Good gold grades from Northgate’s Young-Davidson (February 11, 2008)

VANCOUVER–As if to offset its setback at its Kemess North copper-gold project in B.C., Northgate Minerals (NGX-T, NXG-X) is pulling strong gold grades out of its Young- Davidson project in Ontario.

Results from 13 new diamond-drill holes extended the expanse and depth of known mineralization at the property, which is situated 60 km east of Kirkland Lake in the Abitibi Greenstone Belt. In the Lower Boundary Zone, hole 42B intersected 22.1 metres grading 2.62 grams gold per tonne from 875.5 metres depth, followed a short distance later by 9.1 metres grading 46.8 grams gold. The hole was collared between the C1 and C2 dykes and thus confirmed the continuation of the Lower Boundary zone in that area.

Hole 53 was the deepest and most westerly hole drilled in the Lower Boundary zone. Drilled to a depth of over 1.5 km, it returned a thick intersection of 80.8 metres grading 2.68 grams gold from 1,405 metres down-hole, including 18 metres of 3.47 grams gold. The results confirm that the zone remains open at depth and continues towards the Lower YD zone to the west.

Northgate is developing a 3-km underground exploration ramp, morethan half of which is complete. The first five holes drilled from the new ramp probed the Lucky zone. Hole R-2 returned 3.98 grams gold over 29.5 metres from 216 metres depth, including 8.65 grams gold over 9.1 metres. Hole 4, drilled to test the west limit of the zone, did not return any significant results. Holes 1 and 3 were abandoned for technical reasons before reaching target.

In the Lower YD zone, hole 46A — the deepest hole to date — intersected a dyke at the zone horizon and only returned 1.17 grams gold over 41.3 metres, in what is thought to be footwall rock. Four other drill holes were punched into the west flank of the zone, at various levels, and all intersected mineralization.

Hole 50, the lowest hole, hit 3.03 grams gold over 24 metres from 1,046 metres depth. Above that, hole 52 cut 15.4 metres grading 1.9 grams gold from 644 metres depth, hole 55 returned 4.12 grams gold over 15.6 metres from 549 metres down-hole, and hole 54 intersected 24.8 metres grading 2.4grams gold from 386 metres depth.

News of the drill results pushed Northgate up 8 or 3% to close at $2.95. The company has a 52-week trading range of $2.45-4.55 with 254 million shares issued.

Young-Davidson is situated on the site of two past-producing mines. An estimate from late 2006 pegged the project’s measured and indicated resources at 12 million tonnes containing 1.06 million oz. gold. More than half of the tonnage sits in open-pit targets, grading just over 2 grams gold; the rest is held in underground zones, grading 3.6 grams gold. Inferred resources add another 8.9 million tonnes containing 1.07 oz. gold.

In April 2006, Northgate adopted an accelerated development plan, aiming for production in 2010. The company spent $27 million on the project in 2007, $22 million of which went into ramp excavation and shaft dewatering.

In other Northgate news, the need to realign a potion of the ramp system in the west end of the Kemess South pit is delayed access to the high-grade gold ore that was to be milled in December. The realignment was necessary in order to repair localized cracking and deterioration in a 150-metre section of the ramp.

Mill feed for December instead came from the high-copper, low-gold supergene ore stockpile. As a result, fourth-quarter gold production is now forecast at 45,000 oz., down 20,000 oz. from a previous forecast. The mine is now expected to produce 21 million lbs. copper in the quarter, up 4 million lbs.

In September, a joint federal-provincial environmental review panel recommended against development of Northgate’s Kemess North project.