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Northern Vertex Mining and Eclipse Gold Mining to combine

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Global Mining Review,

Northern Vertex Mining Corp. and Eclipse Gold Mining Corp. have announced that they have entered into a definitive arrangement agreement (the arrangement agreement) to combine in an at-market merger (the transaction), creating a new gold growth resource business focused on the Western US. Northern Vertex will be the resulting company with offices in the US and Canada.

Transaction highlights

  • Concurrent ‘best efforts’ private placement of subscription receipts by Eclipse for minimum gross proceeds of CAN$20 million to be led by Stifel GMP on behalf of a syndicate of agents including Canaccord Genuity Corp., Raymond James Ltd, Beacon Securities Ltd, and PI Financial Corp.
  • Exchange ratio for existing common shares of Eclipse of 1.09 shares of Northern Vertex for every one share of Eclipse, determined based on the 20-day VWAP of each company on 4 December 2020.
  • Combined company will be comprised of 71% Northern Vertex shareholders, 18% Eclipse shareholders and 11% new shareholders.
  • Joining the Board of Directors of Northern Vertex from Eclipse will be Douglas J. Hurst and Marcel de Groot. Hurst will serve as Chairman of Northern Vertex and lead the integrated Board and management team.
  • Accelerated corporate growth will be supported by the Moss Mine’s production and cash flow, and a bolstered balance sheet.
  • Shareholders of the combined company gain leverage to resource growth at greater scale with accelerated drilling at both the Moss Mine and Hercules Gold project.

Northern Vertex President, CEO and Director, Kenneth Berry, said: “The result of this transaction will be a combined company with a greatly strengthened balance sheet, and an enhanced team with extensive experience growing multi-asset gold companies. This represents a significant step toward our unwavering vision of building a top of the class mid-tier gold producer. We plan to use this new platform to accelerate organic growth opportunities by targeting significant resource expansion at the Moss Mine and execute an aggressive roll-up strategy focused on the Western US.”

Eclipse President, CEO and Director, Michael G. Allen, added: “This combination gives Eclipse shareholders exposure to creating value on a larger scale, supported by positive cash-flow. Shareholders of the new combined company will now own a platform including two Walker Lane gold projects with multi-million-ounce potential, a producing mine with untapped production and cash-flow growth opportunities, and an executive team with demonstrated success building multi-asset companies organically and through M&A. This combination aligns all the key elements required toward building America’s next mid-tier gold growth story.”

Greenstone Resources LLP Senior Partner, Michael Haworth, commented: “As a 22% shareholder of this new, integrated gold company, we are excited about the opportunity we see ahead with a stronger balance sheet, enhanced capital markets presence, and accelerated fulfilment of operational and exploration potential. With our original investment in 2017, we had a vision for developing a consolidated, Western US precious metals producer and support this transaction as the next step in that direction.”

Board and management team

The combined company will feature a new integrated Board of Directors comprised of Douglas J. Hurst (Eclipse) acting as Chairman, Geoff Burns (Maverix Metals/Northern Vertex), Michael Haworth (Greenstone Resources/Northern Vertex), Marcel de Groot (Eclipse), David Farrell (Northern Vertex), Kenneth Berry (Northern Vertex), and James M. McDonald (Northern Vertex).

The management team will be comprised of President and CEO Kenneth Berry, CFO David Splett, EVP Corporate Development Michael G. Allen, and Dr. Warwick Board as Vice President of Exploration.

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