Vancouver-based Northern Vertex Mining (TSXV: NEE) (US-OTC: NHVCF) has amended the terms of a loan and lined up two new sources of financing totalling US$13.6 million to improve cash flow at its newly producing Moss gold-silver mine in northwest Arizona.
Vertex achieved commercial production at Moss on Sept. 1, 2018 — becoming the newest gold producer in the U.S. — and expects the open-pit, heap-leach mine to produce 36,000 to 40,000 oz. gold equivalent in its first year of production (32,000-36,000 oz. gold and 224,000-248,000 oz. silver).
In its latest financial dealings, Vertex has made three new arrangements:
- a lowering of the monthly principal payments on its US$20-million loan from Sprott Resource Lending to US$500,000 from US$1.1 million, an extension of the maturity date by 13 months to Dec. 31, 2020, and the issuance of 1.25 million Vertex shares;
- a non-brokered placement of up to US$5 million comprised of up to 21.7 million units priced at 30¢ per unit, with each unit comprising a share and half a warrant, with each whole warrant exercisable into a share at 45¢ within 24 months;
- a US$8.5 million silver purchase agreement with Maverix Metals whereby Vertex will sell to Maverix 45% of the silver production from Moss at an ongoing payment price equal to 30% of the lesser of the average silver price for the calendar quarter, and the spot price of silver at the time of delivery. After the purchase by Maverix of an aggregate of 1.5 million oz. silver, the amount of silver production purchasable by Maverix will be reduced to 22.5% of production for the remaining life of mine.
Northern Vertex president and CEO Ken Berry states in a release: “Following the declaration of commercial production in September we are pleased to improve our free cash flow, strengthen our balance sheet and create financial flexibility to aggressively pursue our M&A opportunities, all during this pivotal growth period.”