2. SHORT TERM INVESTMENTS

Short-term investments comprise Canadian dollar denominated investments in investment grade debt and banker's acceptances with maturities to May 2005.  The counterparties include provincial and federal governments, Canadian financial institutions and utilities.  At March 31, 2003, these instruments were yielding a weighted average interest rate of 4.1% per annum.  The fair value of the short-term investments based on quoted market prices approximates their carrying values.

3. SHARE CAPITAL

Authorized

_{100,000,000 common shares with no par value.}

[a]

Issued

_{Common shares have been issued for the following consideration:}

_{The flow through shares issued effectively pass on tax credits associated with the Canadian Exploration Expenditures (as defined in the Canadian Income Tax Act) funded by the proceeds of the shares. The entire amount of the proceeds were renounced to the subscribers as tax benefits. As at March 31, 2003, $4,689,664 is included in restricted cash in respect of flow through share funds. The expenditure of these funds is restricted to Canadian exploration activities. For future income tax purposes, the taxable benefits renounced can only be recognized when the exploration expenditures to which they relate have been incurred.}

[b]

Warrants

_{At March 31, 2003 there are 3,722,186 (December 31, 2002 – 3,767,520) warrants outstanding to purchase 3,222,186 (December 31, 2002 – 3,267,520) shares of the Company at an average weighted price of $2.64 (December 31, 2002 – $2.62) expiring at varying dates to December 22, 2003.}

[c]

Stock options

_{Under the Cumberland Resources Stock Option Plan of 1995, options to purchase common shares of the Company may be granted to employees and directors of the Company for terms up to five years at an exercise price equal to the market price prevailing on the day immediately preceding the date of the grant. Options previously granted will be forfeited upon leaving the employ of the Company.}

_{At March 31, 2003 there are options outstanding and exercisable to issue 2,910,000 shares of the Company. The price of these options ranges from $0.75 to $2.65, with an average weighted price of $1.84 and their expiry dates range from January 27, 2004 to March 5, 2008. At March 31, 2003, 4,024,800 common shares were reserved for issuance pursuant to the employee incentive share option plan.}

_{The following table summarizes information about the share options outstanding:}

_{Pro forma information regarding net income is required and has been determined as if the Company had accounted for its employee stock options granted after December 31, 2001 under the fair value method. The fair value for these options was estimated at the date of granting using a Black-Scholes Option Pricing Model with the following assumptions for 2003: weighted-average risk-free interest rates of 4.27%; dividend yields of nil; weighted-average volatility factors of the expected market price of the Company's common shares of 60%; and a weighted-average expected life of the options of 4.5 years. For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting periods. The Company's pro forma net loss under Canadian GAAP would be increased by $278,000 for the quarter ended March  31, 2003. Basic loss per-share figures would have been increased by $0.01.}

4. COMMITMENTS AND CONTINGENCIES

_{As disclosed in note 4[b] in the annual financial statements, the Company has a contingent loan balance which totals $12,746,243 at March  31, 2003 This loan will be repaid only if commercial production at Meliadine West is achieved and will be paid only out of production cash flow (as defined in the joint venture agreement).}

_{As disclosed in note 6[a] in the annual financial statements, the Company has $4,689,664 in restricted cash that must be used in Canadian Exploration Expenditures (as defined by the Canadian Income Tax Act) in order to avoid interest and penalty charges imposed by the Canadian Customs and Revenue Agency.}

_{Although the ultimate amount of future site restoration costs to be incurred for existing exploration interests is uncertain, Cumberland Resources has estimated its share of these costs to be $340,000 as at March 31, 2003.}

_{Included in restricted cash is an amount of $38,622 in respect of a government bond arising from the land use agreement entered into with Nunavut Tunngavik Incorporated for protection against environmental accidents.}