Vancouver, B.C. - Northern Vertex Mining Corp. (TSX.V:NEE) (the "Company") is pleased to announce that the Company has signed an Engagement Letter with indicative terms for Macquarie Bank Limited ("Macquarie Bank") to provide project finance facilities of up to US$20 million (the "Macquarie Facility") to be used to fund the majority of the projected development costs of the Company's 70% beneficially owned Moss Gold-Silver Project (the "Project") in north-west Arizona. As previously announced on June 8, 2015, the Company has also received indicative terms for a US$6.5 million Equipment Finance Facility (the "Equipment Facility") from a major US bank. The Macquarie Facility and the Equipment Facility are complementary and together provide up to US$26.5 million towards the estimated pre-production capital of US$33.0 million required to construct the planned 5,000 tonnes per day, open pit, heap leach, gold-silver mine at the Company's Moss Mine site. Northern Vertex has recently completed the requirements to earn a 70% interest in the Project and Patriot Gold Corp. owns the other 30%. The Project's costs and economics are fully described in the Company's feasibility study announced on June 8, 2015 and available for download from the Company's profile on sedar.com.
Dick Whittington, President and CEO states: "We are delighted to partner with Macquarie to develop the Moss Gold-Silver Project. After getting to know the Project in some detail over the last few months, Macquarie has presented a detailed financing proposal that provides both a pre-permitting Bridge Loan and a 4-year Refinancing and Development Facility that is tailored to align with the development and production requirements of the feasibility study. The Macquarie Facility represents another vote of confidence in the Moss Project from both a technical and development perspective. I would like to thank the Macquarie teams, both Vancouver and Australia, for their efforts over the last few months and for their insightful reviews that have enabled these creative and responsive project facilities to be developed. The Macquarie Facility and the Equipment Finance Facility, once finalized, will put us well on our way to getting the Moss Project fully financed and built for the benefit of shareholders of both Northern Vertex and Patriot, as well as our host communities in Arizona."
The Macquarie Facility term sheet sets out detailed indicative terms and conditions, which include:
- Bridge Loan. Up to US$7.5 million available, prior to final operating permits being in place, to fund initial development of the Project. This portion of the Macquarie Facility will be a US dollar loan and will bear interest at 11.75%.
- Refinancing & Development Facility. Up to US$20 million available, upon final operating permits being received, to refinance the Bridge Loan with the balance available for additional development expenditures of the Project. This portion of the Macquarie Facility will be a combination of a US dollar denominated, interest bearing, loan and a gold loan. The US dollar portion of this facility is repayable in US dollars over a 4-year repayment profile and includes a hedging requirement that is expected to be less than 9% of the Project's reserves and less than 5% of the Project's measured and indicated resources. It will be priced at Libor plus 9% and may be prepaid in full. The gold loan portion of this facility is repayable with ounces produced at the Project over the same 4-year repayment profile and has an implied interest rate of 11.75%.
- Two series of warrants aggregating approximately 9 million warrants will be issuable in conjunction with the Bridge Facility -- the first (Series A warrants) will be priced at an exercise price premium of 30% to VWAP for the 20 days prior to the date of issue while the second series (Series B warrants) have a fixed price of $0.50. A third series, linked to the Refinance and Development Facility, will be issuable and priced at the time of its execution. The warrants will be subject to TSX Venture Exchange approval.
- Security will include a charge over the Project assets and completion guarantees from Northern Vertex. The security package for the Macquarie Facility carves out the equipment to be financed by the Equipment Facility.
- Customary covenants and conditions precedent for secured project financings of this nature.
- Customary fees for facilities of this nature will be payable upon acceptance of the Engagement Letter and drawdown of the Bridge Loan and Refinancing and Development Facility.
- The Engagement Letter contains customary break fees and payment of lender costs which are currently the obligation of Northern Vertex only.
The provision of the Macquarie Facility is subject to a number of conditions including additional legal and technical due diligence, internal credit approval by Macquarie Bank, final documentation, the resolution of the arbitration and satisfactory arrangements between the Company and Patriot Gold Corporation to share all costs and to provide the necessary guarantees, securing sufficient equity to fully fund the Project and customary corporate approvals of final documentation. Patriot has advised that it will not support this debt financing with Northern Vertex until the previously disclosed arbitration issues are resolved. The arbitration is scheduled to be heard in early December 2015.
About Northern Vertex: Northern Vertex Mining Corp. is a Canadian based exploration and mining company focused on the reactivation of the Moss Mine Gold-Silver Project located in NW Arizona, USA where the Company has recently earned a 70% property interest and will form an LLC joint venture with Patriot Gold Corp. The Moss Mine Gold-Silver Project is an epithermal, brecciated, low sulphidation quartz-calcite vein and stockwork system which extends over a strike length of 1,400 meters and has been drill tested to depths of 370 meters below surface. It is a potential heap leach, open-pit project that has been advanced to the Feasibility Study stage to ensure that technical, economic, permitting and funding requirements are met prior to proceeding with the development of the mine. The Company's management comprises an experienced management team with a strong background in all aspects of acquisition, exploration, development, operations and financing of mining projects worldwide. The Company is focused on working effectively and respectfully with our stakeholders in the vicinity of the historical Moss Mine and enhancing the capacity of the local communities in the area
About Macquarie Bank: Macquarie Bank Limited is a global leader in providing finance to the resources sector. Macquarie Bank Limited is part of Macquarie Group, a global financial services provider with offices in 28 countries and expertise covering banking, financial, advisory, investment and funds management services.
ON BEHALF OF THE BOARD OF NORTHERN VERTEX
"J.R.H. (Dick) Whittington"
President & CEO
For further information, please visit www.northernvertex.com
or contact Investor Relations at: 604-601-3656 or at 1-855-633-8798.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements: The information in this news release has been prepared as at September 14, 2015. Certain statements in this news release, referred to herein as "forward-looking statements", constitute "forward-looking statements" under the provisions of Canadian provincial securities laws. These statements can be identified by the use of words such as "expected", "may", "will" or similar terms.
Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by the Company as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Many factors, known and unknown, could cause actual results to be materially different from those expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as otherwise required by law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based. In particular, there are many inherent risks that the loans contemplated by the Macquarie Term Sheet, that is the subject of this news release, may never be consummated. These risks include the potential inability or unwillingness of Northern Vertex and/or Patriot to meet the numerous conditions contained in the indicative term sheet such as securing relevant construction and other project permits, the borrowers' securing sufficient additional equity to complete the Project, settlement of the ongoing arbitration, execution of an LLC joint venture agreement between Northern Vertex and Patriot, provision of corporate guarantees by Northern Vertex and Patriot, Macquarie credit committee approval and other factors beyond the control of Northern Vertex. There can be no assurance given that the debt financing can be secured on the indicated terms or on any other terms. US investors should be aware that mining terminology used for Canadian mineral project reporting purposes differs significantly from US terminology.
2015 number 11