NUNAVUT – The updated economic study, done only nine months after the original feasibility study, shows improved numbers for the Meadowbank gold project owned by CUMBERLAND RESOURCES of Vancouver. The new study was done by SRK CONSULTING as part of the requirements for bank financing of the project.
The SRK update boosted gold contained in proven and probable reserves to 2.89 million oz (from 2.77 million oz). Production is expected to be 400,000 oz at a cost of US$175/oz in each of the first four years (rather than 376,000 oz at US$199/oz). Over the life of the mine, production would be 330,000 oz annually at US$201/oz (compared with 316,000 oz at US$224/oz). Even with capital costs going up to US$235 million (from US$227 million), undiscounted pre-tax cash flow will go up to US$243 million (rather than US$174 million). The pre-tax internal rate of return would be 17.6% (not 14.3%). The base case was predicated on US$400/oz gold.
The Nunavut Impact Review Board is completing a technical review of the final Environmental Impact Statement submitted by Cumberland in November 2005. The board has set March 27, 2006, for final hearings to begin. The company plans to commence construction at Meadowbank in late 2006 leading to production in mid-2008, if permits are awarded on the expected dates.
Various technical reports on the Meadowbank project, located near the hamlet of Baker Lake, are posted at www.CumberlandResources.com.