Cumberland releases revised Meadowbank economic study
Cumberland Resources Ltd CBD
Shares issued 27,403,781 Jan 23 close $0.90
Wed 23 Jan 2002 News Release
Mr. Kerry Curtis reports
MEADOWBANK GOLD PROJECT: REVISED ECONOMIC STUDIES INDICATE I ...
Cumberland Resources has released the results of a preliminary assessment
on the company's 100-per-cent-owned Meadowbank gold project, located 70
kilometres north of Baker Lake, Nunavut.
As a result of a 50-per-cent increase in estimated resources over
prefeasibility studies in April, 2000, the company and consulting
engineering firm MRDI Canada, a division of AMEC E&C Services Limited, have
completed the preliminary assessment using a planned production rate of
4,700 tonnes per day (1.71 Mtpa) from both open pit and underground
designs. This study forecasts economics based on measured, indicated and
inferred resources. The production forecast used in the preliminary
assessment includes approximately 5.9 million tonnes of inferred mineral
resource, or 41 per cent of the total forecast. In compliance with National
Instrument 43-101, the company has issued a technical report which is
available at www.sedar.com for review.
The preliminary assessment was completed under the direction of Stephen
Hodgson, professional engineer, president of MRDI Canada, an independent
qualified person as defined by National Instrument 43-101.
A summary of the highlights of the study is as follows:
REVISED ECONOMIC STUDIES
($300 (U.S.) GOLD (1))
Plant throughput (1) 1.71 Mtpa
Mine life 8.3 years
Metallurgical recovery (1) 90.6%
Life of mine
gold production 2.04 M oz
Average annual
gold production 246,000 oz
Initial capital
cost (millions) $123.5 (U.S.)
Sustaining capital
(millions) $13.2 (U.S.)
Cash operating cost
(1,2,3,4) $160 (U.S.)
Total cash cost
(1,2,3,4) $168 (U.S.)
Total production cost
(1,2,3) $235 (U.S.)
Net present value
(0% discount) (3) $90.8-million (U.S.)
Net present value
(5% discount) (3) $34.7-million (U.S.)
Internal rate of
return (3) 10.4%
Payback period (3) 4.9 years
(1) over the life of the mine
(2) per ounce gold
(3) 100-per-cent equity basis, after tax, owner operated
(4) cash operating cost and total cash costs as defined by the Gold
Institute
Cautionary note: The preliminary assessment is preliminary in nature,
includes inferred mineral resources that are considered too speculative
geologically to have the economic considerations applied to them that would
enable them to be categorized as mineral reserves, and there is no
certainty that the preliminary assessment will be realized.
Basis for study
Prefeasibility level studies in April, 2000, concluded that resource
increases or improved gold prices were required for the economic viability
of the Meadowbank project. An optimum rate of production at 2,500 tonnes
per day was recommended given then identified project parameters.
In late 2000 the company discovered the Vault deposit, located five
kilometres north of the original four deposits. As a result, total
estimated resources from the five gold deposits at Meadowbank are as
follows:
Meadowbank 2002 resources (*)
Measured and indicated
(7,775,000 t grading 5.79 g/t)
1,447,300 ounces gold
Inferred
(10,937,000 t grading 4.44 g/t)
1,561,200 ounces gold
(*) All resources estimated by MRDI Canada. Classification conforms to CIM
standards on mineral resources and reserves (August, 2000). Mineral
resources which are not reserves do not have demonstrated economic
viability.
With the added Vault open pit and underground material and revised open pit
designs at the Third Portage deposit the suggested optimum production rate
is now 4,700 tonnes per day.
Similar to the prefeasibility study, a mine plan incorporating year-round
production and seasonal road and barge access with fly-in/fly-out personnel
rotation was used as the basis for the preliminary assessment. The study
contemplates that Meadowbank would be operated primarily as a conventional,
bulk tonnage, open pit mine using an owner operated fleet. Mill feed would
be supplied from one large open pit (combining the Third Portage and North
Portage deposits) and two satellite pits (Goose and Vault) located 400
metres and five kilometres away, respectively. The cost of underground
access and development has been included for deeper resources at the Vault
and Goose Island deposits.
The study incorporates revised capital and sustaining capital estimates
based on the purchase of all new mining and processing equipment.
Study results
The discovery of the Vault deposit and its inclusion in the mine plan for
Meadowbank have had a positive effect on the potential project economics.
Preliminary assessment 2002
Gold price sensitivity
(millions of U.S. dollars)
Life of mine
gold price $275 $300 $325
Net present value
(0% discount) (1) $61.6 $90.8 $119.7
Net present value
(5% discount) (1) $13.6 $34.7 $ 55.5
Internal rate
of return (1) 7.2% 10.4% 13.5%
Payback period
(years) 6.1 4.9 4.1
(1) 100-per-cent equity basis, after tax, owner operated
The preliminary assessment is preliminary in nature, includes inferred
mineral resources that are considered too speculative geologically to have
the economic considerations applied to them that would enable them to be
categorized as mineral reserves, and there is no certainty that the
preliminary assessment will be realized.
In particular, the additional resource has allowed the potential production
rate to be increased while maintaining a reasonable mine life. This
increased production rate has resulted in a reduction of the estimated
operating costs and significant increases to the production forecast.
2000 PREFEASIBILITY MINING VOLUMES (*)
Tons Grade Contained
(000 t) (g/t) ounces
OPEN PIT
Third Portage
Measured and
indicated 4,724 5.19 789,000
Inferred (*) 483 5.11 81,000
Goose Island
Measured and
indicated 778 6.96 174,000
Inferred (*) 172 6.20 35,000
UNDERGROUND
Third Portage
Inferred (*) 336 9.10 98,000
Goose Island
Inferred (*) 532 9.39 161,000
North Portage
Inferred (*) 132 7.13 30,000
Vault
Inferred (*) 1,271 5.32 217,400
Total
mine plan 7,157 5.93 1,365,000
Open pit
strip ratio 7.49:1
2002 REVISED MINING VOLUMES (*)
Tons Grade Contained
(000 t) (g/t) ounces
OPEN PIT
Third Portage
Measured and
indicated 7,711 4.52 1,120,700
Inferred (*) 2,660 4.31 378,900
Goose Island
Measured and
indicated 778 6.96 174,100
Inferred (*) 172 6.20 34,300
Vault
Inferred (*) 1,288 3.92 162,300
UNDERGROUND
Goose Island
Inferred (*) 532 9.39 161,600
Total
mine plan 14,411 4.86 2,249,000
Open pit
strip ratio 7.78:1
(*) Dilution factors applied to account for planned mining method
The preliminary assessment is preliminary in nature, includes inferred
mineral resources that are considered too speculative geologically to have
the economic considerations applied to them that would enable them to be
categorized as mineral reserves, and there is no certainty that the
preliminary assessment will be realized.
"The higher production rate evaluated in this study generates substantial
projected cash flows -- even at today's low gold prices. We believe there
are several opportunities including additional resources and capital cost
savings through contract mining or selection of used equipment that will
further improve the economics of the project. We also believe that with
additional metallurgical testing, improved gold recoveries may be achieved.
Currently, there are less than a handful of developing gold projects in
North America that can offer the size and low cost potential that
Meadowbank offers," said Kerry Curtis, senior vice-president of Cumberland
Resources Ltd.
Year 2002 exploration and development program
Management is planning a two-phase $4.5-million (Canadian) program for the
project in 2002. The target of the proposed program, which is subject to
board approval, is to improve the project economics by adding sufficient
resources to support a 10-year mine plan. A contingent, phase 2 program
will incorporate engineering and definition drilling to improve resource
classification in preparation for reserve estimation and feasibility.
Details of the proposed program will be released as finalized.
WARNING: The company relies upon litigation protection for
"forward-looking" statements.
(c) Copyright 2002 Canjex Publishing Ltd. stockwatch.com |
