1.74 m at 110.52 g/t Au at MeadowbankCumberland drills 1.74 m at 110.52 g/t Au at Meadowbank
Cumberland Resources Ltd (C:CLG)
Shares Issued 56,376,274
Last Close 6/21/2006 $4.60
Thursday June 22 2006 - News Release
Mr. Kerry Curtis reports
CUMBERLAND REPORTS ON NEW GOLD ZONE AT MEADOWBANK AND ADVANCES CANNU DRILLING AND DEVELOPMENT PERMITTING
Cumberland Resources Ltd. is providing drill results from the phase I 2006 drill program at the company's 100-per-cent-owned Meadowbank gold project located 70 kilometres north of the hamlet of Baker Lake, Nunavut. The two-phased 2006 exploration program is focused on increasing gold resources and reserves, and has been successful in identifying new mineralization, as well as improving definition of the Cannu zone, which was discovered in late 2005. The company also confirms the recent advancement of the environmental review process.
"Our initial 2006 exploration efforts have once again demonstrated that Meadowbank has excellent potential for new discoveries. Even though the new Goose South mineralization is at the initial stage of exploration, its proximal location and similarity to existing reserves at the Goose Island deposit underscore the high potential for additional discoveries at Meadowbank," stated Kerry Curtis, president and chief executive officer of Cumberland. "In addition, the phase I 2006 drill assays at Cannu are in line with the grades received from the 2005 drill program. As the Cannu grades are approximately 50 per cent higher than the average reserve grade on the project, we are confident of the excellent potential the Cannu zone offers for open-pit expansion."
During the phase I 2006 program, approximately 2,270 metres of diamond drilling in 12 holes were completed at the Goose South zone and approximately 3,270 metres of diamond drilling in 24 holes were completed at the Cannu zone. Phase II of the 2006 exploration program will commence in early July at the Cannu zone and the Ukalik prospect located north of the Vault deposit. The Goose South zone will not be further explored in 2006, as drilling is ice-based.
New gold zone emerging
Drilling completed during the phase I 2006 program has discovered a new zone of mineralization, the Goose South zone, located approximately 400 metres south of the Goose Island deposit. The 2006 program focused on mineralization intersected by a single drill hole in 1997, which indicated that the stratigraphy at the Goose South zone is the same as that at the Goose Island deposit. Highlights from the phase I Goose South drilling include the following.
SELECTED HIGHLIGHTS FROM GOOSE SOUTH 2006 DRILL HOLES (i)
Hole No. Grade (g/t Au) Width (m) Depth below surface (m)
G06-622 5.12 3.50 77
G06-625 5.07 3.19 193
G06-633 12.63 0.96 81
G06-635 5.61 3.60 22
G06-638 110.52 1.74 100
(i) Estimated true width is approximately 50 per cent to 60 per cent of intersection length.
The drill intersections in this steeply dipping zone have yielded encouraging gold grades over narrow-to-moderate widths within a similar structural and stratigraphic setting as the Goose Island deposit. Additional results are pending. Further exploration will not take place at Goose South in 2006, since Goose South is an ice-based target.
Cannu zone
The Cannu zone gold mineralization represents a potential 350-metre northern extension to the proposed Portage open pit. Mineralization at Cannu is hosted in a shallow, bowl-shaped structure. The 2006 exploration program includes both infill and step-out drilling to define the extent of the mineralization and enable a reserve estimate. Highlights from the phase I Cannu drilling include the following.
SELECTED HIGHLIGHTS FROM CANNU 2006 DRILL HOLES (i)
Hole No. Grade (g/t Au) Width (m) Depth below surface (m)
NP06-607 7.12 11.77 44
NP06-609 7.09 3.04 58
NP06-614 3.30 3.28 44
NP06-615 8.15 4.42 133
NP06-623 13.51 3.11 30
NP06-628 15.00 1.27 5
NP06-634 5.61 20.80 117
(i) True thickness of intersections ranges from 95 to 100 per cent of intersected widths.
Phase I drilling at Cannu has continued to yield high grades and improved definition in the zone. Additional results are pending. Further drilling in areas not reached during phase I is planned to commence in early July and is required to fully delineate the zone.
The following initial inferred resource at the Cannu zone (based on 30 holes drilled in 2005, and four holes drilled before 2005) was calculated by SRK Consulting (U.K.) Ltd. in early 2006.
CANNU ZONE MINERAL RESOURCE (APRIL, 2005) (1)
Category Tonnes Grade (g/t Au) Contained Ounces
Inferred 440,000 6.0 85,000
Environmental review process advances
Public hearings were held in late March, 2006, as part of the Nunavut Impact Review Board's (NIRB) environmental assessment for the development of the Meadowbank project and additional information was requested by the NIRB in April. Cumberland submitted the requested information on June 6 and received NIRB's acknowledgment on June 12. The company anticipates receipt of NIRB's environmental recommendation in the third quarter of 2006, and will then make a production decision. Depending on receipt of permits and licences, operations from three shallow open pits could commence in late 2008, or early 2009.
Advancing Cumberland's Meadowbank gold project toward midtier gold production
The Meadowbank project is host to Canada's largest pure gold open-pit reserves, with gold reserves estimated at 2.9 million ounces (2), and the 2006 exploration program is focused on increasing gold resources and reserves. Cumberland is advancing the Meadowbank project toward open-pit production of 330,000 ounces of gold per year over an 8.1-year mine life with an estimated total cash cost of $201 (U.S.) per ounce based on a bankable feasibility study and subsequent bank due diligence (3) completed in December, 2005. In March, 2006, the company arranged a gold loan facility for up to 420,000 ounces of gold (15 per cent of reserves) from Barclays Capital, Bayerische Hypo-und Vereinsbank and Societe Generale. Such facility is subject to the satisfaction of certain conditions, including, among other things, Cumberland securing all requisite regulatory permits and licences, and completion of final loan documentation. At a spot gold price of $600 (Canadian) per ounce, the monetized value of the gold loan would be approximately $250-million (Canadian). Meadowbank has advanced to the final stages of the environmental review process and the company anticipates receipt of NIRB's environmental recommendation in the third quarter of 2006. Depending on receipt of permits and licences, operations from three shallow open pits could commence in late 2008, or early 2009.
MEADOWBANK GOLD PROJECT PRODUCTION PROFILE (3) (DECEMBER, 2005)
(assuming long-term price of $400 (U.S.) per ounce gold and 75 U.S. cents per $1 (Canadian))
Open-pit mineral reserve (proven and probable) 2,890,000 ounces
Metallurgical recovery 93.2%
Mine throughput 2.73 million tons per year
Mine life 8.1 years
Average annual production rate for years 1 to 4 400,000 ounces
Average annual production rate for life of mine 330,000 ounces
Total cash cost per ounce for years 1 to 4 $175 (U.S.)
Total cash cost per ounce for life of mine $201 (U.S.)
Preproduction capital costs $235-million (U.S.) ($313-million (Canadian))
MEADOWBANK GOLD PROJECT IMPACT OF VARYING GOLD PRICE AND EXCHANGE RATE ON ECONOMICS (3)
(pretax, in Canadian dollars)
Spot gold price IRR (%) NPV at 0% NPV at 5% Fuel price
$533 (i) 17.6 $323.6 $171.0 Base case
$600 22.8 $443.5 $254.9 December, 2005
$675 31.2 $644.5 $397.3 December, 2005
$750 39.1 $845.3 $539.6 December, 2005
(i) On an aftertax basis, IRR (internal rate of return) is estimated at 12.8, NPV (net present value) at 0 per cent is estimated at $206.9-million (Canadian) and payback is estimated at 3.8 years.
MEADOWBANK GOLD PROJECT OPEN-PIT MINERAL RESERVE (PROVEN AND PROBABLE) (FOURTH QUARTER OF 2005) (2)
Open Pit Category Ore (tonnes) Grade (g/t) Ounces
Portage Proven 3,020,000 4.8 470,000
Probable 7,990,000 4.4 1,120,000
Proven and probable 11,010,000 4.5 1,590,000
Vault Proven - - -
Probable 8,010,000 3.4 870,000
Proven and Probable 8,010,000 3.4 870,000
Goose Proven - - -
Probable 2,310,000 5.7 420,000
Proven and probable 2,310,000 5.7 420,000
Total Proven 3,020,000 4.8 470,000
Probable 18,300,000 4.1 2,420,000
Proven and probable 21,320,000 4.2 2,890,000
Note: 95-per-cent mining recovery and contact dilution applied
Qualified person
Roger March, PGeo, is senior project geologist for Cumberland Resources and is the designated qualified person, as defined by NI 43-101, for the Meadowbank project. Mr. March has supervised drill hole planning, implementation and quality control and quality assurance programs at the Meadowbank project since 2002. Drill core analysis is performed on split core with standard fire assay procedures and AA (atomic absorption) finish. Quality assurance and quality control programs employ random insertion of four internal standards, field duplicates and blank samples. Gravimetric analysis is performed on any sample yielding greater than one gram per tonne gold in fire assay. Primary assaying is performed by IPL Laboratories of Vancouver. ACME Analytical Laboratories of Vancouver provides external reference assaying.
(1) Cannu resource (April, 2006) -- the inferred mineral resource estimate was prepared in conformance with the requirements set out in NI 43-101 under the direction of Dr. Mike Armitage, managing director of SRK Consulting (U.K.), who is an independent qualified person as defined by NI 43-101.
(2) Meadowbank gold reserves (fourth quarter of 2005) -- the open pit mineral reserves have been prepared in accordance with NI 43-101. Dr. Armitage is the independent qualified person responsible for preparation of stated reserves.
(3) Meadowbank feasibility study due diligence (December, 2005) -- as a requirement of bank financing, bank-appointed independent engineer, SRK Consulting (U.K.), completed a due diligence audit of the Meadowbank feasibility study completed in early 2005, by AMEC Americas Ltd. The results from the feasibility study by AMEC are summarized in a technical report dated March 31, 2005, prepared by AMEC in accordance with the standards of disclosure for mineral projects as defined by National Instrument 43-101. Construction scheduling and capital cost estimation has been prepared by Merit International Consultants Inc. Metallurgical and process testwork was completed by SGS Lakefield Research Ltd. Process design was completed by International Metallurgical and Environmental Inc. and AMEC. Supporting geotechnical engineering, hydrogeological and geochemical studies were completed by Golder Associates Ltd. Both the SRK and AMEC assumptions include a long-term gold price of $400 (U.S.) per ounce and an exchange rate of 75 U.S. cents per $1 (Canadian).
PHASE I 2006 DIAMOND DRILLING -- CANNU ZONE COMPOSITES
Hole ID From (m) To (m) Grade (g/t Au) Width (m)
NP06-607 43.55 55.32 7.12 11.77
NP06-609 56.23 59.27 7.09 3.04
76.15 76.65 260.00 0.50
NP06-611 39.00 40.00 8.00 1.00
NP06-613 no significant values
NP06-614 42.80 46.08 3.30 3.28
49.28 50.43 10.80 1.15
NP06-615 133.38 137.80 8.15 4.42
NP06-617 56.77 57.84 3.08 1.07
132.97 133.47 10.00 0.50
NP06-620 9.00 10.40 6.47 1.40
NP06-623 35.41 38.52 13.51 3.11
70.37 71.37 11.00 1.00
NP06-626 136.70 139.95 2.28 3.25
NP06-628 6.33 7.60 15.00 1.27
60.90 61.86 12.93 0.96
NP06-634 66.00 68.00 3.20 2.00
86.35 87.35 14.80 1.00
89.48 90.19 184.00 0.71
113.25 134.05 5.61 20.80
incl. 113.25 121.45 10.40 8.20
incl. 117.40 121.45 17.41 4.05
PHASE I 2006 DIAMOND DRILLING -- GOOSE SOUTH COMPOSITES
Hole ID From (m) To (m) Grade (g/t Au) Width (m)
NP06-607 43.55 55.32 7.12 11.77
G06-608 141.00 144.00 2.85 3.00
G06-618 119.60 123.38 1.03 3.78
G06-622 90.50 94.90 5.12 3.50
G06-625 225.84 229.03 5.07 3.19
G06-629 235.06 235.82 8.90 0.76
G06-631 183.44 187.49 2.95 3.95
G06-632 no significant values
G06-633 99.56 100.52 12.63 0.96
G06-635 28.40 32.00 5.61 3.60
G06-637 no significant values
G06-638 121.90 123.64 110.52 1.74
© 2006 Canjex Publishing Ltd.