Northgate drilling indicates deep zone at Kemess (January 02, 2006)

Exploration drilling east of the proposed open pit at the Kemess North copper-gold deposit in northwestern British Columbia has intersected similar mineralization to a hole drilled earlier in the year.

Owner Northgate Minerals (NGX-T, NXG-X) drilled two deep holes as a follow-up to an earlier hole, KN05-24, which had intersected 307 metres grading 0.24% copper and 0.3 gram gold per tonne about 300 metres east of the known resource at Kemess North. The hole included two higher-grade sections, one of 38 metres grading 0.41% copper and the other of 30 metres grading 0.36% copper; both of those intervals ran about 0.5 gram gold.

The two new holes were spotted 90 metres north of the discovery hole and tested to about the same depth. Hole KN05-27 cut 307 metres averaging 0.21% copper and 0.2 gram gold per tonne.

KN05-28 cut 508 metres that averaged 0.18% copper and 0.2 gram gold, but that mineralization was about 400 metres closer to surface than in the other two holes. Northgate’s geological staff point to the possibility that the mineralization has been block-faulted upward.

The newly discovered mineralized zone lies east of a fault that had been thought to be the eastern limit of the Kemess North mineralization. It is south of another fault that is believed to bound the mineralization on the north. The deeper of the two higher-grade intervals in the first hole occurs near the contact of the host rocks, the Takla volcanics, with a quartz-monzonite intrusion.

The company plans a US$2.5-million drilling program for 2006, partly on this “North Offset” mineralization and partly on the Kemess East target.

Earlier this month, Northgate wrapped up its buyout of Young Davidson Mines for 13.1 million shares and just short of 750,000 options. The acquisition gives Northgate the 35-sq.-km Young Davidson property just west of Matachewan, Ont., where a measured and indicated resource of 6.8 million tonnes grading 2.1 grams gold per tonne has been outlined near surface. There is also an inferred resource, largely underground, of 8.1 million tonnes at an average 3.9 grams per tonne.

Young Davidson shareholders received 0.7212 of a Northgate share for one Young Davidson share in the exchange.

The company reported earnings of US$8.8 million (US4 per share) on revenues of US$50.4 million in the three months ended Sept. 30, compared with US$10.1 million (US5 per share) on revenues of US$51.3 million in the third quarter of 2004. For the first nine months of 2005, Northgate is showing a loss of US$5 million (US2 per share) on revenues of US$122 million, against earnings of US$20.3 million on revenues of US$137 million at the same point in 2004.