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NORTHGATE REPURCHASES 24,000 OUNCES OF ITS GOLD HEDGE BOOK-SETTLEMENT REACHED IN JAMESTOWN LITIGATION
VANCOUVER, BRITISH COLUMBIA, May 31, 2006 (CCNMatthews via COMTEX News Network) --
Northgate Minerals Corporation (TSX:NGX)(AMEX:NXG) today announced that during the month of May 2006, it continued to reduce the size of its gold hedge book by repurchasing 24,000 ounces of its gold forward sales position at a cost of approximately US$8.34 million. The cost of closing out these forward contracts in advance of their original settlement dates will be deferred and amortized over the period that the contracts were originally scheduled to settle (June 2006 - September 2006). Northgate now has only 90,000 ounces of gold forward sales contracts remaining at a forward price of $307 per ounce and this position represents only 2.5% of the total proven and probable reserves within the Kemess camp.
In an unrelated event, Northgate is pleased to announce that it has reached a settlement with plaintiffs, the Regional Water Quality Control Board for the Central Valley Region of California and the California Attorney General, and all other defendants named in a lawsuit alleging environmental violations in connection with an inactive gold mine located in Tuolumne County, California, known as the Jamestown Mine. The settlement has been signed by all parties and became effective on May 12, 2006. Under the terms of the settlement, Northgate will pay the State of California US$5 million by June 12, 2006. Effective upon receipt of the settlement payment by the State, Northgate will be released from all known and unknown claims related to the Jamestown Mine, and the State of California will dismiss Northgate from the lawsuit with prejudice, thus bringing the matter to a close. |
