Northgate Exploration (NGXT) reported lower gold production from its Kemess South mine during the first quarter of 2004, but the company says it is still on track to produce 300,000 ounces for the year.
Mill throughput was higher at 157,000 tonnes per day and unit mining costs were 12% lower than the same quarter a year ago at $0.84 per tonne.
Northgate’s Kemess South mine is located in north central British Columbia. The mine produced 51,500 ounces of gold and 17.7 million lbs. copper during the quarter. This compares with 62,000 oz. gold and 17.1 million lbs. copper in the first quarter of 2003. Higher copper prices during the quarter more than offset the lower gold production and the effect of a stronger Canadian dollar.
The company processed lower grade ore while stockpiling about 400,000 tonnes of higher grade material to be processed later this year. The company says the ore resequencing was necessary to maintain the tailings dam construction schedule. The higher-grade transition ore was unexpected and is not suitable for tailings dam construction.
Northgate forecasts it will produce 300,000 ounces of gold at a cash cost of $150 per ounce for the year. Copper production is forecast at total 75 million lbs. for 2004. The company expects that over the year, cash costs will be considerably lower than the first quarter thanks to higher gold and copper production and the recent weakening of the Canadian dollar against the U.S. dollar.