Cumberland to get $250 million for Meadowbank

Cumberland Resources Ltd., the company that’s planning to open the Meadowbank gold mine near Baker Lake, got a big financial boost last week when a group of three European investment banks agreed to give them a $250 million credit arrangement that’s tied to the value of Cumberland’s gold resource.

The banks, Barclays Capital of the U.K., Bayerische Hypo-und-Vereinsbank of Germany, and Societé Generale of France, will pledge the money against the value of 420,000 ounces of gold from Meadowbank. At a world price of $600 an ounce, that’s worth about $250 million.

But until Cumberland receives all necessary permits and licences from government regulators, nothing will happen.

The Nunavut Impact Review Board last week finished the final public hearings on their environmental review of the Meadowbank gold mine.

The next step will be for the review board to make a recommendation to the DIAND minister, Jim Prentice, on whether the mine should go ahead. If Prentice gives the mine a green light, then the company will easily clear most of the other bureaucratic hurdles.

Cumberland’s share price shot past $5 upon the news, then settled down to $4.92 as of Wednesday.