Vancouver – Mid-tier gold miner Northgate Minerals (NGX-T) delivered greatly improved net earnings of US$9 million, or 4 per share, in the second quarter of 2004, coupled with record low net cash costs for gold production at Kemess South.
The Vancouver-based company is on pace for a banner year, with income for the first half of 2004 already equal to that for all of last year. Net income for Q2 2004 compares positively to a loss of US$5.7 million, or 3 a share, in the corresponding quarter of last year.
Northgate continued optimizing Kemess South operations, producing over 78,000 oz. gold and 18 million pounds of copper in the quarter. Net cash cost per oz. of gold produced dropped to a new low of US$129.
Near record level mining rates of over 156,000 tonnes per day combined with strong bullion and copper markets contributed to the strong quarter for the company, who are on track to produce 300,000 oz. of gold and 75 million pounds of copper this year.
Commenting on exploration around the Kemess South pit, "We’ve done a significant amount of drilling there, which we’ve now completed, and we’re just in the process of reviewing the resources to see how much we can convert into reserve" stated Northgate President and CEO, Ken Stowe.
Drilling of the two large mineralized zones on the southwest and southeast boundaries of the Kemess South pit have been completed with results expected by September. "We are at 52 million tonnes of resource sitting in there (in the target) as of our report of the beginning of this year" further stated Stowe.
Proven reserves at Kemess South stand at about 90 million tonnes grading 0.7 grams gold per tonne and 0.23% copper.
Planned development of the Kemess North deposit remains on track with a final feasibility study scheduled for completion later this year. Kemess North has a proven and probable resource of 414 million tonnes of 0.31 grams gold and 0.16% copper.
Northgate has also executed the acquisition agreement for the Sustut Copper project from Doublestar Resources (DSR-V) (TNM, July 2/04). The project is 40 km. south of Kemess and contains a resource of 4.7 million tonnes grading 2% copper, amenable to open pit mining.
Northgate reports 200 million shares outstanding, as of the latest figures, with the issue trading up about 10%, on the earnings report, to the $2.20 per share range.