Matachewan Consolidated Mines, Limited

May 20, 2011 16:05 ET

Matachewan Consolidated Mines, Limited Announces Sale of Mine Property to Northgate Minerals Corporation

TORONTO, ONTARIO--(Marketwire - May 20, 2011) -Matachewan Consolidated Mines, Limited ("MCM") (TSX VENTURE:MCM.A) announces the sale effective May 12, 2011, to Northgate Minerals Corporation ("Northgate") (TSX:NGX)(NYSE Amex:NXG) of its former producing gold property located in the Matachewan Gold Camp, 50 miles southeast of Timmins, Ontario. The property consists of 24 mining leases in Powell and Cairo townships, Larder Lake Mining Division, Ontario, which prior to the sale had been optioned to Northgate as the company builds the Young-Davidson gold mine.

Terms of the sale include cash of $216,500, retention of the royalty of ore mined and processed from the property, and Northgate assuming liability for a note payable on the property of $383,434.

The base royalty is $1.00 U.S. per ton of ore mined and processed from the property. An additional royalty will be paid when the price of gold exceeds $270 U.S. per ounce. This will amount to 5% of the increase per ounce recovered above the base rate of $270 U.S. per ounce. The royalty relates to the current reserves of approximately 600,000 tonnes on the 24 Powell and Cairo mining leases, subject to this agreement.

These tonnes form part of an open pit containing 6.2 million tonnes of ore and will be mined once Young-Davidson commences production in 2012. In addition, underground exploration activity within these mining leases will commence shortly as Northgate explores outside of its current reserve envelope.

Northgate is currently building the Young-Davidson mine, which is scheduled to commence production in late Q1 2012. Young-Davidson is forecasting an initial 15-year mine-life and is projecting average annual production of 180,000 ounces of gold at a cash cost of $400 per ounce.

Matachewan is a Canadian publicly-traded junior resource company that has oil and gas investments in Western Canada. Matachewan's common shares are traded on the TSX Venture Exchange under the trading symbol MCM.A

Northgate 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.

Certain statements contained in this press release constitute "forward looking statements". These statements are based on current expectations of management, however are subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from the forward-looking statements in this news release. Readers are cautioned not to place undue reliance on these statements. The Company does not undertake any obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise after the date hereof, except as required by securities laws.

Shares Outstanding: 12,445,025


Contact Information

  • Matachewan Consolidated Mines, Limited
    Richard McCloskey
    Chief Executive Officer and President
    (416) 364-2173

    Northgate Minerals Corporation
    Keren Yun
    Director, Investor Relations
    (416) 216-2781