Cumberland Resources (CLG)

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CUMBERLAND RESOURCES LTD. (CBD : TSX : C$3.98) - SPECULATIVE BUY - 12-MONTH TARGET PRICE: C$5.30
Graeme Currie/Canaccord
Comment: Revised valuation of Cumberland's key assets

The results generated over the past quarter from Cumberland's 100% held Meadowbank gold project have, in our view, pushed this project over key economic hurdles. In particular, the expansion of the Vault and Portage Pits coupled with material improvements to the metallurgical recovery, along with resource expansion, should allow this project to be viewed solely for open pit development over a minimum ten-year mine life. In fact, given the expansion of in-pit recoverable resources to 3.0 million ounces of gold, it is our contention that a revision in the base-case operating through-put parameter of 4700 tpd could be revised upward by 15-20% and still allow for a ten-year mine life. We derive a target price of $5.30/share, up from our previous target of $4.25/share. Maintain Cumberland as a SPECULATIVE BUY and Top Recommendation with a new target of $5.30/share.