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$2,000 gold has transformed sentiment in miners – Northern Vertex

Kitco News

Gold prices holding above critical support above $1,900 an ounce have breathed new life into the mining sector and investor sentiment has come a long way in the last two years, according to one mining executive.

On the sidelines of the Mines and Money Online Connect virtual mining conference, Ken Berry, CEO of Northern Vertex, said that his company has seen a significant transformation in sentiment as it poured its first gold and silver bars in early 2018 to hitting new production records daily.

Berry added that Northern Vertex's gold and silver production at its Moss Mine in northern Arizona is hitting its stride as gold prices are expected to soar. He said that miners can't understate how much the gold price has improved their balance sheets.

"Our cash costs are in around $860. We expect that to drop in the future. All in sustaining costs were just over a thousand dollars. So the mine is very profitable in this current environment. And that's just looking at our production," he said.

For the quarter ending June 30, the company said that it produced 11,365 gold equivalent ounces and record revenues of $18.2 million. The company saw realized gold and silver prices for the quarter of $1,716 and $16.84, respectively.

Berry added that in July, the company produced about 4,200 ounces of gold as prices pushed to $2,000 an ounce.

Berry said that the company plans to use its cash flow to pay down its debt aggressively, fund its exploration program and improve production.

Although the sentiment is improving, Berry also said that the sector still has a ways to go to reach previous levels. He added that even as his company's gold production fires on all cylinders, it is still undervalued. Berry said that the company's exploration program should help attract new investor interest and value.

"When you look at the Moss mine, we've invested over a $100 million to get this project where it is. And our current market cap is sitting under a $100 million," he said. "This exploration program has a goal of doubling our resource. We're currently setting up just under half-million ounces, global resources.

"We're now hitting our stride where the production is increasing quarter over quarter. And now we look towards, opportunities to utilize Northern Vertex and the Moss mine is a platform for growth," he added. "There's going to be a lot more attention paid to this property and company in the in the quarters to come."

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