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U.S. Gold Producer Takes Stronger Financial Footing in Q2 2019

Jon Brown Jon Brown, Stockhouse
1 Comment| March 12, 2019

Click to enlargeThe newest gold producer in the U.S. has been steadily working to optimize its operations on its path to see a swing toward positive working capital and it has resulted in a strengthened financial position for the Company.
Northern Vertex Mining Corp. (TSX:V.NEENHVCFForum) released its interim consolidated financial results for the second fiscal quarter 2019 in late February.
The result:
  • Increased working capital
  • Decrease debt
  • Improved balance sheet
  • Major private placement closed
Northern Vertex President and Chief Executive Officer, Ken Berry stated:
“During the quarter we dramatically improved our balance sheet and had over $0.5 million (USD) of earnings from mine operations before depreciation and amortization.  Our working capital increased by nearly $18 million, going from a sizeable deficit to a surplus of $9.1 million.  Our balance sheet was strengthened when we retired our $20 million senior loan facility and partnered with Maverix Metals Inc. for a $20 million silver streaming arrangement.”
Balance sheet:
As of December 31st, 2018, cash was $7.68 million, compared to $5.72 million six months earlier. This increase was mainly due to cash received from financings over the quarter. The silver stream advance from Maverix Metals offset debt and interest repayments.
The Company sold $6.5 million in gold and silver over the quarter, which included ounces produced prior to commercial production, including 5,149 gold ounces and 14,081 silver ounces with average realized prices per ounce of $1,215 and $14.43, respectively. Earnings from mine operations for the quarter, excluding depreciation and depletion, was $0.53 million. Losses over the quarter were $5.27 million ($0.03 per share), compared to $0.63 million ($0.00 per share) in losses for the same period last year.
Northern Vertex completed a $28 million financing, which included both the $20 million silver advance from Maverix Metals and a private placement of $8 million.
Alleviating some debt, the Company also retired its $20 million senior secured credit facility, which eliminated roughly $1.3 million in monthly payments and significantly strengthened its balance sheet and improved its cash flow.

Click to enlarge
(Northern Vertex’s Moss Mine.)
CEO Berry was recently interviewed on Investment Pitch Media about the Company’s recent operations and spoke about Maverix’s financing:

“We were pleased to have Maverix come on board and we were able to get the relationship with their technical ability and knowledge in the mining sector.”

Private Placement:
NEE also closed two tranches of a non-brokered private placements after the fiscal Q2 2019, issuing an aggregate of 14,624,074 units at a price of $0.24 (CDN) per unit for gross proceeds of $2.67 million. Under the final tranche of the private placement, an aggregate 3,511,574 units were issued at $0.24 (CDN) per unit for gross proceeds of $640,511.
Subject to final approval of the TSX Venture Exchange, net proceeds from this private placement will be used to fund the ongoing ramp-up of mining operations at its Arizona-based Moss Mine, as well as for working capital and general corporate operations.
Northern Vertex is fully permitted to operate an open pit, heap leach gold and silver recovery operation. In Q1, the Company secured permits to construct a power line to the Moss Mine site and upgrade access roads. In Q2, permitting efforts focused on expanding the mining and leaching operations onto federal lands adjacent to the Company's private lands. 
During this time, the Company also better-defined drill targets through detailed mapping, soil and rock chip sampling of high-priority areas.
Of further positive news from Northern Vertex is the recent announcement that it has just received record shipment of 1,004 ounces of gold from the Moss Mine to a third party refiner. This represents a significant increase over the previous record shipment of 695 ounces recorded in August 2018 and also establishes major overall growth for the Company.
The Company is now focusing on resource expansion along the immediate strike extensions of the deposit to the west and east where gold mineralization remains open ended and is known from previous drilling and surface sampling.

FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.

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