Meliadine West jumps prefeasibility hurdle

An independent prefeasibility study has given the thumbs-up sign to the Meliadine West gold project, situated 70 km north of Rankin Inlet, N.W.T.

The Meliadine West project is a joint venture among Cumberland Resources (CBD-T), with 22%, Comaplex Minerals (CMF-T), with 22% and a subsidiary of Australian-based major WMC, with 56%. WMC is operating and funding the joint venture, and also has the right to earn an additional 4% after production start-up, for between $1 million and $4 million, depending on the timing of production.

The study, which was carried out by engineering firm H.A. Simons, indicates the project could yield 400,000 oz. gold annually over a mine life of 10 years. Operating costs over the life of the mine are estimated at $167 per oz. gold.

Proven and probable resources in the Tiriruniak zone are pegged at 7.5 million tonnes grading 11.6 grams gold per tonne, whereas proven and probable resources in the F zone are estimated at 1.1 million tonnes grading 7.6 grams gold. An additional 4.5 million tonnes of 10.6 grams gold are expected to be proved up over the course of the year, an assumption with which the study reportedly concurs.

Most of the resources are considered amenable to underground mining methods.

However, a portion may also be minable by open-pit methods. A cutoff grade of 5 grams gold was used in the calculation of underground blocks, whereas 3 grams gold was used in the pit outlines.

WMC has refused to divulge any other parameters used in the study or its conclusions. Both Cumberland and Comaplex say they have been requested to do likewise.

“We have asked WMC to allow us to release our own financially constructed model from [the study], but they have indicated that they’d just as soon we didn’t,” says Cumberland President Glen Dickson. “We are trying to argue that the prefeasibility study doesn’t mean anything without the financial modelling numbers ….”.

A spokesman for WMC says the company considers the study an internal matter, but has left Cumberland and Comaplex free to choose which information to release.

Since 1995, WMC has spent over $19 million exploring the property, and has budgeted $7.2 million for exploration and engineering studies in 1998. Of the latter amount, $5.9 million will go towards infill and stepout or engineering drilling at the Tiriruniak and F zones. A further $1.3-2 million will be spent on regional exploration in order to evaluate the potential of the 25-km-long westward extension of the project.

Over 50,000 metres of diamond drilling have been completed on the property to date, with approximately 75% of this focused on the Tiriruniak, F, Wolf and Pump zones. These zones are now collectively referred to as the Wesmeg portion of the project.

Gold mineralization is hosted in Archean-aged, structurally deformed iron formation and mafic volcanics. Within the iron formation, mineralization is dominantly controlled by large fold closures.

WMC currently has five diamond drill rigs operating on site.