Northgate breaks ground at N. Ontario gold mine

Northgate Minerals Corp broke ground at its new $339-million gold mining facility in Northern Ontario Friday, creating as many as 875 jobs.

The first gold pour at the Young-Davidson Gold Mine is slated for early 2012 and in its first 15 years of production the mine is expected to yield more than 2.5 million ounces of gold.

“Young-Davidson represents a long-life, low-cost operation located in one of the best mining jurisdictions in the world. We are extremely proud to be standing here today, five years after Northgate first set foot on the property, as we realize our vision of building this mine,” said Ken Stowe, president and chief executive of Northgate.

The mine is expected to create 875 permanent and spin-off jobs in Matachewan and the surrounding region.

More than $140 million in contracts have already been awarded for activities including construction of the main plant site area, the open pit and tailings dam and clearing the area to construct the main process building, the company said. Other development activities include the deepening of the existing shaft, construction of the tailings impoundment area and the realignment of Highway 566.

Using today's spot prices, the mine is expected to generate $2.2 billion in pre-tax operating cash flow, a pre-tax net present value calculated at 5% of $865 million and a pre-tax internal rate of return of 25%.