June 30, 2003

Cumberland Resources Ltd.

Balance Sheets

(unaudited)

Cumberland Resources Ltd.

Statements of Loss and Deficit

(unaudited)

Cumberland Resources Ltd.

Statements of Cash Flows

(unaudited)

Cumberland Resources Ltd.

Notes to Financial Statements

June 30, 2003

(unaudited)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying interim financial statements have been prepared in accordance with Canadian generally accepted accounting principles for interim financial information and accordingly do not include all disclosure required for annual financial statement.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered for a fair presentation have been included.  Operating results for the six months ended June 30, 2003 are not necessarily indicative of the result that may be expected for the full year ending December 31, 2003.

These statements should be read in conjunction with the December 31, 2002 annual financial statements, including the accounting policies and notes thereto, included in the Annual Report for the year ended December 31, 2002.  These financial statements reflect the same significant accounting policies as those described in the notes to the audited financial statements of Cumberland Resources Ltd. (“the Company”) for the year ended December 31, 2002.

Certain amounts for 2002 have been reclassified to conform with current year’s presentation.

2. SHORT TERM INVESTMENTS

Short-term investments comprise Canadian dollar denominated investments in investment grade debt and banker's acceptances with maturities to December 2005.  The counterparties include provincial and federal governments and Canadian financial institutions.  At June 30, 2003, these instruments were yielding a weighted average interest rate of 3.6% 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 June 30, 2003, $319,400 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 June 30, 2003 there are 1,367,520 (December 31, 2002 – 3,767,520) warrants outstanding to purchase 817,520 (December 31, 2002 – 3,267,520) shares of the Company at an average weighted price of $1.73 (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 ten years at an exercise price equal to the market price prevailing on the day immediately preceding the date of the grant.}

_{At June 30, 2003 there are options outstanding and exercisable to issue 3,290,000 shares of the Company. The price of these options ranges from $0.75 to $2.65, with an average weighted price of $1.92 and their expiry dates range from January 27, 2004 to May 13, 2113. At June 30, 2003, 4,024,800 common shares were reserved for issuance pursuant to the employee incentive share option plan.}

_{The company has elected not to use the fair value methods of accounting for stock options. Accordingly during the period, no compensation costs were recorded in the statement of loss for options granted to employees and directors. Had compensation costs been determined using the fair value based method at the grant dates, the Company’s pro forma net loss per share would have been as follows:}

_{The compensation costs reflected in these pro forma amounts were calculated using the Black-Scholes option pricing model assuming risk-free interest rates between 3.72% and 4.27%, a dividend yield of 0%, an expected volatility of between 60% and 63% and expected lives of stock options of 4.5 years.}

4. COMMITMENTS AND CONTINGENCIES

_{As disclosed in note 4[b] in the annual financial statements, the Company has a non-recourse, contingent loan balance of $12,916,575 at June 30, 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 $319,400 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 June 30, 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.}

_{On July 30, 2003 the Company closed a private placement of ten million units at $3.10 per unit and one million flow through shares at $3.30 per share, for gross proceeds of $34,300,000, net proceeds to the Company of $32,525,000. Each unit consists of a share and one half of a share purchase warrant. Each whole warrant entitles the holder to subscribe for one additional common share at a price of $3.75 until July 29, 2004 unless the closing price of the Company’s shares trade on the TSX at $4.25 or more during any twenty consecutive days during the period commencing}

_{November 29, 2003 and ending March 29, 2004, in which case the Warrants will expire on the later of April 29, 2004 and the date which is twenty-five days following the giving of notice by the Company to the Warrant holders.}

Cumberland Resources Ltd.

Management’s Discussion and Analysis

OVERVIEW

The Company is engaged in the development and exploration of mineral properties.  The Company’s current activities are focused on the Meadowbank gold property, which is in the feasibility stage, located in Nunavut Territory, Canada.

OPERATING SUMMARY

The Company initiated the field component of the $10.5 million 2003 work program at the Meadowbank gold property in early April. The program includes two phases of drilling totaling over 16,000 metres and is designed to complete feasibility and mine permitting requirements as well as a substantial field exploration program.  Initial diamond drilling focused on deposit definition and further exploration of targets generated in 2002. In addition, geotechnical drilling for water retention dike designs was initiated. An extensive overburden drilling program (370 holes) is underway to aid in the delineation of further diamond drill targets.

FINANCIAL SUMMARY

The Company’s operations for the six months ended June 30, 2003 and the three months ended June 30, 2003 together with the comparative numbers from the 2002 year are summarized below:

The Company has no operating revenues, as it has not commenced mining operations. The major component of the Company’s net loss for all periods was exploration costs which, under the Company’s accounting policies, are expensed. Exploration costs are normally higher in the second quarter as the Company’s drilling season usually commences in April. The majority of expenditures for all comparative periods were incurred on the Company’s 100% owned Meadowbank property. The significant increase for 2003 reflects the improved economic forecasts the property generated in early 2002 and the resulting rapid acceleration of the Company’s exploration program at Meadowbank, which is discussed above in the Operating Summary.

 In addition to  its work at Meadowbank , during the second quarter of 2003, the Company completed a small drill program at Meliadine East, at a cost of approximately $300,000. This program was designed to follow up a diamond indicator exploration program undertaken in 2002. No significant results were received from the caustic fusion of the drill core from the kimberlite pipes tested.

The Company’s 22% share of the exploration costs at Meliadine West was financed by way of a non-recourse loan from the property operator, WMC International Ltd. (WMC). There was little activity on the property in both 2003 and 2002. Subsequent to June 30, 2003 WMC announced a $2,070,000 work program (100% basis) for Meliadine West. As at June 30, 2003 the non-recourse loan from WMC was $12,916,575.

The increase in interest income for all comparative periods was due to higher average cash and cash equivalents balances in the 2003 periods. The Company received a $500,000 option payment on its Meliadine West property in the first three months of both 2003 and 2002. The increase in administrative expenses for all comparative periods reflects the increased level of activity and management staff in 2003 and the greater emphasis placed on public relations, including investor relations activities and financing activities.

Capital Resources and Liquidity

The Company’s capital budget for its Meadowbank property for 2003 is $10.5 million. The 2003 program is designed to complete feasibility and mine permitting requirements at Meadowbank, and also includes a substantial field exploration program. The 2003 budget for the 50% owned Meliadine East property is approximately $625,000 shared on a 50/50 basis with a joint venture partner.  At Meliadine West, WMC International Ltd. is obligated to fund the Company’s share of any expenditures by way of non-recourse loans. These loans are repayable only from the Company’s ultimate share of any revenues from the project.

In June 2003 the Company received $5.1 million from the exercise of warrants. At June 30, 2003, the Company had approximately $17.7 million in working capital, including $0.4 million in restricted cash. The majority of the restricted cash is flow through funds, which must be spent on Canadian exploration activities.

_{On July 30, 2003 the Company closed a private placement of ten million units at $3.10 per unit and one million flow through shares at $3.30 per share, for gross proceeds of $34,300,000, net proceeds to the Company of $32,525,000. Each unit consists of a share and one  half of a share purchase warrant. Each whole warrant entitles the holder to subscribe for one additional common share at a price of $3.75 until July 29, 2004 unless the closing price of the Company’s shares trade on the TSX at $4.25 or more during any twenty consecutive days during the period commencing}

_{November 29, 2003 and ending March 29, 2004, in which case the Warrants will expire on the later of April 29, 2004 and the date which is twenty-five days following the giving of notice by the Company to the Warrant holders.}

If ultimately the decision is made, following the feasibility study at Meadowbank, to develop a mining operation, substantial long term financing will be required.