Cumberland boosts Portage

Vancouver — The results from last year drilling at the Connector zone and North Portage deposit have enhanced the economic prospects of the Meadowbank gold project some 70 km north of Baker Lake in Nunavut.

Owner Cumberland Resources (CBD-T) now puts the measured and indicated resource at the Portage Pit area at 10.2 million tonnes grading 4.75 grams gold per tonne. In addition, 2.6 million tonnes grading 4.57 grams gold lie in the inferred resource section.

“We are very pleased to see a 40% increase in the combined measured and indicated resource category and a 15% increase in net ounces at the Portage pit area,” says company CEO Kerry Curtis. “The recent resource additions at the Portage pit area and at the Vault deposit, combined with larger open pit designs at the Vault deposit and simpler, lower cost ore processing alternatives, continue to drive Meadowbank towards high output at lower costs.”

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

So far this year, the company has punched over 121 drill holes into the property as part of a $10.5 million program aimed at producing a feasibility study, as well as completing mine permitting requirements, and test additional exploration prospects. The bankable feasibility study will likely be completed in late 2003 or early 2004 and serve as a basis for financing and construction.

Covering some 350 sq. km along a 25-km-long trend, the Meadowbank project comprises six closely spaced, near-surface gold deposits containing more than 3.2 million oz. The deposits are hosted by iron formation and/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.

In 2002, Cumberland spent $6.5 million on a program designed to expand Meadowbank’s reserve and resource potential. The program included 16,000 metres of infill and exploration drilling in 150 core holes, in addition to geotechnical, metallurgical and environmental studies.

A preliminary assessment completed in January 2002 by AMEC indicated the project could potentially support a production rate of 4,700 tonnes per day (1.7 million tonnes annually) and generate 246,000 oz. gold per year over a mine life of 8.3 years, at cash costs of US$168 per oz. and total costs of US$235 per oz. Capital costs are pegged at US$123 million. The project development plan relies heavily on major earthwork structures, including water containment dykes.

At a gold price of US$325 per oz., the proposed scenario is forecast to produce US$653 million in revenue and carry an 18.5% pretax rate of return and a payback of 3.8 years.

The proposed mine plan was based on an overall measured, indicated and inferred resource of 2.2 million oz. contained in 14.4 million tonnes grading 4.86 grams gold per tonne. About 85% of the forecast production comes from one large open pit (Third Portage) and two satellite pits (Goose Island and Vault). The remainder is to be mined by underground methods on deeper resources at Goose Island and Vault.

Four of the original Meadowbank deposits (Third Portage, North Portage, Goose Island and Bay Zone) are set in and around the Portage Lakes and confined to inter-layered banded iron formations along a 3-by-1-km trend. The Third Portage pit would combine the Third Portage, North Portage and Bay Zone deposits. The Goose Island deposit is 400 metres south of Third Portage, and the Vault deposit lies a further 5 km to the northeast. Vault is a shallow-to-moderately dipping, shear-hosted zone in a complexly folded package of felsic-to-intermediate volcaniclastics.The aim of last year’s drilling program was to add about 400,000 oz. to the mine plan, and convert a portion of the inferred resource into the measured and indicated category.

The mineralogy of the Meadowbank deposits lends itself to standard crushing, grinding, gravity separation and flotation ore processing techniques, allowing for production of a sulphide concentrate. The concentrate would be treated in a carbon-in-pulp circuit followed by carbon stripping, electrowinning and smelting to produce dore bullion. Prefeasibility studies on the original core area deposits indicated overall recoveries of 92.4%, while early tests on the Vault deposit showed a lower recovery of 82%.

Recent metallurgical tests by Lakefield Research using composited drill core samples showed improved recoveries of 92.3% for Vault, 95.7% for Third/North Portage, and 92.5% for Goose Island. Gold recovered by gravity separation alone accounted for 22% at Vault, 42.9% at Third-North Portage, and 55.3% at Goose Island.

Additional drill results from the project are expected shortly.