Northgate posts fourth quarter net income of $32 million



    Completes acquisition of Australian-based gold miner

    VANCOUVER, Feb. 28 /CNW/ - (All figures in US dollars except where noted)
- Northgate Minerals Corporation (TSX: NGX; AMEX:   NXG) today reported cash
flow from operations of $32,914,000 or $0.13 per diluted common share and net
earnings of $32,020,000 or $0.13 per diluted common share for the fourth
quarter of 2007. Cash flow from operations for all of 2007 was $125,285,000 or
$0.49 per diluted common share and net earnings were $38,136,000 or $0.15 per
diluted common share.

    
    Fourth Quarter Highlights

    -   On October 29, 2007, Northgate announced its proposal to acquire
        Perseverance Corporation Ltd. ("Perseverance"), an Australian gold
        producer with two fully-permitted gold mines. The deal was approved
        by Perseverance securityholders and closed on February 18, 2008.
    -   Northgate closed out its gold hedge book and is now completely
        exposed to future gold price changes.
    -   Production of 41,467 ounces of gold and 16.8 million pounds of copper
        from the Kemess South mine.
    -   Quarterly gold net cash cost of $18 per ounce and an annual net cash
        cost of negative $22 per ounce of gold for all of 2007.
    

    Ken Stowe, President and CEO, stated, "All in all, 2007 was another solid
production year at Kemess despite a significant modification to the production
schedule in the fourth quarter, which was necessitated by the realignment of
the main haul road out of the pit. Strong cash flow from operations of
$125 million for the year continued to strengthen an already strong balance
sheet, thereby allowing us to complete the acquisition of Perseverance with no
shareholder dilution. With the closing of the Perseverance deal, we have now
achieved a key strategic objective and transformed Northgate into a multi-mine
400,000-ounce per year gold producer with all of our operations in stable
jurisdictions. With unhedged gold and copper production in 2008 and record or
near-record prices for both metals, we are well positioned for another strong
year of cash flows. This will give us the ability to make strategic
investments at our new Australian operations while continuing to aggressively
develop the Young-Davidson project and look for additional growth
opportunities."

    Results of Operations

    Northgate recorded net earnings of $32,020,000 or $0.13 per diluted share
in the fourth quarter of 2007 compared with $19,790,000 or $0.09 per diluted
share during the corresponding quarter of 2006. For the full year 2007, net
earnings were $38,136,000 or $0.15 per diluted share compared with
$106,742,000 or $0.48 per diluted share in 2006. Earnings for the fourth
quarter and the full year of 2007 included non-cash future income tax
recoveries of $2,267,000 and $13,065,000, respectively. Cash flow from
operations, after changes in working capital and other items, was $32,914,000
or $0.13 per diluted share in the fourth quarter of 2007 compared with
$43,884,000 or $0.20 per diluted share during the same quarter last year. For
the full year 2007, cash flow from operations after changes in working capital
and other items was $125,285,000 or $0.49 per diluted share compared with
$146,612,000 or $0.66 per diluted share in 2006. Per share data is based on
the weighted average diluted number of shares outstanding of 255,065,987 and
255,257,756 in the fourth quarter and full year of 2007, respectively. The
weighted average diluted number of shares outstanding in the corresponding
periods of 2006 was 224,674,332 and 222,892,929, respectively.

    Kemess South Mine Performance

    The Kemess mine posted production of 41,467 ounces of gold and
16.8 million pounds of copper in the fourth quarter of 2007. Metal production
was significantly lower than forecast due to lower than expected mill
throughput and a 15% copper grade deficit compared to blast hole estimates for
the stockpiled, very unusual, high native copper ore that was milled from
stockpile in November and December. Milling of this ore and other lower grade
stockpiled hypogene ores during November and December was necessitated by the
realignment of the main haul road out of the pit due to a crack, which
developed in a section of the road. This realignment was completed on
January 10, 2008 at which time ore production from the west end of the pit
resumed. For all of 2007, Kemess posted gold and copper production of 245,631
ounces and 68.1 million pounds, respectively.
    During the fourth quarter of 2007, approximately 8.0 million tonnes of
ore and waste were removed from the open pit compared to 11.0 million tonnes
during the corresponding quarter of 2006. As a result of the lower tonnes
mined, unit mining costs during the current quarter were unusually high at
Cdn$2.37 per tonne compared with Cdn$1.64 per tonne in the same period of
2006. For the full year 2007, mining costs averaged Cdn$1.76 per tonne mined
compared with Cdn$1.49 per tonne in 2006.
    Mill availability during the fourth quarter of 2007 averaged 90% and
throughput averaged 46,072 tonnes per day (tpd), compared with 91%
availability and throughput of 49,645 tpd in the fourth quarter of 2006. Mill
throughput was lower in the most recent quarter than it was one year ago due
to a variety of operating problems related to processing higher moisture
supergene ore from stockpile during the colder winter months. For the full
year, Kemess milled approximately 17.8 million tonnes of ore grading
0.627 grams per metric tonne (gr/mt) gold and 0.214% copper, and mill
availability averaged 91%, which was the same as 2006.
    Gold and copper recoveries averaged 66% and 75%, respectively, in the
fourth quarter of 2007 compared with 72% and 87% in the fourth quarter of
2006. Copper recoveries were significantly lower in the fourth quarter of 2007
than they were in the same quarter of 2006, due to the large quantity of very
unusual, high native copper supergene ore with inherently lower copper
recovery that was milled from the stockpile in November and December. For the
full year, gold and copper recoveries were 68% and 81%, respectively, compared
with 69% and 83% in 2006.
    Metal concentrate inventory decreased by 1,000 wet metric tonnes (wmt) to
approximately 6,000 wmt during the fourth quarter of 2007. Concentrate
inventory is expected to decline through 2008.
    The total unit cost per tonne milled during the fourth quarter of 2007
was Cdn$13.16 (2006 - Cdn$15.58), including Cdn$3.31 (2006 - Cdn$6.48) for
marketing costs, which was comprised mainly of treatment and refining costs
and transportation fees. The primary reason for the decline in unit cost is
the reduction in treatment and refining costs, which are remitted to Xstrata
Canada Corporation. Total site operating costs in the fourth quarter of 2007
were Cdn$41.9 million, consistent with costs of Cdn$41.6 million in the fourth
quarter of 2006. The net cash cost of production at Kemess in the fourth
quarter was $18 per ounce, bringing the average 2007 cash cost to negative 
$22 per ounce. The net cash cost of gold production for the full year is
negative due to the large by-product credit derived from copper production,
which is credited against site operating costs for purposes of calculating
cash costs.

    
    The following table provides a summary of operations for the fourth
quarter and full year of 2007 and the comparable periods of 2006.

    2007 Kemess Mine Production

    (100% of
     production basis)        Q4 2007      Q4 2006         2007         2006
    -------------------------------------------------------------------------
    Ore plus waste
     mined (tonnes)         8,042,000   11,018,461   42,025,404   43,045,348
    Ore mined (tonnes)      3,206,000    4,746,251   17,060,785   17,219,143
    Stripping ratio
     (waste/ore)                 1.51         1.32         1.46         1.50
    Ore milled (tonnes)     4,238,626    4,567,332   17,802,317   18,233,978
    Ore milled per day
     (tonnes)                  46,072       49,645       48,773       49,956
    Gold grade (gr/mt)          0.459        0.772        0.627        0.763
    Copper grade (%)            0.238        0.243        0.214        0.244
    Gold recovery (%)              66           72           68           69
    Copper recovery (%)            75           87           81           83
    Gold production
     (ounces)                  41,467       81,747      245,631      310,296
    Copper production
     (thousands pounds)        16,766       21,255       68,129       81,209
    Tonnes mined per
     shift worked                 449          645          589          693
    Tonnes milled per
     shift worked                 237          267          249          277
    Net cash cost ($/ounce)        18          (90)         (22)         (56)
    -------------------------------------------------------------------------
    

    Safety

    Safety at Kemess in the fourth quarter continued with solid performance,
although one lost time incident was recorded. On an annual basis, 2007 was an
excellent year for safety at Northgate's operations with only two lost time
incidents reported at Kemess and no lost time incidents reported at
Young-Davidson in Matachewan.

    Financial Performance

    Northgate's revenue in the fourth quarter of 2007 was $93,717,000
compared with $118,239,000 in the corresponding period of 2006. Revenue for
the fourth quarter of 2007 included a positive mark-to-market adjustment of
$29,631,000 on Northgate's hedge book (2006 - $17,975,000). Due to
mark-to-market requirements of Canadian generally accepted accounting
principles (Canadian GAAP) and the large size of the Corporation's copper
forward sales position relative to quarterly copper production, earnings in
future quarters may fluctuate significantly depending on future movements in
the price of copper. Metal sales in the fourth quarter of 2007 consisted of
48,937 ounces of gold and 16.8 million pounds of copper, compared with 77,443
ounces of gold and 20.4 million pounds of copper in the fourth quarter of
2006. During the fourth quarter of 2007, the price of gold on the London
Bullion Market (LBM) averaged $788 per ounce (2006 - $614) and the price of
copper on the London Metal Exchange (LME) averaged $3.26 per pound (2006 -
$3.21). The net realized metal prices received on metal sales in the fourth
quarter of 2007 were approximately $561 per ounce of gold and $3.30 per pound
of copper, compared with $533 per ounce and $3.00 per pound in the fourth
quarter of 2006. A total of $7,523,000 in gold hedging losses were
reclassified from accumulated other comprehensive income when the related
sales occurred. The Corporation's gold hedging activities reduced the realized
price of gold sold during the most recent quarter by $204 per ounce, compared
with $82 per ounce in the corresponding quarter one year ago. At the end of
the fourth quarter, Northgate had settled all its gold forward contracts and
was completely unhedged.
    The cost of sales in the fourth quarter of 2007 was $60,322,000, which
was consistent with the corresponding period of 2006 when the cost of sales
was $60,461,000. Cost of sales in the most recent quarter reflect the negative
impact of the strengthening Canadian dollar on the Corporation's mostly
Canadian dollar costs, which was offset by lower treatment and refining costs
for concentrate.
    Administrative and general expenses totalled $3,689,000 in the fourth
quarter of 2007, higher than the $1,543,000 recorded in the corresponding
period of 2006 due to additional corporate office salaries in support of
organizational growth, increased administration and compliance spending, as
well as the cost of various business development initiatives.
    Depreciation and depletion expenses in the fourth quarter were lower at
$6,131,000 compared to $10,122,000 during the corresponding period of 2006, as
a result of less ore being mined from the open pit in November and December
while the main haul road in the pit was being realigned.
    Net interest income was significantly higher at $4,813,000 in the fourth
quarter of 2007 compared with $2,156,000 in the corresponding quarter of 2006,
as a result of substantial increases in the Corporation's cash position due to
continued strong operating cash flow.
    Exploration costs in the fourth quarter were significantly higher at
$7,679,000 compared with $4,953,000 in the comparable period of 2006, due to
increased activity at Young-Davidson where the advanced underground
exploration program continues.
    Other income recorded in the fourth quarter relates to the mark-to-market
gain of $10,646,000 on Northgate's option to acquire Perseverance's portfolio
of gold forward contracts from an Australian financial institution upon the
close of the transaction.
    Capital expenditures totalled $2,565,000 in the fourth quarter of 2007,
substantially lower than the $6,115,000 recorded in the corresponding period
of 2006 when significant expenditures relating to the Kemess South tailings
dam and permitting activities for the Kemess North project were incurred. The
Kemess North project costs were written off in the third quarter of 2007.

    Liquidity and Capital Resources

    Working Capital: At December 31, 2007, Northgate had working capital of
$235,883,000 compared with working capital of $297,957,000 at December 31,
2006. The decrease in working capital was mainly the result of a short-term
loan ("the Loan") established with a major investment bank in the US. The
proceeds of the Loan have been invested in highly liquid investments, which
can be accessed if needed for working capital requirements. Cash and cash
equivalents at the end of 2007 amounted to $266,045,000 compared with
$262,199,000 at the end of 2006. All cash and cash equivalents are invested in
R1/P1/A1 rated investments including money market funds, direct obligation
commercial paper, bankers' acceptances and other highly rated short-term
investment instruments.

    Investments: Northgate maintains a portion of its investments in Auction
Rate Securities ("ARS"), all of which were rated AAA at the time of purchase.
ARS are long-term, floating rate debt securities that are marketed by
financial institutions with auction reset dates at 7, 28, or 35 day intervals
to provide short-term liquidity. Beginning in August 2007, a number of
auctions began to fail and the Corporation is currently holding ARS with a par
value of $72,600,000, which currently lack liquidity. Northgate's ARS
investments were originally structured and marketed by a major US investment
bank.
    The fair market value of Northgate's ARS holdings at December 31, 2007
was $69,397,000, which reflects a $3,203,000 adjustment to the original par
value of $72,600,000. This adjustment was recorded into other comprehensive
income as Northgate believes that the decline in value is temporary. All of
the Corporation's ARS investments continue to make regular cash interest
payments.
    Historically, given the liquidity created by the auction process, ARS
were presented as current assets on Northgate's balance sheet. Given the
continued failure of these auctions and the uncertainty as to when liquidity
will return, ARS have been reclassified as non-current assets.
    Certain rating agencies such as S&P, Moody's and Fitch monitor the credit
rating of bond insurer institutions (Monoline Insurers), some of which were
insurers of a portion of the ARS held by Northgate. In late January, a number
of bond insurers were downgraded by certain ratings agencies, which in all
cases resulted in corresponding downgrade of the AAA securities insured by
those institutions. Approximately 57% of Northgate's ARS holdings are insured.
All of the Corporation's uninsured ARS securities continue to be rated AAA and
Aaa, as applicable.
    The Corporation has no investments in Asset Backed Commercial Paper
(ABCP), Mortgage Backed Securities (MBS) or Collateralized Debt Obligations
(CDO).
    The balance of Northgate's long-term investments comprises of equity
investments in publicly-listed junior mining companies. These investments are
carried on the balance sheet at fair value based on quoted bid prices.
    If uncertainties in the credit and capital markets persist or Northgate
experiences further downgrades on its ARS holdings, the Corporation may incur
additional impairments, which may be judged to be other than temporary.
Northgate believes that based on its cash and cash equivalents balance of
$266,045,000 at December 31, 2007 and expected operating cash flows, the
current liquidity issues concerning its ARS investments will not have a
material impact on Northgate's ability to carry on its business.

    Acquisition of Perseverance: In connection with the acquisition of
Perseverance, Northgate agreed to acquire all of Perseverance's existing debt,
gold forward contracts and guarantees from a major financial institution in
Australia ("the Bank"). These arrangements were structured in such a way that
they would be executed regardless of the outcome of the acquisition
transaction.
    On December 18, 2007, the Corporation, through an Australian subsidiary,
acquired the Bank's receivables for cash consideration (in Australian dollars
($A)) of A$29,637,000 (US$25,434,000) and comprised the following:

    
    -   Lease Receivables totalling A$1,012,000. All remaining lease and
        residual payments are due in the first quarter of 2008 and are
        included in accounts receivable.

    -   Bridge Facility of A$25,000,000 of which two tranches totalling
        A$5,500,000 had been drawn. The tranches accrue interest daily at the
        Bank Bid Swap Rate ("BBSY") published in the Australian Financial
        Review plus a margin of 4.5% and is payable at the tranches' rollover
        date, at which point the principal is rolled over and the interest
        rate is reset. The facility has a maturity date of May 28, 2010.

    -   Cash Advance Facility of A$23,125,000, which has been fully drawn,
        bearing interest daily at the BBSY Rate plus a margin of 1.40% and is
        payable at the tranches' rollover date, at which point the principal
        is rolled over and the interest rate is reset. The facility will be
        reduced to A$15,000,000 on May 28, 2009 and the remaining balance
        matures on May 28, 2010.
    

    Both the Bridge Facility and the Cash Advance Facility are secured by a
fixed and floating charge over the assets of Perseverance's subsidiaries, a
mining tenement mortgage over tenements held by a subsidiary of Perseverance,
and guarantees by Perseverance and all its subsidiaries. As at December 31,
2007, other receivables included the lease receivables of US$888,000. The
amounts outstanding under the Bridge and Cash Advance Facilities total
US$25,117,000 and are included in long-term receivables.
    In connection with the Merger Implementation Agreement, Northgate and the
Bank entered into an arrangement whereby Northgate will acquire Perseverance's
gold forward contracts for a fixed amount, based on the value of the
underlying forward contracts at October 30, 2007. The fair value of the
underlying forward contracts at December 31, 2007 resulted in a mark-to-market
gain of $10,646,000, which was recorded as other income in net earnings.
    On February 18, 2008, the transaction closed and a total of A$230,200,000
(US$210,300,000) was paid to Perseverance securityholders.

    Stand-By Letter of Credit ("SBLC"): In connection with the acquisition of
Perseverance, the Corporation was required to pledge a cash amount of
A$109,400,000 in a SBLC. A portion of the SBLC was released upon payment of
the consideration for the debt instruments noted above. As at December 31,
2007, the remaining SBLC of A$58,700,000 was held as a pledge against
Perseverance's forward gold sales contracts and certain bank guarantees.
Subsequent to year-end, the forward gold contracts were acquired for
A$49,307,000 (US$45,550,000). The funds remaining in the SBLC continue to
pledge the guarantees of A$8,020,000 (US$7,434,000).

    Short-Term Loan: In December 2007, the Corporation secured the Loan in
the amount of $48,716,000 from the same US investment bank, which structured
and marketed Northgate's ARS investments. The Loan bears interest at LIBOR
plus 100 basis points and matures on June 6, 2008. At December 31, 2007, the
balance of the Loan including accrued interest was $44,835,000.

    Non-GAAP Measure

    The Corporation has included net cash costs of production per ounce of
gold in the discussion of its results from operations, because it believes
that these figures are a useful indicator to investors and management of a
mine's performance as they provide: (i) a measure of the mine's cash margin
per ounce, by comparison of the cash operating costs per ounce to the price of
gold; (ii) the trend in costs as the mine matures; and, (iii) an internal
benchmark of performance to allow for comparison against other mines. However,
cash costs of production should not be considered as an alternative to
operating profit or net profit attributable to shareholders, or as an
alternative to other Canadian GAAP measures and they may not be comparable to
other similarly titled measures of other companies.
    A reconciliation of net cash costs per ounce of production to amounts
reported in the statement of operations is shown below.

    
    (Expressed in thousands
     of US$, except
     ounce amounts)           Q4 2007      Q4 2006         2007         2006
    -------------------------------------------------------------------------
    Gold production
     (ounces)                  41,467       81,746      245,631      310,296
    -------------------------------------------------------------------------
    Cost of sales         $    60,322  $    60,461  $   226,933  $   224,584
    Change in inventories
     and other                 (4,124)       1,944       (8,616)       7,836
    Gross copper and
     silver revenue           (55,467)     (69,735)    (223,721)    (249,699)
    -------------------------------------------------------------------------
    Total cash cost               731       (7,330)      (5,404)     (17,279)
    -------------------------------------------------------------------------
    Cash cost ($/ounce)   $        18  $       (89) $       (22) $       (56)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    SELECTED QUARTERLY FINANCIAL DATA

    (Thousands of
     US dollars,                         2007 Quarter Ended
     except per share,   ----------------------------------------------------
     per ounce and per
     pound amounts)            Dec 31       Sep 30       Jun 30       Mar 31
    -------------------------------------------------------------------------
    Revenue               $    93,717  $    86,756  $    80,878  $    74,313
    Earnings (loss) for
     the period                32,020      (11,937)       8,647        9,406
    Earnings (loss)
     per share

      Basic               $      0.13  $     (0.05) $      0.03  $      0.04

      Diluted             $      0.13  $     (0.05) $      0.03  $      0.04

    Metal production
      Gold (ounces)            41,467       70,055       65,999       68,110
      Copper
       (thousands pounds)      16,766       18,822       14,839       17,702
    Metal Prices
      Gold (LBM - $/ounce)        788          681          667          650
      Copper (LME
       Cash - $/pound            3.26         3.50         3.47         2.69
    -------------------------------------------------------------------------


    (Thousands of
     US dollars,                         2006 Quarter Ended
     except per share,   ----------------------------------------------------
     per ounce and per
     pound amounts)            Dec 31       Sep 30       Jun 30      Mar 31
    -------------------------------------------------------------------------
    Revenue               $   118,239  $   102,667  $   105,348  $    85,059
    Earnings (loss) for
     the period (1)            19,790       14,902       50,315       21,735
    Earnings (loss)
     per share (1)

      Basic               $      0.09  $      0.07  $      0.23  $      0.10

      Diluted             $      0.09  $      0.07  $      0.22  $      0.10

    Metal production
      Gold (ounces)            81,746       74,789       76,127       77,634
      Copper
       (thousands pounds)      21,254       19,602       18,071       22,282
    Metal Prices
      Gold (LBM - $/ounce)        614          622          627          554
      Copper (LME
       Cash - $/pound            3.21         3.48         3.27         2.24
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Operations and Exploration Update

    Australian Mines

    Northgate's acquisition of Perseverance was completed on February 18,
2008. From this date forward, gold production from the Fosterville and Stawell
mines will be attributed to the Corporation. Initial projections call for
these mines to produce between 190,000 - 200,000 ounces of gold during
calendar 2008, all of which will be sold at spot prices. Northgate will
include the results of its Australian operations from the date of acquisition
in its consolidated financial results for the period ending March 31, 2008. In
the second quarter of 2008, the Corporation plans to update its previously
released 2008 production guidance to include the Fosterville and Stawell mines
acquired in the transaction.

    Young-Davidson Update

    Drilling resumed at Young-Davidson in January 2008 with five drill rigs
in operation. One drill is underground and the other four surface drills are
testing underground targets at various levels in and around the known
underground resources with the objective of increasing the indicated resource
to a minimum of 2.0 million ounces. Diamond drilling completed in the fourth
quarter of 2007 expanded resources between the Lower Boundary and the Lower YD
zones and below the Lucky zone to a depth of 1,300 metres (m). On February 6,
2008 Northgate released a new mineral resource estimate based on drilling
conducted during 2007. Total underground resources at Young-Davidson now
include 1.42 million ounces of Measured and Indicated resources and an
additional 440,000 ounces of Inferred resources.
    An update of the open pit resources at Young-Davidson is currently
underway and will incorporate new assay data generated by the 5,000m of infill
drilling completed in 2007.
    The ramp that will provide underground access to the Young-Davidson
deposit advanced dramatically during 2007 and is now about 2,000m long,
reaching a vertical depth of approximately 500m. Underground definition
drilling has begun from the second leg of the ramp targeting the Upper
Boundary zone in order to move the resources from Inferred to Indicated
status. Dewatering of the existing No. 3 shaft down to the 360-m level is
complete and the underground infrastructure left by the previous operator
continues to be in excellent condition.


    Notice of Conference Call and Webcast of Year-End Results

    February 29 at 10:00 a.m. ET

    You are invited to participate in the Northgate Minerals Corporation live
conference call and webcast discussing our year-end financial results. The
call and webcast will take place on Friday, February 29, 2008, at 10:00 a.m.
ET.

    Conference Call

    Please call 416-644-3415 or toll free in North America at 1-800-732-9307.
To ensure your participation, please call five minutes prior to the scheduled
start of the call.

    Webcast

    The webcast package, including the webcast link and management
presentation, will be available on the morning of February 29 and posted on
Northgate's website at www.northgateminerals.com under the Calendar of Events
section. You may also access the webcast at
    http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2147860.

    Replay

    A replay of the conference call will be available beginning on
February 29 at 12:00 p.m. ET until March 14 at 11:59 p.m. ET.

    Replay Access No. 416-640-1917 or 1-877-289-8525
    Passcode: 212 60 773 followed by the number sign.

    NORTHGATE MINERALS CORPORATION is a mid-tier gold and copper producer
with mining operations, development projects and exploration properties in
Canada and Australia. The company is forecasting over 400,000 ounces of
unhedged gold production in 2008 and is targeting steady production growth
through further acquisition opportunities in stable mining jurisdictions
around the world. Northgate is listed on the Toronto Stock Exchange under the
symbol NGX and on the American Stock Exchange under the symbol NXG.

    Forward-Looking Statements:

    This news release contains certain "forward-looking statements" and
"forward-looking information" as defined under applicable Canadian and U.S.
securities laws. Forward-looking statements generally can be identified by the
use of forward-looking terminology such as "may," "will," "expect," "intend,"
"estimate," "anticipate," "believe," or "continue" or the negative thereof or
variations thereon or similar terminology. Forward-looking statements are
necessarily based on a number of estimates and assumptions that are inherently
subject to significant business, economic and competitive uncertainties and
contingencies. Certain of the statements made herein by Northgate Minerals
Corporation ("Northgate") including those related to future financial and
operating performance and those related to Northgate's future exploration and
development activities, are forward-looking and subject to important risk
factors and uncertainties, many of which are beyond the corporations' ability
to control or predict. Known and unknown factors could cause actual results to
differ materially from those projected in the forward-looking statements. Such
factors include, among others: gold price volatility; fluctuations in foreign
exchange rates and interest rates, impact of any hedging activities;
discrepancies between actual and estimated production, between actual and
estimated reserves and resources and between actual and estimated
metallurgical recoveries; costs of production, capital expenditures, costs and
timing of construction and the development of new deposits, and success of
exploration activities and permitting time lines; In addition, the factors
described or referred to in the section entitled "Risk Factors" in Northgate's
Annual Information Form for the year ended December 31, 2006 or under the
heading "Risks and Uncertainties" in Northgate's 2006 annual report, both of
which are available on SEDAR at www.sedar.com, and which should be reviewed in
conjunction with this document. Accordingly, readers should not place undue
reliance on forward-looking statements. Neither corporation undertakes any
obligation to update publicly or release any revisions to forward-looking
statements to reflect events or circumstances after the date of this document
or to reflect the occurrence of unanticipated events, except in each case as
required by law.



    
    INTERIM CONSOLIDATED BALANCE SHEETS
                                                   December 31   December 31
    Thousands of US dollars                               2007          2006
    -------------------------------------------------------------------------
                                                    (Unaudited)
    Assets
    Current Assets
    Cash and cash equivalents                     $    266,045  $    262,199
    Concentrate settlements and
     other receivables                                  17,245        17,960
    Inventories                                         35,234        26,208
    Future income tax asset                              1,194         7,469
    Deferred hedging loss                                    -         8,583
    -------------------------------------------------------------------------
                                                       319,718       322,419
    Other assets                                        80,181        27,622
    Long-term receivables                               25,117             -
    Deferred acquisition costs                           1,799             -
    Future income tax asset                             17,100         6,291
    Mineral property, plant and equipment              121,337       159,299
    Investments                                         70,074             -
    -------------------------------------------------------------------------
                                                  $    635,326  $    515,631
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Liabilities and Shareholders' Equity
    Current Liabilities
    Accounts payable and accrued liabilities      $     35,861  $     22,023
    Short-term loan                                     44,835             -
    Current portion of capital lease obligations         2,267             -
    Future income tax liability                            872         2,439
    -------------------------------------------------------------------------
                                                        83,835        24,462
    Capital lease obligations                              282         2,586
    Other long-term liabilities                         14,115             -
    Provision for site closure and reclamation
     obligations                                        49,120        28,197
    Future income tax liability                          2,487        12,638
    -------------------------------------------------------------------------
                                                       149,839        67,883

    Shareholders' equity
    Common shares                                      309,455       307,914
    Contributed surplus                                  3,940         2,596
    Accumulated other comprehensive income              (3,282)            -
    Retained earnings                                  175,374       137,238
    -------------------------------------------------------------------------
                                                       485,487       447,748
    -------------------------------------------------------------------------
                                                  $    635,326  $    515,631
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

    Thousands of US
     dollars, except
     share and per
     share amounts,    Three Months Ended Dec 31  Twelve Months Ended Dec 31
     unaudited                2007          2006          2007          2006
    -------------------------------------------------------------------------
    Revenue           $     93,717  $    118,239  $    335,664  $    411,313
    -------------------------------------------------------------------------
    Cost of sales           60,322        60,461       226,933       224,584
    Administrative
     and general             3,689         1,543        10,461         8,209
    Depreciation
     and depletion           6,131        10,122        34,140        35,591
    Net interest
     income                 (4,813)       (2,156)      (17,124)       (4,013)
    Exploration              7,679         4,953        29,887        11,449
    Currency
     translation
     loss (gain)               342         3,726        (6,704)        1,922
    Accretion of
     site closure
     and recla-
     mation costs              690           406         2,559         1,553
    Writedown of
     mineral property          382             -        31,815             -
    Other expense (income) (10,646)            -        (7,820)        8,423
    -------------------------------------------------------------------------
                            63,776        79,055       304,147       287,718
    -------------------------------------------------------------------------
    Earnings before
     income taxes           29,941        39,184        31,517       123,595
    Income tax
     recovery (expense)
      Current                 (188)         (951)       (6,446)       (5,406)
      Future                 2,267       (18,443)       13,065       (11,447)
    -------------------------------------------------------------------------
                             2,079       (19,394)        6,619       (16,853)
    -------------------------------------------------------------------------
    Net earnings for
     the period       $     32,020  $     19,790  $     38,136  $    106,742
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Other
     comprehensive
     income
      Reclassification
       of net realized
       gains on
       available for
       sale securities
       to net earnings           -             -          (315)            -
      Unrealized gain
       (loss) on
       available for
       sale securities      (3,486)            -        (3,296)            -
      Reclassification
       of deferred
       losses on gold
       forward
       contracts to
       net earnings,
       net of tax of
       $2,567 Q4 and
       $9,843 YTD            4,956             -        19,005             -
    -------------------------------------------------------------------------
                             1,470             -        15,394             -
    -------------------------------------------------------------------------
    Comprehensive
     income (loss)    $     33,490  $     19,790  $     53,530  $    106,742
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings
     (loss) per
     share
      Basic           $       0.13  $       0.09  $       0.15  $       0.50
      Diluted         $       0.13  $       0.09  $       0.15  $       0.48
    Weighted average
     shares
     outstanding
      Basic            254,329,720   217,165,384   254,166,789   215,609,932
      Diluted          255,065,987   224,674,332   255,257,756   222,892,929
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

    Thousands of
     US dollars,
     except common       Number of        Common         Share
     shares,                Common        Shares      Purchase   Contributed
     unaudited              Shares        Amount      Warrants       Surplus
    -------------------------------------------------------------------------
    Balance at
     December 31,
     2006              253,700,033  $    307,914  $          -  $      2,596
      Transitional
       adjustment on
       adoption of
       financial
       instruments               -             -             -             -
      Shares issued
       under employee
       share purchase
       plan                 32,807            79             -             -
      Shares issued on
       exercise of
       options             413,420           519             -          (153)
      Stock-based
       compensation              -            39             -           759
      Net income                 -             -             -             -
      Other
       comprehensive
       income                    -             -             -             -
    -------------------------------------------------------------------------
    Balance at
     March 31, 2007    254,146,260  $    308,551  $          -  $      3,202
      Shares issued
       under employee
       share purchase
       plan                 41,860           107             -             -
      Shares issued
       on exercise
       of options            5,600            15             -            (4)
      Stock-based
       compensation              -            53             -           320
      Net income                 -             -             -             -
      Other
       comprehensive
       income                    -             -             -             -
    -------------------------------------------------------------------------
    Balance at
     June 30, 2007     254,193,720  $    308,726  $          -  $      3,518
      Shares issued
       under employee
       share purchase
       plan                 46,559            67             -             -
      Shares issued
       on exercise
       of options            5,200            14             -            (3)
      Stock-based
       compensation              -            34             -           279
      Net loss                   -             -             -             -
      Other
       comprehensive
       income                    -             -             -             -
    -------------------------------------------------------------------------
    Balance at
     September
     30, 2007          254,245,479  $    308,841  $          -  $      3,794
      Shares issued
       under employee
       share purchase
       plan                 55,983           114             -             -
      Shares issued
       on exercise
       of options          151,400           443             -          (142)
      Stock-based
       compensation              -            57             -           288
      Net loss                   -             -             -             -
      Other
       comprehensive
       income                    -             -             -             -
    -------------------------------------------------------------------------
    Balance at
     December
     31, 2007          254,452,862  $    309,455  $          -  $      3,940
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

    Thousands of                                   Accumulated
     US dollars,                                         Other
     except common                                      Compre-
     shares,                            Retained       hensive
     unaudited                          Earnings        Income         Total
    -------------------------------------------------------------------------
    Balance at
     December 31,
     2006                           $    137,238  $          -  $    447,748
      Transitional
       adjustment on
       adoption of
       financial
       instruments                             -       (18,676)      (18,676)
      Shares issued
       under employee
       share purchase
       plan                                    -             -            79
      Shares issued on
       exercise of
       options                                 -             -           366
      Stock-based
       compensation                            -             -           798
      Net income                           9,406             -         9,406
      Other
       comprehensive
       income                                  -         4,125         4,125
    -------------------------------------------------------------------------
    Balance at
     March 31, 2007                 $    146,644  $    (14,551) $    443,846
      Shares issued
       under employee
       share purchase
       plan                                    -             -           107
      Shares issued
       on exercise
       of options                              -             -            11
      Stock-based
       compensation                            -             -           373
      Net income                           8,647             -         8,647
      Other
       comprehensive
       income                                  -         5,174         5,174
    -------------------------------------------------------------------------
    Balance at
     June 30, 2007                  $    155,291  $     (9,377) $    458,158
      Shares issued
       under employee
       share purchase
       plan                                    -             -            67
      Shares issued
       on exercise
       of options                              -             -            11
      Stock-based
       compensation                            -             -           313
      Net loss                           (11,937)            -       (11,937)
      Other
       comprehensive
       income                                  -         4,624         4,624
    -------------------------------------------------------------------------
    Balance at
     September
     30, 2007                       $    143,354  $     (4,753) $    451,236
      Shares issued
       under employee
       share purchase
       plan                                    -             -           114
      Shares issued
       on exercise
       of options                              -             -           301
      Stock-based
       compensation                            -             -           345
      Net loss                            32,020             -        32,020
      Other
       comprehensive
       income                                  -         1,471         1,471
    -------------------------------------------------------------------------
    Balance at
     December
     31, 2007                       $    175,374  $     (3,282) $    485,487
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

    Thousands of
     US dollars,         Number of        Common         Share
     except common          Common        Shares      Purchase   Contributed
     shares, unaudited      Shares        Amount      Warrants       Surplus
    -------------------------------------------------------------------------
    Balance at
     December
     31, 2005          214,011,246  $    195,565  $      8,715  $      1,657
      Shares issued
       under employee
       share purchase
       plan                 45,027            68             -             -
      Shares issued
       on exercise of
       share purchase
       warrants            314,523           480          (102)            -
      Shares issued on
       exercise of
       options             386,800           490             -          (154)
      Stock-based
       compensation              -            34             -         1,131
      Net income                 -             -             -             -
    -------------------------------------------------------------------------
    Balance at
     March 31, 2006    214,757,596  $    196,637  $      8,613  $      2,634
      Shares issued
        under employee
        share purchase
        plan                30,269            76             -             -
      Shares issued on
       exercise of
       share purchase
       warrant              10,202            27             -             -
      Shares issued on
       exercise of
       options             810,880         2,245             -          (706)
      Stock-based
       compensation              -            39             -           240
      Net income                 -             -             -             -
    -------------------------------------------------------------------------
    Balance at
     June 30, 2006     215,608,947  $    199,024  $      8,613  $      2,168
      Shares issued
       under employee
       share purchase
       plan                 30,955            73             -             -
      Shares issued on
       exercise of
       share purchase
       warrant               2,778             8             -             -
      Shares issued on
       exercise of
       options              22,800            84             -           (27)
      Stock-based
       compensation              -            36             -           244
      Net income                 -             -             -             -
    -------------------------------------------------------------------------
    Balance at
     September
     30, 2006          215,665,480  $    199,225  $      8,613  $      2,385
      Shares
       issued under
       employee share
       purchase plan        39,300            87             -             -
      Shares issued on
       exercise of
       share purchase
       warrant          37,895,253       108,383        (8,613)           14
      Shares issued on
       exercise of
       options             100,000           176             -           (49)
      Stock-based
       compensation              -            43             -           246
      Net income                 -             -             -             -
    -------------------------------------------------------------------------
    Balance at
     December
     31, 2006          253,700,033  $    307,914  $          -  $      2,596
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

                                                   Accumulated
    Thousands of                                         Other
     US dollars,                                       Compre-
     except common                      Retained       hensive
     shares, unaudited                  Earnings        Income         Total
    -------------------------------------------------------------------------
    Balance at
     December
     31, 2005                       $     30,496  $          -  $    236,433
      Shares issued
       under employee
       share purchase
       plan                                    -             -            68
      Shares issued
       on exercise of
       share purchase
       warrants                                -             -           378
      Shares issued on
       exercise of
       options                                 -             -           336
      Stock-based
       compensation                            -             -         1,165
      Net income                          21,735             -        21,735
    -------------------------------------------------------------------------
    Balance at
     March 31, 2006                 $     52,231  $          -  $    260,115
      Shares issued
        under employee
        share purchase
        plan                                   -             -            76
      Shares issued on
       exercise of
       share purchase
       warrant                                 -             -            27
      Shares issued on
       exercise of
       options                                 -             -         1,539
      Stock-based
       compensation                            -             -           279
      Net income                          50,315             -        50,315
    -------------------------------------------------------------------------
    Balance at
     June 30, 2006                  $    102,546  $          -  $    312,351
      Shares issued
       under employee
       share purchase
       plan                                    -             -            73
      Shares issued on
       exercise of
       share purchase
       warrant                                 -             -             8
      Shares issued on
       exercise of
       options                                 -             -            57
      Stock-based
       compensation                            -             -           280
      Net income                          14,902             -        14,902
    -------------------------------------------------------------------------
    Balance at
     September
     30, 2006                       $    117,448  $          -  $    327,671
      Shares
       issued under
       employee share
       purchase plan                           -             -            87
      Shares issued on
       exercise of
       share purchase
       warrant                                 -             -        99,784
      Shares issued on
       exercise of
       options                                 -             -           127
      Stock-based
       compensation                            -             -           289
      Net income                          19,790             -        19,790
    -------------------------------------------------------------------------
    Balance at
     December
     31, 2006                       $    137,238  $          -  $    447,748
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

    Thousands of
     US dollars,       Three Months Ended Dec 31  Twelve Months Ended Dec 31
     unaudited                2007          2006          2007          2006
    -------------------------------------------------------------------------
    Operating activities:
      Net earnings
       for the period $     32,020  $     19,790  $     38,136  $    106,742
    Non-cash items:
      Depreciation
       and depletion         6,131        10,122        34,140        35,591
      Unrealized
       currency
       translation
       losses (gains)       (1,379)          266         1,362           (22)
      Unrealized gain
       on hedge option     (10,646)            -       (10,646)            -
      Accretion of
       site closure
       and reclamation
       costs                   690           406         2,559         1,553
      Amortization of
       hedging losses        7,523         6,348        28,848        21,375
      Amortization of
       deferred
       charges                 (15)           73           214           562
      Stock-based
       compensation            345           290         1,829         2,014
      Future income
       tax expense
       (recovery)           (2,267)       18,443       (13,065)       11,447
      Change in fair
       value of
       forward
       contracts           (29,631)      (17,975)       24,628       (16,619)
      Writedown of
       mineral
       property                382             -        31,815             -
      Gain on sale of
       investments               -             -          (315)            -
    Changes in
     operating working
     capital and other:
      Concentrate
       settlements
       and other
       receivables          40,529        11,194        (3,099)       13,154
      Inventories            1,655          (457)       (1,860)       (4,661)
      Accounts payable
       and accrued
       liabilities          (6,195)       (2,930)       10,874         3,222
      Settlement of
       forward
       contracts            (5,677)       (1,572)      (19,584)      (25,397)
      Reclamation
       costs paid             (551)         (114)         (551)       (2,349)
    -------------------------------------------------------------------------
                            32,914        43,884       125,285       146,612
    -------------------------------------------------------------------------
    Investing activities:
    Purchase of
     other assets          (51,000)       (1,714)      (51,000)       (1,845)
    Purchase of mineral
     property, plant
     and equipment          (2,565)       (6,115)      (13,825)      (15,199)
    Deferred costs paid     (1,673)            -        (1,673)            -
    Acquisition of
     receivables           (25,434)            -       (25,434)            -
    Purchase of
     investments                 -             -       (72,922)            -
    -------------------------------------------------------------------------
                           (80,672)       (7,829)     (164,854)      (17,044)
    -------------------------------------------------------------------------
    Financing activities:
    Repayment of capital
     lease obligation         (638)         (708)       (2,476)       (6,870)
    Financing from
     credit facility        44,835             -        44,835             -
    Repayment of
     long-term debt              -             -             -       (13,700)
    Issuance of
     common shares             415        99,998         1,056       102,562
    -------------------------------------------------------------------------
                            44,612        99,290        43,415        81,992
    -------------------------------------------------------------------------
    Increase (decrease)
     in cash and cash
     equivalents            (3,146)      135,345         3,846       211,560
    Cash and cash
     equivalents,
     beginning of
     period                269,191       126,854       262,199        50,639
    -------------------------------------------------------------------------
    Cash and cash
     equivalents,
     end of period    $    266,045  $    262,199  $    266,045  $    262,199
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Supplementary
     information
    Cash paid during
     the period for:
      Interest        $        266  $        111  $        482  $      1,006
      Income taxes               -           484             -           484
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    %CIK: 0000072931




For further information:

For further information: Ms. Keren R. Yun, Investor Relations, (416)
216-2781, Email: ngx@northgateminerals.com, Website:
www.northgateminerals.com

Organization Profile

Northgate Minerals Corporation

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