As a result of a review by the British Columbia Securities
Commission, Midway Gold Corp. ("Midway" or the
"Company") (MDW:TSX, MDW:NYSE-MKT) is issuing this press
release to provide clarification pertaining to the previously
announced resource growth at the Company's Spring Valley Project,
Pershing County, Nevada ("Spring Valley"). On August 12,
2014, the Company issued a press release, which included statements
in relation to the updated resource estimate, which were based on a
sensitivity case rather than the base case. The Company
subsequently filed an updated technical report titled "NI 43-101
Technical Report on Resources, Spring Valley Project, Pershing
County, Nevada", dated September 9, 2014 (the "2014 Spring
Valley Technical Report"). No changes have been made to the
mineral resource estimate contained in the 2014 Spring Valley
Technical Report; however the Company has filed an amendment to the
2014 Spring Valley Technical Report and is issuing this press
release to provide clarification about statements contained in its
August 12, 2014 press release. The amended report is titled
"Amended NI 43-101 Technical Report on Resources, Spring Valley
Project, Pershing County, Nevada" and has an amended report date of
December 19, 2014 (the "Amended 2014 Spring Valley Technical
Report" and together with the 2014 Spring Valley Technical
Report, the "Reports").
The Company's prior mineral resource estimate, as contained in
its 2011 technical report, titled "NI 43-101 Technical Report on
the Spring Valley Project, Pershing County, Nevada", dated May 24,
2011 (the "2011 Spring Valley Technical Report"), was
presented at a 0.14 g/t cutoff grade. The 2014 Spring Valley
Technical Report presents a base case mineral resource estimate at
a 0.21 g/t cutoff. The August 12, 2014 press release did not
present the 2014 base case resource estimate but rather it
presented data using the 0.14 g/t cutoff sensitivity case. This was
done in order to allow readers to draw a direct comparison to the
2011 estimate. The resources tabulated at 0.14 g/t and 0.21 g/t in
the Amended 2014 Spring Valley Technical Report are not
significantly different, nor has the mineral resource estimate
contained in the 2014 Spring Valley Technical Report been amended
or revised in the Amended 2014 Spring Valley Technical Report.
The mineral resources for the Spring Valley Project, are
estimated by Gustavson to be 201.9 million tonnes grading an
average of 0.63 g/t Au classified as measured and indicated mineral
resources with an additional 56.3 million tonnes grading an average
of 0.55 g/t Au classified as inferred mineral resources. All of the
estimated mineral resource is based on a 0.21 g/t gold cutoff.
Table 1 presents the 2014 mineral resource estimate and the 2011
mineral resource estimate, with all cutoff grades shown in the
Reports and the 2011 Spring Valley Technical Report,
respectively.
Table 1. 2014 Spring Valley Resource Estimate
with Comparison to 2011
20141
Measured
Indicated
Measured plus Indicated
Inferred
Cutoff (g/t) Tonnes ('000s) (g/t) Contained
('000 oz) Tonnes ('000s) (g/t) Contained ('000
oz) Tonnes ('000s) (g/t) Contained ('000 oz)
Tonnes ('000s) (g/t) Contained ('000 oz) 0.27
54,600 0.80 1,410 105,600 0.71
2,400 160,200 0.74 3,810 42,100
0.65 880
0.21
base case
68,300 0.69 1,510 133,600 0.61
2,610 201,900 0.63 4,120 56,300
0.55 990 0.14 83,000 0.60 1,590
162,500 0.53 2,780 245,500 0.55
4,370 71,100 0.47 1,070
20112
Measured
Indicated
Measured plus Indicated
Inferred
Cutoff (g/t) Tonnes ('000s) (g/t) Contained
('000 oz) Tonnes ('000s) (g/t) Contained ('000
oz) Tonnes ('000s) (g/t) Contained ('000 oz)
Tonnes ('000s) (g/t) Contained ('000 oz) 0.55
14,369 1.15 529 17,701 1.11
632 32,070 1.13 1,161 28,265
1.45 1,315 0.41 21,458 0.93 639 27,755 0.88 783
49,213 0.90 1,422 38,929 1.18 1,476 0.27 33,983 0.71 772 45,980
0.66 983 79,964 0.68 1,755 58,649 0.89 1,687
0.14
base case
59,032 0.49 931
85,793 0.45 1,229
144,825 0.46 2,160
103,935 0.59 1,971
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.
1The Mineral Resource Estimate was prepared by Gustavson
Associates, LLC ("Gustavson") of Lakewood, Colorado. The base case
estimate uses a cutoff grade of 0.21 g/t. The 0.14 g/t cutoff is
included in the tabulation for comparison purposes. A NI 43-101
technical report summarizing the mineral resource estimate was
filed on SEDAR on January 23, 2015. Gustavson completed the mineral
resource estimate, with Zachary Black acting as the Qualified
Person.2Resources as per the 2011 Spring Valley Technical Report.
The base case estimate 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 cutoff values.
This updated report made no changes to the resource estimate.
Comparison between 2011 and 2014 Resource Estimation
The August 12, 2014 press release contained comparisons between
the 2011 base case and 2014 sensitivity case resource estimates.
For clarity, this comparison has been updated and is presented in
Table 2, to show the difference between measured and indicated
resources from the 2011 base case (0.14 g/t cutoff) and 2014 base
case (0.21 g/t cutoff) resource estimates.
Table 2. Comparison Between 2011 and 2014 Base
Case Resource Estimates.
2011 Base Case
2014 Base Case
Percent Increase
Measured plus Indicated – Tonnes ('000s) 144,825
201,900 + 39% Measured plus Indicated – Au Grade (g/t)
0.46 0.63 + 37% Measured plus Indicated –
Contained Au ('000 oz) 2,160 4,120 + 91%
Note: The 2011 base case uses a 0.14 g/t cutoff and the 2014
base case uses a 0.21 g/t cutoff. Comparisons at other cutoff
grades can be made by reference to the resource sensitivities
presented in Table 1.
Whittle Pit-Defined Spring Valley Resources
The mineral resource estimate contained in the
Reports 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 US$1,100/oz and US$1,700/oz in US$200/oz
increments. The results are listed below in Table 3. The
US$1,500/oz pit model was selected as the base case due to a 3-year
trailing average gold price of US$1,543.83/oz.
Table 3. Whittle Pit Shell Mineral Resources at
Various Gold Prices at a 0.21 g/t Au Cutoff
MEASURED
INDICATED
M&I
INFERRED
PIT Tonnes Grade Contained Tonnes
Grade Contained Tonnes Grade
Contained Tonnes Grade Contained (US$/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: Whittle pit optimization was used to determine potentially
mineable tonnage from the resources presented in Table 1. 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 Reports. Mineral resources are not mineral reserves and do
not have demonstrated economic viability.
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 $1.68 US$ per Tonne Processing Cost
$2.94 US$ per Tonne Ore G&A $0.42
US$ per Tonne Ore Mining Recovery 95% Mining
Dilution 5% Royalties Up to 7%
Gold Marketing Cost $1.00 US$ per Troy Ounce
The disclosure above supercedes the disclosure presented in
Midway's press release dated August 12, 2014.
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. Midway has 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, LLC,
in accordance with National Instrument 43-101 – Standards of
Disclosure for Mineral Projects of the Canadian Securities
Administrators ("NI 43-101"), and in compliance with the
disclosure and reporting requirements set forth in Companion Policy
43-101 CP and Form 43-101F1. 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 May 10, 2014.
The mineral resource estimate was prepared for and on behalf of
Midway Gold Corp and is not a work product of the Spring Valley
Joint Venture.
The disclosure contained above has been reviewed and approved by
Zachary J. Black, a "qualified person" as that term is defined in
NI 43-101.
Amendment to Gold Rock Technical Report Filed
The Company also announces that it has also filed an amendment
to its previously filed technical report in relation to its Gold
Rock Project. The amended report is titled “Amended NI 43-101
Technical Report, Updated Mineral Resource Estimate for the Gold
Rock Project, White Pine County, Nevada” and has an amended report
date of January 8, 2015. This amended report was prepared and filed
in order to address inconsistencies between the previously filed
report and the Company’s press release dated May 28, 2014.
Gold Rock Project, Nevada
Gold Rock is in the Pancake Range of western White Pine County,
Nevada. The property is 10.5 km southeast of Midway’s Pan Project
and approximately 104 km west of Ely, Nevada. Historic gold
production at Gold Rock came from the Easy Junior open pit mine
during the 1980s and the 1990s.
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.
Midway Gold Corp.Jaime Wells, 720-979-0900Investor
Relationsjwells@midwaygold.comwww.midwaygold.com
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, 720-979-0900Investor
Relationsjwells@midwaygold.com