Cumberland gets Nunavut approval for Meadowbank (October 09, 2006)

Vancouver — After a two-and-a-half-year public review process, Cumberland Resources (CLG-T, CLG-X) has received the blessing of the Nunavut Impact Review Board (NIRB) for development of its proposed Meadowbank gold mine, located 70 km north of Baker Lake.

The project now goes to the federal minister of Indian Affairs and Northern Development for a project certificate, expected to take about two months. Once the certificate is in hand, construction licences can be issued to the company, which will now start buying and staging equipment for development of an access road to the project.

“Meadowbank is the first major gold development proposal to move through the Nunavut environmental assessment process,” said Cumberland president and CEO Kerry Curtis. “We are now just steps away from developing Canada’s largest pure gold open-pit reserves into Nunavut’s first new large-scale, long-life gold operation.”

On the heels of the NIRB recommendation, Cumberland’s board approved the development plan for an open-pit mine producing an average of 330,000 oz. gold annually over an estimated 8.1-year life. Total life-of-mine cash costs are anticipated to come in at US$201 per oz. with development capital expenses estimated at US$235 million. Production, from three shallow open pits, is expected to begin by early 2009.

Earlier this year, Cumberland established a gold loan for up to 420,000 oz. (about 15% of its reserves) for a monetized value of more that $280 million at current bullion prices.

Meadowbank hosts proven and probable reserves of 21.3 million tonnes grading 4.2 grams gold per tonne, about 2.89 million contained ounces gold.

The Inuit impact and benefit agreement signed earlier this year between Cumberland and the Kivalliq Inuit Association will bring significant economic benefits to the region. Meadowbank is expected to provide about 350 direct jobs during its construction phase, boosting Nunavut’s gross domestic product (GDP) by as much as 8%. Once in production, it will contribute $1.4 billion to the territory’s GDP with a major portion of the new 360 full-time jobs expected to be filled by local residents.

Shares of Cumberland have settled into the $5.75-range, giving the company a $325-million market capitalization based on its 56.5 million shares outstanding.