Northgate Minerals Profit Surges In Q1 [NXG]

5/2/2008 4:17:06 AM Gold and copper mining firm Northgate Minerals Corp. (NXG, NGX.TO) reported on Friday that profit more-than-doubled in the first quarter, helped by one-off, non-cash mark-to-market gain resulting from the settlement of Perseverance's gold forward contracts. Profit, on an adjusted basis, was higher still.

The Vancouver, Canada-based firm's consolidated net earnings for the quarter ended March 31, 2008, was US$20.43 million, or US$0.08 per share, significantly higher than US$9.41 million, or US$0.04 per share, in the year-ago quarter.

Current year quarter included a one-time, non-cash mark-to-market gain of US$9.84 million, resulting from the settlement of the gold forward contracts of Perseverance Corp. Ltd. (PRSVF.PK). The quarter also include a negative non-cash charge of US$29.33 million in the fair value of copper forward sales contracts related to future production in late 2009 and 2010.

The settlement was done by Perseverance following the close of its acquisition by Northgate on February 18. Also, Northgate noted that the quarterly consolidated results include the activities of Perseverance from February 19 onwards.

Excluding the items, the company reported adjusted net earnings of US$29.39 million, or $0.12 per share, for the first quarter. On average, six analysts polled by First Call/Thomson Financial expected the company to report earnings of $0.10 per share for the quarter.

Quarterly revenue increased to US$86.09 million from US$74.31 million in the comparable quarter of last year. Total gold production increased to 89,601 ounces from 68,110 ounces, whereas total copper production declined to 14.38 million pounds from 17.7 million pound, in the prior-year quarter.

On segmental basis, the Kemess South mine reported that quarterly revenue grew to $104.02 million from $93.25 million in 2007. Gold and copper production from this mine for the quarter was 49,583 ounces and 14.4 million pounds, respectively. Production was adversely affected by several factors, including several unscheduled power outages by BC Hydro that disrupted scheduled production for five days, as well as lower-than-expected gold grades.

The Stawell Gold mine reported that revenue from the date of acquisition to March 31 was $11.74 million and gold produced during the period was 28,363 ounces. The Fosterville mine registered revenue of $4.4 million from the date of acquisition to March 31, and produced gold to the tune of 11,655 ounces.