Cumberland Resources Announces $1.2 Million Exploration Program at Meliadine Gold Property

Strategic Insights -

Cumberland Resources, in a joint venture with Comaplex Minerals Corp., has begun a $1.2 million exploration program on the eastern portion of the Meliadine Gold Property in the Canadian wilderness. The project, which spans 16 miles north of Rankin Inlet, NWT, has shown significant potential, with recent drilling indicating strong mineralization to depth. The company is optimistic about increasing the current resource of 740,000 tons at the Discovery deposit to 1.8 million tons, making it economically viable to mine at a rate of 1000 tons per day.

Key Takeaways:

  • The exploration program on the eastern Meliadine Project includes 16,000 feet of diamond drilling, with two drills focusing on expanding the current resource at the Discovery deposit.
  • The joint venture recently commissioned a scoping study by H.A. Simons Ltd. to evaluate the conceptual economic thresholds required at the Discovery deposit, which concluded an underground mine would be economically viable with a cash-flow model using a gold price of $US 375.
  • The study estimates capital costs at $59.2 million with a payback period of 2.9 years and an after-tax DCF Rate of Return of 19.3 percent, but notes that the rate of return depends on mining dilution, which has yet to be determined.
  • The Meliadine project's favorable location reduces estimated capital and operating costs, making it an attractive investment opportunity.
  • The company is optimistic about increasing the current resource of 740,000 tons at the Discovery deposit to 1.8 million tons, reaching the threshold required for economic viability.
  • Surface grab samples at the Sinnuk target have yielded up to 0.46 oz/t gold, indicating the presence of significant mineralization in the area.
  • Cumberland Resources and Comaplex Minerals recently concluded an option agreement with WMC International Limited to earn a 60 percent interest in the western portion of the property.

Statistics:

  • $1.2 million: The budget for the exploration program on the eastern Meliadine Project.
  • 16,000 feet: The total amount of diamond drilling planned as part of the exploration program.
  • 740,000 tons: The current resource at the Discovery deposit.
  • 1.8 million tons: The target resource required for economic viability at the Discovery deposit.
  • $59.2 million: Estimated capital costs for an underground mine based on the current resource at the Discovery deposit.
  • 2.9 years: The estimated payback period for the underground mine based on the scoping study.
  • 19.3 percent: The estimated after-tax DCF Rate of Return for the underground mine based on the scoping study.
  • $375: The gold price used in the cash-flow model for the scoping study.
  • 1000 tons per day: The planned mining rate for the underground mine.
  • 50-50: The joint venture ratio between Cumberland Resources and Comaplex Minerals Corp.

Sources:

  • Business Wire - June 14, 1995
  • Cumberland Resources News Release - June 9, 1995
  • H.A. Simons Ltd. scoping study report - referenced in Cumberland Resources News Release