Northgate secures funds for Kemess mine in B.C.

Northgate Exploration (NGX-T) has arranged a US$100-million financing package from Scotia Capital, which will be used to repay a portion of the US$145-million bridge loan provided by Trilon Financial for the company’s acquisition of the Kemess gold-copper mine.

Technical due diligence and legal documentation for the financing will begin immediately, with funding expected before the end of August.

Earlier this year, Northgate acquired a 95% interest in the Kemess mine in north-central British Columbia for about US$180 million. The previous operator was Royal Oak Mines. The open-pit gold mine is expected to turn out 280,000 oz. gold and 55 million lbs. copper per year over a 9-year mine life.

Currently, Kemess is producing 124,000 tonnes of ore and waste per day. The pit at the Kemess South deposit has a low stripping ratio of 1.1-to-1 and contains 163 million tonnes averaging 0.67 gram gold per tonne and 0.23% copper.

Northgate’s geologists believe that Kemess Centre, about 1 km north of Kemess South, may be the root system that fed the Kemess South deposit. “We believe Kemess Centre will yield similar mineralization to what is seen at the base of the Kemess South deposit,” says Michael Hibbit, the company’s chief geologist.

Another area of promise is Kemess North, about 4 km from the South deposit. The resource there consists of 74 million tonnes grading 0.34 gram gold per tonne and 0.09% copper.

“We want to see if we can bring the higher-grade portions into production, while, at the same time, mine the South deposit,” says Hibbits. “Of course, if it’s large enough, we’ll bring it into production on its own.”