A recent article by Palisade Research highlighted a tour of Arizone highlighting Northern Vertex Mining Corp (TSXV:NEE).
There has been quite a bit of consolidation in the sector over the last five years of depressed markets, most of which occurred with brownfield feasibility-stage companies; the “next tray of brownies” to get eaten by the market. Most of the names we knew and loved are gone, eaten up and absorbed by the big boys. But there are some goodies left, companies that have scratched and scraped through the tough market and are now ready to go.
Our search has brought us to Arizona, to see a little company called Northern Vertex Mining (TSXV:NEE). A soon to be 42,000 ounce per year, little heap leach project, toting an after-tax NPV of US$55 million and IRR of 44% at $1,250 gold. They are ready: resources drilled up, bulk sample and test plant successful, de-risked, cashed up and debt financing for mine construction in place. All for a one time offer low price of C$0.30 share, and an embarrassingly low market cap of $31M.
These guys have one of the only true “horse-before-the-cart” stories we’ve ever seen. They had a showing and concept, drilled it, defined a starter resource, tested the metallurgy, made a plan, built a leach pad, and tested the plan, all while experimenting and fine tuning to the process. This culminated with pouring 5,000 ounces of gold, conducting a bankable feasibility study, advancing the permits.
What NEE discovered when drilling was that there were opposite dipping high angle vein sets to the main Moss Vein (70 degree south-dipping). These vein sets were higher grade, up to 1 ounce per tonne and were the reason for the scattered shafts of historic mining spanning close to hundreds of meters away from the main Moss trend. Because these veins are typically thin and possibly discontinuous, they don’t show themselves out of the landscape like the Moss vein does.
In our opinion the exploration upside of Northern Vertex is the best part. It has a nice little mine to generate cash flow that is fully permitted, de-risked, and partially financed. In the meantime it can grow the resource by a least double, if not quadruple, based on what is immediately available to follow up on for an absurdly low cost of exploration.
Northern Vertex just closed a C$2.7 million financing and has no debt on the books. Ken and company plan on using some of the proceeds to explore the Moss Look-Alike, West Oatman. NEE wants to prove to the market that it has plenty of more gold in the ground – we can’t wait till these results hit the newswire.