"Northgate Minerals Corporation is a leading gold and copper producer with mining operations, development projects and exploration properties in Canada and Australia. The company is forecasting record production of over 390,000 ounces of unhedged gold in 2009 and is targeting growth through further acquisition opportunities in stable mining jurisdictions around the world
Northgate prides itself in its strong operating abilities and has gained a reputation as one of the finest operators in the business. This reputation is based on the Corporation's outstanding track record of delivering on its promises. Over the past eight years, a dedicated and knowledgeable workforce has transformed Kemess into one of the most efficient open pit mines in the world. In 2006, exceptional operating performance at Kemess, combined with a strong metal price environment, produced record earnings of $107 million and record cash flow of approximately $147 million. In 2007, despite a significant modification to the production schedule in the fourth quarter, which was necessitated by the realignment of the main haul road out of the Kemess open pit, Northgate still generated strong cash flow of $125 million, producing 245,631 ounces of gold and 68.1 million pounds of copper.
While Northgate has proven its strong operating abilities, the company has focused its growth strategy on the acquisition of one or more mines and/or late-stage development projects, in order to become a multi-mine gold producer. Northgate successfully achieved this goal in February 2008, with the acquisition of Perseverance Corporation Limited, a gold producer with two fully permitted operating mines in Australia. As a result, Northgate achieved record production of 354,000 ounces of gold in 2008 and posted record revenue of $461 million. Looking into 2009, Northgate is forecasting another record year of 392,000 ounces of gold, when combined with exceptional gold prices in Australia and Canada, will generate strong free cash flow providing an excellent platform to make additional acquisitions in the future.
Our 2008 Achievements:
Produced a record production of 354,000 ounces of gold Produced 51.9 million pounds of copper Fosterville Mine – Converted operation to owner mining – Improved gold recovery to 82% in Q4 from 54% in Q1 – Dramatic decline in cash cost of $500 per ounce in Q4 ($1,190 per ounce in Q1) – Record quarterly production in Q4 of 26,398 ounces of gold Stawell – Added one of the single largest reserve additions in the mine's history – Extended mine life to Q4-11 – Improved underground infrastructure – Increased mine production to highest levels in Q4 of 178,000 tonnes – Q4 cash cost of $383/ounce was in the lowest percentile for Australian gold produces Kemess – Generated substantial free cash flow Young-Davidson – Completed Preliminary Assessment Report – Doubled total gold resource base to over 4.0 million ounces – Ramp development completed, advancing 3,039 meters Our 2009 Objectives:
Produce record production of over 390,000 ounces of gold Produce 54.0 million pounds of copper Fosterville Mine – Significant increase in production to112,000 ounces of gold – Dramatic decline in average net cash cost to $445 per ounce – Targeting 90% gold recovery with commissioning of heated leach circuit – $4.2 million budget in support of mine-life extension and resource conversion Stawell – Steady production of 107,000 ounces of gold – Continued decline in net cash cost to $388 per ounce – Targeting 90% gold recovery – $4.0 million exploration budget in support of mine-life extension Kemess – Generate strong free cash flow – Minimal CAPEX Young-Davidson – Drilling on other areas of the property in search of additional gold resources – Complete pre-feasibility work by the end of Q2 – Complete a feasibility study by the end of the year – Sign IBA with MFN
DIO Price at posting:
71.0¢ Sentiment: ST Buy Disclosure: Held
