NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
October 15, 2018,Vancouver, B.C. - Northern Vertex Mining Corp. (TSX.V: NEE)(OTC Nasdaq Intl.: NHVCF)(the “Company” or “Northern Vertex”) is pleased to announce a number of financing transactions intended to improve free cashflow during early production at the Company’s Moss Mine.
Highlights of the transactions include:
- Sprott Resource Lending amends monthly principal payments from US$1,111,111 to US$500,000.
- Northern Vertex announces a Non-Brokered Placement of up to US$5,000,000.
- Maverix Metals Inc. signs indicative terms for US$8,500,000 silver metal purchase agreement.
Ken Berry, President and Chief Executive Officer of Northern Vertex stated: “Following the declaration of commercial production in September we are pleased to improve our free cashflow, strengthen our balance sheet and create financial flexibility to aggressively pursue our M&A opportunities, all during this pivotal growth period. This is an exciting time for shareholders and stakeholders of America’s newest gold mine.”
US$5M (C$6.5M) Non-Brokered Private Placement
The Company will issue approximately 21,666,667 Units (“each Unit”) at a purchase price of $0.30 per Unit. Each Unit issued in the Private Placement will consist of one common share of the Company (a “Common Share”) and one-half of one transferable Common Share purchase warrant (each whole warrant, a “Warrant”). Each whole Warrant will entitle the holder to acquire one Common Share at an exercise price of $0.45 for a period of 24 months from the closing date of the Private Placement. Finders' fees within Exchange policy guidelines may be paid in cash or Common Shares in connection with the Private Placement to arms’ length finders. See further details on the Private Placement below.
Mike Haworth, Senior Partner of Greenstone, commented, “We are pleased to support Northern Vertex financing and amendment to strengthen the Company’s balance sheet during commercial production ramp up”.
Sprott Lending Amendment
The Company is pleased to announce that it has agreed with Sprott Private Resource Lending (Collector), LP (“Sprott”) to extend the maturity date of its US$20 million facility (the “Sprott Facility”) which was used to fund the development of the Company’s 100% owned Moss Mine in north-west Arizona. The Moss Mine declared commercial production on September 1, 2018 (see September 18, 2018 news release). The maturity date of the Sprott Facility has been extended for an additional 13 months to December 31, 2020 (see November 7, 2016 news release for further details of the Sprott Facility). On November 30, 2018, the Company will commence making principal repayments of US$500,000. As part of the amendment the Company will, subject to the acceptance of the TSX Venture Exchange (the “Exchange”), issue to Sprott 1.25 million common shares of the Company, which will be subject to a four month hold period pursuant to applicable Canadian securities laws. As part of the extension, the Company will amend the gold call options issued to Sprott to a new strike price of US$1,200 from US$1,275, with the number of ounces remaining unchanged.
Silver Metal Purchase Agreement
The Company has entered into an indicative term sheet with Maverix Metals Inc. (TSX.V: MMX) (“Maverix”), pursuant to which the parties intend to enter into a definitive precious metal purchase agreement (the “PMPA”). This agreement is subject to Sprott and Maverix entering into a Intercreditor Agreement and final approval by Sprott. Under the terms of the PMPA, Maverix will make a US$8,500,000 upfront payment (the “Upfront Payment”) to the Company’s wholly-owned subsidiary Golden Vertex Mining Corp. (“Golden Vertex”), which holds the Moss Mine, and in consideration, Golden Vertex will agree to sell to Maverix 45% of the silver production from the Moss mine, at an ongoing payment price equal to 30% of the lesser of the average silver price for the calendar quarter, and the spot price of silver at the time of delivery. After the purchase by Maverix of an aggregate of 1,500,000 ounces of silver, the amount of silver production purchasable by Maverix under the PMPA will be reduced to 22.5% of production for the remaining life of mine. The Company will also have the option prior to closing to elect to increase the amount of the Upfront Payment by a further US$5,000,000, for a total US$13,500,000, in which case Maverix will be able to purchase 75% of the silver production at the Moss Mine until the delivery of 2,500,000 ounces of silver, at which point the purchase rights will be reduced to 37.5% of all silver production for the remaining life of mine. The Company and Golden Vertex’s obligations under the PMPA will be secured, subordinated only to the security interest granted to Sprott in connection with the Sprott Facility. The Company’s delivery obligations under the PMPA will include production on or after October 1, 2018. The Upfront Payment will be used by the Company for general working capital purposes. The PMPA remains subject to the fulfillment of a number of conditions precedent, including the negotiation and execution of definitive documentation, the completion of due diligence by Maverix, and the receipt of all necessary regulatory approvals, including the approval of the Exchange. While the Company expects to close the Maverix transaction in the first half of November, there is no guarantee that the Maverix PMPA will close on the terms set out above or at all.
Private Placement – Additional Details
The Company intends to use the net proceeds of the Private Placement to fund ongoing operations at the Moss Mine and for general working capital purposes including the advancement of accretive growth opportunities.
All securities to be issued pursuant to the Private Placement will be subject to a four month hold period from the closing date under applicable securities laws in Canada. The Private Placement is subject to Exchange acceptance.
The securities being offered under the Private Placement have not been, nor will they be registered under the United States Securities Act of 1933, as amended, or state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. federal and state registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.
About Northern Vertex
Northern Vertex Mining Corp., the newest gold producer in the US, is focused on low cost gold and silver production at its 100% owned Moss Mine in NW Arizona. The Company has experience across all areas of operations, mine development, exploration, acquisitions and financing of mining projects. With operations at the flagship Moss Mine achieving commercial production the Company intends to consolidate additional producing or near-term production gold assets within the Western US. Through mergers and acquisitions Northern Vertex’s corporate goal is to become a mid-tier gold producer with over 200,000 ounces of gold production annually.
ON BEHALF OF THE BOARD OF NORTHERN VERTEX
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.
Cautionary Note Regarding Forward-Looking Statements:
The information in this news release has been prepared as at October 14, 2018. 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, and include, without restriction, statements regarding the execution of a definitive PMPA, the completion of the Private Placement and the proposed use of the proceeds of the PMPA and the Private Placement and the issuance of Common Shares to Sprott in connection with the amendment of the Sprott Facility.
This news release contains statements about our future business and planned activities. These are “forward-looking” because we have used what we know and expect today to make a statement about the future. Forward-looking statements including but are not limited to comments regarding the timing and content of upcoming work and analyses. Forward-looking statements usually include words such as scheduled, may, intend, plan, expect, anticipate, believe or other similar words. 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. We believe the expectations reflected in these forward-looking statements are reasonable. However, actual events and results could be substantially different because of the risks and uncertainties associated with our business or events that happen after the date of this news release. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date made. More particularly, this release contains statements concerning the anticipated Private Placement and the potential unsolicited orders. Accordingly, there is a risk that the Private Placement will not be completely sold, that the Private Placement will not be completed within the anticipated time or at all, and that the Exchange will not provide acceptance to the issuance of Common Shares to Sprott. To the best of management’s knowledge, As a general policy, we do not update forward-looking statements except as required by securities laws and regulations. US investors should be aware that mining terminology used for Canadian mineral project reporting purposes differs significantly from US terminology.
2018 number 17