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Northern Vertex, Greenstone partner to accelerate Moss mine development; US gold consolidation

26th May 2017

By: Henry Lazenby

Creamer Media Deputy Editor: North America

     

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VANCOUVER (miningweekly.com) – Canadian project developer Northern Vertex Mining and Guernsey-based private equity fund Greenstone Resources has formed a partnership that will strengthen Northern Vertex’s balance sheet and expedite construction, procurement and staffing initiatives as the company works up to declaring commercial production at the Moss gold/silver project, in Arizona, later this year.

Under terms of the deal, Greenstone has agreed to buy about 51.77-million Northern Vertex units at C$0.52 apiece, for US-dollar-denominated proceeds of $20-million. Each unit will consist of one common share of the company and half of a nontransferable common share purchase warrant.

Each warrant will have a term of five years and will entitle Greenstone to acquire one common share of the company at an exercise price of C$0.91 a share, for a period of two years from the date of issuance of the warrant and at a price of C$1.04 apiece for the remainder of the term of the warrant.

Northern Vertex also announced a nonbrokered private placement of $5-million on the same terms as the Greenstone financing.

“In addition to accelerating our development schedule, the financing also provides critical working capital during ramp up to commercial production at the Moss mine. Furthermore, the company intends to leverage its strong balance sheet, production cash flow, and financial partnerships to pursue our US gold consolidation vision to a become a midtier gold producer,” Northern Vertex president and CEO Kenneth Barry stated on Friday.

The Greenstone financing will close in two tranches, resulting in Greenstone holding no more than 19.99% of the issued and outstanding Northern Vertex stock, and thereafter increasing its stake to 29.3% pending shareholder approval.

Greenstone will have the right, subject to meeting certain shareholding thresholds, to nominate two directors to the company's board, one of whom will be selected by Greenstone, and the second being an independent person at arm's length to Greenstone and the company, with appropriate industry experience. The partners will set up a steering committee that will be responsible for assessing and reviewing the overall progress of the Northern Vertex’s projects, including the Moss mine, and US gold consolidation opportunities. The committee, which will be chaired by Barry, will comprise five members, two of whom Greenstone will be entitled to nominate.

Northern Vertex has also agreed to grant to Greenstone a standard pre-emptive right for as long as it maintains ownership of at least 10% of the company's issued and outstanding shares.

The $33-million Moss mine gold/silver project is an epithermal, brecciated, low sulphidation quartz-calcite vein and stockwork system that extends over a strike length of 1 400 m and has been drill tested to depths of 370 m vertically. It is a potential heap leach, openpit project that has been advanced to the feasibility study stage to ensure that technical, economic, permitting and funding requirements are met before proceeding with the development of the mine.

The project holds compliant measured and indicated resources of 15.48-million tonnes grading 0.87 g/t gold equivalent for 435 000 oz of gold equivalent, comprising 377 000 oz gold and 4.61-million ounces of silver.

There are also 2.18-million ounces in the inferred category, grading 0.62 g/t gold equivalent, comprising 38 000 oz gold and 390 000 oz silver.

Edited by Creamer Media Reporter

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