Northgate options Hyland property

Vancouver — Northgate Exploration(NGX-T) has inked a deal with StrataGold, a subsidiary of Expatriate Resources (EXR-V), to acquire an initial 51% interest in the Hyland gold property located in the Quartz Lake area in southeast Yukon.

According to the deal, Northgate stands to earn an initial 51% interest in the property by spending $5 million over four years on exploration as well as a commitment to spend a minimum $700,000 in 2003. In addition, Northgate is required to make property payments totalling $210,000 which includes an initial payment of $85,000. Once vested, Northgate can increase its interest by 10% by completing a feasibility study. StrataGold will act as operator during the initial option period and Northgate will take over once it has vested its 51% interest. The property is subject to a net smelter return royalty of 1.25%. An additional 1.0% NSR is applicable to the core part of the property which is capped at $1.5 million.

“The Hyland Property is an excellent addition to our growing exploration portfolio in northern British Columbia and Yukon,” said Ken Stowe, President and C.E.O of Northgate. “We look forward to advancing Hyland to the next stage of development, contributing both funding and the expertise gained from our operating and exploration achievements at Kemess.”

The Hyland property consists of 226 mineral claims covering 40 sq. km. Previous exploration outlined a 14 km-long structural zone situated in Proterozoic-aged sedimentary rocks. Bulldozer trenching in 1987 and 1988 defined a zone of shallow oxide gold mineralization that returned intervals grading up to 4.8 grams gold per tonne gold over 30 metres.

Percussion drilling in 1990 defined an oxidized gold resource in the Main zone which was pegged at 3.2 million tonnes grading 1.1 grams gold. Significant drill intersections include 2.65 grams gold over 16.7 metres and 129.7 metres averaging 1.19 grams gold.

The Main zone oxide gold resource is situated directly south of a large aeromagnetic anomaly. The anomaly is interpreted to reflect magnetite destruction in the host sedimentary rocks due to intense silica-clay alteration. Northgate reports that the magnetic anomaly corresponds to a south- and southeast-trending 3,200-metre-long zone of highly anomalous gold, bismuth and arsenic soil geochemistry.

Short percussion drill holes collared at the northern extent of these anomalies has intersected mineralization grading 1.0 gram gold over 13.7 metres and 0.9 gram gold over 33.6 metres. The gold mineralization is thought to be controlled by steep dipping faults with deposition of gold both in steep structures and as replacements in shallow dipping limy clastic sedimentary rocks.

Northgate reports that a second drill target is situated 4 km to the south and represents a 500-by-500 metre zone of highly anomalous gold, arsenic and bismuth geochemistry.

StrataGold is a new public company being formed by Expatriate to focus on exploration for precious metals in the Americas. Expatriate transferred its 100% interest in the Hyland property, along with eight other gold and platinum group metals properties, to StrataGold in return for shares of the company. Expatriate intends to issue these shares to its shareholders as a dividend.

Northgate’s principal assets are the 280,000-oz.-per-year Kemess South mine in north-central B.C. and the adjacent Kemess North deposit.