ONTARIO - On September 14, Vancouver-based NORTHGATE MINERALS CORP. and Toronto-based and YOUNG-DAVIDSON MINES, LTD. announced that they have agreed to merge. Under the terms of the agreement, approved by both boards of directors, Northgate will issue 0.7212 common shares of Northgate for every share of Young-Davidson. Completion of the transaction, scheduled for November, is subject to the shareholder and regulatory approval. Upon closing, Northgate will issue approximately 13.85 million shares and convertible securities to Young-Davidson security holders, valuing the transaction at Cdn$20 million.
This acquisition diversifies Northgate into another politically stable, mining-friendly jurisdiction with community support for mining. The Young-Davidson property is 60 km west of Kirkland Lake, accessible by a provincially maintained highway. The property consists of contiguous mineral leases and claims totaling 4,400 ha. It has resources containing 1.5 million ounces of gold, including almost half a million ounces of gold (measured & indicated resources) within a low-strip-ratio open pit configuration, and slightly more than one million ounces of gold (inferred resources) in a low-cost bulk mineable underground configuration. The resources were verified by an independent 43-101 compliant technical report prepared by MICON INTERNATIONAL LTD.
Prior to the consolidation of the property by Young-Davidson, various claims were held by a number of parties and in the 1930s through the early 1950s. Two separate mines were operated by Ventures Ltd. and Hollinger Mines, producing a total of almost one million ounces of gold from almost 10 million tonnes of ore. The underground orebodies exploited by these historic operators had exceptionally low cost structures brought about by the low-cost bulk mining configuration of the ore, high gold recoveries (93%) through a simple metallurgical process and environmentally benign waste rock and tailings.
The post-acquisition exploration program is scheduled to begin in early 2006 with an initial Cdn$3-million diamond drilling program focusing on the many established targets within the claim package. There is excellent potential to double the current underground resource base at the Young-Davidson property and convert a large portion of the inferred resources into reserves. For further information visit www.northgateminerals.com or www.youngdavidson.com.
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