Iqaluit (Nov 22/04) - Exploration projects in Nunavut have the territory poised to become a powerhouse in mining over the next two decades. This year, exploration dollars are expected to be close to $120 million, up from last year's $90 million.

In 2005, the investment will be at least as much as this year, said Dave Smith, manager of Minerals and Petroleum Resources Division with the Government of Nunavut.

"We're seeing a global increase in exploration activity. There are higher prices in most metals," said Smith during the 32nd annual Geoscience Forum held in Yellowknife last week.

Smith said the exploration boom in Nunavut was spurred on by the development of the Ekati and Diavik diamond mines in the Northwest Territories.

Part of what has helped to develop the exploration drive in Nunavut is the work done by the Canada and Nunavut Geoscience office, Smith said.

Now, substantial plays are located throughout Nunavut, but mostly along the northwest arm of the Hudson Bay, on Baffin Island and Victoria Island.

Almost all the land in Nunavut is staked with the exception of a few Arctic Islands and some parts of southern Baffin Island.

Cumberland Resources' Meadowbank gold project manager Gordon Davidson and his team are looking at several changes in what could become a major gold mine, located north of Baker Lake.

Cumberland announced on Nov. 12 that its measured and indicated resource at Meadowbank has grown by 245,000 ounces.

Based on current gold prices of US$440, the value of the gold resource now sits at US$1.4 billion on 3.2 million ounces of gold.

"We need more time to evaluate the capital expenditures and production alternatives," said Joyce Musial, manager of investor relations for Cumberland.

"We missed the seasonal shipping windows that we have. Once the feasibility study is complete, engineering studies have to be done on the project and procurement planning has to be undertaken.

"Everything has to be barged out between July and October and that's why it's been pushed back," said Musial.

As a result, Cumberland has gone back to the drawing table, re-examining its feasibility study.

"Basically, we're looking at every facet of the operation," said Davidson.

These considerations include increasing the throughput for the gold operation from 10 years to eight years and enlarging the mill.

Cumberland is also considering the development of an all-weather road to expand the shipping season to five or six months from three months.

"Instead of having to construct a 40 million litre fuel tank we would only need a 20 million litre fuel tank. We were also looking at large Delta trucks that float on ice and if we had an all-weather road we could use normal trucks (which would be another cost savings)," said Davidson.

Engineering studies and an environmental impact statement for the project should be released shortly, said Davidson.