2007-01-17 14:59 ET - News Release
Cumberland completes Cannu gold resource estimate
2007-01-17 14:59 ET - News Release
CUMBERLAND COMPLETES CANNU GOLD RESOURCE ESTIMATE, PLANS FOR NEW RESERVES AND CONTINUED EXPLORATION IN 2007 AT MEADOWBANK GOLD PROJECT
Cumberland Resources Ltd. states that the 2006 drill program at the company's 100-per-cent owned Meadowbank gold project has been successful in readying gold resources for reserve definition at the Cannu zone, a potentially open pittable high-grade zone of mineralization discovered in 2005. Meadowbank is host to Canada's largest undeveloped pure gold open pit reserves of 2.9 million ounces. The Meadowbank project, located 70 kilometres north of the hamlet of Baker Lake, Nunavut, is designed to produce an average of 330,000 ounces of gold per year over an eight-year mine life.
The Cannu gold zone is located immediately north of the proposed Portage open pit, the largest of three proposed open pits at Meadowbank. Systematic infill and step-out drilling completed during 2006 has been incorporated in an updated Cannu resource estimate. Highlights of the updated Cannu mineral resource estimate (January, 2007) include:
inferred mineral resources upgraded to the indicated resource category;
indicated resource grade approximately 40 per cent higher than Meadowbank reserve grade;
near surface mineralization should contribute to future open pit expansion;
majority of indicated resources expected to be converted into open pit reserves; and
potential for Cannu zone to be brought forward in mine plan.
"We are very pleased with the quick progress made in discovering, defining and upgrading the gold resources at Cannu," stated Kerry Curtis, president and chief executive officer. "We will now focus on estimating a Cannu reserve in the first quarter of 2007 and incorporating Cannu into the Meadowbank mine plan. We are also planning an extensive 2007 drill program at the recently-discovered Goose South zone for continued resource and reserve growth at Meadowbank."
2006 drilling improves Cannu zone resource
An updated resources estimate for the Cannu zone, incorporating mineralization intersected in the 2006 drill program, has been prepared by SRK Consulting Ltd. The estimate is based on 123 intersections in 57 drill holes and, as with previously released Meadowbank resource estimates, utilizes three dimensional block models interpolated using inverse distance methods and the same cut-off grade. On this basis, SRK has derived the following Cannu resource estimate (January, 2007):
Cannu Zone Mineral Resource (Jan. 2007) (1)
Category Tonnes Grade (g/t) Ounces
Indicated 490,000 5.9 93,000
Inferred 55,000 6.2 11,000
The Cannu zone was discovered in the fall of 2005 and an initial inferred mineral resource estimate was reported in early 2006. Since discovery, Cumberland has completed 76 drill holes totaling 9,340 metres in the Cannu zone. The zone has now been drilled along a strike length of 350 metres on 25 metre-spaced sections, with spacing on section averaging 35 metres. The company expects to convert the majority of the Cannu indicated mineral resources into open pit reserves in the first quarter of 2007.
Discovery of Goose South zone in 2006
The 2006 program was also successful in discovering a new zone of gold mineralization located approximately 400 metres south of the Goose Island deposit. Drill intersections at the Goose South zone yielded encouraging gold grades over narrow to moderate widths within a similar structural and stratigraphic setting as the Goose Island deposit. Approximately 2,270 metres of diamond drilling in 12 holes were completed at the Goose South zone during 2006. Cumberland is planning an extensive drill program in the spring of 2007 aimed at resource growth at the Goose South zone and Goose Island deposit (see mineralization and growth potential on attached longitudinal section).
Final 2006 drilling at Cannu zone
The company completed approximately 5,940 metres of diamond drilling in 46 holes at the Cannu zone during 2006. The program has been successful in defining four distinct lenses of high grade mineralization (Keel, 305, Core and East lenses) within a shallow, bowl-shaped structure. Drill results have been incorporated into the above revised resource estimate and highlights from the final 2006 Cannu drilling include:
Selected Highlights from Cannu Zone Final 2006 Drill Holes (2)
Hole Number Grade Width Depth Lens
Au (g/t) (m) (m below surface)
NP06-657 2.95 10.50 31 305
NP06-659 6.01 7.12 7 305
NP06-660 8.41 2.14 17 305
NP06-667 5.94 3.07 54 East
NP06-668 2.49 7.40 46 East
Note: True thickness of intersections ranges from 80-100% of
intersected widths
2007 Meadowbank resource increases
With the addition of Cannu zone, mineralization has been defined over a continuous strike length of approximately 2.15 kilometres in the Portage area. The improved Cannu mineral resource has been included within the Portage deposit and has contributed to an approximate 6.5 per cent increase in the indicated resource estimate at Portage. To date, approximately 142,000 metres of diamond drilling in 1,042 holes have been completed at Meadowbank. SRK has updated the Meadowbank resource estimate (January, 2007) as follows:
Meadowbank Gold Project
2007 Mineral Resource (including Cannu Zone) (Jan. 2007) (3)
Deposit Category Tonnes Grade (g/t) Ounces
Portage Measured 2,800,000 5.4 480,000
(including Cannu Zone) Indicated 9,000,000 5.1 1,460,000
Sub-Total 11,800,000 5.1 1,940,000
Inferred 700,000 4.7 100,000
Goose Island Measured - - -
Indicated 2,240,000 6.5 470,000
Sub-Total 2,240,000 6.5 470,000
Inferred 1,370,000 4.2 190,000
Vault Measured - - -
Indicated 8,610,000 3.9 1,080,000
Sub-Total 8,610,000 3.9 1,080,000
Inferred 870,000 5.4 150,000
PDF(i) Inferred 507,000 4.5 73,000
Total Measured 2,800,000 5.4 480,000
Indicated 19,850,000 4.7 3,010,000
Sub-Total 22,650,000 4.8 3,490,000
Inferred 3,447,000 4.6 513,000
Note: Grade rounded to nearest 0.1 g/t. Numbers may not add due to
rounding.
(i)The PDF inferred mineral resource estimate was prepared by Cumberland.
Development of Meadowbank
Cumberland is advancing the Meadowbank project toward open pit production based on a bankable feasibility study and subsequent bank due diligence (4) completed in December, 2005:
Meadowbank Gold Project Production Profile (4) (Dec. 2005)
(Assuming long term US$400/oz. gold and US$0.75 per Cdn$1.00)
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 Oz.: Years 1 to 4 US$175
Life of Mine US$201
Pre-production Capital Costs US$235 million
Cdn$313 million
Meadowbank Gold Project
2005 Open Pit Mineral Reserve (Proven & Probable) (Fourth Quarter 2005) (5)
(Proven & probable mineral reserves are a subset of measured & indicated
resources.)
Category Ore (t) Grade (g/t) Ounces
Proven 3,020,000 4.8 470,000
Probable 18,300,000 4.1 2,420,000
Proven & Probable 21,320,000 4.2 2,890,000
Note: 95% mining recovery and contact dilution applied.
A production decision was made by the board of directors of Cumberland in September, 2006, following a positive development recommendation by the Nunavut Impact Review Board. The company has since secured at least $254-million (Canadian) for its gold loan facility and has raised approximately $100 million (Canadian) in equity financing to be used for development of Meadowbank.
The Federal Minister of Indian Affairs and Northern Development accepted the positive NIRB recommendation in November 2006 and the NIRB issued a project certificate to Cumberland in December 2006. With receipt of the project certificate, Cumberland has commenced the processing of all ancillary permits required for construction. The company has staged the necessary equipment and supplies at Baker Lake for the construction of a four-season access road to Meadowbank and has retained Nuna Logistics Ltd. as contractor for road construction. Subject to the timely receipt of all ancillary permits and requisite financing, production is expected to commence in late 2008 or early 2009.
(1) Cannu resource (January, 2007) -- The inferred mineral resource estimate was prepared in conformance with the requirements set out in National Instruments 43-101 under the direction of Dr. Mike Armitage, managing director of SRK Consulting Ltd., who is an independent Qualified Person as defined by NI 43-101. The Cannu zone resources are not included in the feasibility study of the Meadowbank project.
(2) Qualified Person -- Roger March, PGeo, is senior project geologist for Cumberland Resources Ltd. 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/quality assurance programs at the Meadowbank project since 2002. Drill core analysis is performed on split core with standard fire assay procedures and AA finish. QA/QC programs employ random insertion of four internal standards, field duplicates and blank samples. Gravimetric analysis is performed on any sample yielding greater than 1 gram per tonne (g/t) gold in fire assay. Primary assaying is performed by IPL Laboratories, of Vancouver. ACME Analytical Laboratories of Vancouver provides external reference assaying.
(3) 2007 Meadowbank gold resources (January, 2007)
Portage and Cannu zone (January, 2007), Goose Island (fourth quarter 2005) and Vault (fourth quarter 2005) resources -- The resource estimates were prepared in conformance with the requirements set out in NI 43-101 under the direction of Dr. Armitage, who is an independent Qualified Person as defined by NI 43-101.
PDF resources (August, 2000) -- The PDF inferred mineral resource estimate was prepared by Cumberland in accordance with standards outlined in NI 43-101 and CIM Standards on Mineral Resources and Reserves (August, 2000). James McCrea, PGeo, manager, mineral resources for Cumberland, is the Qualified Person under NI 43-101. PDF deposit resources are not included in the feasibility study of the Meadowbank project.
(4) Meadowbank feasibility study due diligence (December, 2005) -- As a requirement of bank financing, bank-appointed independent engineers SRK Consulting 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 test work 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 cents (U.S.) per $1.00 (Canadian)
(5) 2005 Meadowbank gold reserves (fourth quarter 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.
FINAL 2006 DIAMOND DRILLING: Cannu Composites(i)
HOLE - ID LOCATION FROM TO GRADE WIDTH
Northing Easting (m) (m) Au (g/t) (m)
NP06-656 1525N -665E 57.00 60.00 2.75 3.00
85.00 91.35 2.05 6.35
118.00 120.30 2.08 2.30
NP06-657 1525N -639E 34.00 44.50 2.95 10.50
NP06-659 1625N -641E 6.88 14.00 6.01 7.12
inc. 7.92 9.75 17.63 1.83
42.00 46.00 4.95 4.00
NP06-660 1500N -600E 16.60 19.20 3.80 2.60
21.45 23.59 8.41 2.14
NP06-664 1522N -610E 17.45 19.36 4.29 1.91
57.70 59.48 4.04 1.78
NP06-665 1600N -598E 17.85 20.25 6.00 2.40
NP06-667 1400N -514E 62.20 65.27 5.94 3.07
NP06-668 1400N -487E 50.82 58.22 2.49 7.40
NP06-669 1500N -500E 3.46 5.80 2.41 2.34
(i) True thickness of intersections ranges from 80-100% of
intersected widths.
We seek Safe Harbor.