Midway Gold (MDW-T) May 28, '14 announces substantial resource growth at its Gold Rock project, located only 10.5 km to the southeast of its construction-stage Pan project in White Pine County, Nevada. The Company has received an updated NI 43-101 resource estimate for Gold Rock to include results from its 2012-2013 drill program. The updated resource estimate is effective as of May 27, 2014 and was prepared by Global Resource Engineering. The drilling has resulted in a 65% increase in Measured & Indicated resources, as well as a 62% increase in Inferred resources.
“We always saw great upside in the potential to expand the resource base at Gold Rock, and we are particularly pleased by the extent to which this deposit has grown and improved in quality since our last resource estimate in 2012,” said Ken Brunk, President and CEO of Midway. “Given Gold Rock’s increased size, we plan to pursue a preliminary economic assessment for the Project to assist in determining the potential viability of developing Gold Rock, and to further recognize the value of Gold Rock within our Company’s portfolio of projects. Gold Rock is currently well into the permitting process, with finalization and publication of the draft environmental impact statement expected in Q3 of this year. We are leveraging the development and permitting experience gained from our accomplishments at Pan to advance Gold Rock as our second gold mine in a timely and efficient manner.”
Table 1. Gold Rock Mineral Resource Growth
2012 RESOURCE SUMMARY1
| >
| 2014 RESOURCE SUMMARY2
| RESOURCES
| TONNES
| GRADE
| CONTAINED
|
| TONNES
| GRADE
| CONTAINED
| | | (‘000s)
| (g/t)
| (‘000s oz)
| (‘000s)
| (g/t)
| (‘000s oz)
| Measured
| | | | 1,730
| 0.79
| 44
| Indicated
| 12,968
| 0.74
| 310
| 18,485
| 0.79
| 469
| M&I
| 12,968
| 0.74
| 310
| 20,215
| 0.79
| 513
| Inferred
| 17,894
| 0.58
| 331
| 24,303
| 0.69
| 536
| | | | | | | | | | |
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.
1Resource as per “Updated NI 43-101 Technical Report on the Gold Rock Project, White Pine County, Nevada” dated November 29, 2012 prepared by Gustavson Associates, LLC (“Gustavson”). Uses a cutoff grade of 0.27 g/t Au.
2 This updated resource estimate was prepared by Global Resource Engineering in accordance with NI 43-101 and is effective May 27, 2014. The Company has retained Global Resource Engineering to prepare a technical report in respect of the updated resource estimate. Uses a cutoff grade of 0.27 g/t Au.
Table 1 compares the previous 2012 Gustavson resource estimate to the new updated 2014 resource estimate prepared by Global Resource Engineering estimate, showing a substantial increase across the board. In the Measured & Indicated resource category, tonnage increased by 56%, grade increased by 7%, and contained ounces increased by 65%. In the Inferred resource category, tonnage increased by 36%, grade increased by 19%, and contained ounces increased by 62%. The increase in the 2014 estimate from the previous 2012 estimate is largely attributed to additional step-out drilling and corresponding updates to the block model boundary limits to reflect the new drill results and more closely fit the geology of the deposit.
Pit-Constrained Resource at Gold Rock
The 2014 resource estimate was subjected to a Whittle pit optimization to determine the portion of the resource, which has potential to be mined by open pit methods. Pit shells were generated at gold prices ranging from $1,100/oz to $1,900/oz in $200/oz increments, shown below in Table 2. The $1,500/oz pit shell was selected for the mineral resource estimate based on the trailing 3-year average gold price of $1,543.83/oz. Mineral resources are not mineral reserves and have no demonstrated economic viability.
Table 2. Whittle Pit Shell Mineral Resources at Various Gold Prices at a 0.21 g/t Au Cutoff
| | MEASURED
| INDICATED
| M&I
| INFERRED
| PIT
| Tonnes
| Grade
| Contained
| Tonnes
| Grade
| Contained
| Tonnes
| Grade
| Contained
| Tonnes
| Grade
| Contained
| ($/oz)
| (‘000s)
| (g/t)
| (‘000s oz)
| (‘000s)
| (g/t)
| (‘000s oz)
| (‘000s)
| (g/t)
| (‘000s oz)
| (‘000s)
| (g/t)
| (‘000s oz)
| $1,100
| 1,811
| 0.76
| 44.14
| 17,381
| 0.74
| 411
| 19,193
| 0.74
| 455
| 10,062
| 0.74
| 239
| $1,300
| 1,728
| 0.77
| 42.75
| 15,755
| 0.75
| 380
| 17,483
| 0.75
| 423
| 8,101
| 0.78
| 203
| $1,500
| 1,789
| 0.76
| 43.83
| 16,787
| 0.74
| 400
| 18,576
| 0.74
| 444
| 9,322
| 0.76
| 228
| $1,700
| 1,811
| 0.76
| 44.14
| 17,381
| 0.74
| 411
| 19,193
| 0.74
| 455
| 10,062
| 0.74
| 239
| $1,900
| 1,825
| 0.76
| 44.35
| 18,024
| 0.73
| 422
| 19,849
| 0.73
| 467
| 11,432
| 0.71
| 261
|
Note: The mineral resource was estimated using geologically created wireframe mineral domains and inverse distance cubed 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.
The economic parameters used for this analysis are based on Midway’s Pan Project Feasibility Study report (Independent NI 43-101 compliant Feasibility Study prepared by Gustavson Associates, LLC – November 2011). The Pan Project is approximately 10.5 km northwest of Gold Rock and is similar to Gold Rock in both size and geologic characteristics. Midway plans to pursue a preliminary economic assessment at Gold Rock. Table 3 summarizes the optimization parameters.
Table 3. Economic Parameters Used for Whittle Pit Analysis
Item
| Cost/Rate
| Units
| Ore and Waste Cost
| $1.50
| $ per Ton
| Processing Cost
| $2.58
| $ per Ton Ore
| G&A
| $0.37
| $ per Ton Ore
| Heap Leach Recovery
| 70%
|
| Royalties
| Blended 2%
|
| Gold Marketing Cost
| $1.00
| $ per Troy Ounce
|
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.
Gold Rock is typical of Carlin systems in Nevada where rock alteration includes silicification, argillization, decalcification, and oxidation. Moderate to strong zones of silicification are present along bedding planes and on fault structures that are primarily in the Joana Limestone. Jasperoid within the Joana Limestone carries significant amounts of gold. In surface outcrops, Joana-hosted jasperoid occurs along strike both north and south of the deposit for over 12 kms and is often found in association with anomalous gold values.
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 by Mr. David Mosch, Corporate Mining Engineer at Midway and a "qualified person" as that term is defined in NI 43-101.
Ms. Terre Lane of Global Resource Engineering is the independent, qualified person who has audited and confirmed the updated resource estimate and is responsible for the mineral resource estimate summarized in this release.
ON BEHALF OF THE BOARD
“Kenneth A. Brunk”
Kenneth A. Brunk, Chairman, President and CEO |
