Meadowbank Mine To Get New Owner: Cumberland Sells Out For $710 Million
Published by MAC on 2007-02-18Source: http://www.nunatsiaq.com/news/nunavik/70
Meadowbank mine to get new owner: Cumberland sells out for $710 million
JIM BELL
18th February 2007
The Meadowbank gold mine near Baker Lake will likely get a new owner by April, following an announcement Feb. 14 that in a friendly take-over bid, Agnico-Eagle Mines Ltd. will acquire Cumberland Resources, the small Vancouver firm that developed the project.
The deal, which Cumberland's board of directors approved this week, is worth $710 million. In it, Agnico-Eagle will acquire all the shares of Cumberland Resources by exchanging .185 of a share in Agnico-Eagle for every Cumberland Resources share.
Agnico-Eagle is a mid-size Canadian gold mining firm with projects in Finland, northern Mexico, the western U.S. and northern Quebec.
The Meadowbank project, about 70 km from Baker Lake, is Cumberland Resources' main asset. Cumberland has now acquired all necessary permits and licences to build the $375 million mine, based on an ore body that contains at least 2.9 million ounces of gold.
Agnico-Eagle says they want to acquire the Meadowbank property because Nunavut possesses a "low political risk profile" and because they believe further exploration will expand the size of the gold deposit there.
Right now, Meadowbank's estimated life is about eight years. But Agnico-Eagle believes the area has the potential to become a "multi-decade mining camp."
The deal is expected to close in April.
Meanwhile, Cumberland announced last week they now have all necessary permits to build a 110-km all-weather road from Baker Lake to the mine site. That includes an agreement with the Kivalliq Inuit Association to build the road through Inuit-owned lands.
The mining company is contracting Nuna Logistics Ltd. to build the road and will spend $250,000 on training for Inuit. About 40 people from Baker Lake, selected from a list of about 200 applicants, will receive training.
The company estimates that at full operation, the road construction project will employ 43 Inuit out of a total work force of 64 people.