Post by
nagyonokos on Aug 11, 2005 7:27pm
Total cash cost US$224 Remarkable.
Cumberland Reports Second Quarter 2005 Financial Results and Summary of Activities
Aug 11, 2005 3:40:00 PM
Copyright Business Wire 2005
VANCOUVER, British Columbia--(BUSINESS WIRE)--Aug. 11, 2005--
CUMBERLAND RESOURCES LTD. (TSX:CLG)(AMEX:CLG) is pleased to report unaudited financial results and summary of activities for the three months ended June 30, 2005.
Cumberland is advancing the Company's 100% owned Meadowbank project towards open pit production of 315,000 ounces of gold per year over an 8.3 year mine life with an estimated total cash cost of US$224 per ounce based on a feasibility study1 completed by AMEC Americas Ltd. in February 2005. Development permitting is progressing towards final stages with operations from three, shallow open pits planned to commence in mid-2008, provided development permits and licenses are obtained in early 2006. The Meadowbank gold project is located 70 kilometres north of the Hamlet of Baker Lake, Nunavut.
Meadowbank Gold Project Production Profile(1)
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Open Pit Mineral Reserves 2,768,000 ounces(2)
(Proven and Probable)
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Mine Throughput 2.73 Mtpa
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Mine Life 8.3 years
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Average Annual Production Rate
Years 1 to 4 375,000 ounces
Life of Mine 315,000 ounces
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Total Cash Cost per Oz.
Years 1 to 4 US$197
Life of Mine US$224
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SUMMARY OF RECENT ACTIVITIES
Phase I 2005 Drill Results
A $3.5 million exploration program is focused on increasing gold reserves and resources at Meadowbank, which is host to Canada's largest pure gold open pit reserves. The Phase I program completed approximately 7,300 metres of diamond drilling in 47 holes at the Goose Island deposit, the Goose Island South target and the PDF deposit, and drill results were reported in July (see NR05-08). Phase II has now commenced.
Drilling on the northern and southern flanks of the Goose Island deposit has returned intersections that have extended the limits of the deposit approximately 50 metres to the south and 50 metres to the north for a total strike length of approximately 500 metres at the Goose Island deposit. Drill intersections are expected to improve the quality and size of the resources and reserves. Seven holes drilled on the shallow southern flank of the deposit returned strong grades (from 3.2 g/t up to 10.97 g/t) over better than expected widths (2.48 metres to 9.13 metres) and two holes on the northern flank of the deposit, at depths of 22 metres and 19 metres below surface, returned high grade values (10.09 g/t and 14.90 g/t).
A majority of the ten holes drilled to assess the resource potential below the proposed Goose Island open pit yielded intersections with gold grades of greater than 5.00 g/t. Several of these intersections which are below the current pit design indicate a resource with potential for future underground mining.
Exploration drilling in 2005 on the Goose Island South target, 550 metres south of the Goose Island deposit, followed up on a deep intersection from 1997 (2.64 g/t over 3.00 metres at 277 metres below surface in hole G97-171). One hole returned an encouraging 4.14 g/t over 2.59 metres at a shallow depth (50 metres below surface or approximately 227 metres up dip from the intersection in G97-171). Potential exists for additional mineralization in the vicinity of this drill hole, as the nearest drilling is 150 metres along strike in both directions.
While narrow high grade results from another drill hole suggest that there is potential for high grade mineralization in this area, most other 2005 Goose Island South drill holes encountered narrow and low grade mineralized intercepts.
Extension of the PDF deposit at depth was tested by ten widely spaced drill holes in 2005. Two holes were successful in intersecting the PDF mineralized zone 100 metres down dip from 2004 intersections; however, a second series of 100 metre down dip step outs failed to return any significant values, effectively closing off the mineralized trend.
Phase II Exploration Program and Airstrip Construction Commenced
The 2005 Phase II exploration program commenced in July and is evaluating a number of targets on the Meadowbank property through prospecting, till sampling and Induced Polarization geophysical surveys. In addition, approximately 2,000 metres of diamond drilling will test potential extensions to the north, south and at depth of shallow mineralization intersected in 1998 drilling, located north of the proposed Portage open pit.
Construction of an airstrip at Meadowbank with planned capacity to handle light fixed wing aircraft commenced in July. The airstrip will improve access to the property in support of ongoing exploration programs.
Permitting Advances to Final Stages
After a technical review and pre-hearing conferences held by the Nunavut Impact Review Board's (NIRB) in June 2005, the Company received the NIRB Pre Hearing Decision Report for development of the Meadowbank gold project in July 2005 (see news release NR05-09). The NIRB report provides technical direction for completion of the Final Environmental Impact Statement (FEIS) and Cumberland anticipates submission of the Final EIS in the fall of 2005. Final approvals and licenses are anticipated in early 2006.
Financial Adviser Appointed
SG Corporate & Investment Banking (SG CIB)'s Mining Finance team (a division of Societe Generale Group) was awarded a pre-arranging advisory mandate in June 2005 to act as exclusive financial adviser in connection with debt financing of the Meadowbank gold project (see NR05-07). Pursuant to such mandate, SG CIB will arrange for a syndicate of financial institutions as prospective underwriters and arrangers of the debt financing of the Meadowbank project. In addition, as part of its services under the mandate, SG CIB will appoint an independent engineer to perform a technical audit on behalf of potential lenders with respect to the feasibility study completed for Cumberland by AMEC Americas Ltd. in February 2005.
FINANCIAL HIGHLIGHTS
At June 30, 2005 the Company had working capital of $33.3 million compared to $37.0 million at December 31, 2004.
The Company incurred a net loss of $3.9 million ($0.07 per share) in the second quarter of 2005 compared to $4.2 million ($0.08 per share) in the second quarter of 2004. This decrease in net loss is primarily due to the reduction in exploration costs as a result of the completion of infill drilling at Meadowbank in 2004.
In the second quarter of 2005 the Company incurred exploration and development costs at Meadowbank of $2.6 million compared to $3.9 million in the second quarter of 2004. The reduction in Meadowbank project costs was a result of the completion of infill drilling in 2004 and the completion of the feasibility study in early 2005.
The Company had no operating revenues in the second quarters of 2005 or 2004, as it had not commenced mining operations.
This summary of financial highlights should be read in conjunction with the Company's second quarter 2005 unaudited financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations, both of which are available on www.sedar.com.
Cumberland is a well financed mineral exploration and development company. In February 2005 the Company completed a feasibility study on the Meadowbank gold project (100% interest) in Nunavut and is presently advancing the project towards production. The Company also holds a 22% carried to production interest in the Meliadine West gold project and a 50% interest in the Meliadine East gold project, both located in Nunavut. The shares of Cumberland are traded on the Toronto Stock Exchange and the American Stock Exchange under the symbol CLG.
CUMBERLAND RESOURCES LTD.
Kerry M. Curtis, B.Sc., Geo., President and CEO