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Northgate Minerals losses widen on lower production, higher costs

Last updated: 16:43 08 Mar 2011 GMT, First published: 17:43 08 Mar 2011 GMT

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Northgate Minerals (TSE: NGX, AMEX:NXG), a Vancouver-based mineral exploration company, said Tuesday its fourth quarter losses widened, spurred by lower production, higher cash costs, and noncash charges.


For the fourth quarter ended December 31, the company’s losses widened to $72 million from a loss of $67.8 million in the year-ago period.


 The fourth quarter net loss includes a non-cash $76.9 million impairment charge for its Fosterville Gold mine in Australia.  The results also include a $12 million mark-to-market loss for copper forward sales contracts.


On an adjusted basis, earnings were $17.2 million, or 6 cents per diluted share, in line with analyst estimates. 


Revenue came in at $148.7 million, up from $110.7 million from a year ago and beating analyst estimates of $147.4 million. 


During the quarter, production fell to 66,077 ounces of gold and 10.6 million pounds of copper.  That compares with 80,753 ounces of gold and 11,750 pounds of copper produced in the same period of 2009. 


Gold and copper sales for the quarter reached 70,145 ounces and 12.4 million pounds, respectively. 


Although sales benefitted from rising gold and copper prices, cost increases were an offsetting force.  The company’s average net cash cost for the quarter rose 20% to $646 per ounce from $537 per ounce for the year-ago period. 


At quarter end, Northgate, which has development and exploration projects in Canada and Australia, had proven and probable reserves of 3.6 million ounces.


As of 12:20 pm EST, the company’s shares are unchanged at $2.71.

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