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Northern Vertex director buys up chunk of company shares

Last updated: 14:31 18 Dec 2013 EST, First published: 15:31 18 Dec 2013 EST

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Mining veteran James McDonald is showing he is bullish on Northern Vertex (CVE:NEE), where he is currently a board director, after acquiring stock worth some $118,000 this month. 

McDonald, who is credited with co-founding National Gold (which merged with Alamos Minerals to form Alamos Gold), acquired some 136,000 shares in the public market at 52 cents apiece in early December, and another 92,500 shares at 51 cents each earlier this week. Both transactions were filed yesterday. The stock is currently trading at 51 cents. 

The company is advancing the pilot operations at its Moss project in Arizona, which are part of a staged, three-phase development plan for the reactivation of the mine. The mine is situated in Mohave County, with the company saying recently that the mining component is essentially complete. 

“Now, effectively, there is just the leaching of the heap going forward – a process that will continue for 9-12 months,” said CEO Dick Whittington, who came on board as chief just a little over one year ago, tasked with taking the flagship project from development stage to production.

The company has come a long way so far, raising around $3.4 million through a private placement earlier this year, and putting the company’s three-staged plan in motion.

So far, the junior explorer has loaded the mineralized material on the leach pad, with gold extraction beginning four and a half months ahead of the timeline projected in the preliminary economic assessment report (PEA) released earlier this year. 

The company has said that initial gold extraction rates are in line with expectations outlined previously, coming in at 61% after 40 days of leaching, with gold sales now underway. The aim is to get in the range of 4,000 to 5,000 ounces of gold production from the pilot phase.  

The Moss mine is an open-pit gold and silver project in a well-known mining district, and will be led by an experienced team, with Whittington having taken Farallon Mining’s G-9 mine from discovery to full production in less than four years. 

Phase II of the project, according to the PEA, has an estimated IRR of nearly 118% pre-tax, and before royalties, with a net present value of US$110 million at a 5% discount rate. The economics of Phase II, or full operations, were calculated using a gold price of US$1,500 an ounce and $30 per ounce of silver. The payback period is seen at 15 months, with capex costs projected at US$26.6 million and cash costs estimated at US$490 an ounce. 

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