Northgate reports first quarter production results and updated 2008 production forecast
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| | VANCOUVER, April 21 /PRNewswire-FirstCall/ - (All figures are in US dollars except where noted) - Northgate Minerals Corporation (TSX: NGX, AMEX: NXG) today reported its first quarter 2008 operating results and updated 2008 production forecast, as well as its exploration plans for its Australian operations.
FIRST QUARTER 2008 HIGHLIGHTS - Total quarterly gold production of approximately 90,000 ounces at Northgate's three operating mines at an average net cash cost of production of $347 per ounce of gold. - Kemess produced 49,583 ounces of gold at a cash cost of $105 per ounce. - Stawell produced 28,363 ounces of gold at a cash cost of $428 per ounce. - Fosterville produced 11,655 ounces of gold at a cash cost of $1,185 per ounce. Cash costs were temporarily much higher than normal as mining activities were curtailed to facilitate the smooth and safe transition to owner mining soon after the acquisition closing of Perseverance Corporation. - Kemess produced 14.4 million pounds of copper in concentrate. - A new three-year collective agreement was ratified by the International Union of Operating Engineers Local 115, representing the 300 production and maintenance employees at Kemess. - Indicated resources underground at Young-Davidson increased by 137%. - A Memorandum of Understanding ("MOU") for the development of the Young-Davidson mine was signed with the Matachewan First Nation. 2008 PRODUCTION FORECAST HIGHLIGHTS - Total gold production is forecast to be 425,000 ounces: 236,000 ounces at Kemess; 112,000 ounces at Stawell; and, 77,000 ounces at Fosterville. Gold production attributable to Northgate from the date of acquisition for Stawell and Fosterville is 95,000 ounces and 70,000 ounces, respectively, bringing total production attributable to Northgate to 401,000 ounces. All of Northgate's present and future gold production is unhedged. - Northgate's overall cash cost of gold production, net of by-product credits, is forecast to be $272 per ounce of gold assuming a copper price of $3.50 per pound and exchange rates of Cdn$/US$1.00 and US$/A $0.93. - In Australia, Northgate plans to spend a total of $10 million for exploration on near mine targets designed to increase mineable reserves at Stawell and Fosterville. Ken Stowe, President & CEO, commented, "This is the first time we are reporting production for our two newly acquired Australian mines. The transition to Northgate ownership has gone smoothly and the management teams at both sites are now working diligently on addressing the critical strategic issues that we identified during our due diligence. At Stawell, the key challenge is to increase ore reserves and we are ramping up an aggressive $7 million exploration program, which has already had significant success at the Golden Gift 6 zone as announced last week. At Fosterville, we are in the process of implementing a number of fundamental operating changes that are required in order to produce the dramatic improvements in performance that we expect to see over the remainder of 2008. The conversion to owner mining, which was announced only a few days after the acquisition was completed, is one such important example. Meanwhile, closer to home, we are pleased to have reached a new three-year collective agreement at Kemess without any disruption to scheduled production. In addition, excellent progress continues to be made at the Young-Davidson project with the announcement in February of a 137% increase in indicated resources underground and the signing of a Memorandum of Understanding with the Matachewan First Nation. 2008 will truly be a transformational year for the company."