Northern Vertex Mining (CVE:NEE)(OTCQX:NHVCF) provided investors Wednesday with an update on the phase I operations at its Moss mine gold-silver project in Arizona, saying it is excited with the metallurgical results received to date.
The company is in the first phase of a three-part project development plan for the mine.
It told investors, in a statement released earlier this morning, that gold recovery rates to date are 73.45% after an average of only 96 days, exceeding expectations indicated in the preliminary economic assessment report for the project.
In addition, the quantity of mineralized material for heap leaching permitted during the phase I pilot plant operations has now been increased to 112,500 tonnes from 90,000 tonnes previously. The increase was the result of the requested amendment to the acquifer protection permit for Moss being approved by the Arizona Department of Environmental Quality.
The rise in tonnage allows the company to leach material from a wider area of the phase I pit, and to test recoveries from varying crush sizes, further enhancing the contribution of the pilot plant phase, Northern Vertex said.
"We are more than excited about the metallurgical results we have received to date from our Pilot Plant operations," said president and CEO Dick Whittington, who came on board as chief just over one year ago, tasked with taking the flagship project from development stage to production.
"This first phase, where gold extraction commenced 4.5 months ahead of the PEA scheduled timeline, was our "proof of concept" phase. It has allowed us to reaffirm the technical and operational expectations of the metallurgy of the PEA and to continue de-risking the project as we move towards commercial production in Phase II."
The company also noted Wednesday that silver recoveries are currently 27.1%, as gold is being preferentially adsorbed onto the carbon, resulting in high silver recycling values in the leach solution. Final recovery of silver, however, is expected to meet or exceed expectations set out in the preliminary economics report.
Gold recovery is anticipated to continue until mid-year, Northern Vertex said, with the process of loading gold and shipping to processing facilities continuing. Further sales are expected over the next few months.
As Northern's focus remains the leaching of gold from pilot plant operations, the company is continuing to reduce costs, both corporate and in the field, in order to preserve cash. Work on the feasibility study is ongoing, though at a lower level than originally anticipated, the junior explorer said.
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.