Northern Vertex Mining Corp’s (TSX.V: NEE / OTC Nasdaq Intl.: NHVCF) Moss Mine has exceptional exploration potential to become a significant, long-term profitable producer. When you’re building to be bigger, you need people who know how to get there. David Splett, Northern Vertex’s CFO, certainly knows what the destination looks like. David had CFO and senior executive roles overseeing world-class open-pit mine operations including Peñasquito (Newmont), Cobre Panamá (First Quantum) and Antamina (Teck). While Moss Mine is not viewed in the same weight class, David sees Northern Vertex’s flagship asset as a world-class opportunity. In an interview, David talks about the premium placed on Northern Vertex for defining discovery success. Part 2 of 2.
Q: You’ve had executive oversight at some very large open-pit mines with employee counts numbering in the several thousands. What is the appeal of joining Northern Vertex in this chapter of its growth story?
David: Yes, my career has included multibillion-dollar companies and Northern Vertex can be seen as a very different flavour. However, I like being part of companies where I can have a big impact. Northern Vertex is interesting for me because not only can I have a material role in optimizing mining operations and cash-flow, but help it grow organically with district exploration on our footprint. Plus, my background in mergers, acquisitions and divestitures within dynamic market environments also comes into play. The interesting trend I’m seeing is that most of the seniors have turned to mid-side and junior companies to do exploration and build meaningful deposits – Newmont’s acquisition of GT Gold is recent case in point. The strongest element to Northern Vertex and one of the things that attracted me to the company was the growth potential we can leverage. There is the exploration potential to find duplicates or triplicates of our existing mine resource. Since we merged with Eclipse and now have (President) Mike Allen and (VP Exploration) Warwick Board on our team, they are bringing a very sharp focus on a largely ignored part of our story. It is now being properly put in the forefront. What we’re now communicating in terms of identifying multiple parallel veins on our property to our Moss root vein is very, very compelling.
Q: In terms of moving the dial, what will drive valuation for Northern Vertex in the near-future?
David: The Moss resource potential is enormous: There’s mineralized outcrops at surface all over our property. Part of moving the dial for us will not only be discovery/definition, but valuation of the gold systems. This also applies to Hercules. We should get a premium on resource valuation as a fully permitted mining company with demonstrated profitable production. Typically, an exploration company will get a maximum benefit of approximately $100/ounce of contained gold in the ground, potentially higher or lower due to resource potential. A permitted operation with substantial growth potential – such as Moss mine - should attract a far higher valuation. However, Northern Vertex trades around $300/ounce of the Moss resource. If just the Moss resource is doubled, this valuation is $150/ounce, with zero value attributed to Hercules. And we believe Hercules will deliver to shareholders a significant resource. Our valuation will have a major move up as we demonstrate to the market the potential of Moss and Hercules. We have a Moss Mine resource update in H2 of this year and annually thereafter, an additional new resource on vein extensions in 2023 plus one to three greenfield resources in the Moss district by that time as well. If our 500,000-ounce resource were to evolve into a multi-million-ounce resource, you can do your own math.
So, our story is that we will produce up to 30,000-plus ounces/year over the next several years, which partially funds aggressive exploration programs at Moss and Hercules. Unlike other discovery stories, our exploration is backstopped by production. Our exciting leg-up is illustrating to the market the exponential potential value we have yet to unlock. Our prime objective is to maintain positive operating cash flow, grow the resource, while minimizing shareholder dilution. The likely scope and scale of what we now see should far exceed any dilution through any future potential capital raise.