The preliminary assessment projects Young-Davidson’s average annual production at 158,000 oz/y of gold at a net cash cost of $405/oz, assuming a gold price of $635/oz and a currency exchange rate of $1:C$0.90. The current mine plan calls for recovery of 1.75 million oz of gold over a 12-year mine life. Initial capital cost is estimated at $306 million.

The preliminary assessment is based on underground mineral resources of 11.49 million mt indicated, grading 3.79 g/mt gold, and 3.99 million mt inferred, grading 3.35 g/mt gold, using a 1.90 g/mt gold cutoff grade. Open-pit mineral resources total 4.28 million mt indicated, grading 2 g/mt gold, and 40,000 mt inferred, grading 2.11 g/mt, using a 0.80 g/mt gold cutoff.

During the initial three years of production, feed to the Young-Davidson mill will be sourced from a small open-pit and the upper region of the underground mine. The open-pit design incorporates 10-m-high benches and 15-m-wide haul roads to accommodate planned use of 50-mt haul trucks. The stripping ratio for the open pit is 2.9:1. Production from underground will be ramped up as the open-pit production declines. For the last nine years of the projected mine life, mill feed will be provided exclusively from the underground mine.

The underground deposit is located between 210 m and 1,300 m below the current surface. A 6-m-dia shaft will be sunk in the footwall to a depth of 1,390 m. The underground mine will be developed on 50-m sublevel spacing, using sublevel open stoping mining methods. Scooptrams of 17-mt capacity will load and haul stope production to an ore pass system. Hoisting to surface will be via 18-mt skips. Initial mining capital costs are estimated at $103.2 million for purchase of underground mobile equipment and completion of the shaft, ramp, initial lateral development, ventilation raises, and a paste backfill plant.

Gold will be recovered by gravity, flotation, and standard CIL circuits. Preliminary metallurgical evaluations indicate gold recoveries averaging 91.5% over the mine life. The initial capital cost of the process plant is estimated at $69.3 million.

Electric power for the mine site will be supplied by upgrading approximately 50 km of an existing 115 kV power line and installing 7 km of new 115 kV line. A preferred on-land location for the tailings impoundment facility has been identified that incorporates and remediates an historic tailings site.

Development of the Young-Davidson mine will bring substantial economic development to the village of Matachewan and the surrounding district. A construction workforce of 600 people will be created at the peak of a two-year construction period, and the mine will provide direct employment for 250 people over its 12-year operating life. Northgate has been working cooperatively with the Matachewan First Nation since it began exploring the Young- Davidson property in 2006.

Northgate President and CEO Ken Stowe said, “We are confident that the economics of the project will continue to improve as exploration drilling increases the known resource and the geotechnical drilling program provides more information about ground conditions in the area. We will be placing orders for certain long-lead-time equipment in the coming months to keep the project on schedule for an early 2011 startup.”