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 /PRNewswire/ - (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.
-
- 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 $12.7 million, all of
which was expensed in the second quarter. Reclamation activities
were negatively impacted by a wet spring and summer, which delayed
progress and resulted in increased costs to retain staff and
equipment. As detailed engineering and surveying were completed on
the spillway construction at the tailings impoundment facility as
well as other reclamation projects, the cost estimates also
increased.
The balance of the 2011 reclamation work at
Kemess is expected to be completed by the end of the third quarter.
At that time, the reclamation obligation will be approximately
equal to the amount of the reclamation bond posted with the
Provincial government. Now that most of the 2011 reclamation work
is complete and detailed costs estimates for future work have been
reviewed by the Provincial government, we believe that any
additional increases to rehabilitation activities will not be
material.
2011 Production and Cash Cost Forecast
Production and cash cost forecast for the full year 2011 is
outlined as follows:
|
|
|
|
Total
(ounces) |
Forecast 2011 Cash Cost
($/oz) 1 |
|
Fosterville |
97,000 - 102,000 |
$910 - $950 |
Stawell |
81,000 - 85,000 |
$865 - $905 |
Kemess
(Actual) |
13,8352 |
($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 dollars, except where noted) |
Q2
2011 |
Q2
2010 |
YTD
2011 |
YTD
2010 |
Financial Data |
|
|
|
|
Revenue |
$ 67,416 |
$
122,737 |
$
190,443 |
$
248,015 |
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 -
basic |
(0.04) |
0.00 |
0.02 |
0.01 |
Cash flow from (used in) operations |
(3,695) |
15,236 |
36,414 |
27,288 |
Cash and cash equivalents |
244,469 |
204,173 |
244,469 |
204,173 |
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
production |
43,798 |
68,275 |
95,008 |
141,637 |
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
sales |
44,372 |
65,943 |
101,309 |
141,071 |
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 cost ($/ounce) |
944 |
693 |
812 |
673 |
Copper production (thousands pounds)
5 |
(48) |
9,643 |
6,449 |
19,172 |
Copper sales (thousands pounds) |
218 |
7,997 |
9,216 |
19,142 |
Realized copper price
($/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
derivatives |
|
27,923 |
|
62,051 |
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,
including derivatives |
|
$ 64,856 |
|
$ 93,534 |
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 dollars, |
|
Three
Months Ended June 30 |
|
Six
Months Ended June 30 |
except share and per share amounts, unaudited |
|
2011 |
|
2010 |
|
2011 |
|
2010 |
Revenue |
|
$ 67,416 |
|
$ 122,737 |
|
$ 190,443 |
|
$ 248,015 |
Operating expenses |
|
|
|
|
|
|
|
|
Cost of sales (note 4) |
|
64,189 |
|
104,638 |
|
174,262 |
|
220,686 |
Administrative and general |
|
5,424 |
|
2,809 |
|
9,231 |
|
6,649 |
Exploration |
|
5,687 |
|
6,519 |
|
10,588 |
|
10,646 |
Decommissioning and site rehabilitation
(note 9) |
|
12,652 |
|
— |
|
12,652 |
|
— |
Other expenses (income) (note 13) |
|
3,382 |
|
(1,570) |
|
4,234 |
|
(1,321) |
|
|
91,334 |
|
112,396 |
|
210,967 |
|
236,660 |
Profit (loss) from operating activities |
|
(23,918) |
|
10,341 |
|
(20,524) |
|
11,355 |
Financing income (expenses) |
|
|
|
|
|
|
|
|
Interest income |
|
799 |
|
888 |
|
2,458 |
|
1,820 |
Finance costs (note 12) |
|
(723) |
|
(691) |
|
(1,476) |
|
(1,435) |
Currency translation gain (loss) |
|
1,074 |
|
(7,599) |
|
6,258 |
|
(3,306) |
Fair value adjustment on option component of convertible
notes |
|
3,378 |
|
— |
|
14,005 |
|
— |
Write-down of investments |
|
— |
|
(29) |
|
— |
|
(369) |
|
|
4,528 |
|
(7,431) |
|
21,245 |
|
(3,290) |
Profit (loss) before income taxes |
|
(19,390) |
|
2,910 |
|
721 |
|
8,065 |
Income tax recovery (expense) |
|
6,376 |
|
(3,243) |
|
6,020 |
|
(4,511) |
Net profit (loss) for the period |
|
(13,014) |
|
(333) |
|
6,741 |
|
3,554 |
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
Unrealized gain (loss) on available for sale
investments |
|
401 |
|
(70) |
|
287 |
|
(936) |
Unrealized gain (loss) on translation of foreign
operations |
|
6,596 |
|
(19,158) |
|
8,383 |
|
(14,193) |
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 income (loss) |
|
$ (6,017) |
|
$ (19,274) |
|
$ 20,345 |
|
$ (10,948) |
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 dollars, unaudited |
|
2011 |
|
2010 |
|
2011 |
|
2010 |
|
|
|
|
|
|
|
|
|
Operating Activities |
|
|
|
|
|
|
|
|
Net profit (loss) for the period |
|
$ (13,014) |
|
$ (333) |
|
$ 6,741 |
|
$ 3,554 |
Adjustments for: |
|
|
|
|
|
|
|
|
Depreciation and depletion |
|
21,079 |
|
27,914 |
|
52,671 |
|
59,472 |
Unrealized currency translation losses (gains) |
|
(380) |
|
1,214 |
|
(732) |
|
890 |
Gain on disposal of assets |
|
(1,401) |
|
(1,638) |
|
(1,795) |
|
(1,305) |
Stock-based compensation |
|
687 |
|
601 |
|
1,912 |
|
1,987 |
Accrual of employee severance costs |
|
258 |
|
435 |
|
1,253 |
|
873 |
Interest income |
|
(799) |
|
(888) |
|
(2,458) |
|
(1,820) |
Finance costs |
|
723 |
|
691 |
|
1,476 |
|
1,435 |
Income tax expense (recovery) |
|
(6,376) |
|
3,243 |
|
(6,020) |
|
4,511 |
Income tax credited to operating expenses |
|
(1,091) |
|
- |
|
(1,188) |
|
— |
Change in fair value of forward contracts |
|
(397) |
|
(15,965) |
|
(1,364) |
|
(13,071) |
Fair value adjustment on option component of convertible
notes |
|
(3,378) |
|
— |
|
(14,005) |
|
— |
Decommissioning and site rehabilitation expense |
|
12,652 |
|
— |
|
12,652 |
|
— |
Write-down of investments |
|
— |
|
29 |
|
— |
|
369 |
Loss (gain) on sale of investments |
|
— |
|
258 |
|
(17) |
|
258 |
Changes in operating working
capital and other (note 16) |
|
(12,740) |
|
(197) |
|
(11,074) |
|
(2,277) |
Interest received |
|
1,011 |
|
888 |
|
2,479 |
|
1,820 |
Interest paid |
|
(529) |
|
(489) |
|
(3,990) |
|
(1,053) |
Income taxes paid |
|
— |
|
(527) |
|
(127) |
|
(28,355) |
|
|
(3,695) |
|
15,236 |
|
36,414 |
|
27,288 |
Investing Activities |
|
|
|
|
|
|
|
|
Decrease (increase) in restricted cash |
|
49 |
|
— |
|
49 |
|
(9,879) |
Purchase of plant and equipment |
|
(2,124) |
|
(11,940) |
|
(7,099) |
|
(20,708) |
Mineral property development |
|
(17,557) |
|
(14,029) |
|
(32,237) |
|
(26,570) |
Assets under construction |
|
(50,626) |
|
(13,872) |
|
(96,564) |
|
(16,720) |
Proceeds from sale of equipment |
|
15,933 |
|
262 |
|
15,982 |
|
513 |
Proceeds from insurable asset disposition |
|
— |
|
1,619 |
|
— |
|
1,619 |
Proceeds from sale of investments |
|
— |
|
82 |
|
40,954 |
|
82 |
Purchase of investments |
|
— |
|
— |
|
(201) |
|
— |
Deferred transaction costs paid |
|
(1,071) |
|
(160) |
|
(1,194) |
|
(160) |
|
|
(55,396) |
|
(38,038) |
|
(80,310) |
|
(71,823) |
Financing Activities |
|
|
|
|
|
|
|
|
Repayment of equipment financing obligations |
|
(4,337) |
|
(1,852) |
|
(7,085) |
|
(3,366) |
Cash from equipment financing |
|
— |
|
— |
|
1,275 |
|
— |
Repayment of short-term loan |
|
— |
|
(350) |
|
(40,161) |
|
(728) |
Repayment of other long-term liabilities |
|
(548) |
|
(212) |
|
(1,001) |
|
(429) |
Issuance of common shares |
|
104 |
|
186 |
|
215 |
|
409 |
|
|
(4,781) |
|
(2,228) |
|
(46,757) |
|
(4,114) |
Effect of exchange rate changes on cash and cash
equivalents |
|
253 |
|
(1,103) |
|
282 |
|
(722) |
Decrease in cash and cash equivalents |
|
(63,619) |
|
(26,133) |
|
(90,371) |
|
(49,371) |
Cash and cash equivalents, beginning of
period |
|
308,088 |
|
230,306 |
|
334,840 |
|
253,544 |
Cash and cash equivalents, end of
period |
|
$ 244,469 |
|
$ 204,173 |
|
$ 244,469 |
|
$ 204,173 |
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.
SOURCE Northgate Minerals Corporation