Palisade Research February 23, 2017
Current Price: C$0.54
Shares Outstanding: 100.7 million
Market Capitalization: C$54.4 million
52-Week Range: C$0.18-C$0.55
Cash: ~C$6 million
Total Liabilities: ~C$6.6 million
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This morning Northern Vertex announced its Moss Mine Optimization Plan, and the cost savings outlined significantly increased Moss’ IRR, while giving our projected share price a nice bump at the same time.
The news release, and rightfully so, was headlined by the installation of a power line to the mine site. What does this mean? The current Moss Mine FS currently incorporate the use of diesel generators, which is a costly but necessary expense for many mines. The installation of a powerline not only shows the tremendous support by locals, but will also save the company US$16 million for the first five years of operation.
The Plan also reiterates that gold-silver production is still slated for Q4 2017, and expected to produce an average of 42,000 ounces of gold equivalent per year for five years. The mine life is conservative, considering that it does not incorporate an additional 200,000 AuEq resource ounces on Federal lands, and other ‘low hanging fruit’ on the property.
Taking all this into consideration, according to our analysis the project IRR will increase from 48% to ~68%. We are also bumping our target share price from C$1.00 to $1.13, or a gain of 110% from current levels. Northern Vertex remains one of the premier gold developers in our portfolio and President and CEO, Ken Berry, continues to deliver.
Palisade Global Investments Limited holds shares of Northern Vertex. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report is obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence.