Young-Davidson mine becoming a reality for Northgate

Progress at one of Ontario’s more exciting gold deposits continues un-abated as Northgate Minerals Corporation (NGX-T, NXG-X) drives to get its Young-Davidson mine into production.

Northgate has already put $170 million into construction activities at the mine which sits near the town of Matachewan, in northern Ontario.

Its efforts, thus far, have unfolded on schedule and on budget and the company reports that nearly all construction contracts have been awarded almost all equipment purchase orders have been placed and the bulk of engineering has been completed.

One significant change to the original mine plan as laid out in the feasibility study, is the addition of a mid-shaft crushing and loading facility.

The decision to add the facility came out of a recent optimization study, which determined that the shaft would give it access to higher grade underground ore one year earlier than planned.

Northgate says the mid-shaft facility should be operational by the first quarter of 2013, which is one year ahead of the feasibility study’s schedule for underground ore production.

The addition of the facility will increase sustaining capital in 2014 and 2015 by roughly $25 million.

And while construction at the site is pushing ahead, Northgate is losing track of the property’s exploration potential.

Such potential was highlighted by a recent drill hole, the results of which were released earlier in the month. The hole was drilled in what the company calls the West zone and returned 4.31 grams gold over 79.6 metres.

And more ounces could also be finding their way into the resource estimate if success is met with in an upcoming drill program east of the known deposit. Drill testing there is set to get underway over the final week of June.

Young-Davidson currently has proven and probable reserves of 32.4 million tonnes with grades between 1.6 and 3.22 grams gold for 2.8 million total oz. of gold. That gold is to be mined via both open pit and underground methods.

More good news could be gleaned from the fact that the 115 kV hydro transmission line from Kirkland Lake to the Matachewan Junction is ahead of schedule and should be finished by September 2011.

Northgate also reported that its new mill facility will be enclosed by early July. That milestone will allow the processing equipment to be installed – most of which has already arrived at site.

In Toronto on June 24 the company’s shares were off 2¢ to $2.56 on 291,000 shares traded. Its share price has moved between $2.42 and $3.62 over the last 52-week period.