Mr. McMillan: The company has been around since 1982 and has 25 consecutive years of positive operating cash flow - the first eight years from passive oil and gas assets that the company owned, and the last 17 years from gold production at a 50,000-ounce-a-year producing mine in Western Canada. We're a small-cap gold company with about 130 million or 140 million market cap. We are producing net of that single asset in Western Canada and have a very large exploration project called Madsen, in Red Lake, Ontario. We are currently in a position where we have growing gold production. We expect to move from 50,000 ounces a year roughly now through to 70,000 ounces over the next three years. We have growing cash flow going with it, and we have growing ounces in ground, both at our Seabee gold mine - the producing asset - and at our big project in Red Lake, Ontario. We currently have over 750,000 ounces in inventory at the Seabee gold mine to support the production growth, and we have just had an independent 43-101 report done on our Madsen, Red Lake project that established us with 1.2 million ounces in the resource categories of high-grade ore on that project.
TWST: Over the next two to three years, what do you see as the key opportunities and key challenges for Claude Resources?
Mr. McMillan: The big opportunity for us, I think, from the investor's point of view, remains the exploration potential at depths on our Madsen, Red Lake project. We have had an opportunity to drill five holes below the 4,000-foot level; we did that in 2009. Those holes were outstanding, high-grade extensions to a known discovery that was made many years ago, and it demonstrated that we have the potential to duplicate to some degree the success in the Red Lake camp that's been enjoyed by Goldcorp and Rubicon, and others. We do have the host rock for very high-grade and very large tonnage on our Madsen property.
The second real significant change over the next two to three years is the growth in production at our Seabee mine. We, as I say, believe we can go from where we currently sit at about 47,000 ounces to 50,000, 60,000 and 70,000 ounces through 2012 - all of that growth with the existing resources and existing infrastructure. So on the assumption that we can execute that successfully, we will see dramatic increases in our free cash flow at current gold prices.
The biggest risks to us really are normal execution risks in our production, in our drillings. And then obviously the sensitivity we have to the gold price, particularly in Canadian dollars. We are currently receiving about C1,200 an ounce. So there is obviously gold price risk and foreign exchange risk built into that.
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