Cumberland eyes placement

Subject to regulatory approval, Cumberland Resources (CBD-T) will offer 1 million units at $1.10 apiece to finance its exploration efforts in Nunavut.

Cumberland has three gold projects in the area: Meliadine West, in which it owns a 22% interest; Meliadine East, of which it owns half, and the wholly owned Meadowbank. Meliadine West is operated by WMC of Australia, though the major has placed its 56% interest on the auction block as part of a restructuring program.

At Meliadine West, WMC has spent more than $41 million outlining four zones with combined resources of 32.8 million tonnes averaging 4.7 grams gold per tonne.

Exploration in 2001 is limited to a $350,000 geophysical survey.

Resources at the Meadowbank property, situated 75 km east of Baker Lake, are pegged at 7.1 million tonnes grading 5.93 grams. The resource is spread among five deposits, one of which, Vault, was recently expanded at depth and found to contain higher-grading shoots carrying up to 8.93 grams gold over 4 metres.

Each unit consists of a flow-through share and a warrant. Two warrants entitle the holder to buy one share at $1.20 in the first year or at $1.50 in the second year of the deal’s closing.

Canaccord Capital will receive a 7.5% commission and 100,000 warrants priced at $1.10 apiece in return for underwriting the deal. The warrants expire two years after the deal’s closing.