Cumberland offloads Meliadine interest (November 13, 2006)

Vancouver — Deciding to focus on its key asset, the Meadowbank gold deposit near Baker Lake, in eastern Nunavut, Cumberland Resources (CLG-T, CLG-X) has sold its interest in the Meliadine gold projects, located just north of Rankin Inlet, to Resource Capital Funds for $23 million.

The move puts Cumberland’s 22% stake in Meliadine West and 50% interest in Meliadine East into the hands of the private fund, which will also assume the company’s non-recourse debt at Meliadine West. Resource Capital Funds has agreed to a price adjustment of up to $2 million should the 2006 drill program and subsequent resource estimate — currently under way — increase the gold resource at Meliadine West.

Meliadine project partners Comaplex Minerals (CMF-T, CXMLF-O) and WMC International have both waived their preferential purchase rights.

Cumberland will earmark the funds for construction and development of an open-pit operation at Meadowbank, where it forecasts annual production of about 330,000 oz. gold over an 8-year mine life. Production is anticipated by early 2009. 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.