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Midway’s Spring Valley Gold Project, Nevada Advances To Barrick’s Development And Mine Site Exploration Groups

Stocks in this article: MDW

Midway Gold Corp. ("Midway" or the "Company") (MDW:TSX-V; MDW:NYSE-AMEX) announces third quarter progress at its Spring Valley project based on information provided by Barrick Gold Exploration Inc. (“Barrick”), who is earning into the project. Progress includes:

  • Continued drilling of gold intercepts outside of the present resource area.
  • Increased participation of Barrick’s Project Development group and Barrick’s Mine Site Exploration group.

To accommodate a planned increase in operations, Barrick has expanded the project office in Lovelock. Additionally, Barrick has initiated cultural and biological studies to support an environmental assessment for an expanded drilling area.

Ken Brunk, Midway’s President and COO said, “We are pleased to see good drill results that continue to expand our resources beyond the current resource area. We are pleased to see that Barrick is now involving both the mine development and mine exploration groups in this project. We also want to thank the exploration group that had responsibility for the project for their effort and diligence in conducting their activities on the project prior to this transition. Spring Valley is in the initial stages of transitioning from a pure exploration project to a mine development project. This is an important step in the making of a future mine.”

Widely spaced reconnaissance drilling south of the current resource continues to encounter gold over an area 1.5 km long by 0.5 km wide. New gold intercepts include 27 meters of 0.79 grams per tonne (gpt) gold in SV11-525, and 32 meters of 0.86 gpt gold in SV11-534. Higher grade intercepts included 6.1 meters of 6.86 gpt (including 1.5 meters of 21.91 gpt) gold in SV11-521, 6.1 meters of 4.97 gpt (including 1.5 meters of 18.89 gpt) gold in SV11-530 and 10.7 meters of 1.44 gpt (including 1.5 meters of 8.95 gpt) gold in SV11-532c. At the north end of the resource a new intercept of 65 meters of 0.86 gpt gold in SV11-513c was reported. Barrick’s 2011 drilling through the third quarter totals 33,610 feet in 29 reverse circulation (RC) holes, 3,450 feet of pre-collar RC in the upper levels of core holes, and 15,283 feet in 10 core holes. Final metallic screen assay results have been received for 8 holes, the remaining assay results are from preliminary fire assays. Assays remain pending for an additional 15 holes. Core drilling was completed in September; RC drilling was completed in November.

Spring Valley is a large, porphyry-hosted gold system. A May, 2011 updated resource estimate reported 2.16 million ounces of gold in the combined Measured and Indicated categories at a cut-off grade of 0.14 gpt. There is an additional Inferred resource of 1.97 million ounces of gold at the same cut-off grade. The Measured resource is 0.93 million ounces contained within 59.0 million tonnes grading 0.49 gpt, the Indicated resource is 1.23 million ounces contained within 85.8 million tonnes grading 0.45 gpt, and the Inferred resource is contained within 103.9 million tonnes grading 0.59 gpt. The estimate was prepared for Midway by Gustavson Associates, LLC of Lakewood, Colorado (Midway press release dated May 2, 2011).

Significant New Drill Hole Gold Intercepts

Spring Valley Project, Nevada

(Calculated by Midway from data provided by Barrick)

       
Hole   From (m)   To (m)   Width (m)   Grade gpt
SV11-513c   53.3   56.4   3.0   0.96
    165.8   168.9   3.0   1.03
    272.8   275.2   2.4   1.03
    321.9   330.4   8.5   1.75
    342.0   351.7   9.8   1.17
    362.7   428.5   65.8   0.86
    455.7   465.4   9.8   1.47
    516.9   526.4   9.4   0.69
SV11-518   102.1   103.6   1.5   3.74
    423.7   288.0   1.5   7.95
    449.6   486.2   36.6   0.51
SV11-519   65.5   67.1   1.5   3.09
    193.5   195.1   1.5   3.15
    213.4   239.3   25.9   0.31
SV11-520   106.7   118.9   12.2   0.58
    164.6   169.2   4.6   1.58
    189.0   190.5   1.5   1.82
SV11-521   143.3   149.4   6.1   0.65
    170.7   176.8   6.1   6.86
includes           1.5   21.91
    216.4   219.5   3.0   0.82
    365.8   367.3   1.5   1.20
    495.3   501.4   6.1   0.96
    510.5   513.6   3.0   3.29
SV11-522c   no significant intercepts        
SV11-523c   24.4   32.0   7.6   0.96
            1.5   1.27
    additional assays pending    
SV11-524c   166.4   167.9   1.5   0.82
SV11-525   179.8   207.3   27.4   0.79
    213.4   216.4   3.0   0.86
    224.0   228.6   4.6   0.48
    271.3   275.8   4.6   0.48
    344.4   345.9   1.5   0.79
    365.8   367.3   1.5   4.59
SV11-526   no significant intercepts        
SV11-527   no significant intercepts        
SV11-528   67.1   68.6   1.5   0.79
SV11-529   no significant intercepts        
SV11-530   125.0   132.6   7.6   0.34
    172.2   178.3   6.1   4.97
includes           1.5   18.89
    207.3   213.4   6.1   1.82
includes           1.5   5.90
    428.2   429.8   1.5   0.96
SV11-531   no significant intercepts        
SV11-532c   85.3   96.0   10.7   1.44
includes           1.5   8.95
    additional assays pending    
SV11-533  

no significant intercepts

       
SV11-534   86.9   93.0   6.1   4.94
    246.9   249.9   3.0   0.38
    376.4   379.5   3.0   1.41
    400.8   432.8   32.0   0.86
includes   400.8   403.9   3.0   0.51
includes   413.0   423.7   10.7   1.51
includes   429.8   432.8   3.0   2.98
SV11-537   41.1   42.7   1.5   0.93
    additional assays pending    
SV11-538c  

no significant intercepts to 115m

additional assays pending

   
SV11-539c   89.9   112.8   22.9   0.55
SV11-540   221.0   227.1   6.1   0.58
    295.7   297.2   1.5   1.85
SV11-541   114.3   115.8   1.5   1.06
    182.9   184.4   1.5   0.41
    219.5   221.0   1.5   0.34
SV11-542c  

no significant intercepts to 91m

additional assays pending

   
SV11-543   117.3   118.9   1.5   1.51
    126.5   128.0   1.5   0.79
    152.4   153.9   1.5   0.79
    192.0   199.6   7.6   0.79
    257.6   259.1   1.5   8.50
SV11-547   88.4   91.4   3.0   0.82
    160.0   163.1   3.0   0.62

Reverse circulation drilling was conducted by Hard Rock Drilling of Elko, Nevada. Core drilling was conducted by TonaTec Exploration of Mapleton, Utah. Drill hole numbers ending with a "C" indicate core holes. Samples were assayed by ALS-Chemex Labs, in Sparks, Nevada by 30-gram fire assays (FA) or 1000-gram metallic screen assays (MS). Results reported represent thickness along the trace of the drill hole and do not necessarily represent true thickness.

To view the map associated with this release, please click on the following link: http://www.usetdas.com/pr/midwaymap12062011.jpg

Barrick can earn a 60% interest in the project by completing work expenditures totaling US$30 million before December 31, 2013 under the terms of an agreement executed between Midway and Barrick March 9, 2009. Barrick has informed Midway that it intends to conduct and fund the required program of US$7 million in 2011, resulting in cumulative expenditures of US$16 million by December 31, 2011.

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