Meliadine West put on block

Australia’s WMC has notified its two Canadian partners, Cumberland Resources (CBD-T) and Comaplex Minerals (CMF-T), that the Meliadine West gold project in Nunavut will be included in the package of assets available for sale or merger.

Since November, WMC, in an effort to restructure its gold division, has been exploring sale and merger opportunities.

In 2000, the company’s share of production from its operations, which include St. Ives, Agnew and Norseman in Western Australia, totalled 727,400 oz. at a unit cost of A$426 per oz. The realized price, including hedging, was A$552 per oz.

During the first three months of 2001, gold production totalled 213,021 oz., including 28,847 oz. from the Carosue Dam operations.

Apart from a previously committed airborne geophysical survey, estimated to cost $350,000, WMC will not be conducting any work at Meliadine West this year. The Aussie major is responsible for operating the project and for financing all expenditures. Since 1995, it has spent more than $41 million on the project, including 110,000 metres of diamond drilling.

Situated 20 km north of Rankin Inlet, Meliadine West covers the western half of a 65-km-long gold trend and hosts six deposits. The project is held 56% by WMC, with Cumberland and Comaplex each holding 22%.

WMC is in the midst of prefeasibility studies, which are incorporating results from the 2000 drilling. The studies are examining the potential for developing an open pit or combined open-pit/underground operation, while reassessing the satellite deposits and modelling higher-grade zones in the main deposit. A final report is expected in the second quarter.

Meliadine West contains a total resource of 32.8 million tonnes grading 4.7 grams gold per tonne, or just under 5 million contained ounces.