Cumberland gives green light to Meadowbank

Vancouver – The board of Cumberland Resources (CLG-T, CLG-X) has approved plans to develop the Meadowbank project into the first large-scale gold mine in Nunavut, a territory of northern Canada.

The production decision follows on the heels of a positive development recommendation by the Nunavut Impact Review Board to the Federal Minister of Indian Affairs and Northern Development in late August. Subject to financing and the timely receipt of necessary permits, Cumberland plans to begin production at an average rate of 330,000 oz. gold annually over at least an eight-year mine life, starting in late 2008 or early 2009.

Initial production will come from three shallow open pits, which collectively host proven and probable reserves of 21.3 million tonnes averaging 4.2 grams gold per tonne, or about 2.89 million contained oz. Additional resources have been identified below the proposed open pits.

Along with reserves in the Portage, Goose Island and Vault zones, the Meadowbank project hosts other zones, including the near-surface Cannu zone, where a reserve estimate is expected in early 2007. Other discoveries, such as the Goose South Zone found this year, also offer potential for resource expansion and an expanded mine life.

The gold deposits defined to date are situated along an Archean gold belt that extends for more than 25 km and is known to host additional near-surface gold prospects.

The proposed mine would have pre-production capital costs estimated at US$235 million. Total cash costs are projected to average US$175 per oz. in the first four years of production (based on higher production of about 400,000 oz.) Total cash costs would rise to an average of US$201 per oz. thereafter. The mine is expected to generate more than 300 full-time jobs and various spin-off benefits to nearby communities.

Meadowbank is situated about 70 km north of the hamlet of Baker Lake. Cumberland plans to construct a conventional access road to the site from Baker Lake, and has started procurement, staging and shipping of equipment and supplies for that purpose. Other construction activities are continuing, including a foundation pad for the fuel storage tank to be assembled in 2007.