Canaccord Capital - Daily Letter (May 28)) CUMBERLAND RESOURCES (CBD : TSX : C$2.55) - SPECULATIVE BUY - 12-MONTH
TARGET PRICE: C$3.75
Graeme Currie
Comment: Cumberland discovers kimberlite pipe at the Meliadine East
property
On the Meliadine East property, Cumberland and 50/50 joint venture with
Comaplex Minerals (CMF : TSX) announced yesterday that the first hole in a
diamond exploration program intersected kimberlite that is interpreted as
a pipe. The vertical hole terminated in kimberlite at 100 metres depth,
giving a core interval of 85.4 metres of kimberlite. We understand that
the sample is to be processed by caustic dissolution for analysis of
diamond and diamond indicator minerals. The current program is designed to
test a total of 11 targets as defined by geophysics and, in some cases,
down-ice indicator samples previously completed that had yielded
kimberlite indicator minerals. Cumberland's discovery of a kimberlite
pipe adds to, or enhances, firstly the general district and secondly the
speculative leverage of this junior. We maintain our SPECULATIVE BUY
recommendation with a target price of $3.75/share. Cumberland remains a
top recommendation.