Northgate Exploration Limited - TSX: NGX; AMEX: NXG Message Board

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Gold/Mining/Energy : Northgate Exploration Limited - TSX: NGX; AMEX: NXG

NXG 50.48

+0.8%

2:22 PM EST

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To: Northern Marlin who started this subject	7/31/2004 8:16:05 AM
From: Northern Marlin	of 148

NXG's hedge situation, from their 2Q04 earnings press release: In the second quarter of 2004, the Corporation closed out 21,750 ounces of its gold forward sales position, which reduced the realized price of gold sold during the quarter by $19 per ounce. During their conference call management stated they'll reduce the hedge by 21,750 in each of the next 2 quarters. Since they had 304,500 ounces hedged as of 6/30/04 it's pretty easy to figure that the hedge will be reduced by 21,750 ounces for the next 14 quarters. 14 quarters X 21,750 ounces = 304,500 ounces The forward sales contracts end on 12/31/07. Any earnings model for the next 14 quarters must include quarterly sales of 21,750 ounces at $307/oz. This will knock roughly a penny per share off of earnings each quarter if gold averages $400/oz and shares outstanding stay near 200 million. Phil

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