Northern Vertex Mining Corp: Moving Mountains and Making Money in the Mohave – On Site Report

Palisade Research September 18, 2018
Category: Research

Company Snapshot: Northern Vertex Mining Corp

Share Price: C$0.30

Share Outstanding: 180.30 Million

Market Cap: C$54.0 million

Cash: C$17 Million

 

Northern Vertex Mining Corp (TSX-V:NEE, OTCMKTS:NHVCF) announced today that they began commercial production at their flagship Moss Mine project earlier this month.

This is a pivotal time for the company’s long term value creation now that they are mining and producing cash flow. . .

The special report below will highlight the entirety of the Moss Mine and an on-the-ground look at NEE’s operation. We will show you why at current share prices that this is a very attractive point for investors – especially relative to recent commercial production. 

 

But first and foremost, Palisade Research is ecstatic to announce our newest team member. . .

Mr. Timothy Strong.

Tim’s a mineral exploration geologist who graduated from the prestigious Camborne School of Mines in the United Kingdom.

And since graduation, he’s worked on three continents and eleven countries in a variety of geological settings.

His passion for geology stems from his love of adventure, travelling and discovery. He loves working in the field and the thrill of potentially finding the next big mine.

But there’s more to Tim than just field work. He’s also fascinated with business and the capital markets. That’s why he’s continuing his studies towards an MBA from the University of Dundee.

Our paths have crossed with Tim’s several times in our travels around the world – from mine sites to metal conferences. His knowledge and enthusiasm always impressed us.

And when the opportunity came to bring him aboard the Palisade Team – we wasted no time.

We also wasted no time sending him to mine sites around the world – technically vetting projects for us and our subscribers.

Tim’s inaugural write-up is from his visit to Northern Vertex’s (CVE:NEE, OTCMKTS:NHVCF) ‘Moss mine’ in Arizona.

Long-time readers know that Northern Vertex has been in our portfolio for years – a cornerstone position.

Here’s Tim’s take on the incredible upside at the Moss Mine, and why NEE’s drastically undervalued. . .

 

Palisade’s Site Tour at Northern Vertex Mining Corp

 

Highlights

  • Doubling of the feasibility tonnes per day through plant from 5,000 to 10,000
  • Eastern extension of Moss vein being drill tested
  • Approval for power and additional infrastructure to decrease costs
  • Excellent exploration upside for both low sulphidation and high sulphidation gold targets
  • Well-established and passionate team
  • Excellent relationship with the Bureau of Land Management (BLM) allowing all permitting to be completed in a timely manner.
  • Continued exceeding of feasibility estimations in all areas
  • NEE is a de-risked gold producer trading at a very low price of C$0.30

 

I visited the Moss Mine Project in June with company president – Joe Bardswich.

The trip included a meeting at the company’s office in Bullhead City, Arizona. And a visit to the Moss Mine project. I also checked out the processing plant and refinery on site – as well as an overview of the Oatman district.  

My first impression was that the Moss Mine’s conveniently located just 20 minutes from Bullhead City – along the well graded Silver Creek Country Road. The team also has a great rapport with the Bureau of Land Management in Kingman, AZ – and as such the road’ heavily retained and in great condition.

Tim Strong (right) with President of Northern Vortex, Joe Bardswich

 


The Current Mine

So far, the current mine is producing 97,000 tonnes of ore per month (with 78,000 tonnes of waste). And this is going to be ramped up when the current 40-ton trucks are replaced with 70-ton trucks. As of July 2018, this figure is now 158,227 tonnes of ore and 230,215 tonnes of waste; again, a considerable increase as ramping up continues.

NEE achieved metal production in May 2018 with 1,276 ounces of gold and 3,556 ounces of silver mined – a considerable increase month by month as the ramp-up to commercial production continues to exceed feasibility expectations. As of July 2018, the monthly figure was 2,067 ounces of gold produced and 5,977 ounces of silver, again a considerable increase as NEE continue to ramp up the project to full commercial production.

(Current Mining Face of the Moss Vein)

 


Expansion


(Current mining face – circled – Expansion open to East)

The ‘Moss Vein’ (which’s the mineral vein they’re currently mining) extends on surface West of the mine.

This area only has two RC drill-holes, both which were stopped short of the vein.

The dip of the vein in the main mine is around 70 degrees to the South-West. And to the East, the vein’s an even steeper dip – so the drilling missed the main mineralisation.

This expansion doubles the current mining area and is on patented ground. The vein continues even further to the East on Federal land and offers excellent expansion opportunities once drilled.

In addition to the extension of the vein, there’s scope for disseminated mineralisation in the footwall volcanic sequence. Meaning that the fold is present outside of the veins in the host rocks, this has the potential to increase tonnage at the project.

There is also scope for a high-grade zone within the current mining area on the contact with a dyke to Western edge.

In layman terms this all means that Northern Vertex has swaths of mineral potential in fantastic geology, which is yet to be properly tested. This represents massive upside.

 

Exploration

Eastern extension of the Moss Mine includes the Mordor and Rattan veins – where drilling’ intercepted the mineralisation (assay results are still pending).

It’s expected that these veins will carry similar gold numbers to the Moss vein – which is very exciting. . .

Further drilling on the Rattan and Mordor extensions (2,000 feet from mine) are planned and only waiting on the Bureau of Land Management’s (BLM) permit – which is expected in 2-3 weeks.

Percussion drilling is currently priced at $3.50 to $10.50 per foot, and core drilling at $65 per foot – both which are competitively priced and will keep the exploration costs down. This is in combination of using some exploration holes as water bores – two birds with one stone.

Within the main mine area is the historic ‘Ruth vein’ which dips at a shallow angle in the opposite direction of the main Moss vein. Current exploration of this vein’s returned results of up to 10 feet at 0.33 ounces per ton of gold.

One-mile West of the main Moss Mine Project is the Reynolds project – which, like Moss, is a low sulphide epithermal vein deposit.

Soil geochemistry has yielded up to 1,000 ppb gold and initial drill holes have returned assays including 330 feet at 0.5g/t gold – both very encouraging.

There’s a structure cross-cutting the main zone so there’s an offset section in addition to the main vein. Permitting’s underway so that they can drill this area and create a potentially huge resource.

In addition to the main vein there is good potential for mineralisation within the footwall lithologies. Where the gold containing fluids have propagated into the rocks surrounding the vein.

NEE has one of the largest land holdings in Mohave county which gives them considerable exploration upside in this district.

After all, the Oatman areas historically produced more than 2.5 million ounces of gold. . .


Mineralised rock at Moss Mine Project

 

Typical Oatman district gold vein (East of Moss Mine Project) – Moss Mine Project has the advantage of disseminated ore in the footwall and hanging wall.

 


Plant

Recent news by NEE suggested an increase in production excess of the 5,000 tonnes per day planned by the feasibility study.

The crew scored a record day of 8,261 tonnes in the news release – but are now often reaching 10,000 tonnes per day.

In fact – the day before I arrived – the NEE crew hit a mammoth 11,000 tonnes per day. This more than doubles the now seemingly conservative feasibility number.

The increase in tonnage is due to two major factors. . .

The first being the implementation of two-500 horse power tertiary cones as opposed to the original 400 horse power cones.

And secondly, the comradery and skill within the NEE team. They are experienced and passionate, thriving to beat their projected targets and to keep the plant running at its full potential.

The company crushes to ¼ inch which was initially not considered to be viable, however the company has proven naysayers wrong by almost doubling the output using this crush size.

In addition to the increased throughput achieved by the higher cone capacity, the company uses dust suppressors to stop the screens becoming clogged – significantly decreasing downtime.

 

Plant producing a Whopping 10,000 tonnes per day!

 


Current refinery and heap leach pad setup

The company uses a Merrill-Crowe ‘technique’ for gold separation from the cyanide solution (the heap leach pads). This process involves adding zinc powder and vacuum to extract the gold and negates the need for carbon removal using the ADR setup typically seen at heap leach operations. This older technique is saving NEE time and money in processing gold.

The team at NEE has a great level of experience with this Merrill-Crowe technique and have managed to reduce the leach time considerably allowing more gold to be produced.  

The company invested an additional $3 million to increase the ease of silver extraction.

This will significantly increase revenue when silver prices rise. Current head grades are around 1/gt Au and 11g/t Ag.

 

Infrastructure

As released by the company on 7th July, NEE’s gained permissions from the BLM for power-lines, fibre-optics and access road construction for the Moss Mine Project.

Planning and implementation of this is in progress and as such this will reduce the power costs from $0.20 per kwh to just $0.068.

As the Moss mine continues ramping up – this will result in massive cost-savings and will reduce the mine’s cost-per-ounce even lower than the already attractive $603.

 

So, There You Have It…

Northern Vertex must be one of our oldest holdings.

The Moss Mine’s been steadily de-risked and has incredible economics.

NEE still trades at a wide-discount to its intrinsic value – giving investors a thick margin of safety. Or what we like to call positively asymmetric (low risk – high reward).

We’ve kept NEE in our portfolio not just because of the steep discount – but also for the significant growth prospects they have in exploration. And the incredible leverage to rising gold and silver prices.

But in my opinion, I believe Northern Vertex will be acquired eventually.

Either way – the downside is limited, and the upside is huge.

 

Palisade Global Investments Limited holds shares of Northern Vertex Mining Corp. 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’s 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.

Did You Like What You Read? Get Our Free Exclusive Content
Enter your email below and you'll receive our 'Weekly Palisade Newsletter' covering Contrarian Ideas and Macro-Situations that the mainstream financial media ignores. You'll also get our Top Investment Ideas and Asymmetric Trading Opportunities right when we find them...
Don't worry - we respect your privacy

Get our Research for FREE