Wednesday, 19 June 2013

Northern Vertex says amended PEA keeps principal conclusions intact

Northern Vertex Mining Corp. (CVE:NEE) says it has now filed an amended preliminary economic assessment (PEA) of its Moss mine gold-silver project , following comments received from the British Columbia Securities Commission, with the main conclusions of the initial report remaining intact. 
The latest PEA report included enhanced disclosures, the effects of the 2 per cent net smelter returns royalty on the project's economics, updated consensus price forecasts, and additional sensitivity analyses, among several other items. 
The company told investors late Tuesday that the principal conclusions of the amended report are generally consistent with the original economics released in March of this year. 
The main change is that the effect of the 2 per cent royalty reduced the net present value slightly from the prior $110 million pre-tax to around $105 million, while the IRR was lowered from 118 per cent to 113 per cent. 
The report continues to recommend a pilot plant operation, along with increased drilling of 3,700 metres, from 2,200 metres previously. The conclusions of the report are not dependent on the outcome of the drilling, which is designed to upgrade resources lying outside of the first two phases of the project. 
"We were pleased to see that the principal conclusion of the original PEA remains intact, namely that the Moss Mine Gold-Silver Project appears to show the potential for positive economics even under some negative assumptions such as lower metals prices and higher capital and operating costs," said CEO Dick Whittington in the release on Tuesday. 
"We look forward to implementing the recommendations of the Amended PEA and to work towards establishing a pilot operation to test the technical and economic assumptions which form the basis of the report."            
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.

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