Gold Production on Target at 93,377 Ounces VANCOUVER, Aug. 10
/PRNewswire-FirstCall/ -- (All figures in US dollars except where
noted) - Northgate Minerals Corporation (TSX: NGX; NYSE Amex: NXG)
today reported net earnings of $5,402,000 or $0.02 per diluted
common share and excellent cash flow from operations of $49,997,000
or $0.19 per diluted common share for the second quarter of 2009.
Second Quarter 2009 Highlights - Generated excellent cash flow from
operations of $50 million - Total production of 93,377 ounces of
gold and 13.8 million pounds of copper, which is in line with the
second quarter production forecast - Average net cash cost of
production was $465 per ounce of gold - Gold sales totalled 100,572
ounces at a realized price of $924 per ounce and copper sales
totalled 14.9 million pounds at a realized price of $2.65 per pound
- Announced a positive Pre-Feasibility Study for the Young-Davidson
project - Targeting a 15-year mine-life with 2.8 million ounces of
proven and probable reserves - After-tax operating cash flow of
$736 million, net present value ("NPV") of $370 million using a 5%
discount rate, with an Internal Rate of Return ("IRR") of 18.4%
(based on a gold price of $925 per ounce) - Net asset value of
Cdn$1.70 per share - Signed an Impact and Benefits Agreement
("IBA") with the Matachewan First Nation - The IBA establishes a
framework for the permitting and development of a mine on the
Young-Davidson property and sets out a variety of co-operative
initiatives between the Matachewan First Nation and Northgate -
Identified approximately 870,000 tonnes of additional mineral
reserves containing 93,000 ounces of gold at Stawell, extending the
mine-life until Q2-2012 - Ratified a three-year collective
agreement with the employees at the Fosterville Gold mine Ken
Stowe, President and CEO, stated: "Once again, we have delivered a
strong quarter, achieving our production forecast, generating
excellent cash flow from operations and increasing gold reserves at
our Stawell mine in Australia. More importantly, we have taken two
giant steps forward towards fulfilling our vision of building a new
mine on the Young-Davidson property by signing an IBA with the
Matachewan First Nation and by completing a positive
Pre-Feasibility study for the project. The Pre-Feasibility outlines
a 15-year mine-life with average annual gold production of 170,000
ounces at a net cash cost of $333 per ounce. Together with the
ounces we delineated at Stawell, Northgate's gold reserves have
grown by over 200% since the end of last year and we expect to have
further exploration success at Stawell, Fosterville and
Young-Davidson in the second half of 2009. With cash on hand of
$121 million and a robust price environment for both gold and
copper, we are well positioned to finance the development of the
Young-Davidson mine and are actively evaluating acquisitions that
will add to our near term production profile and generate value for
our shareholders." Executive Overview Financial Performance
Northgate Minerals Corporation ("Northgate" or "the Corporation")
recorded consolidated revenue of $130,297,000 in the second quarter
of 2009, compared with $138,880,000 in the same period last year.
Revenues were lower in the current quarter compared to the same
quarter one year ago due to a large drop in realized copper prices
from $4.10 to $2.65 per pound and a 6% drop in copper sales, which
were partially offset by a 12% increase in gold production. Net
earnings were $5,402,000 or $0.02 per diluted share in the second
quarter of 2009, compared with net earnings of $1,847,000 or $0.01
per diluted share for the corresponding quarter of 2008. Cash flow
from operations was $49,997,000 or $0.19 per diluted share in the
second quarter of 2009, compared with $40,859,000 or $0.16 per
diluted share for the corresponding quarter of 2008. Per share data
is based on the weighted average diluted number of shares
outstanding of 256,469,123 in the second quarter of 2009 and
255,745,076 in the corresponding quarter of 2008. As of August 7,
2009, the Corporation had 256,018,732 issued and outstanding common
shares and 6,639,850 outstanding common share options. Health,
Safety and Environment Northgate strives to ensure that the highest
health, safety and environmental standards are maintained at its
mine sites. During the first half of 2009, both Kemess and
Young-Davidson performed without a single lost time incident
("LTI"). Young-Davidson has maintained an exemplary track record of
health and safety, as the property has not recorded a single LTI
since taking ownership in late 2005. In Australia, Fosterville had
one additional LTI during the second quarter, while Stawell
recorded its first LTI of 2009. Northgate remains in compliance
with all applicable environmental regulations and internal
environmental policies. Human Resources On June 29, 2009, Northgate
announced that a three-year Employee Collective Agreement was
ratified by the Employee Collective at Fosterville, comprised of
190 production and maintenance employees for the underground and
surface operations. This Agreement replaces the Australian
Workforce Agreements and a temporary Greenfield agreement that was
put into place in April 2008 when Northgate completed its
conversion to owner mining from contractor mining. Summarized
Consolidated Results Q2 2009 Q2 2008 H1 2009 H1 2008
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Operating Data Gold Production (ounces) 93,377 83,561 200,854
171,947 Sales (ounces) 100,572 84,281 207,256 145,820(1) Realized
gold price ($/ounce)(2) 924 883 929 915 Copper Production
(thousands pounds) 13,805 13,940 28,812 28,320 Sales (thousands
pounds) 14,947 16,080 27,979 29,456 Realized copper price
($/pound)(2) 2.65 4.10 2.38 3.91 Net cash cost ($/ounce) 465 423
428 353(3)
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Financial Data (Thousands of US dollars, except where noted)
Revenue 130,297 138,880 254,115 224,973 Net earnings 5,402 1,847
26,812 21,512 Earnings per share Basic 0.02 0.01 0.10 0.08 Diluted
0.02 0.01 0.10 0.08 Cash flow from operations 49,997 40,859 95,199
56,309 Cash and cash equivalents 120,759 76,876 120,759 76,876
Total assets 657,215 730,630 657,215 730,630
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(1) Gold sales in H1 2008 include the results for Fosterville and
Stawell from the date of acquisition of February 19, 2008. (2)
Metal pricing quotational period is three months after the month of
arrival (MAMA) at the smelting facility for copper and two MAMA for
gold. 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. (3) Cash costs in H1 2008 include
the results for Fosterville and Stawell from the date of
acquisition of February 19, 2008. Revised 2009 Production Forecast
Northgate's production forecast for the balance of 2009 is outlined
in the following table. Total production for the year is now
forecast to be 382,500 ounces of gold at a net cash cost of $440
per ounce. Annual production forecasts for Fosterville and Kemess
are in line with initial estimates; however, the production
forecast for Stawell has been reduced by approximately 10,000
ounces as a result of changes in the mine plan that were
necessitated by geotechnical issues that developed within the GG5L
("Golden Gift") mining block. These issues have been addressed and
all ounces remain in reserves for mining in future quarters. In
addition, cash costs for the balance of 2009 are expected to be
slightly higher as a result of the lower production and the
stronger Canadian and Australian dollar relative to the US dollar.
-------------------------------------------------------- Actual
(ounces) Forecast (ounces) ------------------------------------
Total Cash Cost Q1 Q2 Q3 Q4 (ounces) ($/oz)(1)
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Fosterville 25,779 25,416 31,000 28,000 110,000 $500 Stawell 22,392
20,066 24,000 30,000 96,500 $510 Kemess 59,306 47,895 35,000 34,000
176,000 $362
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107,477 93,377 90,000 92,000 382,500 $440
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Original Forecast(3) 107,477 93,500 100,400 89,300 390,600 $423(2)
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(1) Assuming copper price of $2.50/lb and exchange rates of
US$/Cdn$0.90 and US$/A$0.80 for Q3 and Q4 2009. (2) Original
forecast cash cost assumed copper price of $1.60/lb and exchange
rates of US$/Cdn0.80 and US$/A$0.70. (3) Q1 original forecast
stated is based on actual production of 107,477 ounces. Results of
Operations - Australia Fosterville Gold Mine Q2 2009 Q2 2008 H1
2009 H1 2008
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Operating Data Ore mined (tonnes) 206,829 116,709 372,184 227,613
Ore milled (tonnes) 203,822 109,987 371,746 249,479 Ore milled per
day (tonnes) 2,240 1,209 2,053 1,371 Gold Grade (g/t) 4.54 5.40
5.04 4.85 Recovery (%) 86 76 86 65 Production (ounces) 25,416
14,630 51,195 25,070(2) Sales (ounces)(1) 24,875 13,117 51,238
17,685 Net cash cost ($/ounce) 537 1,150 483 1,207
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Financial Data (Thousands of US dollars)(1) Revenue 22,573 11,666
46,355 16,064 Cost of sales 12,391 14,657 23,408 21,003 Earnings
(loss) from operations, before taxes 985 (6,650) 7,468 (10,431)
Cash flow from operations 6,015 (4,653) 18,763 (6,561) Capital
expenditures 8,280 13,619 18,027 16,215
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(1) Financial data and gold sales (ounces) for H1 2008 include the
results of Fosterville from February 19 to June 30, 2008. Other
figures are for the six month period ending June 30, 2008. (2)
Production in H1 2008 for Fosterville excludes the change in
gold-in- circuit inventory previously recorded. Operational
Performance The Fosterville mine produced 25,416 ounces of gold
during the three months ended June 30, 2009, which represented a
significant improvement from the 14,630 ounces of gold produced in
the corresponding quarter of 2008. During the second quarter,
206,829 tonnes of ore were mined and mine development advanced
2,033 metres (m), compared with 116,709 tonnes mined and 1,844m
advanced, respectively, in the corresponding period of 2008. Mining
rates dramatically increased in the second quarter of 2009 compared
to the same period last year due to an increase in the number of
working faces made available by the substantial mine development
achieved since taking ownership of the mine. During the quarter, a
record 203,822 tonnes of ore were milled at a grade of 4.54 grams
per tonne (g/t). Although tonnes milled were significantly higher
than they were in the same period of 2008, ore grade was lower than
the corresponding quarter. Tonnes milled in the quarter were higher
than plan by 9% and the ore grade to the mill was lower than
expected by 21%, which resulted in lower gold production than
forecast. Mill head grades were lower than expected due to
unusually high dilution in several stopes, changes to the mining
sequence and lower than expected grades in a number of stopes on
the periphery of the ore body. Mill head grades are expected to
improve as higher grade stopes are mined and gold production is now
anticipated to be 31,000 ounces for the third quarter of 2009. Gold
recoveries of 86% in the second quarter of 2009 were dramatically
higher than the 76% recovery recorded in the same period last year.
Higher recoveries were attributable to the lower quantity of
carbonaceous ore milled during the most recent quarter and the full
commissioning of the heated leach circuit, which was completed in
May. The fully commissioned circuit is expected to further improve
gold recoveries in future quarters as the mill operations team
refines reagent additions and gains experience operating the
circuit. Total operating costs for the second quarter of 2009 were
A$17,946,000 or A$88 (2008 - A$162) per tonne of ore milled.
Operating costs continued to decline from previous quarters as a
result of increased mining efficiencies from the conversion to
owner mining, increased mine output and other improvements to the
manner in which the mine is operated. Mining costs were A$47 (2008
- A$94) per tonne of ore mined and milling costs were A$31 (2008 -
A$46) per tonne of ore milled. The net cash cost of production for
the second quarter of 2009 was $537 per ounce of gold, which was
dramatically lower than the net cash cost of $1,150 per ounce of
gold in the same period last year, as a result of lower mining
costs, higher throughput, improved gold recovery and lower diesel
prices. The net cash cost in the most recent quarter was, however,
higher than it was in the first quarter of the year as a result of
the lower ore grade milled and the stronger Australian dollar
relative to the US dollar. Financial Performance Fosterville's
revenue for the three months ended June 30, 2009 was $22,573,000
based on gold sales of 24,875 ounces, compared to $11,666,000 and
gold sales of 13,117 ounces in the corresponding period of 2008.
The cost of sales for the second quarter of 2009, excluding
depreciation and depletion, was $12,391,000 (2008 - $14,657,000)
and the depreciation and depletion expense was $7,436,000 (2008 -
$3,089,000). Earnings from operations before income taxes recorded
for the period was $985,000 compared with a loss from operations of
$6,650,000 in the corresponding period of 2008. During the second
quarter of 2009, the mine generated $6,015,000 in cash flow from
operations compared to $4,653,000 in cash utilized in the
corresponding period of 2008. Total investment in capital
expenditures at Fosterville was $8,280,000, which included
$4,701,000 for mine development and $3,579,000 for plant and
equipment. Plant and equipment expenditures include $910,000 for
the raising of the flotation tailings dam and $685,000 for the
purchase of a used production drill for the development of the
Ellesmere zone. Total investment in capital expenditures in the
corresponding quarter of 2008 was $20,043,000, which included
$6,424,000 financed by capital leases. Exploration Update During
the second quarter, drilling programs accelerated at Fosterville
with up to four surface diamond drill rigs operating in the
southern part of the mine lease where 17 holes and over 9,000m of
diamond drilling were completed. At Harrier Underground, located
1.7 kilometres south of the current Phoenix mining area, ten holes
drill tested parts of the Osprey and Harrier Base zones. The
current drill programs have two goals: first, to reduce drill
section spacing from 100m to 50m for areas with strong gold
mineralization to permit detailed resource modeling; and, second,
to increase the size of the existing resource by drill testing
potential down plunge mineralization extensions. The results to
date confirm the moderate southerly plunging orientation to both
the Osprey and Harrier zones. The infill drilling, which provides
increased definition, suggests the main Osprey mineralization has
two plunging zones between sections 5250N to 5500N (see Figure 1).
The lower Osprey zone is limited down plunge by drill holes SPD513A
and 513B, but the upper Osprey and Harrier Base zones remain open
down plunge. Drilling highlights for the quarter for Osprey
include: - SPD516 (5450N); 4.0m @ 11.4 g/t gold from 553.5m -
SPD513 (5300N); 3.0m @ 5.8 g/t gold from 666.0m - SPD511B (5500N);
2.0m @ 7.0 g/t gold from 595.4m Drilling highlights for Harrier
Base (see Figure 2) include; - SPD515A (5550N); 10.0m @ 5.7 g/t
gold from 670.2m - SPD515 (5550N); 6.4m @ 4.2 g/t gold from 666.0m
The Harrier Phase 3 exploration drilling will continue into the
third quarter of 2009 to better define presently known high grade
zones and test down plunge extensions of these zones. Drilling was
also conducted on the Phoenix Extension south of the current
Phoenix reserve block (see Figure 3). Infill resource definition
drilling, immediately south of the Phoenix reserve block has
commenced with two holes completed as part of a program that is the
key objective in upgrading existing inferred mineral resource to
reserve classification. Drilling is also underway at Phoenix Deeps,
approximately 300m to the south of and down plunge from the last
Phoenix drill intercept. Three of the five holes attained target
depths and all holes intersected gold mineralization. Assay results
for the west dipping Phoenix splay mineralization include SPD514A,
which intersected 10.0m @ 1.9 g/t gold and SPD514B, which
intersected 2.7m @ 4.3 g/t gold. Figure 1: Harrier Underground
Longitudinal Section: Osprey Gold Mineralization
http://www.northgateminerals.com/Theme/Northgate/files/Releases/LS_OSP_J09.gif
Figure 2: Harrier Underground Longitudinal Section: Harrier Base
Gold Mineralization
http://www.northgateminerals.com/Theme/Northgate/files/Releases/LS_HAR_J09.gif
Figure 3: Fosterville Gold Mine Long Projection
http://www.northgateminerals.com/Theme/Northgate/files/Releases/LS_FGM_J09.gif
Stawell Gold Mine Q2 2009 Q2 2008 H1 2009 H1 2008
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Operating Data Ore mined (tonnes) 170,826 143,692 325,544 293,909
Ore milled (tonnes) 184,725 170,765 364,924 337,600 Ore milled per
day (tonnes) 2,030 1,877 2,016 1,855 Gold Grade (g/t) 3.90 4.87
4.18 5.42 Recovery (%) 87 85 87 87 Production (ounces) 20,066
22,807 42,458 51,170 Sales (ounces)(1) 19,608 21,037 44,243 33,284
Net cash cost ($/ounce) 608 627 515 596
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Financial Data (Thousands of US dollars)(1) Revenue 18,055 18,984
40,470 30,723 Cost of sales 11,890 13,660 22,940 20,905 Earnings
(loss) from operations, before taxes (2,713) (3,389) 1,980 (2,706)
Cash flow from operations 4,811 2,914 17,819 9,506 Capital
expenditures 9,566 6,509 15,492 9,131
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(1) Financial data and gold sales (ounces) include the results of
Stawell from February 19 to June 30, 2008. Other figures are for
the six month period ending June 30, 2008. Operational Performance
The Stawell mine produced a total of 20,066 ounces of gold during
the three months ended June 30, 2009 compared to 22,807 ounces of
gold in the corresponding period last year. During the quarter,
gold production was lower than forecast due to changes in the
stoping sequence that were necessitated by geotechnical issues that
developed within the GG5L mining block. These issues have been
addressed by modifying the mining sequence and extraction rate in
the GG5L block and increasing ground support. All reserves that
were expected to be extracted in the second quarter from GG5L will
be mined in future quarters. With certain GG5L stopes temporarily
unavailable, lower grade ore from the GG3 production zone and
surface stockpiles was milled during the second quarter resulting
in lower than planned gold production. Stawell's annual production
for 2009 is now forecast at approximately 96,500 ounces. Mine
production during the second quarter of 2009 was 170,826 tonnes of
ore, which was higher than the 143,692 tonnes mined in the same
period of 2008. Underground mine development continued in the GG1,
GG3, and GG5L mining blocks and ramp access towards the new GG6
block advanced during the quarter with development totalling 1,697m
(2008 - 1,229m). Phase 3 of the Stawell Cooling and Ventilation
Upgrade project was almost complete by the end of the quarter with
the commissioning of the new ventilation fan beginning in late June
to ensure that the operation can safely and efficiently mine
existing and future ore reserves in deeper areas. During the second
quarter of 2009, 184,725 tonnes of ore were milled at an average
grade of 3.90 g/t compared with 170,765 tonnes of ore at 4.87 g/t
in the same period last year. Gold recoveries of 87% in the second
quarter of 2009 were slightly higher than the 85% recovery recorded
in the same period of 2008 as a result of the higher volume of
lower grade stockpiled sulphide ore processed. Total operating
costs for the second quarter of 2009 were A$16,021,000 or A$87
(2008 - A$89) per tonne of ore milled. The decline in operating
costs is primarily attributable to the increase in mill throughput
quarter over quarter, but is partially offset by higher mining
costs due to increased development metres. Mining costs were A$57
(2008 - A$62) per tonne of ore mined and milling costs were A$26
(2008 - A$25) per tonne of ore milled. The net cash cost of
production for the second quarter of 2009 was $608 per ounce of
gold, which was lower than the net cash cost of $627 per ounce of
gold recorded in the same period last year, but higher than the
cash cost of $432 per ounce recorded in the first quarter of this
year. The increase in net cash cost from the previous quarter
resulted from a stronger Australian dollar relative to the US
dollar and lower gold production. Financial Performance Stawell's
revenue for the three months ended June 30, 2009 was $18,055,000
based on gold sales of 19,608 ounces. The cost of sales during the
quarter, excluding depreciation and depletion, was $11,890,000
(2008 - $13,660,000) and the depreciation and depletion expense was
$8,422,000 (2008 - $6,556,000). Depreciation and depletion expense
was higher in the most recent quarter due to an increase in ore
mined and milled. Loss from operations before income taxes recorded
for the period were $2,713,000 compared with a loss of $3,389,000
in the corresponding period of 2008. During the second quarter of
2009, Stawell generated $4,811,000 in cash flow from operations
compared with $2,914,000 in the corresponding quarter of 2008.
Total investment in capital expenditures at Stawell was $9,566,000,
which includes $5,081,000 for mine development and $4,485,000 for
plant and equipment. The plant and equipment expenditure includes
$1,100,000 for the purchase of a new production drill and $609,000
for the raising of the tailings dam. Total investment in capital
expenditures in the corresponding quarter of 2008 was $7,642,000,
which included $1,133,000 financed by capital leases. Exploration
Update Since the acquisition of the Stawell mine, Northgate's
exploration program has successfully delineated new zones of
economic mineralization. In the first six months of 2009, mineral
reserves and resources were increased in all areas of the mine
through a combination of exploration drilling, resource definition
drilling, and grade control drilling. A total of 870,000 tonnes
containing 93,000 ounces of additional gold reserves were
delineated, of which 48,000 ounces have been depleted for mining
activity. The result is a net increase of 51,000 ounces of
reserves. A further 32,000 ounces of indicated and 98,000 ounces of
inferred resources have also been added. Mineral reserves and
mineral resources, (exclusive of reserves) at June 30, 2009 are
outlined in the following tables:
--------------------------------------------------------- Proven
Probable Total
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Gold Gold Gold Tonnes Grade (000 Tonnes Grade (000 Tonnes Grade
(000 June 30, 2009 (000) (g/t) oz) (000) (g/t) oz) (000) (g/t) oz)
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Open Pit ((less than) 100m from surface) - - - 430 1.80 25 430 1.80
25
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Underground ((greater than) 100m from surface) 64 7.13 15 2,004
4.24 273 2,068 4.33 288
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Total Proven & 15,000 ounces 297,000 ounces 313,000 ounces
Probable Reserves
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Note: Mineral reserves were estimated using a gold price of
A$965/oz; cut-off grade applied was variable for underground ore
depending upon width, mining method and ground conditions; dilution
of 2m-3m and mining; recovery of 95%-100% were applied to the
underground reserves, dependent upon mining method.
-------------------------------------- Indicated Inferred
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Gold Gold Tonnes Grade (000 Tonnes Grade (000 June 30, 2009 (000)
(g/t) oz) (000) (g/t) oz)
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Open Pit ((less than) 100m from surface) 2,975 2.19 209 205 2.64 17
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Underground ((greater than) 100m from surface) 388 4.68 58 843 5.57
151
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268,000 indicated 168,000 inferred Total Resources ounces ounces
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Note: Mineral Resources were estimated using the following
parameters: a. gold price of A$1,071/oz for underground resources;
b. Magdala surface above 130mRL and above a nominal 0.8g/t gold
cut-off; and, c. Wonga surface at A$1,071/oz gold price
Continuation of the 2009 Exploration Program The balance of the
2009 exploration program will focus on the newly discovered GG7 (an
extension to the GG5L system), Dukes Flank and North Magdala zones,
in addition to ongoing work in the Magdala Upper Levels and GG6
areas where definition and exploration drilling will be carried out
in support of resource conversion and further mine-life extensions.
Results of Operations - Canada Kemess Mine Q2 2009 Q2 2008 H1 2009
H1 2008
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Operating Data Ore plus waste mined (tonnes) 5,620,644 6,399,810
12,373,107 14,936,448 Ore mined (tonnes) 2,319,904 2,675,933
8,466,880 7,442,305 Stripping ratio (waste/ore) 1.42 1.39 0.46 1.01
Ore milled (tonnes) 4,468,549 4,550,947 8,780,720 8,794,838 Ore
milled per day (tonnes) 49,105 50,010 48,509 48,323 Gold Grade
(g/t) 0.471 0.468 0.539 0.495 Recovery (%) 71 67 71 69 Production
(ounces) 47,895 46,124 107,201 95,707 Sales (ounces) 56,089 50,127
111,775 94,851 Copper Grade (%) 0.162 0.167 0.175 0.175 Recovery
(%) 86 83 85 84 Production (thousands pounds) 13,805 13,940 28,812
28,320 Sales (thousands pounds) 14,947 16,080 27,979 29,456 Net
cash cost ($/ounce) 366 92 366 98
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Financial Data (Thousands of US dollars) Revenue 95,593 112,310
181,746 216,326 Cost of sales 62,453 74,295 99,704 123,459 Earnings
from operations, before taxes 19,762 31,076 53,337 78,115 Cash flow
from operations 37,521 64,585 43,396 91,901 Capital expenditures
1,072 3,021 2,949 4,810
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Operational Performance Kemess posted gold and copper production of
47,895 ounces and 13.8 million pounds, respectively, in the second
quarter of 2009. Metal production was higher than forecast as
improvements to the metallurgical process resulted in better than
expected gold and copper recoveries. During the second quarter of
2009, approximately 5.6 million tonnes of ore and waste were
removed from the open pit compared to 6.4 million tonnes during the
corresponding quarter of 2008. Early in the second quarter of 2009,
mining operations in the west pit were temporarily scaled back and
ultimately suspended for several weeks in response to spring thaw
conditions, which resulted in localized wall sloughing. Mining
operations resumed in early June and mining in the western end of
the pit was completed two months later. Future mining, from now
until the end of the Kemess South mine life in Q2 2011, will occur
in the eastern end of the open pit where the remaining lower grade
reserves and resources are situated. Unit mining costs were
Cdn$1.94 per tonne moved compared with Cdn$2.07 per tonne moved in
the second quarter of 2008. The unit mining costs in the most
recent quarter were lower than they were in the same period last
year due to significantly lower diesel prices. Mill throughput and
mill availability during the second quarter of 2009 were 49,105
tonnes per day (tpd) and 94%, respectively, which was consistent
with the performance in the second quarter of 2008 of 50,010 tpd
and 92%. The ore milled in the second quarter of 2009 had grades of
0.471 g/t gold and 0.162% copper, compared with grades of 0.468 g/t
gold and 0.167% copper in the same period of 2008. Gold and copper
recoveries were higher year over year and averaged 71% and 86%,
respectively, in the second quarter of 2009 compared with 67% and
83% in the same period last year. Recoveries during the quarter
were improved from the same quarter one year ago due to recent
improvements in the metallurgical process that have made the mill
more efficient in processing lower grade ore with a higher sulphide
content. These improvements will have a very positive impact on the
profitability of the lower grade ore, which makes up the majority
of the remaining reserves at Kemess. Metal concentrate inventory
declined to 4,500 wet metric tonnes (wmt) in the second quarter of
2009 from approximately 10,000 wmt at the end of the first quarter
of 2009 as a result of improved railcar availability in the spring.
The average unit cost of production at Kemess was Cdn$12.45 per
tonne milled during the second quarter of 2009, including Cdn$3.20
per tonne for concentrate marketing costs, comprised of treatment
and refining costs and transportation fees. The unit cost in the
same quarter in 2008 was Cdn$13.01 per tonne milled, which included
Cdn$3.55 per tonne for marketing costs. Concentrate marketing costs
have increased year over year as the 2009 smelting and refining
terms for 2009 have increased to $75 per dry metric tonne (dmt) and
$0.75 per pound of copper compared with terms of $45 per dmt and
$0.45 per pound in 2008. However, the higher cost was offset by
much lower rail cost in the second quarter of 2009 compared to the
same period of 2008. Site operating costs of Cdn$41.6 million have
come down approximately 4% in the second quarter of 2009 (Cdn$43.4
million in the second quarter of 2008). The decrease in site
operating costs resulted from the lower cost of consumables,
including primarily the cost of diesel fuel and mill steel. The net
cash cost of production at Kemess in the second quarter was $366
per ounce of gold compared to $92 per ounce reported in the second
quarter of 2008. The net cash cost was lower than previously
forecast as a result of the higher price of copper. However, the
net cash cost was dramatically higher than the comparative quarter
of 2008 due to the significantly lower copper price, which was only
partially offset by the strengthening US dollar and lower site
costs in the second quarter of 2008. Financial Performance Revenue
from Kemess in the second quarter of 2009 was $95,593,000 compared
with $112,310,000 in the corresponding period of 2008. Metal sales
in the second quarter of 2009 consisted of 56,089 ounces of gold
and 14.9 million pounds of copper, compared with 50,127 ounces of
gold and 16.1 million pounds of copper in the second quarter of
2008. During the second quarter of 2009, the price of gold on the
London Bullion Market averaged $922 per ounce and the price of
copper on the London Metal Exchange (LME) averaged $2.12 per pound.
The net realized metal prices received on sales in the second
quarter of 2009 were approximately $930 per ounce of gold and $2.65
per pound of copper, compared with $876 per ounce and $4.10 per
pound in the second quarter of 2008. Since Northgate's metal
pricing quotational period is three months after the month of
arrival (MAMA) at the smelting facility for copper and two MAMA for
gold, the realized prices reported differ from the average
quarterly reference prices. The 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 June 30. The cost of sales in the second quarter of 2009
was $62,453,000, which was lower than the corresponding period last
year when the cost of sales was $74,295,000. The decrease in the
most recent quarter reflects the lower costs of production and the
positive impact of a stronger US dollar. Depreciation and depletion
expense in the second quarter was $10,159,000 compared to
$6,278,000 during the corresponding period of 2008, as a result of
higher metal sales. Capital expenditures during the second quarter
of 2009 totalled $1,072,000 compared to $3,021,000 in the
corresponding period of 2008. Capital expenditures in the most
recent quarter were primarily devoted to ongoing construction of
the tailings dam and the recurring purchases of new mill liners.
Young-Davidson Project In mid-July 2009, Northgate released
positive Pre-Feasibility study results from its Young-Davidson
project, located in Matachewan, northern Ontario. The
Pre-Feasibility study included proven and probable reserves of 2.8
million ounces, increasing Northgate's reserve base by over 200%.
Highlights of the Pre-Feasibility presented below are based on a
gold price of $925 per ounce and an exchange rate of US$/Cdn$0.85:
- Proven and probable reserves of 2.8 million ounces contained gold
- 15-year mine-life at a mill throughput of 6,000 tpd - Average
annual production of over 170,000 ounces of gold at a net cash cost
of $333 per ounce - After the first two years of open pit
production, average annual production for the next ten years will
increase to over 190,000 ounces of gold at a net cash cost of $326
per ounce - Initial capital cost of $293 million - Sustaining
capital costs of $159 million during the life of the mine -
After-tax operating cash flow of $736 million, NPV 5% of $370
million, with an IRR of 18.4% - Net asset value of Cdn$1.70 per
share - Targeting commissioning in late 2011 with full production
in early 2012 - Payback after start-up of production of 4.7 years
The pre-tax and after tax metrics of the Young-Davidson project at
a variety of gold prices is shown in the following table:
-------------------------------------------------------------------------
Operating Cash NPV 5% Discount Flow (US$M) (US$M) IRR Gold Price
------------------------------------------------------ Payback
US$/oz After After After (years) Pre-tax tax Pre-tax tax Pre-tax
tax
-------------------------------------------------------------------------
725 $548 $404 $233 $155 13.2% 11.1% 6.4 825 $790 $570 $386 $263
17.7% 15.0% 5.4 925 $1,033 $736 $539 $370 21.7% 18.4% 4.7
-------------------------------------------------------------------------
* Base case in bold. Project Timeline 1. A Feasibility Study is
scheduled for completion by the end of 2009. 2. Permitting
activities are currently underway to support a 2010 construction
start. 3. Commissioning in late 2011. 4. Target full production in
early 2012. Community Relations Northgate has been working
cooperatively with the Matachewan First Nation since it began
exploring the Young-Davidson property in 2006 and on July 2, 2009,
the two parties signed an IBA, which establishes a framework for
the permitting and development of a mine on the Young-Davidson
property. The IBA also sets out a variety of co-operative
initiatives of the Matachewan First Nation and Northgate relating
to employment, training and other business opportunities in
connection with the Young-Davidson project. Corporate Overview
Corporate administration costs in the second quarter of 2009 were
$2,356,000, a decrease of 23% compared to the corresponding quarter
of the prior year. Australian corporate administration costs of
$408,000 have decreased by $323,000 compared to the corresponding
period in 2008 due to reduced staffing and the elimination of
duplicate administration costs. Canadian corporate expenditures of
$1,948,000 are comprised mainly of personnel costs, as well as
ongoing compliance and investor relations costs. While corporate
administration costs in Canadian and Australian dollars have
decreased, much of the decline is attributable to weaker exchange
rates relative to the US dollar in the comparative quarter of 2008.
Exploration costs during the second quarter of 2009 were $5,491,000
compared to $11,357,000 in the second quarter of 2008. Exploration
costs in Canada of $3,365,000 were $5,497,000 lower than costs
incurred in the corresponding period of the prior year due to
reduced exploration activities at Young-Davidson, which was focused
on the successful completion of a Pre-Feasibility study that was
released in mid-July. Exploration costs incurred in Australia at
Stawell and Fosterville were $2,126,000 in the quarter compared to
$2,495,000 in 2008. Both sites continue to identify additional
zones with the potential to extend each site's mine life. At June
30, 2009, there were 7,200 tonnes of copper forward sales
outstanding at an average price of $2.49 per pound over the period
from November 2009 through October 2010. The change in fair value
of the remaining forward contracts during the quarter was a loss of
$5,924,000 resulting from the continued increase in the price of
copper throughout the quarter. The fair value of these contracts at
June 30, 2009, was an asset of $3,595,000 of which $2,420,000 is
included in trade and other receivables for contracts expiring
within 12 months and $1,175,000 is included in other assets.
Northgate had no forward gold contracts outstanding at June 30,
2009. Net interest income was significantly lower at $530,000 in
the second quarter of 2009 compared with $1,551,000 in the
corresponding quarter of 2008. The decrease is attributable to
considerably lower interest rates on Australian cash balances and
to increased interest expenses resulting from plant and equipment
acquired by Fosterville and Stawell through the assumption of
capital leases, which began in the second quarter of 2008.
Northgate recorded an income tax expense of $2,834,000 in the
second quarter of 2009 compared to an expense of $5,889,000 in the
corresponding quarter of 2008. The current income tax expense in
the second quarter of $2,267,000 relates exclusively to the
Canadian operations as a result of continued strong financial
results at Kemess. The Corporation has sufficient tax shields such
that the Australian operations will not be cash taxable for the
next several years in the current metal price environment. The
future income tax expense in the current quarter of $567,000
relates predominantly to the reversal of temporary tax differences
in Canada. Northgate granted a total of 50,000 options to employees
in the second quarter of 2009, compared to nil in the corresponding
quarter of 2008. At June 30, 2009, there were 6,802,850 options
outstanding, of which 3,929,800 were exercisable. Liquidity and
Capital Resources Working Capital: At June 30, 2009, Northgate had
working capital of $83,608,000 compared with working capital of
$21,947,000 at December 31, 2008. The increase in working capital
is mainly due to the increase of current assets, which have risen
49% from December 31, 2008. Northgate's cash and cash equivalents
have increased by $58,340,000 due to strong cash flow from
operations and the settlement of a portion of the Corporation's
copper forward contracts. Trade and other receivables have
increased by $16,523,000 in light of higher quarter-end gold and
copper prices. Current liabilities have increased $5,288,000 which
is attributable mainly to the recognition of taxes payable for the
Corporation's Canadian operations. This has been offset by a
decrease in accounts payable and accrued liabilities. Northgate's
cash balance at June 30, 2009 amounted to $120,759,000 compared
with $62,419,000 at December 31, 2008. All cash is held on deposit
with major banks in Canada and Australia. During the quarter,
Northgate generated cash flow from operations of $49,997,000
compared to $40,859,000 for the corresponding quarter of 2008. The
increased cash flow resulted from the increase in revenues from
higher gold sales at Kemess and Fosterville combined with higher
net realized gold prices in the current quarter. Operating cash
flows have also increased due to lower cost of sales for the three
months ending June 30, 2009, which have decreased 15% compared to
the corresponding quarter in 2008. Northgate continues to hold
auction rate securities ("ARS") with a par value of $72,600,000,
all of which securities were rated AAA at the time of purchase. ARS
are floating rate securities marketed by financial institutions
with auction reset dates at 7, 28, or 35-day intervals to provide
short-term liquidity. Beginning in August 2007, auctions at which
these securities were to be re-sold began to fail, and as of the
date hereof, attempts to conduct auctions have generally ceased.
Currently, these securities cannot be readily converted to cash for
use by the Corporation to make capital investments or for other
business purposes, although the underlying payment and other
obligations of the original issuers of these securities remain
intact, and these issuers (or their guarantors) continue to make
regular interest payments to the Corporation. All ARS currently
held by the Corporation were purchased on its behalf by Lehman
Brothers Inc. ("Lehman"), acting in its capacity as broker agent of
Northgate using the discretion conferred on it. The estimated fair
value of the Corporation's ARS holdings at June 30, 2009 was
$39,633,000, which reflects a $2,816,000 increase from the
estimated fair value of $36,817,000 at March 31, 2009 and an
increase of $342,000 from the estimated fair value of $39,291,000
at December 31, 2008. The Corporation continues to earn interest on
all its ARS investments. The increase in value for the three and
six months ended June 30, 2009 is related mainly to the
Corporation's ARS investments issued by Regulation XXX Insurance
companies. This increase has been recorded in other comprehensive
income. The Corporation has concluded that the overall decline in
estimated fair value of these ARS investments is temporary. In
determining that the loss in value is temporary, the Corporation
considered the fact that these particular securities have a lower
probability of future default, continue to make interest payments,
are insured by monoline insurance companies and continue to
maintain a credit rating above investment grade. Management also
considered the senior rank of its holdings in the capital
structures of the respective issuers and the fiduciary obligation
of the major insurance companies who own the Regulation XXX
entities as factors that improve the likelihood that these
investments might eventually return to par value. The overall
estimated fair value of the Corporations' ARS investments issued by
derivative product companies (companies involved in the issuance of
credit default swaps) increased during the three months ended June
30, 2009. However, this includes a decline in estimated fair value
of $508,000 on certain securities in this group. The Corporation
concluded that the decline on these securities was other than
temporary and a corresponding amount has been recognized in net
earnings. Previous other than temporary impairments recognized on
securities, which subsequently have increased in value, are not
reversed through net earnings. Northgate received from Lehman a
short-term loan collateralized by the Corporation's ARS investments
subsequent to such ARS investments becoming illiquid. As of June
30, 2009, the principal outstanding on the short-term loan was
$42,155,000. Northgate continues to treat the short-term loan as an
obligation of the Corporation and has continued to classify it as a
current liability based on its original maturity date. Northgate
believes that its working capital at June 30, 2009, together with
future cash flow from operations, is more than sufficient to meet
its normal operating requirements for the next year,
notwithstanding the current ongoing illiquidity and impairment of
its auction rate securities. Non-GAAP Measures Adjusted Net
Earnings The Corporation has prepared a calculation of adjusted net
earnings, which has removed certain non-cash adjustments from its
Canadian generally accepted accounting principles (Canadian GAAP)
calculation of net earnings as it believes this may be a useful
indicator to investors. Adjusted net earnings may not be comparable
to other similarly titled measures of other companies. (Expressed
in thousands of US$, except share amounts) Q2 2009 Q2 2008 YTD 2009
YTD 2008
-------------------------------------------------------------------------
Net earnings $ 5,402 $ 1,847 $ 26,812 $ 21,512 Adjustments
Write-down of ARS 508 - 508 - Unrealized gain on derivatives
related to the acquisition of Perseverance hedge book - - - (9,836)
Fair value adjustment on copper forward contracts, net of tax 4,147
5,304 10,050 26,880 Effect of provisional pricing on concentrate
sales, net of tax (4,529) 164 (4,040) (6,906)
-------------------------------------------------------------------------
Adjusted net earnings 5,797 7,315 33,330 31,650
-------------------------------------------------------------------------
Diluted common shares outstanding 256,469,123 255,745,076
256,012,372 255,543,256
-------------------------------------------------------------------------
Adjusted net earnings per diluted common share $ 0.02 $ 0.03 $ 0.13
$ 0.12
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash Cost The Corporation has included net cash costs of production
per ounce of gold in the discussion of its results from operations,
because it believes that these figures are a useful indicator to
investors and management of a mine's performance as they provide:
(i) a measure of the mine's cash margin per ounce, by comparison of
the cash operating costs per ounce to the price of gold; (ii) the
trend in costs as the mine matures; and, (iii) an internal
benchmark of performance to allow for comparison against other
mines. However, cash costs of production should not be considered
as an alternative to net earnings or as an alternative to other
Canadian GAAP measures and may not be comparable to other similarly
titled measures of other companies. A reconciliation of net cash
costs per ounce of production to amounts reported in the statement
of operations is shown in the following table. Q2 2009 (Expressed
in thousands of US$, except per ounce amounts) Fosterville Stawell
Kemess Combined
-------------------------------------------------------------------------
Gold production (ounces) 25,416 20,066 47,895 93,377
-------------------------------------------------------------------------
Cost of sales $ 12,391 $ 11,890 $ 62,453 $ 86,734 Change in
inventories and other 1,266 303 (15,040) (13,471) Gross copper and
silver revenue - - (29,872) (29,872)
-------------------------------------------------------------------------
Total cash cost $ 13,657 $ 12,193 $ 17,541 $ 43,391
-------------------------------------------------------------------------
Cash cost ($/ounce) $ 537 $ 608 $ 366 $ 465
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Q2 2008 (Expressed in thousands of US$, except per ounce amounts)
Fosterville Stawell Kemess Combined
-------------------------------------------------------------------------
Gold production (ounces) 14,630 22,807 46,124 83,561
-------------------------------------------------------------------------
Cost of sales $ 14,657 $ 13,660 $ 74,295 $ 102,612 Change in
inventories and other 2,174 637 (15,619) (12,808) Gross copper and
silver revenue - - (54,435) (54,435)
-------------------------------------------------------------------------
Total cash cost $ 16,831 $ 14,297 $ 4,241 $ 35,369
-------------------------------------------------------------------------
Cash cost ($/ounce) $ 1,150 $ 627 $ 92 $ 423
-------------------------------------------------------------------------
-------------------------------------------------------------------------
YTD 2009 (Expressed in thousands of US$, except per ounce amounts)
Fosterville Stawell Kemess Combined
-------------------------------------------------------------------------
Gold production (ounces) 51,195 42,458 107,201 200,854
-------------------------------------------------------------------------
Cost of sales $ 23,408 $ 22,940 $ 99,704 $ 146,052 Change in
inventories and other 1,329 (1,078) (6,093) (5,842) Gross copper
and silver revenue - - (54,344) (54,344)
-------------------------------------------------------------------------
Total cash cost $ 24,736 $ 21,862 $ 39,268 $ 85,866
-------------------------------------------------------------------------
Cash cost ($/ounce) $ 483 $ 515 $ 366 $ 428
-------------------------------------------------------------------------
-------------------------------------------------------------------------
YTD 2008 (Expressed in thousands of US$, except per ounce amounts)
Fosterville(1) Stawell(1) Kemess Combined
-------------------------------------------------------------------------
Gold production (ounces) 18,651 34,315 95,707 148,673
-------------------------------------------------------------------------
Cost of sales $ 21,003 $ 20,905 $ 123,459 $ 165,367 Change in
inventories and other 1,519 (442) (7,317) (6,240) Gross copper and
silver revenue - - (106,716) (106,716)
-------------------------------------------------------------------------
Total cash cost $ 22,522 $ 20,463 $ 9,426 $ 52,411
-------------------------------------------------------------------------
Cash cost ($/ounce) $ 1,207 $ 596 $ 98 $ 353
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Prior half year data for the Stawell and Fosterville gold mines
only include results from February 19, 2008 to June 30, 2008.
Interim Consolidated Balance Sheets June 30 December 31 Thousands
of US dollars 2009 2008
-------------------------------------------------------------------------
(Unaudited) Assets Current Assets Cash and cash equivalents $
120,759 $ 62,419 Trade and other receivables 34,833 18,310 Income
taxes receivable - 6,837 Inventories (note 3) 40,038 41,546
Prepaids 1,402 1,989 Future income tax asset 6,277 5,259
-------------------------------------------------------------------------
203,309 136,360 Other assets 25,957 53,606 Deferred transaction
costs 775 775 Future income tax asset 4,052 3,741 Mineral property,
plant and equipment 383,386 357,725 Investments (note 4) 39,736
39,422
-------------------------------------------------------------------------
$ 657,215 $ 591,629
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and Shareholders' Equity Current Liabilities Accounts
payable and accrued liabilities $ 42,132 $ 56,469 Income taxes
payable 20,059 - Short-term loan (note 5) 42,155 43,096 Capital
lease obligations 4,489 4,533 Provision for site closure and
reclamation costs 8,870 8,420 Future income tax liability 1,996
1,895
-------------------------------------------------------------------------
119,701 114,413 Capital lease obligations 4,848 6,211 Other
long-term liabilities 4,685 3,368 Site closure and reclamation
obligations 40,098 37,849 Future income tax liability 2,726 14,350
-------------------------------------------------------------------------
172,058 176,191 Shareholders' Equity Common shares 312,316 311,908
Contributed surplus 5,891 5,269 Accumulated other comprehensive
loss (47,626) (89,503) Retained earnings 214,576 187,764
-------------------------------------------------------------------------
485,157 415,438
-------------------------------------------------------------------------
$ 657,215 $ 591,629
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The accompanying notes form an integral part of these unaudited
interim consolidated financial statements. Interim Consolidated
Statements of Operations and Comprehensive Income Thousands of US
dollars, Three Months Ended Six Months Ended except share and per
June 30 June 30 share amounts, unaudited 2009 2008 2009 2008
-------------------------------------------------------------------------
Revenue $ 130,297 $ 138,880 $ 254,115 $ 224,973
-------------------------------------------------------------------------
Cost of sales (note 3) 86,734 102,612 146,052 165,367 Depreciation
and depletion 26,092 15,982 49,589 28,833 Administrative and
general 2,356 3,066 4,638 6,227 Net interest income (530) (1,551)
(910) (5,163) Exploration 5,491 11,357 8,740 17,518 Currency
translation loss (gain) 795 205 3,376 (6,907) Accretion of site
closure and reclamation obligations 777 213 1,499 954 Write-down of
auction rate securities (note 4) 508 - 508 - Other expense (income)
(note 9) (162) (740) (828) (10,576)
-------------------------------------------------------------------------
122,061 131,144 212,664 196,253
-------------------------------------------------------------------------
Earnings before income taxes 8,236 7,736 41,451 28,720 Income tax
recovery (expense) Current (2,267) (6,851) (25,120) (8,437) Future
(567) 962 10,481 1,229
-------------------------------------------------------------------------
(2,834) (5,889) (14,639) (7,208)
-------------------------------------------------------------------------
Net earnings for the period $ 5,402 $ 1,847 $ 26,812 $ 21,512 Other
comprehensive income (loss) Unrealized gain (loss) on available for
sale securities 2,800 (2,627) 314 (7,125) Unrealized gain on
translation of self-sustaining operations 45,023 15,691 41,055
15,685 Reclassification of other than temporary loss on available
for sale securities to net earnings 508 - 508 -
-------------------------------------------------------------------------
48,331 13,064 41,877 8,560
-------------------------------------------------------------------------
Comprehensive income $ 53,733 $ 14,911 $ 68,689 $ 30,072
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net earnings per share Basic $ 0.02 $ 0.01 $ 0.10 $ 0.08 Diluted $
0.02 $ 0.01 $ 0.10 $ 0.08 Weighted average shares outstanding Basic
255,859,008 255,325,154 255,806,475 255,001,371 Diluted 256,469,123
255,745,076 256,012,372 255,543,256
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The accompanying notes form an integral part of these interim
consolidated financial statements. Interim Consolidated Statements
of Cash Flows Three Months Ended Six Months Ended Thousands of US
June 30 June 30 dollars, unaudited 2009 2008 2009 2008
-------------------------------------------------------------------------
Operating activities: Net earnings for the period $ 5,402 $ 1,847 $
26,812 $ 21,512 Non-cash items: Depreciation and depletion 26,092
15,982 49,589 28,833 Unrealized currency translation loss (gain)
1,115 2,338 (9) (4,269) Unrealized gain on derivatives - - -
(9,836) Accretion of site closure and reclamation obligations 777
213 1,499 954 Loss on disposal of assets 113 (44) 183 (45)
Amortization of deferred charges 53 53 107 107 Stock-based
compensation 315 408 754 1,313 Accrual of employee severance costs
675 307 1,330 307 Future income tax recovery 567 (962) (10,481)
(1,229) Change in fair value of forward contracts 5,924 7,601
14,357 38,521 Writedown of auction rate securities 508 - 508 -
Changes in operating working capital and other (note 10) 8,456
13,116 10,550 (19,859)
-------------------------------------------------------------------------
49,997 40,859 95,199 56,309
-------------------------------------------------------------------------
Investing activities: Release of restricted cash - 6,729 - 53,156
Increase in restricted cash (64) - (136) (23,912) Purchase of plant
and equipment (9,148) (13,114) (18,888) (17,078) Mineral property
development (9,781) (10,163) (17,620) (13,295) Transaction costs
paid - (308) - (2,233) Acquisition of Perseverance, net of cash
acquired - - - (196,590) Repayment of Perseverance hedge portfolio
- - - (45,550) Proceeds from sale of equipment 238 3,221 310 3,221
-------------------------------------------------------------------------
(18,755) (13,635) (36,334) (242,281)
-------------------------------------------------------------------------
Financing activities: Repayment of capital lease obligations
(1,547) (2,331) (2,659) (3,408) Financing from credit facility 157
408 259 8,356 Repayment of credit facility (480) (1,418) (1,199)
(9,164) Repayment of other long-term liabilities (173) (442) (324)
(746) Issuance of common shares 190 291 276 1,527
-------------------------------------------------------------------------
(1,853) (3,492) (3,647) (3,435)
-------------------------------------------------------------------------
Effect of exchange rate changes on cash and cash equivalents 2,991
456 3,122 238
-------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents 32,380 24,188
58,340 (189,169) Cash and cash equivalents, beginning of period
88,379 52,688 62,419 266,045
-------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 120,759 $ 76,876 $
120,759 $ 76,876
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The accompanying notes form an integral part of these interim
consolidated financial statements. Interim Consolidated Statement
of Changes in Shareholders' Equity Number of Common Thousands of US
dollars, Common Shares Contributed except common shares, unaudited
Shares Amount Surplus
-------------------------------------------------------------------------
Balance at December 31, 2007 254,452,862 $ 309,455 $ 3,940
Transitional adjustment on adoption of inventory standard - - -
Shares issued under employee share purchase plan 382,909 406 -
Shares issued on exercise of options 881,300 1,846 (492)
Stock-based compensation - 201 1,821 Net earnings - - - Other
comprehensive income - - -
-------------------------------------------------------------------------
Balance at December 31, 2008 255,717,071 $ 311,908 $ 5,269
-------------------------------------------------------------------------
Shares issued under employee share purchase plan 181,357 183 -
Shares issued on exercise of options 66,600 133 (40) Stock-based
compensation - 92 662 Net earnings - - - Other comprehensive income
- - -
-------------------------------------------------------------------------
Balance at June 30, 2009 255,965,028 $ 312,316 $ 5,891
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Accumulated Other Thousands of US dollars, Comprehensive Retained
except common shares, unaudited Income (loss) Earnings Total
-------------------------------------------------------------------------
Balance at December 31, 2007 $ (3,282) $ 176,663 $ 486,776
Transitional adjustment on adoption of inventory standard - 381 381
Shares issued under employee share purchase plan - - 406 Shares
issued on exercise of options - - 1,354 Stock-based compensation -
- 2,022 Net earnings - 10,720 10,720 Other comprehensive income
(86,221) - (86,221)
-------------------------------------------------------------------------
Balance at December 31, 2008 $ (89,503) $ 187,764 $ 415,438
-------------------------------------------------------------------------
Shares issued under employee share purchase plan - - 183 Shares
issued on exercise of options - - 93 Stock-based compensation - -
754 Net earnings - 26,812 26,812 Other comprehensive income 41,877
- 41,877
-------------------------------------------------------------------------
Balance at June 30, 2009 $ (47,626) $ 214,576 $ 485,157
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The accompanying notes form an integral part of these interim
consolidated financial statements. ------------------ This press
release should be read in conjunction with the Corporation's second
quarter MD&A report and Notes to the interim consolidated
financial statements, which can be found on
http://www.northgateminerals.com/, in the "Investor Info" section,
under "Financial Reports - Quarterly Reports". ------------------
Q2 2009 Financial Results - Conference Call and Webcast You are
invited to participate in today's live conference call and webcast
discussing our second quarter financial results. The conference
call and webcast will be held at 10:00 am Toronto time. You may
participate in the Northgate Conference Call by calling
416-644-3414 or toll free in North America at 1-800-733-7571. 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
http://www.northgateminerals.com/. Conference Replay A replay of
this event will be available beginning on August 10 at 12:30 pm ET
until August 24 at 11:59 pm ET. Replay Access # 416-640-1917
Passcode: 213 089 12 followed by the number sign Replay Access #
877-289-8525 Passcode: 213 089 12 followed by the number sign
Northgate Minerals Corporation is a gold and copper producer with
mining operations, development projects and exploration properties
in Canada and Australia. The company is forecasting record gold
production of over 380,000 ounces in 2009 and is targeting growth
through further acquisition opportunities in stable mining
jurisdictions around the world. Northgate is listed on the TSX
under the symbol NGX and on the NYSE Amex (formerly AMEX) under the
symbol NXG. Forward-Looking Statements: This Northgate press
release contains "forward-looking information", as such term is
defined in applicable Canadian securities legislation, 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,
2008 or under the heading "Risks and Uncertainties" in Northgate's
2008 Annual Report, both of which are available on the SEDAR
website at http://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.
DATASOURCE: Northgate Minerals Corporation CONTACT: Ms. Keren R.
Yun, Director, Investor Relations, Tel: (416) 363-1701 ext. 233,
Email: , Website: http://www.northgateminerals.com/
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