A favourable court decision has delivered a belated Christmas present to Northern Vertex Mining (CVE:NEE) shareholders, according to Mackie Research.
The company announced that an arbitration decision has confirmed that the feasibility study delivered to Patriot Gold (OTCMKTS:PGOL) in July of 2015 meets the requirements of the 2011 earn-in agreement, the upshot of which is that Northern Vertex gets a 70% interest in the Moss Mine Project.
Additionally, the arbitrator also dismissed Patriot’s claims to be paid a portion of gold and silver sale proceeds from the pilot plant program, Mackie noted.
Given Northern Vertex's small market capital, Mackie doubts it will have the wherewithal to contribute its 30% of the initial capital expenditure – estimated at about US$10mln – on the project, and therefore expects to see its interest in the project converted to a 3% net smelter royalty as per an existing agreement.
So, its one down, two to go, so far as Mackie is concerned.
“The remaining two major hurdles now include permitting and financing – the latter of which the company is essentially half over, given prior announcements outlining project debt. Given the continued progression of the project and favourable economics and despite the lower gold prices, we retain our BUY recommendation and C$0.65 target,” the broker said.
Northern Vertex shares currently trade at 24.5 cents.