Northern Vertex Mining Corp. (CVE:NEE) says it has closed the sale it announced earlier this week of its 51 per cent interest in the Lemhi gold joint venture to Idaho State Gold Company for US$7.65 million, allowing it to focus exclusively on its Moss gold-silver mine in Arizona.
The consideration is made up of US$4.75 million in cash, which was paid in full on Tuesday, with deferred cash payments of US$2.90 million payable in quarterly installments.
Northern Vertex said the US$7.65 million total proceeds from the sale of its interest are equal to the entirety of the capital it had contributed to the joint venture.
The Idaho State Gold Company will now immediately assume management and operating control at Lemhi.
"We are pleased with the successful closing of the Lemhi Property sale," said president and CEO Dick Whittington.
"Lemhi did not fit our core objectives as our company's main focus is on development of the Moss Gold-Silver Mine in NW Arizona. Now we can more effectively streamline our resources, both capital and managerial, towards its development.
"The rehabilitation and revitalizing of this historic mine is the crux of the company's business model - with obvious significance to our shareholders as well as the local communities in the vicinity of the mine."
The company is planning to put the Moss project into commercial production by early 2014, with a three phase mine development plan designed to move the project forward from conceptual design and test work to on-site pilot plant testing and then commercial operations.
Whittington, who said the preliminary economic assessment (PEA) and the start of construction for its phase 1 pilot plant are on track, took over as chief of the company last November.
With regards to the PEA, CDM Smith Engineering of Arizona is on target to complete the the report by the end of March. This economic assessment, focused on phase I and phase II of the company's staged development process, will address expected cash flows, operating costs and capital costs as well as mine and processing designs and other related aspects.
Pending the outcome of the report, the company will initiate a feasibility study focusing on phase II, with a target production rate for this phase of 5,000 tonnes per day.
The phased approach is expected to minimize initial capex and ensure technical and economic objectives are met for subsequent phases prior to proceeding with the plan.
Two exploration programs are ongoing at Moss, running at the same time as the mine development plan. Drill results, expected over the next few months and through the next two years, will be used to streamline the mine design for phase II.
The current NI 43-101 mineral resource estimate is 956,800 gold equivalent ounces in the measured and indicated categories, and 266,340 ounces in the inferred category.
More metallurgical test work is also underway, designed to improve on results from the initial analysis of bottle roll and column leach test work. These results will form a key component of the PEA report.
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