DENVER--(BUSINESS WIRE)--
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 provideclarification
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, 720-979-0900
Investor Relations
jwells@midwaygold.com
www.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.