The Life Cycle of a Junior Mining ShareThe Life Cycle of a Junior Mining Share: Northern Vertex Moving towards 2017 Gold Production
By: Peter Spina, Founder GoldSeek.com
Smart people make complicated matters seem simple. Noted geologist Brent Cook of Exploration Insights does an excellent job outlining the investment life cycle of junior mining shares in a chart embedded below. Cook evaluates the economic viability of a mineral discovery, in other words the cold hard truth of ‘turning rocks into money.’
Drill results are great but that means nothing if the mine is not economic and you cannot build a profitable mine. If a company gets past the initial hype around drill results, produces feasibility studies, a period of time Cook calls this the ‘Orphan period’, then there is the move to development and eventual startup which is typically where share price should move up. It is at this point in the life span of a mining share from discovery to production where institutional investors come in with the sufficient financing to turn this mine operational and the stock price starts to move back up towards full value, and a good time to invest.
Courtesy: Exploration Insights
If you look compare the share price chart for Northern Vertex Mining Corp. (TSX-V: NEE | US-OTC: NHVCF) over its history with Cook’s life cycle of a mining share, the pattern appears to hold true for Northern Vertex and its Moss Mine project with the recent announcement of a $20-million investment from Greenstone Resources LP.
TSX-v: NEE (2008 - 2017) Courtesy www.stockwatch.com
It was back in March 2011, when Northern Vertex entered into an agreement with Patriot Gold to earn a 70% interest in the Moss gold-silver property in Arizona. The company was drilling at its Copley project acquired from Kootenay Silver (TSX-V: KTN) when it began drilling at Moss. Over the summer, Northern Vertex produced a series of drill results from the Moss project which saw the company’s stock price rise to a high of $1.45 on January 30th, 2012. The company conducted a second phase drilling program in 2012 which provided sufficient results to push the company into producing a feasibility study on the property. From then the stock since languished down to a low of 19 cents in late 2015. During this low tide, the company secured financing, acquired the remaining 30% interest from Patriot Gold. Subsequently its share price strengthened; moving out of the down cycle as it advances to commercial production.
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