Going forward, these improvements will have a very positive impact onthe lower grade ore, which makes up the majority of the remaining reserves atKemess.Metal concentrate inventory declined by 2,000 wet metric tonnes (wmt) toapproximately 10,000 wmt in the first quarter of 2009. Railcar availabilitycontinued to be poor due to extreme winter conditions experienced throughoutCanada in February and March.The average unit cost of production at Kemess was Cdn$13.25 per tonne milledduring the first quarter of 2009, including Cdn$3.61 per tonne for concentratemarketing costs, comprised of treatment and refining costs and transportationfees. The unit cost in the same quarter in 2008 was Cdn$13.58 per tonnemilled, which included Cdn$3.18 per tonne for marketing costs. Concentratemarketing costs have increased year over year as the 2009 smelting andrefining terms for 2009 have increased to $75 per dry metric tonne (dmt) and$0.75 per pound of copper compared with terms of $45 per dmt and $0.45 perpound in 2008. However, site operating costs of Cdn$41.6 million have comedown approximately 6% in the first quarter of 2009 (Cdn$44.2 million in thefirst quarter of 2008).

The decrease in site operating costs is attributedprimarily to the lower cost of diesel fuel and mill steel.The net cash cost of production at Kemess in the first quarter was $367 perounce of gold compared to $105 per ounce reported in the first quarter of2008. The net cash cost was significantly lower than forecast due to thestronger gold and copper production from higher than expected ore grades andmetal recoveries, as well as the higher than forecast copper prices. However,the net cash cost was significantly higher than the comparative quarter of2008 due to the lower copper price and higher marketing costs, which were onlypartially offset by the weaker Canadian dollar and lower Canadian dollardenominated site costs.Financial PerformanceRevenue from Kemess in the first quarter of 2009 was $86,153,000 compared with$104,016,000 in the corresponding period of 2008 excluding the effects ofmark-to-market adjustments on Northgate’s hedge books. Metal sales in thefirst quarter of 2009 consisted of 60,852 ounces of gold and 14.8 millionpounds of copper, compared with 44,724 ounces of gold and 13.4 million poundsof copper in the first quarter of 2008.

During the first quarter of 2009, theprice of gold on the London Bullion Market averaged $909 per ounce and theprice of copper on the London Metal Exchange (LME) averaged $1.56 per pound.The net realized metal prices received on sales in the first quarter of 2009were approximately $963 per ounce of gold and $2.07 per pound of copper,compared with $965 per ounce and $3.68 per pound in the first quarter of 2008.Since Northgate’s metal pricing quotational period is three months after themonth of arrival (MAMA) at the smelting facility for copper and two MAMA forgold, the realized prices reported differ from the average quarterly referenceprices. The realized price calculations incorporate the actual settlementprice for prior period sales, as well as the forward price profiles of bothmetals for unpriced sales at March 31.The cost of sales in the first quarter of 2009 was $37,251,000, which waslower than the corresponding period last year when the cost of sales was$49,164,000. The decrease in the most recent quarter reflects the lower costsof production as well as the impact of the strengthening US dollar.Depreciation and depletion expense in the first quarter was $12,402,000compared to $7,745,000 during the corresponding period of 2008. The higherdepreciation and depletion expense for the most recent quarter reflects theincrease in tonnes of ore mined.Capital expenditures during the first quarter of 2009 totalled $1,877,000compared to $1,789,000 in the corresponding period of 2008. Capitalexpenditures in the most recent quarter reflect the impact of thestrengthening US dollar and were primarily devoted to ongoing construction ofthe tailings dam and the purchase of new mill liners.Exploration Update – Young DavidsonPre-feasibility work at Young-Davidson is moving along well with completionexpected by the end of June. This will include revised economics for thedevelopment of the project using the dramatically higher measured andindicated gold resource of 3.3 million ounces that was announced in December2008.

The new larger resource has allowed for the application of lower costbulk mining methods that will decrease mining costs and increase annualproduction. In addition, the capital estimates will be updated to reflectchanges in equipment pricing and contractor unit rates that have taken placeover the past 12 months. A feasibility study is scheduled for completion byyear-end.The rocks that host the Young-Davidson deposit are known to extend to the westunder barren cover rocks. Historically, only a handful of drill holes havebeen tested along strike west of the deposit. Drilling in late 2008 and early2009 has targeted the area outside of the known resource, immediately west ofthe open pit. The results are highlighted by hole 91, which intersected 25.5mof 4.49 g/t gold including 15m of 6.29 g/t gold and 3.5m of 3.07 g/t gold.Hole YD09-97, located 100m west of hole 91, intersected 11.5m of 2.62 g/t goldand hole YD09-96, located 150m west of hole 91, intersected 6.3m of 1.53 g/tgold.

Hole YD09-98, located 200m west of hole 91, intersected 3.0m of 1.56 g/tgold and hole YD09-99, located 50m below hole 91 intersected 3.7m of 1.87 g/tgold and 5.8m of 3.59 g/t gold. Assays on remaining holes are pending.Exploration diamond drilling on the property during the balance of 2009 willfocus on testing various geophysical anomalies that have similarcharacteristics to those of the known Young-Davidson deposit.Figure 4: Young-Davidson Property (Vertical, North Looking, LongitudinalSection with Metric Grid) OverviewIn the first quarter of 2009, Northgate closed out 9,000 tonnes of copperforward sales contracts for proceeds of $19,182,000. The closed-out contractswere spread equally over the maturity dates from November 2009 to October2010. At March 31, 2009, there were 7,200 tonnes of copper forward salesoutstanding at an average price of $2.49 per pound over the period fromNovember 2009 through October 2010.