By advancing the Meadowbank project in eastern Nunavut to production,
Covering some 350 sq. km along a 25-km-long trend, the Meadowbank project is 70 km north of Baker Lake, an inland but ocean-accessible Arctic community. Cumberland initiated the feasibility process late last year by hiring AMEC E&C Services to provide a mine model with capital and operating cost projections. The bankable feasibility study will likely be completed in late 2003 or early 2004 and serve as a basis for financing and construction.
Meadowbank 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. “We are well on our way to achieving the 10-year mine life target for the project,” states Cumberland President Kerry Curtis.
Resource evaluations, incorporating the results from the 2002 drilling at the Vault deposit and the new PDF deposit, have now been completed, while revised estimates for the North Portage and Connector zones are pending.
The Vault deposit has grown by more than 200,000 oz., or 23%, to 1.15 million oz., while the average grade has come down by 8% to 3.58 grams. At the same time, Cumberland has brought about half of the resource into the measured and indicated category, which now stands at 4.5 million tonnes grading 3.64 grams, equal to 531,000 oz. The inferred portion is 5.5 million tonnes grading 3.52 grams, or 620,000 oz.
A highlight of last year’s drilling was the discovery of a sixth deposit at Meadowbank. The new PDF gold deposit, still in the early days of exploration, is hosted in an oxide facies iron formation unit 10 km north of the Vault deposit. Still open for expansion in several directions, the PDF zone is estimated to contain an inferred 344,000 tonnes grading 5.2 grams, equivalent to 57,511 oz.
Three deposit types
To date, three distinctive deposit types have been discovered in the Meadowbank belt, all of which are associated with sulphide mineralization and similar timing of events. The mineralized zones are non-refractory in nature and contain only trace amounts of arsenopyrite. Almost 2 million oz. are hosted in a measured and indicated resource of 12.3 million tonnes grading 5 grams. A further 9.3 million tonnes grading 4.2 grams, equal to 1.2 million oz., are inferred.
Gold mineralization in the main deposit area, near Third Portage Lake, occurs predominantly in iron formation, with associated sulphide mineralization in the form of pyrrhotite and/or pyrite. These sulphides occur as a replacement of magnetite in the oxide iron formation within the plane of S0/S1, and as fracture fill with or without silica and disseminations in both the iron formation and surrounding clastic units. There is a notable lack of arsenopyrite and quartz veins.
Gold mineralization in the Vault deposit is associated with fine-grained pyrite, sericite, silica and carbonate along the S0/S1 plane.
The mineralogy of the Meadowbank deposits lends itself to standard crushing, grinding, gravity separation and flotation ore processing techniques, allowing for productin 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.
Field work
Cumberland has kicked-off the field component of its $10.5-million 2003 work program at Meadowbank. The program, including two phases of drilling totalling about 16,000 metres, is designed to satisfy feasibility study and mine permitting requirements, and test additional exploration prospects.
“Continued resource growth through exploration remains a key focus for Meadowbank in 2003,” states Curtis.
The first phase of drilling will consist of 12,000 metres, taking Cumberland to the end of June. Three rigs will focus on resource definition and further exploration in and around the Vault and PDF deposits. The program will include roughly 4,000 metres of infill drilling on Vault, another 4,000 metres to tidy up some loose ends on the Third and North Portage deposits, and 4,000 metres for exploration, including up to a couple of thousand metres on the PDF zone, depending on results.
An overburden drilling campaign in 2002 identified numerous geochemical targets in the Vault area. Prospecting turned up mineralized showings some 300 metres northeast of Vault. In addition, a new target, 3 km northeast of Vault and known as the Wally South prospect, will be tested in the coming weeks.
Cumberland will use a fourth rig to carry out an extensive program of overburden drilling in a 6-km-long area northeast of the Vault deposit.
In the meantime, the company has submitted a project description report to the Nunavut Impact Review Board to initiate permitting. The report is a full description of the Meadowbank project from start to finish, including the mine plan, infrastructure and personnel requirements, and all of the environmental baseline studies. The review board will assess the document and provide terms for the environmental impact study.
Well-financed
Cumberland has 38.3 million shares outstanding, or 45.7 million fully diluted, and is well-fin
anced with $18 million in working capital. In addition to its wholly owned Meadowbank project, the company holds a 22% carried interest in the idle, 4.5-million-oz. Meliadine West project in Nunavut, near Rankin Inlet. Australia’s
In early 2001, WMC announced its intention to divest itself of its stake in Meliadine West following a corporate decision to get out of the gold business. WMC spent $55 million advancing the project through prefeasibility studies, outlining six closely spaced deposits with a total resource of 22.1 million tonnes grading 6.33 grams, based on a cutoff grade of 3 grams.
Cumberland and Comaplex are carried all the way through to production on the project and hold a right of first refusal pertaining to the sale of WMC’s stake in Meliadine West. In addition, to maintain its interest in the project, WMC must make annual cash payments to its Canadian partners of $1 million at the start of each new year until commercial production has been achieved. The payments escalate to $3 million in 2006. WMC is also required to keep the properties in good standing.
Says Curtis: “From our perspective, patience is going to pay off because it’s becoming more and more expensive for WMC to maintain that project.”
Cumberland and Comaplex are equal partners on the neighbouring Meliadine East project, which covers the eastern, 35-km-long extension of the Meliadine gold trend. Meliadine East hosts the Discovery deposit, which contains an indicated resource of 1.8 million tonnes grading 6.7 grams, or 397,000 oz.
Circular features
In 2002, the pair started investigating circular airborne magnetic features for their kimberlite potential by conducting a $60,000 heavy mineral sampling program down-ice of these targets. Cumberland collected some 60 samples.
“We have some pretty good diamond indicator mineralogy that was yielded from till sampling,” says Curtis. Cumberland and Comaplex have approved a $600,000 diamond exploration budget for Meliadine East in 2003, and Curtis expects drilling to begin in the second week of May.
Elsewhere in the area,
Last year’s regional sampling yielded anomalous kimberlite indicator mineral grains in 27 of the 130 samples collected. One of these samples contained 45 pyrope garnets and two eclogitic garnets. Recovered indicator grains included olivine, chrome diopside, chromite and ruby corundum. In addition, two separate occurrences of kimberlite float were discovered on the Churchill property.
Shear and Northern Empire intend to spend $2.5 million on exploration at the Churchill project this year, including ground geophysics and till sampling, followed by the drill-testing of at least 15 targets.
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