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CUMBERLAND RECEIVES $1.5 MILLION OPTION PAYME

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Cumberland gets $1.5-million Meliadine West option pay 2006-01-16 10:54 ET - News Release Mr. Kerry Curtis reports CUMBERLAND RECEIVES $1.5 MILLION OPTION PAYMENT Cumberland Resources Ltd. has received an annual option payment from Comaplex Minerals Corp. of $1.5-million, an increase from the $500,000 option payment received in 2005, with respect to the Meliadine West joint venture agreement. Cumberland holds a 22-per-cent carried-to-production interest in the Meliadine West gold project located 25 kilometres north of the hamlet of Rankin Inlet in Nunavut. Comaplex is operator of the Meliadine West project. Meliadine West joint venture Comaplex has the right to perfect a 78-per-cent interest in the Meliadine West project by financing, via non-recourse loans repayable from production proceeds, all exploration and development costs to the commencement of commercial production and the cost of any production expansion thereafter. Cumberland has received annual option payments since 1996, and beginning in January, 2006, the payment from Comaplex increased from $500,000 to $1.5-million each year until commercial production is achieved or the agreement is terminated. Beginning in January, 2007, the annual option payment of $1.5-million will be adjusted upward pursuant to an annual CPI index formula. Comaplex has the right to purchase an additional 2 per cent of the project for $2.0-million until 60 days after achievement of production. Upon commencement of production, Cumberland will receive 6 per cent of net revenue until payback of non-recourse loans. Comaplex announced a new 43-101 compliant resource estimate for the Tiriganiaq deposit in March, 2005. Comaplex estimated 853,000 ounces of indicated resources and 171,000 ounces of inferred resources in the Main Tiriganiaq deposit. A deeper resource, at some 400 metres below surface in the West zone, is estimated to contain an inferred resource of 311,000 ounces. The resource estimates do not include other deposits in the project. In October, 2005, Comaplex announced that it had completed 15,851 metres of drilling at Meliadine West during 2005. The operator has not yet submitted plans for the project for 2006. Cumberland advances Meadowbank gold project The Meadowbank project is host to Canada's largest pure-gold open-pit reserves with gold reserves estimated at 2.9 million ounces. 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 feasibility study due diligence completed in December, 2005. Peak production is achieved in the first year, with 451,000 ounces produced at an estimated cash cost of $155 (U.S.) per ounce. Final permitting is under way and operations from three shallow open pits are planned to commence in mid-2008 provided the permitting process is completed in early 2006. Meadowbank gold project Impact of varying gold price and exchange rate on economics (pretax, table figures in U.S. dollars unless otherwise stated): Gold Ex- IPR NPV NPV Fuel price change at 0% at 5% price rate (million) (U.S. dollars per $1 Ca- nadian) $400(i) $0.75 17.6 $242.7 $128.3 base case $450 $0.80 18.1 $272.7 $145.7 cur- rent $500 $0.85 21.3 $349.0 $196.8 cur- rent $550 $0.90 24.1 $425.3 $248.0 cur- rent $600 $0.95 26.5 $501.6 $299.1 cur- rent (i) On an after-tax basis, IRR is estimated at 12.8 per cent and NPV at 0 per cent is estimated at $155.2-million and payback is estimated at 3.8 years. Meadowbank gold project open-pit mineral reserve (proven and probable): Open pit Ore Grade Ounces (t) (g/t) 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 Vaul 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 Total probable 18,300,000 4.1 2,420,000 Total proven and probable 21,320,000 4.2 2,890,000 Note that 95 per cent of mining recovery and contact dilution were applied. Meadowbank gold reserves (fourth quarter, 2005) The open-pit mineral reserves have been prepared in accordance with NI 43-101. Dr. Mike Armitage, managing director of SRK Consulting (U.K.) Ltd. is the independent qualified person responsible for preparation of stated reserves. 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 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 $1.00 (Canadian). We seek Safe Harbor.