Wednesday, September 29, 2010 10:41:16 PM
09.29.2010
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VANCOUVER, Sept. 29 /CNW/ - Northgate Minerals Corporation (TSX: NGX, NYSE Amex: NXG) ("Northgate") announced today that it intends to offer US$135 million of its convertible senior notes due 2016 (the "Convertible Notes") in the United States and Canada pursuant to a preliminary prospectus supplement to its base shelf prospectus dated July 2, 2010. Northgate will grant the underwriters of the offering a 30-day option to purchase up to an additional US$15 million of Convertible Notes to cover over-allotments, if any.
UBS Securities LLC will act as the sole bookrunning manager of the offering on behalf of the underwriters.
The Convertible Notes will have a semi-annual cash interest coupon to be determined at pricing and will be convertible into Northgate common shares at a fixed conversion rate to be determined. Northgate may, in lieu of delivery of common shares upon conversion of all or a portion of the Convertible Notes, elect to pay cash or a combination of cash and common shares. The Convertible Notes will not be redeemable by Northgate prior to maturity, except upon the occurrence of certain changes to the laws governing Canadian withholding taxes. Holders of the Convertible Notes may, upon the occurrence of certain specified events, require Northgate to repurchase for cash all or a portion of their Convertible Notes at a price equal to 100% of the principal amount of such Convertible Notes, plus any accrued and unpaid interest. The offering of Convertible Notes is expected to close, subject to market conditions and satisfaction of closing requirements, on or about October 5, 2010.
Northgate intends to use the net proceeds of the offering to finance a portion of the development costs of its Young-Davidson gold mine near Matachewan, Ontario. As of June 30, 2010, Northgate's pre-production capital cost estimate for Young-Davidson is approximately US$339 million. Northgate's cash balance as of June 30, 2010 was approximately US$204 million. The Young-Davidson mine is currently scheduled to begin producing gold in early 2012.
A registration statement relating to these securities has been filed with and declared effective by the United States Securities and Exchange Commission, and the base shelf prospectus and preliminary prospectus supplement relating to these securities has been filed with certain provincial securities regulatory authorities in Canada.
A copy of the preliminary prospectus supplement and the short form base shelf prospectus may be obtained in the United States from UBS Securities LLC at 299 Park Avenue, New York, NY, 10171 (1-888-827-7275 telephone) or in Canada from UBS Securities Canada Inc. at 161 Bay Street, Suite 4100, Toronto, Ontario, M5J 2S1 (416-364-3293 telephone).
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Convertible Notes in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
Cautionary Note Regarding Forward-Looking Statements and Information:
SOURCE: Northgate Minerals Corporation
Ms. Keren R. Yun, Director, Investor Relations,
Tel: 416-216-2781,
Email: ngx@northgateminerals.com
http://www.northgateminerals.com/NewsReleases/NewsReleaseDetails/2010/Northgate-Minerals-Announces-Launch-of-US135-Million-Public-Offering-of-Convertible-Notes1122816/default.aspx
Young-Davidson Gold Mine -
a snippet historic reflexion -
Hollinger Mines was one of the great mining companies
of North America, operating the Hollinger Mine that
produced over 19.6 million ounces of gold
(second only in scale of production and profitability
to Homestake Mines operating in North Dakota).
Despite having a much larger mine as its core operation -
Hollinger ran
The Young-Davidson Mine -
because it was profitable and Au rich -
each and every year -
paying its initial capital back -
in a remarkable two and a half years -
Mining is, after al,l a business and the
bottom line a key metric -
is profitability (difference between revenue and costs)
is important -
Hollinger was able to achieve this profitability -
and what attracted Northgate to the property -
These advantages are (and were) the ability to start
with an open pit and then develop the large underground
mining units, the relatively simple metallurgy that
allowed high volumes of material to be processed at
low unit costs with high recoveries of gold and the
attractive location relative to the infrastructure
required to operate a mine -
The Young-Davidson Gold Mines -
A view of the Young-Davidson Gold Mine -
with the mill and headframe in the centre -
of the picture -
Twenty-two years and more than six million tones since
operations at the Young-Davidson Mine got underway,
steps are now being taken at Matachewan
to close the mine but not before even the most
optimistic of early expectations have been
exceeded several times over -
still they may got a smell of the large -
Gold Au treasures below -
http://www.northgateminerals.com/OperationsProjects/Young-Davidson/default.aspx
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