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Cumberland Resources opens the Vault

New gold deposit, rise in gold prices could expand future mine’s potential

DENISE RIDEOUT

CAMBRIDGE BAY — The Meadowbank gold project north of Baker Lake is shining with potential.

The discovery of new gold deposits and an increase in gold prices means the seven-year-old project is entering its most promising year so far.

And that’s good news for Meadowbank’s owner, Cumberland Resources Ltd.

"We’ve had some quite exciting developments on that project in the last year," Kerry Curtis, senior vice-president for Cumberland Resources, said at a Mining Symposium last weekend in Cambridge Bay.

Meadowbank, located 75 kilometres north of Baker Lake, is the third largest gold reserve in Canada. It boasts three million ounces of gold reserves, most of it lying just 150 metres under the tundra.

This year, Cumberland Resources will take on major drilling work, look at developing an airstrip at the Meadowbank site and find enough gold resources to increase the life span of the potential mine.

Workers will drill another 160 holes on the site, digging for more sources of gold. The gold reserves it has already discovered, Cumberland says, are enough to sustain a mine for eight years. But, over the next few months the company will expand it’s drilling to look for enough resources to keep the mine running for 10 years.

With 85 per cent of its gold reserves near the tundra surface, Cumberland Resources says a majority of the mining can be done through an open-pit process — a cheaper and less risky method than underground mining.

An on-site airstrip in also high on Cumberland’s wish list. Curtis said right now, workers are flown to Meadowbank by helicopter, but larger aircraft are required to transport heavy freight.

Curtis said in all, Cumberland will spend $4.5 million this year on the project.

All this is good news for Baker Lake.

About 30 per cent of Meadowbank’s employees hail from Baker Lake. The project also uses local businesses, such as heavy equipment contractors, to work on the site.

If Meadowbank goes into the mine production stage, more jobs will go to Baker Lake residents.

"The business community is excited," Curtis said. "The elders are excited because it has the potential to employ youth in the community."

Since 1995, Cumberland has spent $16.5 million on exploration, drilling 429 holes in the Meadowbank area.

But it was the discovery of new gold deposits last year that really upped the ante of the project.

In its 2000 feasibility study, Cumberland Resources concluded it would need more gold resources and higher gold prices to really go much further with the Meadowbank project.

The new discoveries, which they’ve named the Vault deposit, means Cumberland Resources could now mine 2.25 million ounces of gold.

"The discovery here has vastly improved the productivity of the gold project," Curtis said.

Gold prices have also jumped from a low of $250 an ounce. The Vault deposits can now fetch $300 per ounce. "It gives us a green light for this project," Curtis said.

During the remainder of the year, Cumberland will continue to explore ways of making the Meadowbank project feasible.

While there’s no indication if or when Meadowbank will develop into a mine site, Curtis said it’s closer than ever to becoming operational.

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