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

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

NXG 50.72

+1.3%

Nov 3 3:59 PM EST

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To: Northern Marlin who wrote (41)	6/27/2004 9:18:32 AM
From: tyc:>	of 148

Please see; Message 20256744 "The Sustut deposit was deemed uneconomic with copper prices below .90c per lb.". I remember when this information was first made public. .90c per lb equaled C$1.20 per lb Canadian. Mining is a risky business and no enterprise would be undertaken unless it provided an attractive IRR (Internal rate of return). Is it valid to believe that the Sustut would provide an acceptable IRR with copper above .90c (C$1.20)? Probably NOT ! But hang on a minute !! The proposal envisaged when the feasibility study was intitiated was that Doublestar would provide ALL the capital for the mine, but that the profits would be split 50-50 between Doublestar and Northgate. Does that not imply that above .90c copper ONE HALF of the profits might provide an adequate IRR for the entire capital requirement ? When Northgate acquires 100%, is it not therefore reasonable to believe that Sustut would be viable even at the full capital costs envisaged by the feasibility study ? Will this deposit be an "enabler" for the low grade North Kemess ?

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