Cumberland exercises warrants totaling $5 million

Vancouver — Cumberland Resources (CBD-T) reports that share purchase warrants originating from a $14.675 million financing completed in June last year have been exercised for net proceeds of $5.08 million.

As a result, Cumberland’s working capital has increased to about $20 million with 41,273,099 shares issued.

“The additional working capital represented by the exercise of these warrants places Cumberland in a very solid financial position to advance the Meadowbank gold project to development and continue exploration at our projects,” remarked Kerry Curtis, President and CEO.

A feasibility study at the Meadowbank project, located 70 km north of Baker Lake in Nunavut, is currently underway and is expected to be completed late this year or in early 2004. A preliminary assessment completed in January stipulated that Meadowbank could support a production rate of about 250,000 oz. gold per year at an estimated cash cost of US$168 per oz. over an eight year mine life. This was based on 85% of gold production being sourced from open pit mine designs.

Cumberland is in the midst of a $10.5 million program at Meadowbank, which includes ongoing feasibility level engineering, resource definition and exploration drilling programs and environmental impact studies.

The junior states that resources at the Connector zone and North Portage deposits continues to grow. In addition, metallurgical improvements are resulting in simpler and lower cost ore processing designs.

Estimates indicate that the Portage Pit area has a measured and indicated resource of 10.2 million tonnes grading 4.75 grams gold per tonne. An additional 2.6 million tonnes grading 4.57 grams gold are classified as inferred.

Overall, the project hosts a measured and indicated resource of 15.5 million tonnes grading 4.66 grams gold, plus an inferred resource of 8.9 million tonnes grading 4.2 grams gold.

Covering some 350 sq. km along a 25-km-long trend, the Meadowbank project comprises six closely spaced, near-surface deposits, and these contain a total of more than 3.2 million oz. gold. The deposits are hosted by iron formation or volcaniclastic sediments of the Archean Woodburn Lake Group in the Rae Craton of the Western Churchill structural province. The Meadowbank deposits occur in a structurally complex, narrow neck of supracrustal rocks sandwiched between granite plutons and metamorphosed-to-upper-greenschist facies.

Cumberland holds a 100% interest in the Meadowbank project and a 22% carried interest in the idle, 4.5-million-oz. Meliadine West project, also near Rankin Inlet. Australia’s WMC (WMC-N) is the operator of that project and holds a 56% stake, while Comaplex Minerals (CMF-T) is carried with the remaining 22%. Cumberland is also exploring for diamonds at the Meliadine East project in which it has a 50% interest with Comaplex.