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Attention Business Editors
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
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- 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
$0.93.
- 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).
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/For further information: Ms. Keren R. Yun, Director, Investor Relations,
Tel: (416) 363-1701 ext. 233, Email: ngx@northgateminerals.com, Website:
www.northgateminerals.com/
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