Northern Vertex Mining Corp.
TSX VENTURE : NEE

Northern Vertex Mining Corp.

November 07, 2016 13:32 ET

Northern Vertex Announces US$20,000,000 Credit Agreement Signed With Sprott Lending to Advance Moss Mine Project to Commercial Production

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 7, 2016) - Northern Vertex Mining Corp. (TSX VENTURE:NEE) (the "Company") is pleased to announce that it has signed a senior secured credit facility with Sprott Private Resource Lending (Collector), LP ("Sprott"), an affiliate of Sprott Resource Lending Corp., pursuant to which Sprott will advance up to US$20,000,000 (the "Sprott Facility") to fund development costs of the Company's 100% owned Moss Gold/Silver Project in north-west Arizona (the "Project"). The Sprott Facility is available to be drawn in four tranches, and the first tranche of US$5,000,000 has been advanced to the Company's wholly-owned subsidiary, Golden Vertex Corp. (the "Borrower").

Kenneth Berry, the Company's President and CEO, states: "We are delighted to have signed the Sprott Facility that will allow us to fast-track the development of the Moss Mine Gold-Silver project to commercial production. The initial capital expenditure to build the Moss Mine is US$33 million. With a US$20 million facility from Sprott that contemplates an additional US$8.5 million equipment finance facility, in combination with our recently completed $7.35 million convertible debenture offering, we are now ideally positioned to capitalize on the robust economics the Moss Mine offers, as we begin the transition into a fully operating gold-silver entity. We are equally pleased to report strategic development and detailed engineering is officially underway on the project and reclamation and earthworks at site will begin shortly. We look forward to keeping our shareholders and host-communities in and around Bullhead City, Arizona updated with our progress."

The Sprott Facility contains various terms and conditions, including:

  • Hedging - None.

  • Warrants - None.

  • Initial Tranche - US$5,000,000 (drawn).

  • Further Tranches - an aggregate of up to US$15,000,000 in up to three additional tranches, subject to the satisfaction of certain conditions precedent, including the receipt of all key permits.Maturity Date - November 4, 2019.

  • Prepayment - At any time without penalty, subject to a minimum of 6 months interest having been paid on prepaid amounts.

  • Interest Rate - 12-month USD LIBOR plus 8%, to be paid monthly.

  • Costs and Fees:

    • Structuring Fee - US$300,000, which was deducted from the initial draw.

    • Fee Shares - The Company has issued 1,498,202 common shares to Sprott for value of US$375,000, being the number of shares at a 10% discount to the five trading day volume weighted average trading price of the shares (the "Discounted VWAP").

    • Gold Options - The Borrower has issued to Sprott gold call options to purchase up to 6,000 ounces of gold at a strike price of US$1,350, for a period of five years, which may be settled by a cash payment based on the difference between the strike price and the prevailing market price of gold at the time of settlement. If the Sprott Facility remains outstanding and not in default at the time of exercise of the Gold Options, at the Borrower's election the payment of amounts in settlement of the Gold Options may be deferred and added to the principal amount of the Sprott Facility and repaid in accordance with the terms thereof.

    • Anniversary Fee - On each anniversary date of the Sprott Facility, the Borrower will pay Sprott an amount equal to 3% of the principal amount of the Sprott Facility then outstanding, which, at the option of Sprott, may be paid in cash or the Company's shares issued at the Discounted VWAP at the time of issuance.

  • Covenants - The Sprott Facility contains customary covenants for the Company and the Borrower, including restrictions on incurring further debt and the requirement to meet certain working capital requirements.

  • Security - Includes a first charge over assets held by both the Company and the Borrower, as well as a guarantee from the Company.

  • Security Carve-Out for Equipment Finance Facility - The security package for the Sprott Facility provides for a carve-out of up to US$8,500,000 in equipment financing.

There is no guarantee the Company will satisfy any or all of the conditions of further drawdowns under the Sprott Facility or the Equipment Finance Facility. The Company looks forward to updating shareholders on successful milestones over the near term.

As a result of signing the Sprott Facility, the Company will pay a US$175,000 break fee to Macquarie Bank in connection with the engagement letter and credit approved term sheet with Macquarie Bank announced on July 7, 2016.

Qualified Person:

The foregoing technical information contained in this news release has been prepared in accordance with the Canadian regulatory requirements set out in National Instrument 43-101 (Standards for Disclosure for Minerals Projects) and reviewed and approved on behalf the Company by James McDonald, P.Geo & Director for Northern Vertex, a Qualified Person.

About Northern Vertex:

Northern Vertex Mining Corp. is an exploration and mining company focused on the reactivation of its 100% owned Moss Mine Gold/Silver Project located in NW Arizona, USA. 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 vertically. 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.

ON BEHALF OF THE BOARD OF NORTHERN VERTEX

Kenneth Berry, President & CEO

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: 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 advancement of further tranches under the Sprott Credit Facility, receipt of key permits for the Project, and the Company's plans for repayment of the Sprott Facility. Forward-looking statements usually include words such as may, intend, plan, expect, anticipate, believe or other similar words. 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. You should not place undue reliance on forward-looking statements. As a general policy, we do not update forward-looking statements except as required by securities laws and regulations.

Cautionary Note to US Investors: This news release may contain information about adjacent properties on which we have no right to explore or mine. We advise U.S. investors that the SEC's mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties. This news release may contain forward-looking statements including but not limited to comments regarding the advancement of further tranches under the Sprott Credit Facility, receipt of key permits for the Project, and the Company's plans for repayment of the Sprott Facility. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. This press release uses the terms "Measured", "Indicated", and "Inferred" resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of a Mineral Resource is economically or legally mineable.

2016 number 24

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