Northgate takes a shine to Brenda

Vancouver —Northgate Exploration (NGX-T) has inked a deal with Canasil Resources (CLZ-V) to earn a majority interest in Canasil’s wholly-owned Brenda gold-copper property, situated in the Kemess-Toodoggone mining district in north central British Columbia.

“The BRENDA property fits perfectly into our regional exploration strategy of targeting attractive properties that could potentially benefit from the significant infrastructure already in place at Kemess," said Ken Stowe, President and C.E.O. of Northgate. "We expect to begin exploration at Brenda in August utilizing the latest knowledge gained at Kemess North the past two summers. The progam is expected to include geophysical surveys and diamond drilling.”

According to the agreement Northgate stands to earn a 60% interest in the property by incurring expenditures of $2 million and making cash payments totalling $140,000 to Canasil over a four-year period. Upon exercise of the Option, the parties will enter into a joint venture. If Canasil does not participate in the joint venture, or fails to meet its share of planned expenditures, its interest will revert to a 2% net smelter return, one-half of which may be purchased by Northgate for $2,000,000.

The Brenda property is composed of 178 mineral claim units, covering 44.0 sq. km about 25 km northwest of Northgate’s Kemess South Mine. The property is located within a belt of northwest and northeast trending block faults at the transition from porphyry type gold-copper occurrences in the south to epithermal type gold-silver vein and breccia deposits in the northwest.

"We are very pleased with Northgate’s interest in and future involvement with the Brenda property," said Bahman Yamini, President and C.E.O. of Canasil. "Northgate’s specific technical capabilities, financial resources and proven track record of successful operation and exploration at Kemess ideally suits the exploration and possible development of this potentially large mineralized system."

Previous exploration by Canasil has identified a large anomalous zone measuring 900-by-400 metres with coincident gold and silver geochemical anomalies as well as induced polarization chargeability anomalies. Diamond drilling in this zone encountered significant amounts of pyrite, copper sulphides and gold.

Previous drill results from this zone are as follows;

• Hole 93-1 intersected 47.86 metres averaging 1.10 grams gold and 0.13% copper starting 9.14 metres down-hole.
• Hole 93-3 cut 108.80 metres averaging 0.48 gram gold and 0.14% copper starting 12.2 metres down-hole.
• Hole 96-3 intersected 26.21 metres averaging 0.92 gram gold and 0.10% copper starting 15.54 metres down-hole.
• Hole 96-7 cut 62.50 metres grading 0.84 gram gold and 0.14% copper starting 7.3 metres down-hole.
• Hole 97-1 intersected 24.80 metres averaging 1.12 grams gold and 0.13% copper starting 148.0 metes down-hole.
• Hole 07-2 cut 39.95 metres averaging 1.12 grams gold and 0.18% copper starting 65.35 metres down-hole

Northgate’s principal assets are the 275,000 oz-per-year Kemess South mine and the adjacent Kemess North project were the company commenced a $5 million, 34,000-metre diamond drilling program in early June. The first results from this program are expected to be released shortly.

Kemess North, which is 7 km north of the Kemess South gold-copper mine, hosts a resource of 442 million tonnes grading 0.4 gram gold per tonne and 0.23% copper. This calculation is based on a gold-equivalent cutoff grade of 0.6 gram gold per tonne and on gold and copper prices of US$325 per oz. and US90 per lb., respectively. The deposit hosts a higher-grade core of 170 million tonnes grading 0.5 gram gold and 0.29% copper, based on a cutoff grade of 0.6 gram gold.

Kemess is a 50,000 tonne-per-day operation that hosts reserves at the Kemess South deposit that are pegged at 145.9 million tonnes grading 0.65 gram gold per tonne and 0.24% copper. In 2001 Northgate’s targeted production was 275,000 oz. gold and 30,390 tonnes copper at a cash cost of US$200 per oz. gold (net of byproduct credits).