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Gold/Mining/Energy : NORTHGATE EXPL (NGX.TO) -- Ignore unavailable to you. Want to Upgrade?

To: peter snowdon who wrote (34)	6/7/2002 11:01:49 AM
From: tyc:>	Read Replies (1) \| Respond to of 158

FWIW....Here's a bit of Math that may be worth considering: Northgate estimated their production this year would be 295,000 ounces of gold and 84,000,000 lbs of copper, and that with copper at .70c, cash costs would be $176 per ounce of gold. For every penny change in the price of copper, cash flow therefore increases by $840,000. The same change in cash flow would be accomplished by a $2.85 change in the price of gold. That means that a 1 cent increase in the price of copper is equivalent to a $2.85 increase in the price of gold. Fix cash costs at $176 per ounce; with copper currently at .77 cents per lb, seven cents higher than is needed for $176 cash costs, it is as if the price of gold for Northgate was (7 * 2.85) $20 higher than the current market price, or say $347. Cash costs $176; current price $347, for a forecast estimate of 295,000 ounces of production. Whether their production and cost estimates will be met, remains to be seen.