Vancouver – Higher prices for gold and copper increased Northgate Exploration’s (NGX-T) first quarter net earnings to US$39,000 from a US$2.5 million loss for the same period last year. Cash flow from operations was US$11.8 million (6 per share) in the first quarter of 2004 compared with US$6.3 million (3 per share) during the same period a year ago.
The company has moved 4.1 million ounces of gold and 1.46 billion pounds of copper to Kemess North’s reserves from the indicated resource category as part of its prefeasibility study there.
Gold production from Northgate’s Kemess South mine in north central British Columbia was lower but the company is still on track to produce 300,000 ounces at a cash costs of US$150 per ounce for the year. Copper production is forecast at 75 million lbs. for 2004.
Kemess South 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.
Northgate has budgeted $1.2 million for this year’s exploration over the 87,000 acres of claims around the Kemess South mine. Exploration will include diamond drilling, geophysical surveys and prospecting. Drilling is going to focus on a mineralized area southwest of the Kemess South pit, the Nugget Zone and Duncan Ridge.
At Kemess North, the company revised the prefeasibility study. Some 4.1 million ounces of gold and 1.46 billion pounds of copper from the Kemess North deposit were moved from the indicated resource category to a probable reserve. The reserves within the Kemess camp now extend production until at least 2020.
The prefeasibility study outlines three phases for operation at Kemess. From 2004 to 2006, Kemess South will produce around 310,000 oz. gold per year at a cash cost of $US118 per oz. From 2007 to 2009 gold production (from both pits) will average 288,000 oz. a year at a cash cost of US$141 per oz. Finally, from 2010 to 2020, 208,000 oz. per year at an average cash cost of $181 per ounce, will be produced.