VANCOUVER, Oct. 12 /PRNewswire/ - Northgate Minerals
Corporation (TSX: NGX, NYSE Amex: NXG) ("Northgate") announced
today that the underwriters of its previously announced offering of
3.50% convertible senior notes due 2016 have exercised their
US$20 million over-allotment option
in full, increasing the total offering size to US$170 million. As a result, Northgate expects to
receive net proceeds from the offering of approximately
US$163.5 million after deducting the
underwriters' commission and expenses of the offering. Closing of
the over-allotment option is expected to occur on or about
October 15, 2010.
As previously announced, Northgate intends to use the net
proceeds of the offering to finance a portion of the US$339 million pre-production development cost of
its Young-Davidson gold mine near Matachewan, Ontario, which is currently
scheduled to begin producing gold in early 2012.
"With the success of this financing, Northgate now has
sufficient funds to develop Young-Davidson, meaning that a key milestone for the
Company has been achieved through one of the least dilutive means
possible" said Ken Stowe, President
and CEO. "Our intention is to settle the notes by delivery of cash,
and with production at Young-Davidson scheduled to commence in 2012, we
fully expect the mine to generate more than enough free cash flow
to repay the convertible notes prior to their maturity in 2016,
such that there will be no need to issue shares upon
conversion."
Prior to July 2016, the notes are
only convertible into common shares upon the occurrence of a
limited number of specified events, none of which is solely within
the control of the note holder. In the event that an early
conversion right is triggered, any shares issued by Northgate would
be priced at a significant premium to Northgate's current share
price.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the
Convertible Notes in any jurisdiction in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of that jurisdiction.
Northgate Minerals Corporation is a gold and copper producer
with mining operations, development projects and exploration
properties in Canada and
Australia. Our vision is to be the
leading intermediate gold producer by identifying, acquiring,
developing and operating profitable, long-life mining
properties.
Cautionary Note Regarding Forward-Looking Statements and
Information:
This Northgate press release contains "forward-looking
information", as such term is defined in applicable Canadian
securities legislation and "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform
Act of 1995, concerning the offering, the anticipated use of
proceeds and other statements that express management's
expectations or estimates of future developments, circumstances or
results. Generally, forward-looking information can be identified
by the use of forward-looking terminology such as "expects",
"believes", "anticipates", "budget", "scheduled", "estimates",
"forecasts", "intends", "plans" and variations of such words and
phrases, or by statements that certain actions, events or results
"may", "will", "could", "would" or "might" "be taken", "occur" or
"be achieved". Forward-looking information is based on a number of
assumptions and estimates that, while considered reasonable by
management based on the business and markets in which Northgate
operates, are inherently subject to significant operational,
economic and competitive uncertainties and contingencies. Northgate
cautions that forward-looking information involves known and
unknown risks, uncertainties and other factors that may cause
Northgate's actual results, performance or achievements to be
materially different from those expressed or implied by such
information, including, but not limited to gold and copper price
volatility; fluctuations in foreign exchange rates and interest
rates; the impact of any hedging activities; discrepancies between
actual and estimated production, between actual and estimated
reserves and resources or between actual and estimated
metallurgical recoveries; costs of production; capital expenditure
requirements; the costs and timing of construction and development
of new deposits; and the success of exploration and permitting
activities. 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, 2009 or under the heading "Risks and Uncertainties" in
Northgate's 2009 Annual Report, both of which are available on the
SEDAR website at www.sedar.com, should be reviewed in conjunction
with the information found in this press release. Although
Northgate has attempted to identify important factors that could
cause actual results, performance or achievements to differ
materially from those contained in forward-looking information,
there can be other factors that cause results, performance or
achievements not to be as anticipated, estimated or intended. There
can be no assurance that such information will prove to be accurate
or that management's expectations or estimates of future
developments, circumstances or results will materialize.
Accordingly, readers should not place undue reliance on
forward-looking information. The forward-looking information in
this press release is made as of the date of this press release,
and Northgate disclaims any intention or obligation to update or
revise such information, except as required by applicable law.
SOURCE Northgate Minerals Corporation
Copyright . 12 PR Newswire