Cumberland Resources Ltd.

Cumberland Resources Ltd.

March 16, 2005 15:23 ET

Cumberland Reports 2004 Financial Results and Summary of Activities




MARCH 16, 2005 - 15:23 ET

Cumberland Reports 2004 Financial Results and Summary
of Activities

RESOURCES LTD. (TSX:CLG)(AMEX:CLG) is pleased to report audited
financial results for the year ended December 31, 2004, and summary of
activities to date.


On February 24, 2005, Cumberland announced the results from the
Feasibility Study ("Study") on the Company's 100% owned Meadowbank Gold
Project located in Nunavut, Canada. Initiated in 2003, completion of the
Study was extended in early 2004 due in part to global escalations in
the cost of fuel, steel and other construction items which impacted the
preliminary construction cost estimates for the project. The Study
incorporates improvements to the Meadowbank mine model as a result of a
re-design completed in 2004 by the Company and the study manager, AMEC
Americas Ltd. ("AMEC"). The most significant improvements are from
increased annual production and mill throughput, changes to open pit
scheduling, and a proposed 102 km conventional access road to connect
the project to the community of Baker Lake.

The Study results evaluate an open-pit gold mine and assume a gold price
and exchange rate of US$400 per ounce and US$0.75 per Cdn$1.00
respectively and full equity financing. According to the Study,
Meadowbank is projected to produce an average of more than 300,000
ounces of gold per year over an 8.3 year mine life. Peak production is
achieved in Year 1 of operations with 421,000 ounces produced from the
Portage pit. Additional financial projections reflected in the Study

Meadowbank Gold Project Feasibility(i)
Proven & Probable Mining Reserves
(contained ounces) 2.8 million
Average Annual Production Rate
Years 1 to 4 376,000 ounces
Life of Mine 316,000 ounces
Average Cash Production Cost (per Ounce)
Years 1 to 4 US$199
Life of Mine US$224
Payback Period 4.0 years
Total Pre-production Capital US$225 million
Internal Rate of Return
Pre-tax 14.3%
After-tax 10.7%
Net Present Value @ 0%
Pre-tax US$174 million
After-tax US$115 million

Conventional open pit mining methods will be used to exploit the
reserves of the project. The proven and probable open pit reserve
estimate for the three pits on the project is as follows:

Meadowbank Gold Project Open Pit Mining Reserves (Proven and
Open Pit Ore (t) Au Grade (g/t) Contained Ounces
Portage 11,180,000 4.27 1,534,000
Vault 8,469,000 3.18 866,000
Goose 2,247,000 5.09 368,000
Total 21,896,000 3.93 2,768,000

On March 15, 2005, Cumberland announced a budget of $3.5 million for the
2005 exploration program on the Meadowbank Project. The program,
including a planned 7,000 to 9,000 metre diamond drilling program, is
expected to commence in April and will focus on increasing gold reserves
and resources. The exploration program will consist of a two phased
drill program, subject to the availability of third-party drillers, and
grassroots exploration along the 25 kilometre Meadowbank gold trend. At
the Goose Island deposit, the Phase I drill program will focus on
expansion of high grade intersections yielded in the 2004 drill program.
South of the Goose Island deposit, drilling will test an 850 metre
strike length of stratigraphy where previous wide spaced drilling has
intersected gold mineralization similar to the Goose Island deposit. The
Phase I program will also focus on the PDF deposit, which remains open
for expansion at depth. The Phase II program will consist of
approximately 2,000 metres of drilling, grassroots exploration on
favourable structures north of the Vault deposit, and follow-up
exploration on numerous recently defined prospects situated both near
the proposed open pits and across the property.

The development of the Meadowbank Project is being reviewed under a NIRB
Part 5 review as provided under Article 12 of the Nunavut Land Claims
Agreement and existing Federal legislation. The Company has submitted a
Draft Environmental Impact Study ("DEIS") to the Nunavut Impact Review
Board ("NIRB"). The report identifies the potential impacts the
Meadowbank Project will have on the local environment, socio-economic
impacts, and the management and mitigation measures required to minimize
the impacts of the project while maximizing the benefits. The NIRB is
presently reviewing the DEIS and following a period of review and
initial hearings, Cumberland will prepare a final EIS document, which
will include responses to matters raised through the NIRB review period.
The Company anticipates it could move into the Final EIS stage in the
fall of 2005. Final approvals and licenses are anticipated in early 2006.

The engineering and construction schedule for the project assumes that
all necessary NIRB approvals and licenses are obtained in early 2006
allowing procurement and shipping of equipment and supplies in the 2.5
month 2006 shipping season (mid-July to late September). Construction of
the access road from Baker Lake to the Meadowbank site would commence in
the fall of 2006. Upon completion of the access road a mine construction
period of 18 months is required with production commencing in mid-2008.

Cumberland also holds a 22% interest (carried to production) in the
Meliadine West gold project located in Nunavut Territory. Comaplex
Minerals Corp. is the Operator of the Meliadine West gold project.
Primary activities during 2004 at Meliadine West included ongoing
resource evaluation of the Main Tiriganiaq deposit and further
exploration of deeper targets (West Tiriganiaq zone) in preparation for
feasibility study. A surface drill program consisting of 21 holes in
9,297 metres was completed by the Operator in September, 2004. The
Operator reported that results from the final drill holes in the West
Tiriganiaq zone indicate potential for additional gold resources at
depth and along strike of the Main Tiriganiaq deposit. The Operator
further stated it intends to recalculate resources in the Main
Tiriganiaq deposit and perform subsequent exploration with the goal of
moving this deposit towards feasibility as quickly as possible.


At December 31, 2004, the Company had working capital of $37.0 million
as compared to $45.8 million at December 31, 2003.

The Company incurred a net loss of $10.5 million for the year-ended
December 31, 2004, compared to a net loss of $13.4 million for the
year-ended December 31, 2003. The reduction in net loss during 2004 is
primarily attributable to a $2.5 million reduction in exploration and
development costs and a $1.5 million increase in the gain on investments
in public companies, which were partially offset by increases in
stock-based compensation expense and general and administrative and
other expenses.

The Company had no operating revenues in either 2004 or 2003, as it had
not commenced mining operations. In both 2004 and 2003, the Company
received the annual $500,000 option payment from the operator of the
Meliadine West joint venture in accordance with an option agreement
signed in 1995.

The most significant component of the Company's net loss for both 2004
and 2003 was exploration and development costs related to Meadowbank.
During the years ending December 31, 2004 and December 31, 2003, the
Company incurred exploration and development costs of $9.0 million and
$11.2 million respectively on the Meadowbank project. The $2.2 million
reduction in 2004 is primarily attributable to reduced exploration costs
at Meadowbank. Consulting engineering costs related to completion of the
Meadowbank feasibility study were also lower in 2004 than in the prior

This summary of financial highlights should be read in conjunction with
the Company's 2004 audited financial statements and Management's
Discussion and Analysis of Financial Condition and Results of
Operations, both of which are available on

Cumberland is a well financed mineral exploration and development
company. The Company completed a feasibility study on the Meadowbank
gold project (100% interest) in Nunavut and is advancing the project to
production. The Company also holds a 22% carried to production interest
in the Meliadine West gold project in Nunavut. The shares of Cumberland
are traded on the Toronto Stock Exchange and the American Stock Exchange
under the symbol CLG.


Kerry M. Curtis, B.Sc., Geo., President and CEO

Forward Looking Statements and Risks - This News Release contains
"forward-looking statements", including, but not limited to, statements
regarding our expectations as to the market price of gold, strategic
plans, future commercial production, production targets and timetables,
mine operating costs, capital expenditures, work programs, exploration
budgets and mineral reserve and resource estimates. Forward-looking
statements express, as at the date of this report, our plans, estimates,
forecasts, projections, expectations or beliefs as to future events or
results. We caution that forward-looking statements involve a number of
risks and uncertainties, and there can be no assurance that such
statements will prove to be accurate. Therefore, actual results and
future events could differ materially from those anticipated in such
statements. Factors that could cause results or events to differ
materially from current expectations expressed or implied by the
forward-looking statements include, but are not limited to, factors
associated with fluctuations in the market price of precious metals,
mining industry risks and hazards, environmental risks and hazards,
uncertainty as to calculation of mineral reserves and resources,
requirement of additional financing, risks of delays in construction and
other risks more fully described in our AIF filed with the Securities
Commissions of the Provinces of British Columbia, Ontario, Quebec and
Nova Scotia in our 40F filed with the United States Securities and
Exchange Commission (the "SEC") and with the Toronto Stock Exchange.

(i) Meadowbank Feasibility Study (First Quarter 2005) - The feasibility
study incorporates improvements to the mine model as a result of a
re-design completed in 2004 by the Company and the study manager, AMEC
Americas Ltd. ("AMEC"). Construction scheduling and capital cost
estimation has been prepared by Merit International Consultants Inc
("Merit"). Metallurgical and process test work was completed by SGS
Lakefield Research Ltd. Process design was completed by International
Metallurgical and Environmental Inc. and AMEC. Supporting geotechnical
engineering, hydrogeological and geochemical studies were completed by
Golder Associates Ltd. ("Golder"). The Study has been prepared in
accordance with the Standards of Disclosure for Mineral Projects as
defined by National Instrument 43-101 ("NI 43-101"). Assumptions include
a long term gold price of US$400/oz. and an exchange rate of US$0.75 pr

(ii) Meadowbank Gold Reserves (First Quarter 2005) - The open pit mining
reserves have been prepared in accordance with NI 43-101. Mr. Mark
Pearson, P.Eng Principal Mining Engineer with AMEC Americas Limited is
the independent Qualified Person responsible for preparation of stated


Contact Information

    Cumberland Resources Ltd.
    Kerry Curtis
    President and CEO
    (604) 608-2557
    Cumberland Resources Ltd.
    Joyce Musial
    Manager, Investor Relations
    (604) 608-2557
    (604) 608-2559 (FAX)