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Midway Gold Announces US$70 Million Strategic Financing

Midway Gold Corp. ("Midway" or the "Company") (TSX VENTURE:MDW) (NYSE MKT:MDW) is pleased to announce that it has arranged a US$70 million private placement financing of five year 8% convertible Series A Preferred shares at a price of US$1.85 per share (“Preferred Shares”).

Kenneth A. Brunk, Midway’s Chairman, President and CEO said, “Midway is pleased to welcome lead investor Hale Capital Partners, L.P. as a key strategic financial partner in the pursuit of the Company’s goal of becoming a Nevada gold producer in the near term. This is a very important step forward for Midway as we have dramatically reduced financing risk in uncertain times, and have done so without incurring hedging on our future gold production or committing to any security over our assets, all while seeking to minimize equity dilution to our shareholders.”

Martin Hale, CEO and Portfolio Manager of Hale Capital Partners, L.P., said, “We have been investors in Midway since 2010 and that history, the quality of the team and properties, and management execution have given us great confidence in supporting the Company.”

The conversion price of the Preferred Shares represents a significant premium of 37% to the closing price of the Company’s shares on November 20 th, 2012.

The primary use of proceeds from the private placement will be to advance the Pan heap leach gold project towards production, including the ordering of long-lead time capital equipment, as well as engineering studies to advance the Gold Rock project.

The Private Placement is subject to customary closing conditions and deliverables. Midway anticipates executing final documentation and closing the private placement on or before December 13 th, 2012.

Key Terms of the Preferred Shares:
  • US$70 million Offering at a price of US$1.85 per Preferred Share.
  • Each Preferred Share is convertible into Common Shares of the Company on a 1 to 1 basis.
  • Holders of the Preferred Shares are entitled to receive an annual, cumulative preferred 8% dividend payable quarterly in cash or common shares, at the Company’s option.
  • Preferred Shares are redeemable by either the Company or the holders after five years from the date of issuance for cash equal to the conversion price, initially US$1.85.
  • After a period of one year, subject to certain price and volume conditions, the Company may force the conversion of the Preferred Shares to common shares on a 1 to 1 basis.
  • Preferred Shares have a liquidation preference equal to 125% of the issue price of the Preferred Shares in connection with certain liquidation events.
  • Except as otherwise required by law, the holders of Preferred Shares will be entitled to vote their shares, on an as converted basis, at meetings of the shareholders of the Company.
  • Upon common shareholder approval at the next annual general meeting of the Company, the holders of Preferred Shares shall be entitled to nominate and elect a Director of the Company.
  • The issuance of common shares below a price of US$1.85 or repurchase any common shares, requires the consent of a designated Preferred Shareholder.
  • No fees or commissions are payable in connection with this placement.
  • The investors have been granted registration rights under a Registration Rights Agreement and other rights related to board and committee appointments under a side letter.

Neither the Preferred Shares nor the Common Shares issuable upon exercise of the Preferred Shares or in lieu of cash dividend payments have been registered under the United States Securities Act of 1933, as amended, or the securities laws of any state. The securities may be offered or sold only under exemptions from these registration requirements. This press release does not constitute an offer of securities.

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