Home page of NGX www.northgateexploration.ca
Chart 5 years http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=CA%3ANGX&sid=0&o_symb=CA%3ANGX&freq=2&time=12
PRODUCING 300,000 OUNCES OF GOLD AND 75 MILLION POUNDS OF COPPER IN BRITISH COLUMBIA
Business Summary
Northgate Minerals Corporation is a gold and copper mining company focused on operations and opportunities in the Americas. The Corporation's principal assets are the Kemess South Mine in north-central British Columbia, which produces approximately 300,000 ounces of gold and 75 million pounds of copper per year, and the adjacent Kemess North deposit, which contains a Proven and Probable Reserve of 4.1 million ounces of gold.
Over the past five years, a dedicated and knowledgeable workforce has transformed Kemess into one of the most efficient open pit mines in the world. In 2004, exceptional operating performance at Kemess combined with a strong metal price environment, produced record earnings of $31 million and record cash flow of almost $73 million.
As the Corporation moves forward into 2006 and beyond, the culture of operational excellence that exists within Northgate will provide a solid foundation for growth in pursuit of the Corporation's vision of becoming a larger, multi-mine gold producer.
The Kemess Mine
The Kemess Mine is Northgate's principal operation. The mine provides the Corporation with a low risk, low cost core asset from which it can expand its operations.
The Kemess mining and milling complex is located in the mountains of north-central British Columbia, 430 kilometres northwest of Prince George. The complex consists of the Kemess South open pit mine and a 52,000 tonnes per day mill.
GEOLOGY
The Kemess South deposit is a large gold-copper porphyry containing proven reserves of 87 million tonnes. The Kemess South deposit is flat-lying and has uniform gold and copper grades throughout. These characteristics make the ore reserve relatively insensitive to changes in metal prices. The deposit contains three principal types of ore: a primary-sulphide hypogene ore; a copper-enriched secondary sulphide ore; and, an oxidized leach cap ore. Currently, the hypogene ore makes up approximately 85% of the ore body.
MINING OPERATIONS
The Kemess South open pit has a conventional mine plan with 15 metre benches and 45 degree slope angles. Two electric cable shovels, a hydraulic shovel, and a loader supply ore and waste to the fleet of 15 Euclid haulage trucks, which move ore to the primary crusher and waste rock to storage dumps. Current mining capacity is approximately 50 million tonnes/year, 19 million tonnes of which is ore.
MINING OPERATIONS
Hypogene, supergene and leach cap ores are processed using conventional crushing, grinding and flotation techniques to produce gold-copper concentrates with a minor by-product silver value. Based on a nominal production rate of 52,000 tonnes of ore per day or 19 million tonnes of ore per year, average annual metal production is forecast to be 300,000 ounces of gold and 75 million pounds of copper contained in 145,000 tonnes of concentrate.
Run-of-mine ore is crushed by a primary gyratory crusher located adjacent to the open pit. Crushed ore is conveyed to a stockpile and fed to two parallel grinding circuits, each operating at a nominal rate of 26,000 tonnes per day. Each grinding circuit consists of one semi-autogenous grinding mill and one ball mill in combination.
The Kemess North Project
The Kemess North Project is of significant importance to Northgate because it has the potential to increase the productive life of our existing infrastructure by over 11 years. Since 2000, Northgate has invested almost $8 million in exploration and development to expand its resources base by over 800%. On the basis of a feasibility study completed in the third quarter of 2004, Northgate moved 4 million ounces of the resources at Kemess North into the proven and probable reserve category. A NI 43-101 compliant technical report was filed on SEDAR in early June supporting the new reserve designation.
EXPLORATION
In 2005, Northgate plans to complete approximately 17,500 metres of diamond drilling and accompanying fieldwork at Kemess. The diamond drilling target areas are Bear, Kemess North Offset, NOR 1, Kemess East and Hilda. Exploration-related fieldwork such as mapping, geochemical soil sampling, prospecting, and limited geophysical surveys (pole-dipole IP) will be completed over three grid areas (NOR 1, Kemess East and Hilda). Mapping is also proposed over Kemess North, and in a few areas where the latest government geology map suggests that the area may be prospective from an ore control standpoint.
The main objective of the 2005 program is to test by diamond drill any remaining exploration targets on Kemess Mines Ltd.'s claims. Geophysics (IP) and soil/rock geochemistry have historically underpinned exploration during the early to mid-1990s, so all obvious targets identified during that era have been well tested. The remaining targets are less obvious and largely selected by permissive geology, structure as evidenced by magnetics, and masking overburden conditions. With the exception of the deep Kemess North Offset target, this leads into a program of wildcat drilling in areas where the company has the available space for a porphyry deposit (1000 m x 500 m) and indications that the geology is favourable.
RDN Project
Fieldwork on the RDN property, a Joint Venture with Rimfire Minerals (RFM-V) 50 km northwest of the Eskay Creek Mine in the Eskay Creek district of Northwest British Columbia, commenced in June 2005.
Northgate is funding a $1 million dollar exploration program to be completed in two phases. Northgate is earning a 51% interest in the RDN by funding exploration expenditures totalling $5 million by December 31, 2007. An additional 9% can be earned by funding all expenditures up to the completion of a feasibility study.
Hyland Project
The Hyland project, a Joint Venture with StrataGold Corporation, is exploring for sediment-hosted gold mineralization similar to sediment-hosted deposits in the Carlin District of Nevada.
Recent News: Northgate Confirms the Presence of a Substantial New Mineralized System 300 Meters East of Kemess North
Northgate Minerals Corporation announced that the two follow-up exploration drill holes to KN-05-24 on the Kemess North Offset target both intersected substantial thicknesses of similar gold and copper mineralization.
Ken Stowe, President and Chief Executive Officer, stated, " These intersections confirm the continuity and scale of the mineralized system we discovered earlier this year and suggest that it is a robust system that has considerable size potential. The structural information provided by the drilling and the nature of the mineralization itself points to an area to the west of these three holes, within which we will explore for the fault offset of the high-grade core of Kemess North. The system is also open to the south and east and block faulting may have moved a portion of the system much closer to surface. This potential is clearly demonstrated in KN-05-28 where stronger gold-copper mineralization was intersected 200 metres and 400 metres closer to surface than in holes KN-05-24 and 27 respectively. As a result of this year's exploration success, we are planning a 30,000 metre - $US 2.5 million drill program for 2006 in the Kemess North Offset and Kemess East areas."
Fundamental Considerations
With substantial reserves and resources in the ground, an annual gold production that will likely reach 300,000 ounces in 2005, excellent exploration potential and a stable mining environment, Northgate offers outstanding share appreciation potential.
Markets so far have not acknowledged the progress the company has been making on all fronts.
Technical Considerations
We do not expect any marked weakness in the gold price in the immediate future.
Peter Zihlmann
www.pzim.com
investment@pzim.com
forex@pzim.com
December 2, 2005
Disclosure: The author has not been paid to write this article, nor has he received any other inducement to do so. The author is a shareholder in the company and will benefit from any increase in the company's share price. Disclaimer: The author's objective in writing this article is to invoke an interest on the part of potential investors in this stock to the point where they are encouraged to conduct their own further diligent research. Neither the information, nor the opinions expressed should be construed as a solicitation to buy or sell this stock. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions in the stock.