Northgate Minerals has announced positive results from an NI 43-101 preliminary assessment report for its 100%-owned Kemess Underground project in north-central British Columbia, 5 km from its Kemess South mine. The report outlines development of an underground block/panel cave operation, producing an average of 95,000 oz/y of gold and 41.4 million lb/y of copper over a mine life of approximately 12 years.

The Kemess South mill processed its last ore in March 2011 and is being placed on care and maintenance. The Kemess Underground project will make use of the Kemess South infrastructure and mill facilities. Pre-production capital to develop the underground mine is estimated at $437 million, primarily to be spent for mine development and mine equipment, including mobile equipment, crushers and conveyors. Net cash costs of production are estimated at $115/oz of gold.

The Kemess underground report was prepared by AMC Mining Consultants (Canada) and is based on an indicated resource of 136.5 million mt, containing 2.6 million oz of gold at an average grade of 0.56 g/mt and 860.6 million lb of copper at an average grade of 0.29%. There is also an inferred resource of 6 million mt.

The Kemess Underground deposit is located at a depth of 300 m to 550 m below surface. The report outlines an

8-million-mt/y, highly automated, trackless, block caving operation. Ore will be extracted from drawpoints and transferred to ore passes by electric-powered scoops. Diesel-powered trucks operating on a transfer level below the extraction level will transfer ore to a primary crusher. Crushed ore will be conveyed out of the mine in a single 3.4-km run to a surface portal and then transferred to a 4.7-km overland conveyor system, leading to the existing Kemess mill infrastructure.

Ore will be processed through the existing mill at a nominal rate of 24,000 mt/d. The final product will be a gold-copper concentrate containing 22% copper and approximately 1 oz/mt gold for sale to copper smelters in North America or Asia. Only minimal modifications and upgrades to the existing mill are expected to enable efficient processing of Kemess Underground ore.

Mill tailings will be impounded in the existing Kemess South open-pit, which is permitted for tailings disposal and was used for that purpose toward the end of the Kemess South mine life.

Based on the results of the preliminary assessment, Northgate has initiated a full feasibility study, with expectations that it will be completed over the next year.

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