Midway Forecasts Capital Reductions Pan Project, Nevada
24 April 2014 - 09:45PM
Business Wire
Midway Gold Corp. ("Midway" or the "Company") (MDW:TSX,
MDW:NYSE-MKT) is pleased to provide an update on recent
developments and scope changes at the Pan Project including
potential reduction in pre-production capital requirements.
Construction at Pan remains on-track for initial production in
2014.
“We are excited by our progress at Pan,” said Ken Brunk CEO and
President. “Our team has worked diligently during the last few
months to advance our first project through construction while also
finding ways to cut our costs. We believe we can significantly
reduce our borrowing needs by employing two significant scope
changes to the project—the utilization of a contract miner for
early years of mining, and leaching the South Pan ore body by
run-of-mine methods thereby deferring the purchase and installation
of a crusher plant. We are also fortunate to have had our
construction contracts that have been let to date come in at or
very close to our feasibility estimates. With these recent
reductions in initial capital requirements and our current strong
cash balance, we look forward to completing project financing
within the coming weeks. We are pleased that the third party
engineers that have evaluated the project on behalf of potential
lenders have found no 'fatal flaws' in any of these approaches or
with the project.”
RECENT PROJECT SCOPE CHANGES
Transition to Contract Mining
Midway has elected to pursue contract mining in the initial
years at Pan. Midway had planned to pursue owner mining (as
referenced in the 2011 Feasibility Study). However, conditions in
the mining industry have led to an increasingly attractive price
environment for contract mining. A mining contractor will provide
all mining-related services, manpower and equipment for the Pan
Project. They will be directly responsible for drilling, blasting,
loading, and hauling ore to the leach pad for processing by Midway.
Contract mining reduces the initial capital requirements for Pan by
deferring purchase of the planned mine fleet. It also minimizes
initial start-up and operational risks.
Elimination of Crushing in Initial Mine Years
The Company has elected to defer purchase and installation of
crushers for the first 2-3 years of the mine life at Pan. The
November 2011 Feasibility Study included a 2-stage crushing circuit
at South Pan. Detailed metallurgical tests confirm this ore
responds favorably to run-of-mine leaching. Deferral of crushing
circuit equipment and installation is expected to reduce initial
capital expenditures. There is also potential to lower operating
costs associated with the deferral of the crushers. Midway is
currently evaluating the extent of such potential savings.
PROJECT FINANCING
Midway is currently well funded with $48M in cash as of December
31, 2013. Construction progress remains on track for 2014 gold
production at Pan. Project financing is well advanced and expected
to be complete in the second quarter of 2014. Financing is being
designed to retain gold price upside for our shareholders. Midway
is striving to maximize returns on capital invested and return on
equity, and has evaluated a variety of debt financing alternatives,
both traditional and non-traditional. In depth, third party due
diligence for the Pan project has resulted in a determination of no
“fatal flaws” for prospective lenders.
Pan Gold Project, Nevada
The Pan project is a low cost, oxidized, Carlin-style gold
deposit mineable by shallow open pit methods and treatable by heap
leaching.
This release has been reviewed and approved for Midway by Rick
Moritz a "qualified person" as that term is defined in NI
43-101.
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. 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 Exchange, its Regulation Services Provider (as
that term is defined in the policies of the TSX Exchange) 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 and potential offering of common shares of the Company
from time to time. 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.
Midway Gold Corp.Jaime Wells, 877-475-3642 (toll-free)Investor
Relations Analyst
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