Vancouver – A $100-million-bought-deal financing will pull in about a third of funds needed to match estimated capital costs at Northgate Minerals‘ (NGX-T) Young-Davidson gold project.
If built Young-Davidson, Northgate’s primary development project, would become the company’s fourth mine. Northgate runs the Kemess copper-gold mine in B.C. and the Fosterville and Stawell gold mines in Australia.
As outlined in a July, 2009, prefeasibility study, Young-Davidson would be a nearly 200,000 oz. gold per year open pit/underground operation with a 15-year mine life and an initial capital cost of US$293 million.
So far the Northgate has pegged Young-Davidson’s proven and probable reserves at 31 million tonnes grading 2.75 grams gold per tonne and 0.77 gram silver per tonne. The prefeasibility study puts Young-Davidson’s after-tax internal rate of return at 11.1% using a US$725-per-oz. gold price.
The $100-million-bought-deal financing, which sees Northgate issuing 34.3 million shares at $2.92, will add to Northgate’s substantial bankroll. As of June 30 Northgate reported having about $120 million cash on hand.
In its announcement of the bought deal financing Northgate said that funds would be spent on Young-Davidson and used for general working capital.
Currently Northgate is advancing permitting at Young-Davidson and conducting a feasibility study.
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