Cumberland tables $3.9m for Meadowbank

Vancouver — With the latest drilling increasing the gold resources at the Meadowbank property in Nunavut, Cumberland Resources (CBD-T) has decided to accelerate exploration activities.

The wholly owned project, situated 70 km north of Baker Lake, hosts five deposits containing a measured and indicated resource of 7.8 million tonnes grading 5.79 grams gold per tonne, plus an inferred resource of 10.9 million tonnes averaging 4.44 grams gold.

Results from the newly completed, $2.5-million program boosted the resources in two of the deposits and prompted the company to increase the budget for the next round of work to $3.9 million from $2 million. The expanded program is designed to increase reserves ahead of a feasibility study, which is slated to begin later in the year. The new program will include 6,000 metres of resource definition drilling on the North Portage and Vault deposits, where shallow open-pit resources are outlined.

Another 2,000 metres of drilling will test new targets generated from previous overburden drilling. The company has five new target areas containing up to 3,000 parts per billion gold in bedrock between the North Portage and Vault gold deposits.

Cumberland also intends to accelerate its environmental studies. Toward this end, the junior will collect the baseline data required for a project description report and initiate the regulatory review process. The program will include aquatic, terrestrial, engineering and socio-economic components. Geotechnical engineering will focus on data collection for open-pit designs at the Vault and North Portage deposits.

Earlier economic studies on the project envisioned an annual production rate of 246,000 oz. gold at a total cash cost of $US168 per oz., with initial capital costs set at US$123.5 million. The mine life is estimated to be 8.3 years and calls for a payback in 4.9 years, with 85% of the production derived from open pits and an average gold price of US$300 per oz.

Metallurgical studies aimed at improving gold recoveries and improving operating projections are continuing. Last year, initial metallurgical tests on the Vault deposit showed a 92% recovery rate. The Vault deposit hosts an inferred resource of 7.47 million tonnes grading 3.9 grams gold per tonne.