1987 financial results, best ever for Northgate

Following the sale of its Chibougamau gold/copper mines to Western Mining Corp. of Australia, Northgate Exploration recently reported its best ever financial results.

Northgate ended the year with approximately $204 million or $9.70 per share in working capital which puts the company in a good position to make some North American gold acquisitions.

It recently acquired a 20% equity position in Vancouver-listed Chelsea Resources and a 13% equity stake in Campbell Resources of Toronto. As reported (N.M., Feb 22/88) Northgate has an option to increase its Campbell interest to 19.6%.

For the year ended Dec 31, Northgate reported consolidated net income of $60.2 million or $3.30 per share, compared to a loss of $4.8 million or 34 cents per share at the same time last year.

Northgate says its 1987 results include a gain of $67 million ($58 million after provision for taxes) from the sale of its Copper Rand and Portage Island mines in Chibougamau.

The 12-month results also include an extraordinary tax recovery of $3.5 million from losses recorded in 1986, the company says.

Northgate’s gold production dropped from 84,000 oz in 1986 to 70,000 oz (including 3,600 oz from subsidiary Orofino Resources which increased its gold output from 2,600 oz last year) in 1987.

Due to a one-month strike at the Copper Rand mill, Northgate’s copper production also declined from 20.4 million lbs in 1986 to 16.1 million lbs in 1987.

“Northgate intends to re-invest its substantial resources in gold production in North America and to make a decision on the possibility of making a special distribution to shareholders by the annual meeting in May,” said President John Kearney.

The Northgate issue was trading recently on the Toronto Stock Exchange at $7.50 in a 52-week range of $13 and $5.13.