Northgate Minerals Reports Record Gold Production in the Fourth Quarter 2008

    Fosterville Sets All-Time Gold Production Record

    VANCOUVER, Jan. 13 /CNW/ - (All figures in US dollars except where noted)
- Northgate Minerals Corporation (TSX: NGX, NYSE ALTERNEXT/AMEX:   NXG) today
reported record gold production in the fourth quarter of 2008, as well as the
2009 production forecast and exploration plans for its Canadian and Australian

                       Fourth Quarter 2008 Highlights

    -   Achieved record quarterly gold production of 118,265 ounces, bringing
        total 2008 production to a record 354,800 ounces.
    -   Strong turnaround at Fosterville with 26,398 ounces produced,
        representing a new quarterly record.
    -   Production at Stawell of 30,553 ounces of gold, the fourth highest
        quarterly production in the long 26-year history of the mine.
    -   Kemess produced 61,314 ounces of gold and 14.4 million pounds of
    -   Northgate's average net cash cost of production for its three
        operating mines was $421 per ounce of gold.
    -   Doubled the total gold resource base to over 4.0 million ounces at
        the Young-Davidson property.
    -   Announced the discovery of significant extensions to three
        mineralized zones at Fosterville.

                     2009 Production Forecast Highlights

    -   Northgate is forecasting record gold production of 392,000 ounces
        from its three operating mines in Canada and Australia.
    -   Copper production from the Kemess mine is forecast to be 54.0 million
    -   Northgate's average cash cost of production, net of by-product
        credits, is forecast to be $461 per ounce of gold assuming a copper
        price of $1.40 per pound and exchange rates of Cdn$/US$1.25 and
    -   Exploration spending in Australia is forecast to be $8.2 million,
        split almost equally between the two operations, in support of
        mine-life extensions.
    -   Exploration spending for the Young-Davidson property is forecast to
        be $1.2 million, which will focus on targets outside of the known
        resource area.

    Ken Stowe, President & CEO, commented, "When we acquired Perseverance
Corporation only 11 months ago, our stated and primary goals were to quickly
increase the mine life at Stawell through an aggressive exploration program
and underground infrastructure enhancements, and to dramatically improve the
productivity at Fosterville. The results are readily apparent. At Stawell,
after only five months of ownership, we added 140,000 ounces to the reserve in
July, the single largest reserve addition in the mine's history. At the same
time, working conditions underground have dramatically improved through
significant investments in ventilation and cooling. Furthermore, ore haulage
costs have been reduced by approximately 30% with the acquisition of larger
trucks. At Fosterville, having successfully completed the conversion to owner
mining, our considerable turnaround efforts began to show tangible results in
all areas during the fourth quarter, with the mine reporting the highest
quarterly production in its history at a cash cost of $513 per ounce. In
addition, we made considerable progress on the heated leach circuit, which
will further improve gold recovery at the operation while allowing us to
re-treat previously produced high-grade leach circuit tailings containing over
50,000 ounces of gold. Our strong balance sheet will allow us to continue
aggressive exploration programs at both Australian mines, where we plan to
invest $8.2 million, building on our success in the GG6 zone at Stawell and
the recent exciting results from the Harrier Underground zones at Fosterville.
In Canada, production of gold at Kemess is expected to decline slightly from
2008 levels. Mining in the west end of the pit is currently scheduled to be
completed by mid-year, at which time the mill will begin processing lower
grade stockpiles and east pit ores. At Young-Davidson, we are taking a fresh
look at all aspects of the mine development plan based upon the very
impressive doubling of the gold resource base announced in December. Once this
re-scoping has been completed, we will then commence feasibility study work.
With record combined gold production from Kemess, Stawell and Fosterville
forecast for 2009 and strong prospects for continued exploration success in
Australia and at Young-Davidson, the year ahead should be an exciting one for
Northgate and our shareholders."

    Consolidated Fourth Quarter Production Results

    The following table provides a summary of operations for the fourth
quarter and the full year of 2008 and the comparable periods of 2007.

                                 Q4 2008     Q4 2007        2008        2007
      Gold (ounces)(1)           118,265      41,467     354,800     245,631
      Copper (thousands pounds)   14,391      16,766      51,906      68,129
    Net cash cost ($/ounce)(2)       421          18         445         (22)

    (1) Full year production for Fosterville excludes the change in gold-in-
        circuit inventory previously recorded in production for the first
    (2) Q4 and full year 2008 cash cost figures are unaudited estimates and
        are subject to revision.

    Results of Operations - Kemess South Mine

                                 Q4 2008     Q4 2007        2008        2007
    Ore plus waste mined
     (tonnes)                  7,388,248   8,042,000  28,260,894  42,025,404
    Ore mined (tonnes)         5,027,556   3,206,000  13,851,896  17,060,785
    Stripping ratio (waste/ore)     0.47        1.51        1.04        1.46
    Ore stockpile rehandle
     (tonnes)                  1,173,710   2,367,337   7,152,037   4,012,198

    Ore milled (tonnes)        4,171,027   4,238,626  16,924,271  17,802,317
    Ore milled per day (tonnes)   45,337      46,072      46,252      48,773

      Grade (g/t)                  0.661       0.459       0.505       0.627
      Recovery (%)                    69          66          67          68
      Production (ounces)         61,314      41,467     185,162     245,631

      Grade (%)                    0.196       0.238       0.174       0.214
      Recovery (%)                    80          75          79          81
      Production (thousands
       pounds)                    14,391      16,766      51,906      68,129

    Net cash cost ($/ounce)(1)       395          18         272         (22)
    (1) Q4 and full year 2008 cash cost figures are unaudited estimates and
        are subject to revision.

    Operational Performance

    The Kemess South mine posted production of 61,314 ounces of gold and 14.4
million pounds of copper in the fourth quarter of 2008, which was considerably
lower than the forecast of 74,000 ounces and 18.5 million pounds,
respectively. Metal production was adversely impacted by a burst water pipe,
which caused serious damage to the mill's Distributed Control System (DCS),
resulting in six days of downtime just before Christmas. This event, combined
with a one week delay in accessing some higher grade ore in the western end of
the open pit, were responsible for the shortfall in production during the
quarter. However, the ounces that did not materialize in the fourth quarter of
2008 will be produced in the first quarter of 2009.
    Mining operations returned to near normal levels in the western end of
the open pit once waste rock was removed from the northwest corner where
localized sloughing had occurred earlier in the year. A new radar-based wall
monitoring system was installed to ensure safe operation until the western end
of the pit is mined out in mid-2009.
    The mill operated at an average throughput of 45,337 tonnes per day (tpd)
during the quarter and would have achieved a more typical 49,000 tpd rate had
it not been for the unexpected DCS related outage that occurred just before
Christmas. Recoveries in the mill of 69% for gold and 80% for copper were
consistent with historic norms for the hypogene ore, which was processed
during the quarter.
    The cash cost of production at Kemess in the fourth quarter was $395 per
ounce, which was significantly higher than earlier quarters of 2008 due to the
precipitous drop in copper prices from an average of $3.62 per pound in the
first three quarters to $1.77 per pound in the fourth quarter. For the full
year of 2008, the cash cost of production at Kemess averaged $272 per ounce.

    Results of Operations - Stawell Gold Mine

                                 Q4 2008     Q4 2007        2008        2007
    Ore mined (tonnes)           177,561     152,791     629,665     652,372
    Ore milled (tonnes)          183,415     170,554     698,396     721,723
    Ore milled per day (tonnes)    1,994       1,854       1,908       1,978

      Grade (g/t)                   5.97        6.00        5.25        5.39
      Recovery (%)                    87          89          87          89
      Production (ounces)         30,553      29,635     102,679     112,058

    Net cash cost ($/ounce)(1)       393         n/a         541         n/a

    (1) Q4 and full year 2008 cash cost figures are unaudited estimates and
        are subject to revision.

    The Stawell Gold mine produced a total of 30,553 ounces of gold during
the three months ended December 31, 2008. This represents the highest
quarterly production during 2008 and the fourth highest quarterly production
total in the 26-year history of the mine.
    Mine production of 177,561 tonnes during the quarter increased to its
highest level of the year, as improvements in the mine's ventilation and
cooling systems and the commissioning of three 60-tonne haul trucks increased
the effective mining capacity.
    Approximately 183,415 tonnes of ore at a grade of 5.97 grams per tonne
(g/t) were milled in the fourth quarter of 2008. Gold recoveries in the mill
were 87%, which were on target with plan and consistent with the 87%-90%
historic range.
    The net cash cost of gold for the fourth quarter was $393 per ounce,
which was significantly lower than previous quarters of the year, attributable
to the decreased mining costs, milling of higher grade ore and the weaker
Australian dollar relative to the US dollar.

    Results of Operations - Fosterville Gold Mine

                                 Q4 2008     Q4 2007        2008        2007
    Ore mined (tonnes)           167,182     154,887     511,542     799,188
    Ore milled (tonnes)          165,654     213,543     540,725     931,886
    Ore milled per day (tonnes)    1,801       2,321       1,477       2,555

      Grade (g/t)                   6.03        4.00        5.39        3.27
      Recovery (%)                    82          70          70          77
      Production (ounces)(1)      26,398      19,198      66,959      73,378

    Net cash cost ($/ounce)(2)       513         n/a         836         n/a
    (1) Full year production for Fosterville excludes the change in gold-in-
        circuit inventory previously recorded in production for the first
    (2) Q4 and full year 2008 cash cost figures are unaudited estimates and
        are subject to revision.

    The Fosterville Gold mine produced 26,398 ounces of gold during the three
months ended December 31, 2008, which was a quarterly record for the mine and
substantially higher than forecast. The ore grade milled during the quarter
was consistent with forecast; however, gold recovery was significantly higher
due to the lower proportion of black shale ore in the mill feed and several
leach circuit process improvements that were implemented based on the results
of the pilot plant. Gold recovery is expected to improve further in 2009 once
the $4.75 million heated leach circuit is commissioned in the first quarter.
    Mine development activities continued at a high rate during the fourth
quarter and now extend into the heart of the thicker, higher grade sections of
the main Phoenix orebody, which will support production over the next several
    Net cash cost for the fourth quarter was $513 per ounce of gold, which
was dramatically lower than the first three quarters of 2008, as Northgate
worked on the turnaround of the operation. The decrease in costs is the result
of increased mining rates, higher ore grades, improved gold recovery and the
weaker Australian dollar relative to the US dollar.

    Year Ending 2008 Financial Results

    Northgate's audited financial results for the year ended December 31,
2008 are scheduled for release before market opens on March 4, 2009 and the
Corporation's year-end conference call and webcast for investors and analysts
will be held at 10:00 am (Eastern Standard Time) on the same day.

    2009 Production Forecast

    Northgate is forecasting a record year for production in 2009 of 392,000
ounces of gold at a net cash cost of $461 per ounce.

                                              Gold      Copper     Cash Cost
                                            (ounces) (000s pounds)  (ounces)
    Kemess                                   173,000      54,000        $517
    Stawell                                  107,000         n/a        $388
    Fosterville                              112,000         n/a        $445
                                             392,000      54,000        $461

    Note: Assuming copper price of $1.40 per pound and exchange rates of
    Cdn$/US$1.25 and A$/US$1.43.

    In 2009, Northgate's before tax cash flow is subject to the following

                                                               Before Tax
                                                                Cash Flow
    Variable                                 Change           (US$ millions)
    Gold Price                            $25 per ounce            $9.8
    Copper Price                         $0.05 per pound           $2.6
    Cdn$/US$ Foreign Exchange Rate            0.05                 $6.2
    A$/US$ Foreign Exchange                   0.05                 $5.3

    The following table provides a summary of forecast quarterly gold
production for 2009. Gold and copper output will vary from quarter to quarter
due to normal variations in ore grades, ore types and metallurgical
recoveries. All of Northgate's gold production during 2009 is unhedged. As a
result, the Company will receive market prices for all gold sales during the
year. Northgate has entered into copper forward sales contracts for the final
two months of 2009 for approximately 6.0 million pounds of copper at a forward
price of $2.52 per pound.

                                  Kemess     Stawell Fosterville       Total
    Q1                            49,000      26,000      24,000      99,000
    Q2                            46,000      25,000      30,000     101,000
    Q3                            50,000      27,000      29,000     106,000
    Q4                            28,000      29,000      29,000      86,000
                                 173,000     107,000     112,000     392,000

    Kemess South Mine - Projected 2009 Mine Production

    Ore plus waste mined (tonnes)                                 24,523,000
    Ore mined (tonnes)                                            18,024,000
    Stripping ratio (waste/ore)                                         0.36

    Ore milled (tonnes)                                           17,581,000
    Ore milled per day (tonnes)                                       48,167

    Gold grade (g/t)                                                   0.484
    Copper grade (%)                                                   0.181

    Gold recovery (%)                                                     64
    Copper recovery (%)                                                   77

    Gold production (ounces)                                         173,000
    Copper production (thousands pounds)                              53,800

    Net cash cost ($/ounce)                                              517

    In 2009, the mine plan calls for the removal of 18.0 million tonnes of
ore and 6.5 million tonnes of waste from the Kemess open pit. During the first
three quarters of the year, the Kemess mill will process higher grade ore that
will be mined from the western end of the open pit. Beginning in the fourth
quarter, milling of much lower grade ore from surface stockpiles and from the
eastern end of the open pit is scheduled to commence.
    The Kemess mill is expected to operate at a throughput of 48,167 tpd with
the mill operating at 90% availability. The majority of the ore milled during
the year will be hypogene ore with only a small quantity (10%) of supergene
and leachcap ore. Total metal production for 2009 is anticipated to be 173,000
ounces of gold and 54.0 million pounds of copper.
    Production of gold-copper concentrate is forecast to total 131,000 dry
metric tonnes (dmt), which will be shipped to Xstrata Copper's Horne smelter
in Rouyn-Noranda, Quebec. Annual smelting and refining terms for 2009 are
expected to settle at around $75/dmt and 7.5cents/lb of copper with no price
participation and it is expected that Kemess concentrate will be processed on
comparable terms.
    The unit mining cost is forecasted at Cdn$1.75 per tonne moved and the
total average unit cost of production is forecast to be Cdn$11.90 per tonne
milled, including Cdn$3.17 per tonne milled for concentrate marketing costs.
Assuming by-product copper and silver prices of $1.40 per pound and $9.00 per
ounce, respectively, and an exchange rate of Cdn$/US$1.25, the net cash cost
is projected to be $517 per ounce of gold produced in 2009.
    Since Kemess is approaching the end of its mine life, capital
expenditures will amount to only $3.6 million.

    Stawell Gold Mine - Projected 2009 Mine Production

    Ore mined (tonnes)                                               724,000
    Ore milled (tonnes)                                              833,000
    Ore milled per day (tonnes)                                        2,280

    Gold grade (g/t)                                                    4.49
    Gold recovery (%)                                                     89
    Gold production (ounces)                                         107,000

    Net cash cost ($/ounce)                                              388

    In 2009, the Stawell mine plan calls for 833,000 tonnes to be milled at
an average grade of 4.49 g/t. Gold recovery is forecast to be 89% and total
gold production is expected to be 107,000 ounces. Ore for the mill will be
sourced from the GG3, GG5 and Magdala reserve blocks while development towards
the newly discovered GG6 zone is completed. Unit operating costs are forecast
to total A$72/tonne milled, consisting of mining costs of A$46/tonne mined,
milling costs of A$23/tonne milled and general and administrative (G&A) costs
of A$8/tonne milled.
    Although Stawell is a mature and well run operation, there are still
certain areas where improvements can be made. Due to the success of the pilot
plant project at Fosterville in 2008, the plant itself will be shipped to
Stawell where tests will be conducted to determine whether the historic 89%
recovery at the mine can be improved in the future.
    Capital expenditures at Stawell are forecast to total $10.0 million
including $2.8 million for new mining equipment, $3.5 million for additional
ventilation improvements, $1.1 million for a tailings dam raise and $1.0
million for upgrades and the purchase of critical spares in the mill. Mine
development capital and resource definition drilling costs are forecast to be
$17.1 million primarily related to the GG5 reserve block and development
towards the GG6 zone, which will support production in 2010 and 2011.
    Exploration expenditures of $4.0 million are forecast for 2009 and will
focus on three targets. The first target will be Sub-GG6, where a 6,900 metre
(m) program will be conducted to follow up on 2008 drilling, which yielded
some very high grade intersections. The second will be the promising North
Magdala target, where a planned drill program of 5,000m will be conducted.
Lastly, 2,000m will be devoted to the Wonga Gift target. The balance of the
exploration budget will be devoted to the exploration of several other
promising targets on the 1,000 hectare Stawell mining lease. In addition to
this extensive diamond drilling program, Stawell geologists will continue
their very successful program of revisiting resource areas in the upper areas
of the mine to identify additional reserves, which can be mined with very low
development costs due to their proximity to existing workings.

    Figure 1 - Stawell Gold Mine 2009 Exploration Program

    Fosterville Gold Mine - Projected 2009 Mine Production
    Ore mined (tonnes)                                               731,000
    Ore milled (tonnes)                                              733,000
    Ore milled per day (tonnes)                                         2008

    Gold grade (g/t)                                                    5.41
    Gold recovery (%)                                                     84
    Gold production (ounces)                                         112,000

    Net cash cost ($/ounce)                                              445

    In 2009, the Fosterville mine plan calls for the mill to process a total
of 731,000 tonnes at a grade of 5.41 g/t. Gold recovery is estimated to be
84.0% on average during the year and total production is forecast to be
112,000 ounces. Mine production during the year will come primarily from the
heart of the main Phoenix ore body with the remaining production from the
Ellesmere ore body. Unit operating costs are forecast to total A$97/tonne
milled, consisting of mining costs of A$54/tonne mined, milling costs of
A$34/tonne milled and G&A costs of A$10/tonne milled.
    The heated leach circuit is scheduled to be commissioned in the first
quarter of 2009. Pilot plant tests indicated that gold recovery of 90% on
average can be achieved once this circuit is in full operation. Once this last
operational deficiency has been corrected, attention will be turned to reduce
operating costs at the mine with the goal of lowering Australian dollar
denominated cash costs per ounce by as much as 10% by optimizing the
    Capital expenditures at Fosterville are forecast to total $12.0 million
including $2.1 million for the completion of the heated leach project, $2.1
million for new mobile equipment, $1.0 million for a tailings dam raise, $0.9
million for equipment rebuilds and approximately $0.5 million for the tailings
retreatment project. Mine development capital and resource definition drilling
costs are forecast to be $14.5 million primarily related to the ongoing
development of the Phoenix and Ellesmere orebodies.
    Exploration expenditures in 2009 are forecast to be $4.2 million and will
focus on three areas. The key focus of the exploration program is the Harrier
Underground zone, with an 11,500m program that is already underway to follow
up on the excellent results obtained during the 2008 program. The second
target area is Phoenix Deeps, the down plunge extension of the main orebody at
Fosterville where a drill program totaling 5,300m is planned. The third target
area is known as Pegasus, which is a theorized structural repeat of the
Phoenix mineralization at greater depth that will be drill tested during the
year. A total of 3,500m has been allocated to this program.

    Figure 2 - Fosterville Gold Mine 2009 Exploration Program

    Young-Davidson Project

    Upon completion of the underground ramp development at the end of 2008,
mining equipment was demobilized and the remaining shaft refurbishing work on
the 13th level will be completed in early 2009. The number of people working
at the property is now 23, down from an average of 115 in 2008, and this group
will continue to perform a variety of activities related to permitting and
development, while keeping the mine dewatered.
    The new resource estimate was released in December 2008 and a NI 43-101
Technical Report will be filed on SEDAR ( and on Northgate's
website ( at the end of January 2009. The project
focus has now shifted to optimize the NI 43-101 Preliminary Economic
Assessment Report, which was filed in August, by incorporating the new,
dramatically larger resource, using the geotechnical information that has been
collected, and making better use of the existing ramp and shaft infrastructure
at the site. Once this process is completed, a full feasibility study will be
    The rocks that host the Young-Davidson deposit are known to extend to the
west under barren cover rocks. Historically, only a handful of drill holes
have been tested along strike west of Young-Davidson. Other targets on the
property are geophysical anomalies that have similar characteristics to those
of the known Young-Davidson deposit. Exploration in 2009 will focus on these
targets outside of the know resource area.
    2009 exploration spending at Young-Davidson is forecast to total
approximately $1.2 million out of a total project budget of $8.6 million. The
balance of the expenditures will be for permitting, engineering and
feasibility studies and site care and maintenance.

    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 record gold production of
392,000 ounces in 2009 and is targeting growth through further acquisition
opportunities in stable mining jurisdictions around the world. Northgate is
listed on the TSX under the symbol NGX and on the NYSE Alternext US (formerly
AMEX) under the symbol NXG.

    Forward-Looking Statements:

    This news release contains certain "forward-looking statements" and
"forward-looking information" 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, including any
information as to the future activities of and developments related to the
business activities of Northgate Minerals Corporation (Northgate) and its
subsidiaries, the market position, and future financial or operating
performance of Northgate, are forward-looking and subject to important risk
factors and uncertainties, many of which are beyond the corporation's 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; impact of any hedging
activities, including margin limits and margin calls; 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, success of exploration activities and permitting
time lines; changes in national and local government legislation, taxation,
controls, regulations and political or economic developments in any of the
countries in which the corporation does or may carry out business in the
future; risks of sovereign investment; the speculative nature of gold
exploration, development and mining, including the risks of obtaining
necessary licenses and permits; dilution; competition; loss of key employees;
additional funding requirements; and defective title to mineral claims or
property. In addition, there are risks and hazards associated with the
business of gold exploration, development and mining, including environmental
hazards, industrial accidents, unusual or unexpected formations, pressures,
cave-ins, flooding and gold bullion losses (and the risk of inadequate
insurance or inability to obtain insurance, to cover these risks), as well as
the factors described or referred to in the section entitled "Risk Factors" in
Northgate's Annual Information Form for the year ended December 31, 2007 or
under the heading "Risks and Uncertainties" in Northgate's 2007 Annual Report,
both of which are available on SEDAR at, and which should be
reviewed in conjunction with this document. Accordingly, readers should not
place undue reliance on forward-looking statements. The corporation does not
undertake 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.

For further information:

For further information: Ms. Keren R. Yun, Director, Investor Relations,
Tel: (416) 363-1701 ext. 233, Email:, Website:

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