Northgate Minerals Receives Board Approval for Development of the Young-Davidson Mine
VANCOUVER, Feb. 8 /CNW/ - (All figures in US dollars except where noted) Northgate Minerals Corporation ("Northgate") (TSX: NGX, NYSE Amex: NXG) is pleased to announce that its Board of Directors has given formal approval to proceed with development of the Young-Davidson mine near the town of Matachewan, Ontario.
Highlights of the Young-Davidson Mining Project
- 2. 8 million ounces of proven and probable reserves.
- Annual production of 180,000 ounces of gold at a net cash cost of
$350 per ounce over a 15-year mine-life.
- Pre-tax cash flow of $1.2 billion, net present value ("NPV") 5% of
$609 million, with an internal rate of return ("IRR") of 20.3% at
today's spot prices of $1,070/oz gold and exchange rate of US$/Cdn
- Employment for 600 people during the two year construction period and
direct employment for 275 people over the life of the mine.
Ken Stowe, President & CEO, stated "Young-Davidson represents an integral part of our growth platform and fits our vision of developing and operating profitable and long-life operations in politically predictable, mining friendly jurisdictions. We are extremely pleased to be moving ahead with the project with the full support of our board and look forward to a formal celebration in the coming weeks to commemorate this important milestone. With construction slated to begin later this year, we expect to begin producing gold at Young-Davidson in 2012, creating sustainable and long-term value for our shareholders through disciplined growth and operational excellence."
Approval by Northgate's board of directors for the development of the Young-Davidson mine follows the positive results of the recently completed AMEC Feasibility Study (refer to press release dated January 25, 2010). Dewatering of the existing shaft and driving of the existing exploration ramp past 523 metres vertical have recommenced at site. Detailed engineering for the mill facility will begin shortly and construction of surface and shaft facilities is scheduled to begin this summer once the applicable approvals are received. In addition, Northgate plans to enter into agreements with respect to engineering, procurement and construction management ("EPCM") and deepening of the existing shaft and construction of a new production shaft in the coming weeks.
Development of the Young-Davidson mine will provide jobs for 600 people during the two year construction phase of the project and ongoing direct employment for 275 people during the operating life of the mine. Substantial economic benefits will accrue to the communities closest to the mine, including the towns of Matachewan, Elk Lake, and Kirkland Lake. Manufacturers, suppliers and contractors in these nearby towns as well as those in the regional centres of Timmins, North Bay and Sudbury will have the opportunity to share in the $339 million invested during the construction phase and annual expenditures on goods and services of approximately $50 million during the life of the mine.
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. We are forecasting gold production of 316,000 ounces in 2010.
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, 2008 or under the heading "Risks and Uncertainties" in Northgate's 2008 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).
For further information: Ms. Keren R. Yun, Director, Investor Relations, Tel: (416) 363-1701 ext. 233, Email: email@example.com, Website: www.northgateminerals.com