Tuesday, 30 April 2013

Northern Vertex director buys 200,000 shares of the company

Northern Vertex Mining (CVE:NEE) was given a boost last week after director James McDonald purchased 200,000 shares of the company at 95 cents apiece, showing his confidence in the gold and silver explorer's development plan. 
The share purchase transaction, which was made through the public market, was completed on April 22, and filed on Saturday. McDonald has more than 25 years experience in the international mining sector, having co-founded and successfully developed National Gold, which merged with Alamos Minerals to form Alamos Gold. He also formerly served as president of Genco Resources, during which time it operated the La Guitarra Mine, an underground silver mine located in Mexico.
Late last month, Northern Vertex unveiled its long-awaited preliminary economic assessment report for its Moss gold-silver project in Arizona, showing a whopping 118 percent internal rate of return (IRR), pre-tax. 
The NI 43-101 report, which is based on the updated resource estimate the company put out in March, looked at the economics of open pit mining and heap leach processing for the Moss project. Using a gold price of $1,500 an ounce, the project was estimated to have a net present value of $110 million, pre-tax, at a 5 percent discount rate, with an IRR of 117.9 percent. 
Capex was projected at $26.6 million, with a payback period of 15 months before tax. Cash costs per gold equivalent ounce were pegged at $490 an ounce, for a mine with a life of five years producing at 5,000 tonnes per day for 42,000 ounces of gold equivalent per year. 
Northern Vertex has the right to earn a 70 percent interest in the property from Patriot Gold Corp by spending $8 million and preparing a feasibility study. It has spent a total of $5.6 million so far. 
The Moss project has a three-phase mine development plan, which is designed to move the project forward from conceptual design and lab test work to on-site pilot plant testing and then onto operations, the latter of which would be dubbed phase II. 
The third phase, which the company says is conceptual only and will depend on the success of phase II, would involve mine life extension or expansion, and was not included in the preliminary economic report. 
At a higher $1,700 an ounce gold price, the economics of the project boast an IRR of 150 percent, with a net present value of $137 million pre tax, at the same 5 percent discount rate. 
Shares of Northern Vertex are trading at 80 cents in Toronto, for a market cap of just over $42 million. 

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