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Northern Vertex Repays Debt and Strengthens Capital Structure

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Northern Vertex Mining Corp. (TSX-V: NEE) (OTC Nasdaq Intl.: NHVCF)  is pleased to announce that it has repaid in full on the maturity date of December 1, 2020 the principal amount of US$8,500,000, together with all accrued and unpaid interest payable thereunder, of the unsecured subordinated convertible debenture of the Company held by Greenstone Resources II L.P. the terms of which are as described in the Company’s press releases dated October 3, 2019 and October 11, 2019.


Ken Berry, CEO of Northern Vertex stated: “On the back of our first quarter’s record production and revenue, I am delighted to strengthen our balance sheet in a manner that minimizes dilution to all shareholders.  The Greenstone Debenture has been repaid in full.  Greenstone agreed to receive a cash repayment and waive its conversion rights under the Debenture for an additional US$2 million structured cash payment. Our closing price yesterday on the TSXV was C$0.62, more than 100% above the C$0.30 conversion price of the US$8.5 million Debenture.  This transaction saves our shareholders the dilution of approximately 37,000,000 shares (15% of issued) had the C$0.30 conversion rights been exercised in full.”


In accordance with the terms of the Debenture, all or part of the Principal Amount was convertible into common shares of Northern Vertex at a price of C$0.30 per common share, at the sole election of Greenstone, at any time and from time to time from until the Maturity Date.  Northern Vertex and Greenstone have entered into an agreement pursuant to which Greenstone has agreed not to exercise, and to waive in full, the Conversion Right in consideration for a cash payment of US$2,000,000 from Northern Vertex to Greenstone, with such payment to be made on the earlier of the satisfaction by the Company of certain conditions precedent or the date that is six months following the original Maturity Date.


The Waiver of the Conversion right is subject to the final acceptance of the TSX Venture Exchange and is a related party transaction pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, as Greenstone currently holds approximately 31% of the current issued and outstanding common shares of the Company.  The Waiver of the Conversion Right is exempt from the requirement to obtain a formal valuation under section 5.4 of MI 61-101, as the Company’s common shares are not listed on a senior stock exchange as set out in section 5.5(a) of MI 61-101.  The Company is exempt from the requirement to obtain minority shareholder approval of the Waiver of the Conversion Right pursuant to section 5.6 of MI 61-101, as the fair market value of, and the consideration for, the Waiver of the Conversion Right does not constitute more than 25% of the Company’s market capitalization as set out in section 5.7(a) of MI 61-101.  At a meeting of the board of directors of the Company, the Board unanimously approved the Waiver of the Conversion Right, with Michael Haworth and Ivan Fairhall (both having a disclosable interest it the transaction due to their relationships with Greenstone) having left the meeting during the consideration of the Waiver of the Conversion Right.


About Northern Vertex Mining Corp.


Northern Vertex Mining Corp. owns and operates the Moss Mine, currently the largest pure gold and silver mine in Arizona. Focused on low cost gold and silver production, 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.


Posted December 2, 2020

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