EXHIBIT
99.3






Management’s Discussion and
Analysis





The following discussion is a review of
the financial performance and position of Claude Resources Inc. (“Claude” or the
“Company”) for the years ended December 31, 2008 and 2007. This discussion is
the responsibility of Management and the information within this Management
discussion and analysis is current to March 27, 2009.  This Board of
Directors reviewed the disclosure presented herein through the Audit
Committee.  This discussion should be read in conjunction with the
Company’s audited consolidated financial statements and notes thereto. All
amounts are expressed in Canadian dollars, except where otherwise
indicated.





Overview





Claude Resources Inc. is a gold and oil
& natural gas producer with shares listed on both the Toronto Stock Exchange
(TSX-CRJ) and the NYSE Amex (NYSE Amex-CGR).  The Company’s entire
asset base is located in Canada.  Its main revenue generating assets
is the 100 percent owned Seabee gold mine, located in northern Saskatchewan. The
Company also has working interests in oil & natural gas wells located in
both Saskatchewan and Alberta that are being held for sale.





The Company’s primary mission is to
create significant shareholder value through gold exploration and
mining.  Its vision is to be highly valued by all stakeholders for its
ability to discover, develop and produce gold in a safe, environmentally
responsible and profitable manner.  The Company’s goals
include:





•
            Increasing
      its resource base through aggressive exploration
  programs;


•
            Developing
      profitable mining operations at the Seabee
  Operation;


•
            Strengthening
      its Balance Sheet and maintaining liquidity;
and


•
            Increasing
      valueto
      shareholders.





Exploration





At the Madsen property, Claude’s
objective is to fully assess the potential for high grade gold mineralization
while continuing to de-water the Madsen shaft to provide additional underground
access.  In December 2008, the Company reached an important milestone
with the commencement of its directionally-assisted underground drill program
from the 10thlevel of the Madsen mine
shaft.





Claude’s gold exploration efforts at the
Seabee Operation continue to focus on land positions within trucking distance of
the mill: the Santoy 8 and 8E zones, the Porky zones and Seabee
Deep.  In June of this year, the Company released the results of a
National Instrument 43-101 compliant inferred and indicated mineral resource
estimate at the Santoy 8 deposit.  The Company is currently completing
the environmental studies and permitting required for planned commercial mining
of the Santoy 8 and 8E deposits in 2009.





Operations





The Company will continue to focus on
the profitability of the Seabee mining operations.  This will be
accomplished through a combination of improved grade control, stringent cost
controls and developing the production profile at our lower cost satellite ore
bodies.





Financial Capacity





The Company intends to build its cash
reserves and maintain access to financial markets to ensure continued funding of
exploration efforts and expansion of mining projects.





During the second quarter of 2008, the
Company closed a debenture offering for gross proceeds of $18.1
million.  Proceeds from the offering were used to help fund the 2008
exploration program at the Madsen property (including the dewatering of the
Madsen shaft) and to address ongoing equipment and infrastructure upgrades at
the Seabee properties.








Management’s Discussion
      and Analysis

                (in millions of
      CDN dollars, except as otherwise
noted)
            Page
      2




In addition, during the fourth quarter,
Claude sold its working interest in the Edson Gas Unit No. 1 and the Edson Gas
Plant for gross proceeds of $11.2 million.  Proceeds of this
disposition will be used to ensure funding of the Madsen property and to finance
production expansion at the Seabee Mining Operation.
 
 2008 Mining
Operations
 
 Seabee Operation
 
 For
the year ending December 31, 2008, the Seabee project - consisting of feedstock
from the Seabee Mine, Santoy 7 Mine and Porky exploration project - milled
228,427 tonnes of ore, grading 6.46 grams per tonne, producing 45,466 ounces of
gold.  This compares to 227,661 tonnes of ore, grading 6.35 grams per
tonne, producing 44,323 ounces of gold in 2007.
 
 2008 Gold Production
Results
 
 Q1
                                  
                                  
                                  
                                  Q2
                                  
                                  
                                  
                                  Q3
                                  
                                  
                                  
                                  Q4
                                  
                                  
                                  Grand Total
                                  
                                  
                                  Seabee
                                  
                                  
                                  Santoy 7
                                  
                                  
                                  PorkyTonnes
                                  
                                  
                                  51,111
                                  
                                  
                                  
                                  57,984
                                  
                                  
                                  
                                  57,799
                                  
                                  
                                  
                                  61,533
                                  
                                  
                                  
                                  228,427
                                  
                                  
                                  
                                  179,437
                                  
                                  
                                  
                                  43,209
                                  
                                  
                                  
                                  5,781Grade
                                    (grams
      per tonne)
                                  
                                  
                                  5.37
                                  
                                  
                                  
                                  6.45
                                  
                                  
                                  
                                  6.77
                                  
                                  
                                  
                                  7.09
                                  
                                  
                                  
                                  6.46
                                  
                                  
                                  
                                  6.44
                                  
                                  
                                  
                                  6.94
                                  
                                  
                                  
                                  3.59Milled
      Ounces
                                  
                                  
                                  8,831
                                  
                                  
                                  
                                  12,026
                                  
                                  
                                  
                                  12,585
                                  
                                  
                                  
                                  14,021
                                  
                                  
                                  
                                  47,463
                                  
                                  
                                  
                                  37,157
                                  
                                  
                                  
                                  9,638
                                  
                                  
                                  
                                  668Gold
      Recovery %
                                  
                                  
                                  95.38
                                  %
                                  
                                  
                                  95.88
                                  %
                                  
                                  
                                  94.98
                                  %
                                  
                                  
                                  96.66
                                  %
                                  
                                  
                                  95.79
                                  %
                                  
                                  
                                  95.80
                                  %
                                  
                                  
                                  95.73
                                  %
                                  
                                  
                                  96.41
                                  %2008
      Produced Ounces
                                  
                                  
                                  8,422
                                  
                                  
                                  
                                  11,531
                                  
                                  
                                  
                                  11,962
                                  
                                  
                                  
                                  13,551
                                  
                                  
                                  
                                  45,466
                                  
                                  
                                  
                                  35,595
                                  
                                  
                                  
                                  9,227
                                  
                                  
                                  
                                  6442007
      Produced Ounces
                                  
                                  
                                  7,297
                                  
                                  
                                  
                                  9,769
                                  
                                  
                                  
                                  15,091
                                  
                                  
                                  
                                  12,166
                                  
                                  
                                  
                                  44,323
                                  
                                  
                                  
                                  38,709
                                  
                                  
                                  
                                  5,614
                                  
                                  
                                  
                                  0
 
 Total
mine operating costs increased 27 percent to $32.2 million from $25.3 million
last year.  This result was due to increases in labour, material, and
services costs within a very competitive market place.  2009
forecasted operating costs are anticipated to drop modestly with the Company’s
past and continued investment in new mobile equipment and mining
facilities.
 
 Annual Seabee Production and Costs
Statistics
 
 Dec 31
                                              
                                              
                                              Dec 312008
                                              
                                              
                                              2007Tonnes
      Milled
                                              
                                              
                                              228,427
                                              
                                              
                                              
                                              227,631Head
      Grade (grams per tonne)
                                              
                                              
                                              6.46
                                              
                                              
                                              
                                              6.35Recovery
      (%)
                                              
                                              
                                              95.8
                                              %
                                              
                                              
                                              95.4
                                              %Gold
      Produced (ounces)(1)
                                              
                                              
                                              45,466
                                              
                                              
                                              
                                              44,323Gold
      Sold (ounces)(2)
                                              
                                              
                                              44,099
                                              
                                              
                                              
                                              40,238Operating
      Expenses (CDN$ million)
                                              
                                              $
                                              32.2
                                              
                                              
                                              $
                                              25.3Cash
      Operating Costs (CDN$/oz)
                                              
                                              $
                                              729
                                              
                                              
                                              $
                                              629Cash
      Operating Costs (US$/oz)
                                              
                                              $
                                              683
                                              
                                              
                                              $
                                              586
 
 (1)Includes
ounces produced from Santoy 7 and Porky Lake bulk samples.
 (2)Excludes
640 ounces (2007 – 4,456 ounces) sold from Santoy 7 and Porky Lake bulk
samples.
 (3)For an explanation of the use of
non-GAAP performance, please refer to “Non-GAAP Performance
Measures”.
 
 Seabee Mineral Reserves and Mineral
Resources
 
 Modest
surface and underground drill programs were undertaken at Seabee in
2008.  At December 31, 2008, proven and probable reserves in the
Seabee Mining Area were 998,400 tonnes, grading 6.82 grams per tonne or 219,000
ounces.  Compared to December 31, 2007, this represents a five percent
decrease in reserve tonnage and three percent decrease in reserve
ounces.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      3
 The
Company’s mineral resources at its Seabee Operations included measured and
indicated mineral resources of 196,100 ounces and inferred mineral resources
totalled 391,100 ounces.  Compared to December 31, 2007, this
represents a seven percent increase in contained gold within our mineral
resources.
  
  Figure 1: Seabee Mining Area Year End
Gold Mineral Reserves and Mineral Resources
  In
2009, Claude is planning in excess of 30,000 metres of underground drilling to
replace 2009 production.  Drilling will evaluate downplunge extensions
of the Seabee ore shoots as well as targets east of the present mining
areas.
 
 Figure 2: Seabee Mining Area Mineral
Reserves and Resources
 
 Mineral
      Reservesand
      ResourcesProven and Probable
      ReservesProjects
                                                                                                                                            December 31,
      2008
                                                                                                                                            December 31,
      2007Tonnes
                                                                                                                                            Grade (g/t)
                                                                                                                                            ~Ozs
                                                                                                                                            Tonnes
                                                                                                                                            Grade (g/t)
                                                                                                                                            ~OzsSeabee
                                                                                                                                            685,700
                                                                                                                                            6.98
                                                                                                                                            154,000
                                                                                                                                            934,100
                                                                                                                                            6.69
                                                                                                                                            201,000Santoy 7
                                                                                                                                            54,000
                                                                                                                                            7.95
                                                                                                                                            13,800
                                                                                                                                            114,300
                                                                                                                                            6.74
                                                                                                                                            24,800Santoy 8
                                                                                                                                            177,300
                                                                                                                                            7.02
                                                                                                                                            40,000
                                                                                                                                            -
                                                                                                                                            -
                                                                                                                                            -Porky West
                                                                                                                                            81,400
                                                                                                                                            4.29
                                                                                                                                            11,200
                                                                                                                                            -
                                                                                                                                            -
                                                                                                                                            -Totals
                                                                                                                                            998,400
                                                                                                                                            6.82
                                                                                                                                            219,000
                                                                                                                                            1,048,400
                                                                                                                                            6.70
                                                                                                                                            225,800Measured and Indicated Mineral
      ResourcesProjects
                                                                                                                                            December 31,
      2008
                                                                                                                                            December 31,
      2007Tonnes
                                                                                                                                            Grade (g/t)
                                                                                                                                            ~Ozs
                                                                                                                                            Tonnes
                                                                                                                                            Grade (g/t)
                                                                                                                                            ~OzsSantoy 7
                                                                                                                                            -
                                                                                                                                            -
                                                                                                                                            -
                                                                                                                                            -
                                                                                                                                            -
                                                                                                                                            -Santoy 8
                                                                                                                                            545,600
                                                                                                                                            8.98
                                                                                                                                            157,500
                                                                                                                                            -
                                                                                                                                            -
                                                                                                                                            -Porky Main
                                                                                                                                            160,000
                                                                                                                                            7.50
                                                                                                                                            38,600
                                                                                                                                            160,000
                                                                                                                                            7.50
                                                                                                                                            38,600Porky West
                                                                                                                                            -
                                                                                                                                            -
                                                                                                                                            -
                                                                                                                                            90,000
                                                                                                                                            7.33
                                                                                                                                            21,200Totals
                                                                                                                                            705,600
                                                                                                                                            8.64
                                                                                                                                            196,100
                                                                                                                                            250,000
                                                                                                                                            7.44
                                                                                                                                            59,800Inferred Mineral
      ResourcesProjects
                                                                                                                                            December 31,
      2008
                                                                                                                                            December 31,
      2007Tonnes
                                                                                                                                            Grade (g/t)
                                                                                                                                            ~Ozs
                                                                                                                                            Tonnes
                                                                                                                                            Grade (g/t)
                                                                                                                                            ~OzsSeabee
                                                                                                                                            950,000
                                                                                                                                            8.19
                                                                                                                                            250,000
                                                                                                                                            1,020,000
                                                                                                                                            8.09
                                                                                                                                            265,200Santoy 7
                                                                                                                                            -
                                                                                                                                            -
                                                                                                                                            
                                                                                                                                            10,000
                                                                                                                                            10.00
                                                                                                                                            3,200Santoy 8
                                                                                                                                            391,500
                                                                                                                                            8.08
                                                                                                                                            102,000
                                                                                                                                            910,000
                                                                                                                                            6.10
                                                                                                                                            178,500Porky Main
                                                                                                                                            70,000
                                                                                                                                            10.43
                                                                                                                                            23,500
                                                                                                                                            70,000
                                                                                                                                            10.43
                                                                                                                                            23,500Porky West
                                                                                                                                            76,000
                                                                                                                                            6.39
                                                                                                                                            15,600
                                                                                                                                            130,000
                                                                                                                                            5.00
                                                                                                                                            20,900Totals
                                                                                                                                            1,487,500
                                                                                                                                            8.17
                                                                                                                                            391,100
                                                                                                                                            2,140,000
                                                                                                                                            7.14
                                                                                                                                            491,300
 
 The
Mineral Reserves and Mineral Resources estimates are conducted under the
direction of Qualified Persons, Philip Ng, P.Eng., Vice President Mining
Operations and Brian Skanderbeg, P Geo., Vice President
Exploration.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      4
 Health, Safety and
Environment
 
 Significant
progress was made during 2008 with respect to the Company’s Health and Safety
programs and its safety performance.  The Seabee Operation was the
first mine in Saskatchewan to commission an underground portable refuge station
to support underground ramp development.  Further, in order to reduce
the risk associated with older equipment, the Company upgraded self-rescue
equipment to be compatible with other companies in the province.  For
2009, the focus of the Company will be to increase the involvement of its
workers and supervisors to ensure that they continue to be aware of potential
hazards and make it their personal objective to ensure they and their co-workers
are able to work in an injury free environment.
 
 Claude
Resources Inc. continued with planned improvements to lessen its impact on the
environment through its enterprise risk management program.  During
2008, the Company upgraded and expanded its storage facilities of hazardous
materials at site.
 
 Exploration
 
 During
2008, at the Madsen Mine property in the Red Lake camp, 47,210 metres of surface
drilling focused on testing two advanced targets and four grassroots
targets.  Data capture, compilation and verification continued in 2008
with a National Instrument 43-101 technical report anticipated in
mid-2009.  Shaft dewatering continued throughout 2008 and, in December 2008, the Company reached an
important milestone with the commencement of its directionally-assisted
underground drill program from the 10thlevel of the Madsen mine shaft. 
Phase 1 of this underground program is targeting the 8 Zone system with 12,000
metres of drilling and is expected to continue through to the second quarter of
2009.
 
 Exploration
on the Seabee property during 2008 focused on permitting and developing
satellite ore bodies to be used as supplemental feed for the Seabee
mill.  A 35,000 tonne bulk sample permit was obtained at Porky West in
June 2008.  The Company worked diligently to move Santoy 8 towards
commercial production by preparing an Environmental Impact
Statement.  Combined with ongoing production from Santoy 7, the
Company is continuing to demonstrate its capacity to effectively grow the Seabee
camp from discovery, to development and to production.
 
 Geological
exploration activities were carried out under the direction of Qualified Person,
Brian Skanderbeg, P. Geo., Vice President Exploration for Claude Resources
Inc.
 
 Madsen
 
 The
Madsen mine, having produced in excess of 2.4 million ounces over its 40 year
operating history, was the third largest gold producer in the Red Lake
camp.  The property comprises over 4,000 hectares (10,000 acres) and
includes a fully functional 500 ton per day gold mill, 4,000 foot deep shaft and
permitted tailings facility.
 
 During
2008, exploration drilling continued to test the Fork Zone target. The Fork Zone
is located mid-way between the Starratt-Olsen and Madsen mines.  The
target comprises two sub-parallel, moderately, southeast-dipping shear systems
that host southwest plunging ore-shoots. Fifty-five drill holes were completed
in 2008, with the potential of the system highlighted by drill intercepts which
included 17.32 grams per tonne over 10.33 metres and 31.03 grams per tonne over
2.70 metres. The mineralized shear system has been intercepted over a strike
length in excess of 450 metres and remains open along strike and at
depth.
 
 The
Starratt Olsen mine, located approximately three kilometres south of the Madsen
mine and mill complex, operated from 1948 through 1956 and produced
approximately 164,000 ounces of gold at 0.18 ounces per ton.  The potential
of the Starratt-Olsen footwall environment was demonstrated during 2008 by the
discovery of several, narrow high-grade vein systems that returned intercepts of
185.62 grams per tonne over 0.41 metres, 26.85 grams per tonne over 0.58 metres
and 21.25 grams per tonne over 1.0 metre.  The mineralized structures
hosting the intercepts are between 100 and 250 metres in the footwall of the
Starratt Olsen historic infrastructure and show strong similarities to the
historic 8 Zone style mineralization.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      5
  In
addition to the advanced targets, Claude also tested four grassroots and/or
conceptual targets during 2008. The Russett South, Hasaga Shoots, Polymetallic
and 8-Zone up-plunge targets were tested with 16 holes for 11,380
metres.  Drilling of the Russett South, Hasaga and the Polymetallic
zones failed to produce any significant assays; further testing of these zones
will be deferred.  Results from the 8 Zone up-plunge program have
warranted further testing in 2009.
 
 In
conjunction with surface exploration activities, rehabilitation and dewatering
of the Madsen mine shaft was initiated in July of 2007 and is proceeding as
planned.  Access to the 10th level,
as a platform for exploration drilling was achieved in the third quarter of 2008
and Phase 1 drilling was initiated in December.  The primary target of
the underground program is the plunge and strike continuity of the 8
Zone.  It was discovered in 1969 and produced through to mine closure
in 1976 between the 23rd and
27th
levels.  Underground mapping and historic documentation shows a series
of high-grade, quartz-vein systems and silicification associated with a
complexly-folded package of mafic and ultramafic lithologies. Historic drilling
immediately above and below the 27th level,
the deepest production level, returned drill intercepts including 27.77 grams
per tonne over 4.39 metres, 94.63 grams per tonne over 2.01 metres, 76.11 grams
per tonne over 0.91 metres and 42.86 grams per tonne over 0.91
metres.  The system remains open along strike and up and down
plunge.
 
 Claude
continued with historic data capture, compilation and verification in
2008.  As part of the long term development plans at Madsen, an
updated National Instrument 43-101 resource calculation and technical report has
been initiated and is expected to be completed in the second quarter of 2009.
SRK Consulting Inc. has been contracted to oversee the compilation and technical
report and has also completed a structural review of the Madsen
property.
 
 With
the initiation of the Phase I 8 Zone underground drill program and new
discoveries at the Fork Zone and Starratt-Olsen, the 2008 exploration program
was a critical step in the on-going advanced exploration at
Madsen.  Moving forward, the 2009 drill program plans to complete
22,000 metres of underground drilling on the 8 Zone plunge and strike extensions
as well as 10,500 metres of surface drilling on the Fork Zone, Starratt Olsen
Footwall and the 8 Zone up-plunge targets.
 
 Santoy 8 Project
 
 The
Santoy 8 and 8E deposits are located approximately 14 kilometres east of the
Seabee Mine and accessed via an all-weather road.  Gold mineralization
is hosted in siliceous, skarnified, shear structures with
sulfide-chlorite-quartz veins and in silicified granitoid sills.  The
mineralized lenses dip moderately to steeply to the east and are interpreted to
be amenable to bulk mining techniques.  Gold mineralization of the
Santoy 8 ore lens occurs over a strike length of 600 metres, a width of 350
metres and remains open along strike and down plunge to the
north.  The Santoy 8E ore lens has been intercepted over a strike
length of 200 metres, width of 250 metres and remains open along strike and down
plunge to the north.  True thickness of the Santoy 8 and 8E ore
deposits varies from 1.5 metres to 30 metres.
 
 During
2008, Claude updated its National Instrument 43-101 compliant mineral resource
calculation for Santoy 8 and conducted an economic study to evaluate the portion
of mineral resources it plans to mine in the first three years of the Santoy 8
project.  The upgrading
of the resource model is the Company's first step in the transition from
exploration through bulk sampling to commercial production at the Santoy 8
deposits.
 
 At
December 31, 2008, the mineral reserve at Santoy 8 was 177,300 tonnes at 7.02
grams per tonne, the indicated mineral resources consisted of 545,600 tonnes at
8.98 grams per tonne and the inferred mineral resource was 391,500 tonnes at
8.08 grams per tonne. The increase in the quality and quantity of the mineral
reserves and mineral resources are a result of the successful 2007 drill program
and the incorporation of the results into Seabee’s Life of Mine
Plan.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      6
 The Santoy 8 Power Line Project, which
will tie this property to the provincial power grid, continued during
2008.  Phase One of the project, the erection of the power line poles, is
more than 90 percent complete.  Phase Two, consisting of the power line
installation, is planned for the first half of 2009.  The final phase
involves the installation of the main transformer and is expected to be
completed during the second half of 2009.
 
 Claude
views the Santoy 8 project as a key driver in the expansion of the Seabee
Operation and in lowering operating costs over the next three
years.  The Company is
currently completing the environmental studies and permitting required for
planned commercial mining of the Santoy 8 and 8E deposits in
2009.
 
 Porky
 
 Claude
wholly owns the Porky Lake structural zones located approximately three
kilometres northwest of its Seabee gold mill.  The Porky Lake West and
Porky Lake East (“Pigeon Lake”) gold zones lie on opposite flanks of the large
Porky Lake anticline, along a gold-bearing horizon which has been traced
intermittently over 7.5 kilometres from the western extent of Porky West zone to
the north of the Pigeon Lake zone in the east.  Drill testing from
2002 to 2006 successfully discovered two structural zones of significant
mineralization, Porky Main and Porky West.  The extensive mineralized
horizon in the Porky Lake Region will continue to be explored by surface
prospecting and geochemical surveys and further drill
testing.  Drilling is expected to begin in March 2009.
  Claude developed
road access and all surface infrastructures to support a third quarter 2006 bulk
sample at the Porky West site.  As
a follow up to this program, Claude recently obtained an additional 35,000 tonne
bulk sampling permit and in June 2008, dewatering of the decline and underground
development was initiated.  Once preparations were completed, a decline was
driven down to access the 75-11 sill and a cut and fill lift is planned on the
65-11 sill during the initial phase of the expanded bulk sampling program. 
During 2008, 5,781 tonnes at a grade of 3.59 grams per tonne were processed from
Porky West.  The Company plans to sample additional tonnes from Porky West
during
2009.
  At
December 31, 2008, the mineral reserve at Porky West was 81,400 tonnes at 4.29
grams per tonne, the indicated mineral resources consisted of 160,000 tonnes at
7.50 grams per tonne and the inferred mineral resource was 146,000 tonnes at
8.33 grams per tonne.
  Combined
with the Santoy 8 deposits, the potential commercial development of Porky West
brings the Company closer to full integration of satellite production into the
Seabee central milling
complex.
 Quality Assurance and Quality Control
Procedures
 
 Rigorous
quality assurance and quality control procedures have been implemented including
the use of blanks, standards and duplicates.  Geochemical analyses
were submitted to TSL Laboratory in Saskatoon, Saskatchewan, Accurassay
Laboratories at Thunder Bay, Ontario, and or the Seabee minesite
lab.  The former two laboratories are ISO approved. Core samples were
analyzed by a 30 gram gold fire assay with an atomic absorption and gravimetric
and/or screen fire finish. Intercepts are reported as drilled widths and range
from 65 percent to 90 percent of true widths.  Composite intervals
were calculated using a 3.00 grams per tonne cut-off and may include internal
dilution.
 
 Results of
Operations
 
 The Company reports its results of
operations based on Canadian Generally Accepted Accounting Principles
(“GAAP”).
 
 Financial
 
 For
the year ended December 31, 2008, the Company recorded net earnings of $0.4
million, or $0.00 per share, after a gain of $6.5 million arising from the sale
of certain of the Company’s natural gas assets and after a $2.2 million non-cash
recovery related to income tax benefits arising from the issuance of flow
through shares.  This compares to a net loss of $7.0 million, or $0.08
per share, after a $1.7 million non-cash recovery related to income tax benefits
arising from the issuance of flow-through shares for the comparable period in
2007.
 Management’s Discussion
      and Analysis

                    (in millions of CDN dollars,
      except as otherwise noted)
                Page
      7
 Revenue
 
 2008
marked the first full year of production from the Santoy 7 mine.  In
2007, the Santoy 7 project was declared in commercial production effective
October 1, 2007.  Prior to this date, gold sales net of expenditures
were not included in earnings but were offset against the carrying value of the
asset.
 
 Gold
revenue from the Company’s Seabee Operation for the year ended 2008 increased 37
percent to $41.0 million from $29.9 million reported for the year ended
2007.  The increase was a result of higher gold sales volume (2008 –
44,100 ounces; 2007 – 40,200 ounces) combined with a 25 percent improvement in
Canadian dollar gold prices realized: 2008 - $930 (US $871); 2007 - $744 (US
$692).  The comparative increase in gold sales volume was attributable
mainly to 2007 sales volume excluding ounces sold that originated from the
Santoy 7 bulk sample.
 
 Expenditures
 
 For
the year ended December 31, 2008, the Company reported mine operating costs of
$32.2 million, a 27 percent increase from the $25.3 million recorded in
2007.  This increase was largely attributable to the Company
experiencing the industry wide challenges of increasing labour and consumable
costs.  Total cash cost per ounce increased 16 percent to CDN $729 (US
$683)  per ounce this year to date from CDN $629 (US $586) in
2007.  This result was due to a combination of higher operating costs
offset by improved gold sales volume.
 
 Total Cash
Costs(1)per Gold Ounce
Sold
 
 Years ended
                                      
                                      Dec 31
                                      
                                      
                                      Dec 312008
                                      
                                      
                                      2007Operating expenses (CDN $
      thousands)
                                      
                                      $
                                      32,166
                                      
                                      
                                      $
                                      25,311Divided by ounces
      sold
                                      
                                      
                                      44,100
                                      
                                      
                                      
                                      40,200Total cash costs per ounce
      (CDN$)
                                      
                                      $
                                      729
                                      
                                      
                                      $
                                      629CDN $ Exchange
      Rate
                                      
                                      
                                      1.0673
                                      
                                      
                                      
                                      1.0741Total cash costs per ounce
      (US$)
                                      
                                      $
                                      683
                                      
                                      
                                      $
                                      586
 
 (1)For an
explanation of the use of non-GAAP performance, please refer to “Non-GAAP
Performance Measures”.
 
 Depreciation, Depletion and
Accretion
 
 For
the year ended December 31, 2008, depreciation, depletion and accretion reported
was $12.5 million, a 51 percent increase over the $8.3 million reported in
2007.  These results were due to a higher asset base combined with
fewer reserve tonnes at the Seabee Mine.
 
 General and Administrative
Expense
 
 Year
to date costs increased to $4.7 million from $4.2 million for the same period in
2007.  This was largely a result of increased labour, legal and
regulatory compliance costs.
 
 Interest and Other
 
 For
the year ended December 31, 2008, interest and other expenses increased to $1.3
million.  The substantial increase noted is mainly attributable to the
interest paid on the debenture.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      8
 Gain (Loss) on Sale of
Assets
 
 During
the year, the Company realized a small gain on the sale of certain of its
available-for-sale investments.  This compares to the small loss
realized in 2007.
 
 Write down of mineral
properties
 
 The
write down of mineral properties of $0.9 million, $0.6 million in 2007, related
to a reduction in carrying values of certain exploration properties in
Saskatchewan.
 
 Income Taxes
 
 The
income tax recovery of $2.2 million is the estimated income tax benefit arising
from the issuance of flow-through shares in 2007 and the subsequent renouncement
of those expenditures in 2008.  A similar benefit of $1.7 million was
recorded in 2007.
 
 Liquidity & Financial
Resources
 
 The
Company had working capital of $19.2 million (2007 - $11.9
million).  The working
capital improvement was largely the result of increases to cash and cash
equivalents, inventories (including shrinkage stope platform costs) and payables
offset by decreases in accounts receivable and demand loans.  Earnings
before interest, taxes, deprecation and amortization (EBITDA)(1)was $3.5 million (2007 - $0.2
million).
 (1)For an
explanation of the use of non-GAAP performance, please refer to “Non-GAAP
Performance Measures”.
  
 Working Capital and Current
Ratios
 
 Dollars,in thousands
      of CDN dollars
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  Percent
      Increase (Decrease)2008
                                  
                                  
                                  2007
                                  
                                  
                                  2008
                                  
                                  
                                  2007Current
    assets
                                  
                                  
                                  36,719
                                  
                                  
                                  
                                  28,296
                                  
                                  
                                  
                                  30
                                  
                                  
                                  
                                  19Current
      liabilities
                                  
                                  
                                  17,511
                                  
                                  
                                  
                                  16,438
                                  
                                  
                                  
                                  7
                                  
                                  
                                  
                                  4Working
    capital
                                  
                                  
                                  19,208
                                  
                                  
                                  
                                  11,858
                                  
                                  
                                  
                                  62
                                  
                                  
                                  
                                  48Current
    ratio
                                  
                                  
                                  2.1
                                  
                                  
                                  
                                  1.7
                                  
                                  
                                  
                                  24
                                  
                                  
                                  
                                  13
 
 
 The Company’s typical cash requirement
over the first and second quarters of each year is significant because of the
Seabee Operations winter ice road resupply, which includes restocking diesel,
propane and other large consumables as well as the continued upgrading of the
mining fleet and mine infrastructure.  In December 2008, the Company
sold certain of its natural gas interests in Alberta for gross proceeds of $11.2
million.  Proceeds from the sale will be used to support the Madsen
exploration program, the Seabee Operations winter ice road resupply and general
Corporate purposes.
 
 Investing
 
 Mineral property expenditures during the
year were $25.3 million, a $6.8 million decrease from 2007. Year to date,
expenditures were comprised of the following: Seabee mine development of $8.9
million (2007 - $10.6 million); exploration costs,focusing on the Madsen, Santoy 8 and
Porky exploration projects,of $11.0 million; and, property, plant
and equipmentadditionsof $5.4 million. Property, plant and
equipmentadditionsinclude mining equipment, camp
infrastructure, tailings management facility expansion and Madsen
dewatering.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      9
 In 2008, no reclamation and
decommissioning deposits were required for the Company’s Seabee Operations. In
2007, $0.1 million was deposited.
 
 Financing
 
 The Company closed a debenture offering
for gross proceeds of $18.1 million.  This debenture features a 12
percent, five year term with monthly interest only
payments.  Debenture holders received warrants in the amount of 10
percent of the debenture purchase.  Each warrant entitles the holder
to acquire one common share at the exercise price of $1.60 per common share for
a period of five years from the date of closing.
 
 Other financing activities included the
issuance of 114,633 common shares (2007 – 122,289 common shares) pursuant to the
Company’s Employee Share Purchase Plan.
 
 The $0.4 million increase in royalty
obligations was a result of the accrual and payment of interest expense relating
to the Red Mile royalty transactions.
 
 During
the year the Company repaid $2.0 million of its demand loans
outstanding.  The proceeds from and repayments of capital lease
obligations relate primarily to production equipment.
 
 Capital Structure
 
 The
Company’s objective when managing capital is to safeguard its ability to
continue as a going concern so that it can continue to provide adequate returns
to shareholders and benefits to other stakeholders.  The Company
manages the capital structure and makes adjustments to it in light of changes in
economic conditions and the risk characteristics of the underlying
assets.  In order to maintain or adjust the capital structure, the
Company may issue new shares through private placements, sell assets or incur
debt.  The Company is not subject to externally imposed capital
requirements.
 
 The
Company utilizes a combination of short-term and long-term debt and equity to
finance its operations and exploration.  Short-term debt facilities
include access to a $3.5 million operating line of credit
 
 The Capital structure is a
follows:
 
 Capital
      Structure,in thousands
      of CDN dollars
                                            
                                            
                                            
                                            
                                            
                                            Dec 31
                                            
                                            
                                            Dec 31Interest
                                            
                                            Maturity
                                            
                                            2008
                                            
                                            
                                            2007Operating line of credit(1)
                                            
                                            Prime
      + 1.25%
                                            
                                            
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -Demand loan #
    1
                                            
                                            
                                            5.99%
                                            
                                            Feb/2010
                                            
                                            
                                            1,302
                                            
                                            
                                            
                                            2,348Demand loan #
    2
                                            
                                            Prime
      + 1.50%
                                            
                                            Aug/2011
                                            
                                            
                                            2,667
                                            
                                            
                                            
                                            3,667Debenture
                                            
                                            
                                            12%
                                            
                                            May/2013
                                            
                                            $
                                            16,575
                                            
                                            
                                            $
                                            -Total debt
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            20,554
                                            
                                            
                                            
                                            6,015Shareholders’
      equity
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            87,072
                                            
                                            
                                            
                                            88,107Total debt to
      capital
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            .24
                                            
                                            
                                            
                                            .07
 
 (1)Short-term debt facilities include
access to a $3.5 million operating line of credit.
 
 Derivative Instruments and Hedging
Activities
 
 At
December 31, 2008, the Company had no material off-balance sheet arrangements.
To mitigate the effects of price fluctuations in revenue, Claude may undertake
hedging transactions, from time to time, in respect of the price of gold and
foreign exchange rates.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      10
 Contractual
Obligations
 
 The
Company’s contractual and other obligations as at December 31, 2008 are
summarized as follows:
 
 Payments/Commitments due by
      periodTotal
                
                
                Less than
                  1 year
                
                
                2-3
                  years
                
                
                4-5
                  years
                
                
                More than
                  5 yearsContractual
      ObligationDemand
      loans
                
                
                3,969,000
                
                
                
                2,110,000
                
                
                
                1,859,000
                
                
                
                -
                
                
                
                -Interest
      on demand loans
                
                
                297,000
                
                
                
                197,000
                
                
                
                100,000
                
                
                
                -
                
                
                
                -Debenture
                
                
                18,095,000
                
                
                
                -
                
                
                
                -
                
                
                
                18,095,000
                
                
                
                -Debenture
      interest
                
                
                9,534,600
                
                
                
                2,171,400
                
                
                
                4,342,800
                
                
                
                3,020,400
                
                
                
                -Capital
      lease obligation
                
                
                3,064,000
                
                
                
                1,450,000
                
                
                
                1,574,000
                
                
                
                40,000
                
                
                
                -Office
      lease
                
                
                73,000
                
                
                
                73,000
                
                
                
                -
                
                
                
                -
                
                
                
                -Royalty
      payments(1)
                
                
                53,288,000
                
                
                
                5,518,000
                
                
                
                11,405,000
                
                
                
                12,736,000
                
                
                
                23,629,000Royalty
      obligations(1)
                
                
                83,130,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                83,130,000171,450,600
                
                
                
                11,519,400
                
                
                
                19,280,800
                
                
                
                33,891,400
                
                
                
                106,759,000
 
 (1)To repay the Royalty and
Royalty Obligations, funds are available from the Restricted Promissory Note and
interest thereon.
 
 Accounting Estimates
 
 Claude’s
significant accounting policies are contained in Note 2 to the consolidated
financial statements. The following is a discussion of the accounting estimates
that are critical in determining the Company’s financial results.
 
 Reserves
 
 Estimation
of reserves involves the exercise of judgment. Forecasts are based on
geological, geophysical, engineering and economic data, all of which are subject
to many uncertainties and interpretations. The Company expects that, over time,
reserve estimates may be revised upward or downward based on updated
information. Such information may include revisions to geological data or
assumptions, a change in economic data, and the results of drilling and
exploration activities. Reserve estimates can have a significant impact on net
earnings, as they are a key component in the calculation of depreciation and
depletion. In addition, changes in reserve estimates, gold, petroleum or natural
gas prices and future operating and capital costs can have a significant impact
on the impairment assessments of the assets.
 
 Valuation of
Properties
 
 Claude
assesses the carrying values of its properties annually or more frequently if
warranted by a change in circumstances.  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
reserves.  A material change in assumptions may significantly impact
the potential impairment of these assets.
 
 Asset Retirement
Obligations
 
 Claude’s mining, exploration and
development activities are subject to various levels of federal and provincial
law as well as environmental regulations, including requirements for closure and
reclamation. Management judgment and estimates are used when estimating
reclamation and closure costs. In some cases, these costs will be incurred many
years from the date of estimate. Estimates may be revised as a result of changes
in government regulations or assumptions.
 
 Shrinkage Stope Platform
Costs
 
 The Company utilizes shrinkage stoping
and long-hole mining as its primary mining methods to mine the Seabee orebody.
Under the shrinkage stoping method, ore used as a working platform to access and
mine further ore is valued at the lower of cost and net realizable value. Under
the long-hole mining method, costs incurred to access the long-hole stope are
inventoried and also valued at the lower of cost and net realizable
value.  Both amounts are recorded as shrinkage stope platform costs on
the balance sheet. Broken ore from the shrinkage stope is reclassified to
inventory once removed from the stope and taken to surface. If actual tonnage
and grade vary significantly from estimates, or if the price of gold declines,
there could be a material impact on the profitability of mining
operations.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      11
 Business Risk
 
 Claude’s profitability is dependent on
several factors: the quantity of gold and oil, ngls, & natural gas produced,
related commodity prices, foreign exchange, operating costs, capital
expenditures, exploration levels and environmental, health and safety
regulations.
 
 Inherent Exploration and Mining
Risks
 
 The exploration for and development of
mineral deposits involves significant risks, which even the combination of
careful evaluation, experience and knowledge may not eliminate. It is impossible
to guarantee that current or future exploration programs on existing mineral
properties will establish reserves. Whether an orebody will continue to be
commercially viable depends on a number of factors. These factors include
particular attributes of the deposit, such as size, grade and proximity to
infrastructure, as well as metal prices, which cannot be predicted and have been
highly volatile in the past.
 
 Gold Price
Volatility
 
 The economics of developing gold
properties is affected by many factors, including cost of operations variations
in the grade of ore mined and the price of gold. 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, 2008, the market price for gold ranged from a low of
US $713 to a high of US $1,011, with an average price of US
$872.
 
 Any significant drop in the price of
gold adversely impacts Claude’s revenues, profitability and cash flows. Also,
sustained low gold prices may cause the cessation of new mining projects;
decrease the amount of capital available for exploration activities; reduce
existing reserves by rendering blocks with grades marginally above mine cut-off
uneconomic; or cause the write-off of an asset whose value is impaired by the
low price of gold.
 
 Foreign Exchange
Risk
 
 The price of gold and oil & natural
gas is denominated in US dollars and, accordingly, Claude’s revenue from
operations are denominated and received in US dollars. As a result, fluctuations
in the US dollar against the Canadian dollar could result in unanticipated
changes in the Company’s financial results, which are reported in Canadian
dollars. During the year ended December 31, 2008, CDN$/US$ exchange rate ranged
from a low of $0.9765 to a high of $1.2935, with an average of
$1.0673.
 
 Ore Reserves and Ore Grade
Estimates
 
 Claude has assessed its mineral reserves
and mineral resources, and while the Company believes that the calculation
methods used are appropriate, such calculations 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. The indicated level for the recovery of gold or
other minerals may not be realized. Market price fluctuations of gold or other
minerals may render reserves and deposits containing relatively lower grades of
mineralization uneconomic. Moreover, short-term operating factors related 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.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      12
 Access to Funding
 
 Claude’s ability to continue or expand
its production, exploration and development activities depends in part on its
ability to generate revenue from its operations or to obtain financing through
joint ventures, debt financing, equity financing, production sharing
arrangements or other means.
 
 If the Company fails to meet its ongoing
obligations on a timely basis it 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 $10.0 million is the minimum
exploration expenditure required to fulfill Claude’s intended exploration
programs.
 
 Environmental Risk
 
 In connection with its operations and
properties, Claude 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 is
generally toward stricter standards, a trend that is likely to continue in the
future, which may necessitate significant capital outlays. It may also
materially affect Claude’s results of operations and business, or cause material
changes or delays in the Company’s intended activities.
 
 Unfavourable Government Regulatory
Changes
 
 Claude is affected to varying degrees by
government regulations that relate to mining operations, the acquisition of
land, pollution control, 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 conditions set out in
any permit or failure to comply with 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.
 
 Operations may also be affected by
government regulations with respect to restrictions on production, price
controls, export controls, foreign exchange controls, income taxes,
expropriation of property, environmental legislation and mine
safety.
 
 Non-Operator Status of Oil and Natural
Gas Properties
 
 All of Claude’s Alberta oil &
natural 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 inherent in the Company’s oil &
natural gas operations are similar to those of its gold
operations.
 
 Industry Competition
 
 Claude’s business is intensely
competitive. The Company competes with other mining companies, some of which
have greater resources and experience. Competition in the precious metals mining
industry is primarily for mineral-rich properties that can be developed and
produced economically. There is also competition for the technical expertise to
find, develop and produce such properties; the labour to operate them; and the
capital to finance their development.
 
 If the Company is unable to compete with
other mining companies for these mineral deposits, it could have a material
adverse effect on Claude’s results of operations and
business.
 
 Personnel Risk
 
 Many of the projects undertaken by the
Company rely on the availability of skilled labour and the capital outlays
required to employ such labour. The Company employs full-time and part-time
employees, contractors and consultants to assist in executing operations and
providing technical guidance.  In the event of a skilled labour
shortage, various projects of the Company may not become operational due to
increased capital outlays associated with labour.  Further, a skilled
labour shortage could result in operational issues such as production shortfalls
and higher mining costs.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      13
  Flow Through
Securities
 
 Under the Canadian Income Tax Act,
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 expend the funds on qualifying 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 be able to 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.
 
 At December 31, 2008, all flow-through
qualifying expenditures have been made by the Company.
 
 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.  As
such, situations may arise where such directors are in a conflict of interest
with the Company.  The Company will resolve any actual conflicts of
interest if and when the same arise in accordance with the Company’s Conflict of
Interest Policy.
 
 Extreme and Persistent Weather
Conditions
 
 The Seabee Operation, certain of the
Company’s oil and natural gas properties and the Company’s exploration
properties are all located in the northern portions of Saskatchewan, Ontario,
Manitoba and Alberta. 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.
 
 Shareholder Dilution
 
 As of December 31, 2008, there were
directors, officers, key employees and consultant stock options outstanding to
purchase 3,541,335 common shares and 1,809,500 share purchase
warrants.  These options and warrants, if fully exercised, would
constitute approximately 5.2 percent of the Company’s resulting share capital.
The exercise of such options and the subsequent resale of such shares in the
public market could adversely affect the prevailing share market price and the
Company’s ability to raise equity capital in the future at a time and price
which it deems appropriate.  The Company may also enter into
commitments in the future which would require the issuance of additional common
shares and the Company may grant additional share purchase warrants and stock
options.  Any share issuances from the Company’s treasury could result
in immediate dilution to existing shareholders.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      14
 Title to Company
Properties
 
 Acquisition of
title to mineral properties is a very detailed and time-consuming process.
Claude has investigated title to all of its mineral properties and has obtained
title opinions with respect to its most significant properties. To the best of
the Company’s knowledge, titles to all properties are in good standing. For the
Madsen properties, Claude has searched title records for any and all
encumbrances. For the Seabee properties, the Company has examined property
search abstracts from Saskatchewan Energy & Resources as well as made
inquiries and reviewed lease files from the department. It has also received
confirmation of title 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.
 
 Insurance
 
 In the course of
exploration, development and production of mineral properties, certain risks may
occur, in particular, unexpected or unusual operating conditions such as rock
bursts, cave-ins, fire, flooding and earthquakes. It is not always possible to
fully insure against such risks and Claude may decide not to insure 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 Company.
 
 Outlook
 
 For 2009, the
Company will continue to focus on the following:
 
 i)
                  Advance the 22,000 metre
      underground and 10,500 metre surface exploration drill programs at the
      Company’s 100 percent owned Madsen exploration property with a
      continuation of the shaft dewatering
  program;
 ii)
                  Complete a National Instrument
      43-101 resource estimate at
Madsen;
 iii)
                  At the Seabee Operations, continue
      Seabee Mine/Deep exploration and development to increase or sustain
      reserves and resources;
 iv)
                  Further develop satellite deposits
      at the Seabee Operations, by continuing with an underground bulk sampling
      program at Porky West and, pending environment approval and permits,
      moving Santoy 8 towards commercial production;
  and
 v)
                  Invest in capital projects and
      equipment to increase both production and productivity at the Seabee
      Operation.
 
 For 2009,
forecasted gold production at the Seabee Operation is estimated to range from
48,000 to 54,000 ounces of gold.   Cash operating costs for 2009
are estimated to be approximately $33.0 million.
  Capital
is expected to remain at current year levels as a result of added investment at
Madsen and the continued upgrades at the Seabee
Operations.
  At
current gold prices and forecast production, Management believes operating cash
flows will be sufficient to fund the continued exploration at Madsen and winter
ice road resupply requirements at the Seabee properties and
area.The
Company is however proceeding with a private placement offering first announced
on March 23, 2009, which is expected to close on or about April 9,
2009.  Proceeds of the issue will be used to repay a portion of the
outstanding debentures (subject to satisfaction of any necessary approvals or
other requirements), to incur Canadian Exploration Expenses as defined in the
Income Tax Act (Canada) and for general corporate purposes.As
well, the Company intends to divest of its remaining non core assets, the
proceeds of which could decrease the need for additional capital to be
raised.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      15
 Key Sensitivities
 
 Earnings from Claude’s gold operation is
sensitive to fluctuations in both commodity and currency prices. The key factors
and their approximate effect on earnings, earnings per share and cash flow,
based on assumptions comparable to 2008 actuals, are as
follows:
 
 Gold
 
 For a US $10 movement in gold price per
ounce, earnings and cash flow will have a corresponding movement of CDN $0.5
million, or $0.00 per share. For a $0.01 movement in the US$/CDN$ exchange rate,
earnings and cash flow will have a corresponding movement of $0.4 million, or
$0.00 per share.
 
 Fourth quarter Results and Selected
Financial Information
 
 For
the quarter ended December 31, 2008, the Company recorded net earnings of $2.4
million, or $0.03 per share, compared to a net loss of $1.8 million loss, or
$0.02 per share, for the comparable period in 2007.  For the three months ended
December 31, 2008, EBITDA was $1.5 million, or $0.02 per share, compared to $0.7
million, or $0.01 per share, for the comparable period last
year.
 
 Gold
revenue generated during the fourth quarter was $12.1 million, a 10 percent
increase over the $11.0 million reported for the same period in
2007.  This was a result of lower gold sales volume compared to 2007
(Q4 2008 – 12,800 ounces; Q4 2007 – 14,200 ounces), more than offset by improved
Canadian dollar gold prices realized Q4 2008 - $990 (US $816); Q4 2007 - $776
(US $790) are attributable to the improvement.
 
 For
the three months ended December 31, 2008, total mine operating costs decreased 3
percent to $8.4 million from $8.7 million for the same period last
year.  Stabilization of these operating costs offset by the
depreciating Canadian versus US dollar exchange rate resulted in a 12 percent
increase in Canadian dollar cash operating cost per ounce:  Q4 2008 –
CDN $683 (US $564); Q4 2007 – CDN $610 (US $621).
 During
the fourth quarter of 2008, depreciation, depletion and accretion of the
Company’s gold assets of $4.0 million represented a 74 percent increase compared
to the $2.3 reported during the comparable period in 2007.  These
results are attributable to a higher asset base as well as fewer reserve tonnes
at the Seabee Mine.
 
 For
the fourth quarter of 2008, general and administrative costs were 44 percent
higher, increasing to $1.3 million from $0.9 million in 2007.  This
was largely due to interest expense associated with the debenture.
 
 The
write down of mineral properties of $0.9 million related to reduction in
carrying values of certain exploration properties in Saskatchewan.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      16
  Quarterly
Information
 
 Dec 31
                                                  
                                                  
                                                  Sept 30
                                                  
                                                  
                                                  Jun 30
                                                  
                                                  
                                                  Mar 31
                                                  
                                                  
                                                  Dec 31
                                                  
                                                  
                                                  Sep 30
                                                  
                                                  
                                                  Jun 30
                                                  
                                                  
                                                  Mar 31Unaudited ($
      millions)
                                                  
                                                  2008
                                                  
                                                  
                                                  2008
                                                  
                                                  
                                                  2008
                                                  
                                                  
                                                  2008
                                                  
                                                  
                                                  2007
                                                  
                                                  
                                                  2007
                                                  
                                                  
                                                  2007
                                                  
                                                  
                                                  2007Gold
revenue
                                                  
                                                  
                                                  12.1
                                                  
                                                  
                                                  
                                                  10.9
                                                  
                                                  
                                                  
                                                  9.9
                                                  
                                                  
                                                  
                                                  8.1
                                                  
                                                  
                                                  
                                                  11.0
                                                  
                                                  
                                                  
                                                  8.2
                                                  
                                                  
                                                  
                                                  5.0
                                                  
                                                  
                                                  
                                                  5.7Net earnings
      (loss)
                                                  
                                                  
                                                  2.4
                                                  
                                                  
                                                  
                                                  (1.7
                                                  )
                                                  
                                                  
                                                  (0.8
                                                  )
                                                  
                                                  
                                                  0.4
                                                  
                                                  
                                                  
                                                  (1.8
                                                  )
                                                  
                                                  
                                                  (1.8
                                                  )
                                                  
                                                  
                                                  (3.4
                                                  )
                                                  
                                                  
                                                  -Net earnings (loss) per
      share(1)
                                                  
                                                  
                                                  0.03
                                                  
                                                  
                                                  
                                                  (0.02
                                                  )
                                                  
                                                  
                                                  (0.01
                                                  )
                                                  
                                                  
                                                  0.00
                                                  
                                                  
                                                  
                                                  (0.02
                                                  )
                                                  
                                                  
                                                  (0.02
                                                  )
                                                  
                                                  
                                                  (0.04
                                                  )
                                                  
                                                  
                                                  (0.00
                                                  )Average realized gold price(CDN$)
                                                  
                                                  
                                                  990
                                                  
                                                  
                                                  
                                                  888
                                                  
                                                  
                                                  
                                                  915
                                                  
                                                  
                                                  
                                                  922
                                                  
                                                  
                                                  
                                                  776
                                                  
                                                  
                                                  
                                                  720
                                                  
                                                  
                                                  
                                                  695
                                                  
                                                  
                                                  
                                                  765Average realized gold price(US$)
                                                  
                                                  
                                                  816
                                                  
                                                  
                                                  
                                                  853
                                                  
                                                  
                                                  
                                                  906
                                                  
                                                  
                                                  
                                                  918
                                                  
                                                  
                                                  
                                                  790
                                                  
                                                  
                                                  
                                                  689
                                                  
                                                  
                                                  
                                                  633
                                                  
                                                  
                                                  
                                                  653Ounces sold(2)
                                                  
                                                  
                                                  12,200
                                                  
                                                  
                                                  
                                                  12,300
                                                  
                                                  
                                                  
                                                  10,800
                                                  
                                                  
                                                  
                                                  8,800
                                                  
                                                  
                                                  
                                                  14,200
                                                  
                                                  
                                                  
                                                  11,400
                                                  
                                                  
                                                  
                                                  7,100
                                                  
                                                  
                                                  
                                                  7,500Tonnes milled(3)
                                                  
                                                  
                                                  61,500
                                                  
                                                  
                                                  
                                                  57,800
                                                  
                                                  
                                                  
                                                  58,000
                                                  
                                                  
                                                  
                                                  51,100
                                                  
                                                  
                                                  
                                                  65,500
                                                  
                                                  
                                                  
                                                  65,700
                                                  
                                                  
                                                  
                                                  49,400
                                                  
                                                  
                                                  
                                                  47,000Ounces produced(3)
                                                  
                                                  
                                                  13,600
                                                  
                                                  
                                                  
                                                  12,000
                                                  
                                                  
                                                  
                                                  11,500
                                                  
                                                  
                                                  
                                                  8,400
                                                  
                                                  
                                                  
                                                  12,200
                                                  
                                                  
                                                  
                                                  15,100
                                                  
                                                  
                                                  
                                                  9,800
                                                  
                                                  
                                                  
                                                  7,300Grade processed(g/t)
                                                  
                                                  
                                                  7.09
                                                  
                                                  
                                                  
                                                  6.77
                                                  
                                                  
                                                  
                                                  6.45
                                                  
                                                  
                                                  
                                                  5.37
                                                  
                                                  
                                                  
                                                  6.08
                                                  
                                                  
                                                  
                                                  7.46
                                                  
                                                  
                                                  
                                                  6.38
                                                  
                                                  
                                                  
                                                  5.13Cash cost per ounce(4)(CDN$/oz)
                                                  
                                                  
                                                  683
                                                  
                                                  
                                                  
                                                  757
                                                  
                                                  
                                                  
                                                  750
                                                  
                                                  
                                                  
                                                  729
                                                  
                                                  
                                                  
                                                  610
                                                  
                                                  
                                                  
                                                  591
                                                  
                                                  
                                                  
                                                  726
                                                  
                                                  
                                                  
                                                  631Cash
      cost per ounce (US$/oz)
                                                  
                                                  
                                                  564
                                                  
                                                  
                                                  
                                                  727
                                                  
                                                  
                                                  
                                                  743
                                                  
                                                  
                                                  
                                                  725
                                                  
                                                  
                                                  
                                                  621
                                                  
                                                  
                                                  
                                                  566
                                                  
                                                  
                                                  
                                                  661
                                                  
                                                  
                                                  
                                                  539CDN$/US$
      Exchange
                                                  
                                                  
                                                  1.2124
                                                  
                                                  
                                                  
                                                  1.0418
                                                  
                                                  
                                                  
                                                  1.0100
                                                  
                                                  
                                                  
                                                  1.0042
                                                  
                                                  
                                                  
                                                  0.9818
                                                  
                                                  
                                                  
                                                  1.0448
                                                  
                                                  
                                                  
                                                  1.0984
                                                  
                                                  
                                                  
                                                  1.1714
 
 (1)Basic and diluted, calculated based on
the number of shares issued and outstanding during the
quarter.
 (2)Excludes ounces sold from Santoy 7 and
Porky Lake bulk samples.
 (3)Includes ounces produced and tonnes
milled from Santoy 7 and Porky Lake bulk samples.
 (4)For an explanation of non-GAAP
performance measures refer to “Non-GAAP Performance
Measures”.
 
 The
financial results for the last eight quarters reflect the following general
trends: improving gold revenue over the period; improvement in average realized
gold prices aided by the weakening Canadian dollar; relatively constant gold
production notwithstanding the poor first half of 2007 and Q1 2008; improving
grade processed; increasing cash cost per ounce – a result of increased mine
operating costs and lower gold sales volume notwithstanding Q4
2008.
 
 Dec 31
                                    
                                    
                                    Dec 31
                                    
                                    
                                    Dec 31Dollars (CDN $
      thousands)
                                    
                                    2008
                                    
                                    
                                    2007
                                    
                                    
                                    2006Gold
revenue
                                    
                                    
                                    40,999
                                    
                                    
                                    
                                    29,922
                                    
                                    
                                    
                                    32,495Net earnings
      (loss)
                                    
                                    
                                    383
                                    
                                    
                                    
                                    (6,967
                                    )
                                    
                                    
                                    6,422Net earnings (loss) per share,
      basic and diluted
                                    
                                    
                                    0.00
                                    
                                    
                                    
                                    (0.08
                                    )
                                    
                                    
                                    0.09Total
assets
                                    
                                    
                                    215,436
                                    
                                    
                                    
                                    199,434
                                    
                                    
                                    
                                    145,717Total long-term
      liabilities(1)
                                    
                                    
                                    110,853
                                    
                                    
                                    
                                    94,889
                                    
                                    
                                    
                                    64,318
 
 (1)Includes a $83.1 million royalty
obligation which is funded by a promissory note receivable.
 
 Balance Sheet
 
 The Company’s total assets were $215.4
million at December 31, 2008, compared to $199.4 million at December 31,
2007.  The $16.0 million increase was comprised largely of the
following: $5.8 million in Cash and cash equivalents; $1.5 million of Interest
receivable on restricted promissory notes; $3.7 million in Inventories,
stockpiled ore and Shrinkage stope platform costs; and $12.1 million in Mineral
Properties, largely comprised of exploration and mine dewatering costs at the
Madsen property.  These increases were offset by decreases of $2.1
million in Accounts Receivable and $4.7 million in Assets held for
sale.
 
 Total
liabilities were $128.4 million at December 31, 2008, compared to $111.3 million
at December 31, 2007.  The $17.1 million increase was comprised
largely of the following: $1.6 million of Accounts payable and accrued
liabilities; $1.5 million of Interest payable on royalty obligations (note,
interest earned on and principle balance of the Company’s restricted promissory
notes – discussed above – are anticipated to be sufficient to fund the expected
royalty payments over the remaining years of the royalty obligation agreements);
$16.6 million attributable to the debenture issued during the second
quarter.  These increases were offset by a decrease of $2.0 million in
the Company’s Demand loans payable.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      17
 Shareholders’ equity decreased by $1.0
million to $87.1 million at the end of 2008, from $88.1 million at December 31,
2007. This is largely attributable to a decrease in share capital of $1.6
million (due primarily to flow-through renunciation of $2.2 million and common
shares issued offset by the fair value of warrants issued) which was offset by
an increase in contributed surplus of $0.4 million and net earnings of $0.4
million.
 
 Assets Held For Sale and Related
Operations
 
 During
the third quarter of 2008, the Company announced plans to divest of its oil and
natural gas assets.  As required by the Canadian Institute of
Chartered Accountants (“CICA”) Handbook Section 3475 (Disposal of Long-Lived Assets and
Discontinued Operations), the related oil and natural gas assets and
liabilities have been reported as Assets held for sale and Liabilities related
to assets held for sale in separate captions in the consolidated balance sheets
and the related results of operations have been presented as operations held for
sale in the consolidated statements of earnings (loss) and cash flows for all
periods presented.
 
 Provided
below is Management’s discussion and analysis as it relates to the Company’s oil
and natural gas operations:
 
 Claude
produces crude oil, natural gas and natural gas liquids (ngls) from properties
in Alberta and Saskatchewan.
 
 The
Company has various non-operated working interests in oil, ngls and natural gas
in Alberta. During 2008, the Alberta properties provided 89 percent of the total
production for oil and ngls and 100 percent of the production of natural
gas.  The Nipisi Unit is a 151 well unitized oil field operated by
Canadian Natural Resources Ltd.  In addition to this property, the
Company has interests in producing oil and natural gas wells at a number of
other Alberta locations.
 
 In
Saskatchewan, the Company has a 75 percent working interest in six producing
vertical oil wells along with a 33.75 percent interest in four producing
horizontal wells.
 
 During
the second quarter of 2008, in exchange for one third of the Company’s working
interest in its Alberta oil and natural gas assets, the Company eliminated the
70 percent overriding royalty on its Alberta oil and natural gas
assets.
 
 During
the fourth quarter of 2008, Claude sold its working interests in the Edson Gas
Unit No. 1 and the Edson Gas Plant for gross proceeds of $11.2 Million with an
effective date of September 1, 2008.  The Edson Gas Unit represented
the majority of the Company’s historic natural gas sales.  Refer to
Note 7 of the consolidated financial statements for detailed information
relating to the Assets held for sale and related operations.
 
 Gross
oil, ngls and natural gas revenue for the year ended December 31, 2008
decreased18percent to
$7.4million from
$9.0million reported
for 2007. This result was largely attributable to an increase in petroleum and
natural gas prices realized offset by normal production declines, the transfer
of one-third of the Company’s working interest in its Alberta oil and natural
gas assets and the sale of its Edson assets during the fourth
quarter.
 
 Oil
and ngls sales volume for 2008 was 46,000barrels, 29 percent lower
than the 64,600barrels sold during 2007.
The decreaseis
largely attributable to the transfer of one-third of the Company’s working
interest in its Alberta oil and ngls assets and the September 1, 2008 sale of
the Company’s Edson assets.  During 2008, the average realized price
per barrel of oil and ngls in Canadian dollars was $111.81(US $104.78), an
increaseof 56percent over the December
31, 2007  average realized price of $71.52(US $66.59).
 
 Natural
gas sales volume, also impacted by the Company’s transfer of one-third its
working interests in its Alberta oil and natural gas assets and the Edson sale,
decreased to 282MMCF
for the twelve months of 2008 from 588MMCF during the similar
period in 2007. The average realized price in Canadian dollars increased to CDN
$10.54(US $9.88) from
CDN $6.41(US
$5.97).
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      18
 Operating costs were $2.1 million during
2008, a 13 percent decrease from the $2.4 million reported during the comparable
period of 2007.  This reduction is attributable to increased
infrastructure spending at the Nipisi property offset by the transfer of
one-third of the Company’s working interest in its Alberta oil and natural gas
assets.  The sale of its Edson assets during the fourth quarter also
impacted these costs.
 
 Each
year the Company has its proven and probable oil, ngls and natural gas reserves
evaluated independently.  Crude oil and ngls proved and probable
reserves decreased by 39 percent to 652,000 barrels at the end of 2008 from
1,066,000 barrels at the end of 2007.  Decreases in the year were
attributable to normal production declines, the transfer of one-third of the
Company’s working interest in its Alberta oil and natural gas assets and the
sale of its Edson assets during the fourth quarter.  Natural gas
reserves decreased to 329 MMCF in 2008 from 7,387 MMCF in 2007.  These
results were also attributable to normal production declines and the transfer
and sale transactions of the Company’s Edson assets.
 
 Reserves(1)
                                                                    Dec
      31
                                                                    Dec
      312008
                                                                    2007Crude
      oil and ngls (mbbl)ProvedAlberta
                                                                    416
                                                                    737Saskatchewan
                                                                    45
                                                                    51461
                                                                    788ProbableAlberta
                                                                    182
                                                                    266Saskatchewan
                                                                    9
                                                                    12191
                                                                    278Total
                                                                    652
                                                                    1,066Natural
      gas (MMCF)ProvedAlberta
                                                                    231
                                                                    5,987ProbableAlberta
                                                                    98
                                                                    1,400Total
                                                                    329
                                                                    7,387Barrels of oil equivalent (MBOE) (2)Proved
                                                                    500
                                                                    1,786Probable
                                                                    207
                                                                    512Total
                                                                    707
                                                                    2,298
 
 (1)     
      Reserves at December 31, 2008 reviewed by Sproule Associates
      Limited.
 (2)     
      Conversion:  6 mcf = 1
boe
 
 Key Sensitivities
 
 Earnings from Claude’s oil & natural
gas operations are sensitive to fluctuations in both commodity and currency
prices. The key factors and their approximate effect on earnings, earnings per
share and cash flow, based on assumptions comparable to 2008 actuals, are as
follows:
 
 Oil & Natural
Gas
 
 For a US $5 price movement in oil price
per barrel, earnings and cash flow will have a corresponding movement of $0.2
million ($0.00 per share). For a US $1 price movement in natural gas price per
MCF, earnings and cash flow will have a corresponding movement of $0.3 million
($0.00 per share).  A $0.01 movement in the US$/CDN$ exchange rate
does not have a material effect on earnings and cash flow.
 
 Outstanding Share
Data
 
 At
December 31, 2008, there were 97,112,030 common shares
outstanding.   This compares to 96,997,397 shares outstanding at
December 31, 2007.  Subsequent to the balance sheet date, Claude
issued 421,056shares pursuant
to the Company’s Employee Share Purchase Program.  At March 27, 2009,
there were 97,533,086common shares
issued and outstanding.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      19
 In
addition, there were 3.5 million director, officers, key employee and consultant
stock options and 1.8 million warrants outstanding, with exercise prices ranging
from $0.34 to
$2.10 per share.  This compares to 3.7 million director, officers, key
employee and consultant stock options outstanding at December 31, 2007 with
exercise prices ranging from $0.53 to $2.10 per share.
 
 Disclosure Controls and Internal
Controls over Financial Reporting
 
 As
of December 31, 2008, we evaluated our disclosure controls and procedures as
defined in the rules of the US Securities and Exchange Commission and the
Canadian Securities Administrators.  This evaluation was carried out
under the supervision and participation of Management, including the President
and Chief Executive Officer and the Chief Financial Officer.  Based on
that evaluation, the President and Chief Executive Officer and Chief Financial
Officer concluded that the design and operation of these disclosure controls and
procedures were effective.
  Management
is responsible for establishing and maintaining adequate internal control over
financial reporting.  Internal control over financial reporting, no
matter how well designed, has inherent limitations and can only provide
reasonable assurance with respect to the preparation and fair presentation of
published financial statements.  Under the supervision and with the
participation of the President and Chief Executive Officer and the Chief
Financial Officer, management conducted an evaluation of the effectiveness of
its internal control over financial reporting based on the framework in Internal
Control – Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.  Based on this evaluation,
management concluded that internal control over financial reporting is effective
as at December 31, 2008, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external reporting purposes.No significant changes were made in our
internal controls over financial reporting during the year ended December 31,
2008 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
 
 Recent Accounting
Pronouncements
 
 Please
refer to Note 3 to the audited consolidated financial statements for information
pertaining to accounting changes effective January 1, 2008.  Note
3to
the audited consolidated financial statements also contains information on
accounting pronouncements that will be effective in future periods.
 
 The following summarizes future
accounting policy changes that will be relevant to the Company’s consolidated
financial statements subsequent to December 31, 2008:
 
 International Financial Reporting
Standards (IFRS)
 
 The
Canadian Accounting Standards Board (AcSB) has confirmed that Canadian publicly
accountable enterprises will be required to adopt IFRS effective January 1,
2011.  An April 2008 exposure draft issued by the CICA, Adopting IFRS in Canada,
makes possible the early adoption of IFRS by Canadian entities.
 
 In
January 2008, the United States Securities and Exchange Commission (“SEC”)
issued a final rule that would allow some foreign private issuers to use IFRS,
without reconciliation to US GAAP.  The Company does not plan to adopt
IFRS prior to the CICA mandatory deadline of January 1, 2011.
 
 Although
IFRS employs a conceptual framework that is similar to Canadian GAAP, there are
significant differences in recognition, measurement and disclosure.
 
 In
order to plan for and to achieve a smooth transition to IFRS, Claude has
established a project team to assess the potential impacts of the transition to
IFRS.  The project team has developed a detailed plan to ensure
compliance with the new standards.  Regular progress reports on the
status of Claude’s IFRS implementation project are provided to Senior Management
and to the Audit Committee.  A major public accounting firm has been
engaged to provide technical accounting advice and project management guidance
in the conversion to IFRS.
 
 The
Company’s implementation project consists of three primary phases:
 
 ·
              Phase 1:
      Preliminary Study and Diagnostic.  This phase included
      performing a high-level impact assessment to identify key areas that may
      be impacted by the adoption of IFRS.  This analysis resulted in
      the prioritization of areas to be evaluated in the next phase of the
      project plan.  The information obtained from the assessment was
      also used to develop a detailed plan for convergence and
      implementation.  During phase 1, an analysis was also performed
      to assess whether information technology systems used to collect and
      report financial data required modification in order to meet new reporting
      requirements under IFRS.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      20
 ·
              Phase 2:
      Detailed Component Evaluation.  In this phase, further
      evaluation of the financial statement areas impacted by IFRS will be
      completed.  This will involve a more detailed, systematic gap
      analysis of accounting and disclosure differences between Canadian GAAP
      and IFRS.  This detailed assessment will facilitate final
      decisions around accounting policies and overall conversion
      strategy.  This phase also involves specification of changes
      required to existing business processes and
  procedures.
 
 ·
              Phase 3:
      Implementation and Review.  This phase includes the
      execution of changes to business processes and procedures impacted by
      Claude’s transition to IFRS and formal approval of recommended accounting
      policy changes.  Also included in this phase is the delivery of
      necessary IFRS training to Claude’s Audit Committee, Board of Directors
      and staff.  This phase will culminate with the collection of
      financial information necessary to compile IFRS compliant financial
      statements, with Audit Committee approval, commencing in
    2011.
 
 Claude
completed the preliminary study and diagnostic phase during the fourth quarter
of 2008 and is now in the detailed component evaluation
phase.  Claude’s analysis of the areas that may be impacted by the
adoption of IFRS has identified a number of differences.  Claude is
currently assessing the impact of the adoption of IFRS on our results of
operations, financial position and financial statement
disclosures.  In addition, Claude continues to assess the impact of
the conversion on internal controls over financial reporting and disclosure
controls and procedures.  Claude has and will continue to invest in
training and resources throughout the transition period.
 
 Goodwill and Intangible
Assets
 
 Effective
January 1, 2009, the Company will adopt CICA Handbook Section 3064, Goodwill and Intangible
Assets, which supersedes CICA Handbook Section 3062 (Financial Instruments - Goodwill
and Other Intangible Assets) and CICA Handbook Section 3450 (Research and Development
Costs) and substantially harmonizes Canadian Standards with
IFRS.  This standard introduces guidance for the recognition,
measurement, presentation and disclosure of goodwill and intangible assets,
including internally generated intangible assets.  The changes are
effective for interim and annual financial statements beginning on or after
October 1, 2009.  Concurrent with the introduction of this standard,
the CICA withdrew Emerging Issues Committee (“EIC”) 27 - Revenues and Expensesduring
the pre-operating period which removes the ability for companies to defer costs
and revenues incurred prior to commercial production at new mine
operations.  The Company is currently reviewing this new standard in
order to determine its impact.
 
 Consolidated Financial
Statements
 
 Effective
January 1, 2009, the Company will adopt CICA Handbook Section 1601, Consolidated Financial Statementswhich supersedes the existing standards.  This section
establishes the standards for preparing consolidated financial statements and is
effective for periods beginning on or after January 1, 2011.  Claude
does not expect the adoption of this standard to have a material impact on its
consolidated financial statements.
 
 Non-Gaap Performance
Measures
 
 The
Company utilizes non-GAAP financial measures as supplemental indicators of
operating performance and financial position.  These non-GAAP
financial measures are used internally by the Company for comparing actual
results from one period to another.  The Company believes that, in
addition to conventional measures prepared in accordance with GAAP, certain
investors use this information to evaluate the Company’s performance and ability
to general cash flow.  Accordingly, such information is intended to
provide additional information and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
GAAP.
 Management’s Discussion
      and Analysis

                    (in millions of
      CDN dollars, except as otherwise
noted)
                Page
      21
 Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA)
 
 The Company uses EBITDA as a
supplemental financial measure of its operational
performance.   Management believes EBITDA to be an important
measure of its capacity to generate income from operations as it excludes the
effects of items which primarily reflect the impact of long-term investment
decisions and finance strategies, rather than the performance of the Company’s
day-to-day operations.  The Company measures EBITDA as net earnings
before operations held for sale, as reported in accordance with GAAP, plus
income taxes, interest expense, and depreciation, depletion and
accretion.
 
 The Company believes that this
measurement is useful in measuring the Company’s ability to service debt and to
meet other payment obligations or as a valuation measurement. The following
table provides a reconciliation of the Company’s calculation of
EBITDA:
 
 Dec 31
                                    
                                    
                                    Dec 312008
                                    
                                    
                                    2007Earnings (loss) from continuing
      operations
                                    
                                    
                                    (8,129
                                    )
                                    
                                    
                                    (6,641
                                    )Income
taxes
                                    
                                    
                                    (2,240
                                    )
                                    
                                    
                                    (1,705
                                    )Interest and
      other
                                    
                                    
                                    1,325
                                    
                                    
                                    
                                    (113
                                    )Depreciation, depletion and
      accretion
                                    
                                    
                                    12,524
                                    
                                    
                                    
                                    8,308EBITDA
                                    
                                    
                                    3,480
                                    
                                    
                                    
                                    (151
                                    )
 
 As compared to net earnings (loss)
according to GAAP, EBIDTA is limited in that it does not reflect the periodic
costs of certain capitalized assets used in generating revenues, or the non-cash
charges associated with impairments, or gain on sale of long-term investments.
Management evaluates such items through other financial measures such as capital
expenditures and cash flow provided by operating activities.
 
 Cash Operating Cost Per
Ounce
 
 The Company reports its cash 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 SeabeeOperations. Investors are cautioned that the above
measures may not be comparable to similarly titled measures of other companies,
should these companies not follow Gold Institute standards.
 
 Caution Regarding Forward-Looking
Information
 
 This
MD&A contains “forward-looking statements” that are based on Claude’s
expectations, estimates and projections as of the dates the statements were
made. Generally, these forward-looking statements can be identified by the use
of terminology such as “outlook”, “anticipate”, “project”, “forecast”, “target”,
“believe”, “estimate”, “expect”, “intent”, “should”, “could” and similar
expressions. These forward-looking statements are subject to known and unknown
risks and uncertainties and other factors which may cause actual results, levels
of activity and achievements to differ materially from those expressed or
implied by such statements. Such factors include, but are not limited to, gold
price and foreign currency exchange rate volatility and to uncertainties and
costs related to: exploration and development activities, production rates, cash
and total costs of production, or the ability to obtain necessary permitting or
financing.
 
 A
discussion of these and other factors that may affect Claude’s actual results,
performance, achievements or financial position is contained in the filings by
Claude with the Canadian provincial securities commissions and the United States
Securities and Exchange Commission.
 
 This list is not exhaustive of the
factors that may affect Claude’s forward-looking statements. These and other
factors should be considered carefully and readers should not place undue
reliance on forward-looking statements. Claude does not undertake any obligation
to update publicly or to revise any of the included forward-looking statements,
whether as a result of new information, future events or otherwise, except in
accordance with applicable securities law.
 
 Management’s Discussion
      and Analysis

                      (in millions of
      CDN dollars, except as otherwise
noted)
                  Page
      22
  Additional
Information
 
 Additional information related to the
Company, including the Annual Information Form, is available on SEDAR atwww.sedar.com, on EDGAR atwww.sec.govand onwww.clauderesources.com.