Cumberland eyes Portage link (May 08, 2002)

Cumberland Resources (CBD-T) has intersected shallow, high-grade mineralization during a drill program aimed at connecting the Third Portage and North Portage deposits on the Meadowbank gold project in Nunavut.

Results include the following:

• Hole 385 — 5.1 metres (from 36 metres below surface) averaging 14.2 grams gold per tonne, including 0.42 metre of 146 grams;
• Hole 387 — 3.3 metres (from 47.5 metres) of 22.1 grams;
• Hole 388 — 6.4 metres (from 37 metres) running 7.2 grams, including 0.28 metre of 86.2 grams;
• Hole 390 — 3.2 metres (from 32.5 metres) of 18.5 grams;
• Hole 394 – 9.9 metres (from 21 metres) of 6.6 grams; and
• Hole 395 – 11.2 metres (from 47 metres) grading 7.9 grams.

Drilling will continue in the area between Third Portage and North Portage. Cumberland intends for a single, 1.85-km-long open pit to cover the two deposits.

The ongoing drill program also includes about 8,100 metres of drilling designed to expand and delineate resources at the Vault, North Portage and Third Portage deposits. So far, 24 drill holes totalling 4,583 metres have been completed.

A second drill is testing the expansion potential of the Vault deposit, 5 km north of Third Portage. In all, some 67 holes are planned.

Cumberland has budgeted $2 million for work at Meadowbank this summer.

Meadowbank comprises five closely spaced, near-surface gold deposits which the company envisages mining as three open pits — a single large pit on the Third and North Portage deposits, and two satellite pits on the Goose Island and Vault deposits, which lie 400 metres and 5 km away, respectively. Underground mining will also target deeper resources at Goose Island and Vault.

Cumberland’s plan is based on measured, indicated and inferred resources totalling 14.4 million tonnes at a minable grade of 4.86 grams gold per tonne, equivalent to more than 2.2 million contained ounces. About 85% of that tonnage is deemed minable by open-pit methods.

The overall resource includes measured and indicated reserves totalling 7.8 million tonnes running 5.79 grams. Another 10.9 million tonnes of 4.44 grams are classified as inferred.

Cumberland envisages a 10-year mine from which would be mined 1.7 million tonnes (246,000 oz. gold) annually. Right now the project has enough ounces to support such an operation for about 8.3 years. The 10-year mine life would ensure a sufficient payback.

Cash operating costs are pegged at US$168 per oz.; total production costs, at US$235 per oz.; and capital costs, at US$123.5 million. The payback period is 4.9 years at a gold price of US$300 per oz.