Vancouver — A robust metals market has led to a 1-year reprieve for Northgate Minerals’ (NGX-T, NXG-X) Kemess South gold-copper mine, in north-central British Columbia, previously scheduled to shut down in 2009.
The large open-pit operation, which will now close in late 2010, produced 68,110 oz. gold and 17.7 million lbs. (8,000 tonnes) copper in this year’s first quarter at a net gold cash cost of US$28 per oz., after copper and silver credits.
Production was down slightly from the same period in 2006 (77,634 oz. gold and 22.3 million lbs. copper) due to an increased amount of waste being stripped in the north wall pushback, and lower-grade ore being processed through the mill.
Northgate posted first-quarter profits of US$9.4 million (US4 per share), down from the US$21.7 million (US10 per share) earned in the same period last year.
Total site operating costs reflected the industry-wide rise in labour, energy and consumable costs. Production costs of $9.65 per tonne milled increased significantly over the $8.46 per tonne in last year’s first quarter.
About 18 million tonnes of new, low-grade reserves were mapped out in the eastern end of the Kemess South pit to extend the mine’s life. The zone contains about 175,000 oz. gold and 57 million lbs. (26,000 tonnes) copper that will be mined starting in late 2009. The company anticipates net cash costs for gold production from the zone to be around US$400 per oz.
In order to upgrade the lower-grade mineralization to the reserve category, Northgate acknowledges it wrote forward sales contracts for the copper production during that period at an average price of US$2.52 per lb.
“This mine-life extension provides us with a profitable production bridge to the projected start of operations at Kemess North and Young-Davidson,” said Northgate president and CEO Ken Stowe in a statement.
Final hearings regarding development of the company’s Kemess North project are slated for mid-May, after which a government-appointed review panel will submit a recommendation to federal and provincial environment ministers.
Exploration continues on the company’s Young-Davidson gold project, near Kirkland Lake, Ont., with programs of infill and expansion drilling, plus refurbishment and dewatering of underground workings to gain better access.
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