VANCOUVER, Aug 1 /PRNewswire-FirstCall/ -- (All figures in US
dollars except where noted) - Northgate Minerals Corporation (TSX:
NGX; AMEX: NXG) today reported cash flow from operations of
$40,859,000 or $0.16 per diluted common share for the second
quarter of 2008. Second Quarter 2008 Highlights - Total gold
production of 83,561 ounces at Northgate's three operating mines at
an average net cash cost of production of $423 per ounce of gold. -
Gold production for the Kemess South mine was 46,124 ounces at a
net cash cost of $92 per ounce. - Released exploration results at
Young-Davidson, confirming the continuity of mineralization in the
deposit and bringing the Project closer to its total resource goal
of 3 million ounces of gold. - Completed a NI 43-101 Preliminary
Assessment Report for the Young- Davidson project outlining
production of 1.75 million recoverable ounces of gold over a
12-year mine life at an average cash cost of $405 per ounce. -
Achieved excellent, high-grade drill results at Stawell's Golden
Gift 6 exploration area. - Completed the conversion to owner mining
from contractor mining at the Fosterville Gold mine. Ken Stowe,
President and CEO, stated, "The second quarter saw considerable
progress made on a number of fronts. At Kemess, gold production
easily exceeded the revised forecast due to the continued strong
performance in both the mining and milling departments, and
generated almost $65 million in cash flow from operations.
With strong production forecast in the fourth quarter of this year
and high metal prices, we will continue to generate significant
cash flow to fund our various growth initiatives. At
Young-Davidson, we recently issued two important press releases.
First, we released the results of the Preliminary Assessment
Report, which outlines a 12-year mine life with average annual
production of 158,000 ounces of gold per year at a cash cost of
$405 per ounce. Second, we released very positive drill results
from our 2008 drill program, which we expect will significantly
increase the resource base upon which the project feasibility study
will be based. At Stawell, our aggressive $7 million exploration
program continued to follow up on the excellent initial drill
results in the Golden Gift 6 zone and examined a number of other
in-mine and near-mine targets. At the same time, a number of
strategic capital investments are underway to improve the operation
for the longer term. At Fosterville, the conversion to owner mining
went very smoothly with completion ahead of schedule at the end of
May. Underground development at the mine is now ramping up nicely
with the ultimate objective of increasing mining rates and gold
production in the last quarter of 2008. In addition, in order to
speed up the evaluation and engineering of metallurgical
improvements, a pilot plant was constructed and commissioned on
site in late May. Testing to date has demonstrated the potential to
improve gold recovery by approximately 10%. Engineering of the
necessary process plant modifications is presently underway with a
planned implementation date in the first quarter of 2009."
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Executive Overview Financial Performance Northgate Minerals
Corporation recorded consolidated revenue of $138,880,000 in the
second quarter of 2008, compared with consolidated revenue of
$80,878,000 in the same period last year. Net earnings for the
quarter were $1,085,000 or $0.00 per diluted common share, compared
with net earnings of $8,647,000 or $0.03 per diluted common share
during the corresponding quarter of 2007. Net earnings in the most
recent quarter were lower than they are expected to be in future
quarters due to the low gold output from the recently acquired
Australian operations. The low output was combined with temporarily
higher costs as Northgate implemented various improvement projects
in order to rectify a number of production challenges, which were
inherited from the previous owner. These projects are being
undertaken to set the operations up for long-term success, and are
now possible due to Northgate's strong financial position relative
to the previous owner. Cash flow from operations after changes in
working capital was $40,859,000 or $0.16 per common share compared
with $43,685,000 or $0.17 per diluted common share during the
second quarter of 2007. Per share data is based on the weighted
average diluted number of shares outstanding of 255,745,076 in the
second quarter of 2008 and 255,317,140 in the corresponding period
of 2007. As of July 31, 2008, the Corporation had 255,442,692
issued and outstanding common shares. Health, Safety and
Environment Kemess recorded one lost time injury during the second
quarter of 2008. The affected employee returned to full duties in
mid-July. In Australia, Northgate continues to promote a strong
culture of safety and is striving to ensure that the highest level
of health and safety standards are maintained at both sites. In the
second quarter, Stawell and Fosterville each recorded one lost time
injury. Northgate plans to conduct audits of the Safety Management
systems at both sites in the third quarter and an environmental
audit will be undertaken in the fourth quarter of 2008. Human
Resources On April 8, 2008, a new three-year collective agreement
was ratified by the International Union of Operating Engineers
Local 115, which represents the 300 production and maintenance
employees at the Kemess South mine. The agreement replaces the
previous three-year deal that expired on December 31, 2007. The
current collective agreement at the Stawell Gold mine expires on
September 28, 2008. Northgate has commenced negotiations with a
committee of employees and a bargaining agent from the
Construction, Forestry, Mining and Energy Union (CFMEU). During the
quarter, Northgate completed the conversion to owner mining at the
Fosterville Gold mine. All underground activities had been
previously carried out by a privately owned Australian mining
contractor. The conversion included the transfer of approximately
110 mining personnel. Summarized Consolidated Results (Thousands of
US dollars, except where noted) Q2 2008 Q2 2007 H1 2008(1) H1 2007
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Operating Data Gold production (ounces) 83,561 65,999 171,947(2)
134,109 Gold sales (ounces)(3) 84,281 70,220 61,539 66,480 Average
spot gold price - London Bullion Market ($/oz) 896 667 911 659
Copper production (thousands pounds) 13,940 14,839 28,320 32,541
Copper sales (thousands pounds) 16,080 16,761 29,456 34,031 Average
spot copper price - London Metal Exchange Cash ($/lb) 3.83 3.47
3.68 3.08
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Financial Data Revenue $ 138,880 $ 80,878 $ 224,973 $ 155,191 Net
earnings 1,085 8,647 21,512 18,053 Earnings per share Basic 0.00
0.03 0.08 0.07 Diluted 0.00 0.03 0.08 0.07 Cash flow from
operations 40,859 43,685 56,309 62,926 Cash and cash equivalents
76,876 317,761 76,876 317,761 Total assets $ 730,630 $ 574,417 $
730,630 $ 574,417
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(1) Half year financial data and gold sales (ounces) include the
results of Northgate's Australian operations from February 19 to
June 30, 2008. Other figures are for the six month period ending
June 30, 2008. (2) Half year production for Fosterville excludes
the change in gold-in- circuit inventory previously recorded in
production for the first quarter. (3) Prior year comparatives
reflect gold sales (ounces) for Kemess only. KEMESS SOUTH MINE
(Thousands of US dollars, except where noted) Q2 2008 Q2 2007 H1
2008 H1 2007
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Operating Data Ore plus waste mined (tonnes) 6,399,810 10,618,547
14,936,448 22,701,404 Ore mined (tonnes) 2,675,933 3,494,752
7,442,305 9,055,785 Stripping ratio (waste/ore) 1.39 2.04 1.01 1.51
Ore stockpile rehandle (tonnes) 2,412,730 1,356,720 3,050,033
1,386,836 Ore milled (tonnes) 4,550,947 4,435,557 8,794,838
8,776,979 Ore milled per day (tonnes) 50,010 48,742 48,323 48,492
Gold Grade (g/t) 0.468 0.724 0.495 0.701 Recovery (%) 67 64 69 68
Production (ounces) 46,124 65,999 95,707 134,109 Sales (ounces)
50,127 70,220 94,851 136,700 Copper Grade (%) 0.167 0.199 0.175
0.207 Recovery (%) 83 76 84 81 Production (thousands pounds) 13,940
14,839 28,320 32,541 Sales (thousands pounds) 16,080 16,761 29,456
34,031 Net cash cost ($/ounce) 92 35 98 32
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Financial Data Revenue $ 112,310 $ 109,788 $ 216,326 $ 203,553 Cost
of sales 74,295 60,384 123,459 107,370 Earnings from operations
before income taxes 31,076 38,187 78,115 70,868 Cash flow from
operations 64,585 56,581 91,901 58,167 Capital expenditures 3,021
3,404 4,810 6,147
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Operational Performance The Kemess South mine posted gold and
copper production of 46,124 ounces and 13.9 million pounds,
respectively, in the second quarter of 2008. Gold production was
significantly higher than forecast in the second quarter as some of
the ore that had been scheduled for milling in the third quarter
was milled in June. Gold and copper recoveries were better than
forecast and mill throughput exceeded expectations due to high mill
availability. In the third quarter of this year, gold production is
now forecast to be 34,000 ounces as low grade stockpiled ore is
milled and waste stripping continues in the western end of the
Kemess open pit to expose high grade ore that will be milled in the
fourth quarter. Gold and copper production in the fourth quarter of
the year is expected to total 80,000 ounces and 20 million pounds,
respectively. During the second quarter of 2008, approximately 6.4
million tonnes of ore and waste were removed from the open pit
compared to 10.6 million tonnes during the corresponding quarter of
2007. Total tonnes moved (mined tonnes plus stockpile ore rehandle)
were 25% lower in the second quarter of 2008 than they were in the
corresponding period last year due to challenging mining conditions
encountered in the northwestern area of the open pit during this
year's spring thaw. Delays in waste stripping have necessitated a
change in the production plan for the third quarter to include the
milling of more stockpiled ore while waste stripping catches up.
Unit mining costs were Cdn $2.07 per tonne moved compared with
Cdn$1.64 per tonne moved in the second quarter of 2007. The unit
mining costs in the most recent quarter were higher than they were
in the same period last year due to the lower volume of material
moved, higher prices for diesel fuel and higher maintenance costs.
Mill availability and mill throughput during the second quarter of
2008 were 92% and 50,010 tonnes per day (tpd), respectively,
compared with 89% availability and throughput of 48,742 tpd in the
second quarter of 2007. The ore milled in the second quarter of
2008 had a grade of 0.468 grams per metric tonne (g/t) for gold and
0.167% for copper. Gold and copper recoveries averaged 67% and 83%,
respectively, compared with 64% and 76% in the second quarter of
2007. In the most recent quarter, Kemess exclusively milled
hypogene ore while in the same quarter last year, significant
quantities of supergene and leachcap ores, which have metallurgical
characteristics that generate lower metal recoveries, were milled.
Metal concentrate inventory decreased by 3,500 wet metric tonnes
(wmt) in the second quarter of 2008 to approximately 3,600 wmt, as
railcar availability improved during the quarter with the onset of
spring. During the second quarter of 2008, the average unit cost of
production per tonne milled was Cdn$13.01, including Cdn$3.55 for
concentrate marketing costs, which consist of treatment and
refining charges and transportation fees. The average unit cost in
the same quarter in 2007 was Cdn$13.31 per tonne milled,
which included Cdn$3.48 for marketing costs. Overall units costs
have fallen due to a decline in 2008 Benchmark settlement terms for
treatment and refining charges. Although total tonnes moved in the
second quarter of 2008 were 25% lower than they were in the same
period last year and mill throughput was approximately the same,
site operating costs of Cdn$43.4 million were only slightly
below those recorded in the second quarter of 2007 of Cdn$44.3
million. This result is a consequence of the generally inefficient
mining conditions encountered in the second quarter of 2008, as
well as substantial increases in prices for diesel fuel and mill
steel, and increased labour costs associated with the new
collective agreement at Kemess. The net cash cost of production at
Kemess in the second quarter of 2008 was $92 per ounce of
gold compared to the $35 per ounce cash cost reported in the second
quarter of 2007. The net cash cost was higher than the figure in
the comparable period due to the combined effects of lower gold and
copper production and the stronger Canadian dollar, which were only
partially offset by stronger copper prices. Financial Performance
Revenue from the Kemess South mine in the second quarter of 2008
was $112,310 compared with $109,788 in the corresponding period of
2007 excluding the effects of mark-to-market adjustments on
Northgate's copper hedge book. Metal sales in the second quarter of
2008 consisted of 50,127 ounces of gold and 16.1 million pounds of
copper, compared with 70,220 ounces of gold and 16.8 million
pounds of copper in the same period last year. During the second
quarter of 2008, the price of gold on the London Bullion Market
averaged $896 per ounce and the price of copper on the
London Metal Exchange (LME) averaged $3.83. The net realized metal
prices received on sales in the second quarter of 2008 were
approximately $876 per ounce of gold and $4.10 per pound of copper,
compared with $564 per ounce and $2.96 per pound in the same period
of 2007. Realized prices for gold and copper were higher in the
most recent quarter due to general increases in metal prices. In
addition, all of the Corporation's gold and copper sales during the
most recent quarter were sold at market prices compared to 2007,
when a significant portion of the Corporation's sales were hedged
at lower than prevailing prices. The cost of sales in the second
quarter of 2008, excluding depreciation and depletion, was
$74,295,000, which was higher than the corresponding period last
year when the cost of sales was $60,384,000. The increase in the
most recent quarter reflects increases in concentrate
transportation costs due to fuel price escalation and the stronger
Canadian dollar. Depreciation and depletion expense in the second
quarter was $6,278,000 compared to $8,851,000 during the
corresponding period of 2007. The lower depreciation and depletion
expense for the most recent quarter reflects the reduction in
tonnes mined and is slightly offset by an increase in the
amortization rate for 2008 as a result of capital expenditures in
the prior year. Cash invested in capital expenditures during the
second quarter of 2008 totalled $3,021,000 compared to $3,404,000
in the corresponding period of 2007. Capital expenditures in the
most recent quarter were primarily devoted to the ongoing
construction of the tailings dam and road infrastructure. STAWELL
GOLD MINE (Thousands of US dollars, except where noted) Q2 2008 Q2
2007 H1 2008(1) H1 2007
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Operating Data Ore mined (tonnes) 143,692 162,725 293,909 327,562
Ore milled (tonnes) 170,765 180,338 337,600 369,198 Ore milled per
day (tonnes) 1,877 1,982 1,855 2,040 Gold Grade (g/t) 4.87 4.90
5.42 5.50 Recovery (%) 85 90 87 90 Production (ounces) 22,807
25,570 51,170 59,013 Sales (ounces) 21,037 n/a 33,284 n/a Net cash
cost ($/ounce) 627 n/a 596 n/a
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Financial Data Revenue $ 18,984 n/a $ 30,723 n/a Cost of sales
13,660 n/a 20,905 n/a Loss from operations (3,389) n/a (2,706) n/a
Cash flow from operations 2,914 n/a 9,506 n/a Capital expenditures
6,509 n/a 9,131 n/a
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(1) Half year financial data and gold sales (ounces) include the
results of Northgate's Australian operations from February 19 to
June 30, 2008. Other figures are for the six month period ending
June 30, 2008. The Stawell Gold mine produced a total of 22,807
ounces of gold during the three months ended June 30, 2008.
Production was 4,000 ounces lower than forecast, primarily due to
lower tonnes mined from the underground as a result of delays in
development caused by equipment availability and mine environment
(heat load / ventilation). However, the phased ventilation upgrade
project was advanced during the quarter and four new-design spot
coolers were installed, bringing a pronounced improvement to the
working environment. This will have a positive impact on gold
production for the second half of 2008. Approximately 170,765
tonnes of ore at a grade of 4.87 g/t were milled in the second
quarter of 2008. Gold recoveries in the mill were slightly below
plan at 85% due to higher than normal carbon content in the ore
milled, which reduces recovery. Total operating costs during the
period were A$15,139,000 equating to an overall unit operating cost
of A$89 per metric tonne (mt) of ore milled. Mining costs were
A$62/mt of ore mined and milling costs were A$25/mt of ore milled.
The net cash cost of gold for the second quarter was $627 per
ounce, which was higher than plan of $501 per ounce. The cash cost
was negatively impacted primarily by gold production, which was
lower than forecast and consumable costs, which were higher than
plan. Cash costs in future quarters will inherently be lower as a
result of higher forecasted gold production. Underground mine
development continued in the Golden Gift (GG) production zones,
GG1, GG3 and GG5L, during the quarter and the development advance
totalled 1,229 metres. Financial Performance Stawell's revenue in
the second quarter was $18,984,000 based on gold sales of 21,037
ounces. The cost of sales for this period was $13,660,000 and the
loss from operations recorded for the period was $3,389,000. The
mine generated $2,914,000 in cash flow from operations during the
quarter. Cash invested in capital expenditures at Stawell during
the quarter was $6,509,000 of which $4,756,000 was incurred for
mine development and the balance for the acquisition of plant and
equipment. Depreciation and depletion expense for the three-month
period ending June 30, 2008 was $6,556,000. Exploration Update
Underground and surface based diamond drilling continued at Stawell
in the second quarter of 2008 as part of the aggressive $7 million
exploration budget allocated to identify additional resources on
the property and extend the mine life of the Stawell operation.
Diamond drilling results completed during the first and second
quarter of 2008 have outlined high grade gold mineralization in the
Golden Gift 6 (GG6) zone and Northgate expects to release an
updated reserve and resource estimate for the Stawell property in
the next few months. To date, GG6 drilling indicates that the zone
has similar geology and geometry to the other Golden Gift ore
bodies at the Stawell mine. GG6 is situated 210 metres (m) beneath
the Golden Gift 5 Lower (GG5L) zone and is interpreted to be the
fault offset of this ore body, which is currently in production.
The grade of the GG6 zone is similar to the previously mined Golden
Gift ore blocks containing, on average, 100,000 ounces of gold. In
addition to the GG6 exploration campaign, Northgate has commenced
drilling in other areas of the mine including the North Magdala
target. Results of these activities will be released in the next
few months. FOSTERVILLE GOLD MINE (Thousands of US dollars, except
where noted) Q2 2008 Q2 2007 H1 2008(1) H1 2007
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Operating Data Ore mined (tonnes) 116,709 289,259 227,613 438,907
Ore milled (tonnes) 109,987 257,481 249,479 497,946 Ore milled per
day (tonnes) 1,209 2,829 1,371 2,751 Gold Grade (g/t) 5.40 2.51
4.85 2.71 Recovery (%) 76 78 65 80 Production (ounces) 14,630
16,248 25,070(2) 34,199 Sales (ounces) 13,117 n/a 17,796 n/a Net
cash cost ($/ounce) 1,150 n/a 1,160 n/a
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Financial Data Revenue $ 11,666 n/a $ 16,064 n/a Cost of sales
14,657 n/a 21,003 n/a Loss from operations (6,650) n/a (10,431) n/a
Cash used in operations (4,653) n/a (6,561) n/a Capital
expenditures 13,619 n/a 16,215 n/a
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(1) Half year financial data and gold sales (ounces) include the
results of Northgate's Australian operations from February 19 to
June 30, 2008. Other figures are for the six month period ending
June 30, 2008. (2) Half year production for Fosterville excludes
the change in gold-in- circuit inventory previously recorded in
production for the first quarter. The Fosterville mine produced
14,630 ounces of gold during the three months ended June 30, 2008,
which was up significantly from the 10,440 ounces produced in the
first quarter. Grades continued to improve and averaged
5.4 g/t during the second quarter. The key initiatives to
ensuring the long term success of the mine progressed during the
quarter. The conversion to owner mining from contractor mining was
completed ahead of schedule in May. The implementation of the gold
recovery enhancement program also progressed with the installation
of a pilot plant to simulate plant conditions, allowing a number of
gold recovery improvement tests to be conducted. The pilot plant
has identified several sources of gold losses in the
Carbon-in-Leach (CIL) circuit and demonstrated that substantial
gold recovery improvements can be obtained by introducing a heated
leach process to the process flow. Preliminary engineering to
establish capital and operating costs for a heated leach circuit
has commenced and commissioning of a full scale heated leach
process is expected in the first quarter of 2009. During the second
quarter of 2008, 109,987 tonnes of ore at a grade of 5.4 g/t
were milled. Gold recoveries in the milling circuit of 76.2% were
significantly higher than the 54% achieved in the first quarter.
Total operating costs for the second quarter were A$17,823,000,
equating to an overall unit operating cost of A$162/mt of ore
milled. Mining costs were A$94/mt of ore mined and milling costs
were A$46/mt of ore milled. Unit costs during the quarter were much
higher than they will ultimately be at Fosterville due to low ore
production from the mine as a consequence of a lack of accessible
mining areas. Mine development rates dramatically improved during
the second quarter of 2008 and 1,844m of advance was recorded. By
the fourth quarter of 2008, development in the mine will have
progressed to the point where ore production will no longer be
constrained and unit operating costs are expected to drop
dramatically due to higher ore production and cost reductions
associated with the conversion to owner mining. Net cash cost for
the second quarter was $1,150 per ounce of gold, which was
negatively impacted by lower than forecast gold production and
one-time charges related to the owner mining conversion and the
gold recovery enhancement initiatives currently underway. In the
second half of 2008, cash costs are expected to be significantly
lower, as improvements to gold recoveries are made and gold
production is dramatically higher. By the fourth quarter of 2008,
quarterly gold production at Fosterville is expected to rise to
over 25,000 ounces and remain well above this figure in 2009 and
beyond. Financial Performance Fosterville's revenue for the three
months ended June 30, 2008 was $11,666,000 based on gold sales of
13,117 ounces. The cost of sales excluding depreciation and
depletion for this period was $14,657,000 and the loss from
operations was $6,650,000. The mine utilized $4,653,000 in cash
from operations during the second quarter of 2008. Cash invested in
capital expenditures at Fosterville was $13,619,000 of which
$5,406,000 related to mine development and $8,213,000 related to
the acquisition of plant and equipment, which includes the
procurement of mobile equipment. Depreciation and depletion expense
for the three-month period ending June 30, 2008 was $3,089,000.
Exploration Update Northgate has allocated $3 million in 2008
towards definition drilling of the Wirrawilla Zone, which is
located 1.5 kilometres south of the Fosterville processing
facility. The drilling program began in May 2008 with the objective
of delineating a minimum of 150,000 high grade resource ounces at a
grade of 5.0 g/t or better that could be accessed by a ramp. The
program entails approximately 13,000 metres of diamond drilling
with results expected by November. Corporate Overview Northgate had
no forward gold contracts outstanding at June 30, 2008. 16,200 mt
of copper forward contracts, representing approximately 100% of
Kemess South's copper production for the 12-month period ending
June 2010, remained outstanding at an average price of $2.52 per
pound. Corporate administration costs in the second quarter of 2008
were $3,066,000 compared with $2,625,000 in the same quarter last
year. The increase is due primarily to administrative expenditures
in Australia of $731,000. Canadian corporate expenditures of
$2,335,000 were lower than they were in the comparative quarter of
2007. Exploration costs in the second quarter of 2008 were
$11,357,000 compared to $7,842,000 in the corresponding quarter of
2007. In Canada, $8,862,000 was incurred primarily at the
Young-Davidson property where the advanced underground exploration
program continues. A total of $2,495,000 was expended in Australia
during the second quarter with $571,000 incurred at Fosterville and
$1,924,000 incurred at Stawell as both sites continue to identify
zones to extend mine life. Income tax expense in the second quarter
of 2008 was $5,889,000 compared to a recovery of $495,000 in the
corresponding quarter of 2007. The expense is due entirely to
Northgate's Canadian operations and has increased dramatically from
previous periods as the Corporation is now cash taxable in Canada.
Cash paid during the period for income taxes was $4,381,000 while
no cash taxes were paid in the corresponding quarter of 2007.
Liquidity and Capital Resources Working Capital: At June 30, 2008,
Northgate had working capital of $37,636,000 compared with working
capital of $235,739,000 at December 31, 2007. The decrease in
working capital was driven primarily by the acquisition of
Perseverance Corporation Limited ("Perseverance"), which was
achieved through the purchase of all ordinary shares, warrants,
options and convertible securities for cash consideration. Cash and
cash equivalents at June 30, 2008 amounted to $76,876,000 compared
with $266,045,000 at December 31, 2007. All cash and cash
equivalents are held in cash with major financial institutions in
Canada and Australia. On June 6, 2008, Northgate filed a short form
universal base shelf prospectus (the "Prospectus") with the
Securities Commissions in each of the provinces and territories of
Canada and a corresponding registration statement has been filed
with the United States Securities and Exchange Commission. The
Prospectus will facilitate offerings of Northgate's debt
securities, common shares, warrants, share purchase contracts and
share purchase or equity units or any combination thereof up to an
aggregate offering size of Cdn$250,000,000 over a 25 month period.
All costs associated with the Prospectus have been deferred as
long-term assets and will be accounted for as either debt issue
costs and amortized or charged directly to equity as applicable, if
an offering under the Prospectus is completed. Capital Lease
Financing: The conversion to owner mining at the Fosterville Gold
mine required an investment in mobile equipment fleet and other
infrastructure. The estimated budget of approximately $23,000,000
has been partially financed by capital leases totalling $7,557,000.
Additional lease financing of approximately $7,450,000 has been
secured and will be finalized during the second half of 2008.
Investments: Northgate continues to maintain a portion of its
investments in auction rate securities (ARS), which are floating
rate securities that are marketed by financial institutions with
auction reset dates at 7, 28, or 35 day intervals to provide
short-term liquidity. All ARS were rated AAA when purchased,
pursuant to Northgate's investment policy. Beginning in
August 2007, a number of auctions began to fail and the
Corporation is currently holding ARS with a par value of
$72,600,000, which currently lack liquidity. Northgate's ARS
investments were originally structured and marketed by Lehman
Brothers, Inc. ("Lehman"), a major US investment bank. The
estimated fair value of the Corporation's ARS holdings at June 30,
2008 was $61,987,000, which reflects a $7,410,000 adjustment to the
December 31, 2007 estimated fair value of $69,397,000. In
estimating the fair value of ARS, the Corporation considered
various variables, including trading levels of comparable
securities markets, the Corporation's rank within the capital
structure of the individual ARS issuers, the credit circumstances
of financial guarantors, and the investments and reserves held by
the issuers. This adjustment was recorded into other comprehensive
income as Northgate believes this decline in value to be temporary.
All of the ARS investments have continued to make regular interest
payments. If uncertainties in the credit and capital markets
persist or Northgate experiences further downgrades on its ARS
holdings, the Corporation may incur additional impairments, which
may be judged to be other than temporary. Northgate believes that
based on its cash and cash equivalents balance of $76,876,000 at
June 30, 2008 and expected operating cash flows, the current
illiquidity of its ARS investments will not have a material impact
on Northgate's ability to carry on its business. Further,
approximately 57% of the ARS investments are insured by bond
insurer institutions (monoline insurers). Rating agencies such as
S&P, Moody's and Fitch continue to monitor the credit rating of
monoline insurers and ARS investments including those held by
Northgate. During the quarter, a number of bond insurers were
downgraded by certain rating agencies, which in some cases resulted
in a downgrade of the AAA securities insured by those institutions.
All of the Corporation's uninsured ARS continue to be rated AAA and
Aaa, as applicable. The Corporation has no investments in asset
backed commercial paper, mortgage backed securities or
collateralized debt obligations. The balance of Northgate's
long-term investments comprises of equity investments in
publicly-listed junior mining companies. These investments are
carried on the balance sheet at fair value based on quoted bid
prices. On July 3, 2008, Northgate filed a Statement of Claim with
the Financial Industry Regulatory Authority ("FINRA") in New York,
US. FINRA is a self-regulatory organization with jurisdiction over
various securities broker-dealers in the United States, and
administers a dispute resolution service for customer-broker
disputes. The Statement of Claim lists Lehman and various Lehman
employees as respondents. Among other things, the Statement of
Claim requests that the FINRA arbitration panel award relief to
Northgate for Lehman's wrongful purchase of ARS, which are
currently illiquid. The Statement of Claim also asks the FINRA
arbitration panel to relieve Northgate of any obligation to repay
the loan outstanding from Lehman, as part of the compensation for
the damages caused by Lehman's actions. Lehman has not thus far
demanded that Northgate repay the loan principal. The FINRA
arbitration is pending. Short-Term Loan: In December 2007,
Northgate secured a loan from Lehman, which structured and marketed
Northgate's ARS investments. The proceeds of the loan have been
invested in highly liquid investments and can be accessed as needed
for working capital requirements. The loan bears interest at LIBOR
plus 100 basis points and matured on June 6, 2008. At June 30,
2008, the balance of the loan including accrued interest was
$44,027,000. As noted in the Investments section above, Northgate
filed a Statement of Claim with FINRA on July 3, 2008, which
includes a request for the FINRA arbitration panel to relieve
Northgate of any obligation to repay the loan outstanding from
Lehman. To date, Lehman has not demanded repayment of the loan
principal. Acquisition of Perseverance: On February 18, 2008,
Northgate completed its acquisition of Perseverance and a total of
A$230,552,000 (US$210,516,000) was paid to Perseverance
securityholders. The results of Perseverance have been included in
the interim consolidated financial statements from
February 19, 2008. In connection with the acquisition of
Perseverance, the Corporation was required to pledge a cash amount
of A$109,400,000 in a stand-by letter of credit ("SBLC"). A portion
of the SBLC was released upon payment of the consideration for the
debt instruments noted above. The funds remaining in the SBLC at
December 31, 2007 were used to settle Perseverance's gold forward
contracts for A$49,317,000 (US$45,550,000) and to pledge certain
performance guarantees in Australia for A$8,020,000 (US$7,434,000).
In the second quarter, the SBLC was fully extinguished. Project
Update Young-Davidson On June 24, 2008, Northgate reported the
completion of a NI 43-101 compliant Preliminary Assessment Report
("Preliminary Assessment") for the Young-Davidson project. The
Preliminary Assessment lays out the basis for the development of a
combined underground and open pit mine, which will produce an
average of 158,000 ounces of gold per year at $405 per ounce over a
12 year mine life. The initial capital cost of the mine is
projected to be $306 million and can be brought into
commercial production in 2011. The Preliminary Assessment was based
on underground mineral resources contained in a Technical Report
filed on SEDAR on March 26, 2008, which included diamond drilling
results up to December 20, 2007. The Preliminary Assessment
outlines aspects of the project that will be enhanced and optimized
in order to enhance the rate of return of the project. These
include: 1. Adding additional resource ounces to the deposit. 2.
Reducing backfill requirements and costs from the 100% paste fill
assumption carried in the Preliminary Assessment. 3. Increasing
mill throughput and annual gold production. 4. Increasing wall
angles in the proposed open pit. On July 17, 2008, assay results
for an additional 34 surface and 59 underground diamond drill
holes, representing 33,000 metres of drilling completed in the
first six months of 2008, were released. These drill results, in
addition to results of future drilling that will be completed in
the third quarter of 2008, will be incorporated into the updated
resource estimate, which will be used as a basis for the
feasibility study. The updated resource estimate is expected to be
completed in the fourth quarter of 2008 and the feasibility study
will follow in the first quarter of 2009. Underground ramp
development at the Young-Davidson project continued during the
second quarter with an additional 698 metres of linear advance
completed. As part of this advance, a cross cut drift was completed
through the Upper Boundary zone in order to extract a 40-tonne bulk
sample for grinding circuit pilot plant testing and averaged 5.0
g/t gold over a true thickness of 41m. The testwork indicates that
this material is amenable to low cost autogenous grinding.
Dewatering of the existing shaft continued during the quarter and
has progressed to a depth of 422 metres. Engineering activities
will continue through 2008 to support permitting activities and to
complete the feasibility study in the first quarter of 2009. Orders
for long lead equipment will also be placed in the second half of
2008 in order to keep the project on schedule for a start up in
2011. Exploration Update Australian Tenements As part of the
Perseverance acquisition, Northgate acquired an extensive land
package in the state of Victoria, Australia. Northgate's strategy
is to focus its exploration efforts on the land tenements
immediately surrounding its two operating mines within a 50 km
radius and is also looking to sell or form strategic partnerships
with other companies on its non-core exploration tenements.
Pursuant to this strategy, Northgate recently entered into an
agreement to sell its 49% interest in the Nagambie Property to
Panaegis Gold Mines Limited, the owner of the remaining 51% of the
property. Northgate has entered into an option/joint venture
agreement with Rimfire Minerals ("Rimfire") on three tenements in
the Stawell corridor. Under the agreement, Rimfire has agreed to
conduct exploration on these tenements to maintain the licenses in
good standing for the current year and can then elect to conduct
further exploration on any or all three of the licenses, earning a
50% interest on each by spending $500,000 per license over two
years. Northgate then has the option on each license to: 1) carry
out the next $1,500,000 to earn back a 10% interest (total 60%) and
another 10% by reaching a production decision; 2) not participate
and allow Rimfire to earn a 100% interest in the property by
spending, or causing to have spent, an additional $2,000,000 over 4
years; or 3) participate in a 50/50 joint venture. Non-GAAP
Measures Cash Cost Northgate has included net cash costs of
production per ounce of gold in the discussion of its results from
operations, because it believes that these figures are a useful
indicator to investors and management of a mine's performance as
they provide: (i) a measure of the mine's cash margin per ounce, by
comparison of the cash operating costs per ounce to the price of
gold; (ii) the trend in costs as the mine matures; and, (iii) an
internal benchmark of performance to allow for comparison against
other mines. However, cash costs of production should not be
considered as an alternative to net earnings or as an alternative
to other Canadian GAAP measures and may not be comparable to other
similarly titled measures of other companies. A reconciliation of
net cash costs per ounce of production to amounts reported in the
Statement of Operations is shown in the following table. Q2 2008
(Expressed in thousands of US$, except per ounce amounts) Kemess
Stawell Fosterville Combined
-------------------------------------------------------------------------
Gold production (ounces) 46,124 22,807 14,630 83,561
-------------------------------------------------------------------------
Cost of sales $ 74,295 $ 13,660 $ 14,657 $ 102,612 Change in
inventories and other (15,619) 637 2,174 (12,808) Gross copper and
silver revenue (54,435) - - (54,435)
-------------------------------------------------------------------------
Total cash cost 4,241 14,297 16,831 35,369
-------------------------------------------------------------------------
Cash cost ($/ounce) $ 92 $ 627 $ 1,150 $ 423
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Q2 2007 (Expressed in thousands of US$, except per ounce amounts)
Kemess Stawell Fosterville Combined
-------------------------------------------------------------------------
Gold production (ounces) 65,999 n/a n/a 65,999
-------------------------------------------------------------------------
Cost of sales $ 60,384 n/a n/a $ 60,384 Change in inventories and
other (6,035) n/a n/a (6,035) Gross copper and silver revenue
(52,019) n/a n/a (52,019)
-------------------------------------------------------------------------
Total cash cost 2,330 n/a n/a 2,330
-------------------------------------------------------------------------
Cash cost ($/ounce) $ 35 n/a n/a $ 35
-------------------------------------------------------------------------
-------------------------------------------------------------------------
YTD 2008 (Expressed in thousands of US$, except per ounce amounts)
Kemess Stawell(1) Fosterville(1) Combined
-------------------------------------------------------------------------
Gold production (ounces) 95,707 34,315 19,412 149,434
-------------------------------------------------------------------------
Cost of sales $ 123,459 $ 20,905 $ 21,003 $ 165,367 Change in
inventories and other (7,317) (442) 1,519 (6,240) Gross copper and
silver revenue (106,716) - - (106,716)
-------------------------------------------------------------------------
Total cash cost 9,426 20,463 22,522 52,411
-------------------------------------------------------------------------
Cash cost ($/ounce) $ 98 $ 596 $ 1,160 $ 351
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Financial and operational data include the results of
Perseverance from February 19 to June 30, 2008. YTD 2007 (Expressed
in thousands of US$, except per ounce amounts) Kemess Stawell
Fosterville Combined
-------------------------------------------------------------------------
Gold production (ounces) 134,109 n/a n/a 134,109
-------------------------------------------------------------------------
Cost of sales $ 107,370 n/a n/a $ 107,370 Change in inventories and
other (1,674) n/a n/a (1,674) Gross copper and silver revenue
(101,425) n/a n/a (101,425)
-------------------------------------------------------------------------
Total cash cost 4,271 n/a n/a 4,271
-------------------------------------------------------------------------
Cash cost ($/ounce) $ 32 n/a n/a $ 32
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Selected Quarterly Financial Data (Thousands of US dollars, except
per 2008 Quarter Ended 2007 Quarter Ended share, per ounce and
--------------------------------------------------- per pound
amounts) Jun 30 Mar 31 Dec 31 Sep 30
-------------------------------------------------------------------------
Revenue $ 138,880 $ 86,093 $ 95,599 $ 86,756 Earnings (loss) for
the period 1,085 20,427 33,309 (11,937) Earnings (loss) per share
Basic $ 0.00 $ 0.08 $ 0.13 $ (0.05) Diluted $ 0.00 $ 0.08 $ 0.13 $
(0.05) Metal production Gold (ounces) 83,561 88,386(1) 41,467
70,055 Copper (thousands pounds) 13,940 14,380 16,766 18,822 Metal
Prices Gold (London Bullion Market - $ per ounce) 896 927 788 681
Copper (LME Cash - $ per pound) 3.83 3.54 3.26 3.50
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(Thousands of US dollars, except per 2007 Quarter Ended 2006
Quarter Ended share, per ounce and
--------------------------------------------------- per pound
amounts) Jun 30 Mar 31 Dec 31 Sep 30
-------------------------------------------------------------------------
Revenue $ 80,878 $ 74,313 $ 118,239 $ 102,667 Earnings (loss) for
the period 8,647 9,406 19,790 14,902 Earnings (loss) per share
Basic $ 0.03 $ 0.04 $ 0.09 $ 0.07 Diluted $ 0.03 $ 0.04 $ 0.09 $
0.07 Metal production Gold (ounces) 65,999 68,110 81,746 74,789
Copper (thousands pounds) 14,839 17,702 21,254 19,602 Metal Prices
Gold (London Bullion Market - $ per ounce) 667 650 614 622 Copper
(LME Cash - $ per pound) 3.47 2.69 3.21 3.48
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Gold production at Fosterville for the quarter ended March 31,
2008 excludes the change in gold-in-circuit inventory previously
recorded in production. This press release should be read in
conjunction with the Corporation's second quarter MD&A report,
which can be found on http://www.northgateminerals.com/, in the
"Investor Info" section, under "Financial Reports - Quarterly
Reports". Notification of Q2 Financial Results August 1, 2008,
11:00 AM Toronto time You are invited to participate in the
Northgate Minerals Corporation live conference call and webcast
discussing our second quarter financial results on Friday, August
1, 2008, at 11:00 a.m. Toronto time. Conference Call Please call
416-644-3414 or toll free in North America at 1-800-733-7571. To
ensure your participation, please call five minutes prior to the
scheduled start of the call. Webcast The webcast package, including
the webcast link and management presentation, will be available on
the morning of August 1 and posted on Northgate's website at
http://www.northgateminerals.com/ under the Calendar of Events
section. You may also access the webcast at
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2321000.
Replay A replay of the conference call will be made available
beginning on August 1 at 1:00 pm ET until August 15 at 11:59 pm ET.
Replay Access # 416-640-1917 or 1-877-289-8525 Passcode: 212 758 47
followed by the number sign Northgate Minerals Corporation is a
mid-tier gold and copper producer with mining operations,
development projects and exploration properties in Canada and
Australia. The company is forecasting 400,000 ounces of unhedged
gold production in 2008 and is targeting growth through further
acquisitions in stable mining jurisdictions around the world.
Northgate is listed on the Toronto Stock Exchange under the symbol
NGX and on the American Stock Exchange under the symbol NXG.
FORWARD-LOOKING STATEMENTS: This news release contains certain
"forward-looking statements" and "forward-looking information" as
defined under applicable Canadian and U.S. securities laws.
Forward-looking statements generally can be identified by the use
of forward-looking terminology such as "may," "will," "expect,"
"intend," "estimate," "anticipate," "believe," or "continue" or the
negative thereof or variations thereon or similar terminology.
Forward-looking statements are necessarily based on a number of
estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and
contingencies. Certain of the statements made herein by Northgate
Minerals Corporation ("Northgate") including those related to
future financial and operating performance and those related to
Northgate's future exploration and development activities, are
forward-looking and subject to important risk factors and
uncertainties, many of which are beyond the Corporation's ability
to control or predict. Known and unknown factors could cause actual
results to differ materially from those projected in the
forward-looking statements. Such factors include, among others:
gold price volatility; fluctuations in foreign exchange rates and
interest rates; impact of any hedging activities; discrepancies
between actual and estimated production, between actual and
estimated reserves and resources and between actual and estimated
metallurgical recoveries; costs of production, capital
expenditures, costs and timing of construction and the development
of new deposits; and, success of exploration activities and
permitting time lines. In addition, the factors described or
referred to in the section entitled "Risk Factors" of Northgate's
Annual Information Form (AIF) for the year ended December 31, 2007
or under the heading "Risks and Uncertainties" of Northgate's 2007
Annual Report, both of which are available on SEDAR at
http://www.sedar.com/, should be reviewed in conjunction with this
document. Accordingly, readers should not place undue reliance on
forward-looking statements. The Corporation does not undertake any
obligation to update publicly or release any revisions to
forward-looking statements to reflect events or circumstances after
the date of this document or to reflect the occurrence of
unanticipated events, except in each case as required by law.
Interim Consolidated Balance Sheets June 30 December 31 Thousands
of US dollars 2008 2007
-------------------------------------------------------------------------
(Unaudited) Assets Current Assets Cash and cash equivalents $
76,876 $ 266,045 Trade and other receivables 24,323 14,014
Inventories (note 6) 40,400 35,234 Prepaid expenses 2,241 3,087
Future income tax asset 1,158 1,194
-------------------------------------------------------------------------
144,998 319,574 Other assets 41,739 80,181 Long-term receivables -
25,117 Deferred transaction costs (note 7) 374 1,799 Future income
tax asset 16,588 16,507 Mineral property, plant and equipment
389,836 121,337 Investments (note 8) 62,933 70,074 Goodwill 74,162
-
-------------------------------------------------------------------------
$ 730,630 $ 634,589
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and Shareholders' Equity Current Liabilities Accounts
payable and accrued liabilities $ 57,307 $ 35,861 Short-term loan
(note 9) 44,027 44,835 Current portion of capital lease obligations
4,724 2,267 Future income tax liability 1,304 872
-------------------------------------------------------------------------
107,362 83,835 Capital lease obligations 5,184 282 Other long-term
liabilities 36,983 12,089 Site closure and reclamation obligations
(note 10) 47,909 49,120 Future income tax liability 13,123 2,487
-------------------------------------------------------------------------
210,561 147,813 Shareholders' Equity Common shares 311,556 309,455
Contributed surplus 4,679 3,940 Accumulated other comprehensive
income (loss) 5,278 (3,282) Retained earnings 198,556 176,663
-------------------------------------------------------------------------
520,069 486,776
-------------------------------------------------------------------------
$ 730,630 $ 634,589
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The accompanying notes form an integral part of these interim
consolidated financial statements. Interim Consolidated Statements
of Operations and Comprehensive Income Thousands of US dollars,
except share and per share amounts, Three Months Ended June 30 Six
Months Ended June 30 unaudited 2008 2007 2008 2007
-------------------------------------------------------------------------
Revenue $ 138,880 $ 80,878 $ 224,973 $ 155,191
-------------------------------------------------------------------------
Cost of sales 102,612 60,384 165,367 107,370 Administrative and
general 3,066 2,625 6,227 4,753 Depreciation and depletion 15,982
8,933 28,833 19,959 Net interest income (1,551) (4,464) (5,163)
(7,700) Exploration 11,357 7,842 17,518 11,435 Currency translation
loss (gain) 967 (3,972) (6,907) (5,164) Accretion of site closure
and reclamation obligations 213 467 954 905 Other expense (income)
(note 15) (740) 911 (10,576) 911
-------------------------------------------------------------------------
131,906 72,726 196,253 132,469
-------------------------------------------------------------------------
Earnings before income taxes 6,974 8,152 28,720 22,722 Income tax
recovery (expense) Current (6,851) (1,905) (8,437) (5,218) Future
962 2,400 1,229 549
-------------------------------------------------------------------------
(5,889) 495 (7,208) (4,669)
-------------------------------------------------------------------------
Net earnings for the period $ 1,085 $ 8,647 $ 21,512 $ 18,053
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Other comprehensive income (loss) Reclassification of net realized
gains on available for sale securities to net earnings - - - (315)
Unrealized gain (loss) on available for sale securities (2,627) 332
(7,125) 466 Unrealized gain on translation of self-sustaining
operations 15,691 - 15,685 - Reclassification of deferred losses on
gold forward contracts to net earnings, net of tax - 4,842 - 9,148
-------------------------------------------------------------------------
13,064 5,174 8,560 9,299
-------------------------------------------------------------------------
Comprehensive income $ 14,149 $ 13,821 $ 30,072 $ 27,352
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net earnings per share Basic $ 0.00 $ 0.03 $ 0.08 $ 0.07 Diluted $
0.00 $ 0.03 $ 0.08 $ 0.07 Weighted average shares outstanding Basic
255,325,154 254,159,902 255,001,371 254,061,971 Diluted 255,745,076
255,317,140 255,543,256 255,435,956
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The accompanying notes form an integral part of these interim
consolidated financial statements. Interim Consolidated Statement
of Changes in Shareholders' Equity Number of Common Thousands of US
dollars, Common Shares Contributed except common shares, unaudited
Shares Amount Surplus
-------------------------------------------------------------------------
Balance at December 31, 2007 254,452,862 $ 309,455 $ 3,940
Transitional adjustment on adoption of inventory standard (note 4)
- - - Shares issued under employee share purchase plan 108,530 217
- Shares issued on exercise of options 853,300 1,775 (465)
Stock-based compensation - 109 1,204 Net earnings - - - Other
comprehensive income - - -
-------------------------------------------------------------------------
Balance at June 30, 2008 255,414,692 $ 311,556 $ 4,679
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Accumulated Other Comprehensive Retained Income (loss) Earnings
Total
-------------------------------------------------------------------------
Balance at December 31, 2007 $ (3,282) $ 176,663 $ 486,776
Transitional adjustment on adoption of inventory standard (note 4)
- 381 381 Shares issued under employee share purchase plan - - 217
Shares issued on exercise of options - - 1,310 Stock-based
compensation - - 1,313 Net earnings - 21,512 21,512 Other
comprehensive income 8,560 - 8,560
-------------------------------------------------------------------------
Balance at June 30, 2008 $ 5,278 $ 198,556 $ 520,069
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Number of Common Thousands of US dollars, Common Shares Contributed
except common shares, unaudited Shares Amount Surplus
-------------------------------------------------------------------------
Balance at December 31, 2006 253,700,033 $ 307,914 $ 2,596
Transitional adjustment on adoption of financial instruments - - -
Shares issued under employee share purchase plan 74,667 186 -
Shares issued on exercise of share purchase warrants - - - Shares
issued on exercise of options 419,020 534 (157) Stock-based
compensation - 92 1,079 Net earnings - - - Other comprehensive
income - - -
-------------------------------------------------------------------------
Balance at June 30, 2007 254,193,720 $ 308,726 $ 3,518
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Accumulated Other Comprehensive Retained Income (loss) Earnings
Total
-------------------------------------------------------------------------
Balance at December 31, 2006 $ - $ 137,238 $ 447,748 Transitional
adjustment on adoption of financial instruments (18,676) - (18,676)
Shares issued under employee share purchase plan - - 186 Shares
issued on exercise of share purchase warrants - - - Shares issued
on exercise of options - - 377 Stock-based compensation - - 1,171
Net earnings - 18,053 18,053 Other comprehensive income 9,299 -
9,299
-------------------------------------------------------------------------
Balance at June 30, 2007 $ (9,377) $ 155,291 $ 458,158
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The accompanying notes form an integral part of these interim
consolidated financial statements. Interim Consolidated Statements
of Cash Flows Thousands of US dollars, Three Months Ended June 30
Six Months Ended June 30 unaudited 2008 2007 2008 2007
-------------------------------------------------------------------------
Operating activities: Net earnings for the period $ 1,085 $ 8,647 $
21,512 $ 18,053 Non-cash items: Depreciation and depletion 15,982
8,933 28,833 19,959 Unrealized currency translation loss (gain)
3,100 711 (4,269) 676 Unrealized gain on derivatives - - (9,836) -
Accretion of site closure and reclamation obligations 213 467 954
905 Loss on disposal of assets (44) - (44) - Amortization of
hedging losses - 7,350 - 13,887 Amortization of deferred charges 53
76 107 148 Stock-based compensation 408 373 1,313 1,171 Accrual of
employee severance costs 307 - 307 - Future income tax recovery
(962) (2,400) (1,229) (549) Change in fair value of forward
contracts 7,601 16,905 38,521 37,004 Gain on sale of investments -
- (1) (315) Changes in operating working capital and other (note
17) 13,116 2,623 (19,859) (28,013)
-------------------------------------------------------------------------
40,859 43,685 56,309 62,926
-------------------------------------------------------------------------
Investing activities: Release of restricted cash 6,729 - 53,156 -
Increase in restricted cash - - (23,912) - Purchase of mineral
property, plant and equipment (23,277) (3,573) (30,374) (6,334)
Transaction costs paid (308) - (2,233) - Acquisition of
Perseverance, net of cash acquired - - (196,590) - Repayment of
Perseverance hedge portfolio - - (45,550) - Proceeds from sale of
equipment 3,221 - 3,221 - Purchase of investments - (637) - (322)
Proceeds from sale of investments - - 1 -
-------------------------------------------------------------------------
(13,635) (4,210) (242,281) (6,656)
-------------------------------------------------------------------------
Financing activities: Repayment of capital lease obligations
(2,331) (642) (3,408) (1,271) Financing from credit facility 408 -
8,356 - Repayment of credit facility (1,418) - (9,164) - Repayment
of other long-term liabilities (442) - (746) - Issuance of common
shares 291 118 1,527 563
-------------------------------------------------------------------------
(3,492) (524) (3,435) (708)
-------------------------------------------------------------------------
Effect of exchange rate changes on cash and cash equivalents 456 -
238 -
-------------------------------------------------------------------------
Increase/ (decrease) in cash and cash equivalents 24,188 38,951
(189,169) 55,562 Cash and cash equivalents, beginning of period
52,688 278,810 266,045 262,199
-------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 76,876 $ 317,761 $
76,876 $ 317,761
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Supplementary information Cash paid during the period for: Interest
$ 942 $ 74 $ 1,930 $ 145 Income taxes 4,381 - 4,715 - Purchase of
mineral property, plant and equipment by assumption of capital
lease obligations 7,557 - 7,557 -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The accompanying notes form an integral part of these interim
consolidated financial statements. To view the notes in PDF format,
please click on the following link:
http://www.northgateminerals.com/Theme/Northgate/files/Releases/Q2_08_Notes.pdf
DATASOURCE: Northgate Minerals Corporation CONTACT: please contact:
Ms. Keren R. Yun, Director, Investor Relations, Tel: (416)
216-2781, Email: , Website: http://www.northgateminerals.com/
Copyright