Struggling Northgate names new chairman, president (May 25, 1992)

Toronto-based Northgate Exploration (TSE) named a new chairman and president at its annual meeting and appointed an honorary chairman.

John Kearney has moved to the chairman’s seat from the presidency. Replacing Kearney as president is John Kachmar, who was a vice-president of the company and who served formerly as president of gold producer Dickenson Mines.

Retiring from active service with the company he acquired in 1958 was Patrick Hughes, who moves from the chairman’s post to honorary chairman. Formed 35 years ago from an existing publicly traded company, Northgate spent its early years in mining activities overseas, in particular in Ireland. During the 1980s, it operated mines in the Chibougamau, Que., area. Today, Northgate acts mainly as a holding company, with equity positions in a number of companies. Included in its stable of companies is Campbell Resources (TSE), which is 35% owned and which operates the growing Joe Mann gold-copper mine southwest of Chibougamau.

Other holdings include 52% owned NorthWest Gold (Amex), which has an interest in Sonora Gold (TSE) and which is the owner of the closed Colomac gold mine in the Northwest Territories.

Northgate also has a 40% interest in junior Geddes Resources (TSE) and a 35% direct interest in the producing Choquelimpie gold mine in Chile. Choquelimpie, with depleting reserves, will probably be closed late this year after about four years of operation.

For 1991, Northgate recorded a loss of $70.7 million compared with a loss of $118 million in 1990. During the last quarter of 1991, the company recorded a charge against earnings of $65.8 million to reflect a decline in value of its investments and joint venture mining interests.

During the first quarter of 1992, Northgate reported a loss of $747,000 compared with a loss of $1.3 million for the same period a year earlier. Kearney said the company, for 1992, plans to sell its non-core assets to increase liquidity.

Kearney said more than $10 million has been raised since the beginning of the year through a rights offering of $4.3 million and the sale of non-core assets (Orofino Resources and the company’s interest in Ennex International were sold) for about $6 million.

Northgate has almost 28 million shares outstanding. Its two largest shareholders are Westfield Minerals (24% interest) and MacKenzie Financial Corp. (11.75% interest). Shares of Northgate were recently trading in the 78 cents range.