Aussie major options Meliadine property

A major mining company has positioned itself to gain a stake in the Meliadine gold property near Rankin Inlet, N.W.T.

The joint venture is currently owned by Cumberland Resources (VSE) and Comaplex Minerals (TSE), but WMC International, a subsidiary of Western Mining of Australia, can earn a 56% interest in the western part of the project by funding the first $12.5 million in expenditures and making certain cash payments.

WMC will fund costs that exceed $12.5 million by means of non-recourse loans, which will be repayable only if commercial production is achieved.

WMC can boost its interest to 60% by paying between $1 million and $4 million, depending on the date of a production start.

The portion of the Meliadine property under option includes the Wes Meg and Musket Bay prospects. Comaplex and Cumberland retain their full interest in the eastern part of the property, which includes the Discovery deposit (750,000 tons grading 0.29 oz. gold per ton).

WMC expects to launch a $1.6-million exploration program immediately, including a minimum of 20,000 ft. of drilling. Exploration on the Wes Meg area last year returned gold intervals within iron formation, including 23 ft. grading 0.49 oz. gold in the F-2 zone; 57.4 ft. grading 0.28 oz. in the Pump zone and 30.8 ft. grading 0.27 oz. in the F-1 zone.

Cumberland and Comaplex expect to spend $1.2 million on the (unoptioned) eastern part of the property in order to outline proximal reserves surrounding the Discovery deposit. They also plan to drill scout holes to test favorable targets on other parts of the property.