New gold zone at Northgate’s Young-Davidson

Northgate Minerals (NGX-T, NGX-X) has found a new gold zone at its Young-Davidson project near Matatchewan, Ont. close to the area of the proposed mine shaft.

“These holes were originally drilled as condemnation holes to make sure there was no ore in the proposed shaft area,” says Northgate geologist Iain McIlwraith.

McIlwraith says the new mineralization won’t affect the location of the shaft. Two holes were drilled on a 70 degree angle and the mineralization isn’t where the actual shaft will be built.

“(The assays) place the new zone several hundred metres south of the proposed shaft location,” McIlwraith says. “The best case scenario is that we find more ounces … It’s beneficial in that it’s close to the proposed shaft location.”

McIlwraith says that historic drawings showed the potential for mineralization near the shaft so they weren’t surprised when the assays came back.

He says now it just requires further drilling to determine the extent of the mineralization.

The drill cut through syenite-hosted gold mineralization located about 300 metres east of the known reserves and resources for the project.

Northgate is working on a feasibility study right now with the aim of completing it by the end of the year.

The prefeasibility study, released in July, suggested building a 6,000-tonne per day operation that would produce 170,000 oz. gold per yar over a 15-year mine life. Net cash costs were projected at US$333 per oz., after-tax operating cash flow of US$736 million, net present value of US$370 million (5% discount) and an internal rate of return of 18.4%.

The Yonge Davidson project has reserves totaling 2.8 million oz. gold contained in 31.1 million tonnes of ore.

About 4.9 million tonnes grading 1.66 grams gold per tonne would be mined from an open pit (264,000 oz.). The rest would come from underground – 22.7 million tonnes grading 2.92 grams gold per tonne for 2.1 million oz. gold under the probable category and another 3.5 million tonne grading 3.22 grams gold per tonne for 359,000 oz. under the proven category.