
    
    
    
    
    
    
    
    
    
    Net Present Value of Future Net RevenueQualified
    
    
    
    
    
    Location
    
    (10% Discount Rate)Reserves
    
    Description
    
    OfEvaluator or
    
    and Preparation Date of
    
    Reserves
    
    Audited
    
    Evaluated
    
    Reviewed
    
    TotalAuditor
    
    Evaluation Report
    
    (Country)
    
    (M$)
    
    (M$)
    
    (M$)
    
    (M$)Sproule
    
    Evaluation of the
    
    CanadaAssociates
    
    P&NG Reserves ofLimited
    
    Claude Resources Inc.,as of December 31,2006, preparedJanuary to February2007.Total
    
    
    
    
    
    
    
    
    
    Nil
    
    
    17,180
    
    
    Nil
    
    
    17,180
 5.
    
    In our opinion, the reserves data evaluated by us have, in all material respects, been
determined and are presented in accordance with the COGE Handbook.
 6.
    
    We have no responsibility to update the record referred to in paragraph 4 for events and
circumstances occurring after its preparation date.
 7.
    
    Because the reserves data are based on judgments regarding future events, actual results will
vary and the variation may be material.




---



##### 



/s/ Douglas R. BatesDouglas R. Bates, P. Eng.Associate /s/ Michael W. MaughanMichael W. Maughan, C.P.G.,Geol.Vice President, Geoscience /s/ Harry J. HelwerdaHarry J. Helwerda, P.Eng.Senior Vice-President, Engineering




---



##### 



APPENDIX B
 Report of Management and Directors
on Reserves Data and Other Information
 Form 51-101F3
  (a)
    
    (i)
    
    proved and probable oil and gas reserves estimated as at December 31, 2006
using forecast
prices and costs; and(ii)
    
    the related estimated future net revenue; and(b)
    
    (i)
    
    proved oil and gas reserves estimated as at December 31, 2006 using
constant prices and
costs; and(ii)
    
    the related estimated future net revenue.
   (a)
    
    reviewed the Companys procedures for providing information to the independent
qualified evaluator(b)
    
    met with the independent qualified evaluator to determine whether any
restrictions affected the ability of the independent qualified evaluator to report
without reservation, to inquire whether there had been disputes between the independent
qualified evaluators and Management; and(c)
    
    reviewed the reserves data with Management and the independent qualified
evaluator.
  (a)
    
    the content and filing with securities regulatory authorities of the reserves
data and other oil and gas information;(b)
    
    the filing of the report of the independent qualified reserves evaluator on the
reserves data; and(c)
    
    the content and filing of this report.
  /s/ Neil McMillan

Neil McMillan
President & CEO/s/ Rick Johnson

Rick Johnson
CFO




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/s/ Josef Spross

Josef Spross
Chairman/s/ Ronald J. Hicks

Ron Hicks
Director  Reserves CommitteeMarch 29, 2007




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APPENDIX C
 CLAUDE RESOURCES INC.
 Audit Committee Charter
 I.
    
    Purpose
 The primary purpose of the Audit Committee is to assist the Board of Directors in fulfilling
its oversight responsibility to the shareholders as they relate to:
 
    
    the integrity of the Companys financial statements and the
Companys accounting policies, disclosure, internal controls and
financial reporting practices;
 
    
    recommending the appointment, compensation and the monitoring of
the qualifications, independence and performance of the Companys
external auditors; and
 
    
    maintaining, through regularly scheduled meetings, a line of
communication between the Board and the Companys financial
management and external auditors.
 II.
    
    Structure and Operations
 Composition and Qualifications
  1.
    
    Each member of the Committee will be a Director who: (a) is not otherwise employed by the
Company, and (b) has not been so employed at any time during the three years prior to the time
he or she is appointed to the Committee unless otherwise permitted by applicable U.S. and
Canadian regulatory standards.
 2.
    
    Each member of the Committee will have and maintain independence from management of the
Company in accordance with the standards of independence required above.
 3.
    
    Except for the undertaking of non-material specific projects unanimously approved by the
Board, no member of the Committee may receive, directly or indirectly, any consulting,
advisory or other compensatory fee from the Company other than: (a) directors fees, which may
be received in cash, stock options, or other in-kind consideration ordinarily available to
Directors; (b) a pension or other deferred compensation for prior service that is not
contingent on future service; and (c) other regular benefits that Directors receive in their
capacity as members of the Board or its committees.
 4.
    
    Each member of the Committee shall be financially literate (such qualifications interpreted
by the Board in its business judgment) with at least one member designated as being a
financial expert.
 5.
    
    Each member of the Committee shall have accounting or related financial management expertise
(such qualifications interpreted by the Board in its business judgment).
 6.
    
    No member of the Committee shall serve on the audit committee of more than four public
companies (including Claude) unless the Board shall have made a prior determination that such
simultaneous service will not impair the ability of the member to effectively serve on the
Committee.




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Organization, Procedures and Powers
 1.
    
    The Board shall appoint one member of the Committee as the Chair. The Chair (or in his or
her absence, a member designated by the Chair) shall preside at all meetings of the Committee.
The Chair shall be responsible for leadership of the Committee, including scheduling
meetings, preparing agendas and making regular reports to the Board.
 2.
    
    The Committee shall have the authority to establish its own rules and procedures, consistent
with the bylaws of the Company, for notice and conduct of its meetings should the Committee,
in its discretion, deem it desirable to do so.
 3.
    
    The Committee shall have the authority to engage independent counsel, independent accountants
or other outside advisers as the Committee deems necessary to carry out its duties.
 III.
    
    Meetings
  1.
    
    The Committee may include in its meetings: (a) members of the Companys management, (b)
representatives of the external auditors, (c) other directors by invitation, or (d) any other
personnel employed or retained by the Company.
 2.
    
    The Committee may periodically meet with members of the Companys management in separate
executive sessions to discuss any matters that the Committee believes should be addressed
privately.
 3.
    
    A meeting of the Committee may be convened by the Chair of the Committee, a quorum of the
Committee members, or the external auditors. The Corporate Secretary shall, upon direction of
any of the foregoing, arrange a meeting of the Committee. The Committee shall report to the
Board in a timely manner with respect to each of its meetings.
 IV.
    
    Responsibilities and Duties
 Financial Statements and Published Information
 1.
    
    Review with management and the external auditors any items of concern, any proposed changes
in major accounting policies, any identified risks and uncertainties, and any issues requiring
management judgement, to the extent that the foregoing may be material to financial reporting.
 2.
    
    Consider any matter required to be communicated to the Committee by the external auditors
under applicable generally accepted auditing standards, applicable law and listing standards,
including the external auditors report to the Committee (and managements response thereto)
on: (a) all critical accounting policies and practices used by the Company; (b) all material
alternative accounting treatments of financial information within generally accepted
accounting principles that have been discussed with management, including the ramifications of
the use of such alternative treatments and disclosures and the treatment preferred by the
external auditors; and (c) any other material written communications between the external
auditors and management.
 3.
    
    Require the external auditors to present and discuss with the Committee their views about the
quality, not just the acceptability, of the implementation of generally accepted accounting
principles with particular focus on accounting estimates and judgements made by management and
their selection of accounting principles.
 4.
    
    Discuss with management and the external auditors (a) any accounting adjustments that were
noted or proposed (i.e. immaterial or otherwise) by the external auditors but were not
reflected in the financial




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statements and (b) any material correcting adjustments that were identified by the external
auditors in accordance with generally accepted accounting principles or applicable law.
 5.
    
    Discuss with management and the external auditors any significant financial reporting issues
considered during the fiscal period and the method of resolution. Resolve disagreements
between management and the external auditors regarding financial reporting.
 6.
    
    Review with management and the external auditors any off-balance sheet financing mechanisms
being used by the Company.
 7.
    
    Review with management and the external auditors and legal counsel, if necessary, any
litigation, claim or other contingency, including tax assessments, that could have a material
effect on the financial position or operating results of the Company, and the manner in which
these matters have been disclosed or reflected in the financial statements.
 8.
    
    Review any problems experienced by the external auditors in performing the audit, including
any restrictions or limitations imposed by management.
 9.
    
    Review the results of the external auditors audit work including findings and
recommendations, including the post-audit management letter, and managements response and any
resulting changes in accounting practices or policies and the impact such changes may have on
the financial statements.
 10.
    
    Review the annual report, including the audited annual financial statements, in conjunction
with the report of the external auditors, and related management discussion and analysis, make
recommendations to the Board with respect to approval thereof, before being released to the
public, and obtain an explanation from management of all significant variances between
comparable reporting periods.
 11.
    
    Review with management and recommend to the Board for approval the Corporations Proxy Form,
Information Circular, Annual Information Form and Form 40F.
 12
    
    Confirm with the Chief Executive Officer and the Chief Financial Officer (and considering the
external auditors comments, if any, thereon), that the financial statements fairly represent
the Companys financial condition, cash flow and results for the reporting period.
 13
    
    Review and approve all interim unaudited financial statements and quarterly reports and
related interim management discussion and analysis, before being released to the public.
 14.
    
    Review managements internal control report and the related attestation report of the
external auditors when required by Section 404 of the Sarbanes-Oxley Act of 2002.
 15.
    
    Review and approve all related party transactions.
 Appointment, Retention and Evaluation of External Auditors
 1.
    
    The Companys external auditors shall report directly to this Committee. This Committee has
the direct responsibility to compensate, oversee, and evaluate the external auditors. The
Committee will recommend to the shareholders the appointment, and where appropriate, the
replacement of the external auditors. In connection with its oversight of the external audit
activities, the Committee will:
 
    
    At least annually, obtain and review a report by the external auditors describing:
 (a)
    
    The external audit firms internal quality-control procedures;
and(b)
    
    Any material issues raised by: (i) the most recent internal
quality-control review, or peer review, of the firm, or (ii) any inquiry or
investigation by governmental or professional




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authorities, respecting one or more independent audits carried out by the
firm, and any steps taken to deal with any issues raised in the reviews
described above.
 
    
    Annually review and evaluate:
 (a)
    
    The experience and qualifications of the senior members of the
external auditor team; and(b)
    
    The performance and independence of the external auditors,
including the lead partner of the external audit firm.
 
    
    Review and approve the annual audit plan prior to the annual audit being undertaken
by the external auditors, including reviewing the year-to-year co-ordination of the
audit plan and the extent of its scope. Approve the fees to be paid to the external
auditors for audit services.
 
    
    Periodically meet separately with the external auditors without senior management present.
 
    
    At least annually, present the Committees conclusion with respect to its evaluation of the external auditors to the
Board. See External Auditor Review Guidelines.
 Independence of External Auditors
 1.
    
    The Committee shall obtain confirmation and assurance as to the external auditors
independence, including ensuring that they submit on a periodic basis (not less than annually)
to the Committee a formal written statement delineating all relationships between the external
auditors and the Company. The formal submission should also disclose the amount of fees
received by the external auditors for the audit services and for various types of non-audit
services.
 2.
    
    The Committee shall actively engage in a dialogue with the external auditors with respect to
any disclosed relationships or services that may impact the objectivity and independence of
the external auditors and take appropriate action in response to the external auditors report
to satisfy itself of their independence.
 3.
    
    The Committee will periodically review, and if necessary, update its policy with regard to
the pre-approval for any permitted non-audit services, including a requirement that the
Committee approve all non-audit engagements of the external auditors and shall, consistent
with that policy, approve the retention of the external auditors to perform such services and
the fees for such services, if required by that policy. The Committee may, in its discretion,
delegate to the Chair of the Committee the authority to pre-approve any audit or non-audit
services to be performed by the external auditors, provided that any such approvals are
presented to the Committee at its next scheduled meeting. See Pre-Approval Policy.
 4.
    
    Periodically review and, if necessary, update its guidelines for the Companys hiring of
employees and former employees of the external auditors who were previously engaged on the
Companys account.
 5.
    
    Discuss with management the timing and process for implementing the rotation of the lead
audit partner, the concurring partner and any other active audit engagement team partner
within the time limits and in such a manner as necessary to prevent the external auditor from
being deemed not independent of the Company.
 Internal Controls
  
    
    The adequacy and effectiveness of the Companys internal
accounting and financial controls, including computerized
information system controls and security, and consider any
recommendations for improvement of such controls.




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
    
    Major issues as to the adequacy of the Companys internal controls
and any special audit steps adopted in light of material control
deficiencies.
 
    
    Any related significant findings and recommendations of the
external auditors together with senior managements responses
thereto.
 Risk Management
  Disclosure Controls
 1.
    
    Review annually the disclosure controls and procedures, including the certification timetable
and related process. Confirm with the Chief Executive Officer and the Chief Financial Officer
the effectiveness of disclosure controls and procedures, and whether there are any significant
deficiencies in internal controls or any fraud related to management or persons who have a
significant role in internal controls.
 2.
    
    Approve the appointment and removal of Disclosure Committee Members.
 Compliance
 1.
    
    Monitor compliance by the Company with all payments and remittances required to be made in
accordance with applicable law, where the failure to make such payments could render the
directors of the corporation personally liable.
 2.
    
    Review the findings of any examination by financial or corporate governance regulatory
authorities.
 3.
    
    Establish procedures for receipt, retention and treatment of complaints received by the
Committee regarding accounting, internal accounting controls, or auditing matters and the
confidential, anonymous submission by employees of concerns regarding questionable accounting
or auditing matters. See Whistleblower Policy.
 Miscellaneous
  1.
    
    Review the appointment of the Chief Financial Officer and have the Chief Financial Officer
report to the Committee on the qualifications of new employees with a financial oversight role
(i.e. having oversight of, or direct responsibility for, preparing of financial statements and
related information).
 2.
    
    Approve the expenses submitted for reimbursement by the Chief Executive Officer.
 V.
    
    Annual Performance Evaluation