Northgate companies make progress on varied North American

Over the last two years Northgate Exploration (TSE) has spent in excess of $180 million and been involved in about 14 investments and acquisitions, which probably give it the honor of being North America’s most active mining company.

As a result of these activities, Northgate and its associated companies now have 140,000 oz of annual gold production and over four million ounces of gold in reserves.

During the summer of 1989, Northgate’s focus shifted toward advancing projects in which it has become involved.

Northgate’s biggest financial commitment is to the Colomac project of Neptune Resources (TSE), a $155-million undertaking that will produce 200,000 oz of gold per year at full capacity, making it the largest gold development project under way in Canada.

Last winter equipment and supplies were transported to the site, northwest of Yellowknife, over a 190-mile ice road, and construction has proceeded at full tilt since this summer. A work force of over 350 is on site, and construction was 70% completed by the end of August.

The erection and cladding of buildings is essentially finished. Most major equipment has been installed, and mechanical, electrical and instrumentation work is under way. Pre-stripping of the tailings dam area and the orebody has started and the project is on schedule for the commencement of production in the spring of 1990.

Under a recently announced restructuring, the Colomac project will become wholly owned by ABM Gold (TSE), a subsidiary that will be 50% owned by Northgate.

The other major development project in the Northgate Group is the expansion of the Joe Mann mine of Campbell Resources (TSE) to produce 100,000 oz of gold per year.

This $18-million project commenced late in 1988 and more than $8 million has been spent to date on surface facilities and sinking of the new 4-compartment, 2,040-ft shaft which had reached a depth of almost 500 ft by the end of August.

A substantial amount of underground development has been done from the existing shaft and will move a significant amount of reserves from the possible to the proven and probable categories. An additional $2.6 million has been spent in 1989 on refurbishing the mill at Joe Mann which will enable it to process 700 tons of ore per day.

The Joe Mann mine is expected to produce 45,000 oz of gold at an average cost of less than $300(US) per oz in 1989 with production gradually rising until the 100,000-oz- per-year level is attained in 1992. Operating costs are expected to decline to $250 per oz. Northgate has a 26% diluted interest in Campbell.

Northgate also has a 42% indirect interest in Sonora Gold (TSE) whose 70% owned Jamestown mine produced a record 60,100 oz of gold at an average cost of $250 per oz in the first half of 1989.

Sonora began using a new flotation reagent, S-5688, this summer with the objective of increasing the grade of concentrate produced and therefore reducing the cost of trucking concentrates to the company’s leach plant in Nevada. This is the latest in a long series of improvements which has led to a substantial increase in production and reduction in unit operating costs.

Geddes Resources (TSE) (Northgate 31%) is carrying on activity at its Windy Craggy property in British Columbia. Almost $9 million has been spent so far in 1989 on underground exploration and engineering studies leading up to the commissioning of a feasibility study. The exploration program has involved the completion of about 54,000 ft of drilling and 2,900 ft of drifting to date.

Probable and possible reserves on the sections drilled to date total 130 million tons at an average grade of 1.89% copper, and 0.006 oz of gold per ton.

Orofino Resources (TSE) (Northgate 50.1%) completed a $425,000 exploration program this summer on the Coronation Gulf property in the Northwest Territories with mixed results. The property continues to yield encouraging gold intersections but establishing consistency and continuity in the results remains elusive. Orofino is also active in a grassroots massive sulphide exploration in the Kirkland Lake area.