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Midway Reports Significant Gold Resource Increase At Gold Rock, Nevada

Stocks in this article: MDW

Midway Gold Corp. ("Midway" or the "Company") (MDW:TSX-V; MDW:NYSE-AMEX) announces a new Indicated resource of 310,000 ounces (oz) of gold and Inferred resource of 331,000 oz of gold at the Company’s Gold Rock project, White Pine County, Nevada. The gold resource, which appears to be open in all directions, represents a significant increase above the previously reported 344,700 oz historic estimate. The Indicated resource is contained in 12,968,000 tonnes at a grade of 0.74 grams per tonne (gpt) gold. The Inferred resource is contained in 17,894,000 tonnes at a grade of 0.58 gpt gold. The new resource includes results from 466 verified historic drill holes and 31 Midway verification holes that were drilled in 2011. Gold Rock lies 8 km southeast of Midway’s Pan project.

The resource extends for 2,500 meters north and south from the historic Easy Junior open pit gold mine. The significantly higher grade of the Indicated resource reflects the difference between the use of fire assay results in estimation of the Indicated resource and inclusion of cyanide solution assays in estimating the Inferred resource. These solution assays, in historic drill holes by previous owners, appear to significantly understate the gold grade as compared to fire assay results. A set of 1,956 samples having both solution assays and fire assays averaged 25% difference between the assay types. Solution assays comprise about 35% of the gold values in the total resource. The Indicated resource was calculated using only samples with verified fire assays; samples with cyanide solution assays were restricted to the Inferred resource category.

Ken Brunk, President and Chief Operating Officer of Midway said, “Our first resource estimate at Gold Rock shows the deposit is comparable in size to our nearby Pan gold deposit. We are confident we can significantly grow this resource through both in-fill and step-out drilling. We have an aggressive 2012 program planned for Gold Rock that includes drilling for resource expansion, metallurgical testing, initial environmental baseline studies, and conceptual mine engineering. Our goal is to move this project rapidly toward mine development.

“Gold Rock is now at the same stage as the Pan project was back in mid-2010 before our Preliminary Economic Assessment. Eighteen months later, following aggressive drill programs, we announced over a million ounce resource at Pan. This was followed by a Feasibility Study with robust economics and the initiation of the mine permitting process. Our goal is to move Gold Rock forward at a pace similar to the Pan project.”

A rigorous two-stage verification program was critical to validate the previous drill hole database before calculating a new resource estimate at Gold Rock. The first stage required independent validation of the historic drill results by engineers at Gustavson Associates, LLC. This review resulted in validation of drill results from 52,000 meters of previous drilling in 466 holes. The second stage was a 2011 Midway drilling program to independently confirm gold grades, geology, and rock alteration reported from the earlier drill holes. Midway drilled 8,000 meters in 31 holes, including six core holes.

 

Resource Estimate, Gold Rock Project, Nevada

        Inferred Resource       Indicated Resource
Cutoff (gpt)       Tonnes       Grade (gpt)       Gold ounces       Tonnes       Grade (gpt)       Gold ounces
0.51       7,866,000       0.83       211,000       7,820,000       0.98       247,000
0.41 10,857,000 0.73 255,000 9,593,000 0.89 273,000
0.27 17,894,000 0.58 331,000 12,968,000 0.74 310,000
0.14       30,460,000       0.42       409,000       18,010,000       0.59       343,000

Note: The tonnage and total ounces of gold 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.

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