Northgate Minerals Corp (NXG): Northgate Looks Past Kemess North to You...

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Wednesday, 09/26/2007 4:14:22 AM

Wednesday, September 26, 2007 4:14:22 AM

Northgate Looks Past Kemess North to Young-Davidson -
By Jon A. Nones
25 Sep 2007 at 06:20 PM GMT-04:00
DENVER (ResourceInvestor.com) --

Northgate Minerals -
[AMEX:NXG; TSX:NGX] is coming to terms with last week’s
recommendation by a government panel to refuse the company’s
Kemess North copper-gold project in north-central British
Columbia. With shares now at C$2.80, management believes
the company is “exceptionally undervalued” as it moves
forward with its Young-Davidson Project.

In a presentation at the Denver Gold Forum, Northgate
President and CEO Ken Stowe said there has never been a
panel to refuse a project in British Columbia, making
Kemess North the first, “and the government really doesn’t
know what to do with it.”

On Sept. 17, Northgate announced -
that a joint panel set up by the B.C. and federal governments
found that the economic and social benefits of
Kemess North -
“are outweighed by the risks of significant adverse
environmental, social and cultural effects,”
affectively halting further exploration at the site.

Northgate’s Kemess North -
contains proven and probable reserves at 3.9 million ounces
of gold and 1.465 billion pounds of copper.
Stowe said that these reserves will be reclassified as
resources, since there is no longer reasonable expectation
of receiving permits to proceed.

The proposal is for an open-pit mine about six kilometres
from its existing copper-gold mine at Kemess South.
The $190 million project could extend the life of the
existing mine by 11 years or more, which is significant
since its resources are expected to be depleted by 2010.

Kemess South -
produced 134,109 ounces of gold and 32 million pounds
of copper in the first half of the year at a net cash cost
of about $32/oz.
The company forecasts total production for 2007
to be 276,000 ounces of gold
and 68.5 million pounds of copper
at an average cash cost of $15/oz.

The federal and provincial agencies will critically assess
the report on Kemess North and make recommendations to
the Environmental Ministers, who will then make the final
decision expected in January 2008.
Both governments will first consult with First Nations,
namely the Takla Lake, Tsay Keh Dene and Kwadacha First
Nations and the Gitxsan House of Nii Kyap.

First Nations raised objections to the impoundment of
Duncan Lake for the use of waste disposal.
Stowe said some people went to the panel and said the lake
had a spiritual meaning, “which is very difficult to address.”

“If you’re going to [build a mine] in the region, you should
probably cut a deal with First Nation first,” he said.

Stowe said the company will wait to see what the government
decides, but “we’re not going to spend millions of dollars
fighting that fight.”
The company plans to review the carrying value of the asset,
with is currently about C$28 million.

“Our number one requirement is that we’d like to be in stable
jurisdiction,” said Stowe, indicating that the company
will now focus on developing its Young-Davidson Project.

The 100%-owned project, located in northern Ontario,
was purchased in November 2005 for C$18 million.
Since then, Northgate has calculated a total resource base
of 2.1 million ounces, and aims to increase total resources
to 2.5 million by the end of 2007.
Stowe said Northgate plans to release updated resources
in late November.

In 2007, the company budgeted C$27 million in exploration.
Northgate released positive results for four additional
diamond drill holes at Young-Davidson on Tuesday.

Highlights include four separate holes intersecting
19.5 metres of 6.42 g/t Au,
26.3 metres of 5.20 g/t Au,
15.9 metres of 4.3 g/t Au
and 10.5 metres of 4.51 g/t Au.

Later this year, Northgate plans to prepare an environmental
assessment document and a pre-feasibility study.
In 2008, the company hopes to complete the feasibility
study and obtain necessary permitting to begin construction.
By 2010, the company is targeting annual production
of 150,000-200,000 ounces at a cash cost of
US$325 for 10+ years.

The project will cost about C$150-C$175 million to develop.
Stowe said in some ways the Kemess North decision made
things easier, since “we have some free money to look
at other assets.”

Shares in Northgate fell as much as 45 cents to C$2.78
immediately after the announcement concerning
Kemess North, hitting a new 52-week low of C$2.69 on
Sept. 19.

Today’s closing price of C$2.80 shows little recovery in
the last week.

However, Stowe said that even without Kemess North,
the company’s net asset value (NAV) at a discount
of 6% comes closer to C$3.50-C$5.15 per share
with a premium on gold assets.
----

NXG Gold we need to look at precious metals shares -
as measured by the Amex Gold Bugs Index (HUI) -
Here, the big observation is that resistance at 375 is
significant not only because it would involve the new
closing high break out discussed the other day;
but more, as you can see below such a feat would also
involve a significant break back above recently
penetrated trend line related resistance -
which of course use to be support....

GOLD TA technically ex....
James Turk sees similarities in current circumstances
compared to 1974 when gold doubled, so he is talking about
an $800 handle.
And then there are both vertical and horizontal counts
associated with the point and figure charting -
the one I like most is found in nature,
basis, the resulting Fibonacci resonance related measure
is suggestive the next move of consequence for -
Gold should involve it's first attempt to penetrate into
four digits at $1,000.--
a closer look at the break out itself showing significant
diamond penetrations to the upside --

GOLD the real value about fiatz$35,000.-/oz today....

Got NXG Gold Mines Safety -
The Largest Gold Producer in BC -
The lowest cost Gold Producer in the mining industry -
http://www.northgateminerals.com
Imo. Tia.
God Bless

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