Vendetta Mining Corp. is a Canadian junior exploration company which is currently focused on advancing its 100% owned Pegmont Lead Zinc project in Australia. Listed below, a chronology of updates provided to the market in 2019.
Jan. 28 - Announces Positive PEA with Pre-Tax IRR of 31% and NPV (8%) of $204M on Pegmont Lead-Zinc Project. Major highlights were: 1) Mine Life 10 years at 3,000 tonne per day open pit followed by underground 2) Long Term Consensus Metal Prices: $0.94 /lb Lead, $1.09 /lb Zinc and $16.50 /oz Silver. 3) Pre-production Capital of $170M and Life of Mine Sustaining Capital of $59M. 4) After tax payback period 3.5 years, 5) Opportunities for continued refinement through further mine plan optimization and metallurgical test work.
Also noted: There remain significant Mineral Resources not included in the PEA mine plan, which, with further drilling will potentially increase the mine life or increase production rate.
Plan to issue up to 12 million units at $0.125 cents per unit to raise gross proceeds of $1.5 million. Each unit will comprise one and one half common share purchase warrant at an exercise price of $0.18 for a period of two years.
Mar. 14 - Files NI 43-101 – Pegmont Updated Mineral Resource Estimate and Preliminary Economic Assessment.
The Report which is dated March 14, 2019 and is effective January 22, was prepared in compliance with National Instrument 43-101- Standards for Disclosure for Mineral Projects ("NI 43-101").
Mar. 29 - Corporate Update - Announce that it has paid the Pegmont project Vendor (Pegmont Mined Ltd.) A$0.05M to extend the March 31 payment of A$0.3M to May 6. On May 6, the Company may further extend the final property payment of A$3M to November 6, by paying a further A$0.35M. This allows the Company time to complete negotiations and obtain TSX-V approvals for an financial instrument that will allow the Company to pay the A $3M and complete the acquisition of the Pegmont Lead-Zinc project to own 100%.
Apr. 12 - Signs Term Sheet for A$3.0M Funding Package to Complete Pegmont Acquisition non-binding term sheet for a proposed financing transaction with Nebari Holdings LLC (“Nebari”). The proceeds of the proposed financing are planned to be used to pay the final Pegmont Lead-Zinc property payment of A$3,000,000 and in doing so complete the Company’s acquisition of a 100% interest in the Pegmont Lead-Zinc project.
Apr. 25 -Obtains Due Diligence Clearance for A$3.0M Funding Package to Complete Pegmont Acquisition -has been advised by Nebari that technical due diligence has been completed to their satisfaction. Funding to close on May 6th.
May 8th - Closes A$3.0M Funding Package to Complete Pegmont Acquisition and Private Placement Update. Closed the previously announced financing package with Nebari. and that, as a result, it is in a position to make its final property payment to Pegmont Mines Ltd., as vendor, and acquire a 100% interest in the Pegmont Lead-Zinc project.
Private Placement Update - The Company has amended the terms of the previously announced private placement (the "Offering"). Plans to issue up to 15 million units at $0.10 cents per unit to raise gross proceeds of $1.5 million (subject to TSX Venture Approval). Each unit will comprise one and one half common share purchase warrant, at a price of $0.15 per share, for a period of two years following the closing of the Offering.
Field Work - Following the closing of the Offering, the Company will commence field work at the Pegmont Lead-Zinc project. The detailed geological mapping program commenced last year will be expanded and the Company will commence a drill program consisting of resource development drilling in Zones 2, 3 and 4, and exploration drilling on newly identified structural targets. In addition, metallurgical test work will be completed on Zone 1 transition material from six previously drilled holes in Main Pit 1. Additional metallurgical samples to be collected.
Jun. 3 - Vendetta Secures 100% Interest in Pegmont and Closes First Tranche of Private Placement. The formal transfer to update the legal title to the exploration permit and three mining leases that comprise the project is now in progress. The Company has closed the first tranche of the previously announced private placement issuing total of 5,772,500 units (the “Units”) at a price of $0.10 per Unit for gross proceeds of $577,250.
Jul. 10 - Provides Project and Corporate Update. -1) Ore Sorting Test Work -shipped three composites from three previously completed drill holes for sensor-based ore sorting screening test work. If successful, it will have a material impact on the project economics. 2) Field Work - The detailed mapping program on the Pegmont tenements is now half complete - The mapping will now form the basis for developing the exploration programs over these prospects. 3) Australian Corporate Tax Phased Reduction - from current 30% to 25% in 2026. 4) Transition Metallurgical Test Work - To further de-risk the start-up period a variability metallurgical program was commenced on Zone 1. The objective is to understand the range of possible results within the transition material, that is material that is predominately lead & zinc sulphide mineralisation. 5) Private placement; work towards closing, reports insider participation.
Jul. 31 - Closes Non-Brokered Private Placement -closed an additional non-brokered private placement of 11,533,332 units (the “Units”) at a price of $0.09 per Unit for gross proceeds of $1,037,999.88, forming part of a larger offering of up to $1,700,000 in gross proceeds (the ""Private Placement""). Together with the proceeds from the non-brokered private placement completed on June 3, 2019, the Company has now raised $1,615,249.87, an amount in excess of the $1,500,000 referred to in the Company's announcement on March 11, 2019. Net proceeds from the financing will be used to advance the development of the Pegmont Lead-Zinc project and for general working capital.
Elysium Mining Ltd (“Elysium”), a private company controlled by Peter Voulgaris, a director of the Company, acquired 500,000 Units pursuant to the Private Placement and Octavian Capital Corp. (“Octavian”), a private company controlled by Michael Williams, CEO, President & a director of the VTT, acquired 833,333 Units pursuant to the private placement.
Dec. 10 - Shareholders/Investor Update -2019 highlights included the release of a comprehensive Preliminary Economic Assessment (PEA) and acquisition of the project for 100% ownership.
After PEA, next iteration of mining study to focus on 1) AU Corporate Tax Cut, 2) Ore sorting test work, 3) Resource Expansion, 4) Revision of mine plan, and 5) ASX Listing. "Our challenge is to demonstrate to the market that, not only is Vendetta undervalued, it is one of the most viable mine development opportunities."
Summary
As indicated by the chart, 2019 has not been a stellar year for VTT.V's valuation. Despite a positive PEA, and acquiring 100% of Pegmont Project, the declining spot zinc and lead prices along with financing challenges combined with weak communications with the markets in the later half of the year seems to be at issue (i.e. last news release July 31).
Indeed, VTT.V went from $0.17 to $0.04 cents in the span of twelve months. The private placement of March 11 (strike price of $0.125 cents with warrant at 0.18 cents) was revised almost two months later to $0.10 cents; warrant at $0.15 cents. (May 8). While the first tranche representing roughly one third of the target took less than a month (Jun. 3), the remainder of the offer took another two months (July 31). However, insider participation in the placement is noted.
In retrospect, the length of time required for the closing of the "non-brokered" financing and announcement of ASX listings were not mitigating factors within those market conditions.
On October 11 2017, Industrial Alliance Securities Inc.* initiated coverage of VTT.V. * (http://cdn.ceo.ca.s3-us-west-2.amazonaws.com/1ctut1g-20171011 VTT Initiation Report.pdf) The report stated: "We see potential in this resource to reach 14-15Mt grading 9-10% Pb+Zn over the next 12-18 months with further drilling along strike in Zones 1-5 and the Burke Hinge Zone (BHZ). A PEA is expected in Q3-Q4/F18". Also noted: "While it is more likely a takeout candidate, we model an open-pit, followed by underground, $155M mine producing 37Mlbs Zn and 121Mlbs Pb p.a. at a cash cost of $0.42/lb PbEq. The mine would have a four-year payback period".
On October 11 2017, VTT.V closed at $0.27 cents.
In VTT.V's December 2019 Investor Presentation, the following were noted: 1) 8.9MT open pit with 1.7MT high grade underground. 2) 2019 PEA; a 10 year mine life and 3) A 3x increase in resource, 5.8MT indicated and 8.3MT Inferred. 4) a $177M mine cost, 5) An Average Life of Mine Payable Lead (Pb) 124Mlbs at $0.94/lb and Zinc (Zn) 50Mlbs at $1.09/lbs.
Also, MD&A - Ending Aug. 31 2019 disclosed: Cash at August 31, 2019 of $518,364 (May 31, 2019 - $76,006).
Yesterday, VTT.V closed at $0.045 cents.
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