UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM 20-F



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

OR

| | þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2013

OR

| |  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ----------------------------------------------------------------------------------------

OR

| |  ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | -------------------------------------------------------------------------------------------

Date of event requiring this shell company report
____________



For the transition period from ____________ to ____________



Commission file number 1-31956



|CLAUDE RESOURCES INC.                                 
|------------------------------------------------------
|(Exact name of Registrant as specified in its charter)
|                                                      
|CLAUDE RESOURCES INC.                                 
|(Translation of Registrant’s name into English)       
|                                                      
|CANADA                                                
|(Jurisdiction of incorporation or organization)       



|224 4th AVENUE SOUTH, SUITE 200         
|----------------------------------------
|SASKATOON, SASKATCHEWAN                 
|S7K 5M5 CANADA                          
|(Address of principal executive offices)



|Rick Johnson                                                      
|------------------------------------------------------------------
|Chief Financial Officer, Vice President Finance                   
|Telephone: (306) 668 – 7505, E-mail: RJohnson@clauderesources.com,
|Facsimile: (306) 668 – 7500, 224 4th Avenue South, Suite 200,     
|Saskatoon, Saskatchewan, S7K 5M5 Canada                           

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)



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



| | Title of each class | Name of each exchange on which registered
| | ------------------- | -----------------------------------------
| | Common Shares       | Toronto Stock Exchange and OTCQB         



Securities registered or to be registered pursuant to Section 12(g)
of the Act: None



Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act: None



Indicate the number of outstanding shares of each of the issuer’s
classes of capital or common stock as of the close

of the period covered by the annual report:



Common Shares: 175,811,376





Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.



 ̈ Yes    þNo



If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934.

 ̈ Yes    þNo



Note: Checking the box above will not relieve any registrant
required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under
those Sections.



Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

þ  Yes     ̈  No



Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).

 ̈
Yes    ̈ No



Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer”
in Rule 12b-2 of the Exchange Act.



| ̈  Large accelerated filer |  ̈  Accelerated filer | þ Non -accelerated filer
|-------------------------- | -------------------- | ------------------------



Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:



| ̈  U.S. GAAP | þ
        International Financial Reporting Standards as issued
        by the International Accounting Standards
        Board |  ̈ Other
|------------ | ------------------------------------------------------------------------------------------------------------------------------- | -------



If “Other” has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant has elected to follow:

 ̈
Item 17        ̈ Item 18



If this is an annual report, indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 ̈
Yes    þ No



(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)



Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to
the distribution of securities under a plan confirmed by a court:

 ̈
Yes           ̈ No











Table of Contents



|                                                |                                                       |    |                                                         | Page
|----------------------------------------------- | ----------------------------------------------------- | -- | ------------------------------------------------------- | ----
|                                                |                                                       |    |                                                         |     
|Statement Regarding Forward-Looking Information | 4                                                    
|                                                |                                                      
|Glossary of Terms                               | 6                                                    
|                                                |                                                       |    |                                                         |     
|Part I:                                         |                                                       |    |                                                         |     
|                                                |                                                       |    |                                                         |     
|Item 1:                                         | Identity of Directors, Senior Management and Advisors | 10
|                                                |                                                       |   
|Item 2:                                         | Offer Statistics and Expected Timetable               | 10
|                                                |                                                       |   
|Item 3:                                         | Key Information                                       | 10
|                                                |                                                       | A. | Selected Financial Data                                 | 10  
|                                                |                                                       | B. | Capitalization and Indebtedness                         | 11  
|                                                |                                                       | C. | Reasons for the Offer and Use of Proceeds               | 11  
|                                                |                                                       | D. | Risk Factors                                            | 11  
|                                                |                                                       |    |                                                         |     
|Item 4:                                         | Information on the Company                            | 18
|                                                |                                                       | A. | History and Development of the Company                  | 18  
|                                                |                                                       | B. | Business Overview                                       | 19  
|                                                |                                                       | C. | Organizational Structure                                | 20  
|                                                |                                                       | D. | Property, Plants and Equipment                          | 20  
|                                                |                                                       |    |                                                         |     
|Item 5:                                         | Operating and Financial Review and Prospects          | 54
|                                                |                                                       | A. | Operating Results                                       | 54  
|                                                |                                                       | B. | Liquidity and Capital Resources                         | 58  
|                                                |                                                       | C. | Research and Development, Patents and Licenses, etc.    | 63  
|                                                |                                                       | D. | Trend Information                                       | 63  
|                                                |                                                       | E. | Off-Balance Sheet Arrangement                           | 65  
|                                                |                                                       | F. | Tabular Disclosure of Contractual Obligations           | 66  
|                                                |                                                       | G. | Safe Harbor                                             | 67  
|                                                |                                                       |    |                                                         |     
|Item 6:                                         | Directors, Senior Management and Employees            | 67
|                                                |                                                       | A. | Directors and Senior Management                         | 67  
|                                                |                                                       | B. | Compensation                                            | 70  
|                                                |                                                       | C. | Board Practices                                         | 88  
|                                                |                                                       | D. | Employees                                               | 91  
|                                                |                                                       | E. | Share Ownership                                         | 91  
|                                                |                                                       |    |                                                         |     
|Item 7:                                         | Major Shareholders and Related Party Transactions     | 94
|                                                |                                                       | A. | Major Shareholders                                      | 94  
|                                                |                                                       | B. | Related Party Transactions                              | 95  
|                                                |                                                       | C. | Interests of Experts and Counsel                        | 95  
|                                                |                                                       |    |                                                         |     
|Item 8:                                         | Financial Information                                 | 95
|                                                |                                                       | A. | Consolidated Statements and Other Financial Information | 95  
|                                                |                                                       | B. | Significant Changes                                     | 96  
|                                                |                                                       |    |                                                         |     
|Item 9:                                         | The Offer and Listing                                 | 96
|                                                |                                                       | A. | Offer and Listing Details                               | 96  
|                                                |                                                       | B. | Plan of Distribution                                    | 97  
|                                                |                                                       | C. | Markets                                                 | 97  



2







|              |                                                                                | D.  | Selling Shareholders                   | 97 
|------------- | ------------------------------------------------------------------------------ | --- | -------------------------------------- | ---
|              |                                                                                | E.  | Dilution                               | 97 
|              |                                                                                | F.  | Expenses of the Issue                  | 97 
|              |                                                                                |     |                                        |    
|Item 10:      | Additional Information                                                         | 98 
|              |                                                                                | A.  | Share Capital                          | 98 
|              |                                                                                | B.  | Memorandum and Articles of Association | 98 
|              |                                                                                | C.  | Material Contracts                     | 98 
|              |                                                                                | D.  | Exchange Controls                      | 99 
|              |                                                                                | E.  | Taxation                               | 101
|              |                                                                                | F.  | Dividends and Paying Agents            | 105
|              |                                                                                | G.  | Statement by Experts                   | 105
|              |                                                                                | H.  | Documents on Display                   | 105
|              |                                                                                | I.  | Subsidiary Information                 | 106
|              |                                                                                |     |                                        |    
|Item 11:      | Quantitative and Qualitative Disclosures About Market Risk                     | 106
|              |                                                                                |    
|Item 12:      | Description of Securities Other Than Equity Securities                         | 106
|              |                                                                                |    
|Part
    II:  |                                                                                |    
|              |                                                                                |    
|Item 13:      | Defaults, Dividend Arrearages and Delinquencies                                | 107
|              |                                                                                |    
|Item 14:      | Material Modifications to the Rights of Securities Holders and Use of Proceeds | 107
|              |                                                                                |    
|Item 15:      | Controls and Procedures                                                        | 107
|              |                                                                                |     |                                        |    
|Item 16A:     | Audit Committee Financial Expert                                               | 108
|              |                                                                                |    
|Item 16B:     | Code of Ethics                                                                 | 108
|              |                                                                                |    
|Item 16C:     | Principal Accountant Fees and Services                                         | 108
|              |                                                                                |    
|Item 16D:     | Exemption from the Listing Standards for Audit Committees                      | 109
|              |                                                                                |    
|Item 16E:     | Purchases of Equity Securities by the Issues and Affiliated Purchases          | 109
|              |                                                                                |    
|Item 16F:     | Changes in Registrant’s Certifying Accountant                                  | 109
|              |                                                                                |    
|Item 16G:     | Corporate Governance                                                           | 109
|              |                                                                                |    
|Item 16H:     | Mine Safety                                                                    | 109
|              |                                                                                |     |                                        |    
|Part
    III: |                                                                                |     |                                        |    
|              |                                                                                |     |                                        |    
|Item 17:      | Financial Statements                                                           | 109
|              |                                                                                |    
|Item 18:      | Financial Statements                                                           | 109
|              |                                                                                |    
|Item 19:      | Exhibits                                                                       | 110



3







GENERAL MATTERS



Use of Names



In this annual report filed on Form 20-F,
the terms “Claude”, “Company”, “we”, and “our” refers to Claude Resources Inc.,
a Canadian company, and our wholly-owned subsidiaries, 4158849 Canada Ltd. and Madsen Gold Corporation, both Canada federal corporations,
and St. Eugene Mining Corporation Limited (“SEM”), a British Columbia company.



Currency



Unless otherwise specified, all dollar
amounts in this annual report are expressed in Canadian dollars.



STATEMENT REGARDING FORWARD-LOOKING INFORMATION



All statements, other than statements of
historical fact, contained in this annual report constitute “forward-looking information” within the meaning of applicable
Canadian securities laws and “forward-looking statements” within the meaning of the United States Private Securities
Litigation Reform Act of 1995 (referred to herein as “forward-looking statements”). Forward-looking statements include,
but are not limited to, statements with respect to the future price of gold, the estimation of mineral reserves and resources,
the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital
expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency
exchange rate fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks,
unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. Generally, these forward-looking
statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does
not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”,
“intends”, “anticipates” or “does not anticipate” or “believes”, or the negative
connotation thereof or variations of such words and phrases or state that certain actions, events or results, “may”,
“could”, “would”, “might” or “will be taken”, “occur” or “be
achieved” or the negative connotation thereof.



All forward-looking statements are based
on various assumptions, including, without limitation, the expectations and beliefs of management, the assumed long-term price
of gold, that the Company will receive required permits and access to surface rights, that the Company can access financing, appropriate
equipment and sufficient labour, and that the political environment within Canada will continue to support the development of mining
projects in Canada.



Forward-looking
statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of Claude to be materially different from those expressed or implied by such forward-looking
statements, including but not limited to: our ability to continue as a going concern; unexpected changes in business and economic
conditions; changes in interest rates and currency exchange rates; changes in metallurgy; access and availability of materials,
equipment, supplies, labor and supervision, power and water; determination of mineral resources and mineral reserves; availability
of drill rigs; changes in project parameters; costs and timing of development of new mineral reserves; results of current and future
exploration activities; results of pending and future feasibility studies; joint venture relationships; political or economic instability,
either globally or in the countries in which we operate; local and community impacts and issues; environmental costs and risks;
competitive factors, including competition for property acquisitions; and availability of capital at reasonable rates or at all;
actual results of current exploration activities; environmental risks; future prices of gold; possible variations in ore reserves,
grade or recovery rates; mine development and operating risks; accidents, labour issues and other risks of the miningindustry; delays in obtaining government approvals or financing or
in the completion of development or construction activities; and other risks and uncertainties, including but not limited to those
discussed in the section entitled “Risk Factors” in this annual report. These risks and uncertainties are not, and
should not be construed as being, exhaustive.



Although Claude has attempted to identify
important factors that could cause actual results to differ materially from those contained in forward-looking statements, there
may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements
will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking statements.



4







Forward-looking statements in this annual
report are made as of the date of this annual report, being April 30, 2014 and, accordingly, are subject to change after such date.
Except as otherwise indicated by Claude, these statements do not reflect the potential impact of any non-recurring or other special
items that may occur after the date hereof. Forward-looking statements are provided for the purpose of providing information about
management’s current expectations and plans and allowing investors and others to get a better understanding of our operating
environment.



Claude does not undertake to update any
forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.



Cautionary
Note to U.S. Investors Concerning Resource Estimates



Resource Estimates



The resource estimates in this annual report
were prepared in accordance with National Instrument 43-101, adopted by the Canadian Securities Administrators. National Instrument
43-101 - Standards of Disclosure for Mineral Projects(“NI 43-101”) is a rule of the Canadian Securities Administrators
which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral
projects. Unless otherwise indicated, all resource estimates contained in this Form 20-F have been prepared in accordance with
NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Classification System. The requirements of National Instrument
43-101 differ significantly from the requirements of the Securities and Exchange Commission (the “SEC”). In this annual
report, the Company uses certain terms such as “measured”, “indicated” and “inferred” resources.
Although these terms are recognized and required in Canada, the SEC does not recognize them. The SEC permits U.S. mining companies,
in their filings with the SEC, to disclose only those mineral deposits that constitute “reserves”. Under U.S. standards,
mineralization may not be classified as a reserve unless the determination has been made that the mineralization could be economically
and legally extracted at the time the determination is made. U.S. investors should not assume that all or any portion of a measured
or indicated resource will ever be converted into “reserves”. Further, “inferred resources” have a great
amount of uncertainty as to their existence and whether they can be mined economically or legally, and U.S. investors should not
assume that “inferred resources” exist or can be legally or economically mined, or that they will ever be upgraded
to a more certain category. Accordingly, information concerning descriptions of mineralization and resources contained in this
Form 20-F may not be comparable to information made public by U.S. companies subject to the reporting and disclosure requirements
of the SEC.



METRIC EQUIVALENTS



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



|To Convert from Metric |  | To Imperial         |  | Multiply Metric Units by
|---------------------- |  | ------------------- |  | ------------------------
|Metres                 |  | Feet (ft.)          |  | 3.281                   
|Kilometres (km)        |  | Miles               |  | 0.621                   
|Tonnes                 |  | Tons (2,000 pounds) |  | 1.102                   
|Grams                  |  | Troy Ounces         |  | 0.032                   
|Hectares               |  | Acres               |  | 2.471                   



5







Glossary
of Financial Terms



Current ratio = (current asset /
current liabilities)



Working capital = (current asset
– current liabilities)



Glossary
of Technical Terms



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



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



Au Eq (“gold equivalent”)
–a measure of contained metal expressed in equivalent gold grade.



Biotite – a widely distributed
and important rock-forming mineral of the mica group.



Brecciated – broken into sharp-angled
fragments surrounded by finer-grained material.



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



Chalcopyrite - a sulphide mineral
of copper and iron.



Chlorite – a group of platy,
monoclinic, usually greenish minerals.



Chloritic alteration – the
replacement by, conversion into, or introduction of chlorite into a rock.



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



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



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



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



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



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



Duty to Consult - governments in
Canada may have a duty to consult with and potentially accommodate Aboriginal groups prior to making decisions which may impact
lands and resources subject to established or potential treaty or Aboriginal rights, title or other claims. These governments,
in turn, may delegate procedural aspects of this duty to industry.



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



6







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



Feasibility Study – a comprehensive
technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessments
of realistically assumed mining, processing, metallurgical, economic, marketing, legal, environmental, social and governmental
considerations together with any other relevant operational factors and detailed financial analysis, that are necessary to demonstrate
at the time of reporting that extraction is reasonably justified (economically mineable). The results of the study may reasonably
serve as the basis for a final decision by a proponent or financial institution to proceed with, or finance, the development of
the project. The confidence level of the study will be higher than that of a Prefeasibility Study.



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



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



Fracture – a break or crack
in rock.



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



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



Granitoid – a light-coloured,
plutonic rock with quartz between 20 and 60 percent.



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



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



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



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



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



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



Lithostructural– an assemblage
of rocks that is unified on the basis of structural and lithological features.



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



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



7







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



Mill - a processing facility where
ore is finely ground and thereafter undergoes physical or chemical treatment to extract the valuable metals.



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



Mineralization– a natural
concentration in rocks or soil of one or more minerals.



Mineral Reserve – the economically
mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Prefeasibility Study. This study must include
adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of
reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that
may occur when material is mined.



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



National Instrument 43-101 or NI 43-101
– National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators.



Ounces - troy ounces of a fineness
of 999.9 parts per 1,000 parts.



Ore - rock, generally containing
metallic or non-metallic minerals, which can be mined and processed at a profit.



Ore Body - a sufficiently large
amount of ore that can be mined economically.



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



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



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



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



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



Pulp - a mixture of ground ore and
water.



Pyrite - an iron sulphide mineral
(FeS2), the most common naturally occurring sulphide mineral.



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



8







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



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



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



Ramp - an inclined underground opening.



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



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



Showing - surface occurrence of
mineral.



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



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



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



Stratigraphy – the sequence
of bedded rocks in a particular area.



Tailings - Tailings consist of ground
rock and process effluents that are generated in a mine processing plant or mill. Mechanical and chemical processes are used to
extract gold from mine ore and produce a waste stream known as tailings. This process of product extraction is never 100 percent
efficient, nor is it possible to reclaim all reusable and expended processing reagents and chemicals. The unrecoverable and uneconomic
metals, minerals, chemicals, organics and process water are discharged, normally as slurry, to a final storage area commonly known
as a Tailings Management Facility (a “TMF”) or Tailings Storage Facility (a “TSF”).



Till - is unsorted glacial sediment.
Its content may vary from clays to mixtures of clay, sand, gravel and boulders. This material is typically derived from the subglacial
erosion and incorporated by the moving ice of the glaciers of previously available unconsolidated sediments.



Tonne – a metric ton or 2,204
pounds.



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



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



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



Working interest or WI
- means the interest held by Claude in property. This interest normally bears its proportionate share of capital and operating
costs as well as royalties or other production burdens. The working interest percentage is expressed before royalty interests.



9







Part I



Item 1. Identity of Directors,
Senior Management and Advisers



Not Applicable.



Item 2. Offer Statistics and Expected
Timetable



Not Applicable.



Item 3. Key Information



| | A. | Selected Financial Data
| | -- | -----------------------



The following selected financial information
for the fiscal years ended December 31, 2013, 2012, 2011 and 2010 are derived from the audited financial statements of the Company
and the notes thereto, which are prepared in accordance with International Financial Reporting Standards (“IFRS”) as
issued by the International Accounting Standards Board (the “IASB”). The selected information for the fiscal year ended
December 31, 2009 was prepared in accordance with the Canadian generally accepted accounting principles (“Canadian GAAP”).
The selected financial information should be read in conjunction with the discussion in Item 5 of this Form 20-F and the financial
statements of the Company filed as part of this Form 20-F. Historical results from any prior period are not necessarily indicative
of results to be expected for any future period.



|Operations                                                    |  | Canadian Dollar Thousands (except number of common shares and per share amounts) |        
|------------------------------------------------------------- |  | -------------------------------------------------------------------------------- | -------
|                                                              |  | IFRS                                                                             |        
|                                                              |  | 2013                                                                             |        
|Revenue                                                       |  |                                                                                  | 63,794 
|Income (loss) from operations                                 |  |                                                                                  | (73,423
|Income from discontinued operation                            |  |                                                                                  | -      
|Net income (loss)                                             |  |                                                                                  | (73,423
|Net income (loss) per Common share from continuing operations |  |                                                                                  | (0.42  
|-     basic and diluted                                       |  |                                                                                  |        
|Net income (loss) per Common share                            |  |                                                                                  | (0.42  
|                                                              |  |                                                                                  |        
|Weighted average shares outstanding (000’s)                   |  |                                                                                  |        
|-     basic                                                   |  |                                                                                  | 175,562
|-     diluted                                                 |  |                                                                                  | 175,562
|                                                              |  |                                                                                  |        
|Consolidated Balance Sheet Data                               |  |                                                                                  |        
|                                                              |  |                                                                                  |        
|Total assets                                                  |  |                                                                                  | 181,675
|Total liabilities                                             |  |                                                                                  | 59,079 
|Net assets                                                    |  |                                                                                  | 122,596
|Share capital                                                 |  |                                                                                  | 195,245
|Dividends                                                     |  |                                                                                  | 0      



Exchange Rate Data



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



10







The following table sets forth information
as to the average period end, high and low exchange rate for Canadian dollars and U.S. dollars for the periods indicated based
on the Bank of Canada nominal noon exchange rates (U.S. dollars to Canadian dollars) in Canadian dollars (US$1.00 = $1.0963 as
at April 29, 2014).



|                  |  | 2013 |        |  | 2012 |  |        | 2011 |  |  | 2010   |  |  | 2009 |       
|----------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ |  |  | ---- | ------
|                  |  |      |        |  |      |  |        |      |  |  |        |  |  |      |       
|Average ($)       |  |      | 1.0299 |  |      |  | 0.9996 |      |  |  | 0.9891 |  |  |      | 1.0299
|High ($)          |  |      | 1.0697 |  |      |  | 1.0418 |      |  |  | 1.0604 |  |  |      | 1.0778
|Low ($)           |  |      | 0.9839 |  |      |  | 0.9710 |      |  |  | 0.9449 |  |  |      | 0.9946
|                  |  |      |        |  |      |  |        |      |  |  |        |  |  |      |       
|Year End Rate ($) |  |      | 1.0636 |  |      |  | 0.9949 |      |  |  | 1.0162 |  |  |      | 0.9931



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



|                    |  | March |        |  | February |  |        | January |  |  | December |  |  | November |        |  | October | 
|------------------- |  | ----- | ------ |  | -------- |  | ------ | ------- |  |  | -------- |  |  | -------- | ------ |  | ------- | 
|                    |  | 2014  |        |  | 2014     |  |        | 2014    |  |  | 2013     |  |  | 2013     |        |  | 2013    | 
|                    |  |       |        |  |          |  |        |         |  |  |          |  |  |          |        |  |         | 
|Average ($)         |  |       | 1.1107 |  |          |  | 1.1057 |         |  |  | 1.0942   |  |  |          | 1.0637 |  |         | 
|High ($)            |  |       | 1.1251 |  |          |  | 1.1140 |         |  |  | 1.1171   |  |  |          | 1.0697 |  |         | 
|Low ($)             |  |       | 1.0966 |  |          |  | 1.0953 |         |  |  | 1.0614   |  |  |          | 1.0577 |  |         | 
|                    |  |       |        |  |          |  |        |         |  |  |          |  |  |          |        |  |         | 
|Period End Rate ($) |  |       | 1.1053 |  |          |  | 1.1140 |         |  |  | 1.1119   |  |  |          | 1.0636 |  |         | 



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



Not Applicable.



| | C. | Reasons for the Offer and Use of Proceeds
| | -- | -----------------------------------------



Not Applicable.



| | D. | Risk Factors
| | -- | ------------



An investment in the common shares of the
Company must be considered speculative due to the nature of the Company’s business and the present stage of exploration and
development of its mineral deposit properties. In addition to the other information presented in this Form 20-F, a prospective
investor should carefully consider the risk factors set out below and the other information that the Company files with the SEC
and with Canadian securities regulators before investing in the Company’s common shares. The Company has identified the following
non-exhaustive list of inherent risks and uncertainties that it considers to be relevant to its operations and business plans.
Such risk factors could materially affect the Company’s future operating results and could cause actual events to differ
materially from those described in forward-looking statements relating to the Company.



Persistent Low Gold Prices Could Cause
Mine Operations to be Suspended or Shutdown and Negatively Affect the Company’s Profitability, Cash Flow and Ability to Operate
as a Going Concern



The economics of developing gold and other
metal properties are affected by many factors including the cost of operations, variations in the grade of ore mined and the price
of gold or other metals. Depending on the price of gold, the Company may determine that it is impractical to commence or continue
commercial production. The price of gold has fluctuated in recent years. During the year ended December 31, 2013, the market price
per ounce for gold ranged from a low of US$1,192 to a high of US$1,694 with an average price of US$1,411.



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



11







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

| | 2. | Cause the cessation or deferral of new mining projects;
| | -- | -------------------------------------------------------

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

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

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



Gold prices may fluctuate widely and are
affected by numerous industry factors, such as demand for precious metals, forward selling by producers and central bank sales
and purchases of gold. Moreover, gold prices are also affected by macro-economic factors such as expectations for inflation, interest
rates, currency exchange rates and global or regional political and economic situations. The current demand for and supply of gold
affects gold prices, but not necessarily in the same manner as current demand and supply affects the price of other commodities.
The potential supply of gold consists of new mine production plus existing stocks of bullion and fabricated gold held by governments,
financial institutions, industrial organizations and individuals. If gold prices remain at low market levels for a sustained period,
the Company could determine that it is not economically feasible to continue mining operations or exploration activities.



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



Uncertainty of Production Estimates
can Negatively Impact Earnings and Cash Flow



The Company’s gold production may
fall below estimated levels as a result of mining accidents such as cave-ins, rock falls, rock bursts or as a result of other operational
difficulties. In addition, production may be unexpectedly reduced if, during the course of mining, mineral grades are lower than
expected, the physical or metallurgical characteristics of the minerals are less amenable than expected to mining or treatment,
or dilution increases. Accordingly, there can be no assurance that the Company will achieve current or future production estimates.



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



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



The development of gold and other mineral
properties is affected by many factors, including the cost of operations, variations in the grade of ore, fluctuations in commodity
markets, costs of processing equipment and other factors such as government regulations, including regulations relating to royalties,
fluctuations in the U.S. dollar versus Canadian dollar exchange rate, allowable production, importing and exporting of minerals
and environmental protection.



12







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



The price of gold is denominated in U.S.
dollars and, accordingly, the Company’s proceeds from gold sales will be denominated and received in U.S. dollars. As a result,
fluctuations in the U.S. dollar against the Canadian dollar could result in unanticipated fluctuations in the Company’s financial
results, which are reported in Canadian dollars. During the year ended December 31, 2013, the U.S. dollar to Canadian dollar exchange
rate ranged from a low of US$0.9838 to a high of US$1.0704 with an average of US$1.0298.



Limitations under Credit Facilities



The Company’s secured credit facilities
may limit, among other things, the Company’s ability to permit the creation of certain liens, make investments or dispose
of the Company’s material assets. In addition, these credit facilities may limit the Company’s ability to incur additional
indebtedness and requires the Company to maintain specified financial ratios and meet financial condition covenants. Events beyond
the Company’s control, including changes in general economic and business conditions, may affect the Company’s ability
to satisfy these covenants, which could result in a default under one or both of the credit facilities. If an event of default
under the credit facility occurs, the lenders could elect to declare all principal amounts outstanding thereunder at such time,
together with accrued interest, to be immediately due. In such an event, the Company may not have sufficient funds to repay amounts
owing under the facility.



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



The Company’s ability to continue
its production, exploration and development activities depends in part on its ability to generate revenues from its operations
or to obtain financing through joint ventures, debt financing, equity financing, and production sharing arrangements or other means.



The failure of the Company to meet its
ongoing obligations on a timely basis could result in the loss or substantial dilution of its interest (as existing or as proposed
to be acquired) in its properties and materially impact the Company’s business and financial condition.



At current gold prices and forecast production,
Management believes operating cash flows, combined with the recent closing of the Madsen Asset Sale Agreement and NSR Royalty Agreement,
will be sufficient to fund the first quarter 2014 winter road resupply and 2014 operations.



Fluctuations in External Factors Affecting
Costs



The Company’s production costs are
dependent on a number of factors, including refining charges, and the cost of inputs used in mining operations, including, but
not limited to, equipment, labour (including contractors), petroleum, chemical reagents, tires and power. All of these factors
are beyond the Company’s control. If the Company’s total production costs per ounce of gold rise above the market price
of gold and remain so for any sustained period, the Company may experience losses and may curtail or suspend some or all of its
exploration, development and mining activities.



Unfavourable Government Regulatory Changes
May Cause Cessation of Mining Operations and Exploration Activities



The Company’s
exploration activities and mining operations are affected to varying degrees by government regulations relating to mining operations,
the acquisition of land, pollution control and environmental protection, safety, production and expropriation of property. Changes
in these regulations or in their application are beyond the control of the Company and may adversely affect its operations, business
and results of operations. Failure to comply with the conditions set out in any permit or failure to comply with the applicable
statutes and regulations may result in orders to cease or curtail operations or to install additional equipment. The Company may
be required to compensate those suffering loss or damage by reason of its operating or exploration activities.



13







Currently, all of the Company’s properties
are subject to the federal laws of Canada and, depending upon the location of the Company’s properties, may be subject to
the provincial laws of Saskatchewan and Ontario as well as local municipal laws. Mineral exploration and mining may be affected
in varying degrees by government regulations relating to the mining industry. Any changes in regulations or shifts in political
conditions are beyond the control of the Company and may adversely affect its business.



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



Aboriginal Rights, Title Claims and
the Duty to Consult may Delay Projects



Exploration, development and mining activities
at the Company’s Saskatchewan and Ontario properties may affect established or potential treaty or Aboriginal rights, title
or other claims held by Aboriginal groups, in these circumstances, First Nation and Métis, with related duty to consult
issues. The Company is committed to effectively managing any impacts to such rights, title and claims and any resulting consultation
requirements that may arise. However, there is no assurance that the Company will not face material adverse consequences because
of the legal and factual uncertainties associated with these issues.



Failure to Effectively Manage the Company’s
Tailings Facilities could Negatively Impact Gold Production



The Company’s Seabee Mill produces
tailings. Managing these tailings is integral to gold production. The Seabee Operation’s East Lake and Triangle Lake tailings
management facilities have the capacity to store tailings from milling ore from the Seabee Mill until approximately 2016. The Company
is currently in the process of planning tailings capacity expansion beyond 2016. This will support the extension of Seabee’s
mine life and provide additional tailings capacity to process ore from the Santoy 8 deposit and other potential sources such as
the Santoy Gap deposit within the Santoy Mine Complex. If the Company does not receive regulatory approval for new or expanded
tailings facilities, gold production could be constrained.



Changes to Safety, Health and Environmental
Regulations Could Have a Material Adverse Effect on Future Operations



Safety, health and environmental legislation
affects nearly all aspects of the Company’s operations including exploration, mine development, working conditions, waste
disposal, emission controls and protection of endangered and protected species. Compliance with safety, health and environmental
legislation can require significant expenditures and failure to comply with such safety, health and environmental legislation may
result in the imposition of fines and penalties, the temporary or permanent suspension of operations, clean-up costs resulting
from contaminated properties, damages and the loss of important permits. Exposure to these liabilities arises not only from the
Company’s existing operations, but from operations that have been closed or sold to third parties. Generally, the Company
is required to reclaim properties after mining is completed and specific requirements vary among jurisdictions. The Company is
required to provide financial assurances as security for reclamation costs, which may exceed the Company’s estimates for
such costs. The Company could also be held liable for worker exposure to hazardous substances and for accidents causing injury
or death. There can be no assurances that the Company will at all times be in compliance with all safety, health and environmental
regulations or that steps to achieve compliance would not materially adversely affect the Company’s business.



Safety, health and environmental laws and
regulations are evolving in all jurisdictions where the Company has activities. The Company is not able to determine the specific
impact that future changes in safety, health and environmental laws and regulations may have on its operations and activities,
and its resulting financial position; however, the Company anticipates that capital expenditures and operating expenses will increase
in the future as a result of the implementation of new and increasingly stringent safety, health and environmental regulation.
For example, emissions standards are poised to become increasingly stringent. Further changes in safety, health and environmental
laws, new information on existing safety, health and environmental conditions or other events, including legal proceedings based
upon such conditions or an inability to obtain necessary permits, may require increased financial reserves or compliance expenditures
or otherwise have a material adverse effect on the Company.



14







Environmental and regulatory review is
a long and complex process that can delay the opening, modification or expansion of a mine, extend decommissioning at a closed
mine, or restrict areas where exploration activities may take place.



Decommissioning and Reclamation Obligations
May Constrain Production



Environmental regulators are demanding
more and more financial assurances so that the parties involved, and not the government, bear the costs of decommissioning and
reclaiming sites. Decommissioning plans have been filed for the Seabee and Madsen properties. These plans are reviewed, as necessary,
or at the time of an amendment or renewal of an operating licence. Regulators may conduct a further review of the detailed decommissioning
plans, and this can lead to additional requirements, costs and financial assurances. It is not possible to predict what level of
decommissioning and reclamation and financial assurances regulators may require in the future.



As filed with the Government of Saskatchewan’s
Ministry of Environment, the Company estimated in its 2013 Mine Closure Plan the closure costs at the cessation of mining at its
Seabee Mine at $6.1million. Actual costs of completing the reclamation of the mine site may be higher than those estimated. The
Company has issued letters of credit in favour of the Ministry of Environment in the amount of $1.6 million in support of its obligations.
The letters of credit are secured by investment certificates. The Company has received approval to incrementally fund its remaining
closure cost obligations over the next five years as follows: 2014 - $0.5 million; 2015 - $0.5 million; 2016 - $1.0 million; 2017
- $1.0 million; and, 2018 - $1.5 million.



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



Although the Company has assessed the Mineral
Reserve and Mineral Resource estimates contained in this document and believes that the methods used to estimate such Mineral Reserves
and Mineral Resources are appropriate, such figures are estimates. 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. Furthermore,
the indicated level of recovery of gold may not be realized. Market price fluctuations of gold may render reserves and deposits
containing relatively lower grades of mineralization uneconomic. Moreover, short-term operating factors relating to 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. Until Mineral Reserves or Mineral Resources are actually mined and processed, Mineral
Reserve and Mineral Resource grades must be considered as estimates only.



Potential Shareholder Dilution Could
Impact Share Price and New Equity Issues



As of December 31, 2013, there were stock
options outstanding to purchase 7,936,361 common shares and share purchase warrants outstanding, issued pursuant to the CCP Debt
Facility (see Item 2, General Development of the Business), to purchase 5,750,000 common shares. Subsequent to December
31, 2013, the share purchase warrants were cancelled pursuant to terms of a waiver and amendment agreement with Crown Capital Partners
Inc. (“CCP”). The common shares issuable under these options and warrants, if fully exercised, would constitute approximately
7.2 percent of the Company’s resulting share capital. The exercise of such options or warrants and the subsequent resale
of such shares in the public market could adversely affect the prevailing share market price and the Company’s ability to
raise equity capital in the future at a time and price which it deems appropriate. The Company may also enter into commitments
in the future which would require the issuance of additional common shares and the Company may grant additional share purchase
warrants and stock options. Any share issuances from the Company’s treasury could result in immediate dilution to existing
shareholders.



15







Industry Competition may Hinder Corporate
Growth



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



Impairment of Assets may Impact Operational
Performance



In accordance with IFRS, the Company capitalizes
certain expenditures relating to its mineral projects. From time to time the carrying amounts of mining properties and plant and
equipment are reviewed for impairment if events or changes in circumstances indicate that the carrying value may not be recoverable.
If there are indicators of impairment, an exercise is undertaken to determine whether the carrying values are in excess of their
recoverable amount. Such review is undertaken on an asset by asset basis, except where such assets do not generate cash flows independent
of other assets, and then the review is undertaken at the cash generating unit level.



Events that could, in some circumstances,
lead to an impairment include, but are not limited to, changes to gold price or cost assumptions, changes to Mineral Reserve or
Mineral Resource grades or the Company’s market capitalization being less than the carrying amounts of its mining properties
and plant and equipment.



The assessment requires the use of estimates
and assumptions such as, but not limited to, long-term gold prices, foreign exchange rates, discount rates, future capital requirements,
Mineral Reserve and Mineral Resource estimates, operating performance as well as the definition of cash generating units. It is
possible that the actual fair value could be significantly different from those assumptions, and changes in the assumptions will
affect the recoverable amount. In the absence of any mitigating valuation factors, the Company’s failure to achieve its valuation
assumptions or a decline in the fair value of its cash generating units or other assets may, over time, result in impairment charges.



If the Company determines that an asset
is impaired, the Company will charge against earnings any difference between the carrying amount of the assets and the estimated
fair value less cost to sell those assets. Any such charges could have a material adverse effect on the Company’s results
of operations.



Extreme and Persistent Weather Conditions
could Cause Operating and Exploration Difficulties



The Company’s mining and exploration
properties are all located in Saskatchewan and Ontario. Access to these properties and the ability to conduct work on them can
be affected by adverse weather conditions. Adverse weather conditions can also increase the costs of both access and work on the
Company’s properties.



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



Acquisition of title to mineral properties
is a very detailed and time-consuming process. The Company believes it has investigated title to all of its mineral properties
and has obtained title opinions with respect to its most significant properties. To the best of the Company’s knowledge,
titles to all such properties are in good standing. For the Madsen properties, the Company has searched title records for any and
all encumbrances. For the Seabee and Amisk properties, the Company has examined property search abstracts from the Saskatchewan
Ministry of the Economy as well as made inquiries and reviewed lease files from the Ministry. 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.



16







We May Not be Able to Hire Enough Skilled Employees to Support
Operations



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 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.



Uninsured Risks could Negatively Impact
Profitability



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



The Company is Subject to Evolving Corporate
Governance and Public Disclosure Regulations that have Increased the Cost of Compliance and the Risk of Non-compliance



The Company is subject to changing rules
and regulations promulgated by a number of Canadian and United States governmental and self-regulating organizations, including
the Canadian Securities Administrators, the Toronto Stock Exchange (the “TSX”), the SEC and the IASB. These rules and
regulations continue to evolve in scope and complexity making compliance more difficult and uncertain. Efforts to comply with new
regulations have resulted, and are likely to continue to result in, increased general and administrative expenses and a diversion
of management’s time and attention from revenue-generating activities to compliance activities.



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



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



Internal Controls Provide No Absolute
Assurances as to Reliability of Financial Reporting



The Company has invested resources to document
and assess its system of internal controls over financial reporting and it is continuing its evaluation of such internal controls.
Internal controls over financial reporting are procedures designed to provide reasonable assurance that transactions are properly
authorized, assets are safeguarded against unauthorized or improper use, and transactions are properly recorded and reported. A
control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance with respect to
the reliability of financial reporting and financial statement preparation.



The Company is required to satisfy the
requirement of Section 404 of the U.S. Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), which requires an annual
assessment by management of the effectiveness of the Company’s internal control over financial reporting.



If the Company fails to maintain the adequacy
of its internal control over financial reporting, as such standards are modified, supplemented, or amended from time to time, the
Company may not be able to ensure that it can conclude on an ongoing basis that it has effective internal controls over financial
reporting in accordance with Section 404 of the Sarbanes-Oxley Act. The Company’s failure to satisfy the requirement of Section
404 of the Sarbanes-Oxley Act on an ongoing, timely basis could result in the loss of investor confidence in the reality of its
financial statements, which in turn could harm the Company’s business and negatively impact the trading price of its common
shares. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation,
could harm the Company’s operating results or cause it to fail to meet its reporting obligations.



17







Although the Company intends to devote
substantial time and incur substantial costs, as necessary, to ensure ongoing compliance, the Company cannot be certain that it
will be successful in complying with Section 404 of the Sarbanes-Oxley Act.



Internal Control Over Financial Reporting



Based on Management’s 2013 assessment,
it was concluded that, as a result of the material weakness in Internal Controls over Financial Reporting (“ICFR”)
discussed below, ICFR was not effective as at December 31, 2013.



Management noted that as at December 31,
2013, with respect of Income Taxes, there was a lack of review and monitoring controls of the income tax function relating to complex,
non-routine transactions and provisions. This control deficiency resulted in the Company recording adjustments to deferred income
tax assets, deferred income tax liabilities and deferred income tax expense. This control deficiency relating to complex, non-routine
transactions and provisions creates a reasonable possibility that material misstatements of the consolidated financial statements
including disclosures will not be prevented or detected on a timely basis as a result.



The Company is Subject to Certain Legal
Proceedings and May be Subject to Additional Litigation in the Future



All industries, including the mining industry,
are subject to legal claims, with and without merit. The Company is currently involved in litigation of a non-material nature,
including in relation to alleged infractions of environmental compliance matters, and may become involved in legal disputes in
the future. Defense and settlement costs can be substantial, even with respect to claims that have no merit. Due to the inherent
uncertainty of the litigation process, there can be no assurance that the resolution of any particular legal proceedings will not
have a material adverse effect on the Company’s financial position or results of operations.



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 Code of Ethics Policy.



Item 4. Information on the Company



| | A. | History and Development of the Company
| | -- | --------------------------------------



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



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



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



18







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



During 2012, the Company announced that
it had completed the acquisition of St. Eugene Mining Corporation Limited. As a result of this acquisition, Claude now owns 100
percent of the Amisk Gold Project. This gold and silver exploration property is one of the largest land positions in the prolific
Flin Flon mineral district. The Amisk Gold Property is located 20 kilometres southwest of Flin Flon, Manitoba and hosts the Amisk
Gold Project, a bulk mineable gold and silver deposit. Currently, the Amisk Gold Project hosts a National Instrument 43-101 compliant
resource calculation of 1.57 million gold equivalent ounces.



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



During the last three years ended December
31, 2013, the Company spent approximately $145.6 million on principal capital expenditures related to its properties, plant and
equipment including $31.9 million spent during the year ended December 31, 2013. Details of these principal capital expenditures
are set forth in the table below:



|                              |  | 2013                     |      |  | 2012 |  |      | 2011 | 
|----------------------------- |  | ------------------------ | ---- |  | ---- |  | ---- | ---- | 
|Mineral Properties            |  | Canadian Dollar Millions |     
|                              |  |                          |      |  |      |  |      |      | 
|Mine development              |  |                          | 23.0 |  |      |  | 22.3 |      | 
|Exploration expenditures      |  |                          | 1.3  |  |      |  | 20.0 |      | 
|Plant and equipment additions |  |                          | 7.6  |  |      |  | 20.2 |      | 
|Total Capital Expenditures    |  |                          | 31.9 |  |      |  | 62.5 |      | 



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



| | B. | Business Overview
| | -- | -----------------



The Company is engaged in the acquisition,
exploration, and development of precious metal properties and the production and marketing of minerals. All of Claude’s mineral
properties are located in northern Saskatchewan and northwestern Ontario.



The Company’s mineral property portfolio
includes the Seabee Property, which includes two producing gold mines and various exploration properties located at Laonil Lake,
Saskatchewan, approximately 125 kilometres northeast of La Ronge, Saskatchewan. This property has been in operation since December
1991, producing 1,066,941 ounces of gold to December 31, 2013. In 2013, gold sales were 44,823 ounces compared to 48,672 ounces
in 2012 and 44,632 in 2011.



The Company also owns 100 percent of the
Amisk Gold Property, located in the province of Saskatchewan, 20 kilometres southwest of Flin Flon, Manitoba, which covers an area
of 40,400 hectares.



Operations, although affected by weather,
are not seasonal as gold is produced year round. Gold is a commodity for which there is an active market and is not differentiated
from the products of competitors. Therefore, the Company conducts no special marketing and its revenue is determined by prevailing
market prices.



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



19











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



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



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



| | C. | Organizational Structure
| | -- | ------------------------



Claude has three wholly-owned subsidiary
corporations: 4158849 Canada Ltd. and Madsen Gold Corporation, both Canada federal corporations, and St. Eugene Mining Corporation
Limited (“SEM”), a British Columbia company. References herein to the “Company” or “Claude”
include the Company and its subsidiaries, unless otherwise indicated or the context otherwise requires.







| | D. | Property, Plants and Equipment
| | -- | ------------------------------



Mineral Properties



The Company’s mineral property portfolio
includes the Seabee Property, which includes two producing gold mines and various exploration properties located at Laonil Lake,
Saskatchewan, approximately 125 kilometres northeast of La Ronge, Saskatchewan. This property has been in operation since December
1991, producing 1,066,941 ounces of gold to December 31, 2013. In 2013, gold production was 43,850 ounces compared to 49,570 ounces
in 2012.



The Company also owns 100 percent of the
Amisk Gold Property, located in the province of Saskatchewan, 20 kilometres southwest of Flin Flon, Manitoba, which covers an area
of 40,400 hectares.



CLAUDE ASSET LOCATIONS



Except for the operations from Seabee and
the Santoy Mine Complex, all of the Company’s mining properties are at the exploration stage. Among the Company’s exploration
projects, those within trucking distance of the Seabee Mill will receive the majority of the Company’s exploration budget
and focus for the foreseeable future.



SEABEE PROPERTY



The Seabee Mine is located at Laonil Lake,
Saskatchewan, approximately 125 kilometres northeast of the town of La Ronge. Claude commenced commercial production at the mine
in December, 1991. Since start-up, the mine has produced 1,066,941 ounces of gold including 43,850 ounces produced in 2013.



20











SEABEE AREA



Property Description and Access



The Seabee Gold Operation has produced
gold from five mineral leases. It currently is producing from ML5519, ML5520 and ML5543. The original ten quartz claims covering
the mine site were consolidated into a single mineral lease (ML 5519) of approximately 201 hectares granted by the Crown on November
25, 1999. In November 1994, the Company entered into an option agreement to acquire a 100 percent working interest, subject to
a 30 percent Net Profits Interest, in the surrounding Currie Rose property (in August 2010, the Company purchased the 30 percent
Net Profits Interest on the Currie Rose Property). After fulfilling the conditions in the option agreement and obtaining a 100
percent interest in the property, a portion of the claims were converted to a mineral lease (ML 5520) on January 1, 1999. The leases
were renegotiated in June of 2002 and expire in 2025. Additional mineral leases were added during 2007 at Porky West (ML 5536)
and Santoy 7 (ML 5535) and during 2009 at Santoy 8 (ML 5543) and Santoy Gap (ML 5551) during 2013. Late in 2012, the Company staked
an additional 3,350 hectares, taking its current land position to in excess of 17,750 hectares.



21











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



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



Access to the minesite is by fixed wing
aircraft from La Ronge or Flin Flon to a 1,275 metre airstrip located on the property. Equipment and bulky or heavier supplies
are trucked to the site via a 60 kilometre winter road from Brabant Lake on Highway 102. The winter road is typically in use from
January through March.



The Seabee Operation directly supports
a workforce of approximately 300 employees with permanent camp facilities. Electrical power is provided by a transmission line
to the operation by the provincial power authority, Saskatchewan Power Corporation.



Property Royalties



Red Mile Royalty Agreements



From 2004 through 2007 the Company sold
production royalties pursuant to four Royalty Agreements, for proceeds of $7.1 million, $14.0 million, $35.0 million and $25.6
million, respectively. Proceeds from the sale of the royalties were deposited in exchange for a restricted promissory note. Interest
and principal from the restricted promissory note will be sufficient to fund the expected basic royalty payments and any interest
expense. Under certain circumstances the Company has the right, by way of a call option, to acquire the partnership which owns
the royalty, for the lower of market value or for the outstanding amount of the restricted promissory note at the end of the tenth
year of each Royalty Agreement. This would effectively terminate the applicable royalty obligation. In addition to the royalty,
the Company granted a net profit interest (“NPI”) of varying percentages, payable only if gold prices exceed a pre-determined
threshold:



22







|Summary of NPI’s Pursuant to Red Mile Royalty Agreements | 
|-------------------------------------------------------- | 
|                                                         | 
|Net Profit Interest                                      | 
|                                                         | 
|Applicable years                                         | 
|Percent                                                  | 
|Price of gold thresholds                                 | 



Prior to any NPI payment, the Company is
entitled to first recover from the NPI expenditures (including capital expenditures), working capital, operating losses, interest
charges and asset retirement obligations relating to the production of ore at the Seabee Operation. These expenditures are calculated
on a cumulative basis from the commencement of the individual agreements. At December 31, 2013, the cumulative carry forward amounts
remained in a deficiency position under each of the agreements. Using current production, price and cost forecasts within the Company’s
current Life of Mine Plan, no payments are anticipated over the remaining life of these NPIs.



Santoy Project Net Profits Interest



Subject to the Agreement for Assignment
of Mineral Dispositions dated the 21st day of March, 1984 between Saskatchewan Mining Development Corporation (“Cameco”)
and Claude Resources Inc., there was a five percent NPI on the Company’s Santoy property.   During the first quarter
of 2014, the Company entered into an agreement to purchase the Santoy Project NPI for $0.3 million.



Saskatchewan Government Production Royalties



Royalties are payable to the province of
Saskatchewan under the terms of the Mineral Disposition Regulations, 1986. The royalty is calculated on five percent
of the first million ounces of production escalating to 10 percent thereafter on net operating profits and becomes payable once
capital and exploration costs are recovered. At current and anticipated production rates, Crown royalty payments are not expected
to be required during 2014 or 2015. To date, there have been no royalty taxation payments made to the province.



Seabee Operation NSR



During the first quarter of 2014, the Company
announced the closing of an net smelter return (“NSR”) Royalty Agreement on all future gold sales at the Seabee Gold
Operation, with Orion Mine Finance Fund. Pursuant to this transaction, proceeds of US$12 million were received by the Company in
exchange for a three percent NSR. The NSR Royalty Agreement provides the Company with the option to repurchase half or 1.5 percent
of the 3 percent NSR for US$12 million, expiring on December 31, 2016. The NSR payments will be paid quarterly in cash or in physical
gold at the average price of gold in each calendar month.



History



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



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



23







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



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



Regional and Property Geology



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



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



Mine Details



Construction of the Seabee Mine began in
1990. The mill was completed in late 1991 with gold production commencing in December of that year. The mine hosts permanent facilities
to support all mining operations and personnel. The Seabee Operation employs approximately 300 workers with 160 on site at any
given time, subject to seasonal adjustments. Approximately 190 persons are employed in the mill, surface maintenance, electrical,
catering, surface, diamond drilling and technical services areas. The majority of these employees are on a two week-in and two
week-out rotation. The remaining 110 people are employed in the underground operations. Camp facilities on site are capable of
accommodating 195 people and are supported by a full complement of dining and recreation facilities.



Claude received regulatory approval in
1991 to deposit mill effluent and tailings into the dewatered East Lake. The East Lake Tailings Management Facility (“TMF”)
was near capacity by the end of 2004; therefore, a new TMF was proposed.



Claude selected Triangle Lake as the preferred
site for the construction of a new TMF. Conditional regulatory approval to deposit tailings in Triangle Lake was obtained in 2004.



24







The proposed TMF at Triangle Lake included
two containment dams, North Dam and South Dam, at the north and south ends of the Triangle Lake basin, respectively. The North
Dam was to provide tailings containment between Triangle and Pine Lakes, while the South Dam was to divert surface runoff from
the lowlands south of the Triangle Lake and provide tailings containment. Regulatory approval was granted in August 2004 to construct
the North Dam. A preliminary design for the South Dam was completed in August 2005 and the dam itself was completed in 2006.



In 2007, the Company raised the height
of the Triangle Lake Dams to 454.0 metres elevation, recommissioned the water treatment plant and installed evaporators at its
TMF. Designs and construction to raise the Triangle Lake dams to the 460.0 metre elevation have been approved by Saskatchewan Environment.
Construction will be completed in stages and in 2012 construction was completed up to the 457.0 metre elevation. Review and approval
to store tailings up to the new elevation was received in April 2013. Staged upgrades to the tailings facilities will continue
up to the 460.0 metre elevation. Costs to reach the 460.0 metre elevation are expected to be approximately $1.0 to $2.0 million.



Engineering studies also proposed stacked
tailings for the East Lake TMF which could extend TMF capacity by four to five years, at current production rates. Stacked tailings,
a process which allows for tailings impoundment to exceed final dam elevation, has been used successfully in other mining jurisdictions
in Canada. The Company expects the stacked tailings process will also be completed in stages with annual costs of up to $1.0 million.



As required by regulatory authorities,
the Company has provided letters of credit as security for reclamation related to the Seabee Operation in the amount of $1.6 million.
As security for these letters of credit, the Company has provided investment certificates in the same amount. In April 2011, the
Company submitted an updated decommissioning plan for the Seabee Operation. Initial comments were received from Saskatchewan Environment
during the first quarter of 2012 with continuing discussions occurring throughout 2012. In 2013, a final agreement on the decommissioning
plan was accepted with the full cost of the plan being approximately $6.1 million.



The Company uses a variety of mining methods
to extract ore from the gold deposits. The selection of the method is dependent upon a variety of factors including: orebody geometry,
dip, location, personnel and equipment availability, etc. The major mining methods include:



| | · | Longhole Mining: Most of the mining is completed via longhole mining. This method is employed in
steeply dipping orebodies. Strike length is limited and ore pillars, or rib pillars, are left in place to control dilution.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Avoca long hole mining: In high value ore with appropriate access points, avoca mining increases
ore recovery as there are no pillars left for ground stability. Ore is blasted at one end of an open stope while dry waste rock
fill is added to the other end to limit the length of the exposed wall in order to control wall failure.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Cut and Fill: In shallow dipping orebodies cut and fill methods are employed to maximize ore recovery.
In this method mining progresses from bottom up with individual lifts of ore (3-5 metres vertical) are extracted. Waste rock is
backfilled into the open cavity before mining of the next lift up.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Alimak mining: In narrow orezones or zones with significant capital development requirements, alimak
mining is employed to minimize development requirements. Alimak mining requires an upper and lower access point between which an
alimak raise is excavated. Production activities can be conducted from the alimak raise itself, or from a development drift excavated
off the raise.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
zones currently being mined are accessed by a ramp driven to the 1,200 metre level. Mining efforts are currently being focused
on the 2b and 2c zones at depth on the 970 thru 1,100 levels,as well as the L62 zone between the 690 and 900 level.
The shaft and hoisting facility, commissioned in the fourth quarter of 1997 (with extensions commissioned in November 2003 and
February 2013), provides ore and waste transport to surface. As much as 850 tonnes per day of ore and waste are moved to the ore
and waste pass system and hoisted to surface with the ore then conveyed to the mill.  Seabee operated under a five year mine
plan focusing on the 2b, 2c and L62 zones while continuing to expand and explore for additional underground ore zones. The mill
process consists of a three stage crushing circuit, a three stage grinding circuit, followed by cyanide leaching. The leached gold
is collected in a carbon-in-pulp circuit, stripped and collected on stainless steel mesh cathodes by electrowinning. The product
from electrowinning is refined into dore bars in a bullion furnace. Power is supplied by line from Saskatchewan Power Corporation’s
provincial power grid.



25







During 2011, exploration efforts focused
on drill testing of the newly discovered L62 zone. The L62 zone is located approximately 200 metres from existing Seabee Underground
infrastructure on multiple levels. Recent drilling was completed between September and December of 2011, with the results to be
incorporated into an updated National Instrument 43-101 resource calculation anticipated in the first quarter of 2012. Highlights
of recent drilling of the L62 zone results include:



| | · | 12.81 grams of gold per tonne over 6.70 metres true width (U11-649);
| | - | --------------------------------------------------------------------

| | · | 14.83 grams of gold per tonne over 5.19 metres true width (U11-650);
| | - | --------------------------------------------------------------------

| | · | 195.06 grams of gold per tonne over 2.29 metres true width (U11-651);
| | - | ---------------------------------------------------------------------

| | · | 22.03 grams of gold per tonne over 4.41 metres true width (U11-661);
| | - | --------------------------------------------------------------------

| | · | 24.16 grams of gold per tonne over 5.71 metres true width (U11-663); and
| | - | ------------------------------------------------------------------------

| | · | 27.06 grams of gold per tonne over 4.83 metres true width (U11-382).
| | - | --------------------------------------------------------------------



Drilling intercepted economic grades and
widths approximately 25 metres along strike and 125 metres up-dip from previous high grade intercepts. The L62 zone is now interpreted
to have an estimated strike length of up to 100 metres and a dip length of 400 metres. Drilling immediately down plunge encountered
sporadic economic grades, with the geological structure considered open in all directions.



Since discovery during the second quarter
of 2011, the L62 zone has been the focus of an aggressive exploration program and has grown rapidly. The Company commenced underground
development towards the L62 zone in October, two months earlier than originally planned, incorporated the L62 zone into Seabee’s
production profile in the second half of 2012.



During 2012, the Company was able to effectively
upgrade a significant portion of the Inferred Resource into the Indicated category while continuing to grow the Santoy Gap deposit.
Furthermore, the infill drill program demonstrated that a high grade core exists with widths of up to 20 metres. The Santoy Gap
deposit represents a great opportunity for the Company due to its proximity to permitted mine infrastructure, low development cost,
near-term production potential and impressive grade.



In 2013, exploration activities included
significant semi-detailed mapping near Seabee, drilling of 4,300 metres, development, compilation and prospecting of a number of
near-mine targets. Through application of an updated structural model for both the Seabee and Santoy regions, the Company’s
exploration department generated a number of targets for evaluation during 2013. A number of these targets were advanced through
sampling, stripping and mapping with a goal of advancing towards drill readiness. Results from the 2013 program continue to support
the potential for further discovery within the Seabee footwall environment.



26











Seabee Mine Future Work Programs



Mineralization is known to extend below
the current lowest working levels at Seabee, in addition to known veins not yet mined. Claude is planning in excess of 50,000 metres
of underground drilling at Seabee and Santoy to replace production. Drilling will be focused on the extension at depths of the
2B and 2C veins.



In addition, 2014’s exploration budget
will focus on: evaluating the down-plunge extension of the Santoy Gap and Santoy 8 Lenses; expanding recently discovered parallel
zones near Santoy; and initial drill testing of several near-Seabee targets. Infill drilling at the Santoy Gap Lens, which will
continue throughout 2014, will also be prioritized to grow the reserve base and convert additional ounces from the Inferred to
Indicated category.



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





|                                      |  | IFRS |         | Canadian GAAP |     
|------------------------------------- |  | ---- | ------- | ------------- | ----
|Seabee Mine Operating Data            |  | 2013 |         |               | 2012
|                                      |  |      |         |               |     
|Ore Milled (tonnes)(1)                |  |      | 280,100 |               |     
|Grade processed (grams per tonne)     |  |      | 5.11    |               |     
|Mill Recoveries (%)                   |  |      | 95.3    |               |     
|Gold Produced (ounces)(1)             |  |      | 43,900  |               |     
|Gold Sold (ounces)(2)                 |  |      | 44,800  |               |     
|                                      |  |      |         |               |     
|Cash Cost ($/ounce of gold sold)(3)   |  | $    | 983     |               |     
|Cash Cost (US$/ounce of gold sold)(3) |  | $    | 954     |               |     





(1) Includes tonnes milled and
ounces produced from the Santoy 8 Project (2010) and Porky West Bulk Samples (2009).



27







(2) Statistic excludes ounces
sold from the following projects not yet in commercial production: Santoy 8 Project (2010) and the Porky West Bulk Samples (2009).

(3) The Company reports its
operating costs on a per-ounce basis based on uniform standards developed by the Gold Institute. Management uses this measure to
analyze the profitability (compared to average realized gold prices) of the Seabee Operation, before depreciation, depletion and
accretion. When evaluating this profitability measure, investors should be aware that no provision has been made for exploration
or development costs. A reconciliation of the cash costs in the above table is provided below:



Consolidated Total Cash Costs

Per Gold Ounce Sold



Summary of Consolidated Total Cash Costs
for the Years ended December 31,





|                                    |  | IFRS |        | Canadian GAAP |     
|----------------------------------- |  | ---- | ------ | ------------- | ----
|                                    |  | 2013 |        |               | 2012
|                                    |  |      |        |               |     
|Production cost (CDN$)              |  | $    | 44,051 |               |     
|Divided by ounces sold              |  |      | 44,823 |               |     
|Total cash cost per ounce (CDN$)    |  | $    | 983    |               |     
|                                    |  |      |        |               |     
|CDN$ Exchange Rate                  |  |      | 1.0302 |               |     
|                                    |  |      |        |               |     
|Cash operating costs (US)           |  | $    | 954    |               |     
|                                    |  |      |        |               |     
|Less:  Royalties                    |  |      | -      |               |     
|Total cash costs                    |  | $    | 954    |               |     
|                                    |  |      |        |               |     
|Gold ounces sold                    |  |      | 44,823 |               |     
|Mine operating costs (US$ millions) |  | $    | 42.8   |               |     
|($ millions)                        |  | $    | 44.1   |               |     





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



Since commencement of production in 1991,
the mill has processed nearly 4.9 million tonnes of ore at an average head grade of 7.28 grams of gold per tonne producing 1,066,941
ounces of gold to December 31, 2013.



Seabee Property – Santoy Region



The Santoy Lake property is an 11,400 acre
(4,566 hectares) claim group located approximately 14 kilometres east of the Company’s operating Seabee Mine and hosts the
Company’s Santoy Mine Complex (which includes the Santoy 8 and Santoy Gap deposits). Claude holds a 100 percent interest
in the property subject to a five percent NPI. An all-weather road providing access from the Seabee Mill was completed in 2006
and continues to be upgraded. During 2009, the Company completed the construction of the power line extension from the Seabee mine
to the Santoy Mine Complex. During the second quarter of 2011, the Company declared that its Santoy Mine Complex had achieved commercial
production effective January 1, 2011. During 2013 and 2012, the Santoy 8 deposit within the Santoy Mine Complex produced 17,718
ounces and 16,944 ounces of gold, respectively.



Geology



Mineralization in the zones is hosted in
siliceous shear zones with sulfide-chlorite-quartz veins and in silicified granitoid sills. It has been confirmed that the Santoy
8 shear zone is at least 380 metres long and up to 350 metres wide. The zone is open at depth. Mineralized sections of this zone
range in thickness from 1.5 to 15 metres. The Santoy 8 and 8 East zone deposits are hosted in a four kilometre long, northwest
trending and northeast dipping sheared and mineralized corridor in mafic volcaniclastic rocks and granitoid sills. The 8 and 8
East zones start about 2.5 kilometres south of Santoy 7, and extend for at least 1,000 metres further south. Gold mineralization
occurs in gold-sulfide-chlorite-quartz veins in the shear zones, near or in the granodiorite and granite sills. During 2011, drilling
defined the Santoy Gap deposit approximately 400 to 1,000 metres north of the Santoy 8 deposit. The deposit is about 650 metres
along strike and extends to depths in excess of 500 metres. In 2013 and 2012, infill and exploration drilling continued to confirm
and expand the Santoy Gap system.



28







History



In 1998, work crews conducted basic prospecting
and mapping and discovered several new veins. In the first quarter of 2002, these targets were drill-tested with encouraging results.
The Santoy area became the subject of an ongoing exploration program with two significant deposits (Santoy 7 and Santoy 8 and 8
East) outlined in 2004 and 2005.



The 2004 and 2005 drilling programs concentrated
on Santoy 6, 7 and 8 zones. Seven gold zones had been discovered on the Santoy property during the Company’s previous prospecting
programs, with the 7 and 8 zones looking the most promising.



In 2004, there were 5 holes drilled in
Santoy 6 (598 metres), 48 holes in Santoy 7 (6,164 metres) and 21 holes (2,797 metres) drilled in Santoy 8.



The 2005 program in the Santoy area was
devoted to the Santoy 8 and 8 East zones. Sixty-eight diamond drill holes totaling approximately 15,296 metres were drilled. This
drilling was carried out to test the north-northwest plunge and dip extensions of the mineralized shear structures outlined in
previous drill campaigns.



Permit applications for an all-weather
access road and bulk sampling were submitted to the Provincial Government in 2005. Permitting was granted to bulk sample the Santoy
7 zone in the third quarter of 2005, with physical work starting in February of 2006.



During 2007, concurrent with the processing
of Santoy 7 bulk sample tonnes in the first half, infill drilling continued on Santoy 7 and Santoy 8 to provide more accurate information
for proposed mine plans. The Santoy area, as a whole, contains a number of high grade gold showings, some of which were drill-tested
in previous years. Bulk sampling of the Santoy 7 deposit was initiated during the first quarter of 2007 and continued through to
October when commercial production was attained. During 2008 and 2009 mining continued on three levels at a production rate of
approximately 150 tonnes per day. During the first quarter of 2010, mining operations at Santoy 7 ceased due to depletion of existing
reserves.



At Santoy 8, Claude carried out a drill
program of 147 diamond drill holes totaling 31,670 metres in Santoy 8 (23,430 metres in 103 holes) and Santoy 8E (8,240 metres
in 44 holes). The program provided 25-metre infill data to a depth of 250 metres on the deposits as well as testing strike and
plunge extensions. Gold mineralization at Santoy 8 has been extended to a strike length of 600 metres, a width of 350 metres and
remains open along strike and down plunge to the north.



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



During 2008, Claude updated its NI 43-101
compliant Mineral Resource estimate at Santoy 8 and conducted an economic study to evaluate the portion of mineral resources it
planned to mine in the first three years of the Santoy 8 Project.



The Santoy power line project, which ties
the Santoy Mine Complex to the provincial power grid, was completed during 2009. Portal construction and surface infrastructure
for the planned development of the Santoy Mine Complex to access the Santoy 8 deposit were also initiated in late 2009. The Company
completed the environmental studies and received the permits required for commercial mining of the Santoy 8 and 8E deposits in
2010.



29







During 2010, Claude continued underground
development and advanced the Santoy Mine Complex Project towards the commercial production decision made during the second quarter
of 2011.



Exploration during 2010 continued with
a drill program targeting the Santoy Gap deposit as well as infill and extension drilling in proximity to Santoy 8. The program
was designed to test the Santoy shear system between the Santoy 7 and 8 deposits as well as the down plunge continuity of the Santoy
8 and 8E deposits. Historic drill testing of the shear system has focused on relatively shallow drill holes with 200 metre spacings.
Results from the 2010 program successfully outlined continuity at depth for both the Santoy 8 and 8E deposits and provided encouraging
results from the Santoy Gap deposit. The target at the Santoy Gap deposit is located 300 to 900 metres north of underground infrastructure,
immediately on strike and adjacent to the Santoy 8 deposit within the Santoy Mine Complex.



During 2011, drilling targetting the Santoy
Gap deposit included 33,000 metres of drilling in 82 holes. Drilling has intercepted multiple high-grade intervals, significantly
expanding the strike length and width of the mineralized system and has expanded the Santoy Gap and Santoy 8 system to in excess
of 1.8 kilometres long. Highlights of full year drilling provided below:



Highlights from 2011 Santoy Gap drilling



|Hole ID     |  | Easting |        |  | Northing |  |         | From (m) |  |  | To (m) |  |  | Au Grade (g/t) |        | Width (m) | 
|----------- |  | ------- | ------ |  | -------- |  | ------- | -------- |  |  | ------ |  |  | -------------- | ------ | --------- | 
|            |  |         |        |  |          |  |         |          |  |  |        |  |  |                |        |           | 
|JOY-11-565* |  |         | 599043 |  |          |  | 6170888 |          |  |  | 396.22 |  |  |                | 397.68 |           | 
|JOY-11-588  |  |         | 599021 |  |          |  | 6170706 |          |  |  | 222.16 |  |  |                | 231.94 |           | 
|            |  |         |        |  |          |  | Incl    |          |  |  | 231.44 |  |  |                | 231.94 |           | 
|JOY-11-589  |  |         | 599237 |  |          |  | 6170826 |          |  |  | 468.66 |  |  |                | 470.63 |           | 
|JOY-11-594  |  |         | 598995 |  |          |  | 6170771 |          |  |  | 289.42 |  |  |                | 291.70 |           | 
|            |  |         |        |  |          |  | And     |          |  |  | 301.17 |  |  |                | 305.21 |           | 
|JOY-11-600  |  |         | 598968 |  |          |  | 6170808 |          |  |  | 290.36 |  |  |                | 291.77 |           | 
|JOY-11-606  |  |         | 599247 |  |          |  | 6170665 |          |  |  | 395.33 |  |  |                | 403.13 |           | 
|            |  |         |        |  |          |  | Incl    |          |  |  | 397.08 |  |  |                | 400.14 |           | 
|JOY-11-611  |  |         | 599292 |  |          |  | 6170777 |          |  |  | 455.13 |  |  |                | 458.95 |           | 
|            |  |         |        |  |          |  | Incl    |          |  |  | 456.67 |  |  |                | 457.81 |           | 
|JOY-11-535  |  |         | 599349 |  |          |  | 6170487 |          |  |  | 310.57 |  |  |                | 316.00 |           | 
|JOY-11-549  |  |         | 599178 |  |          |  | 6170745 |          |  |  | 330.38 |  |  |                | 336.62 |           | 
|JOY-11-551  |  |         | 599205 |  |          |  | 6170769 |          |  |  | 405.77 |  |  |                | 408.59 |           | 
|JOY-11-554  |  |         | 599146 |  |          |  | 6170803 |          |  |  | 413.20 |  |  |                | 415.44 |           | 
|JOY-11-555  |  |         | 599146 |  |          |  | 6170803 |          |  |  | 377.40 |  |  |                | 397.65 |           | 
|            |  |         |        |  |          |  | Incl    |          |  |  | 377.40 |  |  |                | 378.40 |           | 
|JOY-11-556  |  |         | 599146 |  |          |  | 6170803 |          |  |  | 323.00 |  |  |                | 343.48 |           | 
|            |  |         |        |  |          |  | Incl    |          |  |  | 331.00 |  |  |                | 331.59 |           | 
|JOY-11-580  |  |         | 599097 |  |          |  | 6170891 |          |  |  | 364.06 |  |  |                | 365.78 |           | 



Note:* Partial result, certain assays within
zone are pending. Composites calculated at 3.0 g/t cut-off and may include internal dilution. True width is interpreted to range
from 70 to 95% drilled width.



During 2012, the Company’s exploration
program focused on aggressively exploring the Santoy Gap deposit and its relationship to the Santoy 8 deposit body to depths up
to 750 metres. Infill and exploration drilling continued to confirm and expand the Santoy Gap system. A total of 71 holes and 35,000
metres were completed in and around the Santoy Gap Lens and along the Santoy Regional Shear Zone during 2012. The Santoy Gap system
remains open down plunge to the north, along strike to the south and at depth. These recent intercepts at depth may link with the
existing Santoy 8 resource 300 metres to the south.



30







Highlights from 2012 Santoy Gap drilling
include:



Highlights from 2012 Santoy Gap drilling



|Hole ID    |  | Easting |        |  | Northing |  |         | From (m) |  |  | To (m) |  |  | Grade (g/t) |        |  | Width (m) |  |       | Zone | 
|---------- |  | ------- | ------ |  | -------- |  | ------- | -------- |  |  | ------ |  |  | ----------- | ------ |  | --------- |  | ----- | ---- | 
|JOY-12-622 |  |         | 599436 |  |          |  | 6170747 |          |  |  | 403.57 |  |  |             | 405.29 |  |           |  | 4.81  |      | 
|           |  |         |        |  |          |  | And     |          |  |  | 722.00 |  |  |             | 723.00 |  |           |  | 6.20  |      | 
|JOY-12-624 |  |         | 599148 |  |          |  | 6170973 |          |  |  | 519.71 |  |  |             | 520.43 |  |           |  | 7.87  |      | 
|JOY-12-630 |  |         | 598791 |  |          |  | 6170890 |          |  |  | 272.27 |  |  |             | 272.77 |  |           |  | 13.60 |      | 
|JOY-12-636 |  |         | 599035 |  |          |  | 6170957 |          |  |  | 415.77 |  |  |             | 432.50 |  |           |  | 6.91  |      | 
|JOY-12-638 |  |         | 599035 |  |          |  | 6170957 |          |  |  | 398.00 |  |  |             | 400.30 |  |           |  | 13.94 |      | 
|JOY-12-643 |  |         | 598950 |  |          |  | 6170670 |          |  |  | 181.75 |  |  |             | 183.57 |  |           |  | 41.88 |      | 
|JOY-12-648 |  |         | 599073 |  |          |  | 6170506 |          |  |  | 61.92  |  |  |             | 62.42  |  |           |  | 17.25 |      | 
|           |  |         |        |  |          |  | And     |          |  |  | 158.00 |  |  |             | 159.00 |  |           |  | 11.45 |      | 
|JOY-12-657 |  |         | 599124 |  |          |  | 6170848 |          |  |  | 322.24 |  |  |             | 322.79 |  |           |  | 23.20 |      | 
|JOY-12-661 |  |         | 599124 |  |          |  | 6170848 |          |  |  | 345.20 |  |  |             | 345.70 |  |           |  | 14.90 |      | 
|JOY-12-664 |  |         | 599080 |  |          |  | 6170572 |          |  |  | 135.14 |  |  |             | 135.64 |  |           |  | 15.45 |      | 
|JOY-12-665 |  |         | 599094 |  |          |  | 6170889 |          |  |  | 378.25 |  |  |             | 380.00 |  |           |  | 13.84 |      | 
|JOY-12-666 |  |         | 599000 |  |          |  | 6170595 |          |  |  | 143.29 |  |  |             | 143.95 |  |           |  | 20.30 |      | 
|JOY-12-667 |  |         | 599000 |  |          |  | 6170595 |          |  |  | 124.57 |  |  |             | 126.24 |  |           |  | 10.75 |      | 
|JOY-12-670 |  |         | 599010 |  |          |  | 6170745 |          |  |  | 253.59 |  |  |             | 255.97 |  |           |  | 11.50 |      | 
|JOY-12-674 |  |         | 599207 |  |          |  | 6170942 |          |  |  | 520.15 |  |  |             | 526.45 |  |           |  | 4.67  |      | 
|           |  |         |        |  |          |  | And     |          |  |  | 566.25 |  |  |             | 567.25 |  |           |  | 49.50 |      | 
|JOY-12-677 |  |         | 599154 |  |          |  | 6170781 |          |  |  | 321.04 |  |  |             | 350.78 |  |           |  | 14.58 |      | 
|JOY-12-678 |  |         | 598827 |  |          |  | 6170985 |          |  |  | 230.50 |  |  |             | 231.50 |  |           |  | 50.30 |      | 
|JOY-12-679 |  |         | 599155 |  |          |  | 6170775 |          |  |  | 343.99 |  |  |             | 364.28 |  |           |  | 13.81 |      | 
|JOY-12-682 |  |         | 599155 |  |          |  | 6170775 |          |  |  | 374.60 |  |  |             | 375.60 |  |           |  | 27.20 |      | 
|           |  |         |        |  |          |  | And     |          |  |  | 400.80 |  |  |             | 405.50 |  |           |  | 11.07 |      | 
|JOY-12-686 |  |         | 599287 |  |          |  | 6170925 |          |  |  | 642.40 |  |  |             | 648.33 |  |           |  | 8.16  |      | 
|JOY-12-688 |  |         | 599481 |  |          |  | 6170719 |          |  |  | 416.20 |  |  |             | 422.20 |  |           |  | 5.07  |      | 
|JOY-12-689 |  |         | 599537 |  |          |  | 6170658 |          |  |  | 382.84 |  |  |             | 387.37 |  |           |  | 3.51  |      | 
|           |  |         |        |  |          |  | And     |          |  |  | 603.00 |  |  |             | 604.32 |  |           |  | 4.68  |      | 
|           |  |         |        |  |          |  | And     |          |  |  | 607.50 |  |  |             | 609.08 |  |           |  | 5.03  |      | 



Note:Composites were calculated using a 3.0
g/t Au cut-off grade and may include internal dilution. True widths are interpreted to be 75 to 95 percent of drilled width. Assay
results are uncut. True widths are interpreted to be 75 to 95 percent of drilled width. Assay results are uncut.







31







Santoy Region Composite Longitudinal
Section of the Santoy Mine Complex



In addition to extending the mineralized
system, the program discovered a sub-parallel lens to the Santoy Gap deposit, approximately 150 metres to the east. These latest
drill intercepts continue to affirm the high prospectivity of the Santoy Regional Shear Zone, hosting multiple deposits over a
three kilometre strike length.



The 2013 surface drill program consisted
of three step-out drill holes targeting the down-plunge extension of the Santoy Gap and Santoy 8 deposits. Of these, two drill
holes returned high grade intercepts, interpreted to represent extensions of the mineralized system. Testing intercepted the Santoy
Gap and or Santoy 8 structures. Down-plunge drilling tested the extension of Santoy 8 intercepted a vein system hosted in a thick
package of highly altered shear zone.



Drilling at Santoy Gap has extended the
mineralized system down-plunge to 650 metres depth and at Santoy 8 has extended the system 400 metres below the base of the existing
inferred resource. Theses stepout drill intercepts significantly expand the footprint of the Santoy Mine Complex and are of a materially
higher grade than the current reserve and resource base. Santoy Gap results are highlighted by drill hole JOY-13-690 that returned
330.35 grams of gold per tonne over 1.55 metres, inclusive of a bonanza grade interval of 602.00 grams of gold per tonne over 0.84
metres. This is the highest grade interval drilled to date at the Santoy Gap. Drill hole JOY-13-692 returned 18.80 grams of gold
per tonne over 13.86 metres in the final hole of the program. The intercept is located 400 metres down plunge from existing Santoy
8 inferred resources and 200 metres along strike from the Santoy Gap inferred resources. Drill hole JOY-13-692 is of particular
significance as it confirms continuity at depth between the Santoy Gap and Santoy 8 deposits.



Santoy Region Future Work Programs



At Santoy drilling will be focused on infill
drilling on the Santoy Gap deposit for conversion into reserves as well as production definition drilling. Additional drilling
will evaluate extensions at depths of the Santoy 8 deposit.



Based on the Santoy Gap deposit’s
Inferred Resource, positive exploration results and proximity to the existing Santoy 8 infrastructure, the Company has initiated
an 850 metre long exploration drift to allow for infill drilling and upgrading of the Inferred Resource.



32











Seabee Property – Currie Rose



Claude’s 11,000 acre (4,500 hectare),
100 percent owned Currie Rose property adjoins the Seabee property with most of the ground under disposition lying to the west,
north and east.



Geology



The geology of the Currie Rose property
is similar to that observed in the previously described Seabee Mine, as the Laonil Lake Intrusive Complex underlies much of the
property. Outside the core of the property, the Laonil Lake Intrusive Complex is flanked by a volcanic-sedimentary rock sequence.
Limited drilling in these rock types has returned anomalous gold values. As reported above, gold-bearing shears traverse this sequence.
See “History” below for further detail.



History



The Currie Rose property was originally
staked by prospector David Partridge in 1980 to cover gold occurrences discovered by his father, Eric Partridge, during the mid
1960s and early 1970s. They were optioned in 1980 and purchased outright in 1983 by Currie Rose Resources. Currie Rose Resources
conducted exploration on the property from 1980 to 1984 before optioning the property to Placer. Placer was the exploration operator
from 1984 to 1990. Approximately $2.6 million was spent on various exploration activities on the property during this period.



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



33







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



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



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



In 2002, Claude focused its attention on
a laterally extensive geochemical soil anomaly on the west shore of Porky Lake and on a series of quartz-bearing shear structures
north and east of the No. 5 ramp access. Porky Lake lies three kilometres north of the Seabee Mine. The Porky Main and West zones
are located in or close to the hinge area of the regional Porky Lake anticline. Mineralization is hosted by shear zones near the
contact between mafic metavolcanic rocks and underlying feldspathic arenite. Both lithologies are extensively altered and quartz
flooded. Eighteen holes totaling 3,355 metres targeted the former and 31 holes totaling 6,743 metres targeted the latter. The Porky
Lake drilling resulted in the discovery of the Porky West zone, a ‘calc-silicate’ second order shear structure that
returned gold grades in the 3-15 grams per tonne range over widths from one to three metres. Additional drilling east of the No.
5 mine access produced isolated high gold values over narrow widths.



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



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



The Porky West zone is located approximately
1.5 kilometres northwest of the Porky Main zone, in the northwest limb of the Porky Lake anticline. Mineralization in this structure
is similar to that in the Main zone, but is mainly hosted in the feldspathic arenite. Thirty-one delineation holes totaling 5,027
metres were drilled in 2004 on the West zone on a grid of approximately 25 by 25 metres. The zone is open along strike further
to the northwest as indicated by surface exploration that has returned high-grade grab samples.



A 6.8 kilometre all-weather road has been
constructed between the Porky West zone and the Seabee mill.



34







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



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



Claude continued to aggressively explore
the Porky Lake area for gold deposits in 2005. Permission to conduct bulk sampling of the Porky West zone was granted in early
June. Physical work began at the site with the collaring of the portal and driving about 125 metres of a 3.5 metre high by 4.0
metre wide decline ramp down to the 65 metre level. A 7,657 tonne bulk sample grading 3.69 grams per tonne was extracted in 2006
above the previously defined Mineral Resource.



There was limited exploration done in 2007.
In 2008, Claude obtained an additional 35,000 tonne bulk sampling permit.  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 and 65-11 sills
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.



During 2009 the Company undertook a small
diamond drill exploration program and completed the bulk sample program. The bulk sample program extracted and processed 33,068
tonnes of ore at 3.34 grams of gold per tonne – development reached the 115 metre level. The surface diamond drilling program
extended the Porky West ore shoots down plunge.



During 2010, exploration focused on the
preliminary evaluation of the Neptune target. The Neptune target is approximately six kilometres north of the Seabee Minesite.
Exploration in this area was focused on the Pigeon Lake region utilizing geological, geochemical and geophysical surveys and historical
drill data. The gold-in-soil anomaly exists along three sub-parallel trends spanning a width of at least 200 metres. Peak soil
values of 111 parts per billion (“ppb”) were obtained from minus 80 mesh soil samples obtained over and adjacent to
outcropping mineralization. Prospector channel and grab samples from outcropping quartz vein-hosted mineralization returned values
of up to 18.23 grams per tonne (please see Claude news release “Claude Resources Inc. Drills 13.6 Grams of Gold per Tonne
Over 3.0 Metres at Neptune Target” dated March 23, 2011).



35











Initial drilling revealed high gold grades
associated with sheeted quartz veins within several prospective zones of alteration and veining hosted within both arenite and
basalt-derived, biotite-chlorite schist. Exploration efforts in 2011 included the completion of a 28 hole, 9,550 metre drill program
designed to test the 1.8 kilometre strike length of the soil anomaly to vertical depths of up to 250 metres. This drill program
outlined a gold-bearing structure over a strike length of 1,200 metres to depths in excess of 250 metres and intersected high-grade
gold within multiple structures with assay results of up to 84.66 grams of gold per tonne across 3.20 metres.



In 2012, the Company drilled a further
5,670 metres in 15 drill holes confirming the sporadic nature of the gold-bearing system.



Seabee Property Future Work Programs



Based on the 2012 and 2011 results from
Neptune, Claude will continue to analyze the potential for these targets. However, no exploration work was undertaken in 2013 or
is expected in 2014.



Seabee Area Reserves and Resources



Claude originally commissioned Cominco
Engineering to provide a feasibility study on the Seabee Mine in 1989. A positive feasibility study was prepared and presented
to the Company in August 1989, and a revised study was presented in May 1990. The reserve estimates for the property were reviewed
by A.C.A. Howe. From 1988-2006, A.C.A. Howe visited the mine annually and received all technical, developmental and production
reports concerning the mine. Using this information, A.C.A. Howe then reviewed the reserve estimates developed by the Company’s
own mining staff. From 2007 to 2010 the Mineral Reserves and Mineral Resources estimates were conducted under the direction of
the Company’s Qualified Persons. In 2011, the Company engaged SRK to conduct an independent audit of the 2011 year end reserves
and resources. In 2012, the Mineral Reserves and Mineral Resources estimates were conducted under the direction of the Company’s
Qualified Persons. In 2013, the Company engaged SRK to act as QP on the 2013 year-end Mineral Reserves; Mineral Resources estimates
were conducted under the direction of the Company’s Qualified Person, Brian Skanderbeg, P.Geo., Senior Vice President and
Chief Operating Officer.



36







The methodology for estimating Mineral
Reserves and Mineral Resources is an interpolation and extrapolation between sill sampling and diamond drill holes. Resource blocks
are measured from planned stope dimensions, excluding any pillars. High-grade gold assays are cut to 50 grams per tonne at the
Seabee and Santoy 8 mines prior to grade estimates. The Company uses a 70 grams per tonne top cut for its newly discovered L62
deposit. This cutting factor has been established from statistics and is supported by experience during the life of the mine.



Proven Mineral Reserves are sampled in
two dimensions by a sill and a raise, or are sampled by horizontal sill mining and projected to no more than one mine level to
diamond drill holes on the same structure. Probable Mineral Reserves include blocks that have either been sampled by sill mining
and projected beyond diamond drilling to a maximum one mine level, or have been sampled by closely spaced diamond drill holes of
usually 25 to 35 metres laterally and up to 50 metres down dip on structures with a previous production history, or have been mapped
and sampled at surface.



The major portion of the Proven and Probable
Mineral Reserves occur within the well-defined shoots currently being mined. The following mining and economic factors are well-established
and have been applied to those Mineral Resources thereby resulting in their conversion to Mineral Reserves.



A block cut-off grade averaging 4.6 grams
per tonne for the Seabee Mine, 3.5 grams per tonne for Santoy 8 and Santoy Gap and 3.0 grams per tonne for Porky West and Porky
Main is applied to Mineral Reserves and Mineral Resources. This cut-off is the application of dilution, mining losses and mill
recovery. It may be beneficial on occasion to mine and haul lower grade ore to access reserves.



The walls and back of shrinkage stopes
at the mine are supported by rock bolts to minimize external dilution. Dilution can range from 10 to 40 percent, but typically
a dilution factor of 20 to 25 percent is applied.



Remotely-operated scooptrams are used to
retrieve the residual in-stope ore that is trapped between the drawpoints, keeping stope recovery at an approximate average of
85 percent. Based upon regular test work at the mine, a Specific Gravity of 2.8 is utilized in tonnage estimates on the less sulphide-rich
zones; the 2d structure has a measured density of 2.9.



All samples were assayed by the Company’s
non-accredited assay lab at the Seabee Mine site. Duplicate check assays were conducted at site as well as at TSL Laboratories
in Saskatoon. As well, an extensive quality assurance/quality control program including the insertion of blanks, duplicates and
standards. Results of the spot checks were consistent with those reported. Sampling interval was established by minimum or maximum
sampling lengths and geological and/or structural criteria. Minimum sampling length was 0.3 metres while the maximum was 1.5 metres.
200 gram samples were pulverized until greater than 80 percent passes through a 200 mesh screen. 30 gram pulp samples were then
analyzed for gold by fire assay with gravimetric finish (0.01 grams per tonne detection limit).



|Seabee Gold Operation Mineral Reserves and Mineral Resources
|------------------------------------------------------------
|Proven and Probable Reserves                                
|                                                            
|Projects                                                    
|Seabee                                                      
|Santoy 8                                                    
|Santoy Gap                                                  
|Totals                                                      



|Measured and Indicated Mineral Resources
|----------------------------------------
|Projects                                
|Seabee                                  
|Santoy 8                                
|Santoy Gap                              
|Porky Main                              
|Porky West                              
|Totals                                  



37







|Inferred Mineral Resources
|--------------------------
|Projects                  
|Seabee                    
|Santoy 8                  
|Santoy Gap                
|Porky Main                
|Porky West                
|Totals                    



Footnotes to the Mineral Resource Statement:

| | 1. | At November 15, 2013, Mineral Resources were estimated by Claude personnel. SRK Consulting (Canada)
Inc. prepared the Company’s Mineral Reserves as at November 15, 2013. The Mineral Resource evaluation work was completed
by a team of geologists and engineers under the supervision of Brian Skanderbeg, P.Geo., Senior Vice President and Chief Operating
Officer, a full time employee of Claude. Mr. Skanderbeg has sufficient experience, which is relevant to the style of mineralization
and type of deposit under consideration and to the activities undertaken to qualify as a Qualified Person as defined by NI 43-101.
Mineral Reserves were conducted under the direction of Qualified Person Stephen Taylor, P.Eng (SRK Consulting (Canada) Inc.).
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | In 2012, Mineral Reserves and Mineral Resources estimates were conducted under the direction of
Qualified Persons Brian Skanderbeg, P.Geo., Senior Vice President and Chief Operating Officer and Peter Longo, P.Eng., Former Vice
President, Operations.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | The Mineral Resources and reserves reported herein have been estimated in conformity with generally
accepted CIM “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines and are reported in accordance
with Canadian Securities Administrators’ NI 43-101.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | Mineral Reserves and Mineral Resources for the Seabee deposit are reported at a cut-off of 4.6
grams of gold per tonne. Santoy 8 and Santoy Gap Mineral Reserves and Mineral Resources are reported at a cut-off of 3.5 grams
of gold per tonne. Porky Main and Porky West Mineral Resources are reported at a cut-off grade of 3.0 grams of gold per tonne. 
Assumptions include a price of $1,350 per ounce of gold using metallurgical and process recovery of 95.2 percent and overall ore
mining and processing costs derived from 2013 realized costs.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | All figures are rounded to reflect the relative accuracy of the estimates.  Summation of individual
columns may not add-up due to rounding.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------

| | 6. | Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. 
There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserves.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



At the Seabee Gold Operation, a decrease
in overall Mineral Reserves and Mineral Resources was observed offset by an increase in grade. Year over year, changes in the Seabee
Gold Operations Mineral Reserves and Mineral Resources were driven by:



| | · | a decrease in gold price which increased cut-off grade;
| | - | -------------------------------------------------------

| | · | reduced drilling meterage focused on grade definition;
| | - | ------------------------------------------------------

| | · | mining depletion; and,
| | - | ----------------------

| | · | higher dilution assumptions.
| | - | ----------------------------



The Mineral Reserves and Mineral Resources
of the Santoy Gap deposit are growing in importance and represent an opportunity for the Company due to their proximity to permitted
mine infrastructure, low development cost and near-term production potential. Furthermore, based on its high-grade nature and size,
the Santoy Gap deposit demonstrates the potential that exists to grow production at the Seabee Gold Operation.



Amisk Property



The Amisk Property, totaling 40,400 hectares,
is a gold exploration property located in the province of Saskatchewan 20 kilometres southwest of Flin Flon, Manitoba. Access to
the property is via air, water or winter ice road from Flin Flon. The property consists of 85 mineral dispositions in the Amisk
area. Some of the mineral dispositions have immaterial Net Profits Interest royalties.



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



38







Amisk Location







How Acquired



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



In October of 1995, Claude entered into
an option agreement (the “Amisk Lake Option Agreement”) with Husky and Cameco, whereby it could earn and acquire a
35 percent participating interest in the Amisk Joint Venture by spending an aggregate of $2.5 million on the property by October,
1999. Claude had spent approximately $3.4 million on this property and had earned a 35 percent participating interest under the
Amisk Lake Option Agreement.



Late in 2009 the Company reevaluated the
potential of the Amisk Gold Project and acquired the interests held by Cameco and Husky in early 2010. Subsequently, the Company
then finalized a sale agreement with SEM to sell to SEM a 35 percent interest in the property. During the fourth quarter of 2011,
the Company announced its intent to acquire all of the shares of SEM. On February 2, 2012, the Company announced the successful
closing of this transaction. As a result, Claude now owns 100 percent of the Amisk Gold Project. During 2012, the Company staked
an additional 16,033 hectares on the western portion of the Amisk Gold Project.



39

















Regional and Property Geology



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



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



Previous Exploration History



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



40







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



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



There had been no field work done on the
Amisk Property from 2003 to 2009.



During 2010, a 5,600 metre, 21 hole drill
program on the Amisk Gold Project was completed. The program tested the extensions of the Amisk Gold Deposit as well as validated
historic drill data in the core of the deposit. All of the 11 holes from the winter drill program intersected mineralization and
successfully confirmed near-surface, potentially bulk-mineable gold and silver mineralization. A significant number of the holes
ended in mineralization.



Based on the positive results from the
second quarter drill program, a summer program that included the sampling of greater than 22,000 metres of historic core, was undertaken.
Subsequent sampling of this drill core during 2010 confirmed grade continuity expanded the mineralized system and yielded 244 composite
intervals greater than a 20 gram metre produced from the 278 historic drill holes. Highlights include up to 241 metres at 2.16
grams of gold per tonne and 18.9 grams of silver per tonne.



The results combined with geological compilation
and modeling outline an extensive, bulk-mineable gold system. The system remains open along strike to the northeast, southwest,
southeast and down-dip.



Based on the success of the 2010 winter
drill program and the summer historic core sampling, the Joint Venture approved and completed a 3,300 metre drill program that
expanded the strike and dip extensions of the Amisk Gold Deposit.



Combined with results from the summer historic
core sampling program, 2010 drilling has expanded the mineralized system to a strike length of 500 metres, width of 400 metres
and depths of 400 metres.



On February 17, 2011, Claude released an
NI 43-101 compliant resource calculation which included results of all drilling to date, inclusive of historic core. The independent
Mineral Resource statement was completed by SRK and is outlined in the table below. An NI 43-101 Technical Report in support of
the Mineral Resource statement was filed on SEDAR on April 4, 2011. Claude held a 65 percent interest in the Amisk Lake Gold Project
at December 31, 2011, which increased to a 100 percent interest on February 1, 2012 (see “2.1 Recent History under “General
Development of the Business”).



|Consolidated Mineral Resource Statement* Amisk Gold Project, Saskatchewan (100 percent)
|---------------------------------------------------------------------------------------



|               |  | Quantity        |  | Grade (g/tonne) |  | Contained Ounces (000’s)
|-------------- |  | --------------- |  | --------------- |  | ------------------------
|Resource Class |  | (000’s  tonnes) |  | Au              |  | Ag                      
|Indicated      |  | 30,150          |  | 0.85            |  | 6.17                    
|Inferred       |  | 28,653          |  | 0.64            |  | 4.01                    







| | * | Reported at a cut-off of 0.40 grams of gold equivalent (Au Eq) per tonne using a price of US$1,100 per ounce of gold and
US$16 per ounce of silver inside a conceptual pit shell optimized using metallurgical and process recovery of eight-seven percent,
overall ore mining and processing costs of U.S.$15 per tonne and overall pit slope of fifty degrees. All figures are rounded to
reflect the relative accuracy of the estimates. Mineral Resources are not Mineral Reserves and do not have demonstrated economic
viability.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



41











During 2011, a 20 hole, 6,480 metre drill
program was completed on the Amisk Gold Project. This program focused specifically on testing the limits of the mineralized footprint
north of the current pit outline, targeting depth extension below the pit bottom and infill drilling to evaluate potential upgrade
of categories in the resource estimate completed by SRK. Twenty drill holes successfully confirmed continuity of gold mineralization
within the northern and eastern portion of the deposit as well as demonstrated the potential for expansion to the east and southeast.



42







2011 Summer and Fall Drill Results from
the Amisk Gold Project



|Hole      |  | Easting |  | Northing |  | Az/Dip  |  | From (m) |  | Length (m) |  | Au (g/t) |  | Ag (g/t)
|--------- |  | ------- |  | -------- |  | ------- |  | -------- |  | ---------- |  | -------- |  | --------
|AL-11-300 |  | 676827  |  | 6066224  |  | 80/-45  |  | 50.00    |  | 9.00       |  | 1.50     |  | 9.2     
|and       |  |         |  |          |  |         |  | 188.00   |  | 56.50      |  | 0.58     |  | 3.5     
|AL-11-301 |  | 676875  |  | 6066233  |  | 80/-45  |  | 150.00   |  | 21.00      |  | 1.15     |  | 6.7     
|and       |  |         |  |          |  |         |  | 205.00   |  | 24.61      |  | 1.88     |  | 12.4    
|AL-11-302 |  | 676910  |  | 6066380  |  | 80/-45  |  | 96.00    |  | 8.51       |  | 1.14     |  | 4.5     
|AL-11-303 |  | 676910  |  | 6066380  |  | 283/-45 |  | 18.00    |  | 26.00      |  | 1.02     |  | 4.3     
|AL-11-304 |  | 676910  |  | 6066380  |  | 0/-90   |  | 93.41    |  | 37.59      |  | 0.55     |  | 2.8     
|AL-11-305 |  | 676900  |  | 6066330  |  | 80/-45  |  | 175.47   |  | 8.03       |  | 1.16     |  | 6.2     
|AL-11-306 |  | 676885  |  | 6066283  |  | 80/-45  |  | 40.25    |  | 89.75      |  | 0.51     |  | 2.5     
|AL-11-307 |  | 676921  |  | 6066430  |  | 80/-45  |  | NSI      |  |            |  |          |  |         
|AL-11-308 |  | 676921  |  | 6066430  |  | 285/-45 |  | NSI      |  |            |  |          |  |         
|AL-11-309 |  | 676900  |  | 6066480  |  | 283/-45 |  | 18.92    |  | 1.00       |  | 5.31     |  | 13.1    
|AL-11-310 |  | 676900  |  | 6066480  |  | 0/-90   |  | NSI      |  |            |  |          |  |         
|AL-11-311 |  | 676900  |  | 6066480  |  | 283/-60 |  | NSI      |  |            |  |          |  |         
|AL-11-312 |  | 676877  |  | 6066141  |  | 70/-45  |  | 69.50    |  | 26.50      |  | 0.44     |  | 1.5     
|and       |  |         |  |          |  |         |  | 108.00   |  | 24.00      |  | 0.51     |  | 0.9     
|and       |  |         |  |          |  |         |  | 191.15   |  | 28.85      |  | 0.67     |  | 2.8     
|AL-11-313 |  | 676838  |  | 6066035  |  | 105/-45 |  | 37.85    |  | 16.15      |  | 1.02     |  | 7.4     
|and       |  |         |  |          |  |         |  | 125.00   |  | 22.00      |  | 0.54     |  | 7.6     
|and       |  |         |  |          |  |         |  | 185.00   |  | 19.50      |  | 0.65     |  | 2.3     
|and       |  |         |  |          |  |         |  | 239.47   |  | 36.53      |  | 0.61     |  | 2.9     
|AL-11-314 |  | 676835  |  | 6066052  |  | 90/-45  |  | 141.00   |  | 23.00      |  | 0.76     |  | 2.8     
|AL-11-315 |  | 676999  |  | 6066416  |  | 184/-62 |  | 87.94    |  | 12.22      |  | 1.32     |  | 6.7     
|Incl      |  |         |  |          |  |         |  | 95.08    |  | 1.92       |  | 5.42     |  | 30.8    
|AL-11-316 |  | 676868  |  | 6066443  |  | 177/-58 |  | 92.00    |  | 37.00      |  | 0.49     |  | 2.2     
|AL-11-317 |  | 676769  |  | 6066515  |  | 178/-58 |  | 256.00   |  | 16.50      |  | 1.37     |  | 5.7     
|incl      |  |         |  |          |  |         |  | 257.00   |  | 3.00       |  | 5.28     |  | 22.4    
|AL-11-318 |  | 676444  |  | 6066436  |  | 166/-66 |  | 69.00    |  | 1.81       |  | 0.17     |  | 11.5    
|and       |  |         |  |          |  |         |  | 311.00   |  | 12.00      |  | 6.24     |  | 23.5    
|incl      |  |         |  |          |  |         |  | 313.85   |  | 1.15       |  | 62.00    |  | 224     
|and       |  |         |  |          |  |         |  | 643.5    |  | 71.74      |  | 0.6      |  | 4       
|incl      |  |         |  |          |  |         |  | 699.5    |  | 14.00      |  | 1.64     |  | 11.8    
|and       |  |         |  |          |  |         |  | 728.00   |  | 37.00      |  | 0.61     |  | 2.2     
|incl      |  |         |  |          |  |         |  | 763.00   |  | 2.00       |  | 5.71     |  | 22.0    
|and       |  |         |  |          |  |         |  | 809.39   |  | 10.61      |  | 1.65     |  | 2.6     
|incl      |  |         |  |          |  |         |  | 809.39   |  | 2.21       |  | 6.06     |  | 8.5     
|AL-11-319 |  | 676744  |  | 6065948  |  | 97/-47  |  | 53.00    |  | 32.00      |  | 0.98     |  | 7.1     
|incl      |  |         |  |          |  |         |  | 68.00    |  | 1.00       |  | 8.95     |  | 39.7    
|and       |  |         |  |          |  |         |  | 159.5    |  | 29.00      |  | 0.59     |  | 5.6     
|and       |  |         |  |          |  |         |  | 206.5    |  | 21.00      |  | 1.28     |  | 8.5     
|incl      |  |         |  |          |  |         |  | 223.00   |  | 1.50       |  | 11.3     |  | 45.3    
|and       |  |         |  |          |  |         |  | 339.00   |  | 18.95      |  | 1.95     |  | 14.9    
|incl      |  |         |  |          |  |         |  | 348.00   |  | 3.01       |  | 7.38     |  | 57.7    
|AL-11-320 |  | 676709  |  | 6065787  |  | 105/-47 |  |          |  | NSI        |  |          |  |         



43







Note: Intervals noted are intercepted width not true width,
have been calculated using a 0.3 g/tonne cut-off and are uncut. True width is variable between 60 and 100 percent of drilled width.
They may include internal dilution intervals of up to 10 metres. No significant Intercept (“NSI”).



Mineralization intercepted in the drilling
is consistent with the current resource model and is associated with a sequence of quartz porphyritic, rhyolitic lapilli tuffs
and basaltic tuffs hosting disseminations and stringers of pyrite, sphalerite, galena, tetrahedrite and chalcopyrite.



A total of 20 holes comprising 6,480 metres
were drilled during the fall 2011 program. The program tested from surface to in excess of 700 metres depth and was designed to
expand the limits of the Amisk Gold deposit as well as infill within the northern and eastern portion of the deposit.



Highlights of the drilling include: 6.24
grams of gold per tonne and 23.5 grams of silver per tonne over 12.00 metres and 3.39 percent zinc and 0.91 percent lead over 1.81
metres in hole AL-11-318, and 1.95 grams of gold per tonne and 14.9 grams of silver per tonne over 18.95 metres in AL-11-319. Mineralization
intercepted in the drilling is consistent with the current resource model and is associated with a sequence of quartz porphyritic,
rhyolitic lapilli tuffs and basaltic tuffs and argillite hosting disseminations, stringers and semi-massive intervals of pyrite,
sphalerite, galena, tetrahedrite, pyrrotite and chalcopyrite.



Drill hole AL-11-319 confirmed continuity
of gold mineralization within the southeastern portion of the deposit as well as demonstrated the potential for expansion to the
east and southeast. Four holes were completed evaluating the continuity of the system to depths in excess of 700 metres. Hole AL-11-318
intercepted significant mineralization at depth with intercepts of up to 71.74 metres at 0.60 grams of Au per tonne as well as
a 1.81 metre interval of 3.39 percent zinc and 0.91 percent lead in the hangingwall, 250 metres west of the deposit.



During 2012 and 2013, work on the external
PEA at Amisk continued, including a technical site visit and an evaluation of the potential production rate. Detailed (as well
as reconnaissance) exploration of the deposit also continued. On the Company’s newly acquired claims and western block of
the Amisk Gold Project, reconnaissance work occurred with the goal of identifying similarities to Amisk’s historical geology
and for potential drill targets. These claims host potential for Amisk-style Au-Ag mineralization as well as conventional base-metal
deposits typical of the Flin Flon Belt.



Amisk Property Future Work Programs



No drilling was completed during 2013 and
none is planned for 2014. The Company is currently considering strategic alternatives for this asset.



Madsen Properties



On March 4, 2014, the Company closed the
sale of its 100 percent interest in the Madsen Gold Project to Laurentian Goldfields. See “General Development of the Business
– Recent History”. As such, the Company no longer has any interest in the properties described in this section, other
than the Redaurum property.



The Madsen Properties comprise six contiguous
claim blocks totaling approximately 10,000 acres (4,000 hectares) located in the Red Lake Mining District of northwestern Ontario.
The properties are the Buffalo, Starratt-Olsen, Aiken-Russett, Redaurum, Hagar Option, and Madsen.



44







The above properties are collectively referred
to as the “Madsen Properties”. Included on the southwestern part of the Madsen Properties is the Madsen gold mine and
mill. Claude acquired the properties through its acquisition of Madsen Gold Corp. in 1998.



Claude and Goldcorp Inc. (“Goldcorp”)
signed an option agreement (the “Option Agreement”)(1) on the Madsen Properties dated December 15, 2000.
The option allowed Goldcorp to earn a 55 percent working interest in the Madsen Properties by spending $8.2 million on exploration
and delivering a bankable feasibility study prior to the fifth anniversary of the Option Agreement. The Option Agreement was amended
effective January 1, 2002 whereby Goldcorp then had until December 15, 2006 to earn the 55 percent working interest in the Madsen
Properties under the same terms and conditions as described above.



(1) The
Option Agreement was initially signed by Placer Dome (Canada) Ltd. However, during 2006, Goldcorp Inc. acquired the Option Agreement
from Placer via Barrick Gold Corporation.



With Goldcorp unable to meet the terms
of the Option Agreement, Claude regained control of the exploration project effective September 1, 2006. The Company immediately
began to prepare for dewatering of the shaft to facilitate underground drilling – with the initial focus on drilling extensions
of the historic high grade 8 Zone plus other zones. Preparation also began for a surface drill program that will pursue historic
targets including those developed by Goldcorp.



Although the Madsen Mine is a former gold
producer, the Company’s operations on the properties consisted of an exploratory search for mineable deposits of ore.



Location and Access



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



How Acquired









45







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



|Property       | Claude’s Ownership Percentage                                                                                                                                                                                        
|-------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                      
|Madsen Mine    | 100%                                                                                                                                                                                                                 
|               |                                                                                                                                                                                                                      
|Starratt-Olsen | 100%                                                                                                                                                                                                                 
|               |                                                                                                                                                                                                                      
|Aiken-Russett  | 100%
        The property is subject to a two percent
        Net Smelter Return Royalty, to a maximum of $2.0 million, held by previous property holders United Reef Limited and Canhorn Mining
        Corporation.
|               |                                                                                                                                                                                                                      
|Hagar Option   | 100%                                                                                                                                                                                                                 
|               |                                                                                                                                                                                                                      
|Redaurum       | 25%
        The property is subject to a 0.4 percent
        NSR Royalty in favour of Redaurum Limited.                                                                                                              
|               |                                                                                                                                                                                                                      
|Buffalo        | 100%.                                                                                                                                                                                                                



Regional and Property Geology



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



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



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



High-grade gold pods were also historically
worked at depth in a zone of highly altered ultramafic rocks, in the footwall of the main mine workings. Some of this high-grade
mineralization (8 Zone) occurs in blue quartz veins near the contact of an altered basalt with an ultramafic unit. This mineralized
contact is located stratigraphically below the main sulfide replacement mineralized zones on the north side of the shaft, approximately
600 metres in the footwall.



46











History and Previous Work



The Madsen Property was originally owned
by Madsen Red Lake Gold Mines Ltd. (“Madsen Red Lake”). Madsen Red Lake commenced production from the mine in 1938
at 272 tonnes per day and increased production to 726 tonnes per day in 1949. From 1966 to 1974, production gradually decreased
as the last five years of Madsen Red Lake’s ownership averaged production of 363 tonnes per day at a grade of 8.38 grams
per tonne. Gold production fell from 44,497 ounces in 1971 to 29,163 ounces in 1973. Total production by Madsen Red Lake from 1938
to 1974 totaled 7.25 million tonnes at an average grade of 9.93 grams per tonne, or over 2.4 million ounces of gold.



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



In 1988, Madsen Gold Corp. (“Madsen”)
acquired the Madsen Property from Madsen-Rowland. Madsen had acquired the adjacent Buffalo property in the prior year. Subsequent
to these acquisitions, Madsen acquired interests in the other Madsen properties referred to previously.



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



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



47







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



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



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



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



After optioning the properties from Claude,
Goldcorp initiated an exploration program at the mine in 2001. They drilled 8 holes totaling 8,568 metres to establish the mafic-ultramafic
stratigraphy north of the Madsen Mine and to test a segment of the up-plunge projection of the high grade 8 Zone as hosted by the
mafic-ultramafic rock suite. The 2001 program encountered predictable stratigraphy, strong alteration and four zones containing
elevated gold values.



In 2002, Goldcorp’s exploration emphasis
shifted to the mafic-ultramafic complex approximately three kilometres north of the Madsen Mine. Goldcorp geologists identified
a very strong alteration zone with coincident geochemical and geophysical anomalies aligned on crosscutting structures as determined
by digital terrain modeling. Goldcorp interpreted this group of targets to the north of the Madsen Mine as lateral or stratigraphic
equivalents of the high grade 8 Zone. Seventeen drill holes totaling 10,643 metres tested the three northernmost targets at a reconnaissance
scale (250-metre centers). As reported in a March 2003 press release, Goldcorp intersected high grade gold values over narrow widths
with this drilling.



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



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



48







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



By year-end of 2004, Goldcorp had met its
exploration expenditure requirement of $8.2 million for the Madsen Property. Goldcorp’s remaining obligation to vest in the
Madsen Joint Venture was to deliver a bankable feasibility study by year-end 2006. As the exploration results to that date were
not sufficient to provide the support necessary for this feasibility study, Goldcorp ceased exploring on the property in 2005.
Claude regained control of the Madsen Property in September 2006.



In early 2007, a detailed drill program
was initiated at the “Treasure Box”, 2.4 kilometres north of the Madsen Mine complex. Previous drilling by Placer Dome
had outlined a moderately steep, north-dipping, quartz-tourmaline sheeted vein system that hosts significant visible gold. Of the
27 holes, 21 returned 80 intercepts grading from 2.0 to 116.0 grams per tonne, typically over 0.3 metre widths. In 2007, Claude
completed 51 holes totaling 13,300 metres, testing the system to depths in excess of 350 metres. Results included composite intervals
of 16.66 grams per tonne over 1.80 metres, 12.08 grams per tonne over 6.05 metres and 9.06 grams per tonne over 3.55 metres. The
mineralized vein system was intercepted over a strike length of 165 metres, although high-grade intercepts appear to have relatively
limited continuity.



Subsequent to the “Treasure Box”
program, drilling prioritized testing the contacts of the main ultramafic body for the up-plunge expression of high grade 8 Zone
mineralization. This zone was discovered and mined in the 1970’s on the 22nd to 27th level. It is characterized
by quartz veining and flooding associated with tremolite-talc altered mafic/ultramafic rocks and has many similarities to other
high grade deposits in the Red Lake area, notably at Goldcorp’s Red Lake Mine Complex.



In the Russett South area, a 22 hole drill
program tested 600 metres of the mafic/ultramafic contact. The program resulted in the discovery of significant gold mineralization,
29.08 grams per tonne over 2.0 metres, that is open at depth and along strike to the south. Six hundred metres south of the Russett
South area, the Company drilled 19 holes for 10,600 metres testing the Fork Zone target area. The program expanded the strike length
of mineralization to 270 metres, intercepting mineralization ranging from 2 to 13 grams per tonne over 1.0 metre to 2.0 metre widths.
The results were consistent with those reported by Goldcorp in 2003. Gold mineralization within the Fork Zone comprises sulphidized
quartz-veins variably associated with actinolite-biotite-garnet altered basalt in proximity to the ultramafic contact. Mineralization
remains open along strike in both directions and down plunge.



In 2008, 47,210 metres of surface drilling
on the Madsen Properties in the Red Lake camp focused on testing two advanced targets and four grassroots targets. Exploration
drilling continued to test the Fork Zone target. Fifty-five drill holes were completed during 2008, with the potential of the system
highlighted by drill intercepts including 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.



At the Starrett Olsen Mine the potential
of the 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
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.



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. In conjunction with surface exploration
activities, rehabilitation and dewatering of the Madsen Mine shaft was initiated in July of 2007. Access to the 10th
level, as a platform for exploration drilling was achieved during the third quarter of 2008 and Phase I of the underground drill
program was initiated in December. The primary target of the underground program is the plunge and strike continuity of the 8 Zone.



49







During 2009, exploration drilling focused
on Phase I of the 8 Zone underground drill program. Initiated from the 10th level in December 2008, the directional-drilling
program included testing of the plunge extension of the 8 Zone as well as conceptual targets along the 8 Zone shear system. Results
from Phase I deep drilling of the 8 Zone Trend demonstrated down plunge continuity to 137 metres below the 27th level
with multiple holes returning strong visible gold associated with intensely silicified, biotite-altered basalt. Historic high grade
drill results were verified with the return of 141.80 grams per tonne over 0.95 metres (4.14 ounces per ton over 3.12 feet) and
127.12 grams per tonne over 0.75 metres (3.71 ounces per ton over 2.46 feet). Step-out drilling to the east and west confirmed
the development of favorable 8 Zone structure and stratigraphy. The system remains open down plunge and along strike to the east
and west.



Highlights from Phase I 8 Zone drill
program at the Madsen Mine, Ontario



Summary of drill results from Madsen underground drilling (2008
– 2011).



|Hole ID                   |  | From   |  | Width             |  | Au (g/t)             |  | Zone     
|------------------------- |  | ------ |  | ----------------- |  | -------------------- |  | ---------
|MUG-11-10                 |  |        |  |                   |  | Anomalous            |  |          
|MUG-11-11                 |  |        |  |                   |  | Anomalous            |  |          
|MUG-11-12                 |  |        |  |                   |  | Anomalous            |  |          
|MUG-11-13                 |  | 199.00 |  | 2.00              |  | 15.70                |  | McVeigh  
|MUG-11-14                 |  | 334.00 |  | 2.00              |  | 6.27                 |  | McVeigh  
|MUG-11-14b                |  | 904.43 |  | 2.02              |  | 8.06                 |  | 8 Zone   
|MUG-11-15                 |  |        |  |                   |  | NSI                  |  |          
|MUG-11-16                 |  | 993.36 |  | 2.14              |  | 5.69                 |  | 8 Zone FW
|MUG-11-17                 |  | 211.00 |  | 0.70              |  | 53.70                |  | McVeigh  
|and                       |  |        |  | 2.00              |  | 5.64                 |  | McVeigh  
|MUG-11-19                 |  |        |  |                   |  | Assays Outstanding   |  |          
|MUG-08-01                 |  | 883.00 |  | 0.75              |  | 127.12               |  | 8 Zone   
|MUG-09-02b
        (incl) |  | 891.25 |  | 0.45              |  | 21.52                |  | 8 Zone   
|MUG-09-03
        (incl)  |  | 915.40 |  | 2.49
        1.25 |  | 33.39
        58.18  |  | 8 Zone   
|MUG-09-04
        (incl)  |  | 909.55 |  | 7.90
        0.95 |  | 25.77
        141.80 |  | 8 Zone   
|MUG-09-105
        (incl) |  | 943.51 |  | 3.39
        1.22 |  | 24.30
        62.09  |  | 8 Zone   



* Elevation presented as metres below surface. Composites
calculated using a 3 g/t Au cut-off grade. Reported width is drilled length and interpreted to represent 75 - 85 percent of true
width. NSI - No Significant Intercept. Anomalous - Assayed between 1 and 3 g/t gold. Note that hole MUG-11-14 was lost with hole
MUG-11-14b wedged off and completed.



In addition to Phase I of the 8 Zone underground
drill program, surface exploration also continued to test the Apple and Fork Zone targets. The Apple target consists of an extension
of the Austin and McVeigh Tuff horizons northeast of the Madsen Shaft. 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. The mineralized shear system has been intercepted over a strike length in excess of 450 metres and remains open along
strike and at depth. Assay results from the 2009 programs are being integrated with historic results, with further surface testing
initiated in 2010.



50







Following 20 months of compilation of historic
data, SRK finalized an NI 43-101 Mineral Resource evaluation for the Madsen Mine. This Mineral Resource evaluation was based on
historical exploration and mining data, Phase I underground drilling up to September 27, 2009 and geological and resource modeling.
The Mineral Resource evaluation was undertaken on four separate zones, the Austin, the South Austin, the McVeigh and the 8 Zone.
The NI 43-101 Technical Report was filed on January 20, 2010.



Consolidated Mineral Resource Statement* for the Madsen Mine, Ontario



|Resource
        Class |  | Zone         |  |       |  | Tonnes    |  | Grade
        (g/tonne) |  | Grade
        (oz/ton) |  | Contained
        Gold (oz)
|---------------------- |  | ------------ |  | ----- |  | --------- |  | ----------------------- |  | ---------------------- |  | ---------------------------
|Indicated              |  | Austin       |  |       |  | 1,677,000 |  | 7.92                    |  | 0.23                   |  | 427,000                    
|                       |  | South Austin |  |       |  | 850,000   |  | 9.32                    |  | 0.27                   |  | 254,000                    
|                       |  | McVeigh      |  |       |  | 374,000   |  | 9.59                    |  | 0.28                   |  | 115,000                    
|                       |  | 8  Zone      |  |       |  | 335,000   |  | 12.21                   |  | 0.36                   |  | 132,000                    
|                       |  |              |  | Total |  | 3,236,000 |  | 8.93                    |  | 0.26                   |  | 928,000                    
|Inferred               |  | Austin       |  |       |  | 108,000   |  | 6.30                    |  | 0.18                   |  | 22,000                     
|                       |  | South Austin |  |       |  | 259,000   |  | 8.45                    |  | 0.25                   |  | 70,000                     
|                       |  | McVeigh      |  |       |  | 104,000   |  | 6.11                    |  | 0.18                   |  | 20,000                     
|                       |  | Zone 8       |  |       |  | 317,000   |  | 18.14                   |  | 0.53                   |  | 185,000                    
|                       |  |              |  | Total |  | 788,000   |  | 11.74                   |  | 0.34                   |  | 297,000                    



| | * | Mineral Resources are
not Mineral Reserves and do not have demonstrated economic viability. All figures have been rounded to reflect the relative accuracy
of the estimates. Reported at a cut-off grade of 5.0 g/t gold based on US$1,000 per troy ounce of gold and gold metallurgical
recoveries of 94 percent.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



During 2010, exploration drilling focused
on testing the extension of the Austin Tuff east of the Madsen shaft, the depth continuity of the Starratt Olsen Deposit and the
depth continuity of the McVeigh Tuff.



At Austin East, an extension of the Austin
Tuff, an 18 hole program encountered weak to strong, tuff-style mineralization in multiple zones in all holes. Results of the program
proved continuity of tuff-style mineralization proximal to existing infrastructure. Assay results will be included in future resource
calculations and will be used as a guide for further drill programs.



Mining at Starratt-Olsen ceased in 1956
at a depth of approximately 2,000 feet. Historic drilling shows continuity of the system at depth. The ore shoots are interpreted
to be the strike extension of the Austin and McVeigh tuffs, three kilometres to the southwest. During the second and third quarters,
four holes were completed testing the plunge continuity of the shoots. Assays returned results consistent with historic mining
widths and grade and will be used in planning future exploration.



Initiated from the 10th level
in December of 2008, the Phase I underground program included testing of the plunge extension of the 8 Zone as well as conceptual
targets along the 8 Zone shear system. Results from Phase I deep drilling of the 8 Zone Trend demonstrated down plunge continuity
to 450 feet below the 27th level with multiple holes returning strong visible gold associated with intensely silicified,
biotite-altered basalt. Step-out drilling to the east and west confirmed the development of favourable 8 Zone structure and stratigraphy.
The system remains open down plunge and along strike to the east and west. .



The Company’s Madsen shaft de-watering
and rehabilitation program was a top priority for Management. In the first quarter of 2010, there was an unexpected fall of ground
within the Madsen shaft that delayed the mine de-watering schedule. During the third quarter, repairs to the shaft compartments
were safely completed to below the 16th level, allowing access to develop the 16th level exploration drift.
The 8 Zone Trend hosts the past-producing 8 Zone and is highly prospective for future high grade discoveries. The 16th
level provides the ideal drill platform to explore both at depth as well as the strike potential of this 8 Zone Trend.



51











During 2011, excavation work on two 16th
level diamond drill chambers was completed with the Phase II drill program initiated in the second quarter. Phase II underground
drilling completed 14,800 metres and 9 holes, targeting the 8 Zone plunge and strike continuity as well as sub-parallel footwall
structures.



Drill holes targeting the plunge continuity
of the 8 Zone include MUG-11-12, 14 (14b) and 16. Drill hole 14b and drill hole 16, the deepest hole ever completed on the Madsen
property, intercepted silicified and visible gold-bearing, basalt and returned 8.06 grams gold per tonne over 2.02 metres and 5.69
grams gold per tonne over 2.14 metres, respectively. These intercepts extend the 8 Zone system 250 metres down plunge from previous
drilling to approximately 1,600 metres below surface. The system continues to remain open down plunge.



Drill holes targeted the strike continuity
of the 8 Zone include MUG-11-10, 11, 13, 15, 17 and 19. Drill hole 13 and drill hole 17 intercepted silicified, biotite-altered
basalt and returned 15.70 grams gold per tonne over 2.00 metres and 53.70 grams gold per tonne over 0.70 metres, approximately
950 metres below surface. These intercepts are in the hanging-wall of the 8 Zone system and interpreted to correlate with and be
an extension of the McVeigh Tuff, located approximately 650 metres up-dip. The McVeigh Tuff hosts a current Indicated Resource
of 115,000 ounces at 9.59 grams gold per tonne and has seen very limited drill testing below 350 metres depth. In addition to the
McVeigh mineralization, the 8 Zone structure is developed in all holes completed along strike and is characterized by anomalous
gold associated with biotite-altered, variably silicified basaltic and ultramafic lithologies.



Highlights from Phase II of the Madsen
Underground 8 Zone Drill Program



|Hole ID    |  | Width (m) |  | Au (g/t) |  | Elevation * |  | Zone     
|---------- |  | --------- |  | -------- |  | ----------- |  | ---------
|           |  |           |  |          |  |             |  |          
|MUG-11-13  |  | 2.00      |  | 15.70    |  | 927         |  | McVeigh  
|MUG-11-14  |  | 2.00      |  | 6.27     |  | 1,051       |  | McVeigh  
|MUG-11-14b |  | 2.02      |  | 8.06     |  | 1,543       |  | 8 Zone   
|MUG-11-16  |  | 2.14      |  | 5.39     |  | 1,595       |  | 8 Zone FW
|MUG-11-17  |  | 0.70      |  | 53.70    |  | 927         |  | McVeigh  
|And        |  | 2.00      |  | 5.64     |  | 1,079       |  | McVeigh  





52







* Elevation presented as metres below
surface. Composites calculated using a 3 g/t Au cut-off grade. Reported width is drilled length and interpreted to represent 75
- 85 percent of true width. Note that hole MUG-11-14 was lost with hole MUG-11-14b wedged off and completed.







Figure 10: Madsen Longitudinal Section



In 2012, Phase II underground and surface
drilling completed 19,100 metres and 16 holes, targeting the 8 Zone plunge and strike continuity as well as the Austin and McVeigh
Tuff plunge continuity. The 2012 program was completed in late-September and included two underground rigs active on the 16th level
and one surface rig.



In November 2012, the Company provided
a summary of 2012 exploration activities at the Company’s 100 percent-owned Madsen Project in Red Lake, Ontario. 2012 drilling
continued to expand the 8 Zone plunge at depth and demonstrated significant depth extension to the Austin and McVeigh Tuff. Highlights
from the 2012 drill results are summarized below:



| | · | 14.30 grams Au per tonne over 2.00 metres in AD-11-01	Austin
Tuff
| | - | -----------------------------------------------------------------

| | · | 6.52 grams Au per tonne over 2.00 metres in MUG-12-18d	8
Zone Main
| | - | ------------------------------------------------------------------

| | · | 26.50 grams Au per tonne over 2.00 metres in MUG-12-20	
8 Zone Main
| | - | -------------------------------------------------------------------

| | · | 9.53 grams Au per tonne over 2.00 metres in MUG-11-21	Austin
Tuff
| | - | -----------------------------------------------------------------

| | · | 14.55 grams Au per tonne over 2.00 metres in MUG-12-25b	8
Zone FW
| | - | -----------------------------------------------------------------

| | · | 12.00 grams Au per tonne over 1.50 metres in MUG-12-26	8
Zone Main
| | - | ------------------------------------------------------------------

| | · | 29.60 grams Au per tonne over 1.50 metres in MUG-12-28 8 Zone Main
| | - | ------------------------------------------------------------------

| | · | 17.70 grams Au per tonne over 2.00 metres in MUG-12-29	McVeigh
Tuff
| | - | -------------------------------------------------------------------

| | · | 7.77 grams Au per tonne over 1.00 metres in MUG-12-30
	8 Zone FW
| | - | ----------------------------------------------------------------





During 2013, following the four year advanced
exploration program, the Company advanced the Madsen project to an internal scoping level study and further evaluated surface exploration
targets. In response to completion of the Company’s underground drilling, completion and results from an internal scoping
level study and the intention to reduce expenditures due to the low gold price, Management terminated its underground dewatering
program and evaluated a number of strategic opportunities for this asset. During the third quarter of 2013, the Company adopted
a formal plan to sell its Madsen property, excluding the Redaurum property. On March 4, 2014, the Company announced the closing
of a transaction (see “Item 2 General Development of Business).





53







Sampling and Analysis of Exploration Drill Holes



As a detailed description of each hole
is logged, including detailed documentation of rock quality and core recovery, any zones of potential mineralization are marked
off for sampling, together with three to five samples in both the hanging and foot walls. Samples average one to 1.5 metres in
width with 0.3 metre widths taken in places for geological interpretation purposes.



Samples are chosen based on geology. Lode
gold mineralization in the greenstone belts currently explored by Claude have shown through numerous exploration programs carried
out by the Company to have the economic concentrations of gold located within the visually identifiable quartz- sulphide bearing
dilation or shear zones within the host rocks. However, field geologists are also trained to sample any other interval in the core
that may have mineralization associated with it, such as simple increases in sulphide mineral content or quartz veining not associated
with a known zone.



Once the drill hole has been logged and
marked for assay, the core is transferred to the core splitting facility and the selected sections are sawn, bagged and sealed
using strict cleanliness guidelines. These sealed and labeled bags are then put into large tubs or sacks that are then sealed with
security tags for transport to the approved offsite laboratory.



The Quality Assurance program provides
the Company with the degree of certainty required to use the resulting data as the basis for further exploration and development.
It involves the routine placement of control samples to monitor the performance of the laboratories used by Claude, all of which
are ISO approved. Each batch of samples that goes into a laboratory’s furnace has at least one known powder from a suite
of standards purchased from recognized laboratories, resulting in a frequency of 1 in 20, or 5 percent. A “blank” sample
of a coarse-grained quartz-rich rock is inserted after every sample containing the occurrence of visible gold. During any “definition
drilling” program for the calculation of a mineral resource, then a frequency of one control sample in every 10 samples is
used, with a blank following any occurrence of visible gold. Pulp duplicates are run every tenth sample by the laboratory.



The Quality Control program reviews results
from the above control samples and makes the required decisions to either accept the data from each individual batch or to reject
the data and request a re-run of a batch. A batch is rejected if the result for the standard exceeds the tolerance of the 95 percent
confidence level stated on the certificates that accompany each standard. Regarding the coarse-grained “blanks”, a
batch is rejected if the result is more than 3 times the detection limit of the laboratory. Regarding the pulp duplicates, the
failure trigger is not as clear-cut due to the lode-gold nature of the mineralization. However, batches will start to be considered
for re-run where the duplicates are greater than ±10 percent.



Security of Samples



Drill core is monitored from the moment
it is taken out of the ground until it is split and the samples are delivered to the laboratory door. Unauthorized personnel are
not permitted access to the drill machines or the core logging and splitting facilities. Samples split for assay are double-bagged
within the splitting facility with coded security tags and the laboratory receiving the samples report any tags that are broken
or any sample bags that appear to have been tampered with.



Item 5. Operating and Financial
Review and Prospects



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



The following
section is intended to help the reader understand the factors that have affected the Company’s financial condition and results
of operations for the historical period covered by the financial statements and management’s assessment of factors and trends
which are anticipated to have a material effect on the Company’s financial condition and results in future periods. This
section is provided as a supplement to, and should be read in conjunction with, our audited financial statements and the other
financial information contained elsewhere in this annual report. Our financial statements have been prepared in accordance with
IFRS as issued by the IASB. Our discussion contains forward looking information based on current expectations that involve risks
and uncertainties, such as our plans, objectives and intentions. Our actual results may differ from those indicated in such forward
looking statements.





54







Year Ended December 31, 2013 compared
to Year Ended December 31, 2012



For the year ended December 31, 2013, the
Company recorded a net loss of $73.4 million, or $0.42 per share, after $63.8 million of impairment charges which were offset by
a $1.4 million deferred income tax recovery. This compares to net profit of $5.6 million, or $0.03 per share, after a deferred
tax expense of $3.0 million for the year ended December 31, 2012. Loss from operations before income tax in 2013 was $74.8 million,
or $0.43 per share (2012 – Profit of $8.5 million, or $0.05 per share, reflecting impairment charges incurred during 2013
and a change in the Company’s deferred tax base year over year.



Cash flow from operations, before net change
in non-cash working capital items for the year ended December 31, 2013 was $13.8 million, or $0.08 per share, compared to $25.8
million, or $0.15 per share, for the same period in 2012.



Revenue



Gold revenue from the Company’s Seabee
Gold Operation for the year ended December 31, 2013 decreased 21 percent to $63.8 million from $80.8 million reported for the year
ended December 31, 2012. The decrease in gold revenue in 2013 was attributable to a 14 percent decrease in Canadian dollar gold
prices realized (2013 - $1,423 (US$1,382); 2012 - $1,660 (US$1,661)) and by decreased gold sales volume (2013 – 44,823 ounces;
2012 – 48,672 ounces). The decrease in realized price for the year ended December 31, 2013 reflects the decrease in market
gold prices which averaged US$1,411 per ounce during 2013 compared to market gold prices of US$1,669 per ounce during 2012.



Production Costs



During 2013, the Company milled 280,054
tonnes at a grade of 5.11 grams of gold per tonne (2012 – 275,235 tonnes at a grade of 5.86 grams of gold per tonne) for
total production of 43,850 ounces of gold (2012 – production of 49,570 ounces of gold). This decrease in ounces produced
is attributable to the 13 percent decrease in grade year over year.



Gold production in 2013 was 19% below budget
due to grade that was below the long-term average at the Seabee Gold Operation. Grade decline was due primarily to drill results
from certain stoping blocks not translating when milled.



For the year ended December 31, 2013, mine
production costs of $44.1 million (2012 - $48.5 million) were nine percent lower year over year. This decrease is attributable
to efficiencies associated with the shaft extension, improved planning and procurement practices, increased productivities and
reduced labour costs. Total cash cost per ounce of gold (1) for 2013 decreased one percent to $983 (US$954) per ounce
from $997 (US$998) in 2012, a result of a nine percent decrease in production costs offset by an eight percent decrease in ounces
sold.



Depreciation and Depletion



For 2013, depreciation and depletion was
$22.9 million (2012 - $15.7 million), up 46 percent year over year. These results are attributable to an increase in the Seabee
Gold Operation’s asset base and a decrease in the Seabee Gold Operations reserves.



General and Administrative Expense



General and administrative expense for
the year ended December 31, 2013 decreased to $7.1 million, down 11 percent from the $7.9 million reported in 2012 and attributable
to a reduction in direct administration costs.





55







|December 31                      |  | 2013 |       |  | 2012 |   |       | Change | 
|-------------------------------- |  | ---- | ----- |  | ---- | - | ----- | ------ | 
|                                 |  |      |       |  |      |   |       |        | 
|Direct administration            |  | $    | 4,715 |  |      | $ | 5,464 |        | 
|Stock-based compensation         |  |      | 2,274 |  |      |   | 2,280 |        | 
|Deferred share units             |  |      | 68    |  |      |   | 153   |        | 
|Total General and Administrative |  | $    | 7,057 |  |      | $ | 7,897 |        | 



Finance Expense



Finance expense includes interest expense,
accretion expense and derivative losses (if any). For the year ended December 31, 2013, Finance expense was $3.2 million (2012
- $1.5 million). The increase is attributable to increased interest expense associated with the Company’s $25.0 million debt
facility (which closed at the beginning of the second quarter of 2013) and the Company’s $5.0 million revolving loan facility
(which was retired in the first quarter of 2014).



Finance and Other Income



Finance and other income consists of interest
income, production royalties pursuant to the Red Mile transactions, derivative gains (if any) and other miscellaneous income. For
the year ended December 31, 2013, Finance and other income was $2.7 million (2012 - $1.5 million). This result is attributable
to a $1.2 million mark-to-market derivative gain as well as consistent interest and miscellaneous revenue, year over year.



Impairment Charges



The Company’s accounting policy requires
assessment whether any indication of impairment exists at each of its mineral properties at the end of each reporting period. During
2013, the Company had Impairment charges of $63.8 million (2012 - nil).



During 2013, it was determined that there
were indicators of impairment and an estimate of the recoverable amount of the Company’s mineral properties was completed.
This assessment was done at the Cash Generating Unit (“CGU”) level, which is the lowest level for which identifiable
cash flows are largely independent of the cash flows of other assets. Fair value less cost to sell (“FVLCS”) of the
Company’s CGU was determined by calculating the net present value of the future cash flows expected to be generated by the
CGU. Determining the recoverable amount required the use of estimates and assumptions such as long-term commodity prices, discount
rates, future capital requirements, exploration potential and operating performance. The estimates of future cash flows were derived
from the Company’s most recent Life of Mine Plan (“LOMP”) utilizing an average estimated long-term gold price
$1,435 per ounce to estimate future revenues. The future cash flows of the Company’s CGU were discounted using a real weighted
average cost of capital (“WACC”) 7.75 percent after taking into account the location, market risk and various other
factors deemed applicable to the project. Based on the Company’s estimate of FVLCS, impairment losses totalling $22.2 million
were recognized during 2013 because the carrying amount of the Company’s CGU exceeded its recoverable amount; as such, the
Company’s Mineral properties balance was reduced by the amount of the impairment with a corresponding charge recognized in
profit (loss).



During 2013, as part of its strategy to
minimize corporate expenditures and to focus on the Seabee Gold Operation, Claude adopted a plan to sell its Madsen Property. Under
IFRS, non-current assets, that are expected to be recovered primarily through sale rather than through continuing use, are classified
as held for sale. Immediately before classification as held for sale, Madsen was re-measured at the lower of its carrying amount
and its FVLCS. Total impairment charges on the Madsen Property during 2013 were $41.6 million (2012 – nil).







Deferred Income Tax (Recovery) Expense



For 2013, the Company had a deferred income
tax recovery of $1.4 million (2012 - deferred income tax expense of $3.0 million).  The variance noted is attributable to
an increase in the loss before taxes primarily due to the impairment charges on the Seabee Gold Operation and Madsen Project.





56







Year Ended December 31, 2012 compared
to Year Ended December 31, 2011



For the year ended December 31, 2012, the
Company recorded net profit of $5.6 million, or $0.03 per share, after a $3.0 million non-cash deferred income tax expense. This
compares to a net profit of $9.5 million, or $0.06 per share, after a $0.4 million non-cash deferred income tax expense, for the
year ended December 31, 2011 (2010 – $10.3 million, or $0.08 per share). Profit from continuing operations before income
tax in 2012 was $8.5 million, or $0.05 per share (2011 - $9.8 million, or $0.06 per share), reflecting a change in the Company’s
deferred tax base year over year.



Cash flow from operations, before net change
in non-cash working capital items for the year ended December 31, 2012 was $25.8 million, or $0.15 per share, compared to $22.2
million, or $0.14 per share, for the same period in 2012.



Revenue



Gold revenue from the Company’s Seabee
Gold Operation for the year ended December 31, 2012 increased 16 percent to $80.8 million from $69.7 million reported for the year
ended December 31, 2011 (December 31, 2010 - $56.0 million). The increase in gold revenue in 2012 was attributable to a six percent
improvement in Canadian dollar gold prices realized (2012 - $1,660 (US$1,661); 2011 - $1,561 (US$1,578)) and by increased gold
sales volume (2012 – 48,672 ounces; 2011 – 44,632 ounces). The increase in realized price for the year period ended
December 31, 2012 reflects the increase in market gold prices which averaged US$1,669 per ounce during 2012 compared to market
gold prices of US$1,572 per ounce during 2011.



Production Costs



During 2012, the Company milled 275,235
tonnes at a grade of 5.86 grams of gold per tonne (2011 – 257,181 tonnes at a grade of 5.68 grams of gold per tonne). With
mill recoveries relatively unchanged year over year, the increase in ounces produced is attributable to increased tonnes milled
and slightly higher grade.



For the year ended December 31, 2012, mine
production costs of $48.5 million (2011 - $40.5 million) were 20 percent higher year over year. This increase was primarily attributable
to increased personnel, wage increases and increases in mining and maintenance costs. Total cash cost per ounce of gold (2)
for 2012 increased 10 percent to $997 (US$998) per ounce from $908 (US$918) in 2011, primarily as a result of the higher direct
mining costs, including labour, energy, maintenance and consumable costs, year over year. The Company is continuing to pursue best
practices with the intention of lowering these costs.



Depreciation and Depletion



For the year ended December 31, 2012, depreciation
and depletion was $15.7 million (2011 - $11.4 million), up 38 percent year over year. These results are attributable to an increase
in tonnes throughput and an increase in the Seabee Gold Operation’s asset base.



General and Administrative Expense



General and administrative expense for
the year ended December 31, 2012 increased to $7.9 million, up 16 percent from the $6.8 million reported in 2011. The variances
noted below primarily relate to increases in personnel, stock-based compensation and professional fees.



|December 31                      |  | 2012 |       |  | 2011 |  
|-------------------------------- |  | ---- | ----- |  | ---- | -
|                                 |  |      |       |  |      |  
|Direct administration            |  | $    | 5,464 |  |      | $
|Stock-based compensation         |  |      | 2,280 |  |      |  
|Deferred share units             |  |      | 153   |  |      |  
|Total General and Administrative |  | $    | 7,897 |  |      | $





57









Finance Expense



Finance expense includes interest expense,
accretion expense and derivative gains or losses (if any). For the year ended December 31, 2012, finance expense was $1.5 million,
down 52 percent from the $3.1 million reported during 2011. The decreases were attributable to the Company settling certain out-of-the-money
derivative instruments during the third quarter of 2011.



Finance and Other Income



Finance and other income consists of interest
income, production royalties pursuant to the Red Mile transactions and other income. For the year ended December 31, 2012, finance
and other income of $1.5 million was relatively unchanged year over year.



Deferred Income Tax Expense



Deferred income tax expense for the year
ended December 31, 2012 was $3.0 million (2011 - $0.4 million). This increase in this expense is primarily attributable to the
recognition of previously unrecognized deferred tax assets in 2011 of approximately $3.8 million.



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



Year Ended December 31, 2013



Cash flow from operations, before net change
in non-cash working capital items for the year ended December 31, 2013 was $13.8 million, or $0.08 per share, compared to $25.8
million, or $0.15 per share, for the same period in 2012. This was due to decreased gold revenue year over year.



Operating Activities



Operating cash flow is the Company’s
primary source of liquidity. As required, the Company may enhance its liquidity and supplement operating cash flow through a combination
of equity issuances, securing debt financing and sale of non-core assets. The principal use of operating cash flow is to fund the
Company’s: operating and capital expenditures at the Seabee Gold Operation; General and Administrative costs; and principal
and interest payments.



During 2013, the Company generated $13.6 million in operating
cash flows, a $6.9 million decrease from 2012; this decrease reflects lower net profit. The most significant driver of the change
in operating cash flow year over year is the lower gold sales year over year and the significant decrease in the market price of
gold. Whether favorable or unfavorable, future changes in the price of gold will continue to have a material impact on the cash
flow and liquidity of the Company.



For the year ended December 31, 2013, the
Company’s cash flow from operations before net changes in non-cash operating working capital (2) was $13.8 million,
or $0.08 per share (2012 - $25.8 million, or $0.15 per share).



At December 31, 2013, the Company had a
working capital deficiency of $11.9 million (December 31, 2012 – working capital deficiency of $4.1 million); of that amount,
$11.1 million (net) relates to the Company’s Madsen Property, which was classified as held for sale due to Management’s
adoption of a plan to sell this non-core asset. Also included in the working capital calculation at December 31, 2013 are demand
loans totaling $3.0 million (which have been classified as current liabilities due to their demand feature) and a revolving loan
totaling $5.0 million. In addition, the Company was not in compliance with certain financial covenant requirements of the Term
Loan (see Financial Statement Note 14(c)); as such, the amortized cost of that facility has been re-classified to current liabilities.
Subsequent to December 31, 2013, the Company obtained a waiver from CCP and entered into a Term Loan Amending agreement (“Amending
Agreement”) for the financial covenant requirements of the Term Loan (see Financial Statement Note 24(b)).





58







The decrease in working capital is attributable
to an increase in current liabilities (attributable to the accounting presentation of the Company’s Term Loan) offset by
an increase in current assets.



|December 31                                  |  | 2013 |         |   | 2012 |   |        | Change | 
|-------------------------------------------- |  | ---- | ------- | - | ---- | - | ------ | ------ | 
|                                             |  |      |         |   |      |   |        |        | 
|Current assets                               |  |      |         |   |      |   |        |        | 
|Short-term investments                       |  | $    | 1,643   |   |      | $ | -      |        | 
|Accounts receivable                          |  |      | 2,873   |   |      |   | 4,845  |        | 
|Inventories                                  |  |      |         |   |      |   |        |        | 
|Gold in-circuit                              |  |      | 2,522   |   |      |   | 3,616  |        | 
|Stockpiled ore                               |  |      | 1,838   |   |      |   | 1,191  |        | 
|Materials and supplies                       |  |      | 16,205  |   |      |   | 14,371 |        | 
|Assets held for sale                         |  |      | 13,423  |   |      |   | -      |        | 
|Other current assets                         |  |      | 390     |   |      |   | 277    |        | 
|Total Current assets                         |  | $    | 38,894  |   |      | $ | 24,300 |        | 
|                                             |  |      |         |   |      |   |        |        | 
|Current liabilities                          |  |      |         |   |      |   |        |        | 
|Bank indebtedness                            |  | $    | 8,623   |   |      | $ | 3,531  |        | 
|Accounts payable and accrued liabilities     |  |      | 6,997   |   |      |   | 7,533  |        | 
|Loans and borrowings                         |  |      |         |   |      |   |        |        | 
|Demand loans                                 |  |      | 2,950   |   |      |   | 5,337  |        | 
|Current portion of finance lease liabilities |  |      | 291     |   |      |   | 1,495  |        | 
|Current portion of term loan *               |  |      | 23,628  |   |      |   | -      |        | 
|Revolving loan                               |  |      | 5,000   |   |      |   | -      |        | 
|Debenture **                                 |  |      | -       |   |      |   | 9,665  |        | 
|Liabilities related to assets held for sale  |  |      | 2,316   |   |      |   | -      |        | 
|Other current liabilities                    |  |      | 1,001   |   |      |   | 836    |        | 
|Current liabilities                          |  | $    | 50,806  |   |      | $ | 28,397 |        | 
|                                             |  |      |         |   |      |   |        |        | 
|Working capital (deficiency)                 |  | $    | (11,912 | ) |      | $ | (4,097 | )      | 
|Current ratio                                |  |      | 0.77    |   |      |   | 0.86   |        | 



*
Amortized cost; principal outstanding on Term Loan is $25.0 million.

** Amortized
cost. Principal outstanding on Debenture at December 31, 2012 was $9.8 million.



Investing Activities



Cash used in investing activities amounted
to $33.4 million for the year ended December 31, 2013. Mineral property expenditures during 2013 were $31.9 million, a $30.6 million
decrease year over year. During 2013, expenditures were comprised of Seabee Mine and shaft development of $23.0 million, exploration
costs (focusing primarily on the Santoy Gap deposit, with minimal expenditures on the Seabee Regional and Amisk projects) of $1.3
million and property, plant and equipment additions of $7.6 million. Property, plant and equipment additions include mining equipment,
camp infrastructure and tailings management facility expansion. The Company utilized its cash flow from operations and debt to
fund these additions.



Financing Activities



The Company’s financing activities
during 2013 included proceeds of $0.7 million received from the issuance of common shares pursuant to the Company’s Employee
Share Purchase Program, proceeds received from a five year $25.0 million term loan and proceeds received from a $5.0 million revolving
loan. These were offset by the repayment of the $9.8 million debenture and $3.9 million of demand loans and capital leases repayments,
resulting in a net financing cash inflow of $16.4 million. This compares to a net financing cash inflow of $2.7 million during
2012, which consisted of $0.4 million in funding received from the Company’s Employees Share Purchase Plan (“ESPP”)
and demand loan proceeds of $7.2 million, offset by demand loan and capital lease repayments totaling $4.9 million.



59















During 2013, a total of 2,065,812 common
shares (2012 – 338,676) were issued pursuant to the Company’s ESPP; distribution of these shares pursuant to the ESPP
occurs during the first quarter of the year. Subsequent to December 31, 2013, the Company issued 7,799,148 shares pursuant to 2013
participation in the plan. No common shares were issued pursuant to the Company’s Stock Option Plan during 2013 (2012 –
75,402).



In January 2013, the Company expanded its
current debt facilities with its bank and early in the second quarter of 2013 the Company executed an agreement with Crown Capital
Partners Inc. (“CCP”) for a long-term debt facility of $25.0 million. The new debt facilities enabled the successful
retirement of the Company’s outstanding debentures (which matured in May 2013) and enabled the Company to maintain operations
during the lower gold price environment experienced during 2013. During 2013, the Company was only required to make interest payments
on the $25.0 million facility. At December 31, 2013, the Company was not in compliance with certain financial covenant requirements
relating to its Term Loan (see Financial Statement Note 14(c)); as such, the amortized cost of the Term Loan was been re-classified
to current liabilities. Subsequent to December 31, 2013, the Company obtained a waiver from its lender and entered into an Amendment
Agreement for the financial covenant requirements of the Term Loan (see Financial Statement Note 25(b)). There were no changes
to principal repayment or interest terms as a result of this Amendment Agreement; the maturity date remains 60 months from closing
and interest on the Term Loan remains fixed at 10 percent, compounds monthly and is payable monthly. During 2014, in addition to
interest payments, monthly principal payments of $0.3 million will begin in May 2014.



|Terms of CCP Term Loan Agreement
|--------------------------------
|Period                          
|Months 1 – 12                   
|Months 13 – 59                  
|Due at Maturity (April 2018)    



The Term loan remains subordinate to all
of the Company’s other short-term and long-term loans and borrowings. Upon mutual agreement with CCP, prepayment fees pursuant
to the original agreement have been waived. In addition, the 5,750,000 common share purchase warrants pursuant to the original
agreement have been cancelled for consideration of $1.0 million; consideration was paid with 4,545,454 common shares of Claude.



Demand loans and Obligations under finance
lease



During 2013, the Company repaid $2.4 million
of its demand loans and $1.5 million of its capital leases outstanding. The proceeds and repayments of demand loans and capital
leases relate to production equipment at the Seabee Gold Operation.



Year Ended December 31, 2012



Cash flow from operations, before net change
in non-cash working capital items for the year ended December 31, 2012 was $25.8 million, or $0.15 per share, compared to $22.2
million, or $0.14 per share, for the same period in 2011.



Operating Activities



During 2012, the Company generated $20.5 million in operating
cash flows, a $0.9 million increase from 2011; this increase reflects higher net profit. The most significant driver of the change
in operating cash flow year over year is the higher gold sales year over year and the increase in the market price of gold. Whether
favorable or unfavorable, future changes in the price of gold will continue to have a material impact on the cash flow and liquidity
of the Company.



For the year ended December 31, 2012, the
Company’s cash flow from operations before net changes in non-cash operating working capital (2) was $25.8 million,
or $0.15 per share (2011 - $22.2 million, or $0.014 per share).



60







The Company monitors its spending plans,
repayment obligations and cash resources on a continuous basis with the objective of ensuring that there is sufficient capital
within the Company to meet business requirements, after taking into account cash flows from operations and the Company’s
holdings of cash and cash equivalents and short-term investments. The Company’s typical cash requirement over the first and
second quarters of each year is significant because of the Seabee Gold Operation’s winter ice road resupply, which includes
restocking diesel, propane and other large consumables as well as the continued investment in maintenance and growth capital relating
to the mining fleet and mine infrastructure.



The Company had bank indebtedness of $3.5
million at December 31, 2012 (December 31, 2011 - $2.5 million of cash and cash equivalents and short-term investments of $33.2
million).



At December 31, 2012, the Company had a
working capital deficiency of $4.1 million (December 31, 2011 - surplus of $42.4 million). Included in the working capital calculation
at December 31, 2012 are demand loans and outstanding debentures totaling $5.3 million and $9.7 million, respectively. Demand loans
have been classified as current liabilities due to their demand feature. As the debenture is due in less than one year, its balance
has been classified as a current liability.



|Working Capital and Current Ratio
|---------------------------------
|                                 
|                                 
|                                 
|Current assets                   
|Current liabilities              
|Working capital                  
|Current ratio                    



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, sell assets or incur debt. The Company is not subject to externally imposed capital requirements.



The Company’s capital structure is
comprised of a combination of short-term and long-term debt and shareholders’ equity.



The Capital structure of the Company is
as follows:



|Schedule of Capital Structure of the Company
|--------------------------------------------
|Capital Structure                           
|                                            
|                                            
|Demand loan                                 
|Demand loans                                
|Debenture                                   
|Total debt                                  
|                                            
|Shareholders’ equity                        
|                                            
|Debt to equity                              



In January 2013, the Company expanded its
current debt facilities with its existing bank to $25.0 million and executed a non-binding term sheet with CCP for an additional
long-term debt facility of $25.0 million (please see financing section below). The new debt facilities are intended for the retirement
of the Company’s outstanding debentures (which mature in May 2013), for expansion capital at the Seabee Gold Operation and
for general working capital purposes.



61







Investing Activities



Cash
used in investing activities amounted to $29.2 million for the year ended December 31, 2012. Mineral
property expenditures during 2012 were $62.5 million, an $11.3 million increase from 2011. Expenditures were comprised of Seabee
Mine and shaft development of $22.3 million, exploration costs (focusing on the Santoy Gap deposit, Seabee North, Amisk and Madsen
exploration projects) of $20.0 million and property, plant and equipment additions of $20.2 million. Property, plant and equipment
additions include mining equipment, camp infrastructure and tailings management facility expansion. The Company utilized its cash
on hand and short-term investments to fund these additions.



Financing Activities



The Company’s financing activities
during 2013 included proceeds of $0.7 million received from the issuance of common shares pursuant to the Company’s Employee
Share Purchase Program, proceeds received from a five year $25.0 million term loan and proceeds received from a $5.0 million revolving
loan. These were offset by the repayment of the $9.8 million debenture and $3.9 million of demand loans and capital leases repayments,
resulting in a net financing cash inflow of $16.4 million. This compares to a net financing cash inflow of $2.7 million during
2012, which consisted of $0.4 million in funding received from the Company’s Employees Share Purchase Plan (“ESPP”)
and demand loan proceeds of $7.2 million, offset by demand loan and capital lease repayments totaling $4.9 million.



The Company’s financing activities
during 2012 included proceeds of $0.4 million from the issuance of 338,676 common shares (2011 – 235,614) pursuant to the
Company’s Employee Share Purchase Plan and 75,402 common shares (2011 – 648,667) pursuant to the Company’s Stock
Option Plan. It also included proceeds of $7.2 million from demand loans. These were offset by the repayment of $4.9 million of
its demand loans and capital leases outstanding, resulting in a net cash inflow of $2.7 million during 2012. This compares to a
net cash inflow of $56.2 million in 2011, which primarily consisted of $56.5 million of proceeds from the issue of common shares
and warrants (net of issue costs). The proceeds and repayments of demand loans relate to production equipment at the Seabee Gold
Operation.



Year Ended December 31, 2011



Cash flow from operations (1)
before net changes in non-cash operating working capital of $22.2 million, or $0.14 per share, for the year ended December 31,
2011, up 12 percent from $19.8 million, or $0.15 per share, for the year ended December 31, 2010. This increase was due to higher
contributions from gold sales, which was partially offset by higher administrative costs.



Operating Activities



During 2011, the Company generated $19.6
million in operating cash flows, a $3.8 million decrease from 2010; this decrease reflects lower net profit. The most significant
driver of the change in operating cash flow year over year is the higher gold sales year over year and the increase in the market
price of gold offset by higher stock-based compensation and the write-down of an exploration property. Whether favorable or unfavorable,
future changes in the price of gold will continue to have a material impact on the cash flow and liquidity of the Company.



The Company had cash and cash equivalents
of $2.5 million and short-term investments of $33.2 million at December 31, 2011 (December 31, 2010 - $10.8 million, including
$4.4 million of Restricted cash). The Company monitors its positions with, and the credit quality of, the financial institutions
and government instruments in which it invests its excess cash and cash equivalents. Other than balances maintained in various
bank operating accounts, the Company’s investment policy limits investments to government-backed financial instruments, bank
certificates of deposit and bankers acceptances.



At December 31, 2011, the Company had working
capital of $42.4 million (December 31, 2010 - $4.3 million). Included in the working capital calculation at December 31, 2011 are
demand loans of $0.9 million; these loans have been classified as current liabilities due to their demand feature. Included in
the working capital calculation at December 31, 2010 are demand loans of $2.5 million (due to their demand feature) and the Company’s
debenture of $9.3 million (due to the Company’s offer to prepay outstanding debentures during the fourth quarter of 2010).
The increase in working capital was attributable to: the closing of the equity issue in the second quarter, a decrease in demand
loans attributable to the regular repayment of the loans and the reclassification of non-redeemed debentures from current to long-term
loans and borrowings.



62







|Working Capital and Current Ratios
|----------------------------------
|In thousands of dollars           
|                                  
|                                  
|                                  
|                                  
|Current assets                    
|Current liabilities               
|Working capital                   
|Current ratio                     



Investing Activities



Cash
used in investing activities amounted to $79.7 million for the year ended December 31, 2011. Mineral
property expenditures during the year were $51.2 million, a $16.3 million increase from 2010. Expenditures during 2011 were comprised
of Seabee Mine and Shaft development of $20.8 million, exploration costs (focusing on the Santoy Gap, Seabee North, Amisk and Madsen
exploration projects) of $13.6 million and property, plant and equipment additions of $16.8 million. Property, plant and equipment
additions include mining equipment, camp infrastructure and tailings management facility expansion. The Company utilized its cash
on hand and short-term investments to fund these additions.



Financing Activities



Financing activities during 2011 included
the issuance of 20,000,000 common shares of the Company at a price of $2.50 per share; in addition, the underwriters of the offering
exercised their overallotment option in respect of an additional 3,000,000 common shares at a price of $2.50 per common share.
The aggregate gross proceeds raised under the offering were $57.5 million. Financing activities also included the issuance of 235,614
common shares (2010 – 430,395) and 648,667 common shares (2010 – 422,414) pursuant to the Company’s ESPP and
the Company’s stock option plan, respectively. An additional 1,577,000 common share purchase warrants expiring on November
16, 2012 were exercised. In addition, 116,300 of the warrants expiring on May 22, 2013 were exercised. Finally, 139,321 common
share purchase warrants expiring on April 9, 2011 were exercised.



During the year, the Company repaid $1.6
million of its demand loans outstanding. The proceeds and repayments of capital lease obligations relate primarily to production
equipment.



| | C. | Research and Development, Patents and Licenses, etc.
| | -- | ----------------------------------------------------



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



| | D. | Trend Information
| | -- | -----------------



Operating and Financial Outlook



During 2014, the Company will see the completion
of many milestones including:



| | · | the continuation of access development to the Santoy Gap for infill drilling of the deposit; excavation
of the 300 metre Santoy Gap vent raise to surface;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | expansion of the electrical distribution system to accommodate operational growth; and
| | - | --------------------------------------------------------------------------------------

| | · | initial development ore from Santoy Gap.
| | - | ----------------------------------------



63







For 2014, forecast gold production at the
Seabee Operation is estimated to range from 47,000 to 51,000 ounces of gold. Depreciation and depletion should increase if the
targeted tonnes broken is attained. Unit costs for 2014 are expected to be comparable to 2013’s unit cash costs of $983 per
ounce. Quarterly operating results are expected to fluctuate throughout 2013; as such, they will not necessarily be reflective
of the full year average.



Access to the Seabee Gold Operation is
by fixed wing aircraft to an airstrip located on the property. Large consumables (including diesel and propane) and items related
to the upgrading of the mining fleet and mine infrastructure are trucked to the site via a 60 kilometre annual winter ice road
from Brabant Lake on Highway 102. The winter ice road is typically in use from January through March. This seasonal trend of purchasing
and delivering inventories to the Seabee Gold Operation results in significant cash outflows during the first quarter of the year.



During 2014, the Company expects 300 to
400 semi-trailer loads (2013 – 450 semi-trailer loads), a result of improved operating effectiveness and fewer capital projects
in 2014. The Company will also benefit from lower prices on several of its consumable inventory items, year over year.



At current gold prices and forecast production,
Management believes that operating cash flows, proceeds from the sale of Madsen and proceeds from the sale of the NSR royalty on
the Seabee Gold Operation will be sufficient to fund the 2014 Winter Ice Road resupply requirements and further development opportunities
at the Seabee Gold Operation. In addition, the Company is investigating various external financing options, including the divestiture
of non-core assets, to ensure sufficient funding is in place.



Forecast and Capital Outlook



During 2014, capital expenditures are expected
to include continued investment and expected upgrades at the Seabee Gold Operation.



Capital expenditures at the Seabee Gold
Operation in 2014 are expected to include continued investment and upgrades that are estimated to total approximately $22.0 million,
funded from a combination of operating cash flow, the sale of the Madsen Gold Project and the sale of the NSR royalty on the Seabee
Gold Operation. This 39 percent reduction from 2013 expenditures of $30.6 million is due to the completion of several major projects,
including the shaft extension.



|Capital Expenditures ($ million)
|--------------------------------
|                                
|Capital                         
|Development                     
|Sustaining                      
|Expansion                       
|                                



Development expenditures are expected to
be prioritized at Santoy Gap. Sustaining capital costs include expenditures on equipment replacement and tailings management facilities.
Expansion capital is expected to focus in the Santoy Gap area to support the Company’s Life of Mine Plan and to generate
future returns for the Company as the Santoy Gap deposit represents one of the Company’s best opportunities to build shareholder
value.



Exploration Outlook



Exploration spending during 2014 is forecast
to be approximately $0.2 million (2013 - $1.6 million).



At the Seabee Gold Operation, exploration
expenditures will focus on low cost per ounce targets, proximal to infrastructure with the potential to materially impact near-term
production, drive resource growth and to positively impact the Company’s Mineral Reserves and Mineral Resources. Drilling
at Seabee is anticipated to consist of the following:



64







|Summary of Estimated 2014 Drilling at Seabee
|--------------------------------------------
|Area                                        
|Seabee Operations                           
|Santoy Mine Complex                         
|Total:                                      



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



Accounting Estimates



Certain of the Company’s accounting
policies require that management make decisions with respect to the formulation of estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues and expenses. Claude’s significant accounting policies are contained in Note 3 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, commodity prices and future operating
and capital costs can have a significant impact on the impairment assessments of the applicable assets.



Valuation of Properties



Claude assesses the carrying values of
its properties at the end of each reporting period, or more frequently if warranted by a change in circumstances, to determine
whether any indication of impairment exists. 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 change in assumptions may materially
impact the potential impairment of these assets.



Decommissioning and Reclamation



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’s 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.



| | E. | Off -Balance Sheet Arrangements
| | -- | -------------------------------



In the normal course of its operations,
the Company is exposed to gold price, foreign exchange, interest rate, liquidity, equity price and counterparty risks. The overall
financial risk management program focuses on preservation of capital and protecting current and future Company assets and cash
flows by reducing exposure to risks posed by the uncertainties and volatilities of financial markets.



65







The Company may use derivative financial
instruments to hedge some of its exposure to fluctuations in gold prices and foreign exchange rates. The Company does not acquire,
hold or issue derivatives for trading purposes. The Company’s management of financial risks is aimed at ensuring that net
cash flows are sufficient to meet all its financial commitments as and when they fall due and to maintain the capacity to fund
its forecast project development and exploration strategies.



The value of the Company’s mineral
resources is related to the price of gold and the outlook for this mineral. Gold and precious metal prices historically have fluctuated
widely and are affected by numerous factors outside of the Company’s control, including, but not limited to, industrial and
retail demand, central bank lending, forward sales by producers and speculators, levels of worldwide production, short-term changes
in supply and demand because of speculative hedging activities and certain other factors related specifically to gold. The profitability
of the Company’s operations is highly correlated to the market price of gold. If the gold price declines below the cost of
production at the Company’s operations, for a prolonged period of time, it may not be economically feasible to continue production.



The Company’s revenues from the production
and sale of gold are denominated in U.S. dollars. However, the Company’s operating expenses are primarily incurred in Canadian
dollars and its liabilities are primarily denominated in Canadian dollars. The results of the Company’s operations are subject
to currency risks. The operating results and financial position of the Company are reported in Canadian dollars in the Company’s
consolidated financial statements.



To mitigate the effects of price fluctuations
in revenue, the Company may enter into derivative instrument transactions, from time to time, in respect of the price of gold and
foreign exchange rates. Such transactions can expose the Company to credit, liquidity and interest rate risk.



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



At December 31, 2013, the Company did not
have any derivative instruments outstanding.



At December 31, 2012, the Company did not
have any derivative instruments outstanding.



At December 31, 2011, the Company did not
have any derivative instruments outstanding.



| | F. | Tabular Disclosure of Contractual Obligations
| | -- | ---------------------------------------------



The Company’s contractual and other
obligations as at December 31, 2013 are summarized as follows:



|Schedule of Payments / Commitments due by Period
|------------------------------------------------
|                                                
|Contractual Obligation                          
|                                                
|Demand loans                                    
|Interest on demand loans                        
|Revolving loan                                  
|Interest on revolving loan                      
|Capital lease obligations                       
|Interest on capital leases                      
|Office lease                                    
|Term loan                                       
|Interest on term loan                           
|                                                



66







During 2013 (and subsequent to December
31, 2013), the Company continued updating its decommissioning and reclamation plans. As filed with the Government of Saskatchewan’s
Ministry of Environment (the “Ministry of Environment”), the Company estimated in its 2013 Mine Closure Plan the closure
costs at the cessation of mining at its Seabee Mine at $6.1million. Actual costs of completing the reclamation of the mine site
may be higher than those estimated. The Company has issued letters of credit in favor of the Ministry of Environment in the amount
of $1.6 million in support of its obligations. The letters of credit are secured by investment certificates. The Company has received
approval to incrementally fund its remaining closure cost obligations over the next five years as follows: 2014 - $0.5 million;
2015 - $0.5 million; 2016 - $1.0 million; 2017 - $1.0 million; and 2018 - $1.5 million.



| | G. | Safe Harbor
| | -- | -----------



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



Item 6. Directors, Senior Management
and Employees



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



The names, municipality of residence, positions
with the Company and principal business activities outside the Company of the directors and executive officers of the Company as
at April 30, 2014 are set forth below:



|Name and Municipality
        of Residence                                    |  | Positions Held                                  |  | Director/Officer
        Since |  | Principal Occupation                      
|----------------------------------------------------------------------------- |  | ----------------------------------------------- |  | ------------------------------ |  | ------------------------------------------
|                                                                              |  |                                                 |  |                                |  |                                           
|Ted J. Nieman, Q.C.(1)(3)
        Saskatoon, SK                               |  | Director, Chairman of the Board                 |  | 2007                           |  | Senior Vice President, Canpotex Limited   
|                                                                              |  |                                                 |  |                                |  |                                           
|Mike Sylvestre, M.Sc.,
        P. Eng., ICD.D.(2)(4)(5)
        Port Hope, ON |  | Director, President and Chief Executive Officer |  | 2011                           |  | President and CEO of Castle Resources Ltd.
|                                                                              |  |                                                 |  |                                |  |                                           
|Ronald J.
        Hicks, C.A.(1)(2)(3)
        Saskatoon, SK                  |  | Director                                        |  | 2006                           |  | Chartered Accountant                      
|                                                                              |  |                                                 |  |                                |  |                                           
|J. Robert
        Kowalishin, P. Eng.(1)(4)(5)
        Saskatoon, SK          |  | Director                                        |  | 2007                           |  | Business Person                           
|                                                                              |  |                                                 |  |                                |  |                                           
|Ray A. McKay(2)(4)(5)
        Saskatoon, SK                                   |  | Director                                        |  | 2007                           |  | Business Person                           
|                                                                              |  |                                                 |  |                                |  |                                           
|Rita M. Mirwald, C.M.(2)(3)(4)
        Saskatoon, SK                          |  | Director                                        |  | 2011                           |  | Business Person                           
|                                                                              |  |                                                 |  |                                |  |                                           
|Brian Booth, P.Geo.(1)(4)(5)
        West Vancouver, BC                       |  | Director                                        |  | 2012                           |  | President and CEO of Pembrook Mining Corp.
|                                                                              |  |                                                 |  |                                |  |                                           
|Rick Johnson, C.A.
        Saskatoon, SK                                      |  | Chief Financial Officer                         |  | 2004                           |  | Chief Financial Officer of Claude         
|                                                                              |  |                                                 |  |                                |  |                                           
|Brian Skanderbeg, P.Geo.
        Saskatoon, SK                                |  | Senior Vice President, Chief Operating Officer  |  | 2008                           |  | Chief Operating Officer of Claude         



| | Note: | (1) | Member of the Audit Committee.
| | ----- | --- | ------------------------------

| | (2) | Member of the Human Resources & Compensation Committee.
| | --- | -------------------------------------------------------



67







| | (3) | Member of the Nominating & Corporate Governance Committee.
| | --- | ----------------------------------------------------------

| | (4) | Member of the Safety, Health & Environmental (SHE) Committee.
| | --- | -------------------------------------------------------------

| | (5) | Member of the Reserves Committee.
| | --- | ---------------------------------



All of the directors and executive officers
of Claude have been engaged for more than five years in their present principal occupations, office or executive positions except
for: Mr. Nieman who became Chairman on March 1, 2011; Ms. Mirwald, who from 1997 to 2009 was Senior Vice President, Corporate Services
of Cameco Corporation and was appointed to the Board January 1, 2011; Mr. Sylvestre, who was CEO of Vale Inco New Caledonia from
July 2008 to October 2010, COO of Linear Gold Corp. from October 2009 to July 2010, President of Castle Resources Ltd. (“Castle”)
since July, 2010, COO of Castle from July 2010 to July, 2011 and CEO of Castle from July, 2011 to present; Mr. Brian Booth who
was President and CEO of Pembrook Mining Corp. from March 2008 to present; Mr. Skanderbeg who was VP Exploration from April 2008
to September 2012 and Senior Vice President & COO from September 2012 to present; and, Mr. Longo who was Manager, Mine Projects
of Areva Resources Canada from September 2007 to October 2011, Manager, Capital Projects of Claude from November 2011 to March
2012 and Vice President, Operations from April 2012 to present.



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



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



Executive officers are recommended by the
Chief Executive Officer and approved by the Board of Directors to serve until terminated by the Board of Directors or until their
successors are appointed.



Effective March 31, 2014, the Company’s
president and CEO, Neil McMillan, retired as an officer and director. Directors and officers of the Company, as a group, beneficially
own, directly or indirectly, or exercise control or direction over 423,645 of the common shares outstanding at December 31, 2013,
being less than one percent of the issued and outstanding common shares of the Company.



Principal Occupation



Ted J. Nieman, Q.C., joined the
Board of Directors of Claude Resources Inc. in 2007. He began his career with the law firm of Estey, Robertson, Muzyka, Beaumont,
Barton & Bell in Saskatoon, Saskatchewan, Canada in 1973.  In 1993, Mr. Nieman joined Canpotex Limited (“Canpotex”),
the offshore marketing company for the Saskatchewan potash producers, Agrium, Mosaic and Potash Corporation as General Counsel
and Corporate Secretary.  In 1995, he was appointed Vice President and in 2001 he was appointed Senior Vice President. 
He is a current member of the Canpotex Executive Management Group, and is a member of the board of directors of all Canpotex subsidiaries
and affiliates. In 2012, Mr. Nieman was honored with a Queen’s Counsel (Q.C.) designation in the province of Saskatchewan.
Ted became a director of the Corporation in 2007 and was appointed Chair in 2011.



Ronald J. Hicks, C.A., joined the
Board of Directors Claude Resources Inc. in 2006. He is a member of the Institute of Chartered Accountants of Saskatchewan (“ICAS”). 
He joined Deloitte & Touche LLP in 1959 and was admitted to partnership in 1977 until his retirement in August 2000. In 2004,
Mr. Hicks received the Distinguished Community Service Award from ICAS.  He is currently a Director Emeritus, Ducks Unlimited
Canada. In 2013, Mr. Hicks was awarded the Queen Elizabeth II Diamond Jubilee medal for his contributions to conservation and his
work with Ducks Unlimited Canada. In his career, he has served as director with Dickenson Mines Limited, KamKotia Mines Limited,
Saskatchewan Government Insurance and Prairie Malt Limited.  Mr. Hicks served as Chairman of the Saskatchewan Roughrider Football
Club (Saskatoon Committee), Ducks Unlimited (Saskatoon Committee), ICAS Public Practice Review and Appraisal Committee and Admissions
Committee.



J. Robert Kowalishin, P.Eng., joined
the Board of Directors of Claude Resources Board in 2007. He held a number of senior positions with the Trane Company, a division
of American Standard, over the course of his forty-two year career with the company. Following more than two decades as the Trane
franchise owner in Saskatoon, Mr. Kowalishin was appointed regional manager for Canada and the north-eastern United States. Upon
retiring, he became a consultant and adviser to the Trane Company’s Leadership Development Program.



68







Ray A. McKay joined the Board of
Directors of Claude Resources Inc. in 2007. He began his career in Alberta as an educator in 1968, retiring as a principal in 1979.
He then became the Executive Director for Saskatchewan Education, Training and Employment, Northern Education Services Branch in
La Ronge, SK and in 1996 he became the Deputy Minister for the Government of Saskatchewan, Northern Affairs. He recently retired
as the Chief Executive Officer (“CEO”) for Kitsaki Management Limited Partnership. Mr. McKay received numerous awards
including the Educational Development Award, Keewatin Career Development Corporation, in recognition of “Dedication to
the Development of Education and Training for the people of northern Saskatchewan”;the Bill Hansen Award, Interprovincial
Association on Native Employment Inc. (I.A.N.E.), in recognition of “Outstanding Contribution to the Employment of Aboriginal
People”;and the Commemorative Medal for the 125th Anniversary of Canadian Confederation, Government of Canada, for significant
contribution to Canada, community and fellow Canadians.



Rita Mirwald, C.M., joined the Board
of Directors of Claude Resources Inc. in 2011. She retired from her role as Senior Vice President, Corporate Services at Cameco
Corporation which she held since 1995. In this role she was responsible for brand and image development, communications, investor
relations, human resources, and government and community liaison. She also played a leading role in the execution of Cameco’s
training, employment and community investment programs for First Nations and Metis people of northern Saskatchewan. In July 2010,
Ms. Mirwald was appointed as a member of the Order of Canada. Ms. Mirwald has a Bachelor of Arts degree and a Diploma of Education
from University of Saskatchewan, a Master of Arts from University of Oregon and has completed the executive program at Queen’s
University. She is past Chair of the Saskatchewan Institute of Public Policy and the Global Strategies Committee of the World Nuclear
Association.



Mike Sylvestre, P.Eng., ICD.D., joined the Board
of Directors Inc. in 2011. Effective April 1, 2014, Mike Sylvestre, a Director of Claude, assumed the role of President and Chief
Executive Officer effective April 1, 2014 on an interim basis while the search for a permanent candidate is ongoing. Mr. Sylvestre
is currently the President and Chief Executive Officer for Castle Resources Inc., an exploration and mine development company based
in Toronto, Canada. Mr. Sylvestre is currently the President and CEO for Castle Resources Inc. Castle Resources is an exploration
and mine development company based in Toronto, Canada. Mr. Sylvestre holds an M.Sc. and a B.Sc. in Mining Engineering from McGill
University and Queen’s University, respectively. He is also a member of the Professional Engineers of Ontario and the Canadian
Institute of Mining. For most of his career, Mr. Sylvestre worked at Inco Ltd. where he most recently held senior management positions
domestically and internationally. Most notably, he was the CEO of Vale Inco, New Caledonia, President Vale Inco, Manitoba Operations
and Vice President of Operations PT Inco, Indonesia. Mr. Sylvestre also serves on the Boards of Castle Resources Inc., James
Bay Resources and Wellgreen Platinum (formerly Prophecy Platinum Corp.) and brings over 35 years of mining experience to the
Corporation. Michel became a director of the Corporation in 2011.



Brian Booth, P. Geo., joined the Board of
Directors of Claude Resources Inc. in 2012. currently serves as the President and CEO of Pembrook Mining Corp., an exploration
company based in Vancouver, BC, Canada. Mr. Booth holds a B.Sc in Geology from McGill University and is also a member of the Professional
Geoscientists of Ontario. Mr. Booth began his career as a Geologist on the Casa Berardi gold discoveries in Quebec. He opened Inco's
exploration office in Val d'Or, Quebec and is credited with the discovery of the Douay West gold deposit in 1990 and was subsequently
appointed to the board of Societe D'Exploration Miniere Vior Inc. In 1994, as Inco's Manager Exploration, Eastern North America,
he conducted the preliminary assessment of the Voisey's Bay Ni-Cu-Co discovery . He later relocated to Indonesia to manage Inco's
exploration office in Jakarta during which time he was involved, through a joint venture with Highlands Gold, in the discovery
of the Beutong copper porphyry in Sumatra. Mr. Booth served as the CEO and President of Lake Shore Gold Corp. and later as a Director.
Mr. Booth who serves on the Boards of Pembrook Mining Corp., and Northern Superior Resources Inc. brings more than 30 years experience
in mineral exploration throughout Canada, Europe and southeast Asia.



Brian Skanderbeg, P. Geo., joined Claude Resources
as Exploration Manager in April 2007 and was appointed Vice President of Exploration in 2008. In September 2012 he was appointed
Senior Vice President and Chief Operating Officer. Mr. Skanderbeg previously worked for Goldcorp, INCO and Helio Resources, holding
positions in both exploration and operations. He holds a B.Sc. from the University of Manitoba, an M.Sc. from Rhodes University,
South Africa and brings extensive experience in orogenic gold systems.



69







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



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



Compensation to Directors



Compensation Philosophy and Objectives:



The philosophy and benchmarking with respect
to director compensation is the same as for executive compensation. The director compensation program is designed to attract and
retain highly qualified individuals with the capability to meet the demanding responsibilities of Board members. The Human Resources
& Compensation Committee (sometimes referred to in this section as the “Committee”) believes that the combination
of share ownership guidelines plus the greater emphasis on the equity component of director compensation as well as the requirement
for directors to retain all Deferred Share Units (“DSUs”) until retirement effectively aligns the interests of directors
with those of its shareholders. The Committee believes that the director compensation program provides for competitive and reasonable
compensation levels.



The Board follows a formal performance
assessment process to ensure director effectiveness and encourage director engagement.



Review and Assessment:



The Human Resources & Compensation
Committee reviews director compensation once a year and recommends updates to the Board for approval when considered appropriate
or necessary to recognize the workload, time commitment and responsibility of Board and committee members.



In December 2012 the Board engaged Mercer
to update their independent review of director compensation using the same comparator companies referenced in the discussion of
executive compensation. Based on the benchmarking study, Mercer recommended no change to the existing director compensation structure
for 2013. However, given the share price performance, the Committee recommended, and the Board approved, a $25,000 reduction to
the equity component of total direct compensation. In addition, for 2013, the Board approved a recommendation from the Committee
that all of the directors’ equity compensation would be awarded in the form of DSUs.



Director Compensation for 2013:



|Annual Retainer: Chair of the Board - $40,000;  
|------------------------------------------------
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|Attendance fees:  $1,000 for each Board meeting;
|                                                
|                                                
|                                                
|Equity Compensation:                            
|                                                



70







| | In 2013, the Committee recommended and the board approved a reduction of $25,000, to $100,000 in the equity component of director compensation – all of which are to be delivered in the form of DSUs.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Directors are reimbursed for
certain travel and other expenses incurred in attending meetings and the performance of their duties.



Deferred Share Unit Plan:



Effective January 1, 2012, the Board implemented
a Deferred Share Unit Plan (“DSUP”) for the Company’s non-executive directors. Unless otherwise approved by the
Board, each director is required to receive at least 50 percent of their equity compensation in the form of DSUs.



The purpose of the DSUP is to enhance the
Company’s ability to attract and retain talented individuals to serve as directors and to promote a greater alignment of
interests between directors and shareholders of the Company by linking a portion of annual director compensation to the future
value of the Company’s common shares.



DSUs are only redeemable once a director
ceases to serve as a director, at which point they are paid out in cash. The value of the DSU at the time it is granted or redeemed
for cash is calculated as the volume weighted average trading price of the common shares on the TSX on the last 20 trading days
prior to the grant or redemption.



DSUs credited to a director are counted
as common shares when determining whether a director has met minimum share ownership guidelines.



Share Ownership Guidelines:



Directors were required to hold at least
80,000 common shares or DSUs within five years of joining the Board. The Board believes this contributes to the goal of aligning
the interests of directors with those of shareholders. In 2014, the Committee recommended and the Board approved increasing director
share ownership requirements as follows:



Chair: 3 times annual retainer; and,

Director: 2 times annual retainer.



Further, each director should achieve this
level of ownership within four years of joining the board.



Compensation Details



The following table provides a detailed breakdown of the fees
earned, before withholdings, by non-employee directors for the year ended December 31, 2013. Annual and committee retainers are
paid quarterly.



|                              |  | Fee
    Breakdown        |         |  |                        |  |        | Allocation
    of total Fees            | 
|----------------------------- |  | ------------------------ | ------- |  | ---------------------- |  | ------ | --------------------------------------- | 
|                              |  | Board
    Retainer       |         |  |                        |  |        |                                         | 
|Name                          |  | Equity
    Component ($) |         |  | Cash
    Component ($) |  |        | Board/
    Committee Chair retainer ($) | 
|                              |  |                          |         |  |                        |  |        |                                         | 
|Ted J. Nieman (Age 63)        |  |                          | 100,000 |  |                        |  | 20,000 |                                         | 
|                              |  |                          |         |  |                        |  |        |                                         | 
|Ronald J. Hicks (Age 73)      |  |                          | 100,000 |  |                        |  | 20,000 |                                         | 
|                              |  |                          |         |  |                        |  |        |                                         | 
|J. Robert Kowalishin (Age 74) |  |                          | 100,000 |  |                        |  | 20,000 |                                         | 
|                              |  |                          |         |  |                        |  |        |                                         | 
|Ray A. McKay (Age 73)         |  |                          | 100,000 |  |                        |  | 20,000 |                                         | 
|                              |  |                          |         |  |                        |  |        |                                         | 
|Rita M. Mirwald (Age 71)      |  |                          | 100,000 |  |                        |  | 20,000 |                                         | 
|                              |  |                          |         |  |                        |  |        |                                         | 
|Mike Sylvestre (Age 58)       |  |                          | 100,000 |  |                        |  | 20,000 |                                         | 
|                              |  |                          |         |  |                        |  |        |                                         | 
|Brian Booth (Age 54)          |  |                          | 100,000 |  |                        |  | 20,000 |                                         | 



71







Outstanding Option and Share-Based Awards



The following table shows all option and
share-based awards outstanding at December 31, 2013 that were granted to non-executive directors. The value of unexercised in-the-money
options at December 31, 2013, is the difference between the exercise price of the options and the fair market value of the Company’s
common shares at year end, which was $0.14.



|                    |  | Option-Based
    Awards                                     |         |  | Share-Based
    Awards        | 
|------------------- |  | ----------------------------------------------------------- | ------- |  | ----------------------------- | 
|Name                |  | Number
    of securities underlying unexercised options (#) |         |  | Option
    exercise price ($) | 
|Ted J. Nieman       |  |                                                             | 60,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 20,000  |  |                               | 
|                    |  |                                                             | 70,717  |  |                               | 
|                    |  |                                                             |         |  |                               | 
|Totals              |  |                                                             | 190,717 |  |                               | 
|Ronald J. Hicks     |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 60,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 20,000  |  |                               | 
|                    |  |                                                             | 70,717  |  |                               | 
|                    |  |                                                             |         |  |                               | 
|Totals              |  |                                                             | 200,717 |  |                               | 
|J.Robert Kowalishin |  |                                                             | 60,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 20,000  |  |                               | 
|                    |  |                                                             | 70,717  |  |                               | 
|                    |  |                                                             |         |  |                               | 
|Totals              |  |                                                             | 190,717 |  |                               | 
|Ray A. McKay        |  |                                                             | 60,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 10,000  |  |                               | 
|                    |  |                                                             | 20,000  |  |                               | 
|                    |  |                                                             | 70,717  |  |                               | 
|                    |  |                                                             |         |  |                               | 
|Totals              |  |                                                             | 170,717 |  |                               | 
|Rita M. Mirwald     |  |                                                             | 20,000  |  |                               | 
|                    |  |                                                             | 70,717  |  |                               | 
|                    |  |                                                             |         |  |                               | 
|Totals              |  |                                                             | 90,717  |  |                               | 
|Mike Sylvestre      |  |                                                             | 20,000  |  |                               | 
|                    |  |                                                             | 70,717  |  |                               | 
|                    |  |                                                             |         |  |                               | 
|Totals              |  |                                                             | 90,717  |  |                               | 
|Brian R. Booth      |  |                                                             | 71,239  |  |                               | 
|                    |  |                                                             |         |  |                               | 
|Totals              |  |                                                             | 71,239  |  |                               | 



72







The following table provides information
regarding the share value vested or earned for each non-executive director during the year ended December 31, 2013.



|                     |  | Value Vested or Earned During the Year                 |  
|-------------------- |  | ------------------------------------------------------ | -
|Name                 |  | Option-based awards – Value Vested during the year ($) |  
|(a)                  |  | (b)                                                    |  
|Ted J. Nieman        |  |                                                        | -
|Ronald J. Hicks      |  |                                                        | -
|J. Robert Kowalishin |  |                                                        | -
|Ray A. McKay         |  |                                                        | -
|Rita M. Mirwald      |  |                                                        | -
|Mike Sylvestre       |  |                                                        | -
|Brian Booth          |  |                                                        | -



Director Compensation for 2014



In December 2013 the Board reviewed an
internal benchmarking analysis of director compensation using the same comparator companies referenced in the discussion of executive
compensation.



73







Based on this benchmarking study, the Committee
believes director compensation levels were reasonable. However, given the share-price performance, the Board approved the Committee
recommendation to reduce the equity component of total direct compensation by $25,000. Further, the Board approved a recommendation
from the Committee that all of the directors’ equity compensation would continue to be awarded in the form of DSUs. The Committee
believes the use of DSUs better links director interests with those of the Company’s shareholders (see “Chair Realizable
Pay Analysis” below).



Chair Realizable Pay Analysis



As with executive compensation, the Committee
focuses on total director compensation (retainer, meeting fees and the total grant date value of stock options or DSUs granted
for that fiscal year) in structuring the director compensation program. In addition to reviewing total director compensation, the
Committee also believes that it is important to review and assess “realizable” compensation. Realizable compensation
approximates the directors’ “actual pay” and is comprised of retainer, meeting fees and the change in intrinsic
value of exercisable options or DSUs. As shown in the chart below, based upon a combination of actual stock price performance,
the realizable compensation of the Company’s chair for 2013 was meaningfully lower than the values reported in the Compensation
detail above.







Director Equity Compensation Hedging



Pursuant to the Company’s policy,
directors are not permitted to engage in short selling in shares or purchase financial instruments (including, for greater certainty,
puts, options, calls, prepaid variable formal contracts, equity swaps, collars or units of exchange funds) that are designed to
hedge or offset a change in the market value of common shares or other securities held by a director.



Compensation to Executive Officers



The compensation paid to the executive
officers and incentive options granted are detailed in the Management Information Circular of the Company under the section entitled
“Report on Executive Compensation” prepared for the 2014 annual general meeting, which is an exhibit to this report
and incorporated herein by reference.



The Company’s executive compensation
practices and programs support our strategic growth and operational excellence goals, which are focused on increasing shareholder
value. Compensation is aligned with our risk management processes to ensure there is an appropriate balance between risk and reward.
The program is also designed to attract, engage and retain talented executives who have the capability to manage the Company’s
assets in order to build and sustain shareholder value.



74







Our philosophy is to compensate executives
with:



| | · | compensation levels and opportunities that are sufficiently competitive to facilitate recruitment
and retention of executives, while being fair and reasonable to shareholders;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | compensation programs that reinforce the Company’s business strategy by rewarding the achievement
of key metrics and operational performance objectives, both annual and long-term;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | compensation that is responsive to the commodity-based cyclical business environment by emphasizing
operational performance measures over performance measures that are more directly influenced by gold prices;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | compensation programs that align executives' long-term financial interests with those of the Company's
shareholders by emphasizing incentives in the long-term;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | compensation programs that support the management of risk and ensure management's plans are focused
on generating shareholder value within a risk controlled environment; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | compensation that is transparent so that both executives and shareholders understand the executive
compensation program (e.g., how the program works, the goals it seeks to promote and the compensation levels and opportunities
provided).
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



At-Risk Pay



In determining the appropriate compensation
mix, consideration is given to the proportion of pay that should be at risk, based on the executive’s ability to affect the
Company’s results, as well as the compensation mix for similar positions in the Company’s comparator group. Generally,
the more senior the position, the greater the officer’s total compensation is “at-risk”. The Human Resources
& Compensation Committee (referred to in this section as the “Committee”) generally sought to balance the Named
Executive Officer (“NEO”) target compensation components at 20 to 22% short-term cash compensation and 30 to 45% long-term
equity compensation in the form of stock options or Restricted Share Units (see Amendments to Long-Term Incentive Program on page
37). If the NEO’s or the Company’s performance is poor, the value of “at-risk” compensation will decrease
and conversely, if the NEO’s or Company’s performance is strong, the value of “at-risk” compensation will
increase.



The following charts outline the Company’s
targeted current mix of fixed and at-risk pay within the Company’s executive compensation plan:







75







| | 
| | 



| | (1) | For the President and CEO, individual performance and corporate performance is weighted at 25%
and 75%, respectively.
| | --- | ---------------------------------------------------------------------------------------------------------------------

| | (2) | For the Senior Vice President & Chief Operating Officer individual performance and corporate
performance is weighted at 30% and 70%, respectively.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | For Other NEOs, individual performance and corporate performance is weighted at 35% and 65%, respectively.
| | --- | ----------------------------------------------------------------------------------------------------------



Benchmarking



The Committee believes that it is appropriate
to establish compensation levels based in part on benchmarking against similar companies, both in terms of compensation practices
as well as levels of compensation. In this way, the Company can gauge if its compensation is competitive in the marketplace for
its talent, as well as ensure that the Company’s compensation is reasonable. When making compensation decisions the Committee
may target at or near median levels of the comparator group when setting compensation levels.



Accordingly, the Committee reviews compensation
levels for the NEOs against compensation levels of the comparator companies. Annually, the Committee reviews information regarding
compensation programs and compensation levels among the comparator companies. The comparator group is gold mining specific, is
comprised of organizations that are similar to the Company in terms of scope and complexity and what the Committee believes represents
the market for executive talent.



The following table sets out the comparator
group used for the year ended December 31, 2013:



|Kirkland Lake Gold         | Premier Gold Mines Limited  
|-------------------------- | ----------------------------
|Rainy River Resources Ltd. | Brigus Gold Corp.           
|Elgin Mining Inc.          | Richmont Mines Inc.         
|Wesdome Gold Mines         | Rubicon Minerals Corporation
|Veris Gold Corp.           | San Gold Corporation        
|Lake Shore Gold Corp.      | St. Andrews Goldfields Ltd. 



The criteria for choosing the comparator
group were as follows:



| | i) | companies operating in the gold sector, based in Canada, and with operations primarily in Canada;
| | -- | -------------------------------------------------------------------------------------------------

| | ii) | companies of comparable complexity and size – as measured in terms of, revenues, market capitalization,
enterprise value and total assets; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------

| | iii) | companies that are either in the exploration stage only or are also in production with a comparable
number of producing properties.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------



76







The Company ranked, as compared to the
comparator group, near the 30th percentile in relation to total assets; in the 25th to 50th percentile
for revenues; and, near or below the 25th percentile for both market capitalization and enterprise value.



Managing Compensation Risks



While the mining business, by its nature,
has inherent risks, the Company has designed and structured its corporate and compensation policies and programs to limit risk.
When considering the potential risks facing the Company, it is important to recognize that many of the factors that influence the
organization’s performance (e.g., commodity prices and foreign exchange) are outside of the direct control of Management
and therefore are not subject to potential manipulation for financial gain. Given the oversight procedures and the key risk mitigation
features of the Company’s compensation programs described below, the Committee believes that it would be difficult for anyone
in Management acting alone, or acting as a group, to make “self-interest” decisions for immediate short-term gains
that could have a material impact on the organization’s financial or share price performance.



Oversight Procedures



As part of its corporate governance, the
Board has overseen Management’s development of the Company’s Enterprise Risk Management Program (“ERMP”).
ERMP includes an entity-wide approach to risk identification, assessment, monitoring and management. Also, in the normal course
of business, the Company has financial controls that provide limits in areas such as capital and operating expenditures, divestiture
decisions and gold and foreign currency trading transactions. These financial controls mitigate inappropriate risk taking that
could affect compensation.



Key Risk Mitigating Features



The Company’s compensation program
has the following key features to mitigate risk:



| | i) | Total direct compensation for executives provides an appropriate balance between base salary and
variable, or at-risk, performance-based compensation. For our NEO's, emphasis is spread across short and long-term programs to
balance short-term performance and sustained long-term profitable growth;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ii) | The Company’s total compensation for each NEO is regularly benchmarked against a peer group
of companies of similar size and scope, as approved by the Committee. This ensures that compensation is competitive with peers
and aligned with the Company’s compensation philosophy;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | iii) | Short-term incentive pay is earned through a balanced, diversified mix of performance measures.
The performance measures include operational, exploration and financial goals. The goals, results and payouts are reviewed and
stress-tested by the Committee. This balanced approach discourages the unintended consequence of encouraging a singular focus at
the expense of other key factors (e.g., profitable growth versus safety);
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | iv) | Stock options currently vest over three to five years and have a seven to ten year term. This incentive
component reinforces longer term rewards and mitigates the risk of too much emphasis on short-term goals at the expense of sustainable
performance;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | v) | Maximum incentive earned is currently capped at 2 times target. This helps to mitigate excessive
risk taking; and
| | -- | -----------------------------------------------------------------------------------------------------------------

| | vi) | The Committee and the Board provide strong oversight of the management of the Company’s compensation
programs. The Committee has discretion in assessing performance under executive compensation programs to adjust metrics or the
payouts, based on results and events, and has used this discretion to adjust payouts.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Based on the above, the Committee believes
that the Company’s compensation programs do not encourage excessive risk taking that is reasonably likely to have a material
adverse effect on the Company.



77







Incentive Clawback



The NEOs have agreed to have their annual
incentive clawed back (recouped) if the financial statements are restated subsequent to any bonus being paid due to fraud or the
misappropriation of funds or other illegal behaviour of the NEO.



Compensation Governance



Human Resources & Compensation Committee



The central role of the Committee is to
provide competitive cash compensation and equity incentives that are designed to encourage NEOs to make sound long-term decisions
that will ultimately contribute to the delivery of shareholder value. The capabilities, powers and operation of the Committee include
assisting the Board annually by:



| | · | reviewing program design and NEO total direct compensation levels of the Company’s comparator
group to ensure that compensation programs remain market competitive;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | reviewing and approving the overall corporate goals and objectives of the Company relevant to compensation
of the CEO, and ensuring that the overall goals and objectives of the Company are supported by appropriate executive compensation
philosophy and programs;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | evaluating the performance of the CEO against approved goals and criteria, and recommending to
the Board the total compensation for the CEO in light of the evaluation of the CEO's performance;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | reviewing in-depth the CEO and President's evaluation of the other NEOs' performance and recommendations
for total compensation of these senior executives;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | reviewing the succession planning process and results for NEOs; and
| | - | -------------------------------------------------------------------

| | · | reviewing executive compensation disclosure and recommending it to the Board for approval before
Claude publicly discloses this information.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



All Committee members are independent
directors. The Committee is comprised of the following members: Rita Mirwald (Chair), Ray A. McKay, Ronald J. Hicks C.A.,
Mike Sylvestre, P.Eng., ICD.D., Ted J. Nieman, Q.C. (Ex-Officio).



The Committee members have experience in
top leadership roles, strong knowledge of the mining industry, and a mix of functional experience and competency from operations
and strategy to human resources, legal and public relations. This background provides the Committee with the collective experience,
skills and qualities to effectively support the Board in carrying out their mandate.



Executive Compensation Consultants



The Committee first retained Mercer in
2011 to provide director and executive compensation advice to help discharge its mandate.



The Committee has received information
and recommendations from Mercer in the following areas:

| | · | development of compensation programs and practices for directors and executives;
| | - | --------------------------------------------------------------------------------

| | · | updates on best practices and trends related to director and executive compensation;
| | - | ------------------------------------------------------------------------------------

| | · | reviewing compensation-related materials and highlighting potential issues, including unintended
consequences; and
| | - | ------------------------------------------------------------------------------------------------------------------

| | · | custom survey work benchmarking the Company’s compensation in the marketplace.
| | - | ------------------------------------------------------------------------------



However, the decisions made by the Committee
may reflect factors and considerations other than the information provided or recommendations made by our compensation consultant.
During 2013, Mercer met with the Committee Chair and attended relevant sections of Committee meetings, as necessary.



78







Executive Compensation-Related Fees



Compensation-related fees paid by Claude
in 2013 and 2012 to its compensation consultants are provided in the table below:



|Compensation Consultant |  | 2013 Fees |        |  | 2012 Fees |  
|----------------------- |  | --------- | ------ |  | --------- | -
|                        |  |           |        |  |           |  
|Mercer (Canada) Limited |  |           | 10,983 |  |           | $



All Other Fees



In addition to the fees disclosed above,
Mercer assisted the Company in certain matters related to benefits, including, but not limited to, actuarial services. Total fees
payable to Mercer for the foregoing services were $58,602 in 2013 and $45,593 in 2012. These amounts included all fees payable
to Mercer by the Company not included under executive compensation-related fees in 2013 and 2012, respectively.



The Committee approves all director and
executive compensation-related fees paid to its consultants. Notwithstanding Mercer’s services relating to the Company’s
benefit programs, the Committee is required to pre-approve all services provided by Mercer that do not relate to executive compensation-related
services.



Components of Executive Compensation:



The components of executive compensation
are described in the table below:



|Compensation element |  | How it is paid |  | What it is designed to reward
|-------------------- |  | -------------- |  | -----------------------------
|Base salary          |  | Cash           |  | ·                            
|                     |  |                |  |                              
|Short-term Incentive |  | Cash           |  | ·                            
|                     |  |                |  | ·                            
|                     |  |                |  | ·                            
|                     |  |                |  |                              
|Long-term Incentive  |  | Stock Options  |  | ·                            
|                     |  |                |  | ·                            
|                     |  |                |  | ·                            



Base Salary



Base salaries are fixed compensation and
not subject to uncertainty or share price performance, which therefore does not encourage NEOs to focus exclusively on share price
performance to the detriment of other critical business metrics.



An individual NEO’s base salary is
targeted at the 50th percentile of the comparator group, depending on the Committee’s subjective assessment of
the individual NEO’s experience, recent and long-term performance, expected future contributions, retention concerns and
the recommendation of the CEO. The CEO does not make a recommendation with respect to his own salary or any other component of
his overall compensation.



79











A consideration in establishing base salary
for the NEOs is the evaluation of market comparables for similar positions. However, individual salaries could vary according to
the particular responsibilities related to the position, the experience level of the executive officer and overall performance.



In 2013, the Committee reviewed an analysis
of the compensation levels among the comparator group and considering the Company’s performance, the performance of each
of the NEOs, changes in duties and responsibilities and the base salary of the NEOs relative to the median of the comparator group,
the Board concluded, on recommendation of the Committee, that certain adjustments to 2013 salaries were required.



The 2013 and 2012 base salaries for the
NEOs are set forth in the table below:



|Name and Position                                |  | 2013 Base Salary (% increase) |         |    | 2012 Base Salary |  
|------------------------------------------------ |  | ----------------------------- | ------- | -- | ---------------- | -
|A. Neil McMillan                                 |  | $                             | 341,550 |    |                  | $
|President & CEO                                  |  |                               | (0.0    | )% |                  |  
|Brian Skanderbeg(1)                              |  | $                             | 260,000 |    |                  | $
|Senior Vice President & Chief Operating Officer  |  |                               | (3.1    | )% |                  |  
|Richard Johnson                                  |  | $                             | 250,000 |    |                  | $
|Vice President Finance & Chief Financial Officer |  |                               | (9.1    | )% |                  |  
|Peter Longo(2)                                   |  | $                             | 215,000 |    |                  | $
|Former Vice President Mining Operations          |  |                               | (7.5    | )% |                  |  



(1) Commensurate with his appointment
to Senior Vice President & Chief Operating Officer, Mr. Skanderbeg’s base salary was increased effective September 1,
2012.

(2) Mr. Longo was appointed
as Vice President, Operations effective April 1, 2012. Mr. Longo left the Company on April 17, 2014 to pursue other interests.



As a result of the decline in gold price
during 2013 the Company initiated a corporate wide cash flow optimization plan with the objective to rationalize expenditures,
wherever possible. The CEO voluntarily adopted a “leave without pay” strategy which resulted in a $57,799 or 17% reduction
in his salary to $281,124. Further, the Senior Vice President & Chief Operating Officer deferred his 2013 base salary increase
until January 1, 2014.



Base Salary in 2014



The Committee considered the compensation
levels of the comparator group to help determine base salaries, but also considered individual performance, tenure and experience,
the overall corporate performance, any retention concerns, and individual historical compensation. Based on the above analysis,
the Committee recommended no adjustment to the base salaries of the NEOs for 2014.



The current base salary structure for NEOs
will remain below the median of the comparator group.



The Committee is satisfied that the Company’s
current executive compensation policy and level of compensation with respect to base salary reflect competitive market practices
and satisfies the goal of attracting and retaining key talent.



Short-term Incentive



Short-term incentive compensation is based
on annual results. The short-term incentive ensures that a significant portion of an executive’s compensation varies with
actual results in a given year, while providing financial incentives to executives to achieve short-term financial, operational
and strategic objectives. This element of total compensation is developed based on market data and ensures the Company remains
competitive within its industry. Individual NEO bonuses are targeted at the 50th percentile of the comparator group.
Each NEO has a target and specific objectives that they work towards each year, as described below. Two factors are considered
when determining bonuses for NEOs. The first is the corporate performance against a specific set of performance criteria and the
second is the individual performance of each NEO. Cash bonuses may then be awarded and are calculated based on reaching the corporate
targets and individual performance objectives.



80







Annual performance-based cash incentive
awards to the executive are recommended by the CEO of the Company and reviewed by the Committee. All awards, other than the CEO’s,
are based on the recommendation of the CEO and are at the discretion of the Committee. The CEO does not make a recommendation to
the Committee with respect to his own annual performance-based cash incentive award. The annual performance-based cash incentive
award for the CEO is based on the recommendation of the Committee.



Incentive payments are awarded to NEOs
after taking into account corporate performance and individual performance as follows:



|Short-Term Incentives
|---------------------
|Name                 
|A.Neil McMillan      
|Brian Skanderbeg     
|Richard Johnson      
|Peter Longo          



The Company’s short-term incentive
program is based on both objectively and subjectively defined criteria and both the corporate and personal performance components
of the bonus are capped at two times the target where both the corporate and personal performance objectives are exceeded. This
is intended to prevent excessive payouts and to act as a disincentive against imprudent risk-taking.



Short-term incentives (at target) generally
represent approximately 20 percent of the NEOs’ total direct compensation and are weighted between individual and corporate
performance. The targets are based on realistic performance expectations within acceptable risk parameters, which allows this element
of compensation to achieve an appropriate balance between the achievement of annual objectives and long-term value creation. Actual
performance is measured against targets with a full qualitative assessment of how the results were achieved. The Committee is satisfied
that the Company’s current NEO compensation program and levels of compensation, subject to the Committee's discretion discussed
below, with respect to the annual performance-based cash incentive is aligned with the Company’s performance and reflect
competitive market practices. The Committee is confident that the program does not encourage risk taking while allowing the Company
to attract, retain and motivate executives to add shareholder value.



Measuring Corporate Performance:



In 2013, Corporate performance was determined
as a percentage, weighted by:



| | · | 50% Objective Performance Measures:
| | - | -----------------------------------



| | o | 15% Safety, Health & Environment
| | - | --------------------------------

| | o | 30% Mine Operating Performance
| | - | ------------------------------

| | o | 5% Relative Total Shareholder Return
| | - | ------------------------------------



| | · | 50% Specific Annual Objectives and Other Strategic Initiatives:
| | - | ---------------------------------------------------------------



| | o | Liquidity & financing - a minimum of $10.0 million available at end of 2013;
| | - | ----------------------------------------------------------------------------

| | o | Santoy Gap project advancement
| | - | ------------------------------

| | § | Prefeasibility study completed (end of Q2);
| | - | -------------------------------------------

| | o | Successful implementation of the Management Operating System (Jamieson)
| | - | -----------------------------------------------------------------------



81







| | § | Achieve the following target metrics:
| | - | -------------------------------------

- Seabee
production: 515 tpd; and

- Seabee
development: 6 metres/day;

| | o | Madsen scoping study completed (Q2);
| | - | ------------------------------------

| | o | Amisk preliminary economic assessment completed (Q2);
| | - | -----------------------------------------------------

| | o | Inventory Management System
| | - | ---------------------------

| | § | Q2 2013, PR/PO Module functional; and
| | - | -------------------------------------

| | § | Q3 2013, Inventory Control Module populated (significant functional areas);
| | - | ---------------------------------------------------------------------------

| | o | Incorporate Environment information into SHEMS Program
| | - | ------------------------------------------------------

| | § | Major components implemented in Q2
| | - | ----------------------------------

| | § | 100% compliance in Q3;
| | - | ----------------------

| | o | Assessing capital efficiency – major capital projects, including mine development, are measured
against budgeted costs and timelines. The Audit Committee will also provide oversight on all remaining capital items;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Reduce employee turnover (Seabee operations) from December 31, 2012 - (threshold (0%), target (5%),
stretch (10%));
| | - | -------------------------------------------------------------------------------------------------------------------

| | o | Business Development/Asset optimization; and,
| | - | ---------------------------------------------

| | o | Reserve & Resource growth/execution of exploration business plan.
| | - | -----------------------------------------------------------------



Objective Performance Measures



The Committee approves specific objective
performances measures using a formula approach to measure the achievement of these objectives. These performance measures align
the annual metrics with the Company’s Strategic Plan and received a 50 percent weighting in determining corporate performance.



The following table outlines the target
performance objectives of 2013 versus the actual performance attained by the Company during 2013. The corporate performance attained
is compared to the target performance for each objective and then converted into a performance factor based on whether the target
performance was met or not.



If the Company achieves its targeted performance
for each of the metrics, the payout percentage for the Incentive is 100 percent. If the maximum amounts for each metric are achieved
or exceeded, the payout percentage for the Incentive is up to 200 percent. If the minimum amounts or threshold is not achieved
for a particular metric, no incentive is payable for that metric.



The objective performance goals are based
on fiscal year end results of the Company.



|Corporate Objectives                                           |  | Weighting |      |        | Threshold |                                    |        | Target |  |       | Stretch |   |  | Performance Factor |        |   | Weighted Result | 
|-------------------------------------------------------------- |  | --------- | ---- | ------ | --------- | ---------------------------------- | ------ | ------ |  | ----- | ------- | - |  | ------------------ | ------ | - | --------------- | 
|                                                               |  |           |      |        |           |                                    |        |        |  |       |         |   |  |                    |        |   |                 | 
|1.  Safety, Health & Environmental                             |  |           |      |        |           |                                    |        |        |  |       |         |   |  |                    |        |   |                 | 
|Safety (TRIR)                                                  |  |           | 7.5  | %      |           |                                    | 7.40   |        |  |       | 7.00    |   |  |                    | 6.00   |   |                 | 
|Environment                                                    |  |           | 7.5  | %      |           |                                    | 10.00  |        |  |       | 8.00    |   |  |                    | 7.00   |   |                 | 
|                                                               |  |           |      |        |           |                                    |        |        |  |       |         |   |  |                    |        |   |                 | 
|2.  Mine Operating  Performance                                |  |           |      |        |           |                                    |        |        |  |       |         |   |  |                    |        |   |                 | 
|Production                                                     |  |           | 15.0 | %      |           |                                    | 50,000 |        |  |       | 54,000  |   |  |                    | 58,000 |   |                 | 
|Operating Costs ( Millions $)                                  |  |           | 15.0 | %      |           |                                    | 55.50  |        |  |       | 52.90   |   |  |                    | 50.30  |   |                 | 
|3.  Relative Total Shareholder Return                          |  |           | 5    | %      |           |                                    | 35     | %      |  |       | 50      | % |  |                    | 80     | % |                 | 
|4.  Specific Annual Objectives and Other Strategic Initiatives |  |           | 50.0 | %      |           | Chief Executive Officer Assessment |        |        |  | 75.00 | %       |   |  | 37.50              | %     
|                                                               |  |           |      |        |           |                                    |        |        |  |       |         |   |  |                    |        |   |                 | 
|Total Corporate Score                                          |  |           |      | 97.500 | %        



82







Safety, Health & Environmental

| | · | Safety – Total Recordable Incident Rate (TRIR): reflects the belief that a strong
safety record is essential to the responsible and successful operation of the Company; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Environment: reflects the belief that a strong environmental record is essential to the
responsible and successful operation of the Company.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



Mine Operating Performance

| | · | Production (ounces): focuses on achieving budgeted amounts of gold production. It also provides
incentive to access and develop various projects in a timely manner; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Operating Costs: is designed to promote implementation of operations' cost control measures.
| | - | --------------------------------------------------------------------------------------------



Relative Total Shareholder Return:focuses
on the ability of the Company to deliver consistent and sustainable shareholder value.



Specific Annual Objectives &
Other Strategic Initiatives



Achievement of specific annual objectives
and other strategic initiatives are determined by the Committee based on the CEO’s assessment. These are measured using a
more subjective approach and received the remaining 50 percent weighting to determine overall corporate performance. In evaluating
performance, the Committee considers factors over which the NEO can exercise control, such as meeting liquidity targets, advancing
the Santoy Gap project and meeting capital budget costs and timeline targets.



For the specific annual objectives and
other strategic initiatives, the CEO recommended that the completion of these objectives was, generally, between threshold and
stretch, with only one of the objectives not reaching at least threshold.



Measuring Personal Performance



The Committee approves annual individual
performance objectives for the NEOs that are intended to align with the corporate objectives and reflect key performance areas
for each executive relative to their specific role. These performance objectives may include a combination of quantitative and
subjective measures (e.g., development of succession plans, implementation of the strategic plan(s), and execution of operating
and exploration business plans).



The Committee, in consultation with the
CEO, reviews the achievements and overall contribution of each individual NEO who reports to the CEO. The Committee held in-camera
discussions to complete an independent assessment of the performance of the CEO and the Committee then determined an overall individual
performance rating (percentage) for each NEO.



Corporate and Personal Performance Adjustment



Where the formula for calculation of payout
is deemed inappropriate by the Committee, due to circumstances not foreseen at the setting of objectives, the Committee may apply
discretion in modifying payouts.



In 2013, the Committee considered the results
of the NEO’s Corporate and Personal Performance weighed against the Company’s current liquidity issues, production
shortfalls and share price performance and determined that, at this time, an STI incentive payment would not be appropriate. The
pre-discretion calculated short-term incentive award compared to the actual short-term incentive approved for the executive is
provided below:



83







|Name of Officer  |  | Short-Term Incentive Calculated $ |         |  | Short-Term Incentive Payout $ | 
|---------------- |  | --------------------------------- | ------- |  | ----------------------------- | 
|A.Neil McMillan  |  |                                   | 197,911 |  |                               | 
|Brian Skanderbeg |  |                                   | 136,851 |  |                               | 
|Richard Johnson  |  |                                   | 98,025  |  |                               | 
|Peter Longo      |  |                                   | 81,593  |  |                               | 



Long-term Incentive



The Company’s long-term incentive
program motivates each of the NEOs to deliver sustainable long-term performance, and link the NEO's interests with those of its
shareholders. In this manner both the executive and shareholders will benefit from the future success of the organization. A vesting
element is included as an incentive for the executive to remain with the Company.



In order to deliver a level of compensation
that recognizes the corporate performance achieved and remains competitive with market practices, compensation data for the comparator
group is analyzed on an annual basis to determine appropriate compensation for the Company's NEOs. The Company utilizes this data
to deliver the appropriate long-term incentive stock option grant levels. For the year ended December 31, 2013, when determining
long-term incentive grants, benchmarking considered the median total direct compensation of similar positions held within the comparator
group.



Effective January 1, 2012, the Company
amended its compensation program to award the CEO and each NEO a multiple of their annual base salary in the form of stock options
which is variable and "at-risk". The multiple of annual base salary is based on the ability of the executive to effect
corporate performance.



The Committee also has the discretion to
increase or decrease the percentage of base salary used and will consider reasonableness, extraordinary circumstances, including
unexpected market events and achievement of performance targets. Such awards are contingent upon future performance which, if not
achieved, will reduce or negate the actual value of these awards.



The Board approved the following target
multiplier as a percentage of base salary for 2013 long-term incentive determination:



|Name of Officer  |  | Target Multiplier % of Base Salary |    
|---------------- |  | ---------------------------------- | ---
|A. Neil McMillan |  |                                    | 120
|Brian Skanderbeg |  |                                    | 80 
|Richard Johnson  |  |                                    | 60 
|Peter Longo      |  |                                    | 60 



Amendments to Long-term Incentive Program



Restricted Share Unit Plan:



Effective January 1, 2014, the Board implemented
a Restricted Share Unit Plan (“RSUP”) for the Company’s NEOs.



The purpose of the RSUP is to enhance the
Company’s ability to attract and retain talented individuals and to promote a greater alignment of interests between NEOs
and shareholders. The Committee uses the grant of a Restricted Share Unit (“RSU”) to limit and balance the use of stock
options. The RSUs are settled on a cash basis and have a vesting period of no longer than three years from the date of grant. The
value of the RSU at the time it is granted or redeemed for cash is calculated as the volume weighted average trading price of the
common shares on the TSX on the last 20 trading days prior to the grant or redemption.



For 2013, to limit the grant of stock options,
the Committee recommended and the board approved the issuance of RSUs for the Senior Vice President and Chief Operating Officer,
Chief Financial Officer and Vice President, Mining Operations.



84







Discretion



Where the formula for calculation of long-term
incentive is deemed inappropriate by the Committee, due to unforeseen circumstances, the Committee may apply discretion in modifying
payouts.



In 2013, the Committee considered the past
year’s performance, share price performance and the impact on total direct compensation for the NEOs and, as in 2012, significantly
adjusted downward the multiplier as a percentage of base salary. The Committee felt the adjustment was necessary to more tightly
align executive compensation with shareholder interests. The potential or target long-term incentive award compared to the actual
long-term incentive awarded to the executive is provided below:



|Name of Officer     |  | 2013 Base Salary ($) |         |  | Approved Multiplier % of Base Salary |  |     | Target Equity-Based Awards ($) |  |  | Actual Multiplier % of Base Salary |  |  | Actual Equity- Based Awards Earned ($) |   
|------------------- |  | -------------------- | ------- |  | ------------------------------------ |  | --- | ------------------------------ |  |  | ---------------------------------- |  |  | -------------------------------------- | --
|A. Neil McMillan(1) |  |                      | 341,550 |  |                                      |  | 120 |                                |  |  | 409,860                            |  |  |                                        | 60
|Brian Skanderbeg    |  |                      | 260,000 |  |                                      |  | 80  |                                |  |  | 208,000                            |  |  |                                        | 40
|Richard Johnson     |  |                      | 250,000 |  |                                      |  | 60  |                                |  |  | 150,000                            |  |  |                                        | 30
|Peter Longo(4)      |  |                      | 215,000 |  |                                      |  | 60  |                                |  |  | 129,000                            |  |  |                                        | 30



| | (1) | For the CEO, given his March 31, 2014 retirement, the Committee elected instead to pay his earned
LTI, $204,930, with a cash payout of $125,000.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The value of these long-term incentive awards will form part of 2013 compensation and will be calculated
as part of compensation for the year ending December 31, 2013. The value of these awards is included in the Summary Compensation
Table for the year ended December 31, 2013.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | For the 2013 compensation year the equity-based award will take the form of an RSU. The number
of RSUs granted to each NEO, excluding the CEO, was determined by dividing the value of the total long-term incentive award by
the volume weighted average trading price of the common shares on the TSX on the last 20 trading days prior to the grant or redemption.
The RSUs will vest equally over three years.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Mr. Longo left the Company on April 17, 2014 to pursue other interests.
| | --- | -----------------------------------------------------------------------



The Committee is satisfied that the Company’s
current executive compensation program and levels of compensation with respect to long-term equity incentive is aligned with the
Company’s performance and reflect competitive market practices. The Committee is confident that the program does not encourage
risk taking.



NEO Equity Compensation Hedging



Pursuant to the Company’s Policy,
NEOs are not permitted to engage in short selling in shares or purchase financial instruments (including, for greater certainty,
puts, options, calls, prepaid variable formal contracts, equity swaps, collars or units of exchange funds) that are designed to
hedge or offset a change in the market value of common shares or other securities held by an NEO.



85







Summary Compensation Table



The following table sets forth the total
compensation for the NEOs for the year ended December 31, 2013 and for each of the preceding two years:



|                                  |  |      |  |        |         |  |           |  |         |         |  |  | Non-Equity Incentive plan compensation ($) |  |  |           |         |  |                 | 
|--------------------------------- |  | ---- |  | ------ | ------- |  | --------- |  | ------- | ------- |  |  | ------------------------------------------ |  |  | --------- | ------- |  | --------------- | 
|                                  |  |      |  |        |         |  |           |  |         |         |  |  |                                            |  |  | Long-     |         |  |                 | 
|                                  |  |      |  |        |         |  | Share-    |  |         | Option- |  |  | Annual                                     |  |  | term      |         |  |                 | 
|Name and                          |  |      |  |        |         |  | Based     |  |         | Based   |  |  | incentive                                  |  |  | incentive |         |  | All other       | 
|principal                         |  |      |  | Salary |         |  | Awards(4) |  |         | Awards  |  |  | plan                                       |  |  | plan      |         |  | compensation(5) | 
|position                          |  | Year |  | ($)    |         |  | ($)       |  |         | ($)     |  |  | ($)                                        |  |  | ($)       |         |  | ($)             | 
|N. McMillan                       |  | 2013 |  |        | 281,124 |  |           |  | -       |         |  |  | -                                          |  |  |           | -       |  |                 | 
|President & CEO(1)                |  | 2012 |  |        | 341,550 |  |           |  | -       |         |  |  | 136,620                                    |  |  |           | 140,318 |  |                 | 
|                                  |  | 2011 |  |        | 334,965 |  |           |  | -       |         |  |  | 169,659                                    |  |  |           | 169,659 |  |                 | 
|R. Johnson                        |  | 2013 |  |        | 239,018 |  |           |  | 75,000  |         |  |  | -                                          |  |  |           | -       |  |                 | 
|V.P. Finance & CFO                |  | 2012 |  |        | 229,149 |  |           |  | -       |         |  |  | 80,202                                     |  |  |           | 74,634  |  |                 | 
|                                  |  | 2011 |  |        | 224,808 |  |           |  | -       |         |  |  | 79,744                                     |  |  |           | 79,744  |  |                 | 
|B. Skanderbeg                     |  | 2013 |  |        | 252,064 |  |           |  | 104,000 |         |  |  | -                                          |  |  |           | -       |  |                 | 
|SVP & Chief Operating Officer (2) |  | 2012 |  |        | 236,787 |  |           |  | -       |         |  |  | 132,882                                    |  |  |           | 81,875  |  |                 | 
|                                  |  | 2011 |  |        | 222,287 |  |           |  | -       |         |  |  | 79,840                                     |  |  |           | 79,840  |  |                 | 
|Peter Longo,                      |  | 2013 |  |        | 215,000 |  |           |  | 64,500  |         |  |  | -                                          |  |  |           | -       |  |                 | 
|V.P.  Operations(3)               |  | 2012 |  |        | 189,999 |  |           |  |         |         |  |  | 99,476                                     |  |  |           | 63,311  |  |                 | 



| | (1) | As a result of the decline in gold price during 2013,
the Company initiated a corporate wide cash flow optimization plan with the objective to rationalize expenditures, wherever possible.
The CEO voluntarily adopted a “leave without pay” strategy with resulted in a $57,799 or 17% reduction in his salary
to $281,124.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Mr. B. Skanderbeg was appointed Senior Vice President
& Chief Operating Officer effective September 1, 2012. As part of his compensation package Mr. Skanderbeg received 100,000
options upon appointment valued, using the Black-Scholes option-pricing model at $50,049.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Mr. P. Longo was first appointed Vice President, Operations
on April 1, 2012. As part of his recruitment package Mr. Longo received 50,000 options upon appointment valued, using the Black-Scholes
option-pricing model, at $32,976.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | For compensation purposes, the share-based awards earned
in 2013 will be RSUs and will be granted at the end of March 2014. The number of RSUs granted to each NEO, excluding the CEO,
was determined by dividing the value of the total long-term incentive award by the volume weighted average trading price of the
common shares on the TSX on the last 20 trading days prior to the grant or redemption. Mr. Longo left the Company on April 17,
2014 to pursue other interests.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Other compensation consists of vacation payouts and employee
benefits paid by the Company, including long-term disability and life insurance premiums.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------



86







CEO Target vs Actual Compensation







The above chart illustrates the CEO’s
actual base salary earned, after “leave without pay” discussed prior, and one-time cash bonus of $125,000 paid on the
occasion of the CEO’s retirement after more than 18 years of service to the Company. This compensation package is considerably
lower than the CEO’s target total direct compensation of $815,000 intended to place the CEO at or about the 50th
percentile compared to the comparator group. However, the Committee determined that the Company’s disappointing performance
in 2013, particularly with respect to production, demanded a very constrained approach to executive compensation. For this reason,
the short-term incentive, or cash component of executive compensation, was suspended for all NEOs and the long-term incentive was
provided in cash for the CEO and in a limited number of RSUs for the other NEOs.



Outstanding Equity Awards



The following table summarizes outstanding
equity awards as at December 31, 2013. The value of unexercised in-the-money options at December 31, 2013, is the difference between
the exercise price of the options and the fair market value of the Company’s common shares at year end, which was $0.14.



|2013 Outstanding Equity Awards
|------------------------------
|Name                          
|(a)                           
|A. Neil McMillan              
|                              
|                              
|                              
|                              
|                              
|                              
|Brian Skanderbeg              
|                              
|                              
|                              
|                              
|                              
|                              
|                              
|                              
|Richard Johnson               
|                              
|                              
|                              
|                              
|                              
|                              
|Peter Longo                   
|                              
|                              



87







There were no options granted to the NEO
during the most recently completed financial year.



The following table summarizes the value
vested or earned on outstanding awards for the year ended December 31, 2013:



|                 |  | Awards – Value Vested or Earned During the Year       |        
|---------------- |  | ----------------------------------------------------- | -------
|Name             |  | Share-based awards – Value Vested during the year ($) |        
|(a)              |  | (b)                                                   |        
|A. Neil McMillan |  |                                                       | Nil    
|Brian Skanderbeg |  |                                                       | 104,000
|Richard Johnson  |  |                                                       | 75,000 
|Peter Longo      |  |                                                       | 64,500 



The Company may grant stock options to
Directors, Executive Officers and employees; refer to Item 6.E – “Share Ownership” below. The Company also grants
DSUs to Directors; refer to Item 6.E – “Share Ownership” below. In 2014, the Company granted RSUs to Executive
Officers; refer to Item 6.E – “Share Ownership” below.



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



No funds were set aside or accrued by the
Company during the year ended December 31, 2013, to provide pension, retirement or similar benefits for Directors or Executive
Officers.



| | C. | Board Practices
| | -- | ---------------



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



There were no directors’ service
contracts outstanding with the Company or its subsidiaries during 2013.



88







Committees



There are five standing Board committees
as at December 31, 2013. Note, effective January 1, 2014, the Nominating & Corporate Governance Committee and Reserves Committee
disbanded.



Audit Committee



The Board has determined that all of the
members of the Audit Committee (sometimes referred to in this subsection as the “Committee”) are independent directors
under applicable laws, rules and regulations in Canada and the United States. The Board has determined that each member of the
Audit Committee is “financially literate” within the meaning of the rules of the Canadian securities regulatory authorities
in all of the provinces of Canada relating to audit committees. The Board has determined that Ronald J. Hicks, C.A. (Chair) qualifies
as an “audit committee financial expert” as defined by rules of the SEC.



This Committee is responsible for assisting
the Board in its oversight of the integrity of the Company’s financial statements, the qualifications, performance and independence
of the external auditor, KPMG LLP, the adequacy and effectiveness of internal controls, and compliance with legal and regulatory
requirements. The Committee has the authority to retain and set the compensation of independent counsel and other external advisors
as it deems necessary at the expense of the Company.



The Committee is responsible for recommending
the appointment and revocation of the appointment of the external auditor and for recommending the external auditor’s remuneration.
The Committee is directly responsible for the oversight of the work of the external auditor, including resolution of differences
between Management and the external auditor regarding financial reporting. It has sole authority to approve all audit engagement
fees and terms, as well as the provision of any legally permissible non-audit services provided by the external auditor, and has
established policies and procedures for the pre-approval of audit and legally permissible non-audit services. The Committee is
responsible for reviewing the independence and objectivity of the external auditor, including reviewing any relationships between
the external auditor and the Company that may affect the external auditor’s independence and objectivity. The Committee is
also charged with reviewing any audit issues raised by the external auditor and Management’s response thereto. The Committee
has the authority to communicate directly with the external auditors.



Management of the Company is responsible
for the preparation, presentation and integrity of the Company’s financial statements and for maintaining appropriate accounting
and financial reporting principles, policies, internal controls and procedures designed to ensure compliance with accounting standards
and applicable laws and regulations. The external auditor is responsible for planning and carrying out, in accordance with professional
standards, an audit of the Company’s annual financial statements. The Committee is responsible for reviewing the adequacy
and effectiveness of these activities.



In addition, the Committee has established
a Whistleblower Policy which contains procedures for the receipt and resolution by the Company of complaints concerning accounting,
auditing, internal accounting controls or other matters, as well as procedures for the confidential and anonymous submission by
employees or others of concerns regarding these matters.



For further information relating to the
Audit Committee and the Company’s external auditor, please refer to the section entitled “Audit Committee” in
the Company’s annual information form dated March 28, 2014, which has been filed with securities regulators on SEDAR at www.sedar.com.



Annually, the Committee reviews its Charter
and its own effectiveness in fulfilling its mandate. The Committee is satisfied that it has appropriately fulfilled its mandate
to the best of its ability for the year ended December 31, 2013.



The members of the Audit Committee are
Ronald J. Hicks, C.A. (Chair), Ted J. Nieman, Q.C., J. Robert Kowalishin and Brian Booth.



89







Human Resources & Compensation Committee



The Human Resources & Compensation
Committee (sometimes referred to in this subsection as the “Committee”) is responsible for advising the Board on compensation
and human resources principles, as well as related policies, programs and practices designed to achieve the strategic goals and
financial objectives of the Company. The Committee also makes recommendations to the Board on the compensation of directors and
executive Management, including the CEO and those executives whose compensation is set forth in the Committee’s Report on
Executive Compensation.



The amount of compensation for the CEO
is based on the Committee’s assessment of the CEO’s performance against the Company’s annual goals and objectives.
Compensation for the Senior Vice President & Chief Operating Officer and Vice Presidents is based on the recommendation from
the CEO.



The Committee also reviews and approves
succession plans, leadership development and executive compensation disclosure.



The Board recognizes the importance of
appointing to the Committee knowledgeable and experienced individuals who have the background in executive compensation necessary
to fulfill the Committee’s obligation to the Board and shareholders. All of the Committee members have experience in the
area of executive compensation through their roles as senior leaders in other businesses. The Committee has an annual work plan
which is reviewed and updated as necessary.



The Committee recognizes that independence
from Management is fundamental to its effectiveness in managing executive compensation programs. Accordingly, the Committee was
composed solely of independent directors. At each of its meetings the Committee has the opportunity to hold an “in-camera”
session without Management present. The Committee chose to do so twice during the year.



The Committee has sole authority to retain
and approve the fees of any independent compensation consultant to assist in determining compensation for executives of the Company.
During the year, the Committee engaged the services of Mercer (Canada) Limited (“Mercer”) an independent compensation
consultant, to provide advice and counsel on executive and director compensation and other matters. The Chair of the Committee
has direct access to the independent consultant. During 2013 the fees for consultant services amounted to $10,983 (2012 - $56,744).



The Committee reviews its Charter annually
and assesses its effectiveness in fulfilling its mandate. The Committee is satisfied that it has appropriately fulfilled its mandate
to the best of its ability for the year ended December 31, 2013.



The members of the Human Resources &
Compensation Committee are Rita M. Mirwald (Chair); Ray A. McKay, Ronald J. Hicks, C.A. and Ted J. Nieman, Q.C. (Ex-Officio).



Nominating & Corporate Governance
Committee



The Nominating & Corporate Governance
Committee (sometimes referred to in this subsection as the “Committee”) is responsible for establishing the Company’s
governance policies and practices, identifying individuals qualified to become members of the Board, reviewing the composition
of the Board and its Committees, recommending certain Board and Committee meeting venues and monitoring compliance with the Company’s
Code of Ethics.



The Committee establishes and recommends
to the Board the qualifications and attributes that individuals should have in order to be nominated for election or re-election
as a corporate director. The Committee reviews the appropriateness of both the Board’s current size and its composition as
a whole.



The Committee has developed a process for
assessing the performance and effectiveness of the Board and its Committees which includes annual performance reviews.



The Committee recognizes that independence
from Management is fundamental to its effectiveness. Accordingly, the Committee is comprised solely of independent directors. At
each of its meetings the Committee has the opportunity to hold an “in-camera” session without Management present.



90







Annually, the Committee reviews its Charter
and its own effectiveness in fulfilling its mandate. The Committee is satisfied that it has appropriately fulfilled its mandate
to the best of its ability for the year ended December 31, 2013.



The members of the Nominating & Corporate Governance Committee
are Ted J. Nieman, Q.C., Ronald J. Hicks, C.A., J. Robert Kowalishin, Ray A. McKay, Rita M. Mirwald and Brian Booth.



Safety, Health & Environmental Committee



The Safety, Health & Environmental
Committee (sometimes referred to in this subsection as the “Committee”) is responsible for the review of safety, health
and environmental policies and programs, to oversee the Company’s safety, health and environmental performance, to monitor
current and future regulatory issues and to make recommendations, where appropriate, on significant matters in respect of safety,
health and environmental matters to the Board.



The Committee recognizes that independence
from Management is fundamental to its effectiveness. Accordingly, the Committee was composed solely of independent directors. At
each of its meetings the Committee has the opportunity to hold an “in-camera” session without Management present.



Annually, the Committee reviews its Charter
and its own effectiveness in fulfilling its mandate. The Committee is satisfied that it has appropriately fulfilled its mandate
to the best of its ability for the year ended December 31, 2013.



The members of the Safety, Health &
Environmental Committee are J. Robert Kowalishin (Chair), Ray A. McKay, Rita M. Mirwald, Brian Booth and Ted Nieman, Q.C. (Ex-Officio).



Reserves Committee



The Reserves Committee (sometimes referred
to in this subsection as the “Committee”) is responsible for the annual review of the Company’s Mineral Reserves
and Mineral Resources; the integrity of the Company’s reserves evaluation and reporting system; the Company’s compliance
with legal and regulatory requirements related to reserves evaluation, preparation and disclosure; the qualifications and independence,
if applicable, of the Company’s Qualified Persons; the adequacy of performance of the Company’s independent engineering
consultants; and the business practices and ethical standards of the Company in relation to the preparation and disclosure of reserves.



The Committee recognizes that independence
from Management is fundamental to its effectiveness. Accordingly, the Committee is comprised solely of independent directors. At
each of its meetings the Committee has the opportunity to hold an “in-camera” session without Management present.



Annually, the Committee reviews its Charter
and its own effectiveness in fulfilling its mandate. The Committee is satisfied that it has appropriately fulfilled its mandate
to the best of its ability for the year ended December 31, 2013.



The members of the Reserves Committee are
Ted J. Nieman, Q.C., Ronald J. Hicks, C.A., J. Robert Kowalishin, Ray A. McKay, Rita M. Mirwald and Brian Booth.



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



The Company had approximately 320 employees
(20 at head office and 300 at the Seabee Gold Operation) as of December 31, 2013. See Item 4.D – “Seabee Property -
Mine Details”.



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



Shareholdings of Directors and Executive
Officers



The following table sets forth, as of April
30, 2014, the number of the Company’s common shares beneficially owned by a) the directors and executive officers of the
Company individually, and as a group and (b) the percentage ownership of the outstanding common shares represented by such shares.
The security holders listed below are deemed to be the beneficial owners of common shares underlying options which are exercisable
within 60 days from the above date.



91







|Title of Class           |  | Name of Beneficial Owner               |  | Percent of Ownership |      |   | Number of Shares (1) | 
|------------------------ |  | -------------------------------------- |  | -------------------- | ---- | - | -------------------- | 
|                         |  |                                        |  |                      |      |   |                      | 
|Common                   |  | Ted J. Nieman, Q.C.                    |  |                      | <1   | % |                      | 
|Common                   |  | Ronald J. Hicks, C.A.                  |  |                      | <1   | % |                      | 
|Common                   |  | J. Robert Kowalishin, P. Eng.          |  |                      | <1   | % |                      | 
|Common                   |  | Ray A. McKay, C.M.                     |  |                      | <1   | % |                      | 
|Common                   |  | Rita M. Mirwald, C.M.                  |  |                      | <1   | % |                      | 
|Common                   |  | Mike Sylvestre, M.Sc., P. Eng., ICD.D. |  |                      | <1   | % |                      | 
|Common                   |  | Brian Booth, P.Geo.                    |  |                      | <1   | % |                      | 
|Common                   |  | Brian Skanderbeg, P.Geo.               |  |                      | <1   | % |                      | 
|Common                   |  | Rick Johnson, C.A.                     |  |                      | <1   | % |                      | 
|                         |  |                                        |  |                      |      |   |                      | 
|Total Directors/Officers |  |                                        |  |                      | <1.0 | % |                      | 



(1)  Based on 188,155,978
common shares outstanding as of April 30, 2014.



Stock Options Outstanding



The following table sets forth the outstanding
stock options granted to directors, officers and other employees as of April 30, 2014:



|Name                                   |  | Number of Shares of Common Stock |         |  | Exercise Price |  |      | Expiration Date | 
|-------------------------------------- |  | -------------------------------- | ------- |  | -------------- |  | ---- | --------------- | 
|                                       |  |                                  |         |  |                |  |      |                 | 
|Ted J. Nieman, Q.C.                    |  |                                  | 60,000  |  |                |  | 1.59 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 1.39 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 0.50 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 1.24 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 1.03 |                 | 
|                                       |  |                                  | 20,000  |  |                |  | 2.20 |                 | 
|                                       |  |                                  | 70,717  |  |                |  | 1.36 |                 | 
|Ronald J. Hicks, C.A.                  |  |                                  | 10,000  |  |                |  | 1.75 |                 | 
|                                       |  |                                  | 60,000  |  |                |  | 1.72 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 1.39 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 0.50 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 1.24 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 1.03 |                 | 
|                                       |  |                                  | 20,000  |  |                |  | 2.20 |                 | 
|                                       |  |                                  | 70,717  |  |                |  | 1.36 |                 | 
|J. Robert Kowalishin, P. Eng.          |  |                                  | 60,000  |  |                |  | 1.86 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 1.39 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 0.50 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 1.24 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 1.03 |                 | 
|                                       |  |                                  | 20,000  |  |                |  | 2.20 |                 | 
|                                       |  |                                  | 70,717  |  |                |  | 1.36 |                 | 
|Ray A. McKay                           |  |                                  | 60,000  |  |                |  | 1.76 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 1.39 |                 | 
|                                       |  |                                  | 10,000  |  |                |  | 1.24 |                 | 
|                                       |  |                                  | 20,000  |  |                |  | 2.20 |                 | 
|                                       |  |                                  | 70,717  |  |                |  | 1.36 |                 | 
|Rita M. Mirwald, C.M.                  |  |                                  | 20,000  |  |                |  | 2.20 |                 | 
|                                       |  |                                  | 70,717  |  |                |  | 1.36 |                 | 
|Mike Sylvestre, M.Sc., P. Eng., ICD.D. |  |                                  | 20,000  |  |                |  | 1.75 |                 | 
|                                       |  |                                  | 70,717  |  |                |  | 1.36 |                 | 
|Brian Booth, P.Geo.                    |  |                                  | 71,239  |  |                |  | 1.06 |                 | 
|Brian Skanderbeg, P.Geo.               |  |                                  | 100,000 |  |                |  | 1.70 |                 | 
|                                       |  |                                  | 9,800   |  |                |  | 1.27 |                 | 
|                                       |  |                                  | 100,000 |  |                |  | 1.02 |                 | 
|                                       |  |                                  | 77,590  |  |                |  | 0.78 |                 | 
|                                       |  |                                  | 81,512  |  |                |  | 1.04 |                 | 
|                                       |  |                                  | 43,433  |  |                |  | 2.38 |                 | 
|                                       |  |                                  | 95,457  |  |                |  | 1.35 |                 | 
|                                       |  |                                  | 100,000 |  |                |  | 0.78 |                 | 
|                                       |  |                                  | 276,110 |  |                |  | 0.47 |                 | 
|Rick Johnson, C.A.                     |  |                                  | 100,000 |  |                |  | 1.15 |                 | 
|                                       |  |                                  | 16,300  |  |                |  | 1.27 |                 | 
|                                       |  |                                  | 96,290  |  |                |  | 0.78 |                 | 
|                                       |  |                                  | 99,941  |  |                |  | 1.04 |                 | 
|                                       |  |                                  | 46,116  |  |                |  | 2.38 |                 | 
|                                       |  |                                  | 95,342  |  |                |  | 1.35 |                 | 
|                                       |  |                                  | 267,340 |  |                |  | 0.47 |                 | 
|                                       |  |                                  |         |  |                |  |      |                 | 
|Total Directors/Officers               |  |                                  |         |  |                |  |      |                 | 



92







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



Stock options for up to 9% of the number
of issued and outstanding common shares may be granted from time to time, provided that stock options in favor of any one individual
may not exceed 1% of the issued and outstanding common shares. No stock option granted under the stock option program is transferable
by the optionee other than by the laws of descent and distribution, and each stock option is exercisable during the lifetime of
the optionee only by such optionee.



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



Deferred Share Units Outstanding



The Company offers a Deferred Share Unit
Plan (“DSUP”) to non-employee Directors. A Deferred Share Unit (“DSU”) is a notional unit that reflects
the market value of a single common share of Claude. A portion of each Director’s annual retainer is paid in DSUs. Each DSU
fully vests upon award and are redeemable for cash upon a director leaving the Company’s Board of Directors. The redemption
amount will be based upon the weighted average of the closing prices of the common shares of Claude on the TSX for the last 20
trading days prior to the redemption date multiplied by the number of DSUs held by the Director. Under no circumstances shall Deferred
Share Units be considered any class of shares of the Company, nor entitle any Participant to exercise voting rights or any other
rights attaching to the ownership of Shares, nor shall any Participant be considered the owner of Shares by virtue of the award
of DSUs.



93







The following table sets forth the deferred
share units granted to directors as of April 30, 2014:



|Name of Beneficial Owner               |  |  |          
|-------------------------------------- |  |  | ---------
|                                       |  |  |          
|Ted J. Nieman, Q.C.                    |  |  | 660,291  
|Ronald J. Hicks, C.A.                  |  |  | 660,291  
|J. Robert Kowalishin, P. Eng.          |  |  | 660,291  
|Ray A. McKay                           |  |  | 660,291  
|Rita M. Mirwald, C.M.                  |  |  | 660,291  
|Mike Sylvestre, M.Sc., P. Eng., ICD.D. |  |  | 660,291  
|Brian Booth, P.Geo.                    |  |  | 661,821  
|                                       |  |  |          
|Total DSUs held by Directors           |  |  | 4,623,567



Restricted Share Units Outstanding



In 2014, the Company established a Restricted
Share Unit (“RSU”) plan whereby it provides each plan participant an annual grant of RSUs in an amount determined by
the Company’s Board of Directors. An RSU is a notional unit that reflects the market value of a single common share of Claude
that entitles the participant to a cash payment for all fully vested units. RSUs vest annually over a three-year period. The final
value of the RSUs will be based upon the weighted average of the closing prices of the common shares of Claude on the TSX for the
last 20 trading days prior to the redemption date multiplied by the number of RSUs held by participants. The existence of any RSUs
shall not affect in any way the right or power of the Company or its shareholders to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company’s capital structure or its business, or any amalgamation, combination, merger
or consolidation involving the Company or to create or issue any bonds, debentures, shares or other securities of the Company or
the rights and conditions attaching thereto or to effect the dissolution or liquidation of the Company or any sale or transfer
of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar nature or otherwise.



The following table sets forth the restricted
share units granted to executive as of April 30, 2014:





|Name ofBeneficial Owner     |  |  |        
|--------------------------- |  |  | -------
|                            |  |  |        
|Brian Skanderbeg, P.Geo.    |  |  | 452,174
|Rick Johnson, C.A.          |  |  | 326,087
|                            |  |  |        
|Total RSUs held by Officers |  |  | 778,261



Item 7. Major Shareholders and Related
Party Transactions



| | A. | Major Shareholders
| | -- | ------------------



Our company’s common shares are owned
by residents of Canada, the United States and other foreign Countries. To the extent known to our company, our company is not directly
owned or controlled by another corporation, by any foreign government or by any other natural or legal person severally or jointly.
To the extent known to our company, there are no arrangements, the operation of which may at a subsequent date result in a change
in control of our company.



94







Our company’s registered shareholders’
list for our common shares, dated April 10, 2014, showed 619 registered shareholders and 188,155,978 shares outstanding of which
129 of these registered shareholders were U.S. residents including one that is a U.S. depository holding 2,867,765 common shares
representing 1.5 % of the issued and outstanding shares of Claude.



The Company is not aware of any person
who beneficially owns 5% or more of the Company’s voting securities.





| | B. | Related Party Transactions
| | -- | --------------------------



Key Management Personnel



Key management includes the Company’s
directors and executive management. This compensation is included in exploration costs and general and administrative expenses.



For the year ended December 31, 2013, 2012
and 2011, the following compensation was paid to key management:



|December 31                                                            |  | 2013 |       |  | 2012 |   |       | 2011 | 
|---------------------------------------------------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- | 
|                                                                       |  |      |       |  |      |   |       |      | 
|Cash compensation – Salaries, short-term incentives and other Benefits |  | $    | 1,406 |  |      | $ | 1,810 |      | 
|Long term incentives, including share-based payments                   |  |      | 1,069 |  |      |   | 1,324 |      | 
|Total compensation paid to key management personnel                    |  | $    | 2,475 |  |      | $ | 3,134 |      | 



Compensation of the Company’s key
management personnel includes salaries, non-cash benefits and board fees. Executive officers also participate in the Company’s
stock compensation and ESPP programs. The above transactions were conducted in the normal course of business.



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



This Form 20-F is being filed as an annual
report under the Exchange Act and, as such, there is no requirement to provide any information under this sub-item.



Item 8. Financial Information



| | A. | Consolidated Statements and Other Financial Information
| | -- | -------------------------------------------------------



| | 1. | See Item 18 for the Company’s consolidated financial statements.
| | -- | ----------------------------------------------------------------



| | 2. | See Item 18 for the Company’s consolidated financial statements which cover the last three
financial years
| | -- | ----------------------------------------------------------------------------------------------------------



| | 3. | See page F-1 for the audit report of our auditors, entitled “Independent Auditors’
Report.”
| | -- | -------------------------------------------------------------------------------------------



| | 4. | Not applicable
| | -- | --------------



| | 5. | Not applicable
| | -- | --------------



| | 6. | Claude Resources Inc. is a Canadian gold exploration and mining Company. All gold sales are to
U.S. based bullion brokers.
| | -- | --------------------------------------------------------------------------------------------------------------------------



95







| | 7. | Legal Proceedings: All industries, including the mining industry, are subject to legal claims,
with and without merit. The Company is currently involved in litigation of a non-material nature, including in relation to alleged
infractions of environmental compliance matters, and may become involved in other legal disputes in the future. Defence and settlement
costs can be substantial, even with respect to claims that have no merit. Due to the inherent uncertainty of the litigation process,
there can be no assurance that the resolution of any particular legal proceedings will not have a material adverse effect on the
Company’s financial position or results of operations.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 8. | Dividends: The Company has not paid dividends on its common shares in the past and does not expect
to pay dividends in the near future.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------



| | B. | Significant Changes
| | -- | -------------------



There have been no significant changes
of financial condition since the most recent financial statements dated December 31, 2013 other than described below:



On March 4, 2014, the Company completed
the sale of its 100 percent interest in the Madsen Gold Project in Red Lake, Ontario, Canada to Laurentian Goldfields Ltd. (“Laurentian”).
Upon closing of the transaction, the Company received $6.25 million cash and will receive $2.5 million of cash or equity (at Laurentian’s
option) payable six months following the close of the transaction. Cash proceeds were utilized to reduce bank debt and for working
capital purposes. In addition, Claude received 9,776,885 shares of Laurentian.



Subsequent to December 31, 2013, the Company
executed a Waiver and Credit Amendment Agreement (“Amendment Agreement”) which renegotiated the terms of its $25.0
million term loan (the “Loan”) with CCP. The Amendment Agreement has modified certain covenants within the original
Term loan with CCP. The timing of principal payments has not changed pursuant to the Amendment Agreement; monthly payments of $0.3
million will begin in May 2014. Interest on the Term loan remains fixed at 10 percent, compounds monthly and is payable monthly.
The maturity date of the Term loan remains 60 months from closing (April 2018). As a condition of the amending agreement, the Company
agreed to exercise commercially reasonable efforts to effect a sale or other transaction of all or a portion of its assets by July
31, 2014. The Company has engaged a financial advisor to assist with this process. Upon mutual agreement with CCP, prepayment fees
pursuant to the original agreement have been waived. In addition, the 5,750,000 common share purchase warrants pursuant to the
original agreement have been cancelled in conjunction with the waiver of the covenant breach for consideration of $1.0 million.



On March 20, 2014, the Company completed
an NSR royalty agreement on the Seabee Gold Operation. Pursuant to this transaction, proceeds of US$12.0 million were received
by the Company in exchange for a three (3) percent NSR. Under the terms of the NSR, the Company has the right to purchase 50 percent
of the NSR for US$12.0 million, expiring on December 31, 2016. The NSR payments will be paid quarterly in cash or in physical gold
at the average price of gold in each calendar month. Proceeds from the NSR will be used for further development at the Seabee Gold
Operation and for general working capital purposes primarily related to the Seabee Gold Operation.



On March 28, 2014, Claude completed a private
placement (the “Private Placement”) of common shares in the capital of the Company (“Common Shares”). The
Private Placement consisted of the issuance of 4,545,454 Common Shares at a price of $0.22 per Common Share, being the market price
of the Common Shares within the meaning of the Toronto Stock Exchange Company Manual, to CCP. The Common Shares have been issued
to CCP as payment for a waiver being granted by CCP in connection with a Credit Agreement dated as of April 5, 2013 as a result
of a covenant breach at December 31, 2013, as well as the modification of certain covenants. Concurrently with satisfaction of
this one-time payment, the 5.75 million common share purchase warrants pursuant to the original agreement were cancelled in conjunction
with the waiver.



Item 9. The Offer and Listing



| | A. | Offer and Listing Details
| | -- | -------------------------



The following table sets forth the reported
high and low closing bid prices of the Company’s common shares on the TSX, OTC Markets Groups’ OTCQB Marketplace (“OTCQB”)
(November 2013 forward) and New York Stock Exchange MKT (“NYSE MKT”) (up to October 31, 2013) for (a) the five most
recent fiscal years; (b) each quarterly period for the past two fiscal years; and (c) for the last six months ending March 31,
2014:



96







|                           |  | Common Shares Trading Activity |     
|-------------------------- |  | ------------------------------ | ----
|                           |  | TSX                            |     
|                           |  | Canadian Dollars               |     
|Period                     |  | High                           |     
|                           |  |                                |     
|March, 2014                |  | $                              | 0.26
|February, 2014             |  | $                              | 0.21
|January, 2014              |  | $                              | 0.24
|December, 2013             |  | $                              | 0.16
|November, 2013             |  | $                              | 0.19
|October, 2013              |  | $                              | 0.24
|                           |  |                                |     
|Fiscal Year Ended 12/31/13 |  | $                              | 0.61
|Fiscal Year Ended 12/31/12 |  | $                              | 1.53
|Fiscal Year Ended 12/31/11 |  | $                              | 2.79
|Fiscal Year Ended 12/31/10 |  | $                              | 2.30
|Fiscal Year Ended 12/31/09 |  | $                              | 1.37
|                           |  |                                |     
|Quarter Ended 3/31/2014    |  | $                              | 0.26
|Quarter Ended 12/31/2013   |  | $                              | 0.24
|Quarter Ended 9/30/2013    |  | $                              | 0.35
|Quarter Ended 6/30/2013    |  | $                              | 0.46
|Quarter Ended 3/31/2013    |  | $                              | 0.61
|Quarter Ended 12/31/2012   |  | $                              | 0.82
|Quarter Ended 9/30/2012    |  | $                              | 0.89
|Quarter Ended 6/30/2012    |  | $                              | 1.06



The closing price of the common shares
on March 31, 2014 was $0.205 on the TSX and US$0.1899 on the OTCQB.



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



Not applicable.



| | C. | Markets
| | -- | -------



The Company’s common shares began
trading on the TSX in Toronto, Ontario, Canada on September 14, 1987. The Company’s common shares are quoted on the TSX under
the symbol “CRJ”. The common shares of the Company were listed on the NYSE MKT on December 15, 2003, under the symbol
“CGR”. On October 9, 2013, the Company announced its intention to voluntarily delist its common shares from the NYSE
MKT. On November 1, 2013, the Company announced that as of November 1, 2013, its common stock began trading on the OTCQB under
the symbol “CLGRF”.



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



Not applicable.



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



Not applicable.



| | F. | Expenses of the Issue
| | -- | ---------------------



Not applicable.



97







Item 10. Additional Information



| | A. | Share Capital
| | -- | -------------



Not applicable.



| | B. | Memorandum and Articles of Association
| | -- | --------------------------------------



The information called for by this item
is contained in an Exhibit 1.1 to the Company’s registration statement on Form 20-F filed with the Commission on May 15,
2002 and is incorporated herein by reference.



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



The Company has no material contracts other
than those entered into in the ordinary course of business and the following:



| | (a) | the CCP Debt Facility;
| | --- | ----------------------

| | (b) | the Waiver and Credit Agreement Amendment;
| | --- | ------------------------------------------

| | (c) | the Madsen Asset Sale Agreement;
| | --- | --------------------------------

| | (d) | the Royalty Purchase Agreement and the NSR Royalty Agreement.
| | --- | -------------------------------------------------------------



CCP Debt Facility



On April 5, 2013, the Company executed
an agreement for a five-year $25.0 million term loan (the “Term Loan”) with Crown Capital Partnership Inc. (“CCP”).
Interest is fixed at 10 percent, compounds monthly and is payable monthly. Principal payments will begin in May 2014 and will be
payable monthly. The maturity date of the Term Loan is 60 months from closing.



Repayment Schedule



The tables below represent scheduled repayment
and maturity of the Term Loan over the next five years.



|Period          |  | Monthly Amount |         |  | Annual Amount |  
|--------------- |  | -------------- | ------- |  | ------------- | -
|Months 1 – 12   |  |                | NIL     |  |               |  
|Months 13 – 59  |  | $              | 300,000 |  |               | $
|Due at Maturity |  |                |         |  |               | $



|                           |  | Term Loan |        |  | Interest |   |       | Future Value of | 
|-------------------------- |  | --------- | ------ |  | -------- | - | ----- | --------------- | 
|                           |  | Principal |        |  |          |   |       | Term Loan       | 
|                           |  | Payments  |        |  |          |   |       | Payments        | 
|                           |  | DEC 31    |        |  | DEC 31   |   |       | DEC 31          | 
|                           |  | 2013      |        |  | 2013     |   |       | 2013            | 
|                           |  |           |        |  |          |   |       |                 | 
|Less than one year         |  | $         | 2,400  |  |          | $ | 2,430 |                 | 
|Between one and five years |  |           | 22,600 |  |          |   | 5,593 |                 | 
|                           |  | $         | 25,000 |  |          | $ | 8,023 |                 | 



The Term Loan is subordinate to all of
the Company’s other short-term and long-term Loans and borrowings and contains early retraction and redemption provisions.
After 12 months following the closing of this arrangement, the Company has the right to prepay the term loan subject to a prepayment
fee (calculated on the amount being prepaid) of:



|Months Following Closing |  | Prepayment Fee |  
|------------------------ |  | -------------- | -
|Months 13 – 24           |  |                | 2
|Months 25 – 36           |  |                | 1
|Months 37 – 60           |  |                | 0



98







In conjunction with the closing of this
Term Loan, the Company granted 5,750,000 common share purchase warrants priced at $0.70 per common share purchase warrant. These
common share purchase warrants are exercisable by the holder, in whole or in part, at any time from closing until five years following
closing. The value of the common share purchase warrants associated with the term loan on the date of issuance was $1.0 million.
Subsequent to December 31, 2013, pursuant to a credit agreement waiver agreement with CCP, these warrants were cancelled for consideration
of $1.0 million, which was paid in common shares of the Company.



Term Loan Amendment Agreement



Claude’s Term Loan with CCP contains
certain covenants stating that at the end of each fiscal quarter, the Company must maintain a current ratio of not less than 1.25,
a minimum cash flow coverage ratio (defined in the covenant as the ratio of the Company’s (i) Net EBITDA for the twelve-month
period immediately preceding such date to (ii) Annual Debt Service on such date) of not less than 1.25 and, as at December 31,
2013, a minimum TTM EBITDA of $5.0 million.



Subsequent to December 31, 2013, the Company
executed a Waiver and Credit Amendment Agreement (“Amendment Agreement”) which renegotiated the terms of its $25.0
million term loan (the “Loan”) with Crown Capital Partners Inc. (“CCP”). The Amendment Agreement has modified
certain covenants within the original Term loan with CCP. The timing of principal payments has not changed pursuant to the Amendment
Agreement; monthly payments of $0.3 million will begin in May 2014. Interest on the Term loan remains fixed at 10 percent, compounds
monthly and is payable monthly. The maturity date of the Term loan remains 60 months from closing (April 2018). The Company has
engaged a financial advisor to assist with this process. Upon mutual agreement with CCP, prepayment fees pursuant to the original
agreement have been waived. In addition, the 5,750,000 common share purchase warrants pursuant to the original agreement have been
cancelled in conjunction with the waiver of the covenant breach for consideration of $1.0 million.



Madsen Asset Sale Agreement



During the first quarter of 2014, the Company
completed the sale of the Madsen Gold Project to Laurentian Goldfields Ltd. (“Laurentian”). Claude received $6.25 million
cash and will receive $2.5 million of cash or equity (at Laurentian’s option) payable six months following the close of the
transaction. Cash proceeds were utilized to reduce bank debt and for working capital purposes. In addition, Claude received 9,776,885
shares of Laurentian. The sale of the Madsen Gold Project aligns with Claude’s strategic plan to focus on improving the Company’s
cash flow, margins and Balance Sheet.



Royalty Purchase Agreement and Net Smelter
Return Royalty Agreement



On March 20, 2014, the Company completed
a Net Smelter Return (“NSR”) royalty agreement in conjunction and concurrently with a royalty purchase agreement on
the Seabee Gold Operation.  Pursuant to the royalty purchase agreement, proceeds of US$12.0 million were received by the Company
in exchange for a three (3) percent NSR.  Under the terms of the NSR royalty agreement, the Company has the right to repurchase
50 percent of the NSR for US$12.0 million, expiring on December 31, 2016.  Pursuant to the NSR royalty agreement, the NSR
payments will be paid quarterly in cash or in physical gold at the average price of gold in each calendar month.  Proceeds
from the NSR will be used for further development at the Seabee Gold Operation and for general working capital purposes primarily
related to the Seabee Gold Operation.



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



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



99













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



This summary is of a general nature only
and is not intended to be, and should not be construed to be, legal advice to any holder or prospective holder of our common shares,
and no opinion or representation to any holder or prospective holder of our common shares is hereby made. Accordingly, holders
and prospective holders of our common shares should consult with their own legal advisors with respect to the consequences of purchasing
and owning our common shares.



The Investment Canada Actgoverns the direct or indirect
acquisition of control of an existing Canadian business by non-Canadians. Under the Investment Canada Act, non-Canadian
persons or entities acquiring “control” (as defined in the Investment Canada Act) of a corporation carrying
on business in Canada are required to either notify, or file an application for review with, Industry Canada, unless a specific
exemption, as set out in the Investment Canada Act, applies. Industry Canada may review any transaction which results in
the direct or indirect acquisition of control of a Canadian business, where the gross value of corporate assets exceeds certain
threshold levels (which are higher for investors from members of the World Trade Organization, including United States residents,
or World Trade Organization member-controlled companies) or where the activity of the business is related to Canada’s cultural
heritage or national identity. No change of voting control will be deemed to have occurred, for purposes of the Investment Canada
Act, if less than one-third of the voting control of a Canadian corporation is acquired by an investor. In addition, the Investment
Canada Actpermits the Canadian government to review any investment where the responsible Minister has reasonable grounds to
believe that an investment by a non-Canadian could be injurious to national security. No financial threshold applies to a national
security review. The Minister may deny the investment, ask for undertakings, provide terms or conditions for the investment or,
where the investment has already been made, require divestment. Review can occur before or after closing and may apply to corporate
re-organizations where there is no change in ultimate control.



If an investment is reviewable under the Investment Canada
Act, an application for review in the form prescribed is normally required to be filed with Industry Canada prior to the investment
taking place, and the investment may not be implemented until the review has been completed and the Minister responsible for the
Investment Canada Actis satisfied that the investment is likely to be of net benefit to Canada. If the Minister is not
satisfied that the investment is likely to be of net benefit to Canada, the non-Canadian applicant must not implement the investment,
or if the investment has been implemented, may be required to divest itself of control of the Canadian business that is the subject
of the investment. The Minister is required to provide reasons for a decision that an investment is not of net benefit to Canada.



Certain transactions relating to our common shares will generally
be exempt from the Investment Canada Act, subject to the Minister’s prerogative to conduct a national security review,
including:



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



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



| | (c) | the acquisition of control of our Company by reason of an amalgamation, merger, consolidation or
corporate reorganization following which the ultimate direct or indirect control in fact of our Company, through ownership of our
common shares, remains unchanged.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





100







| | (E) | Taxation
| | --- | --------



Canadian Federal Income Tax Consequences



The following summarizes the principal
Canadian federal income tax consequences applicable to the holding and disposition of common shares in the capital of the Company
by a United States resident, and who holds common shares solely as capital property (a “U.S. Holder” as defined below).
This summary is based on the current provisions of the Income Tax Act(Canada) (the “Tax Act”), the regulations
thereunder, all amendments thereto publicly proposed by the government of Canada, the published administrative practices of Canada
Revenue Agency, and on the current provisions of the Canada-United States Income Tax Convention, 1980, as amended (the “Treaty”).



Except as otherwise expressly provided,
this summary does not take into account any provincial, territorial or foreign (including without limitation, any United States)
tax law or treaty. It has been assumed that all currently proposed amendments will be enacted substantially as proposed and that
there is no other relevant change in any governing law or practice, although no assurance can be given in these respects. Each
U.S. Holder is advised to obtain tax and legal advice applicable to such U.S. Holder’s particular circumstances. Every U.S.
Holder is liable to pay a Canadian withholding tax on every dividend that is or is deemed to be paid or credited to the U.S. Holder
on the U.S. Holder’s common shares. The statutory rate of withholding tax is 25% of the gross amount of the dividend paid.
The Treaty reduces the statutory rate with respect to dividends paid to a U.S. Holder for the purposes of the Treaty. Where applicable,
the general rate of withholding tax under the Treaty is 15% of the gross amount of the dividend, but if the U.S. Holder is a company
that owns at least 10% of the voting stock of the Company and beneficially owns the dividend, the rate of withholding tax is 5%
for dividends paid or credited after 1996 to such corporate U.S. Holder. The Company is required to withhold the applicable tax
from the dividend payable to the U.S. Holder, and to remit the tax to the Receiver General of Canada for the account of the U.S.
Holder.



Pursuant to the Tax Act, a U.S. Holder
will not be subject to Canadian capital gains tax on any capital gain realized on an actual or deemed disposition of a common share,
including a deemed disposition on death, provided that the U.S. Holder did not hold the common share as capital property used in
carrying on a business in Canada, and that neither the U. S. Holder nor persons with whom the U.S. Holder did not deal at arm’s
length (alone or together) owned or had the right or an option to acquire 25% or more of the issued shares of any class of the
Company at any time in the five years immediately preceding the disposition.



United States Tax Consequences



The following summarizes the principal
U.S. federal income tax consequences to the holding and disposition of common shares in the capital of the Company by U.S. Holders
and who hold their shares as capital assets within the meaning of Section 1221 of the U.S. Internal Revenue Code (“the Code”).



U.S. Holders



As used herein, a “U.S. Holder”
includes a holder of Common Shares who is a citizen or resident of the United States, a corporation (including any other entity
treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or
of any political subdivision thereof, and an estate whose income is subject to U.S. federal income taxation regardless of its source,
or a trust (a) if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S.
persons have the authority to control all substantial decisions of the trust, or (b) that has elected to be treated as a U.S. person
under applicable U.S. Treasury Regulations. If a partnership (including for this purpose any entity treated as a partnership for
U.S. federal income tax purposes) holds common shares, the tax treatment of a partner generally will depend upon the status of
the partner and the activities of the partnership. If a U.S. Holder is a partner in a partnership that holds the common shares,
the U.S. Holder should consult its tax advisor regarding the specific tax consequences of owning and disposing of its shares. A
U.S. Holder does not include: (1) those who own (directly, or indirectly by attribution) 10% or more of the share capital or voting
power of the Company; (2) are persons subject to the alternative minimum tax; (3) persons holding the shares as part of a straddle,
hedging or conversion transaction and (4) persons subject to special provisions of federal income tax laws, such as tax exempt
organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated
investment companies, broker-dealers, non-resident alien individuals or foreign corporations whose ownership of common shares is
effectively connected with the conduct of a trade or business in the United States and shareholders who acquired their stock through
the exercise of employee stock options or otherwise as compensation.



101







The following discussion is based upon
the sections of the Code, U.S. Treasury Regulations, published Internal Revenue Service rulings, published administrative positions
of the Internal Revenue Service and court decisions that are currently applicable, any or all of which could be materially adversely
changed, possibly on a retroactive basis, at any time. In addition, this discussion does not consider the potential effects, both
adverse and beneficial, of recently proposed legislation which, if enacted could be applied, possibly on a retroactive basis, at
any time. This discussion does not address all U.S. federal income tax matters that may be relevant to a U.S. Holder in light of
its particular circumstances, and it does not address any state, local and non-U.S. tax consequences of purchasing, owning and
disposing of the common shares of the Company. Each U.S. Holder should consult with his or her own tax advisor with respect to
the tax considerations relevant to such U.S. Holder and its particular circumstances.



Dividends and Other Distributions on
the Common Shares



Subject to the passive foreign investment
company rules discussed below under “Passive Foreign Investment Company,” the gross amount of all our distributions
to a U.S. Holder with respect to the common shares (including any Canadian taxes withheld there from) will be included in the U.S.
Holder’s gross income as foreign source ordinary dividend income on the date of receipt by the U.S. Holder, but only to the
extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income
tax principles). To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits, it
will be treated first as a tax-free return of a U.S. Holder’s tax basis in its common shares, and to the extent the amount
of the distribution exceeds the U.S. Holder’s tax basis, the excess will be taxed as capital gain. We do not currently, and
we do not intend to, calculate our earnings and profits, if any, under U.S. federal income tax principles. Therefore, a U.S. Holder
should expect that a distribution, if any, will be treated as a dividend. The dividends will not be eligible for the dividends-received
deduction allowed to corporations in respect of dividends received from other U.S. corporations.



With respect to non-corporate U.S. Holders,
dividends may constitute “qualified dividend income” that is taxed at the lower applicable capital gains rate provided
that (1) the common shares are readily tradable on an established securities market in the United States or we are eligible for
the benefits of the income tax treaty, (2) we are not a passive foreign investment company (as discussed below) for either our
taxable year in which the dividend was paid or the preceding taxable year, (3) certain holding period requirements are met and
(4) the U.S. Holder is not under an obligation to make related payments with respect to positions in substantially similar or related
property. U.S. Treasury guidance indicates that our common shares, which are listed on OTCQB Equities, are readily tradable on
an established securities market in the United States. There can be no assurance that our common shares will be considered readily
tradable on an established securities market in later years. U.S. Holders should consult their tax advisors regarding the availability
of the lower rate for dividends paid with respect to our common shares. There can be no assurance that the Company’s dividends
will be qualifying dividend income because there can be no assurance of the Company’s PFIC status in either the year of the
distribution or the year preceding the distribution.



Subject to certain limitations, Canadian
taxes withheld from a distribution to a U.S. Holder will be eligible for credit against such U.S. Holder’s U.S. federal income
tax liability. A U.S. Holder that does not elect to claim a foreign tax credit with respect to any foreign taxes paid for a given
taxable year may instead claim a deduction for all foreign tax paid in that taxable year. If a refund of the tax withheld is available
to the U.S. Holder under the laws of Canada or under the income tax treaty between the United States and Canada, the amount of
tax withheld that is refundable will not be eligible for such credit against the U.S. Holder’s U.S. federal income tax liability
(and will not be eligible for the deduction against the U.S. Holder’s U.S. federal taxable income). If the dividends are
qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign
tax credit limitation will in general be limited to the gross amount of the dividend, multiplied by the reduced rate divided by
the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately
with respect to specific classes of income. For this purpose, dividends distributed by us with respect to common shares generally
will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general
category income.” The rules relating to the determination of the U.S. foreign tax credit are complex, and U.S. Holders should
consult their tax advisors to determine whether and to what extent a credit would be available. A U.S. Holder that does not elect
to claim a foreign tax credit with respect to any foreign taxes for a given taxable year may instead claim an itemized deduction
for all foreign taxes paid in that taxable year.



102







If the Company pays distributions on
the Common Shares in Canadian dollars, the U.S. dollar value of such distributions should be calculated by reference to the
exchange rate prevailing on the date of actual or constructive receipt of the distributions, regardless of whether the
Canadian dollars are converted into U.S. dollars at that time. If Canadian dollars are converted into U.S. dollars on the
date of actual or constructive receipt of such distributions, a U.S. Holder’s tax basis in such Canadian dollars will
be equal to their U.S. dollar value on that date and, as a result, the U.S. Holder generally will not be required to
recognize any foreign currency exchange gain or loss. Any gain or loss recognized on a subsequent conversionor
other disposition of the Canadian dollars generally will be treated as U.S. source ordinary income or loss for purposes of
the U.S. foreign tax credit limitation discussed above.



Disposition of the Common Shares



Subject to the PFIC rules discussed below,
upon the sale, exchange or other disposition of the Company’s common shares, a U.S. Holder generally will recognize capital
gain or loss equal to the difference between the amount realized upon the sale, exchange or other disposition of the common shares
and the U.S. Holder’s adjusted tax basis in the common shares. The capital gain or loss generally will be long-term capital
gain or loss if, at the time of sale, exchange or other disposition, the U.S. Holder has held the common shares for more than one
year. Net long-term capital gains of non-corporate U.S. Holders, including individuals, are eligible for reduced rates of taxation.
The deductibility of capital losses is subject to limitations. Any gain or loss that a U.S. Holder recognizes generally will be
treated as gain or loss from sources within the United States for purposes of the U.S. foreign tax credit limitation discussed
above.



Passive Foreign Investment Companies



We believe we were not a passive foreign
investment company (“PFIC”) for U.S. federal income tax purposes for our taxable year ended December 31, 2013. A non-U.S.
corporation is considered to be a PFIC for any taxable year if either:



| | · | at least 75% of its gross income is passive income which includes dividends, interest, royalties,
rents (other than rents and royalties derived in the active conduct of a trade or business and not derived from a related person),
certain gains from the sales of commodities, annuities and gains from assets that produce passive income, or
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | at least 50% of the value of its assets (based on an average of the quarterly values of the assets
during a taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset
test”).
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



There can be no assurance that in any given
year 75% or more of the Company’s gross income will not be passive income and we will not become a PFIC in that or any future
taxable year.



We will be treated as owning our proportionate
share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly,
25% or more (by value) of the stock.



A determination of the Company’s
PFIC status should be done on an annual basis. As a result, our PFIC status may change. In particular, because the total value
of our assets for purposes of the asset test will be calculated using the market price of our common shares (assuming that we continue
to be a publicly traded corporation for purposes of the applicable PFIC rules), our PFIC status will depend in large part on the
market price of our common shares. Accordingly, fluctuations in the market price of our common shares may result in our being a
PFIC for any year. If we are a PFIC for any year during which a U.S. Holder holds common shares, we generally will continue to
be treated as a PFIC for all succeeding years during which such U.S. Holder holds common shares, absent a special election. For
instance, if we cease to be a PFIC, a U.S. Holder may avoid some of the adverse effects of the PFIC regime by making a deemed sale
election with respect to the common shares. If we are a PFIC for any taxable year and any of our non-U.S. subsidiaries is also
a PFIC, a U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes
of the application of these rules. U.S. Holders are urged to consult their tax advisors about the application of the PFIC rules
to any of our subsidiaries.



103







If we are a PFIC for any taxable year during
which a U.S. Holder holds common shares, such U.S. Holder will be subject to special tax rules with respect to any “excess
distribution” that it receives and any gain it realizes from a sale or other disposition (including a pledge) of the common
shares, unless the U.S. Holder makes a “mark-to-market” election as discussed below. Distributions received by a U.S.
Holder in a taxable year that are greater than 125% of the average annual distributions such U.S. Holder received during the shorter
of the three preceding taxable years or its holding period for the common shares will be treated as an excess distribution. Under
these special tax rules:



| | · | the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding
period for the common shares,
| | - | ----------------------------------------------------------------------------------------------------------------------

| | · | the amount allocated to the current taxable year, and any taxable year prior to the first taxable
year in which we became a PFIC, will be treated as ordinary income, and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the amount allocated to each other year will be subject to the highest tax rate for the U.S. Holder
in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax
attributable to each such year.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The tax liability for amounts allocated
to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for
such years, and gains (but not losses) realized on the sale of the common shares cannot be treated as capital, even if the U.S.
Holder holds the common shares as capital assets.



Alternatively, a U.S. Holder of “marketable
stock” (as defined below) in a PFIC may make a mark-to-market election with respect to shares of a PFIC to elect out of the
tax treatment discussed above. If a U.S. Holder makes a valid mark-to-market election for the common shares, the U.S. Holder will
include in income each year an amount equal to the excess, if any, of the fair market value of the common shares as of the close
of its taxable year over its adjusted basis in such common shares. The U.S. Holder is allowed a deduction for the excess, if any,
of the adjusted basis of the common shares over their fair market value as of the close of the taxable year. However, deductions
are allowable only to the extent of any net mark-to-market gains on the common shares included in the U.S. Holder’s income
for prior taxable years. Amounts included in a U.S. Holder’s income under a mark-to-market election, as well as gain on the
actual sale or other disposition of the common shares, are treated as ordinary income. Ordinary loss treatment also applies to
the deductible portion of any mark-to-market loss on the common shares, as well as to any loss realized on the actual sale or disposition
of the common shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included
for such common shares. A U.S. Holder’s basis in the common shares will be adjusted to reflect any such income or loss amounts.
If a U.S. Holder makes such an election, the tax rules that ordinarily apply to distributions by corporations that are not PFICs
would apply to distributions by us, except that the lower applicable capital gains rate for “qualified dividend income”
discussed above under “Dividends and Other Distributions on the Common Shares” would not apply.



The mark-to-market election is available
only for “marketable stock,” which is stock that is traded in other than de minimis quantities on at least 15 days
during each calendar quarter on a qualified exchange, including OTCQB, or other market, as defined in applicable U.S. Treasury
Regulations. We expect that our common shares will continue to be listed on OTCQB and, consequently, the mark-to-market election
would be available to U.S. Holders of common shares were we to be a PFIC.



If a non-U.S. corporation is a PFIC, a
holder of shares in that corporation can avoid taxation under the rules described above by making a “qualified electing fund”
election to include its share of the Company’s ordinary earnings and net capital gain income on a current basis. However,
a U.S. Holder can make a qualified electing fund election with respect to its common shares only if we furnish the U.S. Holder
annually with certain tax information. We do not intend to prepare or provide such information.



A U.S. Holder that holds common shares
in any year in which we are a PFIC will be required to file IRS Form 8621 on an annual basis, subject to certain exceptions based
on the value of PFIC stock held.



U.S. Holders are urged to consult their
tax advisors regarding the application of the PFIC rules to the ownership and disposition of common shares.



Other Consequences



To the extent a shareholder is not subject
to the tax regimes outlined above with respect to foreign corporations that are PFICs, the following discussion describes the United
States federal income tax consequences arising from the holding and disposition of the Company’s common shares.





104







Information Reporting and Backup Withholding



Dividends on common shares and the proceeds
of a sale or redemption of a common share may be subject to information reporting to the IRS and possible U.S. backup withholding
at a current rate of 28%, unless the conditions of an applicable exemption are satisfied. Backup withholding will not apply to
a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification or who is otherwise
exempt from backup withholding. U.S. Holders who are required to establish their exempt status can provide such certification on
IRS Form W-9. U.S. Holders should consult their tax advisors regarding the application of the U.S. information reporting and backup
withholding rules.



Backup withholding is not an additional
tax. Amounts withheld as backup withholding may be credited against a U.S. Holder’s U.S. federal income tax liability, and
a U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate
claim for refund with the IRS and furnishing any required information.



U.S. HOLDERS ARE URGED TO CONSULT THEIR
TAX ADVISORS ABOUT THE APPLICATION OF THE U.S. FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE AND LOCAL
AND FOREIGN TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF COMMON SHARES.



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



Not applicable.



| | G. | Statements by Experts
| | -- | ---------------------



The disclosure in this annual report of
a scientific or technical nature for the Company’s material properties is based on technical reports prepared for those properties
in accordance with NI 43-101 of the Canadian Securities Administrators. Information prepared by or under the supervision of Qualified
Persons under NI 43-101 and included in this annual information form is with the consent of such persons.



Other information has been prepared and
included in this annual report following review and verification by Brian Skanderbeg, P.GEO, Senior Vice President & Chief
Operating Officer or Peter Longo, P.ENG, Former Vice President, Operations both Qualified Persons within the meaning of NI 43-101.
In 2013, Mineral Reserves were prepared under the direction of Qualified Person Stephen Taylor, P. Eng. (SRK Consulting (Canada)
Inc.).



| | H. | Documents on Display
| | -- | --------------------



Any statement in this annual report about
any of the Company’s contracts or other documents is not necessarily complete. If the contract or document is filed as an
exhibit to this annual report, the contract or document is deemed to modify the description contained in this annual report. Readers
must review the exhibits themselves for a complete description of the contract or document.



Readers may review a copy of the Company’s
filings with the SEC, including exhibits and schedules filed with it, at the SEC's public reference facilities at 100 F Street,
N.E., Washington, D.C. 20549. Readers may call the SEC at 1-800-SEC-0330 for further information on the public reference rooms.
The SEC maintains a website (http://www.sec.gov) that contains reports, submissions and other information regarding registrants
that file electronically with the SEC.



The Company also files reports with the
Canadian Securities Administrators that you may obtain through access of the SEDAR website (www.sedar.com).



Readers may read and copy any reports,
statements or other information that the Company files with the SEC at the address indicated above and may also access them electronically
at the website set forth above. These SEC filings are also available to the public from commercial document retrieval services.





105







The Company is required to file reports
and other information with the SEC under the Exchange Act. Reports and other information filed by the Company with the SEC may
be inspected and copied at the SEC's public reference facilities described above. As a foreign private issuer, the Company is exempt
from the rules under the Exchange Act prescribing the furnishing and content of proxy statements and the Company’s officers,
directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in section
16 of the Exchange Act. Under the Exchange Act, as a foreign private issuer, the Company’s is not required to publish financial
statements as frequently or as promptly as United States companies.



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



| | I. | Subsidiary Information
| | -- | ----------------------



Not Applicable.



Item 11. Quantitative and Qualitative
Disclosures About Market Risk



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



See Note 22 to the Company’s consolidated
financial statements filed as part of this annual report for additional disclosure regarding market risk.



Gold



Commodity prices are subject to wide fluctuations
in response to changes in supply of and demand for gold, market uncertainty and a variety of additional factors that are beyond
the control of Claude. Earnings from Claude’s gold operation 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 2013 actuals, are as follows:



For a US$10 movement in gold price per
ounce, earnings and cash flow will have a corresponding movement of $0.5 million, or $0.00 per share. For a $0.01 movement in the
U.S. dollar to Canadian dollar exchange rate, earnings and cash flow will have a corresponding movement of $0.7 million, or $0.00
per share.



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



Interest Rate Sensitivities



The Company holds cash balances in Canadian
currencies which earn interest income. Most of the Company’s cash balances are held in short-term money market and cash deposits
with maturities of under 90 days. These deposits are exposed to interest rate risk. In respect to financial liabilities, one of
the Company’s demand loans carries a floating interest rate with the balance of Company debt at fixed interest rates. The
Company believes that a possible 5% change in market interest rates would not materially impact the earnings or market value of
these balances. The Company incurs the majority of its expenditures in Canadian dollars.



Item 12. Description of Securities
Other than Equity Securities



Not Applicable



106







Part II



Item 13. Defaults, Dividend Arrearages
and Delinquencies



Claude’s Term Loan contains certain
covenants stating that at the end of each fiscal quarter, the Company must maintain a current ratio of not less than 1.25, a minimum
cash flow coverage ratio (defined in the covenant as the ratio of the Company’s (i) Net EBITDA for the twelve-month period
immediately preceding such date to (ii) Annual Debt Service on such date) of not less than 1.25 and, as at December 31, 2013, a
minimum TTM EBITDA of $5.0 million.



The Company was not in compliance with
a financial covenant requirement of the Term Loan as at December 31, 2013; furthermore, this financial covenant requirement was
not waived by CCP prior to December 31, 2013. As such, the amortized cost of the Term Loan has been reclassified as current for
financial statement presentation purposes in accordance with IFRS. Based on the Company's projections at December 31, 2013, the
Company believed it would be unlikely that it will be in compliance with these certain existing covenants during fiscal 2014 without
an amendment or waiver of certain covenants by CCP. Subsequent to December 31, 2013, the Company obtained a waiver from CCP and
entered into an Amending Agreement for the financial covenant requirements of the Term Loan. The Amendment Agreement has modified
certain covenants within the original Term loan with CCP. The timing of principal payments has not changed pursuant to the Amendment
Agreement; monthly payments of $0.3 million will begin in May 2014. Interest on the Term loan remains fixed at 10 percent, compounds
monthly and is payable monthly. The maturity date of the Term loan remains 60 months from closing (April 2018). As a condition
of the amending agreement, the Company agreed to exercise commercially reasonable efforts to effect a sale or other transaction
of all or a portion of its assets by July 31, 2014. The Company has engaged a financial advisor to assist with this process. Upon
mutual agreement with CCP, prepayment fees pursuant to the original agreement have been waived. In addition, the 5,750,000 common
share purchase warrants pursuant to the original agreement have been cancelled in conjunction with the waiver of the covenant breach
for consideration of $1.0 million.



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



Not Applicable



Item 15. Controls and Procedures



(a) Disclosure controls and procedures



Disclosure controls and procedures are
designed to ensure that information required to be disclosed by the Company is collected and communicated to management, as appropriate,
to allow timely decisions regarding required disclosure.



As at December 31, 2013, we evaluated our
disclosure controls and procedures as defined in the rules of the U.S. Securities and Exchange Commission (“SEC”) and
the Canadian Securities Administrators. This evaluation was carried out under the supervision and with the 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 not effective due to the material weakness in internal control over financial reporting (“ICFR”) described below.



(b) Management’s annual report on
internal controls over financial reporting



Management is responsible for establishing
and maintaining adequate ICFR. ICFR, 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 criteria set forth in the Internal Control-Integrated Framework (1992)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment,
Management has concluded that, as a result of the material weakness in ICFR discussed below, ICFR was not effective as at December
31, 2013.





107







Management noted that as at December 31,
2013:



| | · | Income taxes – there was a lack of review and monitoring controls of the income tax function
relating to complex, non-routine transactions and provisions. This control deficiency resulted in the Company recording adjustments
to deferred income tax assets, deferred income tax liabilities and deferred income tax expense. This control deficiency relating
to complex, non-routine transactions and provisions creates a reasonable possibility that material misstatements of the consolidated
financial statements including disclosures will not be prevented or detected on a timely basis as a result.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(c) Attestation report of the registered public accounting firm



This annual report does not include an
attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting
as the Company qualifies as an “emerging growth company” under section 3(a) of the Exchange Act (as amended by the
Jumpstart Our Business Startups Act, enacted on April 5, 2012), and is therefore exempt from the attestation requirement.



(d) Changes in internal controls over financial reporting



Other than the material weakness identified
above, there were no changes in ICFR that occurred during the most recent interim period that has materially affected, or is reasonably
likely to materially affect, ICFR.



Management is currently considering the
necessary changes required to remediate the material weakness described above.



Item 16A. Audit Committee



The Board of Directors has determined that
Mr. Ronald J. Hicks, C.A., a member of the Company’s Audit Committee, qualifies as an “audit committee financial expert”
as defined in Item 16A(b) of Form 20-F. Mr. Hicks is a Chartered Accountant, with over 30 years of experience in both public and
private companies. Mr. Hicks’ relevant education and experience is disclosed above in Items 6.A. above. The Company’s
Board of Directors has determined that Mr. Hicks is an independent director in accordance with the requirements of applicable Canadian
securities laws.



Item 16B. Code of Ethics



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



No amendment was made to the Code of Ethics
during the Company’s most recently completed financial year and no waiver from a provision of the Code of Ethics was granted
by the Company during the Company’s most recently completed financial year.



Item 16C. Principal Accountant Fees and Services



The following summarizes the total fees billed by the external
auditors of the Company with respect to each of the years ended December 31, 2013 and December 31, 2012.



|                   |  | 2013 |         |  | 2012 |  
|------------------ |  | ---- | ------- |  | ---- | -
|Audit fees(1)      |  | $    | 206,700 |  |      | $
|Audit-related fees |  |      | -       |  |      |  
|Tax fees(2)        |  |      | -       |  |      | $
|All other fees     |  |      | -       |  |      |  
|Total              |  | $    | 206,700 |  |      | $





108







(1)Audit fees were for KPMG LLP services in respect of the audit of the December 31, 2013
consolidated financial statements.

(2)Tax fees in 2012 were for KPMG LLP services in respect of certain tax compliance and
tax planning, including the St. Eugene Mining transaction.



Pre-Approval Policies & Procedures



The Audit Committee has adopted a policy
that requires pre-approval by the Audit Committee of audit services and other services within permissible categories of non-audit
services. The policy prohibits the Company from engaging the auditor for “prohibited” categories of non-audit services.



Item 16D. Exemptions from Listing Standards for Audit
Committee



Not Applicable.



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



The Company did not repurchase any of its shares during 2013.



Item 16F. Change in Registrant’s Certifying Accountant



Not Applicable.



Item 16G. Corporate Governance



Not Applicable.



Item 16H. Mine Safety Disclosure



Not Applicable.



Item 17. Financial Statements



Not Applicable.



Item 18. Financial Statements



The Company’s financial statements
are stated in Canadian dollars ($) and are prepared in accordance with IFRS as issued by the IASB.



The following financial statements are filed as part of this
annual report:



|Management Responsibility for Consolidated Financial Statements | F-1
|--------------------------------------------------------------- | ---
|Independent Auditors’ Report                                    | F-1
|Consolidated Statements of Financial Position                   | F-2
|Consolidated Statements of Income (Loss)                        | F-3
|Consolidated Statements of Shareholders’ Equity                 | F-4
|Consolidated Statements of Cash Flows                           | F-5
|Notes to the Consolidated Financial Statements                  | F-6



109







Item 19. Exhibits



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



| | 4.1 | CCP Debt Facility dated April 5, 2013 between Claude Resources Inc. and Norrep Credit Opportunities Fund Inc., in its capacity
as general partner of Norrep Credit Opportunities Fund II, LP and Norrep Credit Opportunities Fund II (Parallel), LP (incorporated
by reference to Exhibit 99.1 to the Company’s Report of Foreign Private Issuer on Form 6-K, filed on April 30, 2014).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4.2 | Waiver and Credit Amendment Agreement dated February 14, 2014 between Claude Resources Inc. and Norrep Credit Opportunities
Fund Inc., in its capacity as general partner of Norrep Credit Opportunities Fund II. LP and Norrep Credit Opportunities Fund II
(Parallel), LP (incorporated by reference to Exhibit 99.2 to the Company’s Report of Foreign Private Issuer on Form 6-K,
filed on April 30, 2014).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4.3 | Madsen Asset Purchase Agreement dated December 19, 2013 between Laurentian Goldfields Ltd. and Claude Resources Inc. (incorporated
by reference to Exhibit 99.3 to the Company’s Report of Foreign Private Issuer on Form 6-K, filed on April 30, 2014).
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4.4 | Royalty Purchase Agreement dated March 20, 2014 between Claude Resources Inc. and 8248567 Canada Limited (incorporated by reference
to Exhibit 99.4 to the Company’s Report of Foreign Private Issuer on Form 6-K, filed on April 30, 2014).
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4.5 | Net Smelter Returns Royalty Agreement dated March 20, 2014 between Claude Resources Inc. and 8248567 Canada Limited (incorporated
by reference to Exhibit 99.5 to the Company’s Report of Foreign Private Issuer on Form 6-K, filed on April 30, 2014).
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | 12.1 | Certification of the President and Chief Executive Officer of the Company pursuant to Section 302
of Sarbanes-Oxley Act of 2002.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------

| | 12.2 | Certification of the Chief Financial Officer of the Company pursuant to Section 302 of Sarbanes-Oxley
Act of 2002.
| | ---- | ------------------------------------------------------------------------------------------------------------------

| | 13.1 | Certification of the President and Chief Executive Officer of the Company pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------

| | 13.2 | Certification of the Chief Financial Officer of the Company pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
| | ---- | ----------------------------------------------------------------------------------------------------------------------



110







SIGNATURES



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



|                       | CLAUDE RESOURCES INC.
|---------------------- | ---------------------
|                       | (Registrant)         
|                       |                      
|Dated:  April 30, 2014 | By:                  
|                       |                      



111











| | KPMG LLP                       | Telephone | (306) 934-6200
| | ------------------------------ | --------- | --------------
| | Chartered Accountants          | Fax       | (306) 934-6233
| | 500 – 475 Second Avenue South  | Internet  | www.kpmg.ca   
| | Saskatoon Saskatchewan S7K 1P4 |           |               
| | Canada                         |           |               



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Shareholders of Claude Resources
Inc.



We have audited the accompanying
consolidated statements of financial position of Claude Resources Inc. as of December 31, 2013 and December 31, 2012 and the related
consolidated statements of income (loss), comprehensive income (loss), shareholders’ equity and cash flows for each of the
years in the three-year period ended December 31, 2013. These consolidated financial statements are the responsibility of Claude
Resources Inc.’s management. Our responsibility is to express an opinion on these consolidated financial statements based
on our audits.



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



In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the consolidated financial position of Claude
Resources Inc. as of December 31, 2013 and December 31, 2012, and its consolidated financial performance and its consolidated cash
flows for each of the years in the three-year period ended December 31, 2013 in conformity with International Financial Reporting
Standards as issued by the International Accounting Standards Board.



Without qualifying our opinion,
we draw attention to Note 2 in the consolidated financial statements which indicates that Claude Resources Inc. has a working capital
deficiency of $12 million, has violated certain financial covenants of its term loan and has a loss of $73 million for the year
ended December 31, 2013. These conditions, along with other matters as set forth in Note 2 in the consolidated financial statements,
indicate the existence of a material uncertainty that casts substantial doubt about Claude Resources Inc.’s ability to continue
as a going concern.







Chartered Accountants



April 30, 2014

Saskatoon, Canada





KPMG LLP, is a Canadian limited liability partnership
and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity.

KPMG Canada provides services to KPMG LLP.



F-1







Claude Resources Inc.

Consolidated Statements of Financial Position

(In Thousands of Canadian Dollars)



|                                            |  |      |  | DECEMBER 31 |         |   | DECEMBER 31 |  
|------------------------------------------- |  | ---- |  | ----------- | ------- | - | ----------- | -
|                                            |  | Note |  | 2013        |         |   | 2012        |  
|Assets                                      |  |      |  |             |         |   |             |  
|Short-term investments                      |  | 6    |  | $           | 1,643   |   |             | $
|Accounts receivable                         |  |      |  |             | 2,873   |   |             |  
|Inventories                                 |  | 7    |  |             | 20,565  |   |             |  
|Prepaid expenses and deposits               |  |      |  |             | 390     |   |             |  
|Assets held for sale                        |  | 8    |  |             | 13,423  |   |             |  
|Current assets                              |  |      |  |             | 38,894  |   |             |  
|                                            |  |      |  |             |         |   |             |  
|Mineral properties                          |  | 9    |  |             | 140,544 |   |             |  
|Investments                                 |  | 11   |  |             | -       |   |             |  
|Deposits for reclamation costs              |  | 12   |  |             | 2,237   |   |             |  
|Non-current assets                          |  |      |  |             | 142,781 |   |             |  
|Total assets                                |  |      |  | $           | 181,675 |   |             | $
|                                            |  |      |  |             |         |   |             |  
|Liabilities                                 |  |      |  |             |         |   |             |  
|Bank indebtedness                           |  |      |  | $           | 8,623   |   |             | $
|Accounts payable and accrued liabilities    |  |      |  |             | 6,997   |   |             |  
|Debenture                                   |  | 14   |  |             | -       |   |             |  
|Loans and borrowings                        |  | 14   |  |             | 31,869  |   |             |  
|Net royalty obligation                      |  | 13   |  |             | 1,001   |   |             |  
|Liabilities related to assets held for sale |  | 8    |  |             | 2,316   |   |             |  
|Current liabilities                         |  |      |  |             | 50,806  |   |             |  
|                                            |  |      |  |             |         |   |             |  
|Loans and borrowings                        |  | 14   |  |             | -       |   |             |  
|Deferred income tax liability               |  | 20   |  |             | -       |   |             |  
|Net royalty obligation                      |  | 13   |  |             | 1,826   |   |             |  
|Decommissioning and reclamation             |  | 12   |  |             | 6,447   |   |             |  
|Non-current liabilities                     |  |      |  |             | 8,273   |   |             |  
|                                            |  |      |  |             |         |   |             |  
|Shareholders’ equity                        |  |      |  |             |         |   |             |  
|Share capital                               |  | 15   |  |             | 195,245 |   |             |  
|Contributed surplus                         |  |      |  |             | 8,223   |   |             |  
|Accumulated deficit                         |  |      |  |             | (80,925 | ) |             |  
|Accumulated other comprehensive income      |  |      |  |             | 53      |   |             |  
|Total shareholders’ equity                  |  |      |  |             | 122,596 |   |             |  
|Total liabilities and shareholders’ equity  |  |      |  | $           | 181,675 |   |             | $
|                                            |  |      |  |             |         |   |             |  
|Going concern                               |  | 2    |  |             |         |   |             |  
|Subsequent events                           |  | 24   |  |             |         |   |             |  



See accompanying notes to consolidated financial statements.



|On behalf of the Board: |  |                          
|----------------------- |  | -------------------------
|                        |  |                          
|                        |  |                          
|Ted J. Nieman           |  | Ronald J. Hicks, CA      
|Chairman                |  | Chairman, Audit Committee





F-2







|Claude Resources Inc.                                       
|------------------------------------------------------------
|Consolidated Statements of Income (Loss)                    
|(In Thousands of Canadian Dollars, except per share amounts)



|                                       |  |      |  | DECEMBER 31 |        
|-------------------------------------- |  | ---- |  | ----------- | -------
|                                       |  | Note |  | 2013        |        
|                                       |  |      |  |             |        
|Revenue                                |  |      |  | $           | 63,794 
|                                       |  |      |  |             |        
|Mine Operating:                        |  |      |  |             |        
|Production costs                       |  |      |  |             | 44,051 
|Depreciation and depletion             |  |      |  |             | 22,949 
|                                       |  |      |  |             | 67,000 
|Gross profit (loss)                    |  |      |  |             | (3,206 
|                                       |  |      |  |             |        
|General and administrative             |  |      |  |             | 7,057  
|Finance expense                        |  | 16   |  |             | 3,195  
|Finance and other income               |  | 17   |  |             | (2,712 
|Impairment charges                     |  | 10   |  |             | 63,835 
|Write-down of exploration property     |  | 9    |  |             | -      
|Gain on sale of exploration property   |  | 11   |  |             | -      
|Loss (gain) on investments             |  |      |  |             | 262    
|                                       |  |      |  |             | 71,637 
|(Loss) profit before income tax        |  |      |  |             | (74,843
|                                       |  |      |  |             |        
|Deferred income tax (recovery) expense |  | 20   |  |             | (1,420 
|                                       |  |      |  |             |        
|Net profit (loss)                      |  |      |  | $           | (73,423
|                                       |  |      |  |             |        
|Net earnings (loss) per share          |  |      |  |             |        
|Basic and diluted                      |  | 21   |  |             |        
|Net earnings (loss)                    |  |      |  | $           | (0.42  
|Basic                                  |  |      |  |             | 175,562
|Diluted                                |  |      |  |             | 175,562



See accompanying notes to consolidated financial statements.



Consolidated Statements of Comprehensive Income (Loss)

(In Thousands of Canadian Dollars)



|                                                                   |  | DECEMBER 31 |        
|------------------------------------------------------------------ |  | ----------- | -------
|                                                                   |  | 2013        |        
|                                                                   |  |             |        
|Net profit (loss)                                                  |  | $           | (73,423
|                                                                   |  |             |        
|Other comprehensive loss                                           |  |             |        
|Loss (gain) on available-for-sale securities transferred to profit |  |             | 227    
|Unrealized loss on available-for-securities                        |  |             | (199   
|Other comprehensive income (loss)                                  |  |             | 28     
|Total comprehensive income (loss)                                  |  | $           | (73,395



See accompanying notes to consolidated financial statements.



F-3







Claude Resources Inc.

Consolidated Statements of Shareholders’ Equity

(In Thousands of Canadian Dollars)



|                                              |  | DECEMBER 31 |        
|--------------------------------------------- |  | ----------- | -------
|                                              |  | 2013        |        
|                                              |  |             |        
|Share Capital                                 |  |             |        
|Balance, beginning of year                    |  | $           | 193,189
|Common shares and warrants issued             |  |             | 1,421  
|Warrants exercised                            |  |             | -      
|Transfers from contributed surplus            |  |             | 635    
|Balance, end of year                          |  | $           | 195,245
|                                              |  |             |        
|Contributed Surplus                           |  |             |        
|Balance, beginning of year                    |  | $           | 6,652  
|Stock-based compensation                      |  |             | 2,274  
|Transfers to share capital                    |  |             | (635   
|Tax impact of expired warrants                |  |             | (68    
|Balance, end of year                          |  | $           | 8,223  
|                                              |  |             |        
|Accumulated Deficit                           |  |             |        
|Balance, beginning of year                    |  | $           | (7,502 
|Net profit (loss)                             |  |             | (73,423
|Balance, end of year                          |  | $           | (80,925
|                                              |  |             |        
|Accumulated Other Comprehensive Income (Loss) |  |             |        
|Balance, beginning of year                    |  | $           | 25     
|Other comprehensive income (loss)             |  |             | 28     
|Balance, end of year                          |  | $           | 53     
|                                              |  |             |        
|Shareholders’ equity, end of year             |  | $           | 122,596



See accompanying notes to consolidated financial statements.



F-4







Claude Resources Inc.

Consolidated Statements of Cash Flows

(In Thousands of Canadian Dollars)



|                                                                      |  | DECEMBER 31 |        
|--------------------------------------------------------------------- |  | ----------- | -------
|                                                                      |  | 2013        |        
|                                                                      |  |             |        
|Cash flows from (used in) operating activities                        |  |             |        
|                                                                      |  |             |        
|Net profit (loss)                                                     |  | $           | (73,423
|Adjustments for non-cash items:                                       |  |             |        
|Depreciation and depletion                                            |  |             | 22,949 
|Finance expense                                                       |  |             | 522    
|Finance and other income                                              |  |             | (1,214 
|Impairment charges                                                    |  |             | 63,835 
|Loss on investments                                                   |  |             | 262    
|Stock-based compensation                                              |  |             | 2,274  
|Write-down of exploration property                                    |  |             | -      
|Gain on sale of exploration property                                  |  |             | -      
|Deferred income tax (recovery) expense                                |  |             | (1,420 
|                                                                      |  |             | 13,785 
|Net changes in non-cash operating working capital:                    |  |             |        
|Accounts receivable                                                   |  |             | 1,972  
|Inventories                                                           |  |             | (1,530 
|Prepaid expenses and deposits                                         |  |             | (113   
|Accounts payable and accrued liabilities                              |  |             | (536   
|Cash provided by operating activities                                 |  |             | 13,578 
|Cash flows from investing activities:                                 |  |             |        
|Additions to mineral properties                                       |  |             | (31,907
|Restricted cash                                                       |  |             | -      
|Reclamation deposits                                                  |  |             | -      
|Decrease (increase) in investments                                    |  |             | (1,500 
|Cash used in investing activities                                     |  |             | (33,407
|Cash flows from financing activities:                                 |  |             |        
|Proceeds from issue of common shares and warrants, net of issue costs |  |             | 725    
|Debenture redemption                                                  |  |             | (9,751 
|Term loan                                                             |  |             |        
|Proceeds, net of issues costs                                         |  |             | 24,328 
|Demand loans:                                                         |  |             |        
|Proceeds                                                              |  |             | 5,000  
|Repayments                                                            |  |             | (2,388 
|Obligations under finance lease:                                      |  |             |        
|Proceeds                                                              |  |             | -      
|Repayments                                                            |  |             | (1,495 
|Cash from financing activities                                        |  |             | 16,419 
|Decrease in cash and cash equivalents                                 |  |             | (3,410 
|Decrease in cash and cash equivalents related to assets held for sale |  |             | (1,682 
|                                                                      |  |             |        
|Cash and cash equivalents (bank indebtedness), beginning of year      |  |             | (3,531 
|Cash and cash equivalents (bank indebtedness), end of year            |  | $           | (8,623 



See accompanying notes to consolidated financial statements.



F-5







Claude Resources Inc.

Notes to the Consolidated Financial Statements

For the Years ended December 31, 2013, 2012 and 2011

Expressed in Thousands of Canadian Dollars, except share
data or as otherwise noted



| | 1. | Corporate Information:
| | -- | ----------------------



Claude Resources Inc. (“Claude”
or the “Company”) is a company domiciled in Canada. The address of the Company’s registered office is at 1500,
410 – 22nd Street East, Saskatoon, Saskatchewan, S7K 5T6. Its principal office is located at 200, 224 –
4th Avenue South, Saskatoon, Saskatchewan, S7K 5M5.



Claude Resources Inc. is a gold producer
whose shares are listed on both the Toronto Stock Exchange (TSX-CRJ) and the OTCQB (OTCQB: CLGRF). The Company is also engaged
in the exploration and development of gold mineral reserves and mineral resources. The Company’s entire asset base is located
in Canada. Its revenue generating asset is the 100 percent owned Seabee Gold Operation, located in northern Saskatchewan. During
2013, Claude also owned 100 percent of the Amisk Gold Project in northeastern Saskatchewan and 100 percent of the Madsen Property
in the Red Lake gold camp of northwestern Ontario; however, the Company completed the divestiture of the Madsen Property in the
first quarter of 2014.



| | 2. | Basis of Preparation:
| | -- | ---------------------



STATEMENT OF COMPLIANCE



These consolidated financial statements
have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International
Accounting Standards Board (“IASB”).



These consolidated financial statements
were authorized for issue by the Company’s Board of Directors on April 30, 2014.



Details of the Company’s accounting
policies, including changes during the year, are included in Notes 3 and 4.



BASIS OF MEASUREMENT



These consolidated financial statements
have been prepared on the historical cost basis except for available-for-sale financial assets and liabilities for cash-settled
share-based payment arrangements, which are measured at fair value.



FUNCTIONAL CURRENCY



These consolidated financial statements
are presented in Canadian dollars, which is the Company’s functional currency. All financial information presented in Canadian
dollars has been rounded to the nearest thousand, except share data or as otherwise noted.



GOING CONCERN



These consolidated financial statements
have been prepared on the assumption that the Company will continue as a going concern and realize its assets and discharge its
liabilities in the normal course of business. As at December 31, 2013, the Company had a working capital deficiency of $11.9 million,
was in violation of certain financial covenants on its term loan and incurred a loss of $73.4 million for the year ended December
31, 2013. These factors result in a material uncertainty and therefore cast substantial doubt as to the Company’s ability
to continue as a going concern.



The Company’s plans to address this
material uncertainty include selling certain assets (Note 24(a)), obtaining a waiver on the above covenant violation (Note 24(b),
Note 24(d)), completing a royalty agreement financing for gross cash proceeds of US$12.0 million (Note 24(c)) and implementing
operational cost savings measures. As a condition of obtaining the covenant waiver, the Company agreed to exercise commercially
reasonable efforts to effect a sale or other transaction of all or a portion of its assets by July 31, 2014. The Company has engaged
a financial advisor to assist with this process. If the Company’s plans are unsuccessful, it would be required to request
additional waivers for potential covenant violations from its lenders and seek additional sources of financing (debt or equity).
The ability of the Company to continue as a going concern and to realize the carrying value of its assets and discharge its liabilities
when due is dependent on continued support from its lenders and the successful completion of the actions taken or planned, some
of which are described above, which management believes may mitigate the adverse conditions and events which raise substantial
doubt about the validity of the going concern assumption used in preparing these consolidated financial statements. There is no
certainty that these and other strategies will be sufficient to permit the Company to continue as a going concern.



The consolidated financial statements do
not reflect adjustments that would be necessary if the going concern assumption were not appropriate. If the going concern basis
was not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying value of assets
and liabilities, the reported revenues and expenses, and the consolidated statement of financial position classifications used.



F-6







USE OF JUDGMENTS AND ESTIMATES



The preparation of the Company’s
consolidated financial statements in conformity with IFRS requires Management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses and disclosure
of contingent assets and liabilities at the date of the consolidated financial statements. Significant judgments, estimates and
assumptions are related to the useful lives and recoverability of mineral properties and deferred income tax assets or liabilities,
valuation of inventory, provisions for decommissioning and reclamation and financial instruments.



Although these estimates are based on Management’s
best knowledge of the amount, events or actions, actual results ultimately may differ from those estimates.



Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised
and in any future periods affected.



Critical Judgments in Applying Accounting
Policies



Critical judgments that the Company’s
management has made in the process of applying the Company’s accounting policies, apart from those involving estimates, that
have the most significant effect on the amounts recognized in the Company’s consolidated financial statements are as follows:



Production Start Date



The Company assesses the stage of each
mine under construction to determine when a mine moves into commercial production. The criteria used to assess the start date of
commercial production are based on the unique nature of each mine construction project, such as the complexity of the geology and
its location. The Company considers various relevant criteria to assess when the mine construction phase is substantially complete
and the mine is ready for its intended use. At this point, deferred costs are reclassified from “Mines under construction”
to “Producing mines” and “Property, plant and equipment”. Some of the criteria will include, but are not
limited, to the following:



| | · | Completion of a reasonable period of testing of the mine plant and equipment;
| | - | -----------------------------------------------------------------------------

| | · | Ability to produce precious metal in saleable form;
| | - | ---------------------------------------------------

| | · | Ability to sustain certain levels of ongoing production of precious metals; and
| | - | -------------------------------------------------------------------------------

| | · | Production attaining a reasonable percentage of Mine Plan for a specified period of time.
| | - | -----------------------------------------------------------------------------------------



When a mine enters the production stage,
the capitalization of certain construction costs ceases and costs are either regarded as inventory or operating expense, except
for new capital costs which are capitalized. Depreciation and depletion commences at this time.



Exploration and Evaluation Expenditures



The application of the Company’s
accounting policy for exploration and evaluation expenditures requires judgment in determining whether future economic benefits
are likely either from future extraction or sale or where activities have not reached a stage which permits a reasonable assessment
of the existence of mineral reserves. The determination of a mineral resource is itself an estimation process that involves varying
degrees of uncertainty depending on sub-classification and these estimates directly impact the decision to continue the deferral
of exploration and evaluation expenditures. The accounting policy requires management to make certain estimates and assumptions
about future events or circumstances, in particular whether an economically viable extraction operation can be established. Estimates
and assumptions made may change if new information becomes available. If, after an expenditure is capitalized, information becomes
available suggesting that the recovery of this expenditure is unlikely, the amount capitalized is written off in the statement
of comprehensive income in the period when the new information becomes available.



Business Combinations



Determination of whether a set of assets
acquired and liabilities assumed constitute a business may require the Company to make certain judgments, taking into account all
facts and circumstances. Upon acquisition of a set of assets and liabilities, the Company examines the criteria set forth in IFRS
3, Business Combinations(“IFRS 3”). If a transaction does not meet the definition of a business, as defined
in IFRS 3, it is accounted for as an asset acquisition.



Critical Estimates and Assumptions in
Applying Accounting Policies



Significant assumptions about the future
and other major sources of estimation uncertainty as at the end of the reporting period that have a significant risk of resulting
in a material adjustment to the carrying amounts of the Company’s assets and liabilities are as follows:



F-7







Impairment



At the end of each reporting period, the
Company assesses whether any indication of impairment exist. Where an indicator of impairment exists, an estimate of the recoverable
amount is made. Determining the recoverable amount requires the use of estimates and assumptions such as long-term commodity prices,
discount rates, future capital requirements, exploration potential and operating performance. Changes in circumstances may affect
these estimates and the recoverable amount.



Fair value for mineral properties is generally
determined as the present value of estimated future cash flows arising from the continued use of the assets, which includes estimates
such as the cost of future expansion plans and eventual disposal, using assumptions that an independent market participant would
take into account. Cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.



Inventories



Net realizable value tests are performed
at each reporting date and represent the estimated future sales price of the product the Company expects to realize when the product
is processed and sold, less estimated costs to complete production and bring the product to sale.



Stockpiles are measured by estimating the
number of tonnes added and removed from the stockpile, the number of contained gold ounces is based on assay data, and the estimated
recovery percentage is based on the expected processing method.



Stockpile tonnages are verified by periodic
surveys.



Mine Operating Costs



When determining mine operating costs recognized
in the Consolidated Statements of Income, the Company makes estimates of quantities of ore within stockpiles and of quantities
in-circuit and the recoverable gold in this material to determine the average costs of finished goods sold during the period. Changes
in these estimates can result in a change in mine operating costs of future periods and carrying amounts of inventories.



Ore Reserve and Resource Estimates



Ore reserves are estimates of the amount
of ore that can be economically extracted from the Company’s mining properties. Estimating the quantities and grades of the
reserves and resources requires the size, shape and depth of the ore bodies to be determined by analyzing geological data such
as the logging and assaying of drill samples. This process may require complex and difficult geological judgments and calculations
to interpret the data. The estimation of recoverable reserves is based upon factors such as estimates of foreign exchange rates,
commodity prices, future capital requirements and production costs along with geological assumptions and judgments made in estimating
the size and grade of the ore body.



Because the economic assumptions used to
estimate the gold mineral reserves and resources change from year to year, and because additional geological data is generated
during the course of operations, estimates of the mineral reserves and resources may change from year to year. Changes in the reserve
or resource estimates may impact upon the carrying value of exploration and evaluation assets, mine properties, property, plant
and equipment, decommissioning and reclamation, recognition of deferred tax balances and depreciation and amortization charges.



At the end of each financial year, the
Company updates its estimate of proven and probable gold mineral reserves and resources. Depreciation of the Company’s mining
assets, included within the Mineral properties line item on the Statement of Financial Position, is prospectively adjusted, based
on these changes. The Company also monitors the accuracy of the estimate during the periods between annual updates for significant
changes to economic assumptions and geological data that could require an interim update to the estimate.



Fair value measurement



The Company measures financial instruments,
such as derivatives, at fair value each balance sheet date. The fair values of financial instruments measured at amortized cost
are disclosed in Note 22. Also, from time to time, the fair values of non-financial assets and liabilities are required to be determined,
e.g., when the entity acquires a business, or where an entity measures the recoverable amount of an asset or cash-generating unit
(CGU) at fair value less costs of disposal.



Fair value is the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.



The fair value of an asset or a liability
is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market
participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market
participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.



F-8















The Company uses valuation techniques that
are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs. Changes in estimates and assumptions about these inputs could
affect the reported fair value.



Taxation



Estimation of deferred taxes includes judgments
based on expected performance of the Company. Various factors are considered to assess taxes, including past operating results,
operational plans, expiration of tax losses and tax pools carried forward and tax planning strategies.



Decommissioning and Reclamation



The Company’s mining and exploration
activities are subject to various environmental laws and regulations. The Company estimates environmental obligations based on
the current legal and constructive requirements. The Company provides for the closure, reclamation and decommissioning of its operating
and development sites based on the estimated future costs using information available at the reporting date. Provision is made,
based on net present values, for decommissioning and land restoration costs as soon as the obligation arises.



Additional Accounting Judgments, Estimates
and Assumptions



In addition to the above disclosure on
estimates and judgments, the Company has disclosed additional information relating to significant estimates and judgments recognized
in the consolidated financial statements throughout the following notes:



|Note 9  | Mineral Properties             
|------- | -------------------------------
|Note 11 | Investments                    
|Note 12 | Decommissioning and Reclamation
|Note 13 | Net Royalty Obligation         
|Note 15 | Share-based Compensation       
|Note 20 | Income Taxes                   
|Note 22 | Financial Instruments          



| | 3. | Significant Accounting Policies:
| | -- | --------------------------------



The accounting policies utilized by Management
for the Company and its wholly owned subsidiaries have been applied consistently to all periods presented in these consolidated
financial statements, unless otherwise indicated.



CONSOLIDATION PRINCIPLES



The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries. Subsidiaries are entities controlled by the Company. The Company
controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability
to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated
financial statements from the date on which control commences until the date on which control ceases. These consolidated financial
statements include the Company’s proportionate share of joint operations. Intercompany transactions have been eliminated
on consolidation. The financial statements of the subsidiaries are prepared using the same reporting dates as the Company.



FOREIGN CURRENCY TRANSLATION



The Company’s functional and presentation
currency is the Canadian dollar. Transactions denominated in foreign currencies are translated into Canadian dollars at the rate
of exchange prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated
into Canadian dollars at the rate of exchange in effect at the date of the Statement of Financial Position. Non-monetary items
are translated at the rate in effect at the date of the transaction. Exchange gains and losses on these transactions are included
in profit (loss).



FINANCIAL INSTRUMENTS



Non-derivative Financial Assets



The Company initially recognizes loans
and receivables and deposits on the date they originate. All other financial assets (including assets designated at fair value
through profit or loss) are recognized initially on the trade date at which the Company becomes a party to the contractual provisions
of the instrument.



The Company derecognizes a financial asset
when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash
flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset
are transferred.



F-9







Financial assets and liabilities are offset
and a net asset amount is presented in the Statement of Financial Position when, and only when, the Company has a legal right to
offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.



The Company’s non-derivative financial
assets include: held-to-maturity financial assets; loans and receivables; and available-for-sale financial assets.



Held-to-maturity financial assets



If the Company has the positive intent
and ability to hold debt securities to maturity, then such financial assets are classified as held-to-maturity. Held-to-maturity
financial assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition, held-to-maturity financial assets are measured at amortized cost using the effective interest method, less any impairment
losses. Any sale or reclassification of a more than insignificant amount of held-to-maturity investments not close to their maturity
would result in the reclassification of all held-to-maturity investments as available-for-sale, and prevent the Company from classifying
investment securities as held-to-maturity for the current and the following two fiscal years.



The Company’s held-to-maturity financial
assets are deposits for reclamation costs.



Loans and receivables



Loans and receivables are financial assets
with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value
plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortized
cost using the effective interest method, less any impairment losses.



The Company’s loans and receivables
are comprised of: cash and cash equivalents; accounts receivable; and short-term investments.



Cash and cash equivalents comprise cash
balances and deposits with original maturities of three months or less. Bank overdrafts, if utilized, are repayable on demand,
form an integral part of the Company’s cash management and are included as a component of cash and cash equivalents for the
purpose of the Statement of Cash Flows. The Company only deposits cash surpluses with major banks of high quality credit standing.
Cash on hand earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods
of between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at the respective
short-term deposit rates.



Available-for-sale financial assets



Available-for-sale financial assets are
non-derivative financial assets that are designated as available-for-sale and are not classified in any of the previous categories
of financial assets. Available-for-sale financial assets are recognized initially at fair value plus any directly attributable
transaction costs.



Subsequent to initial recognition, these
assets are measured at fair value and changes therein, other than impairment losses, are recognized in other comprehensive income
and presented within equity. When an investment is derecognized through sale or has an impairment that is other than temporary,
the cumulative gain or loss in other comprehensive income is transferred to profit or loss.



The Company’s investments in equity securities are classified
as available-for-sale financial assets.



Non-derivative Financial Liabilities



The Company initially recognizes debt securities
issued and subordinated liabilities on the date that they originate. All other financial liabilities (including liabilities designated
at fair value through profit or loss) are recognized initially on the trade date at which the Company becomes a party to the contractual
provisions of the instrument.



The Company derecognizes a financial liability
when its contractual obligations are discharged, cancelled or expire.



The Company has the following non-derivative
financial liabilities: demand loans; bank overdrafts in the form of a line of credit; accounts payable and accrued liabilities;
and the Company’s debenture.



Such financial liabilities are recognized
initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities
are measured at amortized cost using the effective interest method.



F-10







Share Capital



Common shares



Common shares are classified as equity.
Incremental costs directly attributable to the issue of common shares are recognized as a deduction from equity, net of any tax
effects.



Flow-through shares



From time to time, the Company may finance
a portion of its exploration activities through the issue of flow-through shares. The premium paid for flow through shares in excess
of the market value of the shares without the flow-through features at the time of issue is credited to other liabilities and included
in income at the time the qualifying expenditures are made.



Debenture



The Company’s debenture, which was
retired in May of 2013, was issued with common share purchase warrants. The debenture and common share purchase warrants are presented
separately on the Company’s Statement of Financial Position. Transaction costs incurred with the completion of this debenture
have been netted against the proceeds received. The liability portion of the debenture has been designated as an other financial
liability and was initially recognized at fair value. Subsequent to initial recognition, the debenture is measured at amortized
cost using the effective interest method. The common share purchase warrants were initially recognized at fair value and are not
re-measured subsequent to initial recognition.



Derivative and Other Financial Instruments



Derivative financial instruments, which
include foreign exchange and gold derivative contracts, are not designated as hedges. These instruments are recorded using the
mark-to-market method of accounting whereby the instruments are recorded in the consolidated Statement of Financial Position at
their fair value as either an asset or liability with changes in fair value recognized in profit or loss. Transaction costs are
expensed as incurred.



Effective Interest Rate Method



The Company utilizes the effective interest
rate method when accounting for certain of its financial instruments. The effective interest rate method is a method of calculating
the amortized cost of a financial asset or a financial liability (or group of financial assets or financial liabilities) and of
allocating the interest income or interest expense over the relevant period.  The effective interest rate is the rate that
discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate,
a shorter period to the net carrying amount of the financial asset or financial liability.  When calculating the effective
interest rate, the Company estimates cash flows considering all contractual terms of the financial instrument.



INVENTORIES



Inventories are comprised of broken ore,
gold in-circuit and consumable materials and supplies. Broken ore represents material that, at the time of extraction, the Company
expects to process into a saleable form and sell at a profit. Ore is recorded as an asset that is classified within inventory as
material is extracted from underground mines. Ore contained in stockpiles is initially measured by estimating the number of tonnes
added and removed from the stockpile, and then converted to estimated ounces of gold contained therein based on assay data and
applying estimated metallurgical recovery rates (based on the expected processing method). As ore is processed, costs are removed
based on recoverable quantities of gold and each stockpile’s average cost per unit.



Ore is accumulated in stockpiles which
are subsequently processed into gold dore in a saleable form under a mine plan that takes into consideration optimal scheduling
of production of the Company’s reserves, present plant capacity and the market price of gold. Gold contained in the milling
circuit represents gold that the Company counts as production but is not yet in a saleable form. Gold contained in the milling
circuit and in stockpiled ore on surface is valued at the lower of cost and net realizable value. Costs include labour, equipment
costs and operating overhead.



Material and supplies inventory is valued
at the lower of cost and net realizable value. Any provision for obsolescence is determined by reference to specific stock items
identified as obsolete.



ASSETS HELD FOR SALE



Non-current assets, or disposal groups
comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily
through sale rather than through continuing use.



Such assets, or disposal groups, are generally
measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated
first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories,
financial assets or deferred tax assets, which continue to be measured in accordance with the Company’s other accounting
policies. Impairment losses on initial classification as held-for-sale or held-for-distribution and subsequent gains and losses
on re-measurement are recognized in profit or loss. Subsequent gains, if any, are not recognized in excess of any cumulative past
impairment losses.



F-11







Once classified as held-for-sale, intangible
assets and property, plant and equipment are no longer amortized or depreciated, and any equity-accounted investee is no longer
equity accounted.



MINERAL PROPERTIES



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



Recognition and Measurement



All costs related to the acquisition, exploration
and development of mineral properties and the development of milling assets are capitalized on a property by property basis. These
costs include expenditure that is directly attributable to the acquisition of the asset, as well as development costs on producing
properties incurred to develop future producing assets. Development costs on producing properties include only expenditures incurred
to develop reserves or for delineation of existing reserves. Interest on debt directly related to the acquisition and development
of mineral properties is capitalized until commencement of commercial production. Expenditures for maintenance and repairs are
charged to operations expenses as incurred. The cost of self-constructed assets includes the cost of materials and direct labour,
any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling
and removing the items and restoring the site on which they are located, and borrowing costs on qualifying assets. Items of property,
plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.



The decision to develop a mine property
within a project area is based on an assessment of the commercial viability of the property and the availability of financing.
Once the decision to proceed to development is made, development and other expenditures relating to the project area are reclassified
and disclosed as part of mineral properties with the intention that these will be depreciated by charges against earnings from
future mining operations. No depreciation is charged against the property until commercial production commences. After a mine property
has been brought into commercial production, costs of additional work on that property are expensed as incurred, except for new
development costs which are capitalized.



When material components of property, plant
and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment
and depreciated separately.



Gains and losses on disposal of an item
of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant
and equipment, and are recognized within other income in profit or loss.



Subsequent Costs



The cost of replacing a part of an item
of property, plant and equipment is added to the carrying amount of the item if it is probable that the future economic benefits
embodied within the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part
is removed. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.



Depreciation and Depletion



Depreciation (on those assets subject to
depreciation) is calculated over the depreciable amount (which is the cost of an asset, less its residual value, if any) using
either the straight-line method or the units of production method. Depletion is calculated over the net book value using the units
of production method. Land is shown at cost and not depreciated or depleted.



Upon commencement of commercial production,
the cost of mine development, mine buildings, plant and equipment directly used in production are amortized using the shorter of
the unit of production method over estimated recoverable ore reserves or the useful life of the asset. Estimated recoverable ore
reserves include proven and probable mineral reserves.



Depreciation methods, useful lives and
residual values are reviewed at each financial year end and adjusted if appropriate.



EXPLORATION AND EVALUATION EXPENDITURES



Exploration and evaluation expenditures
are those expenditures incurred by the Company in connection with the exploration for and evaluation of mineral resources before
the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.



Pre-exploration expenditures are expensed
as incurred.



F-12







All direct costs related to the acquisition
and exploration of resource property interests are capitalized by property. Exploration and evaluation assets include expenditures
on acquisition of rights to explore, studies, exploratory drilling, trenching, sampling, and other direct costs related to exploration
or evaluation of a project. General and administrative costs are only included in the measurement of exploration and evaluation
costs where they are related directly to operational activities in a particular area of interest. Exploration and evaluation assets
are initially measured at cost and classified as tangible assets.



An impairment review of exploration and
evaluation assets is performed, either individually or at the cash-generating unit (“CGU”) level, when there are indicators
that the carrying amount of the assets may exceed their recoverable amounts. To the extent that this occurs, the excess is fully
provided for, in the financial period in which this is determined. Exploration and evaluation assets are reassessed on a regular
basis and these costs are carried forward provided that at least one of the conditions below is met:



| | · | such costs are expected to be recouped in full through successful development and exploration of
the area of interest or alternatively, by its sale; or
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | exploration and evaluation activities in the area of interest have not yet reached a stage that
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in relation to the area are continuing, or planned for the future.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Where a project is determined to be technically
or commercially feasible and a decision has been made to proceed with development with respect to a particular area of interest,
the relevant exploration and evaluation asset is tested for impairment and the balance is reclassified as a development asset in
mineral properties.



LEASES



Leases in terms of which the Company assumes
substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset
is measured at an amount equal to the lower of its cost or the present value of the minimum lease payments. Subsequent to initial
recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Other leases are operating
leases and the leased assets are not recognized in the Company’s statement of financial position.



DECOMMISSIONING AND RECLAMATION



The mining, extraction and processing activities
of the Company normally give rise to legal and / or a constructive obligation for site closure or environmental restoration. Closure
and restoration can include property decommissioning and dismantling, removal or treatment of waste materials, as well as site
and land restoration. The Company provides for the closure, reclamation and decommissioning of its operating and development sites
based on the estimated future costs using information available at the reporting date. Costs included in the provision comprise
all closure and restoration activity expected to occur gradually over the life of the operation and at the time of closure. Routine
operating costs that may impact the ultimate closure and restoration activities, such as waste material handling conducted as a
normal part of a mining or production process, are not included in the provision.



The amount of the provision recognized
is estimated based on the risk adjusted costs required to settle the present obligation, discounted using a pre-tax risk-free discount
rate consistent with the probability weighted expected cash flows.



When the provision is initially recorded,
a corresponding asset is recognized. At each reporting date the restoration and rehabilitation provisions are remeasured in line
with changes in discount rates and timing or amounts of the costs to be incurred.



Changes in the provision relating to mine
rehabilitation and restoration obligations, which are not the result of the current production of inventory, are added to or deducted
from the related asset, other than the unwinding of the discount which is recognized as a finance cost in the Statements of Income.
Changes to the provision for reclamation and remediation obligations related to operating mines, which are not the result of current
production of inventory, are recorded with an offsetting change to the related asset. For properties where mining activities have
ceased or are in reclamation, changes are charged directly to earnings.



IMPAIRMENT



Financial Assets



A financial asset not carried at fair value
through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired.
A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the
asset and that the loss event will have a negative effect on the estimated future cash flows of that asset.



Objective evidence that financial assets
(including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the
Company on terms that the Company would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, or the
disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged
decline in its fair value below its cost is objective evidence of impairment.



F-13







At the end of each reporting period, the
Company assesses whether there is objective evidence that a financial asset or group of financial assets is impaired. With respect
to available-for-sale securities, for which unrealized gains and losses are generally recognized in Other Comprehensive income
(“OCI”), a significant or prolonged decline in the fair value of the investment below its cost may be evidence that
the assets are impaired. If objective evidence of impairment were to exist, the impaired amount (i.e. the unrealized loss) would
be recognized in profit (loss); any subsequent reversals would be recognized in OCI and would not flow back into profit (loss).



Impairment losses on available-for-sale
investment securities are recognized by transferring the cumulative loss that has been recognized in other comprehensive income,
and presented in unrealized gains/losses on available-for-sale financial assets in equity, to profit or loss. The cumulative loss
that is removed from other comprehensive income and recognized in profit or loss is the difference between the acquisition cost,
net of any principal repayment and amortization, and the current fair value, less any impairment loss previously recognized in
profit or loss.



If, in a subsequent period, the fair value
of an impaired available-for-sale investment security increases and the increase can be related objectively to an event occurring
after the impairment loss was recognized in profit or loss, then the impairment loss is reversed, with the amount of the reversal
recognized in profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security
is recognized in other comprehensive income.



Non-Financial Assets



The carrying amounts of the Company’s
non-financial assets, other than inventories, deferred tax assets, and exploration and evaluation assets, are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated.



The recoverable amount of an asset or CGU
is the greater of its value in use and its fair value less costs of disposal.



Fair value less costs of disposal is determined
as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and
willing parties. Fair value for mineral assets is generally determined as the present value of the estimated future cash flows
expected to arise from the continued use of the asset, including any expansion prospects, and its eventual disposal, using assumptions
that an independent market participant would take into account. These cash flows are discounted by an appropriate discount rate
to arrive at a net present value of the asset.



Value in use is determined as the present
value of the estimated future cash flows expected to arise from the continued use of the asset in its present form and its eventual
disposal. Value in use is determined by applying assumptions specific to the Company’s continued use and cannot take into
account future development. These assumptions are different than those used in calculating fair value and consequently the value
in use calculation is likely to give a different result (usually lower) than a fair value calculation. The estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset.



For the purpose of impairment testing,
assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of other assets or groups of assets.



An impairment loss is recognized if the
carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognized in profit (loss). Impairment
losses recognized in respect of CGUs are allocated first to reduce the carrying amount of goodwill, if any, allocated to the units,
and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis.



Impairment losses recognized in prior periods
are assessed at each reporting date whenever events or changes in circumstances indicate that the impairment may have reversed.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. A reversal of an impairment
loss is recognized immediately in profit (loss).



PROVISIONS



A provision is recognized if, as a result
of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable
that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability. The unwinding of the discount is recognized as finance cost.





F-14







EMPLOYEE FUTURE BENEFITS



Short-term Employee Benefits



Short-term employee benefit obligations
are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term
cash bonus plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided
by the employee and the obligation can be estimated reliably.



Share-based Payments



The Company has two stock-based compensation
plans which are described further in Note 15(a) and 15(b).



Stock Option Plan



The Company accounts for all stock option
awards using the fair-value method of accounting. Under this method, the Company recognizes compensation expense for the stock
options granted based on their grant date fair value, which is determined using the Black-Scholes option pricing model. The fair
value of the option is expensed over the vesting period with a corresponding amount recorded as contributed surplus. Consideration
received on the exercise of stock options is recorded as share capital and the related contributed surplus is transferred to share
capital.



Employee Share Purchase Plan



Under the Employee Share Purchase Plan
(“ESPP”), compensation expense is recognized as the fair value of the shares granted under the plan and is recognized
over the one year vesting period pursuant to the ESPP. Consideration received from the ESPP is recorded as share capital and amounts
recorded in contributed surplus related to the fair value of the shares granted under the plan are transferred to share capital
upon the issuance of shares. Shares issued pursuant to the ESPP are valued for accounting purposes using the Black-Scholes option
pricing model using variables in effect at the grant date.



Deferred Share Unit Plan



The Company’s Deferred Share Unit
(“DSU”) Plan is a cash-settled plan. For cash-settled plans, the fair value of the amount payable to eligible individuals
is recognized as an expense, with a corresponding increase in liabilities, over the period that the individuals unconditionally
become entitled to payment. The liability is re-measured at each reporting date and at the settlement date. Any changes in the
fair value of the liability are recognized as employee benefit expense in earnings.



TERMINATION BENEFITS



Termination benefits are expensed at the earlier of when the
Company can no longer withdraw the offer of those benefits and when the Company recognizes costs for a restructuring. If benefits
are not expected to be settled wholly within 12 months of the end of the reporting period, then they are discounted.



REVENUE RECOGNITION



Revenue from the sale of precious metals
is recognized when the significant risks and rewards of ownership have passed to the customer. This is when persuasive evidence
of an arrangement exists, title and insurance risk passes to the customer, collection is reasonably assured and the price is reasonably
determinable.



LEASE PAYMENTS



Payments made under operating leases are
recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognized as an
integral part of the total lease expense, over the term of the lease.



Minimum lease payments made under finance
leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated
to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.



INCOME TAXES



Income tax expense is comprised of current
and deferred taxes. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business
combination, or items recognized directly in equity or in other comprehensive income.



Current



Current tax is the expected tax payable
or receivable on the taxable income or loss for the year, using tax rates enacted or substantially enacted at the reporting date,
and any adjustments to tax payable in respect of previous years.





F-15







Deferred



Deferred tax is recognized in respect of
temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used
for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when
they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.



A deferred tax asset is recognized for
unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits
will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to
the extent that it is no longer probable that the related tax benefit will be realized.



Tax Exposures



In determining the amount of current and
deferred tax, the Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may
be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information
may become available that causes the Company to change its judgment regarding the adequacy of existing tax liabilities; such changes
to tax liabilities will impact tax expense in the period that such a determination is made.



EARNINGS PER SHARE



The Company presents basic and diluted
earnings per share (“EPS”) data for its common shares. Basic per share amounts are calculated using the weighted average
number of shares outstanding during the period. Diluted per share amounts are calculated based on the treasury-stock method, which
assumes that any proceeds obtained on exercise of options and warrants, along with any unrecognized stock-based compensation, would
be used by the Company to repurchase common shares at the average market price during the period. The weighted average number of
shares outstanding is then adjusted by the net change.



| | 4. | Accounting Standards:
| | -- | ---------------------



Changes in Accounting Policies



The Company has adopted the following new
standards, along with any consequential amendments, effective January 1, 2013. These changes were made in accordance with the applicable
transitional provisions.



Consolidated Financial Statements



In May 2011, the IASB issued IFRS 10, Consolidated
Financial Statements. This new standard defines the principle of control and establishes control as the basis for determining
which entities are included in consolidated financial statements. The principle of control is based on three criteria: power over
the investee; exposure to variable returns from involvement in the investee; and the ability of the investor to use its power to
affect the amount of its returns. The standard requires control of an investee to be reassessed when the facts and circumstances
indicate that there have been changes to one or more of the criteria for determining control. This new standard supersedes the
requirements relating to consolidated financial statements in IAS 27, Consolidated and Separate Financial Statements (as
amended in 2009) and SIC-12, Consolidation – Special Purpose Entities. The adoption of IFRS 10 did not result in any
change in the consolidation status of any of the Company’s subsidiaries.



Joint Arrangements



IFRS 11, Joint Arrangements, was
issued to replace IAS 31, Interests in Joint Ventures. Under IFRS 11, joint arrangements are classified as either joint
operations or joint ventures. Parties to a joint operation retain the rights and obligations to individual assets and liabilities
of the operation, while parties to a joint venture have rights to the net assets of the venture. Any arrangement which is not structured
through a separate entity or is structured through a separate entity but such separation is ineffective such that the parties to
the arrangement have rights to the assets and obligations for the liabilities will be classified as a joint operation. Joint operations
shall be accounted for in a manner consistent with jointly controlled assets and operations whereby the Company’s contractual
share of the arrangement’s assets, liabilities, revenues and expenses are included in the consolidated financial statements.
Any arrangement structured through a separate vehicle that does effectively result in separation between the Company and the arrangement
shall be classified as a joint venture and accounted for using the equity method of accounting. The adoption of this standard did
not have an impact on the Company’s consolidated financial statements.



Disclosure of Interests in Other Entities



In May 2011, the IASB issued IFRS 12, Disclosure
of Interests in Other Entities. This new standard requires enhanced disclosures about an entity’s interest in subsidiaries,
joint arrangements, associates and unconsolidated structured entities. IFRS 12 contains new disclosure requirements for interests
the Company has in subsidiaries, joint arrangements, associates and unconsolidated structured entities. Required disclosures aim
to provide readers of the financial statements with information to evaluate the nature of and risks associated with the Company’s
interests in other entities and the effects of those interests on the Company’s financial statements. The adoption of IFRS
12 resulted in incremental disclosures in the Company’s annual consolidated financial statements.



F-16







Fair Value Measurement



In May 2011, the IASB published IFRS 13,
Fair Value Measurement. IFRS 13 replaces fair value measurement guidance contained in individual IFRSs, providing a single
source of fair value measurement guidance. The standard provides a framework for measuring fair value and establishes new disclosure
requirements to enable readers to assess the methods and inputs used to develop fair value measurements and for recurring valuations
that are subject to measurement uncertainty, the effect of those measurements on the financial statements. The Company has adopted
IFRS 13 on a prospective basis and has added additional disclosures on fair value measurement in Note 22.



Presentation of Financial Statements



In June 2011, the IASB issued an amendment
to IAS 1, Presentation of Items of OCI: Amendments to IAS 1 Presentation of Financial Statements. The amendments stipulate
the presentation of net profit and OCI and also require the Company to group items within OCI based on whether the items may be
subsequently reclassified to profit or loss. Amendments to IAS 1 are effective for annual periods beginning on or after July 1,
2012. As a result of the adoption of the amendments to this standard, the Company has modified the presentation of items in OCI
in its statement of profit or loss and OCI, to present separately items that would be reclassified to profit or loss from those
that would never be. Comparative information has been re-presented accordingly.



Investments in Associates and Joint
Ventures



In May 2011, the IASB issued amendments
to IAS 28, Investments in Associates and Joint Ventures. Amendments to IAS 28 provide additional guidance applicable to
accounting for interests in joint ventures or associates when a portion of an interest is classified as held for sale or when the
Company ceases to have joint control or significant influence over an associate or joint venture. When joint control or significant
influence over an associate or joint venture ceases, the Company will no longer be required to re-measure the investment at that
date. When a portion of an interest in a joint venture or associate is classified as held for sale, the portion not classified
as held for sale shall be accounted for using the equity method of accounting until the sale is completed at which time the interest
is reassessed for prospective accounting treatment. The adoption of the amendments to IAS 28 did not have a material impact on
the Company’s consolidated financial statements.



Financial Instruments: Disclosures



In December 2011, the IASB published Offsetting
Financial Assets and Financial Liabilitiesand issued new disclosure requirements in IFRS 7 Financial Instruments: Disclosures.
The amendments to IFRS 7 contain new disclosure requirements for financial assets and liabilities that are offset in the statement
of financial position, or subject to master netting arrangements or similar arrangements. The effective date for the amendments
to IFRS 7 is annual periods beginning on or after January 1, 2013. These amendments are to be applied retrospectively. The amendments
to IFRS 7 did not have a material impact on the Company’s consolidated financial statements.



Future Changes in Accounting Policies



The standards and interpretations that
are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below.
These are the changes that the Company reasonably expects will have an impact on its disclosures, financial position or performance
when applied at a future date. The Company intends to adopt these standards, if applicable, when they become effective.



Offsetting Financial Assets and Liabilities



In December 2011, the IASB published Offsetting
Financial Assets and Financial Liabilitiesand issued new disclosure requirements in IFRS 7 Financial Instruments: Disclosures.
The amendments to IAS 32 clarify that an entity currently has a legally enforceable right to set-off if that right is not contingent
on a future event, and enforceable both in the normal course of business and in the event of default, insolvency or bankruptcy
of the entity and all counterparties. The amendments to IAS 32 also clarify when a settlement mechanism provides for net settlement
or gross settlement that is equivalent to net settlement. The effective date for the amendments to IAS 32 is annual periods beginning
on or after January 1, 2014. These amendments are to be applied retrospectively. The amendments to IAS 32 are not anticipated to
have a material impact on the Company’s consolidated financial statements.



Financial Instruments



IFRS 9, Financial Instruments (“IFRS
9”), was issued by the IASB on November 12, 2009 and will replace IAS 39, Financial Instruments: Recognition and Measurement
(“IAS 39”). IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost
or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments
in the context of its business model and the contractual cash flow characteristics of the financial assets. The new standard also
requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual
periods beginning on or after January 1, 2015. The Company is currently evaluating the impact of IFRS 9 on its financial statements.



F-17









IFRIC 21 Levies



IFRIC 21, Levies (“IFRIC 21”),
clarifies that an entity recognizes a liability for a levy when the activity that triggers payment, as identified by the relevant
legislation, occurs. For a levy that is triggered upon reaching a minimum threshold, the Interpretation clarifies that no liability
should be anticipated before the specified minimum threshold is reached. IFRIC 21 is effective for annual periods beginning on
or after 1 January 2014, with early application permitted. The adoption of IFRIC 21 may have an impact on the Company’s accounting
for production and similar taxes, which do not meet the definition of an income tax in IAS 12. The Company is still assessing and
quantifying the effect.



| | 5. | Determination of Fair Values:
| | -- | -----------------------------



A number of the Company’s accounting
policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities.
Fair values have been determined for measurement and or disclosure purposes based on the methods described below. When applicable,
further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.



Investments in Equity Securities and Debt Securities



The fair value of the Company’s available-for-sale
financial assets is determined by reference to their quoted closing bid price at the reporting date.



Derivatives



The fair value of the Company’s forward
exchange contracts are estimated based on appropriate price modeling commonly used by market participants. Such modeling uses discounted
cash flow analysis with observable market inputs including future interest rates, implied volatilities and the credit risk of the
Company or the counterparties as appropriate, with resulting valuations periodically validated through third-party or counterparty
quotes.



Share-based payment transactions



The fair value of issuances under the Company’s
employee share purchase plan, and stock option plan are measured using the Black-Scholes option pricing model. Measurement inputs
include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic
volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments
(based on historical experience and general option holder behavior) and the risk-free interest rate (based on government bonds).



| | 6. | Short-term Investments:
| | -- | -----------------------



|December 31                                                         |  | 2013 |       |  | 2012 |  
|------------------------------------------------------------------- |  | ---- | ----- |  | ---- | -
|                                                                    |  |      |       |  |      |  
|Short-term Investments                                              |  | $    | 1,500 |  |      | $
|Available-for-sale securities reclassified from long-term (Note 11) |  |      | 143   |  |      |  
|Short-term Investments                                              |  | $    | 1,643 |  |      | $



Short-term investments are denominated
in Canadian dollars, are comprised of instruments with terms to maturity between three and 12 months. At December 31, 2013, the
Company’s short-term investment had a stated interest rate of 1.20 percent. Short-term investments are classified as loans
and receivables for financial instrument purposes (Note 22).



The Company’s available-for-sale
securities at December 31, 2013 have been reclassified from long-term investments to current due to Management’s plan to
divest of these non-core assets in the next 12 months.



| | 7. | Inventories:
| | -- | ------------



Details of the Company’s inventories are as follows:



|December 31                |  | 2013 |        |  | 2012 |  
|-------------------------- |  | ---- | ------ |  | ---- | -
|                           |  |      |        |  |      |  
|Gold in-circuit (1) (2)    |  | $    | 2,522  |  |      | $
|Stockpiled ore (1) (2)     |  |      | 1,838  |  |      |  
|Materials and supplies (3) |  |      | 16,205 |  |      |  
|Inventories                |  | $    | 20,565 |  |      | $



F-18







| | (1) | For the year ended December 31, 2013, depreciation and depletion of $1.7 million is included in
the above noted balances (December 31, 2012 - $1.6 million).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | For the year ended December 31, 2013, there was a $1.8 million write-down of gold inventory (December
31, 2012 – nil).
| | --- | ----------------------------------------------------------------------------------------------------------------------

| | (3) | There was no write-down or reversal of write-down of materials and supplies inventory for the year
ended December 31, 2013 or for the year ended December 31, 2012.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 8. | Assets Held for Sale:
| | -- | ---------------------



During 2013, as part of its strategy to
focus on the Seabee Gold Operation and to minimize corporate expenditures, Claude adopted a plan to sell its Madsen Property (“Madsen”).
Under IFRS, non-current assets, that are expected to be recovered primarily through sale rather than through continuing use, are
classified as held for sale; as at December 31, 2013, Madsen met the criteria to be classified as held for sale. The Company presents
assets held for sale separately from the Company’s other assets; liabilities associated with assets held for sale are also
presented separately from the Company’s other liabilities.Immediately
before classification as held for sale, Madsen was re-measured at the lower of its carrying amount and fair value less costs to
sell (Note 10(b)). In addition, cash flows of Madsen have been presented as a net decrease in cash and cash equivalents from assets
held for sale of $1.7 in the Consolidated Statements of Cash Flows.



The sale of the Madsen Gold Project was
completed in the first quarter of 2014 (Note 24(a)).



| | 9. | Mineral Properties:
| | -- | -------------------



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



|                                   |  | Property    |         |   |            |   |         | Exploration |  |   |         |  
|---------------------------------- |  | ----------- | ------- | - | ---------- | - | ------- | ----------- |  | - | ------- | -
|                                   |  | acquisition |         |   | Buildings, |   |         | And         |  |   |         |  
|                                   |  | and mine    |         |   | plant and  |   |         | evaluations |  |   |         |  
|                                   |  | development |         |   | equipment  |   |         | assets      |  |   | Total   |  
|                                   |  |             |         |   |            |   |         |             |  |   |         |  
|Cost                               |  |             |         |   |            |   |         |             |  |   |         |  
|                                   |  |             |         |   |            |   |         |             |  |   |         |  
|Balance at January 1, 2011         |  | $           | 120,847 |   |            | $ | 104,302 |             |  | $ | 67,456  |  
|Additions                          |  |             | 25,548  |   |            |   | 16,767  |             |  |   | 13,593  |  
|Transfers between groups           |  |             | 15,757  |   |            |   | -       |             |  |   | (15,757 | )
|Balance at December 31, 2011       |  | $           | 162,152 |   |            | $ | 121,069 |             |  | $ | 65,292  |  
|Additions                          |  |             | 21,607  |   |            |   | 20,192  |             |  |   | 32,514  |  
|At December 31, 2012               |  |             | 183,759 |   |            |   | 141,261 |             |  |   | 97,806  |  
|Additions                          |  |             | 18,214  |   |            |   | 7,081   |             |  |   | 7,708   |  
|Reclassification to held for sale  |  |             | (1,469  | ) |            |   | (1,059  | )           |  |   | (53,302 | )
|At December 31, 2013               |  | $           | 200,504 |   |            | $ | 147,283 |             |  | $ | 52,212  |  
|                                   |  |             |         |   |            |   |         |             |  |   |         |  
|Depreciation and impairment losses |  |             |         |   |            |   |         |             |  |   |         |  
|                                   |  |             |         |   |            |   |         |             |  |   |         |  
|Balance at January 1, 2011         |  | $           | 98,034  |   |            | $ | 81,597  |             |  | $ | 6,495   |  
|Depreciation                       |  |             | 5,482   |   |            |   | 6,260   |             |  |   | -       |  
|Impairment                         |  |             | -       |   |            |   | -       |             |  |   | 851     |  
|Balance at December 31, 2011       |  | $           | 103,516 |   |            | $ | 87,857  |             |  | $ | 7,346   |  
|Depreciation                       |  |             | 7,554   |   |            |   | 8,951   |             |  |   | -       |  
|At December 31, 2012               |  |             | 111,070 |   |            |   | 96,808  |             |  |   | 7,346   |  
|Depreciation                       |  |             | 10,927  |   |            |   | 11,879  |             |  |   | -       |  
|Impairment (Note 10)               |  |             | 22,059  |   |            |   | 277     |             |  |   | 41,499  |  
|Reclassification to held for sale  |  |             | -       |   |            |   | (1,059  | )           |  |   | (41,351 | )
|At December 31, 2013               |  | $           | 144,056 |   |            | $ | 107,905 |             |  | $ | 7,494   |  
|                                   |  |             |         |   |            |   |         |             |  |   |         |  
|Carrying amounts                   |  |             |         |   |            |   |         |             |  |   |         |  
|                                   |  |             |         |   |            |   |         |             |  |   |         |  
|At December 31, 2011               |  | $           | 58,636  |   |            | $ | 33,212  |             |  | $ | 57,946  |  
|At December 31, 2012               |  | $           | 72,689  |   |            | $ | 44,453  |             |  | $ | 90,460  |  
|At December 31, 2013               |  | $           | 56,448  |   |            | $ | 39,378  |             |  | $ | 44,718  |  





F-19







Exploration properties



Amounts reflected for exploration properties
not in commercial production represent costs incurred to date, net of impairments, and are not intended to reflect present or future
values. The recoverability of these costs is dependent upon the discovery of economically recoverable ore reserves and the ability
to obtain necessary financing for the development of future profitable production from the properties or realization of sufficient
proceeds from the disposition of the properties.



At December 31, 2013, the Company reviewed
its exploration and evaluation assets individually for indicators of impairment. Management believes that the Company’s exploration
and evaluation assets have not yet reached a stage that permits a reasonable assessment of the economically recoverable reserves.
In addition, exploration activities in relation to these assets are continuing or planned for the future. As such, no indicators
that the carrying amount of these assets may exceed their recoverable amount were noted.



During 2011, the Company transferred exploration
and evaluations assets related to the Santoy 8 to mine development costs upon the property achieving technical feasibility and
economic viability. In accordance with IFRS, the Company tested these costs for impairment upon transfer to mine development and
determined that no impairment charge was required. Fair value less costs to sell was used to assess impairment and was determined
using a discounted cash flow approach that incorporated marketplace participant assumptions. The cash flows were discounted over
an 8 year period at a post-tax rate of 11.3 percent.



Leased machinery



The Company leases production equipment
under a number of finance lease agreements. Some leases provide the Company with the option to purchase the equipment at a beneficial
price. Some leases are for specialized equipment and in these leases the Company can cancel the leases at its option, but is responsible
for reimbursing the lessor for any losses incurred. The leased equipment secures lease obligations (see Note 14). At December 31,
2013 the carrying amount of assets under finance leases included in buildings, plant and equipment was $3.0 million (December 31,
2012: $5.1 million).



Security



The Company’s demand loans (Note
14) were utilized for the purchases of specialized equipment. The equipment purchased secures the obligations under these demand
loans. At December 31, 2013 the carrying amount of assets utilized as security under demand loans included in buildings, plant
and equipment was $7.5 million (December 31, 2012: $8.9 million).



The Company’s Term loan (Note 14)
is secured by a general security agreement covering all of the Company’s assets, except those subordinated to bank debt.



Capitalized interest



Debenture interest costs of $0.2 million
for the year ended December 31, 2013 (December 31, 2012 - $0.5 million; December
31, 2011 - $0.5 million) relating to the Madsen project have been capitalized in accordance with the Company’s accounting
policy prior to the classification of this project as assets held for sale.



Mine Operating Costs by Function



|December 31                            |  | 2013 |         |  | 2012 |   |        | 2011 | 
|-------------------------------------- |  | ---- | ------- |  | ---- | - | ------ | ---- | 
|                                       |  |      |         |  |      |   |        |      | 
|Production costs                       |  | $    | 44,051  |  |      | $ | 48,535 |      | 
|Depreciation and depletion             |  |      | 22,949  |  |      |   | 15,681 |      | 
|Impairments (Note 10)                  |  |      | 63,835  |  |      |   | -      |      | 
|(Gain) on sale of exploration property |  |      | -       |  |      |   | -      |      | 
|                                       |  | $    | 130,835 |  |      | $ | 64,216 |      | 



| | 10. | Impairment Loss
| | --- | ---------------



The Company’s accounting policy requires
assessment whether any indication of impairment exists at each of its mineral properties at the end of each reporting period.



(a) Seabee Gold Operation



During 2013, due to revised assumptions
relating to future production from the Seabee Gold Operation during the third quarter, it was determined that there were indicators
of impairment and an estimate of the recoverable amount of the Company’s mineral properties was completed. This assessment
was done at the Cash Generating Unit (“CGU”) level, which is the lowest level for which identifiable cash flows are
largely independent of the cash flows of other assets. Fair Value Less Costs of Disposal (“FVLCD”) of the Company’s
CGU was determined by calculating the net present value of the future cash flows expected to be generated by the CGU. Determining
the recoverable amount required the use of estimates and assumptions such as long-term commodity prices, discount rates, future
capital requirements, exploration potential and operating performance. The estimates of future cash flows were derived from the
Company’s most recent Life of Mine Plan (“LOMP”) utilizing an average estimated long-term gold price of $1,435
per ounce to estimate future revenues. The future cash flows of the Company’s CGU were discounted using a real weighted average
cost of capital (“WACC”) of 7.75 percent after taking into account the location, market risk and various other factors
deemed applicable to the project.



F-20







Based on the Company’s estimate of
FVLCD, total impairment losses of $22.2 million were recognized during 2013 because the carrying amount of the Company’s
Seabee Gold Operation CGU exceeded its recoverable amount; as such, the Company’s Mineral properties balance was reduced
by the amount of the impairment with a corresponding charge recognized in profit (loss).



During the year ended December 31, 2012,
the Company tested its CGUs for indicators of impairment and determined that the fair value less costs of disposal of the Company’s
CGUs (the Seabee Gold Mine and the Santoy Mine Complex) were greater than the carrying value; as such, an impairment charge was
not required. Fair value less cost to sell was determined using a discounted cash flow approach that incorporated marketplace participant
assumptions. While testing the Seabee Gold Mine for impairment, the Company reviewed and concluded that a reversal of the January
1, 2010 impairment charge of $13.1 million was not warranted because indicators of reversal were not present.



(b) Madsen Property



During 2013, the Company’s Madsen
assets were classified as held for sale. Non-current assets, or disposal groups comprised of assets and liabilities, that are expected
to be recovered primarily through sale rather than through continuing use, are classified as held for sale. Immediately before
classification as held for sale, the assets, or components of a disposal group, are re-measured at the lower of their carrying
amount and fair value less costs to sell, with the exception of financial assets and deferred income tax assets, which continue
to be measured in accordance with the Company’s accounting policies. Based on the Company’s estimate of FVLCS, an impairment
loss was recognized as the carrying amount of the Company’s Madsen Property exceeded its recoverable amount by $37.3 million;
as such, the Company’s Mineral properties balance was reduced by the amount of the impairment with a corresponding charge
recognized in profit (loss). An additional impairment charge of $4.3 million was recognized in the fourth quarter in conjunction
with the sale of the Madsen assets.



The sale of Madsen closed in the first
quarter of 2014 (Note 24(a)).



| | 11. | Investments:
| | --- | ------------



|December 31                                      |  | 2013 |      |   | 2012 |   |        | 2011 | 
|------------------------------------------------ |  | ---- | ---- | - | ---- | - | ------ | ---- | 
|                                                 |  |      |      |   |      |   |        |      | 
|Available-for-sale securities, beginning of year |  | $    | 378  |   |      | $ | 2,854  |      | 
|Disposition of available-for-sale securities     |  |      | -    |   |      |   | (1,565 | )    | 
|Acquisition of available-for-sale securities (1) |  |      | -    |   |      |   | -      |      | 
|Write-down of available-for-sale securities      |  |      | (284 | ) |      |   | (993   | )    | 
|Unrealized gain on available-for-sale securities |  |      | 49   |   |      |   | 82     |      | 
|                                                 |  |      | 143  |   |      |   | 378    |      | 
|Reclassification to current (Note 6)             |  |      | (143 | ) |      |   | -      |      | 
|Available-for-sale securities, end of year       |  | $    | -    |   |      | $ | 378    |      | 



| | (1) | The acquisition in 2011 related to shares in a public company received as settlement for Claude’s
disposition of a mineral property interest.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------



During 2013, the Company reviewed its portfolio
of available-for-sale securities in order to assess whether there was objective evidence of impairment. Factors considered in the
Company’s assessment included the length of time and extent to which fair value was below cost and current conditions specific
to the investment. During 2013, the Company concluded that objective evidence of impairment existed for certain of its available-for-sale
investments and, as a result, the unrealized loss of $0.3 million, which was included in Other comprehensive income, was charged
against profit. At December 31, 2013, no further impairment charges were recorded on the Company’s available-for-sale securities.



By holding these available-for-sale securities,
the Company is exposed to various risk factors including market price risk and liquidity risk (Note 22).



Subsequent to December 31, 2013 (Note 24(a)),
pursuant to the Company’s sale of the Madsen Gold Project to Laurentian, Claude received 9,776,885 shares of Laurentian.



| | 12. | Decommissioning and Reclamation:
| | --- | --------------------------------



The Company’s decommissioning and
reclamation costs consists of reclamation and closure costs. Mineral property obligations were determined using discount rates
ranging from 1.73 to 2.77 percent. Expected undiscounted payments of future obligations are $10.1 million over the next 5 to 14
years. During 2013, an accretion expense of $0.2 million has been charged (2012 - $0.2 million; 2011 - $0.2 million), augmented
by revisions made to the decommissioning and reclamation costs, resulting in a decrease in the overall carrying amount of the provision.
Changes to the provision during the year ended December 31, 2013 are as follows:



F-21







|December 31                                                         |  | 2013 |        |   | 2012 |   |       | 2011 | 
|------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ----- | ---- | 
|                                                                    |  |      |        |   |      |   |       |      | 
|Decommissioning and reclamation provision, beginning of year        |  | $    | 9,163  |   |      | $ | 9,713 |      | 
|Accretion                                                           |  |      | 182    |   |      |   | 175   |      | 
|Revisions due to change in estimates and discount rate              |  |      | (673   | ) |      |   | (725  | )    | 
|                                                                    |  |      | 8,672  |   |      |   | 9,163 |      | 
|Amount re-classified to Liabilities related to assets held for sale |  |      | (2,225 | ) |      |   | -     |      | 
|Decommissioning and reclamation provision, end of year              |  | $    | 6,447  |   |      | $ | 9,163 |      | 



As required by regulatory authorities,
the Company has provided letters of credit as security for reclamation related to its properties in the amount of $2.2 million
(December 31, 2012 - $2.2 million). As security for these letters of credit, the Company has provided investment certificates in
the amount of $2.2 million (December 31, 2012 - $2.2 million).



During 2013 (and subsequent to December
31, 2013), the Company has been updating its decommissioning and reclamation plans. It is expected that additional security of
approximately $4.5 million will need to be provided to the applicable regulatory authorities.



As filed with the Government of Saskatchewan’s
Ministry of Environment, the Company estimated in its 2013 Mine Closure Plan the closure costs at the cessation of mining at its
Seabee Mine at $6.1 million. Actual costs of completing the reclamation of the mine site may be higher than those estimated. The
Company has issued letters of credit in favor of the Ministry of Environment in the amount of $1.6 million in support of its obligations.
The letters of credit are secured by investment certificates. The Company has received approval to incrementally fund its remaining
closure cost obligations over the next five years as follows: 2014 - $0.5 million; 2015 - $0.5 million; 2016 - $1.0 million; 2017
- $1.0 million; and 2018 - $1.5 million.



| | 13. | Net Royalty Obligation:
| | --- | -----------------------



(a) Royalty Agreements



During each of 2004, 2005, 2006 and 2007,
the Company entered into separate Royalty Agreements (“Agreements”) whereby it sold a basic royalty on a portion of
the gold production at its Seabee Gold Operation. The Company received cash consideration consisting of royalty income, indemnity
fee income and interest income.



Under the terms of the Agreements, the
Company is required to make royalty payments at fixed amounts per ounce of gold produced; these amounts vary over the term of the
respective Agreements. A portion of the cash received at the inception of the respective agreements was placed with a financial
institution; in return, the Company received a restricted promissory note. The Company utilizes interest earned from the restricted
promissory notes and, if necessary, a portion of the principal to fund the basic royalty payments pursuant to each agreement. Over
the life of the royalty agreements, it is expected that interest earned and principal from the restricted promissory notes will
be sufficient to fund the expected basic royalty payments.



The Company has the legal right of offset
and the intention to settle on a net basis. As such, the Company has presented these transactions on a net basis on the Statements
of Financial Position.



|                                                |  | Note |  | 2004
    Agreement |                                                           |  | 2005
    Agreement |  |                                                            | 2006
    Agreement |  |  | 2007
    Agreement                                         |  |  | Total |                                                           
|----------------------------------------------- |  | ---- |  | ------------------ | --------------------------------------------------------- |  | ------------------ |  | ---------------------------------------------------------- | ------------------ |  |  | ---------------------------------------------------------- |  |  | ----- | ----------------------------------------------------------
|                                                |  |      |  |                    |                                                           |  |                    |  |                                                            |                    |  |  |                                                            |  |  |       |                                                           
|Restricted Promissory Notes                     |  |      |  |                    |                                                           |  |                    |  |                                                            |                    |  |  |                                                            |  |  |       |                                                           
|                                                |  |      |  |                    |                                                           |  |                    |  |                                                            |                    |  |  |                                                            |  |  |       |                                                           
|Principal
    Balance (1)                       |  | (b)  |  |                    | 6,776                                                     |  |                    |  | 14,337                                                     |                    |  |  | 36,482                                                     |  |  |       | 26,159                                                    
|Interest receivable
    (1)                     |  |      |  |                    | 407                                                       |  |                    |  | 752                                                        |                    |  |  | 2,232                                                      |  |  |       | 1,600                                                     
|Interest Rate                                   |  |      |  |                    | 6
                                         percent        |  |                    |  | 6
                                         percent         |                    |  |  | 7
                                         percent         |  |  |       | 7
                                         percent        
|Maturity                                        |  |      |  |                    | DEC
                                         10, 2014     |  |                    |  | FEB
                                         15, 2015      |                    |  |  | FEB
                                         15, 2016      |  |  |       | FEB
                                         15, 2017     
|                                                |  |      |  |                    |                                                           |  |                    |  |                                                            |                    |  |  |                                                            |  |  |       |                                                           
|Royalty Payments                                |  |      |  |                    |                                                           |  |                    |  |                                                            |                    |  |  |                                                            |  |  |       |                                                           
|                                                |  |      |  |                    |                                                           |  |                    |  |                                                            |                    |  |  |                                                            |  |  |       |                                                           
|Royalty Rate per ounce
    of gold produced (2) |  |      |  |                    | $13.29
                                         to $24.53 |  |                    |  | $26.72
                                         to $112.45 |                    |  |  | $69.69
                                         to $198.95 |  |  |       | $40.56
                                         to $147.05
|Royalty payable (current)
    (1)               |  | (b)  |  |                    | 314                                                       |  |                    |  | 670                                                        |                    |  |  | 2,219                                                      |  |  |       | 1,579                                                     
|Royalty obligation payable
    (long-term) (1)  |  | (b)  |  |                    | 6,911                                                     |  |                    |  | 14,529                                                     |                    |  |  | 36,527                                                     |  |  |       | 26,275                                                    





F-22









|                         |  | Note |  | 2004
    Agreement |                                                               |  | 2005
    Agreement |  |                                                                 | 2006
    Agreement |  |  | 2007
    Agreement                                              |  |  | Total |                                                                  
|------------------------ |  | ---- |  | ------------------ | ------------------------------------------------------------- |  | ------------------ |  | --------------------------------------------------------------- | ------------------ |  |  | --------------------------------------------------------------- |  |  | ----- | -----------------------------------------------------------------
|                         |  |      |  |                    |                                                               |  |                    |  |                                                                 |                    |  |  |                                                                 |  |  |       |                                                                  
|Net Profit Interest      |  | (c)  |  |                    | -                                                             |  |                    |  | -                                                               |                    |  |  | -                                                               |  |  |       | -                                                                
|                         |  |      |  |                    |                                                               |  |                    |  |                                                                 |                    |  |  |                                                                 |  |  |       |                                                                  
|Applicable years         |  |      |  |                    | 2010-2014                                                     |  |                    |  | 2011-2015                                                       |                    |  |  | 2012-2016                                                       |  |  |       | 2013-2017                                                        
|Percent                  |  |      |  |                    | 2.50,
                                         3.00 or 4.00   |  |                    |  | 1.00,
                                         2.00 or 3.00     |                    |  |  | 3.75,
                                         4.00 or 4.25     |  |  |       | 3.50,
                                         3.70 or 3.90      
|Price of gold thresholds |  |      |  |                    | $800,
                                         $900 or $1,200 |  |                    |  | $875,
                                         $1,075 or $1,275 |                    |  |  | $975,
                                         $1,175 or $1,375 |  |  |       | $1,250,
                                         $1,500 or $1,675



| | (1) | At December 31, 2013.
| | --- | ---------------------

| | (2) | Over the remaining life of the respective agreements.
| | --- | -----------------------------------------------------



(b) Net Royalty Obligation



The following schedule outlines the different
components of the transaction that are presented net on the Company’s consolidated Statements of Financial Position:



|December 31                                        |  | 2013 |        |  | 2012 |  
|-------------------------------------------------- |  | ---- | ------ |  | ---- | -
|                                                   |  |      |        |  |      |  
|Current portion                                    |  |      |        |  |      |  
|Assets                                             |  |      |        |  |      |  
|Interest receivable on Restricted promissory notes |  | $    | 4,991  |  |      | $
|Restricted promissory note (2004 agreement)        |  |      | 6,776  |  |      |  
|                                                   |  |      | 11,767 |  |      |  



|Liabilities                             |  |   |        |   |  |   |       |  
|--------------------------------------- |  | - | ------ | - |  | - | ----- | -
|Current portion of deferred revenue     |  |   | 1,075  |   |  |   | 1,038 |  
|Interest payable on royalty obligations |  |   | 4,782  |   |  |   | 4,811 |  
|Royalty obligation (2004 agreement)     |  |   | 6,911  |   |  |   | -     |  
|                                        |  | $ | 12,768 |   |  | $ | 5,849 |  
|                                        |  |   |        |   |  |   |       |  
|Net royalty obligation (current)        |  |   | (1,001 | ) |  |   | (836  | )



|December 31                        |  | 2013 |        |   | 2012 |  
|---------------------------------- |  | ---- | ------ | - | ---- | -
|                                   |  |      |        |   |      |  
|Long-term portion                  |  |      |        |   |      |  
|Assets                             |  |      |        |   |      |  
|Restricted promissory notes        |  | $    | 76,978 |   |      | $
|                                   |  |      |        |   |      |  
|Liabilities                        |  |      |        |   |      |  
|Deferred revenue                   |  |      | 1,473  |   |      |  
|Royalty obligation                 |  |      | 77,331 |   |      |  
|                                   |  | $    | 78,804 |   |      | $
|                                   |  |      |        |   |      |  
|Net royalty obligation (long-term) |  |      | (1,826 | ) |      |  
|                                   |  |      |        |   |      |  
|Total net royalty obligation       |  | $    | (2,827 | ) |      | $



The interest income and the indemnity fees
received by the Company are being amortized into income over the prepayment period and the life of the respective agreements. The
interest income and the indemnity fees are netted against interest expense and are reflected in “Financing expense”
on the consolidated statement of income.





F-23







(c) NPI Payment





In addition to the royalty, the Company
granted a net profit interest (“NPI”) of varying percentages, payable only if gold prices exceed a pre-determined threshold.
Prior to any NPI payment, the Company is entitled to first recover the NPI expenditures (including capital expenditures), working
capital, operating losses, interest charges and asset retirement obligations relating to the production of ore at the Seabee Operation.
These expenditures are calculated on a cumulative basis from the commencement of the individual agreements. At December 31, 2013,
the cumulative carry forward amounts remained in a deficiency position under each of the agreements and no payments are expected
during 2014 or 2015.



(d) Call and Put



Under certain circumstances, a 100 percent
owned subsidiary of Claude will have the right to purchase (“Call”) the equity of the holder of the royalties or right
to receive the royalties at an amount no greater than the fair market value thereof at the time of the Call. The Call price will
be paid from the balance owing to the Company under the promissory notes. Under certain circumstances, the purchaser of the royalties
will have the right to sell (“Put”) their interest in the royalty to the Company at an amount no greater than the fair
market value thereof at the time of the Put. However, such right is subject to the subsidiary of Claude’s pre-emptive right
to exercise the Call in advance of any Put being exercised and completed.



| | 14. | Loans and Borrowings:
| | --- | ---------------------



This note provides information about the
contractual terms of the Company’s interest-bearing loans and borrowings, which are
measured at amortized cost. For more information about the Company’s exposure to interest rate and liquidity risk, see Note
22.



|December 31                                  |  |     |  | 2013 |        |  | 2012 |  
|-------------------------------------------- |  | --- |  | ---- | ------ |  | ---- | -
|                                             |  |     |  |      |        |  |      |  
|Current liabilities                          |  |     |  |      |        |  |      |  
|Demand loans                                 |  | (a) |  | $    | 2,950  |  |      | $
|Current portion of finance lease liabilities |  | (b) |  |      | 291    |  |      |  
|Current portion of term loan                 |  | (c) |  |      | 23,628 |  |      |  
|Debenture                                    |  | (d) |  |      | -      |  |      |  
|Revolving loan                               |  | (e) |  |      | 5,000  |  |      |  
|                                             |  |     |  | $    | 31,869 |  |      | $



|December 31               |  |     |  | 2013 |         |   | 2012 |  
|------------------------- |  | --- |  | ---- | ------- | - | ---- | -
|                          |  |     |  |      |         |   |      |  
|Non-current liabilities   |  |     |  |      |         |   |      |  
|Finance lease liabilities |  | (b) |  | $    | -       |   |      | $
|Term loan                 |  | (c) |  |      | 23,628  |   |      |  
|Less current portion      |  | (c) |  |      | (23,628 | ) |      |  
|                          |  |     |  | $    | -       |   |      | $



The Company was not in compliance with
certain financial covenant requirements of the Term Loan as at December 31, 2013 (Note 14(c)). As such, the amortized cost of this
facility has been reclassified as a current liability. Subsequent to December 31, 2013, the Company obtained a waiver from the
lender and entered into a Waiver and Credit Amendment Agreement (“Amending Agreement”) to make certain amendments to
the original Credit Agreement (Note 24(b), Note 24(d)).



(a) Demand Loans



Terms and conditions of the Company’s
outstanding demand loans are as follows:



|December 31                                                                                                                                                   |  | 2013 |       |  | 2012 |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ----- |  | ---- | -
|                                                                                                                                                              |  |      |       |  |      |  
|Demand loans, repayable in consecutive monthly blended payments of $214,893 including interest at prime plus 1.50 percent, due between January and April 2015 |  | $    | 2,950 |  |      | $
|                                                                                                                                                              |  | $    | 2,950 |  |      | $



The demand loans are secured by a general
security agreement covering all assets of the Company. At December 31, 2013 the carrying amount of assets under demand loans included
in buildings, plant and equipment was $7.5 million (December 31, 2012: $8.9 million).



(b) Finance Lease Liabilities



The Company has finance lease lines of
credit outstanding which bear interest at prime plus 1.5 percent; the prime rate at December 31, 2013 was 3 percent.



F-24







Obligations under finance leases bear interest
between 5.4 percent and 5.5 percent per annum, are due between January and March 2014 and are secured by the leased equipment.
The estimated principal repayments on the leases are as follows: 2014 - $291.



|                   |  | Present Value of |     |  |          |   |   | Future Value of | 
|------------------ |  | ---------------- | --- |  | -------- | - | - | --------------- | 
|                   |  | Minimum Lease    |     |  |          |   |   | Minimum Lease   | 
|                   |  | Payments         |     |  | Interest |   |   | Payments        | 
|                   |  | DEC 31           |     |  | DEC 31   |   |   | DEC 31          | 
|                   |  | 2013             |     |  | 2013     |   |   | 2013            | 
|                   |  |                  |     |  |          |   |   |                 | 
|Less than one year |  | $                | 291 |  |          | $ | 2 |                 | 



|                           |  | Present Value of |       |  |          |   |    | Future Value of | 
|-------------------------- |  | ---------------- | ----- |  | -------- | - | -- | --------------- | 
|                           |  | Minimum Lease    |       |  |          |   |    | Minimum Lease   | 
|                           |  | Payments         |       |  | Interest |   |    | Payments        | 
|                           |  | DEC 31           |       |  | DEC 31   |   |    | DEC 31          | 
|                           |  | 2012             |       |  | 2012     |   |    | 2012            | 
|                           |  |                  |       |  |          |   |    |                 | 
|Less than one year         |  | $                | 1,495 |  |          | $ | 56 |                 | 
|Between one and five years |  |                  | 291   |  |          |   | 2  |                 | 
|                           |  | $                | 1,786 |  |          | $ | 58 |                 | 



The Company’s finance leases are
secured by a general security agreement. At December 31, 2013 the carrying amount of assets under finance leases included in buildings,
plant and equipment was $3.0 million (December 31, 2012: $5.1 million).



(c) Term Loan



Terms



On April 5, 2013, the Company executed
an agreement for a five-year $25.0 million term loan (the “Term Loan”) with Crown Capital Partnership Inc. (“CCP”).
Interest is fixed at 10 percent, compounds monthly and is payable monthly. Principal payments will begin in May 2014 and will be
payable monthly. The maturity date of the Term Loan is 60 months from closing.



Repayment Schedule



The tables below represent scheduled repayment
and maturity of the Term Loan over the next five years.



|Period          |  | Monthly Amount |         |  | Annual Amount |  
|--------------- |  | -------------- | ------- |  | ------------- | -
|Months 1 – 12   |  |                | NIL     |  |               |  
|Months 13 – 59  |  | $              | 300,000 |  |               | $
|Due at Maturity |  |                |         |  |               | $



|                           |  | Term Loan |        |  |          |   |       | Future Value of | 
|-------------------------- |  | --------- | ------ |  | -------- | - | ----- | --------------- | 
|                           |  | Principal |        |  |          |   |       | Term Loan       | 
|                           |  | Payments  |        |  | Interest |   |       | Payments        | 
|                           |  | DEC 31    |        |  | DEC 31   |   |       | DEC 31          | 
|                           |  | 2013      |        |  | 2013     |   |       | 2013            | 
|                           |  |           |        |  |          |   |       |                 | 
|Less than one year         |  | $         | 2,400  |  |          | $ | 2,430 |                 | 
|Between one and five years |  |           | 22,600 |  |          |   | 5,593 |                 | 
|                           |  | $         | 25,000 |  |          | $ | 8,023 |                 | 



The Term Loan is subordinate to all of
the Company’s other short-term and long-term Loans and borrowings and contains early retraction and redemption provisions.
After 12 months following the closing of this arrangement, the Company has the right to prepay the term loan subject to a prepayment
fee (calculated on the amount being prepaid) of:



|Months Following Closing |  | Prepayment Fee |  
|------------------------ |  | -------------- | -
|Months 13 – 24           |  |                | 2
|Months 25 – 36           |  |                | 1
|Months 37 – 60           |  |                | 0



F-25







In conjunction with the closing of this
Term Loan, the Company granted 5,750,000 common share purchase warrants priced at $0.70 per common share purchase warrant (Note
14(d)). These common share purchase warrants are exercisable by the holder, in whole or in part, at any time from closing until
five years following closing. The value of the common share purchase warrants associated with the term loan on the date of issuance
was $1.0 million. Subsequent to December 31, 2013, pursuant to a credit agreement waiver agreement with CCP, these warrants were
cancelled for consideration of $1.0 million, which was paid in common shares of the Company (Note 24(b), Note 24(d)).



The Company incurred $1.6 million of closing
costs, including the value of the common share purchase warrants noted above, associated with the completion of this Term Loan.
These costs reduce the carrying value of the Term Loan and will be amortized using the effective interest rate method at an effect
rate of approximately 12 percent over the five year period of the Term Loan.



|December 31                        |  | 2013 |         |   | 2012 |  
|---------------------------------- |  | ---- | ------- | - | ---- | -
|                                   |  |      |         |   |      |  
|Term loan                          |  | $    | 25,000  |   |      | $
|Less:                              |  |      |         |   |      |  
|Closing costs                      |  |      | (672    | ) |      |  
|Warrant valuation                  |  |      | (955    | ) |      |  
|                                   |  |      | 23,373  |   |      |  
|Add: Amortization of closing costs |  |      | 255     |   |      |  
|                                   |  |      | 23,628  |   |      |  
|Current portion                    |  |      | (23,628 | ) |      |  
|                                   |  | $    | -       |   |      | $



Breach of Covenant



Claude’s Term Loan contains certain
covenants stating that at the end of each fiscal quarter, the Company must maintain a current ratio of not less than 1.25, a minimum
cash flow coverage ratio (defined in the covenant as the ratio of the Company’s (i) Net EBITDA for the twelve-month period
immediately preceding such date to (ii) Annual Debt Service on such date) of not less than 1.25 and, as at December 31, 2013, a
minimum TTM EBITDA of $5.0 million.



The Company was not in compliance with
a financial covenant requirement of the Term Loan as at December 31, 2013; furthermore, this financial covenant requirement was
not waived by CCP prior to December 31, 2013. As such, the amortized cost of the Term Loan has been reclassified as current for
financial statement presentation purposes. Based on the Company’s projections at December 31, 2013, the Company believed
it would be unlikely that it will be in compliance with these certain existing covenants during fiscal 2014 without an amendment
or waiver of certain covenants by CCP. Subsequent to December 31, 2013, the Company obtained a waiver from CCP and entered into
an Amending Agreement for the financial covenant requirements of the Term Loan (Note 24(b), Note 24(d)).



(d) Debenture



The Company’s debenture was due and
repaid during the second quarter of 2013.



|December 31                          |  | 2013 |        |   | 2012 |   |       | 2011 | 
|------------------------------------ |  | ---- | ------ | - | ---- | - | ----- | ---- | 
|                                     |  |      |        |   |      |   |       |      | 
|Debenture payable, beginning of year |  | $    | 9,665  |   |      | $ | 9,452 |      | 
|Amortization of debt issue costs     |  |      | 86     |   |      |   | 213   |      | 
|Repayment                            |  |      | (9,751 | ) |      |   | -     |      | 
|Debenture payable, end of year       |  | $    | -      |   |      | $ | 9,665 |      | 



(e) Revolving Loan



The Company has a $5.0 million revolving
loan, available for general corporate purposes, which bears interest at bank prime plus 1.75 percent, all of which was drawn at
December 31, 2013. The prime rate at December 31, 2013 was 3 percent. The Company’s revolving loan was initially due in December
2013; however, upon mutual agreement with its lender, this agreement was extended with interest only payments at bank prime plus
1.75 percent. The full amount of this facility was repaid in March 2014 in conjunction with the sale of the Madsen Gold Project
(Note 24(a)).



(f) Line of Credit



The Company has access up to a $10.0 million
operating line of credit which bears interest at prime plus 1.625 percent; the prime rate at December 31, 2013 was 3 percent. These
funds are available for general corporate purposes. At December 31, 2013, the Company was bound by and met all covenants on this
credit facility. The Company had drawn $8.6 million on this line of credit as at December 31, 2013.





F-26







| | 15. | Share Capital:
| | --- | --------------



AUTHORIZED



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



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



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



The common shares of the Company are entitled
to vote at all meetings of the shareholders and, upon dissolution or any other distribution of assets, to receive such assets of
the Company as are distributable to the holders of the common shares.



|December 31                         |  |        |             |  | 2013 |   |         |        |  |  | 2012        |  |  |        |         |   | 2011 | 
|----------------------------------- |  | ------ | ----------- |  | ---- | - | ------- | ------ |  |  | ----------- |  |  | ------ | ------- | - | ---- | 
|                                    |  | Shares |             |  |      |   |         | Shares |  |  |             |  |  | Shares |         |   |      | 
|Common shares:                      |  |        |             |  |      |   |         |        |  |  |             |  |  |        |         |   |      | 
|                                    |  |        |             |  |      |   |         |        |  |  |             |  |  |        |         |   |      | 
|Outstanding, beginning of year      |  |        | 173,745,564 |  |      | $ | 189,640 |        |  |  | 164,630,231 |  |  | $      | 176,994 |   |      | 
|ESPP (a)                            |  |        | 2,065,812   |  |      |   | 1,359   |        |  |  | 338,676     |  |  |        | 546     |   |      | 
|Exercise of stock options (b)       |  |        | -           |  |      |   | -       |        |  |  | 75,402      |  |  |        | 92      |   |      | 
|Equity issue (d)                    |  |        | -           |  |      |   | -       |        |  |  | 8,701,255   |  |  |        | 12,008  |   |      | 
|Equity issue (e)                    |  |        | -           |  |      |   | -       |        |  |  | -           |  |  |        | -       |   |      | 
|Broker warrant exercise (f)         |  |        | -           |  |      |   | -       |        |  |  | -           |  |  |        | -       |   |      | 
|Warrant exercise (f)                |  |        | -           |  |      |   | -       |        |  |  | -           |  |  |        | -       |   |      | 
|Warrant exercise (f)                |  |        | -           |  |      |   | -       |        |  |  | -           |  |  |        | -       |   |      | 
|Issue costs, net of income taxes    |  |        | -           |  |      |   | -       |        |  |  | -           |  |  |        | -       |   |      | 
|Outstanding, end of year            |  |        | 175,811,376 |  |      |   | 190,999 |        |  |  | 173,745,564 |  |  |        | 189,640 |   |      | 
|                                    |  |        |             |  |      |   |         |        |  |  |             |  |  |        |         |   |      | 
|Warrants and other equity:          |  |        |             |  |      |   |         |        |  |  |             |  |  |        |         |   |      | 
|                                    |  |        |             |  |      |   |         |        |  |  |             |  |  |        |         |   |      | 
|Warrants (f)                        |  |        |             |  |      |   | 697     |        |  |  |             |  |  |        | -       |   |      | 
|Common share purchase warrants (d)  |  |        |             |  |      |   | 12      |        |  |  |             |  |  |        | 12      |   |      | 
|Common share purchase warrants (f)  |  |        |             |  |      |   | 2,700   |        |  |  |             |  |  |        | 2,700   |   |      | 
|Tax adjusted cumulative issue costs |  |        |             |  |      |   | (228    | )      |  |  |             |  |  |        | (228    | ) |      | 
|Common share purchase warrants (f)  |  |        |             |  |      |   | 552     |        |  |  |             |  |  |        | 552     |   |      | 
|Debenture purchase warrants (f)     |  |        |             |  |      |   | 513     |        |  |  |             |  |  |        | 513     |   |      | 
|                                    |  |        | 175,811,376 |  |      | $ | 195,245 |        |  |  | 173,745,564 |  |  | $      | 193,189 |   |      | 



Subsequent to December 31, 2013, the Company
completed a private placement of 4,545,454 common shares to CCP as payment for a waiver being granted by CCP in connection with
a Credit Agreement dated as of April 5, 2013 (Note 24(b), Note 24(d)).



The Company has the following equity-settled plans:



| | (a) | Employee Share Purchase Plan (“ESPP”)
| | --- | -------------------------------------



The ESPP was established to encourage employees
to purchase the Company’s common shares. Under the plan, eligible employees may contribute up to five percent of their basic
annual salary and the Company shall contribute common shares in an amount equal to 50 percent of the employee’s contribution.
Shares of the Company are issued to employees based on a weighted average market price over a specific period.



During 2013, the Company issued 2,065,812
common shares (2012 – 338,676; 2011 – 235,615) pursuant to this plan. The maximum number of common shares of the Company
available for issue under this ESPP is five percent of the Company’s common shares outstanding.Distribution of common
shares pursuant to the Company’s ESPP occurs annually in the first quarter subsequent to the year of participation. Subsequent
to December 31, 2013, the Company issued 7,799,148 shares pursuant to 2013 participation in the plan.



The weighted average fair value of ESPP
options granted during 2013 was $0.25 (2012 - $0.62; 2011 - $0.90) and, for accounting purposes, was estimated using the Black-Scholes
option pricing model with assumptions of a 1.00 year weighted average expected option life (2012 – 1.00 year; 2011 –
1.00 year), a 23 percent expected forfeiture rate (2012 – 16 percent; 2011 – 15 percent), 61 percent volatility (2012
– 72 percent; 2011 – 53 percent) and an interest rate of 1.1 percent (2012 – 0.98 percent; 2011 – 1.3 percent).
The expected volatility used in the Black-Scholes option pricing model is based on the historical volatility of the Company’s
shares over the weighted average expected option life.



F-27







During 2013, compensation expense recognized
in respect of the ESPP was $1.7 million (2012 - $0.6 million; 2011 - $0.3 million). This compensation expense has been included
in General and administrative expense in the Consolidated Statements of Income.



| | (b) | Stock Option Plan
| | --- | -----------------



The Company has established a stock option
plan under which common share purchase options may be granted to directors, officers and key employees. The maximum number of common
shares available for option under the stock option plan is nine percent of the Company’s common shares outstanding. Options
granted have an exercise price of the Company’s prior day’s closing price quoted on the TSX for the common shares of
Claude. All options are settled by physical delivery of shares. Vesting periods of options granted under the Company’s stock
option plan vary on a grant by grant basis, at the discretion of the Company’s Board of Directors. Grants to Employees have
a term to expiry of 7 to 10 years and typically have a vesting term of 3 to 5 years. Grants to Directors have a term to expiry
of 7 to 10 years and vest immediately.



Options outstanding under this plan at
December 31, 2013, December 31, 2012 and December 31, 2011 and their weighted average exercise prices are as follows:



|                  |  |         |           |   | Weighted |   |      |         |  |  | Weighted  |   |  |         |      |  | Weighted | 
|----------------- |  | ------- | --------- | - | -------- | - | ---- | ------- |  |  | --------- | - |  | ------- | ---- |  | -------- | 
|                  |  | DEC 31  |           |   | Average  |   |      | DEC 31  |  |  | Average   |   |  | DEC 31  |      |  | Average  | 
|                  |  | 2013    |           |   | Exercise |   |      | 2012    |  |  | Exercise  |   |  | 2012    |      |  | Exercise | 
|                  |  | Options |           |   | Price    |   |      | Options |  |  | Price     |   |  | Options |      |  | Price    | 
|                  |  |         |           |   |          |   |      |         |  |  |           |   |  |         |      |  |          | 
|Beginning of year |  |         | 6,948,527 |   |          | $ | 1.43 |         |  |  | 5,484,250 |   |  | $       | 1.57 |  |          | 
|Options granted   |  |         | 1,937,268 |   |          |   | 0.43 |         |  |  | 1,896,290 |   |  |         | 1.04 |  |          | 
|Options exercised |  |         | -         |   |          |   | -    |         |  |  | (75,402   | ) |  |         | 0.78 |  |          | 
|Options forfeited |  |         | (934,434  | ) |          |   | 1.35 |         |  |  | (316,611  | ) |  |         | 1.82 |  |          | 
|Options expired   |  |         | (15,000   | ) |          |   | 1.79 |         |  |  | (40,000   | ) |  |         | 1.51 |  |          | 
|End of year       |  |         | 7,936,361 |   |          | $ | 1.19 |         |  |  | 6,948,527 |   |  | $       | 1.43 |  |          | 



There were no share options exercised during
the year ended December 31, 2013. The weighted average share price at the date of exercise for share options exercised during 2012
was $1.02 (December 31, 2011: $1.84).



For director and employee options outstanding
at December 31, 2013, the range of exercise prices, the weighted average exercise price and the weighted average remaining contractual
life are as follows:



|                       |  | Options Outstanding |           |  | Options Exercisable             | 
|---------------------- |  | ------------------- | --------- |  | ------------------------------- | 
|Option Price Per Share |  | Quantity            |           |  | Weighted Average Remaining Life | 
|$0.14 - $0.50          |  |                     | 1,883,765 |  |                                 | 
|$0.51 - $1.00          |  |                     | 1,114,845 |  |                                 | 
|$1.01 - $1.50          |  |                     | 2,453,006 |  |                                 | 
|$1.51 - $2.00          |  |                     | 1,988,000 |  |                                 | 
|$2.01 - $2.38          |  |                     | 496,745   |  |                                 | 
|                       |  |                     | 7,936,361 |  |                                 | 



The foregoing options have expiry dates
ranging from January 12, 2014 to December 8, 2021.



The weighted average fair value of stock
options granted during 2013 was $0.28 and was estimated using the Black-Scholes option pricing model with assumptions of a 6.1
year weighted average expected option life, a 4.8 percent expected forfeiture rate, 72.9 percent volatility and interest rates
ranging from 1.4 to 2.1 percent. The weighted average fair value of stock options granted during 2012 was $0.65 (2011 - $1.37)
and was estimated using the Black-Scholes option pricing model with assumptions of a 5.57 year (2011 – 7.11 year) weighted
average expected option life, a two to four percent expected forfeiture rate (2011 – two percent), 65 percent to 76 percent
volatility (2011 – 68 percent to 75 percent) and interest rates ranging from 1.1 percent to 1.8 percent (2011 – 1.3
percent to 3.1 percent).



For 2013, the compensation expense recognized
in respect of stock options was $0.5 million (2012 - $1.6 million; 2011 - $1.7 million). This compensation expense has been included
in General and administrative expenses in the Consolidated Statements of Income (loss).



The expected volatility used in the Black-Scholes
option pricing model is based on the historical volatility of the Company’s shares over the weighted average expected option
life.





F-28











The Company has the following cash-settled plan:



| | (c) | Deferred Share Unit Plan
| | --- | ------------------------



The Company offers a Deferred Share Unit
(“DSU”) plan to non-employee Directors. A DSU is a notional unit that reflects the market value of a single common
share of Claude. A portion of each Director’s annual retainer is paid in DSUs. Each DSU fully vests upon award and are redeemable
for cash upon a director leaving the Company’s Board of Directors. The redemption amount will be based upon the weighted
average of the closing prices of the common shares of Claude on the TSX for the last 20 trading days prior to the redemption date
multiplied by the number of DSUs held by the Director.



During 2013, the Company granted 1,296,295
DSUs to participating Directors (2012 – 283,791; 2011 - nil). At December 31, 2013, total DSUs held by participating Directors
was 1,580,086 (December 31, 2012 – 283,791; 2011 - nil).



Compensation expense recognized in respect
of DSUs was $0.2 million (2012 - $0.2 million). This compensation expense has been included in General and administrative expenses
in the Consolidated Statements of Income.



Equity Issue:



| | (d) | Acquisition
| | --- | -----------



During 2012, the Company issued 8,701,255
common shares pursuant to a Plan of Arrangement whereby Claude acquired all of the outstanding common shares of St. Eugene Mining
Corporation Limited that it did not already own. Pursuant to this transaction, the Company also granted a total of 853,594 common
share purchase warrants to replace St. Eugene common share purchase warrants outstanding at the time of the transaction; all of
these warrants expired during 2012.



| | (e) | Short form Prospectus
| | --- | ---------------------



During 2011, the Company completed a short
form prospectus offering. The Offering consisted of the issuance of 20,000,000 common shares of the Company, on a bought deal basis,
at a price of $2.50 per share, as well as the issuance of 3,000,000 shares of the Company, at a price of $2.50 per share, to the
Underwriters pursuant to the over-allotment option, for aggregate gross proceeds of $57,500,000.



Other:



| | (f) | Schedule of Warrants Outstanding
| | --- | --------------------------------



Each common share purchase warrant entitles
the holder to acquire one common share of the Company at prices determined at the time of issue. The exercise price and date of
expiration of the common share purchase warrants outstanding at December 31, 2013 are as follows:



|         |      |  |             |               | Number         |  |           |         |  |  |           |  |  | Number         |          
|-------- | ---- |  | ----------- | ------------- | -------------- |  | --------- | ------- |  |  | --------- |  |  | -------------- | ---------
|Exercise |      |  |             |               | Outstanding at |  |           |         |  |  |           |  |  | Outstanding at |          
|Price    |      |  | Expiry Date |               | DEC 31, 2012   |  |           | Granted |  |  | Expired   |  |  | DEC 31, 2013   |          
|$        | 1.60 |  |             | May 22, 2013  |                |  | 1,693,200 |         |  |  | -         |  |  |                | 1,693,200
|$        | 0.70 |  |             | April 5, 2018 |                |  | -         |         |  |  | 5,750,000 |  |  |                | -        
|         |      |  |             |               |                |  | 1,693,200 |         |  |  | 5,750,000 |  |  |                | 1,693,200



The weighted average fair value of the
warrants granted during 2013 was approximately $0.17 and was estimated using the Black-Scholes option pricing model with assumptions
of a 4.27 year weighted average expected option life, 66.6 percent volatility and a risk free interest rate of 1.16 percent. Subsequent
to December 31, 2013, the Company entered into an Amending Agreement pursuant to its long-term debt arrangement with CCP whereby
the 5,750,000 warrants held by CCP were cancelled in conjunction with the waiver of covenant breach for consideration of $1.0 million,
which the Company paid in common shares of Claude (Note 24(b), Note 24(d)). At March 28, 2014, there were no common share purchase
warrants of the Company outstanding.



The range of exercise prices and dates of expiration of the
common share purchase warrants outstanding at December 31, 2012 were as follows:



|         |      |  |             |                   | Number         |  |           |         |  |  |         |  |  | Number         |          
|-------- | ---- |  | ----------- | ----------------- | -------------- |  | --------- | ------- |  |  | ------- |  |  | -------------- | ---------
|Exercise |      |  |             |                   | Outstanding at |  |           |         |  |  |         |  |  | Outstanding at |          
|Price    |      |  | Expiry Date |                   | DEC 31, 2011   |  |           | Granted |  |  | Expired |  |  | DEC 31, 2012   |          
|$        | 1.60 |  |             | May 22, 2013      |                |  | 1,693,200 |         |  |  | -       |  |  |                | -        
|$        | 0.90 |  |             | November 16, 2012 |                |  | 1,023,000 |         |  |  | -       |  |  |                | 1,023,000
|$        | 1.77 |  |             | April 7, 2012     |                |  | -         |         |  |  | 319,545 |  |  |                | 319,545  
|$        | 1.77 |  |             | April 12, 2012    |                |  | -         |         |  |  | 10,257  |  |  |                | 10,257   
|$        | 3.17 |  |             | March 31, 2012    |                |  | -         |         |  |  | 79,980  |  |  |                | 79,980   
|$        | 4.44 |  |             | March 31, 2012    |                |  | -         |         |  |  | 443,812 |  |  |                | 443,812  
|         |      |  |             |                   |                |  | 2,716,200 |         |  |  | 853,594 |  |  |                | 1,876,594



F-29







The warrants granted during 2012 relate
to outstanding warrants assumed as part of the St. Eugene acquisition completed in the first quarter. Note 22 The weighted average
fair value of warrants granted during 2012 was $0.02 and was estimated using the Black-Scholes option pricing model with assumptions
of a 0.2 year weighted average expected option life, and an interest rates of 0.9 percent.



The range of exercise prices and dates of expiration of the
common share purchase warrants outstanding at December 31, 2011 were as follows:



|         |      |  |             |                   | Number         |  |            |           |  |  |           |  |  | Number         |          
|-------- | ---- |  | ----------- | ----------------- | -------------- |  | ---------- | --------- |  |  | --------- |  |  | -------------- | ---------
|Exercise |      |  |             |                   | Outstanding at |  |            |           |  |  |           |  |  | Outstanding at |          
|Price    |      |  | Expiry Date |                   | DEC 31, 2010   |  |            | Exercised |  |  | Expired   |  |  | DEC 31, 2011   |          
|$        | 1.60 |  |             | May 22, 2013      |                |  | 1,809,500  |           |  |  | 116,300   |  |  |                | -        
|$        | 0.83 |  |             | April 9, 2011     |                |  | 139,321    |           |  |  | 139,321   |  |  |                | -        
|$        | 0.90 |  |             | November 16, 2012 |                |  | 2,600,000  |           |  |  | 1,577,000 |  |  |                | -        
|$        | 1.75 |  |             | December 30, 2011 |                |  | 6,000,000  |           |  |  | -         |  |  |                | 6,000,000
|         |      |  |             |                   |                |  | 10,548,821 |           |  |  | 1,832,621 |  |  |                | 6,000,000



| | 16. | Finance Expense:
| | --- | ----------------



|December 31                                |  | 2013 |       |   | 2012 |   |       | 2011 | 
|------------------------------------------ |  | ---- | ----- | - | ---- | - | ----- | ---- | 
|                                           |  |      |       |   |      |   |       |      | 
|Interest expense on loans and borrowings   |  | $    | 2,884 |   |      | $ | 1,514 |      | 
|Interest capitalized to mineral properties |  |      | (211  | ) |      |   | (536  | )    | 
|Derivative loss                            |  |      | -     |   |      |   | 85    |      | 
|Debenture and Term Loan amortization       |  |      | 340   |   |      |   | 212   |      | 
|Accretion expense                          |  |      | 182   |   |      |   | 175   |      | 
|                                           |  | $    | 3,195 |   |      | $ | 1,450 |      | 



Finance expense paid for during 2013 was $2.9 million (December
31, 2012 - $1.6 million; December 31, 2011 - $3.2 million).



| | 17. | Finance and Other Income:
| | --- | -------------------------



|December 31        |  | 2013 |        |   | 2012 |   |        | 2011 | 
|------------------ |  | ---- | ------ | - | ---- | - | ------ | ---- | 
|                   |  |      |        |   |      |   |        |      | 
|Net royalty income |  | $    | (1,214 | ) |      | $ | (1,248 | )    | 
|Other income       |  |      | (217   | ) |      |   | (138   | )    | 
|Derivative gain    |  |      | (1,249 | ) |      |   | -      |      | 
|Interest income    |  |      | (32    | ) |      |   | (109   | )    | 
|                   |  | $    | (2,712 | ) |      | $ | (1,495 | )    | 



Finance and other income received during 2013 was $1.5 million
(December 31, 2012 - $0.2 million; December 31, 2011 - $0.5 million).



| | 18. | Personnel Expenses:
| | --- | -------------------



|December 31                                    |  | 2013 |        |  | 2012 |   |        | 2011 | 
|---------------------------------------------- |  | ---- | ------ |  | ---- | - | ------ | ---- | 
|                                               |  |      |        |  |      |   |        |      | 
|Wages and salaries                             |  | $    | 35,182 |  |      | $ | 38,951 |      | 
|Canadian Pension Plan (CPP) and EI remittances |  |      | 1,305  |  |      |   | 1,473  |      | 
|                                               |  | $    | 36,487 |  |      | $ | 40,424 |      | 



| | 19. | Related Party Transactions:
| | --- | ---------------------------



Key Management Personnel



Compensation of key management personnel of the Company:



|December 31                                                            |  | 2013 |       |  | 2012 |   |       | 2011 | 
|---------------------------------------------------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- | 
|                                                                       |  |      |       |  |      |   |       |      | 
|Cash compensation – Salaries, short-term incentives and other Benefits |  | $    | 1,406 |  |      | $ | 1,810 |      | 
|Long term incentives, including share-based payments                   |  |      | 1,069 |  |      |   | 1,324 |      | 
|Total compensation paid to key management personnel                    |  | $    | 2,475 |  |      | $ | 3,134 |      | 



F-30







The Company’s Executive Leadership
Team (consisting of the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Vice President Operations)
are considered to be Key Management Personnel. In addition, members of the Company’s Board of Directors are included in this
definition, as defined by IAS 24, Related Party Disclosures.



Compensation of the Company’s key
management personnel includes salaries, non-cash benefits and board fees. Executive officers also participate in the Company’s
stock compensation and ESPP programs.



| | 20. | Income Taxes:
| | --- | -------------



(a) Effective tax rate reconciliation



The provision for income tax, both current
and deferred, differs from the amount calculated by applying the combined expected federal and provincial income tax rate to profit
before income tax. The reasons for these differences are as follows:



|December 31                                       |  | 2013 |         |   | 2012 |   |       | 2011 | 
|------------------------------------------------- |  | ---- | ------- | - | ---- | - | ----- | ---- | 
|                                                  |  |      |         |   |      |   |       |      | 
|Profit (loss) before income taxes                 |  | $    | (74,843 | ) |      | $ | 8,541 |      | 
|Federal and Provincial statutory income tax rate  |  |      | 27.0    | % |      |   | 27.0  | %    | 
|Expected tax (recovery)expense                    |  |      | (20,208 | ) |      |   | 2,306 |      | 
|                                                  |  |      |         |   |      |   |       |      | 
|Permanent differences                             |  |      | 556     |   |      |   | 358   |      | 
|Effect of change in effective tax rates           |  |      | -       |   |      |   | -     |      | 
|Other                                             |  |      | 23      |   |      |   | (27   | )    | 
|Decrease in tax assets related to royalty payable |  |      | 66      |   |      |   | 88    |      | 
|Tax assets not recorded                           |  |      | 18,143  |   |      |   | 247   |      | 
|Income tax (recovery) expense                     |  | $    | (1,420  | ) |      | $ | 2,972 |      | 



(b) Income tax recognized directly in
Other comprehensive income (loss)



Other comprehensive income included on
the consolidated statements of comprehensive income (loss) is presented net of income taxes. The following income tax amounts are
included in each component of other comprehensive income (loss):



For the year ended December 31, 2011:



|                                                            |  |            |        |   | Income tax |  |     |            | 
|----------------------------------------------------------- |  | ---------- | ------ | - | ---------- |  | --- | ---------- | 
|                                                            |  | Before tax |        |   | expense    |  |     | Net of tax | 
|                                                            |  |            |        |   |            |  |     |            | 
|Other comprehensive income (loss)                           |  |            |        |   |            |  |     |            | 
|                                                            |  |            |        |   |            |  |     |            | 
|Gain on available for sale securities transferred to profit |  |            | (35    | ) |            |  | 5   |            | 
|Unrealized loss on available for sale securities            |  |            | (2,409 | ) |            |  | 325 |            | 
|                                                            |  |            | (2,444 | ) |            |  | 330 |            | 



For the year ended December 31, 2012:



|                                                            |  |            |      |   | Income tax          |  |     |            | 
|----------------------------------------------------------- |  | ---------- | ---- | - | ------------------- |  | --- | ---------- | 
|                                                            |  | Before tax |      |   | (recovery) 
expense |  |     | Net of tax | 
|                                                            |  |            |      |   |                     |  |     |            | 
|Other comprehensive income (loss)                           |  |            |      |   |                     |  |     |            | 
|                                                            |  |            |      |   |                     |  |     |            | 
|Loss on available for sale securities transferred to profit |  |            | 199  |   |                     |  | (27 | )          | 
|Unrealized loss on available for sale securities            |  |            | (909 | ) |                     |  | 123 |            | 
|                                                            |  |            | (710 | ) |                     |  | 96  |            | 



F-31







For the year ended December 31, 2013:



|                                                            |  |            |      |   | Income tax          |  |     |            | 
|----------------------------------------------------------- |  | ---------- | ---- | - | ------------------- |  | --- | ---------- | 
|                                                            |  | Before tax |      |   | (recovery)
 expense |  |     | Net of tax | 
|                                                            |  |            |      |   |                     |  |     |            | 
|Other comprehensive income (loss)                           |  |            |      |   |                     |  |     |            | 
|                                                            |  |            |      |   |                     |  |     |            | 
|Loss on available for sale securities transferred to profit |  |            | 262  |   |                     |  | (35 | )          | 
|Unrealized loss on available for sale securities            |  |            | (231 | ) |                     |  | 32  |            | 
|                                                            |  |            | 31   |   |                     |  | (3  | )          | 



(c) Significant components of recognized
Deferred income tax assets (liabilities)



The significant components of deferred income tax assets/liabilities
are as follows:



|                                               |  |       |        |   |            |  |        |            |  |  | Recognized in |  |  |        |    
|---------------------------------------------- |  | ----- | ------ | - | ---------- |  | ------ | ---------- |  |  | ------------- |  |  | ------ | ---
|                                               |  |       |        |   | Recognized |  |        | Recognized |  |  | other         |  |  |        |    
|                                               |  | JAN 1 |        |   | in         |  |        | directly   |  |  | comprehensive |  |  | DEC 31 |    
|                                               |  | 2011  |        |   | Net profit |  |        | to equity  |  |  | Income        |  |  | 2011   |    
|                                               |  |       |        |   |            |  |        |            |  |  |               |  |  |        |    
|Deferred income tax assets (liabilities)       |  |       |        |   |            |  |        |            |  |  |               |  |  |        |    
|Share issue costs                              |  |       | 564    |   |            |  | (461   | )          |  |  | 929           |  |  |        | -  
|Decommissioning and reclamation                |  |       | 1,299  |   |            |  | 1,324  |            |  |  | -             |  |  |        | -  
|Net royalty obligation                         |  |       | 3,918  |   |            |  | (1,024 | )          |  |  | -             |  |  |        | -  
|Investments                                    |  |       | (323   | ) |            |  | 10     |            |  |  | -             |  |  |        | 330
|Mineral properties                             |  |       | (1,615 | ) |            |  | (3,960 | )          |  |  | -             |  |  |        | -  
|Other                                          |  |       | 44     |   |            |  | (37    | )          |  |  | -             |  |  |        | -  
|Total Deferred income tax assets (liabilities) |  |       | 3,887  |   |            |  | (4,148 | )          |  |  | 929           |  |  |        | 330
|Recognized (unrecognized) deferred tax assets  |  |       | (3,887 | ) |            |  | 3,784  |            |  |  | 103           |  |  |        | -  
|                                               |  |       | -      |   |            |  | (364   | )          |  |  | 1,032         |  |  |        | 330



|                                               |  |       |        |   |                |  |     |            |  |  |            |   |  | Recognized in |      |   |        | 
|---------------------------------------------- |  | ----- | ------ | - | -------------- |  | --- | ---------- |  |  | ---------- | - |  | ------------- | ---- | - | ------ | 
|                                               |  |       |        |   | Acquisition of |  |     | Recognized |  |  | Recognized |   |  | other         |      |   |        | 
|                                               |  | JAN 1 |        |   | St. Eugene     |  |     | in         |  |  | directly   |   |  | comprehensive |      |   | DEC 31 | 
|                                               |  | 2012  |        |   | Mining         |  |     | Net profit |  |  | to equity  |   |  | Income        |      |   | 2012   | 
|                                               |  |       |        |   |                |  |     |            |  |  |            |   |  |               |      |   |        | 
|Deferred income tax assets (liabilities)       |  |       |        |   |                |  |     |            |  |  |            |   |  |               |      |   |        | 
|Financing charges                              |  |       | 1,032  |   |                |  | -   |            |  |  | (344       | ) |  |               | -    |   |        | 
|Decommissioning and reclamation                |  |       | 2,623  |   |                |  | -   |            |  |  | (148       | ) |  |               | -    |   |        | 
|Net royalty obligation                         |  |       | 2,894  |   |                |  | -   |            |  |  | (389       | ) |  |               | -    |   |        | 
|Investments                                    |  |       | 17     |   |                |  | -   |            |  |  | (113       | ) |  |               | -    |   |        | 
|Mineral properties                             |  |       | (5,575 | ) |                |  | -   |            |  |  | (2,240     | ) |  |               | -    |   |        | 
|Loss carry forwards                            |  |       | -      |   |                |  | 939 |            |  |  | 63         |   |  |               | -    |   |        | 
|Other                                          |  |       | 7      |   |                |  |     |            |  |  | 199        |   |  |               | (158 | ) |        | 
|Total Deferred income tax assets (liabilities) |  |       | 998    |   |                |  | 939 |            |  |  | (2,972     | ) |  |               | (158 | ) |        | 



|                                               |  |       |        |   |            |  |        |            |  |  | Recognized in |   |  |        |  
|---------------------------------------------- |  | ----- | ------ | - | ---------- |  | ------ | ---------- |  |  | ------------- | - |  | ------ | -
|                                               |  |       |        |   | Recognized |  |        | Recognized |  |  | other         |   |  |        |  
|                                               |  | JAN 1 |        |   | in         |  |        | directly   |  |  | comprehensive |   |  | DEC 31 |  
|                                               |  | 2013  |        |   | Net profit |  |        | to equity  |  |  | Income        |   |  | 2013   |  
|                                               |  |       |        |   |            |  |        |            |  |  |               |   |  |        |  
|Deferred income tax assets (liabilities)       |  |       |        |   |            |  |        |            |  |  |               |   |  |        |  
|Financing charges                              |  |       | 688    |   |            |  | (430   | )          |  |  | (258          | ) |  |        | -
|Decommissioning and reclamation                |  |       | 2,475  |   |            |  | (2,475 | )          |  |  | -             |   |  |        | -
|Net royalty obligation                         |  |       | 2,505  |   |            |  | (2,505 | )          |  |  | -             |   |  |        | -
|Investments                                    |  |       | -      |   |            |  | (3     | )          |  |  | -             |   |  |        | 3
|Mineral properties                             |  |       | (7,815 | ) |            |  | 7,815  |            |  |  | -             |   |  |        | -
|Loss carry forwards                            |  |       | 1,002  |   |            |  | (1,002 | )          |  |  | -             |   |  |        | -
|Other                                          |  |       | 48     |   |            |  | 20     |            |  |  | (68           | ) |  |        | -
|Total Deferred income tax assets (liabilities) |  |       | (1,097 | ) |            |  | 1,420  |            |  |  | (326          | ) |  |        | 3



F-32







(d) Significant components of unrecognized
Deferred income tax assets (liabilities)



The significant components of unrecognized deferred income tax
assets/liabilities are as follows:



|                                         |  | JAN 1
                                                                        2011 |        |   | Tax assets
 not recognized in net income |  |        | Tax assets not recognized in equity |  |  | Tax assets not recognized in other comprehensive income |   |  | DEC 31
                                                                        2011 |  
|---------------------------------------- |  | ---------------------------------------------------------------------------------- | ------ | - | ---------------------------------------- |  | ------ | ----------------------------------- |  |  | ------------------------------------------------------- | - |  | ----------------------------------------------------------------------------------- | -
|                                         |  |                                                                                    |        |   |                                          |  |        |                                     |  |  |                                                         |   |  |                                                                                     |  
|Deferred income tax assets (liabilities) |  |                                                                                    |        |   |                                          |  |        |                                     |  |  |                                                         |   |  |                                                                                     |  
|Financing charges                        |  |                                                                                    | 564    |   |                                          |  | (461   | )                                   |  |  | (103                                                    | ) |  |                                                                                     | -
|Decommissioning and reclamation          |  |                                                                                    | 1,299  |   |                                          |  | (1,299 | )                                   |  |  | -                                                       |   |  |                                                                                     | -
|Net royalty obligation                   |  |                                                                                    | 3,918  |   |                                          |  | (3,918 | )                                   |  |  | -                                                       |   |  |                                                                                     | -
|Investments                              |  |                                                                                    | (323   | ) |                                          |  | 323    |                                     |  |  | -                                                       |   |  |                                                                                     | -
|Mineral properties                       |  |                                                                                    | (1,615 | ) |                                          |  | 1,615  |                                     |  |  | -                                                       |   |  |                                                                                     | -
|Other                                    |  |                                                                                    | 44     |   |                                          |  | (44    | )                                   |  |  | -                                                       |   |  |                                                                                     | -
|                                         |  |                                                                                    | 3,887  |   |                                          |  | 3,784  |                                     |  |  | (103                                                    | ) |  |                                                                                     | -



|                                         |  | JAN 1
                                                                        2012 |   |  | Tax assets not recognized in net income |  |     | Tax assets not recognized in equity |  |  | Tax assets not recognized in other comprehensive income |  |  | DEC 31
                                                                        2012 |  
|---------------------------------------- |  | ---------------------------------------------------------------------------------- | - |  | --------------------------------------- |  | --- | ----------------------------------- |  |  | ------------------------------------------------------- |  |  | ----------------------------------------------------------------------------------- | -
|                                         |  |                                                                                    |   |  |                                         |  |     |                                     |  |  |                                                         |  |  |                                                                                     |  
|Deferred income tax assets (liabilities) |  |                                                                                    |   |  |                                         |  |     |                                     |  |  |                                                         |  |  |                                                                                     |  
|Investments                              |  |                                                                                    | - |  |                                         |  | 247 |                                     |  |  | -                                                       |  |  |                                                                                     | -



|                                         |  | JAN 1
                                                                        2013 |     |  | Tax assets not recognized in net income |  |        | Tax assets not recognized in equity |  |  | Tax assets not recognized in other comprehensive
 income |  |  | DEC 31
                                                                        2013 |  
|---------------------------------------- |  | ---------------------------------------------------------------------------------- | --- |  | --------------------------------------- |  | ------ | ----------------------------------- |  |  | -------------------------------------------------------- |  |  | ----------------------------------------------------------------------------------- | -
|                                         |  |                                                                                    |     |  |                                         |  |        |                                     |  |  |                                                          |  |  |                                                                                     |  
|Deferred income tax assets (liabilities) |  |                                                                                    |     |  |                                         |  |        |                                     |  |  |                                                          |  |  |                                                                                     |  
|Financing charges                        |  |                                                                                    | -   |  |                                         |  | 165    |                                     |  |  | -                                                        |  |  |                                                                                     | -
|Decommissioning and reclamation          |  |                                                                                    | -   |  |                                         |  | 2,342  |                                     |  |  | -                                                        |  |  |                                                                                     | -
|Net royalty obligation                   |  |                                                                                    | -   |  |                                         |  | 2,017  |                                     |  |  | -                                                        |  |  |                                                                                     | -
|Investments                              |  |                                                                                    | 247 |  |                                         |  | 32     |                                     |  |  | -                                                        |  |  |                                                                                     | -
|Mineral properties                       |  |                                                                                    | -   |  |                                         |  | 12,532 |                                     |  |  | -                                                        |  |  |                                                                                     | -
|Loss carry forwards                      |  |                                                                                    | -   |  |                                         |  | 989    |                                     |  |  | -                                                        |  |  |                                                                                     | -
|Other                                    |  |                                                                                    | -   |  |                                         |  | 66     |                                     |  |  | -                                                        |  |  |                                                                                     | -
|                                         |  |                                                                                    | 247 |  |                                         |  | 18,143 |                                     |  |  | -                                                        |  |  |                                                                                     | -



(e) Unrecognized Income Tax Credits



The Company has $4.2 million (2012 - $4.0
million) of unused income tax credits that can be applied against future taxes payable. No deferred tax asset or income tax credit
receivable has been recognized as it is not probable that future taxable profits will be available to utilize the credits. The
income tax credit will expire, if unused, as follows:



|     |  | 2013 |      
|---- |  | ---- | -----
|     |  |      |      
|2026 |  | $    | 61   
|2027 |  |      | 539  
|2028 |  |      | 314  
|2029 |  |      | 230  
|2030 |  |      | 273  
|2031 |  |      | 700  
|2032 |  |      | 1,843
|2033 |  |      | 241  
|     |  | $    | 4,201



F-33







| | 21. | Earnings (Loss) Per Share:
| | --- | --------------------------



Basic:



The calculation of basic earnings per share
has been based on the following profit (loss) attributable to ordinary shareholders and weighted-average number of ordinary shares
outstanding.



|December 31                                                  |  | 2013 |         |   | 2012 |   |         | 2011 | 
|------------------------------------------------------------ |  | ---- | ------- | - | ---- | - | ------- | ---- | 
|                                                             |  |      |         |   |      |   |         |      | 
|Net (loss) profit attributable to common shareholders        |  | $    | (73,423 | ) |      | $ | 5,569   |      | 
|Weighted average number of common shares outstanding (basic) |  |      | 175,562 |   |      |   | 172,933 |      | 
|Basic net (loss) earnings per share                          |  | $    | (0.42   | ) |      | $ | 0.03    |      | 



Diluted:



The calculation of diluted earnings per
share has been based on the following profit (loss) attributable to ordinary shareholders and weighted-average number of ordinary
shares outstanding after adjustment for the effects of all dilutive potential ordinary shares.



|December 31                                                    |  | 2013 |         |   | 2012 |   |         | 2011 | 
|-------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- | 
|                                                               |  |      |         |   |      |   |         |      | 
|Net (loss) profit attributable to common Shareholders          |  | $    | (73,423 | ) |      | $ | 5,569   |      | 
|                                                               |  |      |         |   |      |   |         |      | 
|Weighted average number of common shares outstanding           |  |      | 175,562 |   |      |   | 172,933 |      | 
|Dilutive effect of warrants                                    |  |      | -       |   |      |   | -       |      | 
|Dilutive effect of stock options                               |  |      | -       |   |      |   | 299     |      | 
|Weighted average number of common Shares outstanding (diluted) |  |      | 175,562 |   |      |   | 173,232 |      | 
|Diluted net (loss) earnings per share                          |  | $    | (0.42   | ) |      | $ | 0.03    |      | 



For the year ended December 31, 2013, there
was no effect of applying the treasury-stock method to the weighted average number of shares outstanding as all of the options
and warrants were anti-dilutive.



Excluded from the computation of diluted
earnings per share at December 31, 2012 were:



| | i. | options outstanding on 5,653,682 common shares with an average exercise price greater than the
average market price of the Company’s common shares; and
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | ii. | 1,693,200 warrants with an exercise price greater than the average market price of the Company’s
common shares.
| | --- | ---------------------------------------------------------------------------------------------------------------



Excluded from the computation of diluted
earnings per share at December 31, 2011 were options outstanding on 648,561 common shares with an average exercise price greater
than the average market price of the Company’s common shares.



| | 22. | Financial Instruments:
| | --- | ----------------------



The Company is exposed in varying degrees
to a variety of financial instrument related risks by virtue of its activities. The overall financial risk management program focuses
on preservation of capital and protecting current and future Company assets and cash flows by reducing exposure to risks posed
by the uncertainties and volatilities of financial markets.



The Company’s Board of Directors
has responsibility to ensure that an adequate financial risk management policy is established and to approve the policy.



The Company’s Audit Committee oversees
Management’s compliance with the Company’s financial risk management policy, approves financial risk management programs,
and receives and reviews reports on management compliance with the policy.



The types of risk exposures and the
way in which such exposures are managed are as follows:



Credit Risk – The Company’s
credit risk is primarily attributable to its liquid financial assets including cash and cash equivalents, receivables, and commodity
and currency instruments. The Company limits exposure to credit risk on liquid financial assets through maintaining its cash and
cash equivalents and reclamation deposits with high-credit quality financial institutions. Sales of precious metals are to entities
considered to be credit worthy, as evaluated through the Company’s risk management program, which includes an evaluation
of new and existing customers and quarterly monitoring.



F-34







Liquidity Risk – The
Company ensures that there is sufficient capital in order to meet short term business requirements, after taking into account cash
flows from operations and the Company’s holdings of cash and cash equivalents. The Company believes operating cash flows
will be sufficient to fund the ongoing capital improvements at the Seabee properties for the next twelve months. The Company’s
cash is invested in business accounts with quality financial institutions and is available on demand.



|                           |  | Payments/Commitments due by period |       
|-------------------------- |  | ---------------------------------- | ------
|At December 31, 2013*      |  | Total                              |       
|Contractual Obligation     |  |                                    |       
|                           |  |                                    |       
|Demand loans               |  |                                    | 2,950 
|Interest on demand loans   |  |                                    | 85    
|Revolving loan             |  |                                    | 5,000 
|Interest on revolving loan |  |                                    | 40    
|Term loan *                |  |                                    | 25,000
|Interest on term loan      |  |                                    | 8,023 
|Capital lease obligations  |  |                                    | 291   
|Interest on capital leases |  |                                    | 2     
|Office lease               |  |                                    | 74    
|                           |  |                                    | 41,465



* Subsequent to December 31, 2013, the
Company renegotiated certain covenants within its Term Loan agreement (Note 24(b), Note 24(d)).



During 2013 (and subsequent to December
31, 2013), the Company has been updating its decommissioning and reclamation plans for the Seabee property. It is expected that
additional security of approximately $4.5 million will need to be provided to the applicable regulatory authorities, payable in
installments during 2014 to 2018.



As noted above, the Company had a working
capital deficiency of $11.9 million, was in violation of certain financial covenants on its term loan and incurred a loss of $73.4
million for the year ended December 31, 2013. In order to address this working capital deficiency, the Company, subsequent to December
31, 2013, sold certain assets (Note 24(a)), obtained a waiver of the above covenant violation (Note 24(b), Note 24(d)), completed
a royalty agreement financing for gross cash proceeds of US$12.0 million (Note 24(c)) and has continued to implement operational
cost savings measures.



Market Risk – Market
risk is the potential for loss from adverse changes in the market value of financial instruments. The level of market risk that
the Company is exposed to varies depending on the composition of its derivative instrument portfolio, as well as current and expected
market conditions. The significant market risk exposures to which the Company is exposed are Foreign exchange risk, Commodity price
and Interest rate risk. These are discussed further below:



Foreign exchange risk –
The results of the Company’s operations are subject to currency risks. The Company’s revenues from the production and
sale of gold are denominated in U.S. dollars. However, the Company’s operating expenses are primarily incurred in Canadian
dollars and its liabilities are primarily denominated in Canadian dollars. The Company is not exposed to material foreign exchange
risk on its financial instruments.



For a $0.01 movement in the U.S. dollar
to Canadian dollar exchange rate, earnings and cash flow will have a corresponding movement of $0.7 million, or $0.00 per share.



Interest rate risk –
In respect to the Company’s financial assets, the interest rate risk mainly arises from the interest rate impact on our cash
and cash equivalents, reclamation deposits and debt. In respect to financial liabilities, one of the Company’s demand loans
carries a floating interest rate with the balance of Company debt at fixed interest rates. When possible, the Company will fix
its interest costs to avoid variations in cash flows. Due to the greater proportion of fixed rate debt, a one percent change in
interest rates would not materially impact earnings or cash flows.



Commodity price risk –
The value of the Company’s mineral resources is related to the price of gold and the outlook for this mineral. Gold and precious
metal prices historically have fluctuated widely and are affected by numerous factors outside of the Company’s control, including,
but not limited to, industrial and retail demand, central bank lending, forward sales by producers and speculators, levels of worldwide
production, short-term changes in supply and demand because of speculative hedging activities and certain other factors related
specifically to gold. The profitability of the Company’s operations is highly correlated to the market price of gold. If
the gold price declines below the cost of production at the Company’s operations, for a prolonged period of time, it may
not be economically feasible to continue production. The Company is not exposed to material commodity price risk on its financial
instruments.



For a US$10 movement in gold price per
ounce, earnings and cash flow will have a corresponding movement of $0.5 million, or $0.00 per share.



F-35







Fair Value- The Company
has various financial instruments comprised of cash and cash equivalents, receivables, short and long-term investments, restricted
promissory notes, reclamation deposits, demand loans, accounts payable and accrued liabilities, long-term debt, and royalty obligations.



Fair value is the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
For disclosure purposes, all financial instruments measured at fair value are categorized into one of three hierarchy levels, described
below. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value.
Each level is based on the transparency of the inputs used to measure the fair values of assets and liabilities:



Level 1 – Values
based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.



Level 2 – Values
based on quoted prices in markets that are not active or model inputs that are observable either directly (for example, interest
rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts
and volatility measurement used to value option contracts) or indirectly for substantially the full term of the asset or liability.



Level 3 – Values
based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value
measurement.



The fair values of financial assets
and liabilities, together with the carrying amounts shown in the Statement of Financial Position, are as follows:



|December 31                                 |  | 2013           |        |  | 2012                  |  
|------------------------------------------- |  | -------------- | ------ |  | --------------------- | -
|                                            |  | Carrying Value |        |  | Estimated 
Fair Value |  
|                                            |  |                |        |  |                       |  
|Loans and receivables                       |  |                |        |  |                       |  
|Short-term investments (1)                  |  | $              | 1,500  |  |                       | $
|Accounts receivable (2)                     |  |                | 2,873  |  |                       |  
|Available-for-sale financial assets         |  |                |        |  |                       |  
|Investments (1)                             |  |                | 143    |  |                       |  
|Held-to-maturity                            |  |                |        |  |                       |  
|Deposits for reclamation costs              |  |                | 2,237  |  |                       |  
|Other financial assets                      |  |                |        |  |                       |  
|Assets held for sale                        |  |                | 13,423 |  |                       |  
|Other financial liabilities                 |  |                |        |  |                       |  
|Bank indebtedness                           |  |                | 8,623  |  |                       |  
|Demand and revolving loans                  |  |                | 7,950  |  |                       |  
|Accounts payable                            |  |                | 6,997  |  |                       |  
|Liabilities related to assets held for sale |  |                | 2,316  |  |                       |  
|Net royalty obligations                     |  |                | 2,827  |  |                       |  
|Debenture (1)                               |  |                | -      |  |                       |  
|Term loan                                   |  |                | 23,628 |  |                       |  

| | (1) | Based on quoted market prices – Level 1.
| | --- | ----------------------------------------

| | (2) | At December 31, 2013, there were no receivables that were past due or considered impaired.
| | --- | ------------------------------------------------------------------------------------------



Valuation Techniques:



Investments



The fair value of Investments is determined based on the closing
bid price of each security at the balance sheet date. The closing bid price is a quoted market price obtained from the exchange
that is the principal active market for the particular security, and therefore Investments are classified within Level 1 of the
fair value hierarchy.



Term Loan



The Company’s Term Loan is recorded at amortized cost.
The fair value is the principal outstanding on the Term Loan, as the fixed interest rate approximates rates for similar instruments.



F-36







| | 23. | Capital Management:
| | --- | -------------------



The Company’s objective when managing
its capital is to safeguard its ability to continue as a going concern so that it can provide adequate returns to shareholders
and benefits to other stakeholders. The Company defines capital that it manages as the aggregate of its equity attributable to
owners of the Company, which is comprised of issued capital, contributed surplus, accumulated deficit and accumulated other comprehensive
income (loss).



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 and
the Company’s working capital requirements. In order to maintain or adjust the capital structure, the Company (upon approval
from its Board of Directors, as required) may issue new shares through private placements, sell assets or incur debt. The Board
of Directors reviews and approves any material transaction out of the ordinary course of business, including proposals on acquisitions,
major investments, as well as annual capital and operating budgets. The Company believes that this approach, given the relative
size of the Company, is reasonable. There were no changes in the Company’s approach to capital management during the year
ended December 31, 2013. 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.



|                          |  |          |            |   |          |              | DEC 31 |   |         | DEC 31 | 
|------------------------- |  | -------- | ---------- | - | -------- | ------------ | ------ | - | ------- | ------ | 
|                          |  | Interest |            |   | Maturity |              | 2013   |   |         | 2012   | 
|                          |  |          |            |   |          |              |        |   |         |        | 
|Demand loans              |  |          | P + 1.50   | % |          | Jan–Apr/2015 |        | $ | 2,950   |        | 
|Revolving loan            |  |          | P + 1.75   | % |          | May 2014     |        |   | 5,000   |        | 
|Finance lease liabilities |  |          | 5.40%-5.50 | % |          | Jan-Mar/2014 |        |   | 291     |        | 
|Term loan *               |  |          | 10.00      | % |          | Apr/2018     |        |   | 23,628  |        | 
|Debenture *               |  |          | 12.00      | % |          | May/2013     |        |   | -       |        | 
|Total debt                |  |          |            |   |          |              |        | $ | 31,869  |        | 
|                          |  |          |            |   |          |              |        |   |         |        | 
|Shareholders’ equity      |  |          |            |   |          |              |        |   | 122,596 |        | 
|                          |  |          |            |   |          |              |        |   |         |        | 
|Debt to equity            |  |          |            |   |          |              |        |   | 26.0    | %      | 



| | * | Closing costs associated with the Company’s long-term
debt are netted against the principal balance owing, thereby reducing the carrying value of the Company’s debt on the Statement
of Financial Position. Amounts presented in the above table are the amortized cost of the balances owing (Note 14).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



At December 31, 2013, with the exception
of certain covenants relating to the Company’s Term loan (Note 14(c), Note 24(b), Note 24(d)), the Company is bound by and
has met all covenants on these credit facilities.



| | 24. | Subsequent Events:
| | --- | ------------------



| | (a) | Madsen Sale
| | --- | -----------



On March 4, 2014, the Company completed
the sale of its 100 percent interest in the Madsen Gold Project in Red Lake, Ontario, Canada to Laurentian Goldfields Ltd. (TSX.V:
LGF).



Upon closing of the transaction, the Company
received $6.25 million cash and will receive $2.5 million of cash or equity (at Laurentian’s option) payable six months following
the close of the transaction. Cash proceeds were utilized to reduce bank debt and for working capital purposes. In addition, Claude
received 9,776,885 shares of Laurentian.



| | (b) | Term Loan Amendment Agreement
| | --- | -----------------------------



Subsequent to December 31, 2013, the Company
executed a Waiver and Credit Amendment Agreement (“Amendment Agreement”) which renegotiated the terms of its $25.0
million term loan (the “Loan”) with Crown Capital Partners Inc. (“CCP”). The Amendment Agreement has modified
certain covenants within the original Term loan with CCP. The timing of principal payments has not changed pursuant to the Amendment
Agreement; monthly payments of $0.3 million will begin in May 2014. Interest on the Term loan remains fixed at 10 percent, compounds
monthly and is payable monthly. The maturity date of the Term loan remains 60 months from closing (April 2018). As a condition
of the amending agreement, the Company agreed to exercise commercially reasonable efforts to effect a sale or other transaction
of all or a portion of its assets by July 31, 2014. The Company has engaged a financial advisor to assist with this process. Upon
mutual agreement with CCP, prepayment fees pursuant to the original agreement have been waived. In addition, the 5,750,000 common
share purchase warrants pursuant to the original agreement have been cancelled in conjunction with the waiver of the covenant breach
for consideration of $1.0 million (Note 24 (d)).



F-37







| | (c) | Royalty
| | --- | -------



On March 20, 2014, the Company completed
a Net Smelter Return (“NSR”) royalty agreement on the Seabee Gold Operation. Pursuant to this transaction, proceeds
of US$12.0 million were received by the Company in exchange for a three (3) percent NSR. Under the terms of the NSR, the Company
has the right to purchase 50 percent of the NSR for US$12.0 million, expiring on December 31, 2016. The NSR payments will be paid
quarterly in cash or in physical gold at the average price of gold in each calendar month. Proceeds from the NSR will be used for
further development at the Seabee Gold Operation and for general working capital purposes primarily related to the Seabee Gold
Operation.



| | (d) | Private Placement Pursuant to Credit Agreement Waiver
| | --- | -----------------------------------------------------



On March 28, 2014, Claude completed a private
placement (the “Private Placement”) of common shares in the capital of the Company (“Common Shares”). The
Private Placement consisted of the issuance of 4,545,454 Common Shares at a price of $0.22 per Common Share, being the market price
of the Common Shares within the meaning of the Toronto Stock Exchange Company Manual, to CCP. The Common Shares have been issued
to CCP as payment for a waiver being granted by CCP in connection with a Credit Agreement dated as of April 5, 2013 as a result
of a covenant breach at December 31, 2013, as well as the modification of certain covenants. Concurrently with satisfaction of
this one-time payment, the 5.75 million common share purchase warrants pursuant to the original agreement were cancelled in conjunction
with the waiver.



F-38