Progress on Meadowbank

Cumberland Resources and the Kivalliq Inuit Association (KIA) have reached an Agreement in Principle with respect to an Inuit Impact and Benefits Agreement (IIBA) relating to Cumberland’s 100% owned Meadowbank gold project located 70 km north of Baker Lake, Nunavut. A signing ceremony of the formal agreement between Cumberland and the KIA will be held in March in Baker Lake. The IIBA satisfies the requirements of Article 26 of the Nunavut Land Claims Agreement and outlines the benefits that will be provided to Inuit as a result of the proposed 12 years of development, operation and closure of the Meadowbank gold project. The IIBA will ensure that local employment, training and business opportunities arising from all phases of the project are accessible to the Kivalliq Inuit. The IIBA also outlines the special considerations and compensation that Cumberland will provide for Inuit regarding traditional, social and cultural matters.

Kerry Curtis, President and CEO of Cumberland commented, “We are very pleased by the commitment and dedication shown by the KIA in reaching this agreement. This agreement will help fulfill Cumberland’s goal of ensuring that the Meadowbank gold project provides a favourable economic situation for both Cumberland and the Kivalliq Inuit. Settling the terms of the IIBA brings us one step closer to our goal of proceeding with the development of the Meadowbank gold project. The agreement with the KIA is a key milestone for Cumberland and the Kivalliq Inuit as Cumberland enters the Final Hearings in the permitting process.”

“The agreement clearly indicates the support of the KIA for the development of a project that will provide a significant contribution to the economy of the Kivalliq region, particularly in the Community of Baker Lake,” Mr. Tongola Sandy, President of KIA stated. “The IIBA is an important step in the regulatory process that will ensure Inuit benefit from the Meadowbank gold project. We look forward to working with Cumberland on the implementation of the IIBA.”

Meadowbank is host to what Cumberland describes as “Canada’s largest pure gold open pit reserves, estimated at 2.9 Moz.” Cumberland has completed a bankable feasibility study and is advancing the project towards production. In December 2005 Cumberland announced further improvements to the project as a result of independent due diligence completed for bank financing. Revisions now forecast gold production at 330,000 oz/y of gold over an 8.1 year mine life with an estimated total cash cost of $201/oz. Peak production is forecast at 451,000 oz produced at an estimated cash cost of $155/oz. Final hearings in the permitting process are scheduled for March 27, 2006 and terms for bank financing are currently being finalized. Operations from three, shallow open pits are planned to commence in 2008 provided the permitting process is completed in early 2006.

The KIA represents the interests of the Inuit of the Kivalliq region. Directly controlled by the regional Inuit population, the KIA invests in subsidiary corporations and represents collective Inuit political interests. The primary operating location is Rankin Inlet. Other locations include Arviat, Baker Lake, Chesterfield Inlet, Coral Harbour, Repulse Bay and Whale Cove.