Northgate reports record quarterly net income
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VANCOUVER, British Columbia--(BUSINESS WIRE)--Oct. 30, 2003--(All figures in US dollars except where noted) - Northgate Exploration Limited (TSX: NGX, AMEX: NXG) today reported cash flow from operations before changes in working capital of $14,697,000 or $0.07 per common share (fully diluted) for the three months ended September 30, 2003, from record production of 84,132 ounces of gold and 17.3 million pounds of copper. Net earnings for the quarter were $7,050,000 or $0.04 per common share.
2003 Third Quarter Highlights
Record cash flow from operations of $14.7 million and net earnings of $7.1 million.
Kemess produced a record 84,132 ounces of gold in the third quarter at a cash cost of $201 per ounce net of by-product credits using the Company's full absorption method ($151 per ounce - Gold Institute method)
Quarterly production records were established for mill throughput at 54,269 tonnes/day and mine output at 144,000 tonnes/day.
The Kemess mill achieved record quarterly availability of 93% as a result of continued optimization maintenance practices and operating procedures.
Kemess North Pre-feasibility study was completed outlining a mineable resource containing 4 million ounces of gold and 1.4 billion pounds of copper that would extend operations in the Kemess Camp until 2019.
Ken Stowe, President and CEO, stated, "I am delighted to report that our strong operating results, combined with buoyant prices for gold and copper, produced substantial cash flow and net income for Northgate's shareholders in the third quarter of 2003. In the fourth quarter, we now expect to produce 77,000 ounces of gold and over 21 million pounds of copper which would bring our annual 2003 production to a record 292,000 ounces of gold and 75 million pounds of copper. We anticipate continued improvements in gold and copper prices, the impact of which will be reflected in higher cash flow and a lower cash cost for gold in the fourth quarter."
OPERATING RESULTS
Management's Discussion and Analysis
Northgate reported cash flow from operations (before changes in working capital) of $14,697,000 in the third quarter of 2003 compared with cash flow of $5,394,000 during the same period last year. Net earnings for the quarter were $7,050,000 or $0.04 per common share compared with a net earnings of $977,000 or $0.01 per common share during the same period last year.
Northgate's total revenues for the third quarter were $38,261,000 compared with $27,970,000 for the corresponding period in 2002. The increase in revenue during the current quarter resulted from a 15,000-ounce increase in gold production and higher realized prices for gold and copper. The average metal prices received on sales in the third quarter of 2003 were approximately $363 per ounce of gold and $0.80 per pound of copper compared with $314 per ounce and $0.69 per pound last year.
Total operating expenses in the third quarter of 2003 were $20,220,000, only 9% higher than the corresponding period last year even though mine production increased 36% and mill throughput increased 7%. Cash costs in the third quarter of 2003 were $201 per ounce, slightly lower than the $209 per ounce recorded in the comparable quarter in the previous year but significantly improved over the $252 per ounce figure in the first half of 2003. The decline in cash cost in the third quarter was primarily attributable to substantially higher gold production but higher copper prices also had a positive effect.
Net interest expense declined slightly to $1,139,000 for the three months ended September 30, 2003 from $1,152,000 during the corresponding period in 2002.
Administrative and general expenses were $863,000 in the quarter compared with $326,000 in the corresponding period of 2002. The increase was the result of certain non-recurring legal expenses.
Depreciation expenses in the third quarter were $7,363,000 compared with $4,379,000 in the corresponding period of 2002. Depreciation charges were unusually low in the third quarter of 2002 because the Kemess mill processed a substantial quantity of stockpiled supergene ore that had been depreciated as it was mined from the Kemess South open pit in earlier quarters of 2002. In the third quarter of 2003, more than 60% of the supergene ore processed in the mill was mined from the pit during the quarter.
Capital expenditures during the third quarter of 2003 totaled $5,206,000 compared with $5,958,000 in the third quarter of last year. Ongoing construction of the tailings impoundment facility represented the majority of these expenditures with the balance of approximately $1.25 million related to the Kemess North feasibility study. |
