OMA Member Profile: Northgate Minerals – New Mines for Old Ontario Sites

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Ontario Mining Association member Northgate Minerals is building one of the province’s newest gold mines upon the foundation of past producers.  The company is investing $339 (U.S.) million to construct the Young-Davidson Gold Mine.  Production is scheduled to start in early 2012 and plans call for annual production of 180,000 ounces of gold over a 15 year mine life.  Recent exploration results show promise of increasing the 2.8 million ounce reserve, which would extend the mine’s operation beyond that time frame and allow Northgate to increase annual gold production.

Young-Davidson is located near Matachewan in northeastern Ontario and is about 60 kilometres west of Kirkland Lake.  The site covers the operations of two historic gold mines, which produced about 1 million ounces of the precious metal from the mid-1930s to mid-1950s.  Northgate purchased the Young-Davidson property in 2005.

“Our vision since the moment we stepped onto the property has been to build a financially robust and long-life gold mine in one of the best mining jurisdictions in the world,” said Ken Stowe, President and Chief Executive Officer of Northgate.  “Once production commences in 2012, Young-Davidson will become the new cornerstone of our company.”

“We also recognize the importance of the project for Northern Ontario,” he added.  “We are proud to be participating in the revitalization of the Kirkland Lake gold camp and contributing to the local and provincial economy as a whole.  With the added benefit of today’s gold prices, we see a long future ahead for the project, for the local and surrounding communities and for our company.”

In this case, the old saying that the best place to find a new gold mine is near an existing gold mine has more merit than ever.  Over time, technology for the detection of ore bodies, mining processes and metallurgical recoveries all improve often making old sites worth a fresh look and assessment. 

Along with technological advances you have to look at economics. The price of gold today is hovering around $1,300 an ounce.  In the 1930s through to the 1950s, the price was about $35 per ounce.  Technological advances and changing economics and markets can turn old mineral properties into new mines, if individuals and companies have the vision and dedication to make it work – something Northgate has every intention of executing.

Surface construction activities began in the summer of 2010 and it is expected that the mine will employ about 600 people during its two year construction period.  Once production commences, about 275 people will be employed annually during the operating life of the mine.  Using a 6,000 tonne-per-day mill processing facility, ore will be sourced from an open pit for the first two years, before operations move exclusively underground for the remainder of the mine’s life.

The company has established a strong working relationship with the local Matachewan First Nation signing an impact and benefit agreement in 2009.

Northgate Minerals is a gold and copper producer with mining operations, development projects and exploration properties in Canada and Australia.  In 2010, the company produced more than 272,000 ounces of gold and more than 40 million pounds of copper from its three operating mines: Kemess South Mine in British Columbia and the Fosterville and Stawell gold mines in Australia. 

The company’s headquarters are in Toronto.  The company started in 1919 under the original name Kirkland-Hudson Bay Gold Mines Ltd.  In 1958, the name was changed to Northgate Exploration and then to Northgate Minerals in 2004.

Northgate Minerals is an active and long serving member of the OMA.  This article is the sixth in a series of profiles of OMA member companies and their contributions to the vitality of Ontario’s society and economy.