Midway Gold Corp. ("Midway" or the "Company") (MDW:TSX,
MDW:NYSE-MKT) announces substantial resource growth at its Spring
Valley project, located in Pershing County, Nevada (“the Project”).
The Company has updated the mineral resource estimate to include
the 2011-2013 drill results. Midway’s independent consulting
engineers, Gustavson Associates, have determined that this drilling
has resulted in a 102% increase in Measured & Indicated
(“M&I”) ounces to 4.37 million ounces, as well as a 20%
increase in the M&I gold grade. In addition, the drilling has
resulted in an inferred resource now totaling 1.07 million ounces.
Midway also announces its decision to become a 25% joint venture
partner, to be carried to production by Barrick free of any
additional payments or capital outlays.
“We are thoroughly impressed with the continued growth and the
significant quality upgrade at Spring Valley,” said Ken Brunk,
President and CEO of Midway. “The accelerated progress on the
project continues to give us confidence that Spring Valley has the
potential to be a world-class gold mine in the near future. The
three drill rigs on site continue to be focused on in-fill drilling
and will likely have an even greater future impact on ounce quality
as we move forward to completion of a pre-feasibility study in the
fall of 2015. The $9 million drilling program and the $8.4 million
commitment currently being spent on all of the various engineering
and permitting activities speaks to the merits of the project. We
are happy to have Barrick as our joint venture partner and pleased
to see 2014’s major progress.”
Table 1. Spring Valley Resource Growth
2011 MINERAL RESOURCE ESTIMATE1
>
2014 MINERAL RESOURCE ESTIMATE2
RESOURCES TONNES GRADE
CONTAINED TONNES
GRADE CONTAINED (‘000s) (g/t) (‘000s oz) (‘000s)
(g/t) (‘000s oz)
Measured 59,032 0.48 931 83,000 0.60 1,590
Indicated 85,793 0.45 1,229 162,500 0.53 2,780
M&I 144,825 0.46 2,160
245,500 0.55 4,370 Inferred
103,935 0.59 1,971 71,100
0.47 1,070
Note: The tonnage and total ounces of gold for resources were
determined from the statistical block model. Average grades were
calculated from the tonnage and total ounces and then rounded to
the significant digits shown. Calculations based on this table may
differ due to the effect of rounding.
1Resources as per Independent NI 43-101 Technical Report by
Gustavson Associates, LLC (May, 2011). The calculation uses a
cutoff grade of 0.14 g/t. An updated report “Updated NI 43-101
Technical Report on the Spring Valley Project, Pershing County,
Nevada” dated November 29, 2012 was filed to clarify
responsibilities of the Qualified Persons and to clarify language
regarding capping, density, and cut-off values. This updated report
made no changes to the resource estimate.
2The Mineral Resource Estimate was prepared by Gustavson
Associates, LLC (“Gustavson”) of Lakewood, Colorado. The estimate
uses a cutoff grade of 0.14 g/t. A NI 43-101 technical report
summarizing the Estimate will be filed on SEDAR within 45 days.
Gustavson completed the open pit mineral resources, with Zachery
Black and Donald E. Hulse acting as the Qualified Persons.
Resource Growth
The updated resource estimate for Spring Valley incorporates
drill results from 2010-2013. Infill drilling has resulted in a
significant increase in resource confidence through the conversion
of Inferred ounces into the M&I categories, as well as nearly a
20% increase (from 0.46 g/t to 0.55 g/t) in the M&I gold grade.
Gustavson performed the updated resource from all of the drill
data, geologic controls from the main rock types, and from implicit
grade shells with an Ordinary Kriging algorithm. Prior to
statistical treatment, the data was verified by using original
third party lab assay certificates.
Table 1 compares the previous 2011 Gustavson resource estimate,
to the updated 2014 Gustavson resource estimate. In the M&I
resource category, tonnage increased by 70%, grade increased by
20%, and contained ounces increased by 102%. The increase in the
2014 estimate from the previous 2011 estimate is largely due to
excellent infill drilling results. The cross section in Figure 1
illustrates the upgrade by resource class from 2011 to 2014.
Drilling at Spring Valley has occurred within an area
approximately 10,500 feet long in a N20E-S20W direction and up to
3,000 feet wide. The defined gold resource lies within an area
7,500 feet in strike length by 2,300 feet wide. Table 2 lists the
amount of drilling completed to date on the Spring Valley project,
including the number of meters completed since the 2011 Resource
Estimate. In 2011, 519 drill holes were used to calculate a
resource estimate, and in 2014, an additional 153 holes (for a
total of 672) were available to calculate the new estimate.
Table 2. Drill Data from 2011 to 2014
2011 Resource New
Drilling 2014 Resource RC Holes
443 88 531 RC Meters 127,856
33,231 161,087 Core Holes 76 64 140 Core Meters 27,668 25,066
52,734 Total Drill Holes 519 153 672
Total Drill Meters
125,044 58,973
184,017
Project Development
Barrick’s 2014 project budget is $17.4 million, which includes
$9 million for continued in-fill drilling and $8.4 million for
preparation of an internal pre-feasibility study and other related
project development expenditures. Planned development activities
will include additional metallurgical studies, hydrological
studies, environmental baseline studies, and geotechnical wall rock
stability studies required for mine planning.
Exploration Potential
Beyond the resources added by the infill program, Spring Valley
has excellent growth potential and exploration upside. The current
resource remains open to the south, to the northwest and at depth.
A cross-section shown in Figure 2 provides a view of this growth
potential by showing an extended lateral resource growth achieved
through step-out drilling between 2011 and 2014. Looking west, this
cross-section illustrates the growth in the resource to the north
and to the south since the 2011 resource estimate.
Additionally, a number of high potential drill targets outside
of the current resource area have been identified. These targets
are based on soil and rock sampling, analysis of geophysical data,
detailed geological mapping and historic wide-spaced drill hole
data. The map in Figure 3 outlines potential drill targets in
relation to the current Spring Valley resource.
Figure 1. East-West Cross-Sections (A-A’) Looking NorthShowing
2014 Upgrades in M&I and Inferred Resources
To view the graphic, please click here
Figure 2. North-South Cross-Sections (B-B’) Looking
NorthwestShowing Lateral Growth Achieved Through Step-Out
Drilling
To view the graphic, please click here
Figure 3. Exploration Drill Targets at Spring Valley
To view the graphic, please click here
Whittle Pit-Defined Spring Valley Resources
The 2014 mineral resource estimate was further analyzed by a
Whittle pit optimization program to determine the portion of the
resource which has the potential to be mined by open pit methods
based upon the current level of resource development. Open pit
models were generated at gold prices ranging between $1,100/oz and
$1,700/oz in $200/oz increments. The results are listed below in
Table 3. The $1,500/oz pit model was selected as the base case due
to a 3-year trailing average gold price of $1,543.83/oz.
Table 3. Whittle Pit Shell Mineral
Resources at Various Gold Prices at a 0.21 g/t Au Cutoff
MEASURED INDICATED
M&I INFERRED PIT
Tonnes Grade Contained
Tonnes Grade Contained
Tonnes Grade Contained
Tonnes Grade Contained
($/oz) (‘000s) (g/t) (‘000s oz) (‘000s) (g/t) (‘000s oz) (‘000s)
(g/t) (‘000s oz) (‘000s) (g/t) (‘000s oz) $ 1,100 37,600 0.99 1,200
63,200 0.81 1,640 100,800 0.88 2,840 17,200 0.67 370 $ 1,300 45,400
0.97 1,410 72,200 0.80 1,860 117,600 0.86 3,270 19,600 0.73 460 $
1,500 49,400 0.94 1,490 79,900 0.79 2,030 129,300 0.84 3,510 20,700
0.74 490 $ 1,700 56,000 0.86
1,550 83,100 0.79
2,120 139,000 0.82 3,660
21,200 0.73 500
Note: The mineral resource was estimated using Leap Frog Kriging
Grade Shell Estimation routine for domain definition and the
Ordinary Kriging estimation algorithm. Whittle pit optimization was
used to determine potentially mineable tonnage. Measured, indicated
and inferred mineral classification was determined by the
variography of each mineral domain. A complete description of the
modeling method, environmental and other project risks can be found
in the full technical report, which will be filed on Sedar within
45 days. Mineral resources are not mineral reserves; resources have
no engineered economic viability and should not be considered
economic to mine.
The economic parameters used for this analysis are based upon
operating costs of similar sized mines currently operating in
Nevada and upon estimated gold recoveries from metallurgical tests
completed to date. Table 4 summarizes the estimated cost
parameters.
Table 4. Economic Parameters Used for
Whittle Pit Analysis
Item Cost/Rate
Units Mining Cost $1.68 $ per
Tonne Processing Cost $2.94 $ per Tonne Ore G&A $0.42 $ per
Tonne Ore Mining Recovery 95% Mining Dilution 5%
Royalties Up to 7% Gold Marketing Cost $1.00
$ per Troy Ounce
Spring Valley Project, Nevada
Spring Valley is a large porphyry-hosted gold system located
about 20 miles northeast of Lovelock in Pershing County, Nevada.
Barrick achieved their earn-in by spending $38 million to earn a 70
percent interest in the project (see February 24, 2014 press
release). The project is now run as a joint venture with Barrick as
manager. Following today’s announcement, Midway has now converted
its 30% interest into a 25% free-carried interest in Spring Valley
and will be carried to production, at which point Midway will pay
back its share of development capital from production.
About The Resource Estimate
The resource estimate was prepared by Gustavson Associates in
accordance with the Canadian Securities Administrators (“CSA”) NI
43-101 and in compliance with the disclosure and reporting
requirements set forth in Companion Policy 43-101 CP and Form
101-F1 (June 2011). Resources have been classified in accordance
with standards as defined by the Canadian Institute of Mining,
Metallurgy and Petroleum(CIM) “CIM Definition Standards-For Mineral
Resources and Mineral Reserves”, prepared by the CIM Standing
Committee on Reserve Definitions and adopted by CIM Council on
December 17, 2010.
The resource estimate was prepared for and on behalf of Midway
Gold Corp and is not a work product of the Spring Valley Joint
Venture.
ON BEHALF OF THE BOARD
“Kenneth A. Brunk”Kenneth A. Brunk,
Chairman, President and CEO
About Midway Gold Corp.
Midway Gold Corp. is a precious metals company with a vision to
explore, design, build and operate gold mines in a manner
accountable to all stakeholders while assuring return on
shareholder investments. The Company’s business of mineral
exploration has a high level of inherent risk. Although the Company
is optimistic about the potential of many of its projects, there is
no guarantee that any mineral deposits will be economically
feasible and that these deposits will be put into production. The
Company’s exploration and development activities may also be
affected by a number of risks, including environmental,
metallurgical, financing, permitting, approval, legislative and
other government risks which are common to the industry and are
referenced in greater detail in the Company’s annual report on Form
10-K.
This release has been reviewed and approved for Midway by David
Mosch, Corporate Mining Engineer at Midway, and a "qualified
person" as that term is defined in NI 43-101.
For more information about Midway, please visit our website at
www.midwaygold.com or contact Jaime Wells, Investor Relations
Analyst, at (877) 475-3642 (toll-free).
Neither the TSX its Regulation Services Provider (as that term
is defined in the policies of the TSX ) nor the NYSE MKT accepts
responsibility for the adequacy or accuracy of this release.
This press release contains forward-looking statements about the
Company and its business. Forward looking statements are statements
that are not historical facts and include, but are not limited to,
statements about the Company's intended work plans and resource
estimates, including plans for the further development of the
Spring Valley Project and plans for a preliminary economic
assessment in relation to the Spring Valley Project.
Forward-looking statements are typically identified by words such
as: “may”, “should”, “plan”, “believe”, “predict”, “expect”,
“anticipate”, “intend”, “estimate”, postulate” and similar
expressions or the negative of such expressions or which by their
nature refer to future events. The forward-looking statements in
this press release are subject to various risks, uncertainties and
other factors that could cause the Company's actual results or
achievements to differ materially from those expressed in or
implied by forward looking statements. These risks, uncertainties
and other factors include, without limitation, risks related to the
timing and completion of the Company's intended work plans, risks
related to fluctuations in gold prices; uncertainties related to
raising sufficient financing to fund the planned work in a timely
manner and on acceptable terms; changes in planned work resulting
from weather, logistical, technical or other factors; the
possibility that results of work will not fulfill expectations and
realize the perceived potential of the Company's properties;
uncertainties involved in the interpretation of drilling results
and other tests and the estimation of gold resources and reserves;
the possibility that required permits may not be obtained on a
timely manner or at all; the possibility that capital and operating
costs may be higher than currently estimated and may preclude
commercial development or render operations uneconomic; the
possibility that the estimated recovery rates may not be achieved;
risk of accidents, equipment breakdowns and labor disputes or other
unanticipated difficulties or interruptions; the possibility of
cost overruns or unanticipated expenses in the work program;
changes in interest and currency exchanges rates; local and
community impacts and issues; environmental costs and risks; and
other factors identified in the Company's SEC filings and its
filings with Canadian securities regulatory authorities.
Forward-looking statements are based on the beliefs, opinions and
expectations of the Company's management at the time they are made,
and other than as required by applicable securities laws, the
Company does not assume any obligation to update its
forward-looking statements if those beliefs, opinions or
expectations, or other circumstances, should change. Although the
Company believes that such forward-looking statements are
reasonable, it can give no assurance that such expectations will
prove to be correct. For the reasons set forth above, investors
should not attribute undue certainty to or place undue reliance on
forward-looking statements.
Cautionary note to U.S. investors concerning estimates of
reserves and resources: This press release and the documents
referenced in this press release use the terms “reserve" and
"mineral resource“, which are terms defined under Canadian National
Instrument 43-101 and the Canadian Institute of Mining and
Metallurgy Classification system. Such definitions differ from the
definitions in U.S. Securities and Exchange Commission ("SEC")
Industry Guide 7. Under SEC Industry Guide 7 standards, a
"final" or "bankable" feasibility study is required to report
reserves, the three-year historical average price is used in any
reserve or cash flow analysis to designate reserves and the primary
environmental analysis or report must be filed with the appropriate
governmental authority. Mineral resources are not mineral reserves
and do not have demonstrated economic viability. The SEC normally
only permits issuers to report mineralization that does not
constitute SEC Industry Guide 7 compliant "reserves" as in-place
tonnage and grade without reference to unit measures. The
references to a “resource” in this press release and the documents
referenced in this press release are not normally permitted under
the rules of the SEC. It cannot be assumed that all or any part of
mineral deposits in any of the above categories will ever be
upgraded to Guide 7 compliant reserves. Accordingly, disclosure in
this press release and in the technical reports referenced in this
press release may not be comparable to information from U.S.
companies subject to the reporting and disclosure requirements of
the SEC.
Midway Gold Corp.Jaime Wells, (877) 475-3642 (toll-free)Investor
Relations Analystwww.midwaygold.com