Northgate Minerals Reports Second Quarter Results
VANCOUVER, Aug. 5, 2011 /CNW/ --
Fosterville Achieves Record Quarterly Production
Notice: Conference Call and Webcast of Q2 Results Today at 10:00 am ET
Dial in: +647-427-7450 or 1-888-231-8191
VANCOUVER, Aug. 5, 2011 /CNW/ - (All figures based in accordance with
International Financial Reporting Standards ('IFRS') and expressed in
US dollars except where noted) - Northgate Minerals Corporation
('Northgate' or the 'Corporation') (TSX: NGX; NYSE Amex: NXG) today
announced its financial and operating results for the three and six
months ended June 30, 2011.
Second Quarter Highlights
Operating and Financial
-- Gold production for the second quarter of 2011 totalled 43,798
ounces at an average net cash cost of $944 per ounce.
o The Fosterville mine achieved a quarterly record of 29,181 ounces
of gold at a net cash cost of $787 per ounce.
-- Gold sales were 44,372 ounces at a realized price of $1,502 per
ounce.
-- Reported a net loss of $13.0 million or $0.04 per share. The
adjusted net loss((1)) for the second quarter of 2011 was $16.7
million or $0.05 per share. The net loss and adjusted net loss
figures include a $12.7 million expense resulting from
revisions to the reclamation cost estimate at Kemess South.
-- Strong cash flow from operations in Australia of $23.1
million. On a consolidated basis, Northgate reported cash flow
from operations of ($3.7) million or ($0.01) per share, as a
result of working capital changes and expenses associated with
closing Kemess South and putting the facility on care and
maintenance.
-- Northgate's cash balance at the end of the second quarter 2011
was $244.5 million.
Business Combination for Strong Value Creation
-- On July 13, 2011, Northgate announced a proposed business
combination with Primero Mining Corp. (TSX:P) to create a
leading mid-tier gold producer with significant value creation
opportunities. The new company will benefit from a diversified
production base, expansion potential from a portfolio of mines
and projects and enhanced near-term cash flow.
Significant Development Opportunity
-- Northgate recently released positive results from a NI 43-101
Preliminary Assessment for the Kemess Underground Project. The
results outline the development of an underground block/panel
cave operation. Average annual production is expected to be
95,000 ounces of gold and 41.4 million pounds of copper at a
below-industry cash cost of $115 per ounce over a 12-year
mine-life.
Building Young-Davidson
-- Construction activities at Young-Davidson remain on schedule
and on budget. To date, Northgate has invested approximately
$180 million towards the construction of the Young-Davidson
mine.
Expanding YD West Zone
-- At Young-Davidson, hole YD11-234B intersected one of the best
intervals ever drilled on the property of 4.31 grams per tonne
('g/t') gold over 79.6 metres ('m').
'Second quarter production was highlighted by an excellent performance
at Fosterville, as the mine achieved record quarterly production of
over 29,000 ounces of gold' commented Richard Hall, President and CEO.
'Our mines in Australia are projected to ramp up production in the
second half of the year and to generate strong cash flow from
operations.'
'As we look to the future of Northgate, we are excited about the value
creation opportunity from the recently announced proposed business
combination with Primero that we believe will create a stronger company
going forward. Combined with the excellent progress being made at
Young-Davidson and the positive results from the Kemess Underground
Project, we have established a strong pipeline of operations and
projects to deliver both near and long-term value for our
shareholders.'
Financial Performance
Northgate recorded consolidated revenue of $67.4 million in the second
quarter of 2011. Record gold production from Fosterville and stronger
gold prices drove revenue from Northgate's Australian mines higher
during the second quarter compared to the first quarter of the year.
Northgate reported a net loss of $13.0 million or $0.04 per share during
the second quarter of 2011. The adjusted net loss for the same period
was $16.7 million or $0.05 per share. The net loss and adjusted net
loss figures included a $12.7 million expense related to increases to
reclamation cost estimates at Kemess South. In future periods,
Northgate believes that any additional increases to these cost
estimates will not be material.
During the second quarter, the Fosterville and Stawell mines generated
excellent cash flow from operations of $23.1 million, driven by record
production at Fosterville. On a consolidated basis, Northgate reported
cash flow from operations of ($3.7) million or ($0.01) per share in the
second quarter of 2011, which was mainly attributable to the increased
spending on decommissioning and site rehabilitation activities at
Kemess South as previously mentioned. The Corporation continues to
maintain a strong balance sheet, with cash and cash equivalents
totalling $244.5 million as of June 30, 2011.
Corporate Development
Business Combination with Primero Mining Corp. for Strong Value Creation
Northgate has announced a proposed business combination with Primero to
create a new, leading mid-tier gold producer with significant value
creation opportunities. The combined company will benefit from a robust
gold growth profile and strong cash flow from a portfolio of producing
mines, supported by a robust resource base (see press release dated
July 13, 2011). The new company will be led by Joe Conway, current
President and CEO of Primero. Highlights of the transaction include:
-- Diversified production base: Three producing gold mines with
320,000 gold equivalent ounces in 2011E increasing to 550,000
ounces in 2013E coming from the addition of Young-Davidson and
expansion at San Dimas, plus exploration pipeline, all located
in pro-mining jurisdictions.
-- Leading growth profile: Expected production growth of 72% from
2011E to 2013E and declining cash costs, which will place the
combined company amongst the leaders of its expected peer
group.
-- Strong, complementary management team: Combines a proven CEO
with an experienced technical team.
-- Solid financial position and cash flow: Fully-funded
development of Young-Davidson with expected sufficient cash
flow to re-pay all corporate debt and pursue accretive
opportunities.
-- Unique re-valuation opportunity: Currently trading below peer
average net asset value and cash flow multiples.
-- Enhanced capital markets presence: A market capitalization of
over $1.4((2)) billion is expected to appeal to a broader
shareholder base, increase analytical following and improve
share trading liquidity.
The proposed business combination will be effected by way of a Plan of
Arrangement completed under the Business Corporations Act of British
Columbia.
Under the terms of the Plan of Arrangement, each Primero shareholder
will receive 1.50 common shares of Northgate for each Primero share
held. The transaction will be carried out by way of a court-approved
Plan of Arrangement and will require approval of the shareholders of
Primero at a special meeting of Primero shareholders. The transaction
is also subject to obtaining approval of the shareholders of Northgate
at a special meeting of Northgate shareholders. The respective
shareholder meetings for Northgate and Primero are scheduled to take
place on September 21, 2011.
Significant Development Opportunity at Kemess Underground
Northgate recently released positive results from a NI 43-101
Preliminary Assessment for the Kemess Underground Project. The results
outline the development of an underground operation that is well suited
to block caving. Average annual production is expected to be 95,000
ounces of gold and 41.4 million pounds of copper at a below-industry
cash cost of $115 per ounce over a 12-year mine-life. At $1,500 per
ounce gold and $4.00 per pound copper, Kemess Underground is expected
to generate pre-tax operating cash flow of $2.1 billion, pre-tax net
present value ('NPV') at a 5% discount rate of $755 million and a
pre-tax internal rate of return ('IRR') of 27% (see press release dated
August 2, 2011).
The envisaged Kemess Underground block cave operation would leverage the
existing infrastructure and mill facilities at the Kemess South mine,
including a permitted area for tailings storage within the Kemess South
open pit.
Based on the results of the Preliminary Assessment, Northgate's Board of
Directors has approved the commencement of a full Feasibility Study,
which is expected to be completed over the next year.
Results from Operations
Fosterville Gold Mine
Fosterville capped off the quarter with a monthly record of 12,500
ounces in June and achieved gold production of 29,181 ounces for the
second quarter, which was also a record for the mine. The excellent
performance at Fosterville follows on a strong first quarter;
year-to-date, the mine has produced 49,813 ounces of gold and continues
to forecast annual production consistent with original guidance.
As a result of record gold production at the mine, Fosterville also
generated record cash flow from operations of $21.3 million during the
quarter. Cash flow from operations is expected to remain strong for the
balance of the year.
During the quarter, approximately 200,000 tonnes of ore were mined and
mine development advanced 2,190 m. Also during the quarter, a record
226,218 tonnes were milled at a higher than planned grade of 4.82 g/t,
resulting in record gold production.
The average net cash cost of production for the second quarter of 2011
was $787 per ounce, which was lower than the original guidance
provided, despite a 4% increase in the Australian dollar relative to
the US dollar during the quarter. Cash costs also declined from the
$1,012 per ounce cash cost figure recorded in the first quarter of
2011. For the first half of the year, the average cash cost of
production was $880 per ounce, which was lower than guidance. As the
Australian dollar has continued to climb in 2011, Northgate has revised
its exchange rate assumption to US$/A$1.08 for the second half of the
year (from the original assumption of US$/A$1.00). As a result, the
annual cash cost forecast at Fosterville has increased slightly to $910
- $950 per ounce.
Stawell Gold Mine
During the second quarter, the Stawell mine produced 15,354 ounces of
gold. Production was impacted by lower head grades mined. In the
second half of 2011, production at Stawell is expected to rise as
grades improve from the GG6 ore zone, which is expected to come into
production in August. The annual forecast has been lowered to
approximately 81,000 - 85,000 ounces of gold to reflect the lower
production in the first half of the year.
During the quarter, approximately 193,000 tonnes of ore was mined and
mine development advanced 1,768 m, which was in line with plan. Also
during the quarter, 204,000 tonnes of ore was milled at an average
grade of 2.81 g/t. Although mill production was higher than plan, the
processing of higher carbonaceous and low-grade ore resulted in lower
head grades, which impacted production during the quarter. Recoveries
improved to 83% in the second quarter, from 77% in the corresponding
period last year.
Unit operating costs remained low during the second quarter at A$83 per
tonne of ore milled (2010 - A$90). Mining costs were A$54 per tonne of
ore mined (2010 - A$66).
During the second quarter of 2011, the average net cash cost of
production was $1,173 per ounce, resulting from the 20% year-over-year
increase in the Australian dollar relative to the US dollar and lower
gold production during the quarter. For the second half of 2011, cash
costs are expected to decrease as gold production increases. The
annual production and cash cost forecast for Stawell has been revised
slightly to reflect lower production in the first half of the year and
the stronger Australian dollar.
Kemess South
During the second quarter of 2011, activities on site mainly focused on
mine closure and rehabilitation and placing the Kemess mill on care and
maintenance in anticipation of a production decision for the Kemess
Underground Project.
Northgate's asset retirement obligation was increased by $12.7 million,
all of which was expensed in the second quarter. Reclamation activities
were negatively impacted by a wet spring and summer, which delayed
progress and resulted in increased costs to retain staff and equipment.
As detailed engineering and surveying were completed on the spillway
construction at the tailings impoundment facility as well as other
reclamation projects, the cost estimates also increased.
The balance of the 2011 reclamation work at Kemess is expected to be
completed by the end of the third quarter. At that time, the
reclamation obligation will be approximately equal to the amount of the
reclamation bond posted with the Provincial government. Now that most
of the 2011 reclamation work is complete and detailed costs estimates
for future work have been reviewed by the Provincial government, we
believe that any additional increases to rehabilitation activities will
not be material.
2011 Production and Cash Cost Forecast
Production and cash cost forecast for the full year 2011 is outlined as
follows:
Total Forecast 2011 Cash Cost
(ounces) ($/oz) (1)
Fosterville 97,000 - 102,000 $910 - $950
Stawell 81,000 - 85,000 $865 - $905
Kemess (Actual) 13,835(2) ($64)
190,000 - 200,000 $825 - $860
(1) Assuming exchange rates of US$/Cdn$1.00 and US$/A$1.06 for Q3 to Q4
2011.
(2) Metal production data for the three months ended June 30, 2011 include
the actual settlements for prior period sales at Kemess.
Building Young-Davidson
Northgate is extremely pleased with the ongoing construction activities
at Young-Davidson. As of the end of the second quarter 2011, Northgate
has invested approximately $180 million towards construction of the
mine, which remains on schedule and on budget. All major construction
contracts have been awarded or are imminent (worth approximately $250
million) and approximately 85% of the engineering has been completed.
In addition, almost all of equipment purchase orders have been placed
and much of the equipment has already been delivered to site. We
expect the balance of equipment will be delivered in the fall.
The mill building was enclosed by early July and the installation of
process equipment has begun. After completing an intensive optimization
study in June, the Board of Directors approved a mid-shaft loading
facility, which is a modification to the original mine design that will
allow for early underground ore production to supplement open pit
production in the initial years of the mine-life. The facility is
scheduled to be operational by the first quarter of 2013, one year
ahead of the feasibility schedule for underground ore production.
Underground Ramp and Shaft
Activities underground continue to make excellent progress. For the
second quarter of 2011, the development rate averaged over 14 m per
day. The ramp was extended an additional 315 m to an approximate length
of 4,450 m and has passed a vertical depth of over 700 m (eventual
depth of 1,500 m).
In July, the first leg (446 m) of the new Northgate production shaft was
completed. The second leg (to a depth of 700 m) is expected to commence
early next year.
Young-Davidson is scheduled to commence commissioning activities in the
fourth quarter of 2011 and is targeting start-up of production in late
Q1 2012. Initial production will come from an open pit scheduled to
produce approximately 85,000 ounces in 2012 and 135,000 ounces in 2013.
Over a 15-year mine-life, the mine is expected to generate average
annual production of 180,000 ounces of gold.
Expanding YD West Zone
Drilling on the newly discovered YD West zone, just west of the
currently known reserves at Young-Davidson, continues to achieve
excellent results. Hole YD11-234B, which was reported in June, returned
4.31 g/t gold over 79.6 m. This intersection is located approximately
130 m above and 55 m east of Discovery Hole YD10-198, which returned
3.46 g/t over 79.5 m. Together, these holes are amongst the highest
grade-thickness intervals intersected to date on the property. By the
end of the second quarter, a total of seven holes have intersected the
YD West zone and all but one has returned ore-grade intersections (see
press release dated June 7, 2011). These have been significant
intersections as they demonstrate the continuity of the YD West Zone,
which remains open up and down dip and to the west.
Two diamond drills will continue to explore the YD West zone until a
sufficient number of intercepts have been obtained to estimate an
initial resource. The YD West zone appears to have excellent potential
to add significant gold resources to the project.
Summarized Consolidated Results
(Thousands of US Q2 2011 Q2 2010 YTD YTD
dollars, except 2011 2010
where noted)
Financial Data
Revenue $ 67,416 $ 122,737 $ $ 248,015
190,443
Adjusted
net loss( 1) (16,670) (11,719) (8,219) (5,423)
Per share
(2 ) (0.05) (0.04) (0.02) (0.02)
Net profit (loss) (13,014) (333) 6,741 3,554
Per share - (0.04) 0.00 0.02 0.01
basic
Cash flow from (3,695) 15,236 36,414 27,288
(used in)
operations
Cash and cash 244,469 204,173 244,469 204,173
equivalents
Total assets $ 806,893 $ 676,433 $ $
806,893 676,433
Operating Data
Gold production
(ounces)
Fosterville 29,181 28,476 49,813 54,897
Stawell 15,354 14,832 31,360 37,070
Kemess (5) (737) 24,967 13,835 49,670
Total gold 43,798 68,275 95,008 141,637
production
Gold sales
(ounces)
Fosterville 28,900 29,152 48,037 55,096
Stawell 14,841 15,944 31,311 37,355
Kemess 631 20,847 21,961 48,620
Total gold 44,372 65,943 101,309 141,071
sales
Realized
gold price
($/ounce) (3,5) 1,502 1,274 1,437 1,196
Net cash cost
($/ounce) (4)
Fosterville 787 669 880 674
Stawell 1,173 1,069 1,090 904
Kemess (470) 497 (64) 499
Average net cash 944 693 812 673
cost ($/ounce)
Copper production (48) 9,643 6,449 19,172
(thousands
pounds) (5)
Copper sales 218 7,997 9,216 19,142
(thousands
pounds)
Realized copper
price ($/pound)
(3, 5) (5.33) 2.42 2.58 3.04
1 Adjusted net profit (loss) is a non-IFRS measure. See section
entitled 'Non-IFRS Measures' in the Corporation's interim MD&A
Report.
2 Adjusted net profit (loss) per share is based on diluted number of
shares outstanding.
3 The metal pricing quotational period is three months after the month
of ship loading for copper and one month after the month of ship
loading for gold produced at Kemess South. Realized prices reported
will differ from the average quarterly reference prices, as realized
price calculations incorporate the actual settlement price for prior
period sales, as well as the forward price profiles of both metals
for unpriced sales at the end of the quarter.
4 Net cash cost per ounce of production is a non-IFRS measure. See
section entitled 'Non-IFRS Measures' in the Corporation's interim
MD&A Report.
5 Metal production data include the final settlement adjustments for
prior period sales. Realized metal prices in the current quarter
were impacted by negative smelter adjustments at Kemess South during
a quarter that had no production.
Interim Condensed Consolidated Statements of Financial Position
(Previously referred to as the Consolidated Balance Sheets)
June 30 December 31
Thousands of US dollars, unaudited 2011 2010
Assets
Current Assets
Cash and cash equivalents $ 244,469 $ 334,840
Trade and other receivables, including 27,923 62,051
derivatives
Income taxes receivable 9,536 2,236
Inventories (note 4) 26,973 46,268
Prepaid expenses 3,190 2,367
Assets held for sale (note 5) 739 —
Total Current Assets 312,830 447,762
Non-current Assets
Other assets (note 6) 49,942 40,819
Deferred tax assets 10,476 13,014
Mineral property, plant and equipment 431,722 323,903
Investments (note 7) 1,923 36,519
Total Non-current Assets 494,063 414,255
Total Assets $ 806,893 $ 862,017
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable and accrued liabilities, $ 64,856 $ 93,534
including derivatives
Short-term loan (note 8) — 40,161
Equipment financing obligations 8,519 7,945
Provisions (note 9) 26,081 38,359
Total Current Liabilities 99,456 179,999
Non-current Liabilities
Equipment financing obligations 14,746 10,763
Convertible senior notes 133,950 131,235
Option component of convertible senior notes 33,409 47,414
Other long-term liabilities 388 379
Provisions (note 9) 35,976 30,459
Deferred tax liabilities 4,728 —
Total Non-current Liabilities 223,197 220,250
Total Liabilities 322,653 400,249
Shareholders' Equity
Common shares 407,352 407,029
Contributed surplus 10,719 8,915
Accumulated other comprehensive income 36,618 23,014
Retained earnings 29,551 22,810
Total Shareholders' Equity 484,240 461,768
Total Liabilities and Shareholders' Equity $ 806,893 $ 862,017
Subsequent event (note 17)
The accompanying notes form an integral part
of these condensed consolidated interim
financial statements.
Interim Condensed Consolidated Statements of Comprehensive Income
Thousands of US Three Months Ended June Six Months Ended June 30
dollars, 30
except share and 2011 2010 2011 2010
per share
amounts,
unaudited
Revenue $ 67,416 $ 122,737 $ 190,443 $ 248,015
Operating
expenses
Cost of sales 64,189 104,638 174,262 220,686
(note 4)
Administrative 5,424 2,809 9,231 6,649
and general
Exploration 5,687 6,519 10,588 10,646
12,652 — 12,652 —
Decommissioning
and site
rehabilitation
(note 9)
Other expenses 3,382 (1,570) 4,234 (1,321)
(income) (note
13)
91,334 112,396 210,967 236,660
Profit (loss) (23,918) 10,341 (20,524) 11,355
from operating
activities
Financing income
(expenses)
Interest 799 888 2,458 1,820
income
Finance costs (723) (691) (1,476) (1,435)
(note 12)
Currency 1,074 (7,599) 6,258 (3,306)
translation gain
(loss)
Fair value 3,378 — 14,005 —
adjustment on
option component
of convertible
notes
Write-down of — (29) — (369)
investments
4,528 (7,431) 21,245 (3,290)
Profit (loss) (19,390) 2,910 721 8,065
before income
taxes
Income tax 6,376 (3,243) 6,020 (4,511)
recovery
(expense)
Net profit (13,014) (333) 6,741 3,554
(loss) for the
period
Other
comprehensive
income (loss)
Unrealized 401 (70) 287 (936)
gain (loss) on
available for
sale investments
Unrealized 6,596 (19,158) 8,383 (14,193)
gain (loss) on
translation of
foreign
operations
Reclassification
of impairment on
available for
sale
investments
to profit or
loss — 29 — 369
Reclassification
of realized loss
on available for
sale
investments
to profit or
loss — 258 4,934 258
6,997 (18,941) 13,604 (14,502)
Comprehensive $ (6,017) $ (19,274) $ 20,345 $ (10,948)
income (loss)
Earnings (loss)
per share (note
14)
Basic $ (0.04) $ 0.00 $ 0.02 $ 0.01
Diluted $ (0.05) $ 0.00 $ (0.02) $ 0.01
Weighted average
shares
outstanding
(note 14)
Basic 291,937,341 290,859,592 291,907,785 290,789,562
Diluted 333,583,601 290,859,592 333,554,045 292,096,622
The accompanying notes form an integral part of these condensed
consolidated interim financial statements.
Interim Condensed Consolidated Statements of Cash Flows
Three Months Ended June 30 Six Months Ended June 30
Thousands of US 2011 2010 2011 2010
dollars,
unaudited
Operating
Activities
Net profit $ (13,014) $ (333) $ 6,741 $ 3,554
(loss) for the
period
Adjustments
for:
Depreciation 21,079 27,914 52,671 59,472
and depletion
Unrealized (380) 1,214 (732) 890
currency
translation
losses (gains)
Gain on (1,401) (1,638) (1,795) (1,305)
disposal of
assets
Stock-based 687 601 1,912 1,987
compensation
Accrual of 258 435 1,253 873
employee
severance costs
Interest (799) (888) (2,458) (1,820)
income
Finance costs 723 691 1,476 1,435
Income tax (6,376) 3,243 (6,020) 4,511
expense
(recovery)
Income tax (1,091) - (1,188) —
credited to
operating
expenses
Change in (397) (15,965) (1,364) (13,071)
fair value of
forward
contracts
Fair value (3,378) — (14,005) —
adjustment on
option
component of
convertible
notes
12,652 — 12,652 —
Decommissioning
and site
rehabilitation
expense
Write-down of — 29 — 369
investments
Loss (gain) — 258 (17) 258
on sale of
investments
Changes in (12,740) (197) (11,074) (2,277)
operating
working capital
and other (note
16)
Interest 1,011 888 2,479 1,820
received
Interest paid (529) (489) (3,990) (1,053)
Income taxes — (527) (127) (28,355)
paid
(3,695) 15,236 36,414 27,288
Investing
Activities
Decrease 49 — 49 (9,879)
(increase) in
restricted cash
Purchase of (2,124) (11,940) (7,099) (20,708)
plant and
equipment
Mineral (17,557) (14,029) (32,237) (26,570)
property
development
Assets under (50,626) (13,872) (96,564) (16,720)
construction
Proceeds from 15,933 262 15,982 513
sale of
equipment
Proceeds from — 1,619 — 1,619
insurable asset
disposition
Proceeds from — 82 40,954 82
sale of
investments
Purchase of — — (201) —
investments
Deferred (1,071) (160) (1,194) (160)
transaction
costs paid
(55,396) (38,038) (80,310) (71,823)
Financing
Activities
Repayment of (4,337) (1,852) (7,085) (3,366)
equipment
financing
obligations
Cash from — — 1,275 —
equipment
financing
Repayment of — (350) (40,161) (728)
short-term loan
Repayment of (548) (212) (1,001) (429)
other long-term
liabilities
Issuance of 104 186 215 409
common shares
(4,781) (2,228) (46,757) (4,114)
Effect of 253 (1,103) 282 (722)
exchange rate
changes on cash
and cash
equivalents
Decrease in (63,619) (26,133) (90,371) (49,371)
cash and cash
equivalents
Cash and cash 308,088 230,306 334,840 253,544
equivalents,
beginning of
period
Cash and cash $ 244,469 $ 204,173 $ 244,469 $ 204,173
equivalents,
end of period
The accompanying notes form an integral part of these condensed
consolidated interim financial statements.
This press release for the second quarter ended June 30, 2011 should be
read in conjunction with Northgate's second quarter MD&A, which is
available on our website at www.northgateminerals.com.
* * * * * * *
Q2 2011 Second Quarter Results Conference Call and Webcast
You may participate in our conference call today at 10:00 am ET by
calling 647-427-7450 or toll free in North America at 1-888-231-8191. To ensure your participation, please call five minutes prior to the
scheduled start of the call.
A live audio webcast and presentation package will be available on
Northgate's homepage at www.northgateminerals.com. Information pertaining to the conference replay, available from August
5 - 19, 2011, can also be found on our website.
* * * * * * *
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.
* * * * * * *
Qualified Person
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 geologic content of
this release.
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, 2010 or under the
heading 'Risks and Uncertainties' in Northgate's 2010 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 Corporation prepares its disclosure in accordance with the
requirements of securities laws in effect in Canada, which differ from
the requirements of US 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 Corporation 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
Corporation's public filings which have been filed with securities
commissions or similar authorities in Canada).
Notes to Press Release:
(1) Adjusted net profit/loss is a non-IFRS measure. See section
entitled 'Non-IFRS Measures' in the Corporation's second quarter MD&A
Report.
(2) Based on August 2, 2011 closing prices on TSX, on a fully diluted
in-the-money basis. Share capital as at March 31, 2011 adjusted for
subsequent events.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/August2011/05/c9467.html
Ms. Keren R. Yun, Director, Investor Relations Tel: 416-216-2781 Email: ngx@northgateminerals.com