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Tuesday, April 18, 2017 Derek Macpherson

NEE Identifies Sufficient Water for Operations

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Northern Vertex Mining Corp’s (TSXV:NEE) updated water report concludes that existing groundwater resources on the patented claims are sufficient to support expected mining operations at its Moss gold-silver mine in Arizona. The updated report estimates current groundwater resources to yield between 180 and 240 gpm, with an additional 120 to 160 gpm by way of pit dewatering from mining operations. Water demand at Moss will range between 170 gpm (winter) and 240 gpm (peak months, June and July), an average of 210 gpm, falling within the estimated capacity. Subsequently, a water distribution system is being designed to connect the groundwater wells. While identifying sufficient water for planned operations is critical; we believe this was already priced into the Northern Vertex’s share price. Northern Vertex trades at C$103/oz a premium to peers (C$55/oz). We view the premium valuation as reasonable given that the Moss mine is financed and under construction. In addition, the company’s valuation does not appear to account for the potential of meaningful mine-life extension and improved economics from the ongoing optimization and exploration programs. read more


Friday, March 24, 2017 Derek Macpherson

NEE Adds C$5M from Warrant Incentive Program

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Northern Vertex Mining Corp. (TSXV:NEE) announced it has completed the warrant exercise incentive program announced on February 17, 2017. The purpose of the program was to provide funding for the ongoing development plans and construction of the Moss gold-silver mine in Arizona. Gross proceeds of C$5,000,054 were raised through the exercise of 10,713,608 outstanding unlisted warrants. For holders who exercised their warrants under the program, the company issued 5,356,804 common share purchase warrants, whereby each incentive warrant entitles the holder to purchase an additional common share of the company at a price of C$1.00 per common share until March 24, 2021. At C$103/oz, Northern Vertex currently trades at a premium to peers (C$55/oz). In our view, this premium valuation is reasonable given that the Moss mine is financed and under construction. In addition, the company’s valuation does not appear to account for the potential of meaningful mine-life extension from the Phase III engineering work or the ongoing exploration program. read more


Sunday, February 26, 2017 Derek Macpherson

RCKS Pre-PDAC Mining Showcase Presenter Preview

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On Friday March 3th, 2017, Red Cloud Klondike Strike Inc. will be hosting its 5th Annual Pre-PDAC Mining Showcase. The event features presentations from 21 companies, including a themed lunch presentation by leading corporations in the gold mining sector. Visit the event page for more details on the day’s schedule. In this post, we provide a brief preview on the 21 presenting companies and 13 banner sponsors that will also be in attendance.  read more


Thursday, February 23, 2017 Derek Macpherson

NEE Optimization Plan Should Improve Moss' Economics

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Northern Vertex Mining Corp. (TSXV:NEE) provided an update on its optimization plan which should improve both the mine’s economics, both for the five-year mine-life (Phase II) and the longer-term (Phase III). A key piece of the plan is to move the mine from diesel power, as envisioned in the feasibility study, to grid power. We expect a nominal increase in initial capital; however, the planned savings of US$16 million over the first five years should materially improve the project´s currently robust after-tax IRR of 48%. As well, the company plans infrastructure improvements (upgrade to Silver Creek Road) and is examining the sale of its waste rock as aggregate which may be a source of additional revenue. Although the power line construction and road upgrades require additional permits, the Moss mine remains on schedule to commence commercial production in Q4 2017. With the project remaining on schedule, we view these optimization initiatives positively, allowing NEE to further reduce costs and improve project economics. At C$99/oz, Northern Vertex currently trades at a premium to peers (C$54/oz). In our view, this premium valuation is warranted given that the Moss mine is financed and under construction. In addition, the company’s valuation does not appear to account for the potential of meaningful mine-life extension potential from the ongoing Phase III engineering work or the ongoing exploration program. read more


Monday, February 20, 2017 Derek Macpherson

NEE Looks to Add Cash with Warrant Incentive

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Northern Vertex Mining Corp. (TSXV:NEE) announced it has initiated an incentive program to encourage the early exercise of up to ~29 million warrants in order to fund the ongoing construction of the Moss gold-silver mine in Arizona. Exercisable warrants from four out of the five eligible tranches have an exercise price of C$0.50 per warrant while warrants from one tranche have an exercise price of C$0.45 per warrant. For each full warrant exercised, holders will receive a new transferable half warrant. Each new full warrant is exercisable at a price of $1.00 for four years from the issue date (~March 22, 2021). As well, the company plans on listing the newly issued warrants. If all the warrants were exercised the total proceeds from the incentive program would amount to ~C$13.9 million. While it is not possible to determine the number of warrants that are going to be exercised, the proceeds should provide Northern Vertex’s balance sheet flexibility as it constructs the Moss mine. As we discussed in a previous post, the company completed a US$20.0 million credit facility and a US$8.5 million equipment lease facility in Q4 2016. With the project’s feasibility study suggesting initial capex of US$33 million and combined with the US$5.6 million of convertible debt raised in H2 2016, these recent financings should provide Northern Vertex with funds to construct the project. At C$111/oz, Northern Vertex currently trades at a premium to peers (C$58/oz). In our view, this premium valuation is warranted given that the Moss mine is financed and under construction. In addition, the company’s valuation does not appear to account for the potential of meaningful mine-life extension from the Phase III engineering work or the ongoing exploration program. read more


Thursday, February 02, 2017 Derek Macpherson

NEE´s Moss Mine Construction Remains On-Track

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Northern Vertex Mining Corp. (TSXV:NEE) provided a construction and permitting update on its wholly owned Moss gold-silver project in Arizona. The update suggests that the Phase II project remains on schedule for commercial production in Q4 2017 and on budget. As well, the company announced it initiated Phase III design work, which is key to incorporating the ~200k ounce of M&I resource currently excluded from the mine plan and extending the Moss mine beyond the current 5 year mine life. In addition, the company has completed 7 holes of the ongoing 3,000m drill program on the wider project area, assays are pending. We view the overall update positively, particularly since the mine remains on schedule and budget at this early stage. At C$76/oz, Northern Vertex currently trades at a premium to peers (C$52/oz). In our view, this premium valuation is warranted given the Moss mine is financed and under construction and does not appear to account for the potential for meaningful mine-life extension from the Phase III engineering work or the ongoing exploration program. However, we note that near-term share price performance is likely to be driven by ongoing construction updates. read more


Monday, January 30, 2017 Derek Macpherson

NEE Results Highlight Resource Growth Potential

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Northern Vertex Mining Corp. (TSXV:NEE) announced the first results from the ongoing 3km step-out drill campaign at its wholly owned Moss gold-silver project in Arizona. Today’s results include two holes and of note, hole WW-16 intersected gold and silver mineralization ~40m below the Moss mine’s current open-pit resource boundaries. Although it is early days, in our view, this intercept highlights there is potential for the resource to grow at depth. Considering the project’s relatively short life (~5 years at 42k AuEq oz per year), even a small resource addition is likely to have a meaningful positive impact on the project’s economics. To date, the company has completed seven holes as part of the ongoing program and we expect pending results should provide positive momentum for the share price. Northern Vertex currently trades at a premium to peers at C$79/oz vs. peers at C$50/oz. read more


Monday, December 19, 2016 Derek Macpherson

Northern Vertex Starts Step-Out Drilling to Expand Resource

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Northern Vertex Mining Corp. (TSXV:NEE) announced it has initiated a 3,000m step-out drill campaign at its wholly owned Moss gold-silver project in Arizona. Northern Vertex has identified four priority targets outside the existing mine plan with the current drilling focused on the Moss Vein’s Western extension which extends for at least 1.5km west of previous drilling at the project. Considering the project’s relatively short-life (~5 years at 42k AuEq oz per year), even a small resource addition is likely to have a meaningful positive impact on its economics. Northern Vertex currently trades at a premium to peers, at 0.46x NAV vs. peers at 0.41x NAV, and at C$88/oz vs. peers at C$44/oz. We believe this premium valuation is warranted given funding is in place for the construction of the Moss project, coupled with the project’s stage (construction underway) and the project’s exploration potential.  read more


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