Cumberland gets thumbs up from NIRB
Cumberland gets thumbs up from NIRB for Meadowbank
2006-08-30 17:41 ET - News Release
Mr. Kerry Curtis reports
CUMBERLAND RECEIVES POSITIVE RECOMMENDATION FROM THE NUNAVUT IMPACT REVIEW BOARD FOR DEVELOPMENT OF THE MEADOWBANK GOLD PROJECT
Cumberland Resources Ltd. has received a recommendation from the Nunavut Impact Review Board (NIRB) that development of the Meadowbank gold project should proceed. The decision by NIRB concludes a 2.5-year comprehensive review and public hearing process involving multidisciplinary federal, territorial, regional and community-based representation. The Meadowbank gold project is designed to produce an average of 330,000 ounces gold per year over an eight-year mine life, making it one of Canada's future highest-output gold producers. Cumberland has a 100-per-cent interest in the Meadowbank gold project, located 70 kilometres north of the hamlet of Baker Lake, Nunavut.
"Meadowbank is the first major gold development proposal to move through the Nunavut environmental assessment process. After a multiyear review conducted by NIRB, we are extremely pleased with today's recommendation for development of the project," stated Kerry Curtis, president and chief executive officer of Cumberland. "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. With this transition into mid-tier-level gold production, Meadowbank will provide much desired jobs, training, infrastructure and economic opportunities to Nunavut."
Next steps
The positive NIRB recommendation and associated report will now be forwarded to the Federal Minister of Indian Affairs and Northern Development to ensure compliance with Article 12 of the Nunavut land claims agreement. Upon acceptance of the NIRB recommendation by the Federal Minister, a project certificate can be issued. This process is expected to take at least two months, at which point the necessary licences to commence construction can be issued. In the interim, Cumberland will commence procurement and staging of equipment and supplies in preparation for construction of the conventional access road from Baker Lake to Meadowbank.
Meadowbank gold project
Cumberland is advancing the Meadowbank project toward open pit production based on a bankable feasibility study and subsequent bank due diligence(1) completed in December, 2005.
MEADOWBANK GOLD PROJECT PRODUCTION PROFILE(1) (DECEMBER, 2005)
(assuming long-term $400 (U.S.) per ounce gold
and 75 U.S. cents per $1.00 (Canadian))
Mine life 8.1 years
Average annual production rate
Years 1 to 4 400,000 ounces
Life of mine 330,000 ounces
Total cash cost per ounce
Years 1 to 4 $175 (U.S.)
Life of mine $201 (U.S.)
Preproduction capital costs $235 million (U.S.)
($313 million (Canadian))
In March, 2006, Cumberland 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 $600-per-ounce spot gold price, the monetized value of the gold loan would be approximately $250-million.
Positive economic impacts to Nunavut
Meadowbank is forecast to provide substantial employment and economic benefits to Nunavut for at least 12 years of development, operation and closure. The Meadowbank final environmental impact statement estimated that during construction, 350 direct jobs will be created and the GDP of Nunavut will rise 7 per cent to 8 per cent. During operations, the project is estimated to contribute $1.4-billion to Nunavut's GDP. Of the planned 360 new full-time permanent jobs to be created during operations, many are expected to be filled by residents of Baker Lake and the surrounding Kivalliq communities.
As a requirement for development of Meadowbank, Cumberland and the Kivalliq Inuit Association signed a comprehensive Inuit impact and benefit agreement (IIBA) during early 2006. The IIBA ensures that local employment, training and business opportunities arising from all phases of development, operation and closure of the Meadowbank project are accessible to the Kivalliq Inuit.
(1) 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 have been prepared by Merit International Consultants Inc. Metallurgical and process testwork were 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 $1.00 (Canadian).
We seek Safe Harbor.