Northgate Minerals: Another Junior Miner on the Move

Thanks for all the positive feedback on the post about the Newgold (NGD)- Western Goldfield (WGW) merger and the possbility of a U.S. Gold (UXG)- Rubicon Minerals (RBY) deal. Many have asked what other gold mining companies I own. Here’s the current list: Yamana Gold (AUY), Banro Corp. (BAA), Claude Resources (CGR), Golden Star Resources (GSS), NovaGold Resources (NG) New Gold Inc. (NGD), Northgate Minerals (NXG), Rubicon Minerals (RBY), Western Goldfields (WGW), U.S.Goldcorp (UXG).

Today I want to take a closer look at Northgate Minerals (Amex:NXG), a gold and copper miner operating in Canada and Australia. Northgate exhibits strong momentum both fundamentally and technically.

Fundamentally, Northgate’s first quarter 2009 gold production and net cash cost for the Fosterville and Stawell mines in Victoria, Australia and the Kemess South mine in British Columbia, Canada exceeded guidance. As a result, Northgate delivered $45.2 million in operating cash flow and $0.08 net earnings per share, fully diluted for the quarter.

Ken Stowe, President and CEO, stated:

Strong financial results were achieved from our operations during the first quarter, as we beat the forecast for both gold and copper production, generating excellent cash flow from operations of $45 million. Kemess performed extremely well during the quarter, exceeding our expectations for production and costs. We were equally as pleased with the strong operating results from both Fosterville and Stawell, where we achieved another solid quarter of production and lower cash costs. On the exploration front, drill results over the past six months in the North Magdala target at Stawell and in the Harrier zone at Fosterville have been sufficiently compelling that we are commencing development towards both of these areas while exploration continues. Pre-feasibility work at Young-Davidson is moving along well, with completion expected by the end of June.

Technically, Northgate’s stock chart looks just as strong as its operations.

After forming a rounded base in late 2008, NXG shares found a higher level of support in March and recently broke out to new 2009 highs. NXG shows no sign of stopping and is still far from major resistance. Equally important, the trade triangle signals gave a low-risk entry around 1.40.

DISCLOSURE: Long NXG.

Comments

[jimp:]

Any thoughts on Lynas Corp?

May 12 04:37 PM

[Sakata:]

I bought NXG when the mining stocks bottomed on Oct 30th of last year when it was $0.70, along with many other mining stocks. So at its current price of $1.74 I have 148% profit, the sixth best performing stock in my portfolio since that time. DMMIF and DRGDF have beaten if by far and GYSLF, QADMF and PRZ have all bettered it even though I have held them for less time. Of those five DMMIF is starting to look a bit tired but the others are still going stong.

May 12 06:30 PM

[Sakata:]

On May 12 06:30 PM Sakata wrote:

>....

I forgot I have not looked at today's market when I wrote that. After the last two day's my profit is 185% , not 148% !!!!

May 12 06:51 PM

[nmelendez:]

I too am an NXG buyer. Bought at .83. However i am holding on for the long term. using it as a hedge base. If NXG continues at this pace it will be in the 5 to 6 dollar range by december/jan. My main attraction to NXG is it's locations, capital/debt ratio and it's copper. If they are able to in the future open kemess North thats another 5 to 6 million ounces of gold plus the copper. Gotta love this company.

May 12 08:13 PM

[easy jay:]

NXG has its hopes riding on the Young-Davidson project. This is the big upside for the stock. Kenmess North is only a distant possibility but Young Davidson will have a 14 plus year llife with 175,000 ounces of gold per year at a net cost of 450. per ounce. Production start up in 2012 with 25 million spent last year out of total spending to date of 55 million. This is a big project just like Kenmess was. Pre feasibilty study due by end of June 2009 and could move stock price. Full Feasibility study due by end of 2009.

May 23 09:38 PM