Cumberland expands Meadowbank (February 09, 2004)

Convinced that the Meadowbank gold deposit is rich enough to support an open-pit mine and mill in the High Arctic region of Nunavut, Cumberland Resources (CBD-T) is advancing the project through the feasibility stage.

The property is 70 km north of Baker Lake, an in-land but ocean-accessible community. Cumberland is evaluating the feasibility of a 10-year open-pit mine based on a preliminary assessment by AMEC E&C Services in January 2002.

AMEC E&C had proposed annual production just shy of 250,000 oz. for a little more than eight years at an estimated cash cost of US$168 per oz. and a total cost of US$235 per oz. The capital cost of a 4,700-tonne-per-day (or 1.7-million-tonne-per-year) operation was pegged at US$123 million. Roughly 2.2 million oz., or 76%, of the total 3-million-oz. resource outlined at the time of the assessment figured in the mine plan.

Cumberland has spent the past couple of field seasons adding ounces to the project to support the 10-year plan. In 2003, the company completed a $10.5-million program, including two phases of drilling totalling more than 21,500 metres in 182 drill holes. To date, 707 holes have been drilled on the property. An updated resource calculation by AMEC shows a measured and indicated 21.7 million tonnes grading 4.3 grams gold per tonne, equivalent to 3 million oz. An additional 788,000 oz. are in an inferred 5.7 million tonnes grading 4.3 grams gold.

“Resources have improved to threshold levels targeted for feasibility,” says Cumberland President Kerry Curtis. “We are now well-positioned to begin final open-pit designs and complete the feasibility process.” The formal feasibility study is expected to be completed in the next 6-8 weeks. Cumberland is applying for development permits and conducting an environmental impact statement.

The Meadowbank project comprises six near-surface gold deposits 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 deposits occur in a structurally complex narrow neck of supracrustal rocks, sandwiched between granite plutons and metamorphosed to upper greenschist facies. The property covers 350 sq. km along a 25-km-long trend.

Three distinctive deposit types have been discovered in the Meadowbank belt. The four original Meadowbank deposits — Third Portage, North Portage, Goose Island and Bay Zone — are set in and around the Portage Lakes and occur in iron formation along a 3-by-1-km trend. “The Portage area is considered the backbone of the resource potential on the property,” Curtis told delegates attending the Mineral Exploration Roundup, held recently in Vancouver. About two-thirds of the Meadowbank resource sits in the Portage area. Gold mineralization in these deposits is associated with pyrrhotite and pyrite mineralization, with a notable lack of arsenopyrite and quartz veins.

Lying 5 km to the northeast is the Vault deposit, a shallow-dipping, shear-hosted zone in a complexly folded package of felsic-to-intermediate volcaniclastic sediments. The most recent find, the new PDF zone, is hosted in an oxide facies iron formation unit 10 km north of the Vault deposit. At an inferred 344,000 tonnes grading 5.2 grams, or 57,511 oz., the PDF zone is not included in the feasibility study of the project.

The proposed mine plan involves a starter pit on the Third Portage zone that will eventually grow to 1.8 km in length and incorporate the North Portage zone. Curtis says some of the highest grades of the project will come out of Third Portage. The Goose Island and Vault zones will be mined by separate satellite pits. All three pits will be relatively shallow at less than 170 metres deep. The project development plan relies heavily on major earthwork structures, including water containment dykes. Mill throughput under review in the feasibility study has been increased by 17% to 5,500 tonnes per day. In addition, previous plans for going underground at Meadowbank have been deferred.

Metallurgical tests on the original Meadowbank deposits indicated that gold recoveries of 92% were reasonable for a gravity-flotation-cleaner concentrate circuit. Gravity recoveries alone accounted for 30-35% of the gold. The ore process for the feasibility study has been simplified by eliminating previous plans for flotation, says Curtis. Cumberland continues to forecast gold recoveries greater than 93%.

In the meantime, Cumberland’s directors have approved a $4.7-million exploration program for Meadowbank in 2004. The program will focus on grassroots and newly defined prospects near the existing deposits and along trend. “We have lots of exploration left [to do] at Meadowbank,” says Curtis. “Every year we go out, we find more. This year is not going to be any different.” Cumberland will also try to add to the potential high-grade underground resource at Goose Island, which remains open for expansion. The Vault deposit also remains open in several directions. In total, 12,000 metres of exploration drilling are budgeted. This year’s program is expected to get under way in early March and continue for about six months.

Cumberland has $47 million in working capital.