North River Resources and Greenstone Equity Deal Welcomed by Analysts
Top analysts have welcomed news announced today that North River Resources has secured a US$12m equity funding commitment from natural resources private equity firm Greenstone Resources.
The funding which will be drawn down in a series of tranches, will enable North River Resources (NRRP) to bring its flagship Namib Lead Zinc Mine into production in 2015.
Sheldon Modeland and Paul Renken, senior analysts at London investment bank specialising in natural resources, VSA Capital Ltd, said: “The addition of Greenstone as a major shareholder is a great endorsement of management, the business plan and the deposit and reduces the project funding risk.”
VSA also reaffirmed its BUY recommendation and tp of 2p. The target price demonstrates more than 200 percent value uplift in comparison to the current price of 0.66p. The share price was up 32 percent his morning.
NRRP had released a Mine Development Plan earlier this week. A mine and plant capex estimate of US$25m is proposed by consultants Snowden, based on a 56-month production period, with 660,000t of milled current inferred resources averaging 8.5 percent combined lead-zinc and 46g/t silver.
Based on this, an IRR after tax of 38 percent is achieved with a payback period of 1.4 years. Site preparation and further work to complete a feasibility study begins immediately.
An indicative off-take offer has also been received from MRI Trading for concentrate offtake and smelter returns of 85 percent contained Zn and 95 percent on contained Pb and Ag on concentrates received.
Martin French, NRRP Managing Director, said: “I am extremely pleased to welcome Greenstone as a corner-stone shareholder in North River. This is a major step in the Company’s transition to become a revenue-generating concern.
“Greenstone has conducted extensive due diligence on the Company and specifically the Namib project, so this investment represents a great vote of confidence in the project. It allows us to fast-track the development of the mine and provides a clear pathway to production in 2015.
“North River is an ambitious Company. It is our objective to use the Namib project as a platform to capitalise on numerous other opportunities in Namibia and elsewhere to build a larger business.”
Mark Sawyer, Senior Partner of Greenstone, said: "We are delighted to become a major shareholder in North River and look forward to supporting Martin and his team in delivering both the Namib mine restart and the Company’s broader growth strategy.”
