Northgate Minerals Announces Updated Resource Estimate for Kemess Underground
Indicated Resource Contains
2.6 Million Ounces of Gold and 860 Million Pounds of Copper
VANCOUVER, Feb. 15
/CNW/ - Northgate Minerals Corporation
(TSX: NGX, NYSE Amex: NXG) is pleased to report an updated NI 43-101 compliant
resource estimate for the Kemess Underground
Project, located five kilometres
("km") north of the Kemess South mine and
milling complex in north-central British
Columbia. The updated resource estimate follows on the completion of
a 30-hole infill diamond drill program at Kemess
Underground in 2010.
Highlights
<<
- Indicated Resource of 136.5 million tonnes ("Mt") containing 2.6 million ounces of gold and 860.6 million pounds of copper.
- Identified a 10.3 Mt, high-grade sector of the overall resource
containing 450,000 ounces of gold and 119 million pounds of copper
grading 1.35 grams per tonne ("g/t") gold and 0.52% copper, respectively.
- Northgate has engaged AMC Mining Consultants ("AMC") to complete
technical studies, which will be incorporated into a NI 43-101
compliant Preliminary Assessment.
>>
"We are very pleased
with the results of the new resource estimate for Kemess
Underground, which has exceeded our initial expectations and increased our
confidence in this significant resource" commented Ken Stowe,
President and Chief Executive Officer. "In addition to increasing the gold
and copper content of the resource, the 2011 drill results have identified a
continuous, high-grade sector of the resource, which should allow us to enhance
the value of the project if it can be scheduled for mining during the early
years of production. In the third quarter of 2011, we look forward to filing a
Preliminary Assessment, which will outline the economics for mining a large
portion of the identified resources."
Kemess Underground - Synopsis
The 2010 infill diamond
drill program was designed and executed to increase confidence in the grade
distribution, location and geotechnical characteristics of a target area
containing approximately 70 Mt of mineralization that had been identified as
potentially mineable using low-cost bulk underground mining methods. The target
area is situated in the eastern portion of the Kemess
North deposit(1) approximately 300 and 600 metres ("m") below surface. The target zone of 70
Mt was initially estimated to contain approximately 1.4 million ounces of gold
and 500 million pounds of copper using a resource model based upon an internal
revision of the 2005 NI 43-101 resource estimate for Kemess
North and an engineered outline at a $15 Net Smelter Return
("NSR") cut-off for vertical columns of blocks. The target zone was a
potentially mineable subset of a larger Indicated Resource of 121.1 Mt
containing 2.3 million ounces of gold and 819 million pounds of copper.
Using a $15
block NSR cut-off, the new 2011 Indicated Resource estimate for Kemess Underground is now 136.5 Mt containing 2.6 million
ounces of gold, 860.6 million pounds of copper and 9.2 million ounces of
silver.
Kemess Underground 2011 Resource
The 2011 resource estimate
captures all drilling completed to November 2010 and is based
upon a total of 146 drill holes. Initial estimates for underground bulk mining
costs, combined with milling and general and administrative (G&A) costs
consistent with the size of operation envisioned for the Kemess
underground, indicate that a mine could be economically viable with a NSR
cut-off in the range of $13-$15 per tonne
of ore. Table 1 shows resource estimates for NSR cut-offs of $15
and $13 per tonne and for the
"All blocks" area, which has boundaries that are 60 m outside the $13
per tonne NSR cut-off along the western margin and 30
m outside the $13 per tonne NSR
cut-off elsewhere.
Table 1: 2011 Kemess Underground Resources (using $1,100/oz
gold, $2.80/lb copper and $20/oz silver)
<<
------------------------------------------------------------------------
Indicated
Cut-Off Tonnes Au Cu Ag Gold* Copper NSR(xx)
(Cdn$/t NSR) (Mt) (g/t) (%) (g/t) (Mozs) (Mlbs) (Cdn$/t)
------------------------------------------------------------------------
$15 136.5 0.558 0.29% 2.105 2.61 860.6 $24.96
$13 162.8 0.513 0.27% 1.992 2.87 964.8 $23.19
All blocks 185.0 0.477 0.25% 1.882 3.04 1032.9 $21.72
------------------------------------------------------------------------
------------------------------------------------------------------------
Inferred
Cut-Off Tonnes Au Cu Ag Gold* Copper NSR(xx)
(Cdn$/t NSR) (Mt) (g/t) (%) (g/t) (Mozs) (Mlbs) (Cdn$/t)
------------------------------------------------------------------------
$15 6.0 0.42 0.22% 1.65 0.09 29.6 $19.07
$13 7.8 0.39 0.21% 1.57 0.10 36.6 $17.96
All blocks 10.2 0.35 0.20% 1.43 0.12 43.7 $16.25
------------------------------------------------------------------------
* Includes silver contribution at 55 ounces of silver to one ounce of
gold.
(xx)NSR or in-situ recovered value assumes metallurgical recoveries of
90% for copper and 68% for gold and an exchange rate of 1.00
>>
At a $15 NSR
cut-off, the total Indicated Resource for Kemess
Underground is 136.5 Mt containing 2.6 million ounces of gold, 860.6 million
pounds of copper and 9.2 million ounces of silver. The 2011 resource is a
significant improvement over the May 2010 resource, which showed
121.1 Mt containing 2.3 million ounces of gold and 819 million pounds of copper
at a $15 NSR cut-off. This represents an 18% increase in tonnes, a 10% increase in contained gold and a 9% increase
in contained copper, resulting from better definition of the +1.0 g/t material
within the target area and on improved metal price assumptions.
The 2011 mineral resource
estimate will form the basis of a Preliminary Assessment, which Northgate
expects to file in the third quarter of 2011 once AMC has completed engineering
studies relating to the geotechnical and economic feasibility of developing an
underground mine at Kemess.
High-Grade Sector
The 2010 infill drilling
reported some of the highest grade intercepts on the Kemess
property and it is clear that these intercepts come from a continuous zone
measuring 350 m x 180 m x 90 m located adjacent to two faults in the north-east
corner of the deposit. The resources within the high-grade sector amount to
10.3 Mt grading 1.35 g/t gold, 0.52% copper and 3.09 g/t silver. There are
obvious economic benefits of having 450,000 ounces of gold, 119 million pounds
of copper and 1.03 million ounces of silver contained within a small tonnage
that could be scheduled for mining early on in the mine-life to provide higher
cash flow in the early years and a better payback. Figure 1 shows the location
of the high-grade sector relative to the Kemess
Underground resource outline.
Figure 1: Plan Map showing Kemess Underground Resource (gray) and the high-grade
sector (red). Drill hole traces in blue and 50 m
surface elevation contours in grey. Red outline shows $13 mining
target area.
www.northgateminerals.com/Theme/Northgate/files/Releases/2011/KUG_Fig1.jpg
Resource Estimate Details
A 20 m x 30 m x 20 m block
model was generated by Northgate's resource geologist under supervision by the
qualified person noted below. Grade for copper and gold was estimated by
ordinary kriging interpolation methods from 6 m
uncapped composites of diamond drill core samples. Silver grades were estimated
using silver analytical values and co-kriged with
copper using a cross variogram.
* * * * * * *
Quality Control - Analyses
and Sample Location
Details of quality
assurance/quality control procedures for sample analysis and drill hole survey
methodology are reported in detail in the Canadian National Instrument 43-101
Standards of Disclosure for Mineral Projects ("NI 43-101") compliant
Technical Report filed on SEDAR (www.sedar.com) on May 6 2005. All
2010 drill holes have had their down hole surveys
completed by non-magnetic based instruments such as gyroscope or DeviFlex.
Qualified Persons
The program design,
implementation, quality assurance/quality control and interpretation of the
results are under the control of Northgate's geological staff, which includes a
number of individuals who are qualified persons as defined under NI 43-101. Carl
Edmunds, PGeo, Northgate's Exploration
Manager, has reviewed the technical contents of this release.
* * * * * * *
Note to Investors:
The terms "Qualified
Person", "Mineral Reserve", "Proven Mineral Reserve",
"Probable Mineral Reserve", "Mineral Resource",
"Measured Mineral Resource", "Indicated Mineral Resource",
and "Inferred Mineral Resource" used in this news release are defined
in accordance with NI 43-101.
* * * * * * *
Northgate Minerals Corporation is a gold and copper producer with
mining operations, development projects and exploration properties in Canada
and Australia. Our
vision is to be the leading intermediate gold producer by identifying,
acquiring, developing and operating profitable, long-life mining properties.
* * * * * * *
Cautionary Note Regarding
Forward-Looking Statements and Information:
This Northgate press
release contains "forward-looking information", as such term is
defined in applicable Canadian securities legislation and "forward-looking
statements" within the meaning of the United States Private Securities
Litigation Reform Act of 1995, concerning Northgate's future financial or
operating performance and other statements that express management's
expectations or estimates of future developments, circumstances or results. Generally,
forward-looking information can be identified by the use of forward-looking
terminology such as "expects", "believes",
"anticipates", "budget", "scheduled",
"estimates", "forecasts", "intends",
"plans" and variations of such words and phrases, or by statements
that certain actions, events or results "may", "will",
"could", "would" or "might" "be taken",
"occur" or "be achieved". Forward-looking information is
based on a number of assumptions and estimates that, while considered
reasonable by management based on the business and markets
in which Northgate operates, are inherently subject to significant operational,
economic and competitive uncertainties and contingencies. Northgate cautions
that forward-looking information involves known and unknown risks,
uncertainties and other factors that may cause Northgate's actual results,
performance or achievements to be materially different from those expressed or
implied by such information, including, but not limited to gold and copper
price volatility; fluctuations in foreign exchange rates and interest rates;
the impact of any hedging activities; discrepancies between actual and
estimated production, between actual and estimated reserves and resources or
between actual and estimated metallurgical recoveries; costs of production;
capital expenditure requirements; the costs and timing of construction and
development of new deposits; and the success of exploration and permitting
activities. In addition, the factors described or referred to in the section
entitled "Risk Factors" in Northgate's Annual Information Form for
the year ended December 31, 2009 or under the heading
"Risks and Uncertainties" in Northgate's 2009 Annual Report, both of
which are available on the SEDAR website at www.sedar.com, should be reviewed in conjunction
with the information found in this press release. Although Northgate has
attempted to identify important factors that could cause actual results,
performance or achievements to differ materially from those contained in
forward-looking information, there can be other factors that cause results,
performance or achievements not to be as anticipated, estimated or intended.
There can be no assurance that such information will prove to be accurate or
that management's expectations or estimates of future developments,
circumstances or results will materialize. Accordingly, readers should not
place undue reliance on forward-looking information. The forward-looking
information in this press release is made as of the date of this press release,
and Northgate disclaims any intention or obligation to update or revise such
information, except as required by applicable law.
Cautionary Note to US
Investors Regarding Mineral Reporting Standards:
The Company prepares its
disclosure in accordance with the requirements of securities laws in effect in Canada,
which differ from the requirements of U.S. securities laws. Terms relating to
mineral resources in this press release are defined in accordance with National
Instrument 43-101-Standards of Disclosure for Mineral Projects under the
guidelines set out in the Canadian Institute of Mining, Metallurgy,
and Petroleum Standards on Mineral Resources and Mineral Reserves. The
Securities and Exchange Commission (the "SEC") permits mining
companies, in their filings with the SEC, to disclose only those
mineral deposits that a company can economically and legally extract or
produce. The Company uses certain terms, such as, "measured mineral
resources" "indicated mineral resources", "inferred mineral
resources" and "probable mineral reserves", that the SEC
does not recognize (these terms may be used in this press release and are
included in the Company's public filings which have been filed with securities
commissions or similar authorities in Canada).
(1) Kemess
North 2005 resource: 719,190,000 tonnes @ 0.30 g/t
gold and 0.15% copper.