CUMBERLAND RESOURCES (CLG : TSX : C$3.85) - SPECULATIVE BUY - 12-MONTH
TARGET PRICE: C$5.30
Graeme Currie
Comment: Cumberland reports an increase in the resource estimates for Meadowbank
Last week, Cumberland reported an increase in the resource estimates for Meadowbank that incorporated the results from the 2003 drill program. An 8% increase in total ounces in situ was defined. Importantly, the M&I estimate is now at the roughly 3.0 million ounce threshold, which we estimate is required to allow for a 10 year open pit mine life. The M&I resource was reported at 21.6 million tonnes at 4.3 g/t Au for 2.99 million ounces. Cumberland also announced that beginning in early March, a $4.7 million exploration budget is planned for Meadowbank. This budget, we understand, is over and above expenditures for what is expected to be a very active year at Meadowbank, as site development towards mine construction is anticipated. The 2004 exploration program will encompass roughly 12,000 metres of drilling focused on three areas. Of particular interest, in our view, will be deeper drilling planned for the Goose Island Zone. Cumberland Resources has announced that effective at the opening on Tuesday, February 3, the company will be listed on AMEX and will also remain listed on the TSX, but will change the ticker in Canada from CBD to CLG to coincide with the AMEX ticker designation of CLG. We maintain our SPECULATIVE BUY rating and $5.30 target on Cumberland - this target will be reviewed once the feasibility study on Meadowbank is released, anticipated by late Q1/04.
