Feb 16 2011
Northgate Minerals Corporation (TSX: NGX, NYSE Amex: NXG) has reported an updated NI 43-101 compliant resource estimate for the Kemess Underground Project, located five kilometres north of the Kemess South mine and milling complex in north-central British Columbia.
The updated resource estimate follows on the completion of a 30-hole infill diamond drill program at Kemess Underground in 2010.
Highlights
- Indicated Resource of 136.5 million tonnes ("Mt") containing 2.6 million ounces of gold and 860.6 million pounds of copper. - Identified a 10.3 Mt, high-grade sector of the overall resource containing 450,000 ounces of gold and 119 million pounds of copper grading 1.35 grams per tonne ("g/t") gold and 0.52% copper, respectively. - Northgate has engaged AMC Mining Consultants ("AMC") to complete technical studies, which will be incorporated into a NI 43-101 compliant Preliminary Assessment.
"We are very pleased with the results of the new resource estimate for Kemess Underground, which has exceeded our initial expectations and increased our confidence in this significant resource" commented Ken Stowe, President and Chief Executive Officer. "In addition to increasing the gold and copper content of the resource, the 2011 drill results have identified a continuous, high-grade sector of the resource, which should allow us to enhance the value of the project if it can be scheduled for mining during the early years of production. In the third quarter of 2011, we look forward to filing a Preliminary Assessment, which will outline the economics for mining a large portion of the identified resources."
Kemess Underground - Synopsis
The 2010 infill diamond drill program was designed and executed to increase confidence in the grade distribution, location and geotechnical characteristics of a target area containing approximately 70 Mt of mineralization that had been identified as potentially mineable using low-cost bulk underground mining methods. The target area is situated in the eastern portion of the Kemess North deposit(1) approximately 300 and 600 metres ("m") below surface. The target zone of 70 Mt was initially estimated to contain approximately 1.4 million ounces of gold and 500 million pounds of copper using a resource model based upon an internal revision of the 2005 NI 43-101 resource estimate for Kemess North and an engineered outline at a $15 Net Smelter Return ("NSR") cut-off for vertical columns of blocks. The target zone was a potentially mineable subset of a larger Indicated Resource of 121.1 Mt containing 2.3 million ounces of gold and 819 million pounds of copper.
Using a $15 block NSR cut-off, the new 2011 Indicated Resource estimate for Kemess Underground is now 136.5 Mt containing 2.6 million ounces of gold, 860.6 million pounds of copper and 9.2 million ounces of silver.
Kemess Underground 2011 Resource
The 2011 resource estimate captures all drilling completed to November 2010 and is based upon a total of 146 drill holes. Initial estimates for underground bulk mining costs, combined with milling and general and administrative (G&A) costs consistent with the size of operation envisioned for the Kemess underground, indicate that a mine could be economically viable with a NSR cut-off in the range of $13-$15 per tonne of ore.
At a $15 NSR cut-off, the total Indicated Resource for Kemess Underground is 136.5 Mt containing 2.6 million ounces of gold, 860.6 million pounds of copper and 9.2 million ounces of silver. The 2011 resource is a significant improvement over the May 2010 resource, which showed 121.1 Mt containing 2.3 million ounces of gold and 819 million pounds of copper at a $15 NSR cut-off. This represents an 18% increase in tonnes, a 10% increase in contained gold and a 9% increase in contained copper, resulting from better definition of the +1.0 g/t material within the target area and on improved metal price assumptions.
The 2011 mineral resource estimate will form the basis of a Preliminary Assessment, which Northgate expects to file in the third quarter of 2011 once AMC has completed engineering studies relating to the geotechnical and economic feasibility of developing an underground mine at Kemess.
High-Grade Sector
The 2010 infill drilling reported some of the highest grade intercepts on the Kemess property and it is clear that these intercepts come from a continuous zone measuring 350 m x 180 m x 90 m located adjacent to two faults in the north-east corner of the deposit. The resources within the high-grade sector amount to 10.3 Mt grading 1.35 g/t gold, 0.52% copper and 3.09 g/t silver. There are obvious economic benefits of having 450,000 ounces of gold, 119 million pounds of copper and 1.03 million ounces of silver contained within a small tonnage that could be scheduled for mining early on in the mine-life to provide higher cash flow in the early years and a better payback.
Resource Estimate Details
A 20 m x 30 m x 20 m block model was generated by Northgate's resource geologist under supervision by the qualified person noted below. Grade for copper and gold was estimated by ordinary kriging interpolation methods from 6 m uncapped composites of diamond drill core samples. Silver grades were estimated using silver analytical values and co-kriged with copper using a cross variogram.
Qualified Persons
The program design, implementation, quality assurance/quality control and interpretation of the results are under the control of Northgate's geological staff, which includes a number of individuals who are qualified persons as defined under NI 43-101. Carl Edmunds, PGeo, Northgate's Exploration Manager, has reviewed the technical contents of this release.
Source: Northgate Minerals Corporation