Northgate Minerals Corp. Follow-Up #9

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THE TIMELESS PRECIOUS METAL FUND

THE SIERRA MADRE GOLD & SILVER VENTURE CAPITAL FUND        

TSX:NXG/AMEX:NXG: August 31, 2007

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PRODUCING 285,000 OUNCES OF GOLD AND 75 MILLION POUNDS OF COPPER IN BRITISH COLUMBIA

Business Summary

Northgate Minerals Corporation is a gold and copper mining company focused on operations and opportunities in the Americas.

The Corporation's principal assets are the Kemess South mine in north-central British Columbia, the adjacent Kemess North deposit, which contains a proven and probable reserve of 4.1 million ounces of gold and the Young-Davidson property in northern Ontario with a total resource base of 2.1 million ounces of gold.

Northgate is now widely recognized as one of the finest operators in the global mining business. This reputation is based on the Corporation's outstanding track record of delivering on its promises. Over the past seven years, a dedicated and knowledgeable workforce has transformed Kemess into one of the most efficient open pit mines in the world. In 2006, exceptional operating performance at Kemess, combined with a strong metal price environment, produced record earnings of $107 million and record cash flow of almost $147 million.

As the Corporation moves forward into 2008 and beyond, the culture of operational excellence that exists within Northgate will provide a solid foundation for growth in pursuit of the Corporation's vision of becoming a larger, multi-mine gold producer.

The Kemess Mine

The Kemess Mine is Northgate's principal operation. The mine provides the Corporation with a low risk, low cost core asset from which it can expand its operations.

The Kemess mining and milling complex is located in the mountains of north-central British Columbia, 430 kilometres northwest of Prince George. The complex consists of the Kemess South open pit mine and a 52,000 tonnes per day mill.

GEOLOGY

The Kemess South deposit is a large, gold-copper porphyry containing proven reserves of 87 million tonnes. The Kemess South deposit is flat-lying and has uniform gold and copper grades throughout. These characteristics make the ore reserve relatively insensitive to changes in metal prices. The deposit contains three principal types of ore: a primary-sulphide hypogene ore; a copper-enriched secondary sulphide ore; and, an oxidized leach cap ore. Currently, the hypogene ore makes up approximately 85% of the ore body.

MINING OPERATIONS

The Kemess South open pit has a conventional mine plan with 15 metre benches and 45 degree slope angles. Two electric cable shovels, a hydraulic shovel, a loader supply ore and waste to the fleet of 15 Euclid haulage trucks, which move ore to the primary crusher and waste rock to storage dumps. Current mining capacity is approximately 50 million tonnes/year, 19 million tonnes of which is ore.

MILLING OPERATIONS

Hypogene, supergene and leach cap ores are processed using conventional crushing, grinding and flotation techniques to produce gold-copper concentrates with a minor by-product silver value. Based on a nominal production rate of 52,000 tonnes of ore per day or 19 million tonnes of ore per year, average annual metal production is forecast to be 300,000 ounces of gold and 75 million pounds of copper contained in 145,000 tonnes of concentrate.

Run-of-mine ore is crushed by a primary gyratory crusher located adjacent to the open pit. Crushed ore is conveyed to a stockpile and fed to two parallel grinding circuits, each operating at a nominal rate of 26,000 tonnes per day. Each grinding circuit consists of one semi-autogenous grinding mill and one ball mill in combination.

Rougher flotation consists of four parallel rows, each with seven flotation cells. Rougher concentrates are reground before being upgraded in two cleaning stages. Cleaner concentrates are pumped to a concentrate thickener and then to two plate filter presses, which reduce the moisture content in the final concentrate product to approximately 8% by weight.

Mill tailings are pumped through one of two parallel pipelines to the tailings impoundment facility located in the South Kemess valley, seven kilometres from the mill. A zoned, earth–filled embankment dam constructed across the valley permanently contains the tailings. In order to accommodate tailings from each subsequent year of production, the height of the dam is increased annually using locally sourced construction materials with very specific properties. The dam’s core is supported with millions of tonnes of clean, coarse sand that is extracted from the tailings in the cycloning and depyritization plant that began operating in 2002.

Design engineering, as well as quality assurance and quality control during construction of the tailings impoundment, is performed by an independent consultant and reviewed further by an independent panel comprised of three industry experts.

EXPLORATION

Young-Davidson Project Summary

The specific objectives for the Young-Davidson exploration program are to discover additional zones of gold mineralization either along trend of the known mineralization, down dip of the known Inferred Resources, or elsewhere on the property. In conjunction with this exploration, the program is designed to upgrade our confidence in the known Indicated Resources to the higher level of Measured and Indicated Resources. This work will be carried out in a systematic manner, starting from the known and moving out as new information is acquired and as the geologists become more familiar with the style of mineralization and develop exploration targets to be tested. A conceptual drilling plan for this exploration is illustrated on the Longitudinal section shown below.

The results of the first 12 holes were reported in press releases dated April 10, 2006 and May 25, 2006. In summary the drilling to date has met the expectations in terms of confirming the historic data and drilling outside of the known resource areas.

It has intersected some of the best intersections (judged by grade times thickness) ever obtained on this property.

Kemess Property Summary

Late in the 2005 Exploration season, diamond drilling to the east of the bounding fault at Kemess North intersected significant lengths of porphyry gold and copper mineralization within the same host rock and within the same alteration style as that at the Kemess North deposit.

Although this mineralization is not outcropping at surface, this discovery opened up several target areas and had important implications for exploration in 2006. 

One important target that was is the focus of the 2006 exploration program, was the discovery of the fault offset high grade core of Kemess North. This is important as the highest grade gold and copper mineralization within Kemess North, as it was defined at the time of the 2004 Reserve and Resource calculation, is adjacent to this fault. This target is postulated to exist to the west of the 2005 drill holes and to the east of the bounding fault.

A second objective was the broad spaced delineation of the full extent of the mineralized system intersected in hole KN-05-24, 25 and 26 (Press releases dated September 25 and November 24, 2005). This is important as there are examples in other mining districts where much higher grade deposits of porphyry gold copper systems have been discovered within large, lower grade mineralization.

By reference to the below noted Target Area Longitudinal Section, it is apparent that the barren cover rocks (Hazelton Volcanics) shown in the light green shade are interpreted to thin to the east. This apparent thinning is related to the “piano key” style of faulting that has moved the host rocks to the Kemess North deposit (Takla Volcanics). The area to the east of Kemess North will be explored by diamond drilling with the targets selected on the basis of geological interpretation, the results of a deep-seeing geophysical survey (Quantec Titan©) and re-interpretation of geochemical surveys in the light of a new understanding of the structure and widespread nature of the gold and copper mineralization.

RDN Property (Eskay Creek) Summary

Drilling on the north end of the RDN property in 2005 indicated the presence of Eskay Creek-type rhyolites (host rocks to the Eskay Creek deposit) with elevated pathfinder elements similar to those identified in the underlying rocks to the 109 zone at Eskay Creek. Based on these similar lithologies and broadly similar alteration styles, additional ground was acquired along this trend. As this area is heavily forested with rugged terrain and thick overburden, a helicopter-based geophysical survey was carried out in the early part of this year. Drill targets have been selected based on the integration of this data with drilling results of 2005. Drilling will commence in early July and a total of five holes are scheduled totaling 1,750 metres.

Recent News: NORTHGATE REPORTS STRONG QUARTERLY CASH FLOW OF $43.7 MILLION

A THIRD LARGE GOLD-COPPER PORPHYRY SYSTEM DISCOVERED AT KEMESS

Northgate Minerals Corporation reported cash flow from operations of $43,685,000 or $0.17 per diluted common share and net earnings of $8,647,000 or $0.03 per diluted common share for the second quarter of 2007.

SECOND QUARTER HIGHLIGHTS

• Production of 65,999 ounces of gold and 14.8 million pounds of copper
• Net cash cost of production of $35 per ounce of gold
• Exploration drilling on targets identified in a deep penetrating induced polarization (IP) survey in 2006 has discovered two new zones of mineralization east of the Kemess North deposit

» Ora Zone: Hole KH-07-04 returned 441 metres (m) of 0.38 grams per metric tonne (g/t) gold and 0.39% copper

» Altus Zone: Holes KH-07-03 and KH-07-05 returned 155 m and 128 m, respectively, averaging 0.23 g/t gold and 0.3% copper

• The underground exploration ramp at the Young-Davidson property progressed by 560 m during the quarter and is now 25% complete; the No. 3 shaft was dewatered down to the 180-m level

Ken Stowe, President and CEO, stated, “The discovery of another large mineralized system in the Kemess camp is very exciting. Equally important is the success of the Titan© deep penetrating IP survey technique, which has proven itself to be an excellent predictive tool for spotting drill holes on the Kemess property in areas where there is no surface expression of mineralization. Over the next two months, we plan to follow up with further drilling of the Ora and Altus zones while conducting additional IP surveys at both Kemess North and Kemess South. From a financial point of view, the second quarter was also very successful as the Kemess mine generated over $43 million in operating cash flow and our cash balance increased to over $317 million. Looking forward to the second half of the year, we are eagerly awaiting the recommendation report from the Joint Environmental Review Panel on the Kemess North project, which is due in the next few weeks.

At Young-Davidson, our pre-feasibility study is progressing very well and we expect to release more detailed information on the technical and economic parameters of the project

before the end of the year.”

Fundamental Considerations

The Corporation’s principal assets are

• the Kemess South mine in north-central British Columbia, the adjacent Kemess North deposit, which contains proven and probable reserves of 4.1 million ounces of gold and 1.4 billion pounds of copper, and
• the Young-Davidson property in Northern Ontario with a total resource base of 2.1 million ounces

With substantial reserves and resources in the ground, an annual gold production that will likely reach 285,000 ounces in 2007, excellent exploration potential and a stable mining environment, Northgate offers outstanding share appreciation potential.

Hedging Summary

·         In January 2007 Northgate opportunistically repurchased another 30,000 ounces of our forward sales position at $612 per ounce

·         The remaining gold hedge position of 30,000 ounces represents only 4% of remaining Kemess South production

·         Northgate’s gold hedge book will be eliminated by the end of 2007

·         Copper forward sales position at March 31/07

2007 Objectives

Technical Considerations

“We do not expect any marked weakness in the gold price in the immediate future.”, we wrote in December when the price marched towards the $ 500 level.  Since then, the gold price moved to $720 for a gain of over 40%.

The recent correction is healthy and prepares the bases for new advances.

The share price reached an all-time high of CAD 5.29, 360% above the May low of last year of $ 1.15, a price which represented an incredible bargain.  The stock is no longer a bargain. Nevertheless, we believe that the shares still represent a good value as a long-term investment.

Peter Zihlmann

www.pzim.com  

invest@pzim.ch

+41 44 268 51 10

+41 79 379 51 57

THE TIMELESS PRECIOUS METAL FUND

is a shareholder in the company and will benefit from any increase in the company’s share price.

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Disclosure: The author has not been paid to write this article, nor has he received any other inducement to do so. The author is a shareholder in the company and will benefit from any increase in the company’s share price.

Disclaimer: The author’s objective in writing this article is to invoke an interest on the part of potential investors in this stock to the point where they are encouraged to conduct their own further diligent research. Neither the information, nor the opinions expressed should be construed as a solicitation to buy or sell this stock. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions in the stock.

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