VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/27/16 -- Northern Vertex Mining Corp. (the "Company") (TSX VENTURE: NEE) announces that the Company's unaudited interim consolidated financial results for the third quarter fiscal 2016 ended March 31, 2016 have been filed on SEDAR. The full version of the Financial Statements and Management's Discussion & Analysis can be viewed on the Company's website at www.northernvertex.com or on SEDAR at www.sedar.com.
Financial and Corporate Highlights for the Quarter Ended March 31, 2016
-- For the quarter, net loss was $0.63 million (2015: $0.43 million),
excluding a non-cash, unrealized foreign exchange loss of $3.14 million
(2015: profit of $3.27 million);
-- Net loss for the quarter was $3.77 million ($0.04 per share) due to
a $3.14 million non-cash, unrealized foreign exchange loss compared
to a net profit of $2.85 million ($0.04 per share), after a $3.27
million non-cash, unrealized foreign exchange gain, for the same
period last year;
-- Year-to-date net loss, excluding a non-cash, unrealized foreign exchange
gain, was $2.57 million compared to a net loss of $1.09 million for the
comparative period last year;
-- Year-to-date net loss was $1.16 million ($0.01 per share), primarily
due to a $1.42 million non-cash, unrealized foreign exchange gain
compared to a net profit of $4.99 million ($0.07 per share) that
included an unrealized foreign exchange gain of $6.08 million for
the same period last year;
-- Cash and cash equivalents was $3.52 million at March 31, 2016, compared
to $3.18 million at March 31, 2015. The variance was primarily due to
cash received from financing activities reduced by legal fees regarding
the recent arbitration, consulting fees pertaining to the Macquarie debt
financing due diligence, and exploration and evaluation spend at the
Moss Mine Project;
-- Total costs incurred to March 31, 2016 regarding the Moss Mine Project,
including the Silver Creek Project, was $32.59 million, compared to
$29.92 million for the same period in the prior year; and
-- Working capital increased to $3.24 million at March 31, 2016, compared
to $2.83 million for the previous year.
Dick Whittington, President & CEO, states, "The Company is entering a transformational phase in its history. Acquiring 100% of the Moss Gold Mine Property (see May 26th News Release) is a significant milestone toward commercial production which, coupled with the recently announced $7.5 Million Convertible Debenture Private Placement (see May 25th News Release), will enable us to advance permitting, mine construction planning and property-wide exploration activities as well as further evaluate the additional 200,000 M&I resource ounces not included in the Feasibility Study. The economics of the Moss Mine project are exceptionally robust as demonstrated by our 2015 Feasibility Study. Our focus remains on finalizing our funding requirements to maintain momentum as we look to build on recent developments and transition the company from a development company to a production company."
Cost Management
-- The Company has improved its working capital position with the recent
non-brokered private placement closings however, the Company continues
to be focused on taking substantial measures to reduce its monthly cash
burn by eliminating non-essential expenditures and preserving its cash
position as it continues to adapt to the difficult market conditions.
Operating Results
Operations
-- Phase I - Pilot Plant Operations continues to be on a scheduled care and
maintenance program. Company staff maintain the site Monday to Friday on
day shifts, while Mohave Security monitors the site on night shifts,
weekends and holidays. The Company continues to safeguard the facilities
on site in preparation of a future construction decision relating to
Phase II - Commercial Operations.
Exploration
-- The Company has completed a field geological mapping and sampling
program on areas outside of the main Moss vein system, indicating the
property wide potential. Exploration potential is considered to be
excellent both adjacent to the main Moss vein system, both on strike and
to depth, as well as property wide.
Feasibility Study
-- The economic highlights of the Feasibility Study ("FS"), at prices of
US$1,250/oz Gold and US$20/oz Silver, 100% Project basis using a
discount factor of 5% in arriving at the Project Net Present Value
("NPV") and recoveries to dore for gold and silver of 82% and 65%,
respectively, are summarized in the following table:
---------------------------------------------
Pre-Tax After-Tax
---------------------------------------------
NPV@ 5% US$75.30 M US$55.30 M
IRR% 54.6% 44.3%
Payback (yrs) 2.3 2.4
---------------------------------------------
-- The FS is the basis by which the Company is progressing its efforts to
transition the Company from a development company to a production
company.
Debt Financing
-- On September 15, 2015, the Company signed an Engagement Letter with
indicative terms for Macquarie Bank Limited to provide project finance
facilities of up to US$20 million (the "Macquarie Facility") to be used
to fund the majority of the projected development costs of the Moss Mine
Project. The Company has also received indicative terms for a US$6.5
million Equipment Finance Facility (the "Equipment Facility") from a
major US bank. The Macquarie Facility and the Equipment Facility are
complementary and together would provide up to US$26.5 million towards
the estimated pre-production capital of US$33.0 million required to
construct the planned gold-silver mine at the Moss Mine site.
Corporate
-- On May 25, 2016, the Company announced a non-brokered private placement
of unsecured convertible debentures for gross proceeds of up to
$7,500,000. Each debenture will have an issue price of $100, a term of
five years from the date of issue and bear interest at 5% per annum,
payable semi-annually and convertible into common shares of the Company
at the price of $0.50 per share. The Company has the option to repay the
principal amount of the debentures in common shares in certain
circumstances. The funds will be used to advance the Moss Mine to final
design and construction planning along with required permitting,
additional exploration work to test the potential for further
discoveries on the Moss and Silver Creek claims and general corporate
purposes.
-- On April 4, 2016, the Company closed the final tranche of its
oversubscribed February 26, 2016 announced non-brokered private
placement. The Company issued a further 500,000 units bringing the
aggregate total units issued to 8,474,875 at a price of $0.32 per unit
for total gross proceeds of $2,711,960. Each unit consists of one common
share of the Company and one transferable share purchase warrant, with
each whole warrant entitling the holder to acquire one common share at
an exercise price of $0.50 until April 4, 2019. The funds will be used
for the advancement of the Moss Gold/Silver Mine along with general
corporate purposes.
Tax Pools
-- As of March 31, 2016, the Company has approximately US$34.3 million in
tax deduction pools that can be applied directly to the Company's
taxable income from the Moss Mine, to off-set future tax liabilities.
Utilizing these tax deduction pools will significantly enhance the
Company's economics of the Moss Mine over and above the analysis of the
FS.
Consolidation of Moss Mine with 100% Ownership
-- On May 26, 2016, the Company and Patriot Gold announced the completion
of a previously announced agreement, whereby the Company would purchase
Patriot Gold's remaining interest in the Moss Gold/Silver Mine for
$1,500,000 plus the retention by Patriot Gold of a 3% net smelter
returns royalty. The consideration of $1,200,000 cash and $300,000 in
the Company's common shares valued at $0.35 per share (857,140 shares)
has been paid and the transaction is complete with the Company now
owning 100% of the Moss Mine.
Strategic Priorities
-- The key strategic priorities for the Company are to secure financing and
advancing the Moss Mine to the development and construction stage.
-- Additional priorities involve the continued exploration of the Moss and
Silver Creek properties where the potential exists to make new
discoveries and to continue to support the various community related
initiatives that the Company has started in both the educational and
community development areas.
-- Now owning 100% of one of the strongest development projects in the
market, the Company is committed to advancing its efforts in moving the
mine towards commercial production as expeditiously as possible. The
Company's directors and management believe that this priority will
provide a solid foundation for Northern Vertex Mining Corp., and its
shareholders, as it continues working towards building a prosperous,
well-respected and long-term, production mining company.
About Northern Vertex
Northern Vertex Mining Corp. is a Canadian exploration and mining company focused on the reactivation of its 100% owned Moss Mine Gold/Silver Project located in NW Arizona, USA. The Moss Mine Gold-Silver Project is an epithermal, brecciated, low sulphidation quartz-calcite vein and stockwork system which extends over a strike length of 1,400 meters and has been drill tested to depths of 370 meters vertically. It is a potential heap leach, open pit project that has been advanced to the Feasibility Study stage to ensure that technical, economic, permitting and funding requirements are met prior to proceeding with the development of the mine. The Company's management comprises an experienced management team with a strong background in all aspects of acquisition, exploration, development, operations and financing of mining projects worldwide. The Company is focused on working effectively and respectfully with our stakeholders in the vicinity of the historical Moss Mine and enhancing the capacity of the local communities in the area.
Qualified Persons:
The foregoing technical information contained in this news release has been approved by Mr. L.J. Bardswich, P. Eng., General Manager Moss Project, and a Qualified Person ("QP") for the purpose of National Instrument 43-101 (Standards of Disclosure for Mineral Projects).
ON BEHALF OF THE BOARD OF DIRECTORS
J.R.H. (Dick) Whittington, President & CEO
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note About Forward Looking Information
This news release contains statements about our future business and planned activities. These are "forward-looking" because we have used what we know and expect today to make a statement about the future. Forward-looking statements including but are not limited to comments regarding the timing and content of upcoming work and analyses. Forward-looking statements usually include words such as may, intend, plan, expect, anticipate, believe or other similar words. We believe the expectations reflected in these forward-looking statements are reasonable. However, actual events and results could be substantially different because of the risks and uncertainties associated with our business or events that happen after the date of this news release. You should not place undue reliance on forward-looking statements. As a general policy, we do not update forward-looking statements except as required by securities laws and regulations.
Cautionary Note to US Investors:
This news release uses the terms "Measured", "Indicated", and "Inferred" resources. US investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. US investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. US Investors are also cautioned not to assume that all or any part of a Mineral Resource is economically or legally mineable.
2016 number 09
Contacts:
Northern Vertex Mining Corp.
Investor Relations
604-601-3656 or 1-855-633-8798
www.northernvertex.com
