Northern Vertex Mining Corp. (TSXV:NEE) announced it has signed a credit agreement with Sprott Lending to advance its wholly owned Moss gold-silver
project in Arizona towards commercial production. The credit facility of US$20 million is a previously proposed facility with Macquarie Bank of the
same size. While the cost of the two facilities appears to be similar, the newly completed Sprott facility appears to provide the company with more
flexibility (no hedging requirement, large equipment financing carve out). Importantly, the completion of this facility, along with the addition of
equipment lease financing (US$8.5 million possible) and the recently completed convertible debt ~US$5.5 million (C$7.35 million) provides Northern
Vertex with the funds for construction of the Moss project.
New Sprott facility provides Northern Vertex a little more flexibility. The new US$20 million dollar Sprott facility, of which US$5 million
has been drawn, bears an interest rate of LIBOR +8% (Macquarie Loan LIBOR +8.75%), requires no hedging (Macquarie, 15% of M&I resources), requires
no equity warrants (Macquarie, 400k 3 year warrants at 30% premium), has a US$300k structuring fee plus ~1.5 million Northern Vertex shares (Macquarie,
none), provides Sprott 6,000 oz worth of gold purchase options at US$1,350 (Macquarie, none) and allows for an equipment financing carve out of US$8.5
million (Macquarie, US$6.5 million).
Company Description: Northern Vertex Mining Corp. (TSXV:NEE) is an exploration and development company focused on the reactivation of
its wholly-owned Moss gold-silver mining project in Arizona that hosts a resource of 478,000 oz AuEq (17.7Mt at 0.84 g/t AuEq). The company completed
a Feasibility Study in 2015 on the project suggesting initial capex of US$33 million and all-in sustaining costs (AISC) of US$624/oz AuEq over the
5 year LOM.
Derek Macpherson | VP Mining Analysis
Sunneva Bernhardsdottir | Associate, Mining Analysis
Victoria Ellis Hayes | Associate
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