Northern Vertex's Moss Gold-Silver Mine Now Funded to Production

Northern Vertex Mining‘s (TSXV:NEE) share price was on the rise Friday (May 26) on the news that its Arizona-based Moss gold-silver mine is now funded through to production. 
The company has arranged for private equity fund Greenstone Resources to buy just over 51.7 million units for C$0.52 each for aggregate gross proceeds of US$20 million. Units will consist of one common Northern Vertex share and half a non-transferable common share purchase warrant. Northern Vertex also announced a US$5-million non-brokered private placement on the same terms as the Greenstone financing.
“The announced US$25 million financing strengthens our balance sheet and will expedite construction, procurement and staffing initiatives. In addition to accelerating our development schedule, the financing also provides critical working capital during ramp up to commercial production at the Moss Mine,” said Kenneth Berry, president and CEO of Northern Vertex.

Northern Vertex has been steadily moving forward at the Moss mine for the last six years, and Berry said the plan is to reach commercial production later this year. A 2014 resource estimate shows that the Moss mine has a measured resource of 4.86 million tonnes grading 0.97 g/t gold and 10.4 g/t silver for 1.1 g/t gold equivalent and 172,000 ounces of contained gold equivalent.
Meanwhile, its indicated resource stands at 10.62 million tonnes grading 0.66 g/t gold and 8.7 g/t silver for 0.77 g/t gold equivalent containing 263,000 gold equivalent ounces. The mine has an inferred resource of 2.18 million tonnes grading 0.55 g/t gold and 5.6 g/t silver for 0.62 g/t gold equivalent containing 43,000 gold equivalent ounces.
According to a feasibility study completed in 2015, the Moss mine will be able to produce 1.75 million tonnes a year grading 0.826 g/t gold and 9.282 g/t silver (or 0.93 g/t gold equivalent) at a gold price of US$1,250 and a silver price of US$20. It has an IRR of 44.3 percent and a payback period of 2.4 years, both after tax, and a NPV of US$55.25 million at a 5-percent discount.
In addition to the money it will receive from Greenstone, Northern Vertex has also recently raised funds from Sprott Private Resource Lending (Collector) (US$20-million loan facility) and Caterpillar Financial Services (US$9-million equipment financing facility).

In Friday’s release, Norther Vertex adds that it will use its “strong balance sheet, production cashflow, and financial partnerships” to move forward with a gold consolidation strategy and become a mid-tier gold producer. No further details have been released so far, but Greenstone has expressed support for that growth plan.
“Northern Vertex has clearly demonstrated its ability to execute its business strategy. We support the Company’s vision of creating value for shareholders via both free cashflow from operations and the consolidation of US gold opportunities. We are pleased to provide our support to pursue management’s vision and aggressive growth plan,” said Mike Haworth, senior partner at Greenstone.
The Greenstone financing will close in two separate tranches. The first, through which Northern Vertex will receive aggregate gross proceeds of US$10.8 million, is expected to close soon; once it does, Greenstone will hold 19.99 percent of the company’s issued and outstanding common shares. Northern Vertex will require shareholder approval to close the second tranche, and once it closes Greenstone’s stake in Northern Vertex will rise to 29.3 percent.
As of Friday at 1:30 p.m. EST, Northern Vertex’s share price was sitting at $0.55, up 7.84 percent. Year-to-date the company’s share price has risen 35.8 percent.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Northern Vertex Mining is a client of the Investing News Network. This article is not paid-for content.