Cumberland picks up pace at Meadowbank

Cumberland Resources (CBD-T) is sending another diamond drill rig to its Meadowbank gold project, 70 km north of Baker Lake, N.W.T.

The rig, which has the capacity to drill deeper than the two already on site, will facilitate an ongoing $1.8-million drill program aimed at expanding resources at the property’s Third Portage, North Portage and Goose Island deposits. In situ resources at the former deposit currently stand at 4.5 million tonnes grading 7.06 grams gold per tonne, whereas those at the latter two are 374,495 tonnes of 9.72 grams and 976,834 tonnes of 11.46 grams, respectively.

At Third Portage, Cumberland is focusing on two zones, dubbed Upper Bay and Lower Third Portage, situated west of the deposit. Results from drilling on the zones last year include 30.6 grams gold over 6 metres in hole 97-163 and 19.7 grams gold over 8.6 metres in hole 165; both of these intersections were fewer than 60 metres from the surface.

The Lower Third Portage zone remains open in several directions, whereas the Upper Bay zone is open only to the north and west.

Drilling at the Goose Island deposit will test mineralization to depths of 400 metres below the currently outlined resource — twice as deep as the holes drilled in 1997, when up to 25.8 grams gold over 5.2 metres was intersected 200 metres below the deposit.

Cumberland hopes the current program will connect North Portage with Third Portage, 500 metres to the south.

If successful, the drill program could significantly improve what is already becoming a promising project. In its preliminary scoping study, Cumberland predicted that the project could yield an after-tax rate of return of 18.9% and pegged its net present value, assuming a 5% discount rate and a gold price of US$325 per oz., at $63.4 million.

The study envisions a combined open-pit and underground mine operating at 2,000 tonnes per day and capable of yielding 120,000 oz. gold per year. Cash costs are projected at US$156 per oz. gold over a mine life of 10 years, with initial capital costs estimated at $94 million.

At a gold price of US$300 per oz., the project’s after-tax rate of return drops to 15.1% and at US$275 per oz., it falls to 11.1% (T.N.M., Feb.

23-March 1/98).